# 1 SPI Tick Per Day? Per Half Day? Per Hour?



## johnnyg (25 May 2009)

Going on from something I read in another thread, it got me thinking how simple it sounded and how pathetic (right word?) normal wages are when you compare yourself to working for 1 tick an hour ~ $25, But I'm curious as to how many people approach their futures trading this way? 

If I could make 1 tick a day - $125 a week, constantly, I'd be doing a whole lot better then what I currently am.

What about then if I tried to make 1 tick every 3 hours? - $250 a week

Then moved onto 1 tick every hour - $750 a week

You could then move onto 2 contracts and start again.

I guess that the process is the same as it is with all types of trading, you need to get plenty of screen time and practice till you find yourself an edge to where you can constantly be profitable.

The simplicity of it all just made me take a step back and realize that I still have quite a journey in front of me.

Cheers.


----------



## Mr J (26 May 2009)

It's simple if you look at it that way, but as you suggest the trouble is actually making those ticks.

As your example shows, one of the great benefits to trading is the scaling of income. I could go from 1 contract to 5 much faster (if I'm a decent trader) than the equivalent in most other professions. The SPI has a lower limit there though, if you really want to scale the ES is the place to be.


----------



## Trembling Hand (26 May 2009)

You are missing the most important bit of the equation. one of the Rs - *R*:R

To take one tic what are you going to risk?

This is why people fail at scalping. Its not a way to take 1 tick every day, hour, 30 min, whatever. Its a way to take 50 ticks a day per contract traded.

So the equation looks like this 20:50. What you are talking about looks like this 10:1


----------



## beamstas (26 May 2009)

You are assuming you will always be in the position to take one tick profit


----------



## Frank D (26 May 2009)

Mr J said:


> The SPI has a lower limit there though, if you really want to scale the ES is the place to be.




Why would the ES be the place to be to be scalping?

You have 6 less places to trade compared to the same dollar equivalent as the DOW futures.

DOW 10 points = $50
ES       1 point =   $ 50

I can trade every point in a 10-point range in the DOW, but I can only trade in 4 places in ES.

So I’m worse off trading the ES because of the spread.


----------



## johnnyg (26 May 2009)

Trembling Hand said:


> You are missing the most important bit of the equation. one of the Rs - *R*:R
> 
> To take one tic what are you going to risk?
> 
> ...




Fair point T/H, I am aware of R:R and probably should of worded it into my original post. There would be no way that id take a trade @ 10:1. With your 20:50 --> 1:2.5, is this roughly what you work with?


----------



## Timmy (26 May 2009)

Frank D said:


> Why would the ES be the place to be to be scalping?
> 
> You have 6 less places to trade compared to the same dollar equivalent as the DOW futures.
> 
> ...




Hi Frank - the ES does not trade in points, it trades in tics, so to do a more accurate comparison it would look like this:

emini Dow contract (YM) 1 point = $5
emini S&P contract (ES) 1 tic = $12.50 (all USD figures of course).

Yes the spread in the ES is wider, but not on the scale of 10:1.

Also, Mr J did say "if you really want to scale the ES is the place to be" (my underlining).  On this there can't be much argument.  The YM trades around 180,000 contracts per day, the ES trades around 2.5 million contracts per day (back of the envelope figures, but the order of magnitude difference is about correct).


----------



## Trembling Hand (26 May 2009)

johnnyg said:


> With your 20:50 --> 1:2.5, is this roughly what you work with?




Nope


----------



## Frank D (26 May 2009)

Timmy said:


> Hi Frank - the ES does not trade in points, it trades in tics, so to do a more accurate comparison it would look like this:
> 
> emini Dow contract (YM) 1 point = $5
> emini S&P contract (ES) 1 tic = $12.50 (all USD figures of course).
> ...





I know how S&P trades, because I trade both on most days.

Think about it:- you are trading same position using the same dollar 
amount on both the S&P and DOW futures.

You’re worse off trading the S&P because of the spread. Simple!!!

