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Can Day Trading be profitable for retail?

  #43 (permalink)

edison new jersey
Trading Experience: None
Platform: motivewave
Favorite Futures: ES
Posts: 69 since Nov 2016
Thanks: 45 given, 17 received

Thankyou Iang for sharing the simulation result. I will definitely read your journal. I did some basic math with your results and the below is my observation:

1. You have 3000 trades in the week with profit of $18000.
2. With round trip commission of $4 it will cost $12000 for commission. If we assume $1 round trip (which is quite unrealistic) then it is $3000.
3. With 2 ticks of slippage per trade it comes to $25 * 3000= $75,000. if we assume 1 tick slippage per trade then it is $ 37,500.
4. That means $40,000 to $78,000 could be lost to slippage and commission alone.

With those numbers your strategy is not profitable.

How do i arrive at 2 ticks of slippage? It's my personal experience trading strategy live and also the number given by likes of kevin davey. This is what i saw. My entries were limit orders and exits market orders. My strategy converted the entry limit order to a market if it was not filled within 5 seconds of price crossing it. All exits were naturally market orders. My observation was a minimum of 2 tick slippage in every trade in es.
You have to win at least 3 ticks per trade to stay profitable overall in the retail world.

Last edited by jefforey; February 13th, 2018 at 10:57 AM.
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