Why are Futures and Forex more popular than stocks for short-term trading?

[volpunter]

exactly, aggregate execution costs are not complex to estimate/compute, but they are not trivial either because various factors flow into the calculation, such as min tick size. Its not all number of contracts/shares on either side...

You're being silly. Have you actually traded ES for a significant amount of time? I've had LMT orders rest of the bid for minutes and then price move away from me, trading SPY you might take the 1 cent loss by hitting it with MKT but that is guaranteed execution. Large min. ticks take money out of my pocket.

 

[volpunter]

So, what point are you actually trying to make? It still escapes not just me apparently.

As I stated earlier in this thread I only trade the 6E. To answer your question; no I have not traded the ES at all. Never claimed I have. I used it as an example of a market with large size in the order book.

I am having difficulty understanding what you are arguing. You say you have missed trades using limit orders and perfer trading the SPY with market orders? In what way does that have anything to do with what I posted? Doesn't it sort of confirm my arguement that it is often difficult to get filled with a limit orders in thick markets?

 

[wartrace]

So, what point are you actually trying to make? It still escapes not just me apparently.

I'll type slow for you. It is more difficult to get filled using a limit order in a market with large size (1000+ contracts) at each level in the book. I use the term "Thick" for markets like this as opposed to "thin" markets with 20 to 30 contracts.

My comment in post #42 "Yep; thicker markets make limit orders less likely to get filled." prompted you to call me a douche. It started this whole thread drift.

Either you are saying it is easier to be filled with a limit order at the back of a 1000 contract que while price is moving away from you or you just like to argue.

Just because YOU haven't heard the term "thick markets" doesn't mean it is improper termonology. You still haven't provided what you feel is the correct term.

 

[volpunter]

And I told you already that this is not a rule by any means, certainly not the norm. If a single contract represents only a small amount of notional then 1000 contracts may mean nothing. Even 100,000 contracts may mean nothing. It does not depend on the number of contracts, it depends on the aggregate (or best bid offer) notional value relative to the average daily turn-over in terms of xyz-currency denominated notional. Which part is so hard to understand, I am happy to further clarify but where are you stuck with?

The much more interesting question should be "what gets you away with a lower cost of execution, a limit or market order". Answer, it depends (on many variables)

I'll type slow for you. It is more difficult to get filled using a limit order in a market with large size (1000+ contracts) at each level in the book. I use the term "Thick" for markets like this as opposed to "thin" markets with 20 to 30 contracts.

My comment in post #42 "Yep; thicker markets make limit orders less likely to get filled." prompted you to call me a douche. It started this whole thread drift.

Either you are saying it is easier to be filled with a limit order at the back of a 1000 contract que while price is moving away from you or you just like to argue.

 

[wartrace]

Sorry, yes. I misconstrued your previous reply as sarcasm.

 

[wartrace]

And I told you already that this is not a rule by any means, certainly not the norm. If a single contract represents only a small amount of notional then 1000 contracts may mean nothing. Even 100,000 contracts may mean nothing. It does not depend on the number of contracts, it depends on the aggregate (or best bid offer) notional value relative to the average daily turn-over in terms of xyz-currency denominated notional. Which part is so hard to understand, I am happy to further clarify but where are you stuck with?

The much more interesting question should be "what gets you away with a lower cost of execution, a limit or market order". Answer, it depends (on many variables)

It is hard to understand why you would post that bullshit in a thread asking about short term trading. Clarify that.

It is hard to understand why you can object to my use of the term "thick market" yet can't tell us all what the "proper terminology" is.

It's not hard to understand why other posters have called you a basket case.

 

[wzero]

Same winners vs losers meaning nothing until your win % is ok!
If you target a 300k win and 300 stop lose, you may have 1000 straight losers before one win. And more important thing is, after 1000 losers you may already lose all you funds!

You have to obviously see what there average win/loss ratio is. If they average lets say in CL 10 tick winners but their losers are 100 ticks, or even worse they are one of these martingale types who average down then yes, it will lead to ruin. Look at that clown who traded Russell futures in that chat room he ran. Forgot his name. It's on here. He had like 200 straight winning days of like 200-600 dollar winning days. Then lost 300k in one day.

Win % means nothing until you look at average winners vs average losers.

Leverage for some who can manage it is a great thing to have in your arsenal. For those who don't have a clue on risk management it's an obvious disaster.

 

[wzero]

It's more likely the trade is on the wrong side of direction at the moment the LMT is get filled on a thick market than thin market.

 

[volpunter]

Classic thread derailment by know-nothings. Glad I anticipated where this was going...

 

[BearRunner]

Is there a tendency among short-term traders to prefer leverage? Why the preference for leverage given the risk of financial ruin is much higher?

Greed.

Your looking at it from a point of understanding the downside risk also. Your already ahead of 80% of people that get into trading who think it might be easy to make a quick couple of $1000 a day as a hobby. If they think like this then from their view point, it can only be better for them if a broker will give them 50:1, 100:1, 400:1 leverage on their deposit so they can achieve their goals of making millions a year quicker and they will be drawn towards markets that provide the leverage. What ever could go wrong for them, after all, trading is easy... Right.