never had i thought slippag3 would be a huge issue in trading ES

[howruhowruong]

a tick slippage is $12.5

2 ticks round trip is $25

if you do this 4000 times it would cost you 100000

lmao, how much edge do you need to counter that in ES future trading?

 

[Robert Morse]

Buying on the ASK and selling on the BID is NOT slippage. You are also talking about a symbol with a notional value of $281,700. The bid/ask spread is VERY low.

 

[Bad_Badness]

And if you clip 4 ticks, net, you have 200K after 4000 trades.

It is a bargain to control that much notional value for about $5 RT. Name any other business that you can control that much for so little. Perhaps the OP needs to get "commission free" on a tightly spread stock and see how that works out.

 

[maxinger]

a tick slippage is $12.5

2 ticks round trip is $25

if you do this 4000 times it would cost you 100000

lmao, how much edge do you need to counter that in ES future trading?

Now look at the bigger pictur3.


1 round of trade generates 30 ticks profit
= 28 ticks profit after 'slippage'

day trading hypothetical case / For illustration only :
Do it 4000 times and you earn
28*4000*$12.5
= $1.4 million !!!!!

1 or 2 ticks of slippage is acceptable.


For High frequency trading, the above numbers will be different.


Occasionally, slippage could be tens of ticks.
This happens once in a few years when there is mega news/events.
Anyway, when it happens, you wouldn't be trading because
the charting software and trading platform would freeze due
to super heavy internet traffic.

 

[SimpleMeLike]

a tick slippage is $12.5

2 ticks round trip is $25

if you do this 4000 times it would cost you 100000

lmao, how much edge do you need to counter that in ES future trading?

Hello howruhowruong,

I trade ES everyday of my life, slippage is my least concern.

Real masters of the ES futures do not care about slippage and commissions.

 

[ironchef]

1 round of trade generates 30 ticks profit
= 28 ticks profit after 'slippage'
day trading hypothetical case / For illustration only :
Do it 4000 times and you earn
28*4000*$12.5
= $1.4 million !!!!!

1 or 2 ticks of slippage is acceptable.

Sounds so easy, a million here a million there!

There must be lots of ES millionaires on ET.

 

[ironchef]

And if you clip 4 ticks, net, you have 200K after 4000 trades.

It is a bargain to control that much notional value for about $5 RT. Name any other business that you can control that much for so little. Perhaps the OP needs to get "commission free" on a tightly spread stock and see how that works out.

True. I practice paper day trading stocks. I am finding it a very very tough gig.

 

[Bugsy]

a tick slippage is $12.5

2 ticks round trip is $25

if you do this 4000 times it would cost you 100000

lmao, how much edge do you need to counter that in ES future trading?

ES Futures are a bit extreme starting out. Why not start out with MES Futures (Micros) where a tick is $1.25 and a point is $5?

 

[padutrader]

Buying on the ASK and selling on the BID is NOT slippage

damn right.

hilarious the ignorance

 

[ironchef]

ES Futures are a bit extreme starting out. Why not start out with MES Futures (Micros) where a tick is $1.25 and a point is $5?

Good point.

However, if I day trade SPY, usual bid/ask of 1 tick is $0.01. Per @Robert Morse, the equivalent of slippage (500 shares) is $5 per entry and that is less than half of trading ES futures. From a percentage "overhead" point of view, quite a bit cheaper.

Anyway for scalping SPY I am entering/exiting 5-10 ticks, a 2 ticks overhead is 20-40 %. My win rate needs to be > 70% to breakeven?

It is a tough job to have such an edge for anyone starting out. OP ask a very good question.