Over the same distance and dollar amount you have 6 less places to
enter and exit over the same $50 move, even though 1 moves $5, and 
the other moves $12.50

Spare me the comparison regarding the volume, I doubt that’s going to be a concern for the majority, considering this thread is about scalping 1 ticks.

*Your concern should be the spread, the spread and the spread.*


----------



## Timmy (26 May 2009)

Frank, I don't want to take this thread off topic, but your post was misleading.

Think about it.  A minimum price move in the YM is $5.  A minimum price move in the ES is $12.50, a 2.5:1 ratio.  You implied a 10:1 ratio, maybe you didn't mean to, but it needed correcting.  

Regarding the comparison of volumes, Mr J was clearly referring to the scalability and on this the differences between the ES and YM are chalk and cheese.  Sorry to not 'spare' you on this, but the opening post talks of scalping for a tick AND scaling, NOT JUST scalping for a tick.  Like you say, for the majority it is not a concern, but it is brought up on the opening post so needed to be corrected.


----------



## Mr J (26 May 2009)

I was talking about scaling up, not scalping. As someone who spent years sportsbetting, I am fully aware of the significance of the spread. Minimising it is obviously of great importance.

As for less moves, I've heard many traders in the US had a tough time going from fractions to decimals because there were less moves.



> considering this thread is about scalping 1 ticks.




I don't think it is restricted to that. I get the impression that Johhnyg is simply impressed with the potential earning power of trading.


----------



## beamstas (26 May 2009)

Mr J said:


> I don't think it is restricted to that. I get the impression that Johhnyg is simply impressed with the potential earning power of trading.




I don't think it is restricted to that. I get the impression that Johhnyg is simply impressed with the potential losing power of trading.


----------



## johnnyg (26 May 2009)

Hah, it goes both ways doesn't it. How many of us work a full time job that earns less then 1 tick an hour? Maybe im just a minority but I know I do. For me it just puts a different perspective on it.

Its the massive earning potential of trading that originally got me interested in it. I can see opportunity. Ive only just started my journey though.


----------



## Mr J (26 May 2009)

There is no shortage of lucrative opportunities in the biggest casino around. There must be balance though, and the potential reward is great only because the risk is great. It's not exactly charitable environment .


----------



## Frank D (26 May 2009)

Timmy said:


> A minimum price move in the YM is $5.  A minimum price move in the ES is $12.50, a 2.5:1 ratio.  You implied a 10:1 ratio, maybe you didn't mean to, but it needed correcting.




I wasn’t implying a 10:1 ratio, I was implying that over the same 
$dollar amount between the DOW futures and the S&P, I have more places 
to enter and exit positions trading the DOW than the S&P.

A $50 dollar move in both markets was used as an example, even though 
the moves per tick aren’t the same.

Therefore, the S&P has a worse spread than the DOW over the 
equivalent dollar amount, using a $50 move as an example.


*But in real-time trading, the S&P will probably remain with its constant
 spread because of the size volume, whilst the DOW spreads can often be 
greater than 1:1, which probably defeats my argument.*


----------



## Timmy (26 May 2009)

Frank D said:


> I wasn’t implying a 10:1 ratio, I was implying that over the same
> $dollar amount between the DOW futures and the S&P, I have more places
> to enter and exit positions trading the DOW than the S&P.
> 
> ...




Yeah, fair enough - I misconstrued... even though I had a full nights sleep!


----------



## Naked shorts (10 June 2009)

Mr J said:


> There is no shortage of lucrative opportunities in the biggest casino around. There must be balance though, and the potential reward is great only because the risk is great. It's not exactly charitable environment .




The market is not a casino!


----------



## Mr J (10 June 2009)

Naked shorts said:


> The market is not a casino!




It most certainly is! If you want to get technical, the technical definition of a casino is a public establishment for the purpose of gambling. The definition of gambling is placing a stake on an uncertain outcome, so yes we're gambling, and the markets are casinos. 

