When all is said and done, I can't quite understand how one of the world's more liquid markets has a larger tick size (and therefore spread, more often than not) than similar but less liquid markets. In my perhaps limited view, it is certainly not doing retail traders any favors. And yet, I suspect that the majority of the people who voted "No" in this poll are retail traders, as I am. Go figure, eh?
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POLL: Would you like to see ES's tick size proportionate to that of SP?
- Thread starter Thunderdog
- Start date
"If you are buying on the bid and it is getting hit, odds are you are wrong on the direction anyway"
utter rubbish.
my methodology means that, on average i enter about 75% of my trades on a limit.
and it works for me.
it depends if you are trading "breakouts" vs. buying support or using a means regression method, etc.
as i said, YM is superior (unless size is an issue) the shorter the target/stop, and buying the bid, selling the ask adds MORE cost efficiency to the trade.
like i said, many traders make big $$$ by exploiting small edges. getting a good price is part of my edge.
again, depending on YOUR style, it may not work for you, but the idea that buying bid/selling ask for entries means you are wrong on entries is absurd and not supported by data
utter rubbish.
my methodology means that, on average i enter about 75% of my trades on a limit.
and it works for me.
it depends if you are trading "breakouts" vs. buying support or using a means regression method, etc.
as i said, YM is superior (unless size is an issue) the shorter the target/stop, and buying the bid, selling the ask adds MORE cost efficiency to the trade.
like i said, many traders make big $$$ by exploiting small edges. getting a good price is part of my edge.
again, depending on YOUR style, it may not work for you, but the idea that buying bid/selling ask for entries means you are wrong on entries is absurd and not supported by data
how on hell do u get around that $4 spread on spx options? don't tell me you sit there among those 100's waiting to be hit or lifted..
Quote from Pa(b)st Prime:
You're fooling yourself. Because you have ABILITY trading YM you're in turn giving the product too much credit. For starters YM's tape is largely predicated upon ES turning. If you're saying you have a "system" that quickly says "buy 37's and sell 42's" then yes perhaps YM provides you a unique setup to ES. Few folks effectively trade like that. For those who do: Trade the biggest, baddest most expensive tick you can. The Dax for instance. Commissions are a huge consideration. It's the same reason I trade SP options more than ES. Paying 4 bucks for a friggin' MINI is a gip enough without the bs tick size.
To rebut costs: If I think the market is going to quickly pop higher a couple of ES points then why buy YM and catch a 14-16pts x $5 when a corresponding ES move will be a hundred dollars?
Besides on 5-10-20 cars the incidence of partial fills is constant in YM. Don't get me wrong. I trade plenty of YM. If YM is strong to tech then I take longs in YM and short NQ on up ticks. Or ES or ER2. All depends. In that regard I actually benefit by the small tick size. But I hate it. To me any single digit dollar tick is sort of minor league.
i like it like it is. and it's one of few markets where it's not only possible to scalp all day but the opportunities to do so are relativevely easy to spot and exploit. most of all liquidity is there to make it very much worthwhile.
Quote from Thunderdog:
When all is said and done, I can't quite understand how one of the world's more liquid markets has a larger tick size (and therefore spread, more often than not) than similar but less liquid markets. In my perhaps limited view, it is certainly not doing retail traders any favors. And yet, I suspect that the majority of the people who voted "No" in this poll are retail traders, as I am. Go figure, eh?
Quote from whitster:
"If you are buying on the bid and it is getting hit, odds are you are wrong on the direction anyway"
utter rubbish.
my methodology means that, on average i enter about 75% of my trades on a limit.
and it works for me.
it depends if you are trading "breakouts" vs. buying support or using a means regression method, etc.
as i said, YM is superior (unless size is an issue) the shorter the target/stop, and buying the bid, selling the ask adds MORE cost efficiency to the trade.
like i said, many traders make big $$$ by exploiting small edges. getting a good price is part of my edge.
again, depending on YOUR style, it may not work for you, but the idea that buying bid/selling ask for entries means you are wrong on entries is absurd and not supported by data
The object is to beat the CROWD in and beat them out. How is that done more efficiently when you are waiting in line with the CROWD to do both ?
