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

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Quote from saxon22:

Now doing it with 200 contracts .... that is greedy!!!!!!!!!!!!!!
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Whether or not you have the strategy to actually do this is up to you to work out... it will not be easy...

<B>BUT</B> if you do trade a large number of contracts a day you can easily get a lower commision cost per round turn lot as in $1.50 round turn... as in .75cents in and .75cents out = $1.50

which is a savings of $3.50 a contract...

SO... do the math... that would make a HUGE diffence in your profit potential...

http://www.velocityfutures.com/commisions_full.asp?exchanges_id=1

:)

cj...

__________________
HAVE STOP - WILL TRADE

If You Have The Vision We Have The Code
 
Quote from saxon22:

I doubt that it is easier to catch the market like ES for 2 points (than again I am new to this thing so feel free to stomp me). However, it seems to me that having the market move 1/4 happens more frequently and therefore it would be easier to achieve a fill. I would rather get 10 fills for 1/4 points than wait for that 2 point set up that might or might NOT come my way. :( ) Anyway, can it be done at a profit?:confused:
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Simple answer... YES, it can be done. The considerations to be made is how so...

There are two ways to do it ignoring "setup". The methodology would be either to LIMIT SELL at the ASK (ie. join the ASK SIZE queue) and LIMIT BUY at the BID (ie. join the BID SIZE queue), or go the market order route which is to MARKET BUY the ASK and then MARKET SELL at the BID + 2 tick and vice versa for SHORTS...

In the LIMIT ORDER approach, you have to be careful that both sides are being drawn from continually since when the market actually moves, you lock yourself into a losing position IMMEDIATELY and ALWAYS. In otherwords, as long as the BID/ASK spread doesn't change, this type of charade can be played assuming that you do not get caught with an open position once the pair move. Places where this may be some use to you experimenting is during the lunch time dullness where there is no volume to move the market. However, it is going to be generally tough to not see the BID/ASK pair change frequently (ie. every 30-60 seconds).

In the MARKET ORDER approach, you wind up in the boat with the majority of folks from scalpers right on up to swing/position folks. Unlike the LIMIT ORDER approach, the MARKET ORDER approach requires the market to move in order that you may close your position at a gain. The subtle part is that you need the BID/ASK pair to move 2 ticks in your direction. In other words, using the original example, when you MARKET BUY at the ASK, when the BID/ASK pair moves up 1 tick, the BID is NOW at the ASK from which you just opened a long position. Were you to sell now, you are at a +0 gain on your position but also with commission loss. Thus the market (ie. BID/ASK pair) must tick up an additional tick for you to realize a 1 tick gain (less comm)...

Net/net, in the first approach, you don't want the market to move. In the latter, the market has to move...

Regards...
 
Austinp, thank you for your reply. You are absolutely right ES is a buzzfest and when you look at it in tick by tick mode the screen is like a NYC street during rush hour. However, if you look at 1 minute chart there is a clear pattern of the market. Es is going up a couple of ticks and then goes down a couple. This motion is repeated and if I can catch it going my way I get a fill. If I go with a trend the market might not go up 2 o 3 points but the probability of it hitting 1/4 point would be much higher than going for 2,3 or 4 points.
Also when the Es is in consolidation, it should be possible to hit it on its way up and on its way down especially if I am only looking for 1/4 of a point.
 
I think a higher bid/ask size may not get totally filled before the price ticks above/below you. Also, if the bid size suddenly upticks by 200 contracts, the ask price may move up by 1 tick.

Filling 10-20 lot size is one thing but filling 200 contracts everytime and scalping 1 tick everytime is sort of a pipe dream. Leave it to the floor traders and professionals. Like someone said, its not for retail traders.
 
this game/strategy is more difficult than you are making it out to be. what do u think your winrate will be with this strategy? what would your entries be based on? you will get burned alot, u are not realizing this. don't look at it onesided "do it 10x a day", need to think if i could do this 20 times a day and make a quarter point, and do this 10 times a day and lose a quarter point, net exchange fees I will make a tidy sum.


I am sorry I do not understand your argument.
 
Quote from mwahal:

I think a higher bid/ask size may not get totally filled before the price ticks above/below you. Also, if the bid size suddenly upticks by 200 contracts, the ask price may move up by 1 tick.

