thanks. about stops..if you use a buy stop to open and its rth..not super thin not heavy volume but a small cap...how badly cents wise would you say a stop gets hit after breaking out of a resistance line..i know it varies but in es i can tell you..a tick or 2 but max would be 3..even on a 3000 lot break higher in a second. how bad cents wise can it get in stocks furing rth
I'm not sure on this, but it seems you like stocks over the index futures... What about individual stock futures? That would seem to combine the best of both worlds for your trading needs?
I am a big fan of futures, however you have to ask yourself - why do so many of the pros, like those at private equity firms that are real big earners trade stocks? For one thing when unexpected news, good or bad, hits the wire and you see a huge surge in volume with price gaping out of congestion or S/R - often you can have highly directional moves that can tack on a far greater % moves than any futures stock index, that is without having to add on leverage, which makes the chances of getting shaken out far more likely. The stock market is massive, you can find a few stocks in play just about very day with a huge billboard (volume+price) shouting "the big players have big positions to enter or exit which is likely to go on all day, and for days to come." For us smaller fish we are nibble enough to sort of front run the big fish under certain circumstances. Sure futures has a bit of this to, just not nearly at the same level as stocks.
It has seemed to me that it depends on equity, individuals with more money, a million+ will be happy with the return on stocks. People with less want the same percent return or more and choose futures, often foolishly but not always so. I trade a lot of agro futures as I am a farmer, I have years of predicting behind me. The rich live in a world of decent stock tips. Only recently I was tipped on a pharma stock that was about to have a major trial clear to the final phase at dinner.
on stocks, im not able to give you an exact answer, as i specifically avoid small caps & m not subscribed to depth. algo market maker games will be extremely bad. a sh*t ton of ticks. if you go odd lot, even worse. ideally, i would use ladders to see dom on all exchanges on something like TT's x trader, if i were daytrading stocks algo mm game is already bad even on a high end midcap, with decent daily volume. here is a fresh example today. please correct if wrong. look at the highlighted time & sales. it looks to me that the algo mm saw a buy stop 500 shares @ ~103.94 (today's high), "fired up"/ withdrew asks to fill it + some other orders near it, before "firing back down" immediately. these orders are in the vicinity of a recent swing high. in my understanding, the algo mm seems to be able to "see/read" the order book to play such games. this is where & how the "unfair" money is made in stocks on futures, slippage only happens at obvious stop loss / volume void locations. i've seen 3ticks slippage on 6J, 5mins into US open with no news, at an obvious stop loss location. slippage is generally not a concern for futures, except around high impact news & crisis enviros i would trade patterns on both futures & stocks. after all, we are traders trading other traders. & fear & greed shows up in any asset
Slippage is actually huge in futures. $ 12.50 a tick of slippage.. so you get charge commission+fees+slippage in and then you ghet charged commission plus fees plus slippage out. it averages on the low end on a 1 lot= $ 30 bucks total cost per minimum trade in the emini. mini naz futures = round turn = 4 +7.5 +7.5= $ 19 or 20.. i used 1 tick and 2 ticks and averaged them for slippage.. depends a lot on mkt conditions for slipapge. Slipapge is just as important in futures. 500 share equivalent spy to 1 emini futures so... 30/500= $ .06 in and out (RT) with fees and slippage.. or half in and half out = $ .03 opr 3 cents. so you must make a total of 6 cents when trading the spy in order to overcome the costs of doingn business in trading. IT DOESNT matter if you use a limit or a stop or a mkt order.. you still pay the spread. HFT makes sure they make money on your trades so you are paying the spread one way or another no matter what order type.
if you make 10 (1) lot eminii trades you really need to cover $ 300 in expenses before you make any money