Bit, I'm talking about CME traded pit options on the SP500 futures. Not the CBOE's SPX. My fills? Suck. Riskarb gave me the best advice for options: Trade at the market and be right. I buy spreads and I'm hopefully buying it for keeps so an extra tick isn't going to kill me. Trying to leg them on ES/Globex would be a greater commission/risk/hassle. You know what they say about pissing on the wrong leg........
Quote from Bitstream:
how on hell do u get around that $4 spread on spx options? don't tell me you sit there among those 100's waiting to be hit or lifted..
"The object is to beat the CROWD in and beat them out. How is that done more efficiently when you are waiting in line with the CROWD to do both ?"
because your limit orders are generally set at key reference areas.
sometimes i set a limit order and it takes an hour or two to fill. that's fine. as long as the internals and intermarket relationships are there, i get a good price, i have a small defined risk, and my fill FREQUENTLY happens faster than if i had pressed for a market order (iow, it touches and/or goes through my price by less than 2 ticks and then reverses).
as for limit orders on exits. generally speaking, im getting out when i want to, not when the market is forcing me to.
again, it depends on your trade methodology, setups etc.
MOST of my setups are not "breakouts". i am buying and selling at key reference areas, so this allows me to set orders often hours ahead. that puts me first or near first in the queue. so, im already in with my orders AHEAD of the crowd.
the crowd is generally retail traders using squiggly lines.
i prefer to get a good price, get good trade locations, let the market come to me, be patient, and take high reward low risk trades
noted that in the current market, i am using slightly more market orders than in the previous market.
note that on the ES , if was to lord forbid trade it, and i use market orders, i am down $12.50 per contract if i get in and out with market orders.
iow, i pay the spread. i pay just over $3 per r/t. so, that's acost too.
if i buy limit and sell market or vice versa, i am splitting the spread, and breaking even on it. still gotta pay commission.
if i make the spread, then i am UP $12.50 and still profitable (just under 9.50)
for many traders, exploiting small edges is a road to longterm profitability. ceteris paribus, market orders erode that.
again, plenty can and are successful using market orders to enter. my point was that the previous statement i quoted in re: limit orders was false.
one thing i constantly see when sharing my shares realtime (in skype ) is that traders find it hard to believe i GOT filled (cause they use market orders, they are not used to getting a good price).
it's not a matter of mad skillz. it's a matter of patience. setting my order and waiting
because your limit orders are generally set at key reference areas.
sometimes i set a limit order and it takes an hour or two to fill. that's fine. as long as the internals and intermarket relationships are there, i get a good price, i have a small defined risk, and my fill FREQUENTLY happens faster than if i had pressed for a market order (iow, it touches and/or goes through my price by less than 2 ticks and then reverses).
as for limit orders on exits. generally speaking, im getting out when i want to, not when the market is forcing me to.
again, it depends on your trade methodology, setups etc.
MOST of my setups are not "breakouts". i am buying and selling at key reference areas, so this allows me to set orders often hours ahead. that puts me first or near first in the queue. so, im already in with my orders AHEAD of the crowd.
the crowd is generally retail traders using squiggly lines.
i prefer to get a good price, get good trade locations, let the market come to me, be patient, and take high reward low risk trades
noted that in the current market, i am using slightly more market orders than in the previous market.
note that on the ES , if was to lord forbid trade it, and i use market orders, i am down $12.50 per contract if i get in and out with market orders.
iow, i pay the spread. i pay just over $3 per r/t. so, that's acost too.
if i buy limit and sell market or vice versa, i am splitting the spread, and breaking even on it. still gotta pay commission.
if i make the spread, then i am UP $12.50 and still profitable (just under 9.50)
for many traders, exploiting small edges is a road to longterm profitability. ceteris paribus, market orders erode that.
again, plenty can and are successful using market orders to enter. my point was that the previous statement i quoted in re: limit orders was false.
one thing i constantly see when sharing my shares realtime (in skype ) is that traders find it hard to believe i GOT filled (cause they use market orders, they are not used to getting a good price).
it's not a matter of mad skillz. it's a matter of patience. setting my order and waiting
I appreciate the input thus far. And while I may not agree with a number of you, it has been a lively exchange. If you trade ES and have not yet voted, then please do so. I'm hoping for at least 100 votes in my poll. Thanks.