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

[johnnyg]

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]

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]

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]

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

 

[Frank D]

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]

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

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]

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.

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]

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

Nope

 

[Frank D]

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.

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]

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]

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]

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]

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]

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]

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]

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.

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

 

[Naked shorts]

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]

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]

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]

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.