Lot size in day trading

[marco565]

Hello Guys,

I would like to start day trade, after months of practising with Trading Sim, I would like to work on the psychology side of the game. I have one question:

Can I day trade with a lot of 10 or 25 actions at the time without having slippage (because the lot is small) on stock like AAPL, MU, FB, SQ, X...
At the moment I can not risk too much money because I am still on the learning process.


Thanks.
Mark.

 

[tommcginnis]

Market sims can only work with market data -- by definition. So your ability to sell+clear above-market quantities will lack the flood-to-offer slippage that live trades of that sort would produce. There would still be slippage from every tick away from the bid, but not both.

Here's the thing, though: there is not so much lost in reducing your quantities to those regularly traded in the visible live market. Look at contracts/minute and trades/minute figures, and keep your order size to within 1/10th of that amount -- if it's 10:42 and the contract usually trades 2,000 times in that minute, don't put on more than 200 yourself -- and certainly, via 100+100.

 

[qlai]

Can I day trade with a lot of 10 or 25 actions at the time without having slippage (because the lot is small) on stock like AAPL, MU, FB, SQ, X...

I would not do that. Trade on sim 100 shares until you get losses under control. Then trade live 100 shares at a time. Odd-lots would not be apples to apples comparison as executions may get weird. Also your commissions will be huge percent of pnl(sucks psychologically). Just gain more confidence on sim and try to replicate same exact thing live. The less variance from sim the better. To challenge your psychology, you really need to be loosing some meaningful amounts.

How about this idea ... Trade 100 shares on simulator but take 10% of the daily pnl and get rid of it with real money (charity, or just burn it!). No cheating! Try it for a month ... trust me it will save you money over long run

 

[marco565]

Thanks for your responses guys. The idea of giving the money to charity is a good idea. I know commission will be a huge percentage of my trades around 3$ per trade with IB. I will not be confident to play with 100 real shares even if I have a good experience in sim. So do you think there is slippage difference when trading 10 shares or 100 ?