es profit on 1/4 point can it be done?

[saxon22]

Quote from WD40:

the only people who can buy at bid and sell at ask are the market makers.

If you are a retail trader, you better first check the speed of your internet. Because the market might have moved away by the time you see it on your screen.

http://www.bandwidthplace.com/speedtest/

http://www.pcpitstop.com/internet/default.asp

http://reviews.cnet.com/7004-7254_7-0.html

I reside in NYC so the internet connection here is pretty good. I would worry about it if I were trading from rural Oklahoma or southern Australia (no punt intended T28 ).

 

[saxon22]

Quote from traderdon56:

It would be very helpful. And I'm glad that you decided to ask yourself about those losses, you were beginning to worry me when you told us that they didn't matter.

It seems you're going down a better path than you were previously, good for you.

Don-

The whole thing is a one big learning experience and boy am I learning! In my line of work I am used to being always right, so you could only imagine how I felt when some of you ripped "my system" to pieces. I admit, I needed it, to realize that making money trading is not easy by a long shot.

 

[saxon22]

Quote from Tums:

free money for grabs !

That looks like my dollar!!!!!!!

 

[saxon22]

Quote from Barry-Or:

Saxon22 and Nutsneal,

Saxon22, did you miss fully reading all of the post by Nutsneal? It is on page 21 of this thread.

Sounds like Nutsneal is actually doing what you asked about originally. Yet, you haven't responded to his post yet -- at least not to the main part of what he said.

Nutsneal said that he had some other suggestions and I would like to hear what they are.

Thanks!

I read the whole post and it seems that HE can pull it off. However, the reason for his success is experience and many battle scars that made him a master trader. I could attempt to implement his way of getting 1/4 filled but it seems to me that to do it, one must be really good at trading and I am NOT. I will keep his system in mind but for now I realized that taking 1/4 from the market is not as easy as it once seemed to me.

 

[saxon22]

Quote from John47:

I think a big part of why there's so much dissent here is because scalping ES w/ a retail setup from a normal DSL line is probably close to impossible. Thats probably what most guys here have expirience with (retail). And thats probably why guys are saying you can't buy bids, etc. Scalping like this is something pro's do, because they have the setup and have learned from other pro's. The offers they lift or bids they hit are stuff that without a pro connection you probably won't see when they become good. I trade a block away from the merc in an office w/ a 20mg direct line, and when there's an order that the whole market wants it still goes faster than we can see, and you won't get it untill you saw it ahead of time and were ready to pounce.

I am glad that the system I tried to devise has been used by the pros. Unfortunately, it seems that it is not something that could be copied by retail traders and much less nubies like me. Maybe in a distant future I will pul it off, but as for now, it is back to T28's approach which as he calls it quiet correctly, is both simple and profitable.

 

[saxon22]

Quote from nexial_1002002:

While you're on the subject of speed of the internet, I would consider this. A regular t1 line has 2 1.5Mb pipes, an out and an in. For those of us with just a regular internet connection, I would say that it is possible if you have a connection rated 5 MBps to be just as fast as the others. Most people also haven't taken the time to invest in truly high speed computers that are designed for trading.

Do you really need something super high tech to trade the markets????? I doubt it. A regular pentium 4 with 1 gig of ram a graphic card that can handle up to 4 monitors and 2 hard drives would be more than enough.

 

[John47]

Quote from Tums:

the bandwidth of your internet connection is a SMALL part of the equation. Your IPS only quote you with the "Last Mile" speed. i.e. from his server to your home.
Here's how you can check the rest of the bottleneck.

1. you can do a route trace to see how many intermediate stops are there between you and your broker.
http://www.pcpitstop.com/internet/tracert.asp
(assuming you don't have to worry about the link between your broker and the exchange.)

2. you can check the speed between major routers. This is important if you are overseas.
http://www.speedtest.net/
http://www.internettrafficreport.com/main.htm


attention: pls post your results here. This will be an educational exercise.

Indeed, I don't know if I mentioned this but I've traded the same way out of an office in pennsylvania before with a 10meg pipe and only three traders using it...it was ok for a bit but we started getting lag when there was a glitch with a server in DC, we couldn't scalp with it, when your used to being able to hit prices on "the turn" it all counts. So basically, yes to trade a style where speed is important, you have to have a direct connection to the exchange.

 

[saxon22]

Quote from Businessman:

If you take the theoretical price of ES at any time as half way between the bid and ask then the profit you are theoretically making only every buy and sell is 6.25 dollars, Not $12.5.

After paying $2.5 commission you only have 3.75 dollars to play for.

And dont think you can increase your profit past 6.25, when you think you can predict which the market is going you probably wont get a fill.

even 3.75 per contract is not bad if:

1. you could it all day long with very high win ratio (super hard to do)

2. you trade 100 or 200 lots per trade

It is not the amount of money that one makes on this type of set up that is in question.

 

[saxon22]

Quote from mwahal:

new xmas toy for traders !!!!

Looks like a cash register at a local Mc Donald. I guess if trading does not pan out, one could easily re-train to start a new career at a local fast food joint.

 

[Tums]

Quote from saxon22:

even 3.75 per contract is not bad if:

1. you could it all day long with very high win ratio (super hard to do)

2. you trade 100 or 200 lots per trade

It is not the amount of money that one makes on this type of set up that is in question.

the problem is, the market has an uncunning way to fake you, fade you, then fuxk you.

let me give you another example:
say, you got filled at 1330.00.
you are carrying 100 lot, each tick is worth $1250.00

the market is hovering at bid 1330, ask 1330.25, and you feel good about it.

then the market moves to bid 1329.75, ask 1330.00

well, what do you do?
theoretically you are still in the game.

but what if the market spikes to 1329.5/1329.75?

"Spike" is a term you give the market in hindsight. You won't know it is a spike until 2~ bars later.

If it is not a spike, then the best you can get out is minus 0.50pts. That's $2500 right there !!! (probably it happens in 5 seconds.)

Of course you won't get out. Because you have observed that the market makes a lot of minar oscillations. YOu wait...

two possible scenario can happen:
1. It keeps on going down and you get out at market. The fill is at minus 3/4pt.

2. it goes in your direction, you got your 1/4pt, then the market continues on its way to a leisurely 2~3 pt swing.

BTW, as liquid as the ES market might be, having a 100 contract retail order filled is NOT as easy as some thought. YOu can safely expect a 30 lot order filled in a flash, but you surely don't want to carry any partially filled order in a fast market that is going against you.

Sigh, the market is ruthless. It takes pleasure in our humiliation.

Don't let me discourage you.
I said it is difficult to scalp 1/4pt in ES -- as a retail trader.
A prop firm might be able to help. They usually have faster connection than your home office. By "Faster", I mean a connection into the floor or a market maker.