I was in a guru room he trade ES and made calls with uncanny target and reversal point but the weird thing was he watched DJ cash to figure where ES should do, he said something like DJX is at such and such, ES need to move another 5p... or DJX is high enough? ES should turn, etc...this guy has been operated his room since 92.
ALWAYS take 0.25 points slippage at entry and 0.25 points slippage at exit. In real live your system will lose money with a certainty of over 90%. If you make only 70% on intraday scalping the profit per trade is almost nihil, even without slippage. With 2 trades per day you make about 500 trades a year, or a profit of 0.14% on the capital invested per trade. The real slippage will be a multiple of your profit. Backtesting often gives very good returns that in real live never are achieved. Especially if you start already without a realistic fill of the order. Small errors in calculating can have severe consequences, especially if you are calculating with nano returns. I made a simulation in the sheet i added. I took a margin between 500 and 2000$ per mini; your 70% return, and 500 trades per year. I calcultaed your profit with 0.25 and with 0.5 points slippage. You can change all the data to make additional simulations. But what i see is horrible. I hope for you that i made a mistake in my calculations.
spike500 [and others] please explain WHY slippage must be accounted for, the actual reasoning behind it. Shouldn't it be a 50/50 chance of going either way? Thanks in advance.
You have to pay the spread when entering(1 tick) And exiting (1 tick) Usually you can not enter at the close price easily unless its going to backfire. So right there you pay 2 ticks just to play the game, don't forget about commissions.,
What do you mean "unless its going to backfire"? Keep in my mind my system is NOT trendfollowing. Also, commission is already accounted for in my returns. Thanks in advance.
good to hear!!! yes this is true what he is saying and watching the Dow cash is important if you are doing scalps in the way i think he is doing them {and you can watch the TICKI and TICK for this also --- pick up on momentum pulses that the ES has not yet reacted to.} --- thanks for the info nkhoi!
Coolweb is right. You MUST take 2 ticks slippage in account, otherwise you will fool yourself. My estimation is that in reality you will lose about 18000 $ a year per contract with this system. So even if you get lucky and the spread is only half what i think he will be you will still lose between 8000 and 10000$ a year per contract.