Filling 10-20 lot size is one thing but filling 200 contracts everytime and scalping 1 tick everytime is sort of a pipe dream. Leave it to the floor traders and professionals. Like someone said, its not for retail traders.
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I was not aware that ES was so sensitive to 200 contracts. I was under the impression that it would take more than 200 to "back up" the mighty S&P 500 even if it is the mini version of the original one. I could underestand a 1000 contract but 100 or 200 would it really move the market?
 
Quote from EdgeHunter:

Whether or not you have the strategy to actually do this is up to you to work out... it will not be easy...

<B>BUT</B> if you do trade a large number of contracts a day you can easily get a lower commision cost per round turn lot as in $1.50 round turn... as in .75cents in and .75cents out = $1.50

which is a savings of $3.50 a contract...

SO... do the math... that would make a HUGE diffence in your profit potential...

http://www.velocityfutures.com/commisions_full.asp?exchanges_id=1

:)

cj...

__________________
HAVE STOP - WILL TRADE

If You Have The Vision We Have The Code
More...


You are 100% right a saving of $3.50 a contract would amount to a nice change at the end of the day. Thanks for the info.
 
You are going for a risk reward ratio of .25 (risking $1.00 to make $0.25).

So, u need to be right 80% just to breakeven without commission. Including comm, for each 1 loss, you have make 5 successful trades to make atleast 1 penny. If you hit 2-3 losses in a row, you are probably dead.

So unless your system signals you to trade almost every other couple of minutes, its not likely that you can do 20-30 trades in a day to come out ahead of the game.
 
Quote from makosgu:

Simple answer... YES, it can be done. The considerations to be made is how so...

There are two ways to do it ignoring "setup". The methodology would be either to LIMIT SELL at the ASK (ie. join the ASK SIZE queue) and LIMIT BUY at the BID (ie. join the BID SIZE queue), or go the market order route which is to MARKET BUY the ASK and then MARKET SELL at the BID + 2 tick and vice versa for SHORTS...

In the LIMIT ORDER approach, you have to be careful that both sides are being drawn from continually since when the market actually moves, you lock yourself into a losing position IMMEDIATELY and ALWAYS. In otherwords, as long as the BID/ASK spread doesn't change, this type of charade can be played assuming that you do not get caught with an open position once the pair move. Places where this may be some use to you experimenting is during the lunch time dullness where there is no volume to move the market. However, it is going to be generally tough to not see the BID/ASK pair change frequently (ie. every 30-60 seconds).

In the MARKET ORDER approach, you wind up in the boat with the majority of folks from scalpers right on up to swing/position folks. Unlike the LIMIT ORDER approach, the MARKET ORDER approach requires the market to move in order that you may close your position at a gain. The subtle part is that you need the BID/ASK pair to move 2 ticks in your direction. In other words, using the original example, when you MARKET BUY at the ASK, when the BID/ASK pair moves up 1 tick, the BID is NOW at the ASK from which you just opened a long position. Were you to sell now, you are at a +0 gain on your position but also with commission loss. Thus the market (ie. BID/ASK pair) must tick up an additional tick for you to realize a 1 tick gain (less comm)...

Net/net, in the first approach, you don't want the market to move. In the latter, the market has to move...

Regards...
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Thank you for your post.
I read it and then re read it twice and I think that what I am looking for is the MARKET ORDER approach. Like you stated it is not the easiest way to take profits but to me it seems like the one I would like to play with and perfect it to see if there is a way to make it profitable. I did not reralize that 2 ticj is neede in order to realize the profit.
Thank you for your input.
 
Quote from mwahal:

You are going for a risk reward ratio of .25 (risking $1.00 to make $0.25).

So, u need to be right 80% just to breakeven without commission. Including comm, for each 1 loss, you have make 5 successful trades to make atleast 1 penny. If you hit 2-3 losses in a row, you are probably dead.

So unless your system signals you to trade almost every other couple of minutes, its not likely that you can do 20-30 trades in a day to come out ahead of the game.
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Now I understand your point of view and there is logic to it. You are correct in stating that the risk reward ratio is high and I am aware of it. However, just as you have a set up and place your trade for that 2 or 3 point gain I enter into a picture when I think that the market is going to go my way and instead only look for 1/4 of a point to get out of a trade. I think that there are a lot more opportunities for the ES to go up 1/4 point or 1/2 point than there is for it to go up 2,3 or 4 points. Consequently, going for the extreme scalp of 1/4 point can happen more frequently and make more money at the end of the day.
 
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