In my opinion it is difficult to scalp futures because of the speed and volitility in which they trade. (This is ES or NQ that i am refering to, i have no experience with any other) If your trading slow moving equities, i bet you have no trouble flatting a position or taking a 1 cent loss. In futures, you basically have no chance of getting filled with decent volume protecting you, you must punch in or have the level you are on dissapear and then come back through. Couple this with the fact that any given level can be bought out in well under a second, and all of the sudden your down 2 ticks. So basically you are trying to get 1 tick 1 tick 1 tick and then BAM 3 tick loss. Add in some fees and your giving away your money. Just my opinion.
Thanks for the post. I sort of know how you mean. I traded NT a little today on one of its lower volume days. You'll see that it just kind of puts around in a 1 cent range all day, but then all of sudden spikes vertically 4 cents, stays there for about a half hour, then goes straigt down 4 cents. We put positions in on both sides when its in this 1 cent range because the chances of getting filled are so slim. Usually takes about 30-1 hour. I had to cancel my orders and actively hit the ask to get out, which can turn pretty ugly when the only exchange left is NY. Always seems to delay when you're actively getting out. This happens on LU, but in a different way. Sometimes the bid or ask will just disappear, and I'm thinking about taking a flat or loss. But when its moving in this 1 cent range, moves 1 cent up and trades in another range, advertising to take a flat is awful; the line is pretty long to get filled sometimes. I've always heard getting filled in futures is much easier, but you bring up a nice point. Thanks for the advice and keep up the good work; i've noticed you take profits almost everyday in another thread.
Makosgu/Mak! I agree with tradingbugm, your post is helpful and interesting, please continue with your posts. Can you please elaborate on the number of 198 back-to-back (ie. continuous) trades please. This is not the number you took but the number of possibilities correct ? How do you measure these visually or do you track them somehow from chart or DOM data ? What do you define as a wash ? for me a wash means b/e i.e. break even but would still cost me $4.80 ~ in commissions so 10 of those add up to 1 pt. Maybe a wash is a limit order that you cancel. How many trades do you average per day and do you use market or limit orders ? You said the DOM for you is intersting but do you use charts as your main trading tool or the DOM - an example chart would probably answer several of my questions if convenient for you. thank you ! Fionna
Greed and speed. With 100 to 1 leverage, most people never perfect the risk control needed to trade them and they blow up from being over leveraged. Also the speed is crazy compared to trading equites, watching the DOM will make you dizzy when the program trades start going off. You can make or lose 5k in less than a minute, most equity trades are not used to the violent swings.
Here is a dose of reality. Stick with the penny scalping for now, you have minimal experience and really have zero idea about the true nature of scalping. You will get torn apart in futures. There are no innefficencies of multiple routes and rebates like on the NYSE penny stocks. Yeah I'm pretty sure I know where you trade (new york?) and I'm very familiar with the firm. The big players & the pit tear the retail traders apart in the futures chops. I agree with gnome, trying to scalp futures for ticks is a sucker's game unless you have order flow info at your hand. Watch the SPY trade and you will see that there are absolutely no bids or offers to lean as they get whacked, canceled and moved away from the price almost everytime. You would be fighting vs computers trying to get those ticks, do you really think you're faster than a computer? If you're looking to grow as trader, the answer is not scalping for the minimum tick. For now just get experience.
well, i would trade for rebates, but we're discouraged from doing that. Also we cannot trade inside the penny, otherwise i might dabble in that. I mean we could, but they would rather us not, so nobody does. Thanks again. Just out of curiousity, have you seen any successful scalpers that trade for a cent? Is this something you've tried to do as a retail customer? I've seen people do this without using rebates or trading inside the penny, so its easy to see why I think it can be. You must of seen someone do this and fail, or fooled around with it. Otherwise maybe it just makes sense to you that it wouldn't work. I can believe that. Speaking of computers and program trading, who do you believe is throwing all those INET orders on the bid and ask like 2.678 ect. You think those are people doing that? I'm not quite sure. And no, I'm not in NY. (there are a few people on this board who scalp the DAX for a tick. You'll probably never see eye to eye with them, but hey, whatever works for you as long as you're trading well.) Good luck Hydro, and thanks for the warning. Btw, I was wondering if you found the Open book or level 2 useful in your trading. That would help me understand whether or not you and I see eye to eye as well.
I do not have experience daytrading stocks. I started with index futures(ES & YM). While I am not yet consistently profitable, here is what I have found: I've had better success scalping the YM than the ES. Part of this might be the psychological effect of having $5 ticks instead of $12.50. When I trade the ES, one tick against me and I'm sweating it already. There are probably other reasons for this, and many experienced traders suggest newbs avoid the ES. Many ETers question whether the ES can be profitably traded at all(obviously, I believe it can be). I should not be scalping for one or two ticks due to my commission structure. I am currently paying 0.55 per side in commish for eminis, and the exchange fees on top of this. If you could get member rates, I definitely think 1-3 tick scalps would be very realistic. I am trying to reduce the number of trades I do and hold for more ticks, but I am finding this difficult as I like to ring the cash register when I can. I have yet to be able to successfully read the DOM. By this, I mean that I cannot just look at the DOM and determine what is going on. Instead, I use tape reading indicators(large lot filters, tick counters, velocity measures, etc.) on my charts to follow what is going on in real-time. I also watch the time&sales. I think you should listen closely to anything FuturesTrader71 has to say on this topic. He is a successful futures scalper and has mentioned several times before what he believes the keys to his success are.
It's alot easier to lose money in futures than stocks. leveredge. Also, stocks don't move fast enough for the most part to really make you afraid. My .02.
futures is stocks on 1 kilo cocain. is you are bad its no good idea. if you are good it is the best way to make some juicy cash.
Actually, I don't think it's any more or less easy to lose money in futures vs stocks. That's all strategy dependent. I do, however, think it's much easier to lose lots of money!