Utilizing a mid-frequency black box

P

porton83

Imagine that you have a black box that can predict whether an equity will be binarily up or down in the next three minutes with a 53% accuracy.

Given that you will be making many trades with high leverage at the three minute level the bid/ask spread will likely nail you if you only do market orders because the movement on this time window will be so small. What would be the best overall strategy to utilize this black box while not getting killed by slippage/spread and broker fees?

Is it even possible?
 
You would need to adjust wich market is worth and size =)
In example, e-mini would be ok (cheap round trip, high contract size).On the other hand If you'd like to trade micro-euro, probably you would need to increase number of contracts.
 
porton83 said:
Imagine that you have a black box that can predict whether an equity will be binarily up or down in the next three minutes with a 53% accuracy.

Given that you will be making many trades with high leverage at the three minute level the bid/ask spread will likely nail you if you only do market orders because the movement on this time window will be so small. What would be the best overall strategy to utilize this black box while not getting killed by slippage/spread and broker fees?

Is it even possible?
More...

The probability of profit means nothing.

You could be right 90% of the time and still have a net losing strategy if your losers are 10x greater.
 
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