I'd like to ask a question about scalping BAC in lieu of ES. Let's say I want to scalp a stock like BAC for size. BAC closed at $32.93 so lets assume I have portfolio margin and I'm getting 6:1 on longs. Assume I have a 'commision free' broker and my account is $125,000. Then, I get the edge on the SPX through my proprietary indicator package. Alright, I'm gonna lever this all the way so 20,000 shares. This is $658,600 notional exposure. (leaves me with about $15,000 in free margin). So, I hit the market with a market order (or marketable limit order). I'm theoretically in and out for just exchange fee's? If I traded ES with a comparable amount, it would run me 16 bucks in commission's plus spread. Do this enough times in a day and the commissions add up. Anybody have experience doing stuff like this wanna compare the two?
Do you have an edge in trading BAC? Is that edge greater than ES? I've switched from trading futures to trading/scalping equities almost exclusively due to recent zero commissions. But also because I feel I have a better edge. I scalped lower priced stocks than BAC with decent size from 10K-60K shares a clip. And I love the $0 comm. Just paying the SEC fees. ka-ching.
Is it possible to trade a US stock like APPL on a one minute chart ? Has anyone done it? Do you feel that it is more worthwhile ( higher hit rate) than trading the Dow Index for example?
No. I don't have an edge on any particular name in the index. My edge involves the rate and index futures. Actually, I like the idea of scalping a liquid issue but I don't think I will ever move away from futures now. I am too used to the leverage. The idea of being at full margin with 600k of exposure is just too restrictive. I wish that you could lever cash equities much more than RegT or PM will allow. It seems like I will never be a stock trader. Thanks for the comment. It seems like I would have to have a huge account before scalping stocks would become a viable enterprise.
I would just scalp the nasdaq futures instead of apple. More flexible trading that way. They trade nearly identically.
I'm not a scalper really. If I scalp it will be 2 or 3, maybe 4 ticks on ES. With my system I can get more than that if I wait for a setup. But, it depends. I have to watch the ultra bond rate futures and the ES. Sometimes I should be trading the rates, sometimes the ES, or sometimes it's a spread using both at the same time. Hard to calculate a R:R when you are trading more than one instrument at a time.