Please try not to bother me with issues trading less than 1 -2 million shares a day, i try my hardest not to waste my time with such issues, cause the only way i can make money is through HFT trading and pennying the scalper behind me!!! WTF are you talking about you lunatic? You seem to have a habit of going way over board while the vast majority laughs at you, feel free to point out how wrong i am, i would love to hear this.
No slippage on entry because I only use limit orders (partial fills sometimes though, which is similar to slippage when you have to chase down the rest). Slippage when profit target is exceeded and I then move my stop to the initial profit target. Then if the stop is before the the next profit target in line, there is often slippage.
It would be no different. But I agree with Stoxtrader, stocks can have a particular personality that's appealing, and also be influenced counter to the market by news which can set up some really nice relative strength/weakness plays.
there's a lot to be said for trading a few stocks more aggressively that you know very well; eg I trade MGM X AIG RIG (and ETFs like FAS/FAZ) and a few others that I know the intraday moves of... of course I trade dozens of others, too.. but knowing a couple of stocks inside-out, the trading ranges, how long they will move for before retracing, daily trading ranges, tape reading breakout patterns...is a solid way to trade. I think it's a very good strategy. for example I've made the most in net gains from a single stock this last year or so (MGM) that I know how to play very well, for swings/day trades. And of course I hedge w/ETFs and other plays. Knowing a couple of stocks very well, is a great strategy, been doing that for many years. -k
i have a group of stocks i trade every day. however,i do change from time to time if my particular stocks sudenly lose interest(i.e.solar stocks).
Yeah, i have seen that the ES and SPY are nearly identical in its trading ranges. I just did a comparison between the two in terms of liquidity, spreads, and commissions costs. I also added YM for comparison as well. I used 1 ES contract as the benchmark, and then used 10 ES contracts as the benchmark for the second scenario. I'm using IB as the broker. The Results: scenario 1, All costs are roundtrip. ES. 1 contract, spread costs: $12.50, commission: $2.80, value: $53,000 Margin: $2813. Total entry costs $15.30 SPY. 500 shares approx. spread costs: $5.00, commission: $2.00 - 7.00 (depending on adding or removing liq) , value: $53,000 Margin: $14,000. Total entry costs $7.00-12.00 YM. 1 contract, spread costs: $5.00-10.00, commission: $4.00, value: $50,000 Margin: $3250. Total entry costs $9.00-14.00 scenario 2. ES. 10 contracts, spread costs: $125.00, commission: $28.00, value: $530,000 Margin: $28130. Total entry costs $153.00 SPY. 5000 shares approx. spread costs: $50.00, commission: $20.00 - 70.00 (depending on adding or removing liq) , value: $530,000 Margin: $140,000. Total entry costs $70.00-120.00 YM. 10 contracts, spread costs: $50.00-100.00, commission: $40.00, value: $500,000 Margin: $32,500. Total entry costs $90.00-140.00 Dollar value exchaged per second on average (during normal hours) ES: $4.5 million SPY: $1 million YM: $250,000 Judging from this, it seems that the ES is somewhat more inefficient in terms of entry costs with the spread being quite pricey. The YM can be slightly better, if the spread is held at one point, which isn't always the case, and occasionaly jumps to 3 points difference. SPY wins hands down in spread costs , almost always being 1 cents, occasionaly 0 cents and very rarely 2 cents. A 1 cent spread on the SPY is 5 bucks for a 1 ES contract equivalent share size. Quite a large difference to the $12.50 spread on the ES. For a relatively small player, who only trades between 500 to 1000 shares on SPY, it seems to me that it makes more sense to trade the SPY, rather then an 1 to 2 contracts on the ES, simply because of the lower spreads and much cheaper commissions if one adds liquidity. As well in the worst case scenario of removing liquidity, you still get a total entry costs that's about 25% less then the ES on a 1 contract size. I'm acknowledging the fact that you need way less money to trade an equivalent size on the ES, and the leverage is about 5 times more then you get in stocks with IB. Perhaps this is the main reason why most people trade the ES instead? Or is there something else that I'm missing. My guess is that there are way less partial fills in the ES, but then again the liquidity is quite sufficient in SPY. I'm quite impressed that the ES is actually 4.5 times larger then SPY in terms of dollar value traded per day. So a for a large player, the ES is the best choice, since there is massive liquidity, and obviously you can leverage yourself to the hilt and make much larger returns if successful. I do not know if there are refunds for adding liqiduity in the ES, I also know the commissions costs can get lower if your a member and do more volume etc. In the end commissions costs are fairly similar among the 3 instruments. SPY has a slight advantage but one has to be adding liquidity in order to get a cheaper cost, which can hamper performance. The most important finding in my report here is the spread differences between the instruments. And that can make a large difference over the long run. For the small player (1 lotters) not needing leverage, I would say that your better off trading the SPY, but this is just my opinion largely based on spread calculations. I would like to see if anyone has any opinions stating why the ES would be better for a small player, leverage aside. Perhaps I am missing something. Rolando