We don't really even need technical support here, as the results mimic those of typical casinos: most people have no idea what they're doing and leave with less than they came in. The money is redistributed in favour of the sharps and the house. The house in this case are the exchanges and brokerages, and the sharps are the profitable traders. Biggest game in town :.


----------



## jersey10 (10 June 2009)

Mr J said:


> The definition of gambling is placing a stake on an uncertain outcome, so yes we're gambling, and the markets are casinos.




If you have a properly verified backtested system with a positive expectancy isn't it more appropriate to describe the outcome as certain as opposed to uncertain?


----------



## nomore4s (10 June 2009)

jersey10 said:


> If you have a properly verified backtested system with a positive expectancy isn't it more appropriate to describe the outcome as certain as opposed to uncertain?




But the outcome of each trade is not certain. We don't know what each trade will do when we take it.

Just because a system has been backtested and has a positive expectancy it doesn't guarantee anything moving forward.


----------



## moXJO (10 June 2009)

jersey10 said:


> If you have a properly verified backtested system with a positive expectancy isn't it more appropriate to describe the outcome as certain as opposed to uncertain?




You mean like counting cards:


----------



## jersey10 (10 June 2009)

nomore4s said:


> But the outcome of each trade is not certain. We don't know what each trade will do when we take it.
> 
> Just because a system has been backtested and has a positive expectancy it doesn't guarantee anything moving forward.




Obviously each trade can do anything it likes.  My point is it is more accurate to describe a trading methodology / system with a positive expectancy as certain to make money rather than uncertain to make money.
To put it another way traders with good systems are more certain than uncertain that they are going to make money.  Semantics, but thats the mood i'm in after a conversation with someone on the weekend that 'trading is just gambling'.



moXJO said:


> You mean like counting cards:




if you're good at it, yes, exactly like counting cards


----------



## jonojpsg (10 June 2009)

nomore4s said:


> But the outcome of each trade is not certain. We don't know what each trade will do when we take it.
> 
> Just because a system has been backtested and has a positive expectancy it doesn't guarantee anything moving forward.




Agree completely nomore, if the outcome were certain one would simply put everything on a trade, compound it to the nth degree and walk away a gazillionaire


----------



## jonojpsg (10 June 2009)

jersey10 said:


> Obviously each trade can do anything it likes.  My point is it is more accurate to describe a trading methodology / system with a positive expectancy as certain to make money rather than uncertain to make money.
> To put it another way traders with good systems are more certain than uncertain that they are going to make money.  Semantics, but thats the mood i'm in after a conversation with someone on the weekend that 'trading is just gambling'.
> 
> 
> ...




Thinking more about it though jersey, I would have to agree with you here.  Not a certain outcome, but definitely on the positive side of 50% probability.  Take for instance my current trade on oil futures - I am 90% certain that over the next six months oil is going to rise, so my trades going forward are going to reflect that and I am more than less certain that I will make money on it.


----------



## nomore4s (10 June 2009)

jonojpsg said:


> Thinking more about it though jersey, I would have to agree with you here.  Not a certain outcome, but definitely on the positive side of 50% probability.  Take for instance my current trade on oil futures - I am 90% certain that over the next six months oil is going to rise, so my trades going forward are going to reflect that and I am more than less certain that I will make money on it.




There is a difference between high probability and certainty.


----------



## Naked shorts (10 June 2009)

If you have no edge over a casino, the casino always has the edge. 
You may get an edge in the market. You can also see when that edge is gone which allows you to keep profits intact.


----------



## Mr J (10 June 2009)

nomore4s said:


> But the outcome of each trade is not certain. We don't know what each trade will do when we take it.
> 
> Just because a system has been backtested and has a positive expectancy it doesn't guarantee anything moving forward.




Not only that, but the overall outcome is less than certain, because it is made up of many uncertain trades. There is never any certainty, we just minimise risk. In the case of a long and fruitful trading career, there was always a chance of failure, it just may have been very small.



> Semantics, but thats the mood i'm in after a conversation with someone on the weekend that 'trading is just gambling'.




It's not semantics. The problem wasn't with you gambling, but the other person seemingly not realising that you can gamble with +ev.



