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where to , to learn how to scalp the ES ?


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where to , to learn how to scalp the ES ?

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  #11 (permalink)
Los Angeles, California
 
 
Posts: 24 since Mar 2017
Thanks: 4 given, 5 received


iantg View Post
Like others have mentioned... This route will be hard for you.

There is right and wrong way to do this, or put another way... an easy way and a very hard way to consistently get a few ticks profit on the ES.

If you want to be successful with the ES aiming for just a few ticks of profit then you are essentially entering the arms race with the HF traders. And that is okay, there is a right way to play in this space... You will need to be an algorithmic trader and take advantage of the spread on entries and exits alike using only passive limit orders and your execution speed will need to be very quick.

I did some analysis on how quickly price levels were clearing a little while back but I think this will give you some perspective on what you are up against. If you are targeting 2-3 ticks, you will need to be in and out in 1 to 2 seconds in order to not end up going for a ride 3-5 ticks the opposite way. To do this effectively and use the spread in your favor you will need queue optimization, and an algorythm to pull the trigger only using passive limit orders on every entry and every exit. You can have the occasional emergency exit that crosses the spread, but this won't get hit too often if you know how to use it. These are the tools of HF traders, and wanna be HF traders like me. . There is a play book to this that is fairly well known among these types of circles, but for anyone else trying to profit in the ES on just a few ticks.... most of this is going to sound like Charlie Brown's teachers.... Unfortunately I think you will have a difficult time if you don't use this type of tool set, and it is not very well known or discussed.

There are plenty of other profitable ways to trade the ES, especially for discretionary retail traders, but these all involve using larger targets. This is due the fact that you will not be competitive in a speed race at all in this market. So the few ticks you pick up will be across the spread, late on entries and late on exits every time. And I think you will struggle to find an edge that overcome these factors. So it would be better IMO to target 5,10,15,20 ticks on the ES if you are discretionary / retail.

Consider the following:

1. Based on my analysis below you will see 50% to 75% of the price levels get cleared in 1 to 2 seconds.
2. Unless you are co-locating and using an algorythm that is very optimized you will typically be clicking to trade from home and hitting 1- 2 seconds just to click, submit your order, send your order over the internet, touch your data feed, go to your broker, then go to the exchange.
3. Adverse selection will come into play in a big way considering points 1 and 2.
4. Depending on if you submit a profit target / stop loss with your order or if you try to pull the trigger on your exit yourself you may see additional delays that can impact your P&L.




Best of luck!

Ian



Hey iantg. Is there anywhere that you have shared some of your methods and strategies for trading? I understand you're trading with algorithms? All my trading is discretionary, although I'd like to find a platform where I could build various strategies and actually test them. I tried previously with NinjaTrader, but the platform seemed buggy at the time giving mixed data.

Best

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  #12 (permalink)
charlotte nc
 
Experience: Master
Platform: ninjatrader
Broker: NinjaTrader
Trading: Emini (ES, YM, NQ, ect.)
 
Posts: 393 since Jan 2015
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Hi miktrading,

I have a trading journal on here that covers quite a bit of different ideas I have developed over the years.


I haven't updated it much since I started pursuing a more HF route.... mostly due to the fact that very few traders on this site would find this useful / interesting, or in any way transferable to discretionary, etc. If there is an apatite for insight into that world, I may update my journal and share some things. I just know that most traders, even algo only traders approach trading from a completely different mindset. The world of HF is fascinating in it's own way, but the strategy aspect is completely different from anything else out there used by most traders. I think it all comes down to the fact that the edges derived from HF can not be transferred in any way into the tool set of discretionary traders. Frankly a lot of it can't even be transferred to algo traders using retail level platforms because of the speed disadvantage. But if there is anything you or others would like to learn, I would be more than willing to share.

Thanks,

Ian





miktrading View Post
Hey iantg. Is there anywhere that you have shared some of your methods and strategies for trading? I understand you're trading with algorithms? All my trading is discretionary, although I'd like to find a platform where I could build various strategies and actually test them. I tried previously with NinjaTrader, but the platform seemed buggy at the time giving mixed data.

Best


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  #13 (permalink)
Los Angeles, United States
 
 
Posts: 6 since Jun 2017
Thanks: 0 given, 1 received


There are some great videos on YouTube. PM me if you are still interested I will send you one of the newer and relevant ones!

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  #14 (permalink)
washington, DC
 
 
Posts: 1 since Jul 2019
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rintin2x View Post
Another thing to think about, please correct me if im wrong here. I did my last year tax, statement showed me way more than what I have in my account, I truely believe thats because they tax on gross, not net. So for example you trade ES, 2 tick=$25, lets just say total fee=$5, than on top of that IRS tax=$25*15%(just guessing)=$3.75, your total net=$16.25....just 65%. I can see itís worth if you trade big and have big winning ratio, but weíre just small retails.

Now looking at the losers: 2 tick loss + fees = $30, granted not taxable, you earn $16.25 vs loss $30.

That being said, if youíre still set to just really quick scalp, trade only first and last 10 minutes, each swing for sure can give you 2 ticks easily on momentum move....thatís my secret cheat cheat sauce . Good luck.

Edit: Nie Iím even trying to change for larger target because itís not favorable for small retail.


So basically if you make $25.00 with two ticks, your net minus commission from the trader is let's say 20, more or less, but the federal taxes are calculated on the $25 not on the $20? You know that for a fact?

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July 30, 2019


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