E-mini traders....any advice

catman · Dec 8, 2002

I have been trading equities for the last 3 years and I am now getting ready to begin trading the e-minis.
My main concerns are the pitfalls of execution.....I'm not sure what to expect. I am using IB for my trades. I will be day trading only. Any advice regarding pitfalls, problems, slippage will be greatly appreciated. I also will be using mostly limit orders. TIA

gnome · Dec 8, 2002

Quote from catman:

I have been trading equities for the last 3 years and I am now getting ready to begin trading the e-minis.
My main concerns are the pitfalls of execution.....I'm not sure what to expect. I am using IB for my trades. I will be day trading only. Any advice regarding pitfalls, problems, slippage will be greatly appreciated. I also will be using mostly limit orders. TIA

Not to worry... Slippage is nil on limit orders, and you can always buy the offer and sell the bid on market orders.... usually .25 spread. If you've got a streamer, you'll know exactly what your fills will be.

gnome · Dec 8, 2002

Quote from catman:

I have been trading equities for the last 3 years and I am now getting ready to begin trading the e-minis.
My main concerns are the pitfalls of execution.....I'm not sure what to expect. I am using IB for my trades. I will be day trading only. Any advice regarding pitfalls, problems, slippage will be greatly appreciated. I also will be using mostly limit orders. TIA

Not to worry... Slippage is nil on limit orders, and you can always buy the offer and sell the bid on market orders.... usually .25 spread. If you've got a streamer, you'll know exactly what your fills will be (excluding fast markets, of course).

Tacsian · Dec 8, 2002

In my experience with the eminis (2 years), slippage is a minimal issue. When testing systems I account for 1 tick slippage in and 1 tick slippage out, but often you won't experience that.

With a Limit order, I rarely experience even the 1 tick of slippage, but I do encounter times where I've missed the trade entirely if my Limit was so far down in line as to not be executed before price turned. For example, if I'm working a limit sell for 903.75, price is currently 903.25 X 903.50...sometimes you'll see the current trade jump up to 903.75 on the offer for a second or 2, 20 or 50 lots get traded, and then price begins to decline and you got no fill on your offer. With a market order, I always expect one tick of slippage, or the opposite side of the Bid/Ask. If I enter an order to sell, and price is 903.25 X 903.50...even if price is trading at 903.50, expect for the sake of realism to get a 903.25 fill.

If you do a search on eminis and slippage on this board, I think you'll find most members will have had similiar experience. Many have even claimed to experience very little slippage on orders of 50 lots or more. Good trading to you!

catman · Dec 8, 2002

Quote from Tacsian:

With a market order, I always expect one tick of slippage, or the opposite side of the Bid/Ask. If I enter an order to sell, and price is 903.25 X 903.50...even if price is trading at 903.50, expect for the sake of realism to get a 903.25 fill.

Based on yur post, if the market begins to move fast against you, is it better to use a market order to get out and accept the slippage, rather than take a chance a limit order won't be filled?

GD2KNO · Dec 8, 2002

If you are using limit orders and electronic entry there is zero slippage - you will get your price or no fill.

However, it has been my experience that I have missed some very profitable trades going for a limit price - and feel that on a good signal a market order and giving up 0.25 or 0.50 is worth just getting into the position.

My gaol is consistent profits and minimal drawdowns and thankfully have manged to average 10+ points daily with few - only 2% net losing losing days - the worst of which was less than 5 points.

So i feel you may be focusing on the cents, and overooking the dollars
Best of luck

profitseer · Dec 8, 2002

Quote from gnome:

Not to worry... Slippage is nil on limit orders, and you can always buy the offer and sell the bid on market orders.... usually .25 spread. If you've got a streamer, you'll know exactly what your fills will be.

that's right

profitseer · Dec 8, 2002

Quote from gnome:

Not to worry... Slippage is nil on limit orders, and you can always buy the offer and sell the bid on market orders.... usually .25 spread. If you've got a streamer, you'll know exactly what your fills will be (excluding fast markets, of course).

that's exactly right

profitseer · Dec 8, 2002

Quote from Tacsian:

In my experience with the eminis (2 years), slippage is a minimal issue. When testing systems I account for 1 tick slippage in and 1 tick slippage out, but often you won't experience that.

With a Limit order, I rarely experience even the 1 tick of slippage, but I do encounter times where I've missed the trade entirely if my Limit was so far down in line as to not be executed before price turned. For example, if I'm working a limit sell for 903.75, price is currently 903.25 X 903.50...sometimes you'll see the current trade jump up to 903.75 on the offer for a second or 2, 20 or 50 lots get traded, and then price begins to decline and you got no fill on your offer. With a market order, I always expect one tick of slippage, or the opposite side of the Bid/Ask. If I enter an order to sell, and price is 903.25 X 903.50...even if price is trading at 903.50, expect for the sake of realism to get a 903.25 fill.

If you do a search on eminis and slippage on this board, I think you'll find most members will have had similiar experience. Many have even claimed to experience very little slippage on orders of 50 lots or more. Good trading to you!

that's right, exactly right

profitseer · Dec 8, 2002

Quote from catman:

Based on yur post, if the market begins to move fast against you, is it better to use a market order to get out and accept the slippage, rather than take a chance a limit order won't be filled?

that's right