			
				Naked Shorts said:
			
		

> If you have no edge over a casino, the casino always has the edge.
> You may get an edge in the market. You can also see when that edge is gone which allows you to keep profits intact.




Your first sentence - yes? If you don't have an edge, of course the casino has the edge. They don't always have it though, as even a fool can luck into betting in a deck with a positive count. You can see your edge just as clearly counting cards. If you're good at it, your count will be quite accurate, and you will actually have a better idea of whether or not you have an edge than with trading.

I imagine the "trade" versus "gamble" debate comes from society's views on what is commonly perceived as gambling. Traders will want to think they're above that, and they'll want people to take them seriously, so it's natural that a trader will want to avoid that image and reject that they're gambling. It certainly doesn't help that the term is widely misunderstood, as many people assume to gamble means to leave it purely to chance.


----------



## nunthewiser (10 June 2009)

hmmmmmmmmmm 

intrestingto see ones thoughts on there methods 

i personally am not a gambler but hey i hold no malice or unkind words to those that are 

the more undisiplined and undirected cash in the market the better i say 


as you were


----------



## Naked shorts (10 June 2009)

Mr J said:


> I imagine the "trade" versus "gamble" debate comes from society's views on what is commonly perceived as gambling. Traders will want to think they're above that, and they'll want people to take them seriously, so it's natural that a trader will want to avoid that image and reject that they're gambling. It certainly doesn't help that the term is widely misunderstood, as many people assume to gamble means to leave it purely to chance.




I imagine the "trade" vs "gamble" debate comes from people who consistently lose to the market, give up, and to make themselves feel better they belittle the whole system and label it as gambling.


----------



## Naked shorts (10 June 2009)

nunthewiser said:


> the more undisiplined and undirected cash in the market the better i say




amen.


----------



## nunthewiser (10 June 2009)

Naked shorts said:


> amen.




that,ll be $129.95 for the use of that copyrighted catchphrase

or i,ll flip ya for it


----------



## Mr J (10 June 2009)

Naked shorts said:


> I imagine the "trade" vs "gamble" debate comes from people who consistently lose to the market, give up, and to make themselves feel better they belittle the whole system and label it as gambling.




That too, but they couldn't do that if society understood the proper definition of gambling, and how markets work. These people would be labelled as unsuccessful, rather than being able to use "it's just gambling" as an excuse. Humans will make any excuse though.



> i personally am not a gambler




Wanna bet?


----------



## beamstas (10 June 2009)

jonojpsg said:


> Thinking more about it though jersey, I would have to agree with you here.  Not a certain outcome, but definitely on the positive side of 50% probability.  Take for instance my current trade on oil futures - I am 90% certain that over the next six months oil is going to rise, so my trades going forward are going to reflect that and I am more than less certain that I will make money on it.




Why are you 90% certain oil will rise?

What happens if next week a car comes out that takes 5minutes to charge through an electric power point, and has the same speed and handling capabilites as a regular car, and only costs a third of the price of a regular car

Would oil still rise?

Im not saying an electic car like this will come out, but you shouldn't buy on an expectation. If oil was 90% certain to rise, wouldn't the price be higher? Wouldn't everyone be pouring funds into oil?


----------



## Mr J (10 June 2009)

I am 99.99999999999999999% certain that oil will rise at some point this year.


----------



## moXJO (10 June 2009)

Mr J said:


> I am 99.99999999999999999% certain that oil will rise at some point this year.




That .00000000000000001 in case the world ends


----------



## tech/a (10 June 2009)

Oil will rise at some point I'm 100% sure. It will also fall 100% sure of that as well.

*Question.*
Is it easier to anticipate a move in Ticks,Pips/Minutes/Hrs/Days/Weeks/Years?

Often asked when determining trading timeframe.
Why does T/H trade in Pips/Ticks and others Daily-Weekly or longer?
I think I know the answer (Why)---my why anyway.


----------



## Mr J (10 June 2009)

Something like that .


----------

