I'm Trading an RJ O'Brien futures account, and so far have made a lot of money...

[Con1991]

What??

If there are 10 contracts for sale a price X and you need 250 contracts, what do you think will happen next?

Still learning as I go along tbh, I'm not entirely sure how illiquid contracts work, but I am assuming that traders add liquidity over time.

 

[DevBru]

Still learning as I go along tbh, I'm not entirely sure how illiquid contracts work, but I am assuming that traders add liquidity over time.

You need a counterparty for every contract you want to buy or sell, you can't just magically buy as much contracts as you want, except in a demo account obviously.

 

[Tradex]

I'm not entirely sure how illiquid contracts work, but I am assuming that traders add liquidity over time.

At any given price there are only X or Y contracts available. With illiquid markets the smallest orders can move the market significantly in seconds, so you won't be able to get the price you see on your (demo) screen, unless you are willing to chase the market because you know something that the other traders don't know.

Like that fake Orange Juice report in the Trading Places movie

 

[Overnight]

Update to questions guys, here is another screenshot. This is of Jun 24 Gold. You can clearly see the last price(because of lack of trading activity) is much lower than both the bid and the ask prices. So, if I were to sell at the price, the platform gives a result of difference between bid and last price. Then when the ask price drops I sell. That is how I did it. Not saying by any means this can be done in every case.

Ahh, you've stumbled across the phenomenon known as "sim arbitrage".

Your sim engine is lying to you. Sorry to burst your bubble. As one who trades illiquid futures outright, I can tell you that that huge green 9 figure number on your smartphone is a fantasy. It's an hallucination. In the real world it will never work. But the sim engine you have sure makes it seem all fine and dandy, doesn't it?

 

[DevBru]

Give us as example, what size of position did you have in GC or CL?

 

[heispark]

I love ET !!

 

[Con1991]

Give us as example, what size of position did you have in GC or CL?

I was entering market orders of 500 or 1000 lots a time. I made sure to go below what I assumed would be the 'limit' in a real live account.

To add, I would start with a few contract and build up margin using buying power.

 

[maxinger]

excellent.
NOW proceed to trade Live.

Then you can retire in just a day.

However, if you are not ready/skillful,
it could end up with a disastrous result.

 

[wrbtrader]

Ahh, you've stumbled across the phenomenon known as "sim arbitrage".

Your sim engine is lying to you. Sorry to burst your bubble. As one who trades illiquid futures outright, I can tell you that that huge green 9 figure number on your smartphone is a fantasy. It's an hallucination. In the real world it will never work. But the sim engine you have sure makes it seem all fine and dandy, doesn't it?

I wonder if that's what Robinhood does on their simulator via giving the illusion there will be fills in illiquid markets when in reality there will be no fill, partial fill depending upon the order type in real money trades of the same illiquid market.

Traders then beat their chest and jump unprepared in real money trading.

wrbtrader

 

[Tradex]

Ahh, you've stumbled across the phenomenon known as "sim arbitrage".

Your sim engine is lying to you. Sorry to burst your bubble. As one who trades illiquid futures outright, I can tell you that that huge green 9 figure number on your smartphone is a fantasy. It's an hallucination. In the real world it will never work. But the sim engine you have sure makes it seem all fine and dandy, doesn't it?

Few people know that but this great movie has helped PC manufacturers sell millions of home computers almost overnight.
Before that the PC was just some odd and almost useless expensive toy, for most consumers.