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CFD/Depth and sales platform, help wanted.

  #10 (permalink)

Elite_Member
Wiltshire, United Kingdom
 
Trading Experience: Beginner
Platform: Jigsaw daytradr
Favorite Futures: US Equity Index Futures
 
matthew28's Avatar
 
Posts: 699 since Sep 2013
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With futures markets you pay commission on every trade however you enter. With a futures platform if scalping you can try to buy the bid instead of hitting the offer with a market order. For crude oil the spread is usually 1 tick, which is $10 on one contract and an easily available commission of $5 or less per contract. Therefore one could get in on a trade paying only half a tick in commission and also entering on the favourable side of the spread for a good proportion of trades with limit exit orders working in the market.

From Lemons' Oanda example he gives the West Texas Oil spread as 7 ticks. There is a thread in Elite Trading Journals called the Scalper's Journey where people talked about taking 5x5 trades, ie banging out 5 tick scalps on five lots ($250). They were taking profit at five ticks whereas with a seven tick spread you wouldn't even be at break even on the trade.

Scalping is very difficult for most people to do consistently well and beat their costs or not have lots of small winning days punctuated by occasional much larger losing days which makes their overall expectancy negative. Trying to scalp on a platform where the broker earns their money from the spread would make it much harder still.

Trading, ideally structured, is a vehicle for expanding consciousness, not damaging it. - Brett Steenbarger
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