a tick slippage is $12.5 2 ticks round trip is $25 if you do this 4000 times it would cost you 100000 lmao, how much edge do you need to counter that in ES future trading?
Buying on the ASK and selling on the BID is NOT slippage. You are also talking about a symbol with a notional value of $281,700. The bid/ask spread is VERY low.
And if you clip 4 ticks, net, you have 200K after 4000 trades. It is a bargain to control that much notional value for about $5 RT. Name any other business that you can control that much for so little. Perhaps the OP needs to get "commission free" on a tightly spread stock and see how that works out.
Now look at the bigger pictur3. 1 round of trade generates 30 ticks profit = 28 ticks profit after 'slippage' day trading hypothetical case / For illustration only : Do it 4000 times and you earn 28*4000*$12.5 = $1.4 million !!!!! 1 or 2 ticks of slippage is acceptable. For High frequency trading, the above numbers will be different. Occasionally, slippage could be tens of ticks. This happens once in a few years when there is mega news/events. Anyway, when it happens, you wouldn't be trading because the charting software and trading platform would freeze due to super heavy internet traffic.
Hello howruhowruong, I trade ES everyday of my life, slippage is my least concern. Real masters of the ES futures do not care about slippage and commissions.
ES Futures are a bit extreme starting out. Why not start out with MES Futures (Micros) where a tick is $1.25 and a point is $5?
Good point. However, if I day trade SPY, usual bid/ask of 1 tick is $0.01. Per @Robert Morse, the equivalent of slippage (500 shares) is $5 per entry and that is less than half of trading ES futures. From a percentage "overhead" point of view, quite a bit cheaper. Anyway for scalping SPY I am entering/exiting 5-10 ticks, a 2 ticks overhead is 20-40 %. My win rate needs to be > 70% to breakeven? It is a tough job to have such an edge for anyone starting out. OP ask a very good question.