AN IDEA: $850 with two 1 tick trades

[ILoveSax]

My goal is to become a successful trader as quickly as possible. Since success breeds success. Once you are successful, then it becomes easier to be successful at the next step.

So, I am trying to perfect a 1 tick trade. (See profit below.) Here's my idea.

EXAMPLE: I see that the market has slowed down, and is trading in a very tight range, and gradually moving down: The action would be 1 tick up ($900.25), and then 1 tick back down ($900.00), back and forth.

This trade assumes that I have an advantage over the market, and know which way the trade direction is going. Which I may not have. LOL

Idea 1:
Create a programmed strategy to place 50 contracts, with a target of 1 tick, and a stop loss of 1 tick. If I want to go short: When the current price is on $900.00, place the trade directly above at $900.25). Benefit, if I am in the right direction, and it fills, I have saved 1 tick. I can actually make a profit, by immediately placing a buy at $900.00, when it hits or crosses. Biggest disadvantage: I may not get filled on my entry. Also, the trade may fill, and then continue on up to hit my 1 tick stop loss at 900.50.

Idea 2:
Create a programmed strategy to place 50 contracts, with a target of 1 tick, and a stop loss of 2 ticks.
Using the same strategy. Wait til the price goes to 900.25, and then immediately place the trade at 900.00. Benefit, it will most probably fill as price hits or crosses. The market is moving in the right direction. Biggest disadvantage: I have lost a 1 tick advantage, and now have to hit or cross 999.75 to make a profit. If the market continues on up, I will have a 2 tick loss atl 900.50.

I was doing this today on CL and GBPusd. Unfortunately, sometimes, I got in on the wrong side of the trade. LOL

Which do you think would be a preferable strategy, or do you have an alternate idea?

Aloha,
Randy

Profit. Take two 1 tick trades with 50 contracts (margin $20,000). 2 ticks x $12.50 x 50 contracts. Gross $1250 - $400 commission = $850 profit.

 

[pedro01]

slippage ?

 

[ILoveSax]

That's a good point. I think that #2 would have a better chance to avoid slippage.

 

[A Dashing Blade]

My goal is to become a successful trader as quickly as possible . . .

No need to read further.
Made of fail.

 

[GammaJammer]

hahah lol made of fail - like that.

Might turn into an example of 'fractal wrongness' if it goes on long enough....

 

[DeadMoney]

I have tried this strategy with the ES and here is what I came up with.

when the market is moving in your direction, you don't get filled because your using a limit order. So most of your good moves you will make nothing.

When the market does fill you, that means it's actually moving against you and will continue to move against you. This is what will happen most of the time.

Sometimes, the market will fill you then turn and go in your direction and allow you to get out with a profit, of the 3 options this one happens the least.... by far. I didn't keep statistics but it was a huge underdog to the other options.

This means that you have to place your entry points where they will dramatically increase the odds of the market filling you then changing directions. I was never able to do this, although I think it could be possible for someone to do.

 

[claudfs]

Sorry guys i'm a noob.. is 1 tick = 1 pip ??

 

[dmprest1947]

I know a way you can do this but you must trade the CL probably not more than 10 contracts at a time. You would need to take 2 ticks profit with a 4 tick stop. Put a 13 and a 21 ema on your screen using a 4 range chart. you will need a linear regression set to 4. It is a counter trend trade but works well. However, there is a better way to trade oil. send me an email at " [email protected]" and I'll send you a chart explaining it.
Dennis

 

[Pento]

1 tick stop loss? Some could suggest this is a little tight.

I can't see this system working in the long run. 1 or 2 ticks as a stop is not enough. I understand you are only looking to take a tick or two each time but as you are going against the market to get filled in the first place what's to say that the market will fill you and then turn back?

This might work for a while but then you'll get slippage. With a 1 tick take profit and 2 tick stop you need to get 2 trades right for each one wrong just to break even. It's not impossible but looks like odds against you.

Would you be inputting these orders manually or with some algo? This sort of scalping strategy will be best suited to an algo than a human trader.

Have you tried this strategy anywhere? On a simulator? I'd be interested to see how it goes.

 

[J Magoo]

My goal is to become a successful trader as quickly as possible. Since success breeds success. Once you are successful, then it becomes easier to be successful at the next step.

So, I am trying to perfect a 1 tick trade. (See profit below.) Here's my idea.

EXAMPLE: I see that the market has slowed down, and is trading in a very tight range, and gradually moving down: The action would be 1 tick up ($900.25), and then 1 tick back down ($900.00), back and forth.

This trade assumes that I have an advantage over the market, and know which way the trade direction is going. Which I may not have. LOL

Idea 1:
Create a programmed strategy to place 50 contracts, with a target of 1 tick, and a stop loss of 1 tick. If I want to go short: When the current price is on $900.00, place the trade directly above at $900.25). Benefit, if I am in the right direction, and it fills, I have saved 1 tick. I can actually make a profit, by immediately placing a buy at $900.00, when it hits or crosses. Biggest disadvantage: I may not get filled on my entry. Also, the trade may fill, and then continue on up to hit my 1 tick stop loss at 900.50.

Idea 2:
Create a programmed strategy to place 50 contracts, with a target of 1 tick, and a stop loss of 2 ticks.
Using the same strategy. Wait til the price goes to 900.25, and then immediately place the trade at 900.00. Benefit, it will most probably fill as price hits or crosses. The market is moving in the right direction. Biggest disadvantage: I have lost a 1 tick advantage, and now have to hit or cross 999.75 to make a profit. If the market continues on up, I will have a 2 tick loss atl 900.50.

I was doing this today on CL and GBPusd. Unfortunately, sometimes, I got in on the wrong side of the trade. LOL

Which do you think would be a preferable strategy, or do you have an alternate idea?

Aloha,
Randy

Profit. Take two 1 tick trades with 50 contracts (margin $20,000). 2 ticks x $12.50 x 50 contracts. Gross $1250 - $400 commission = $850 profit.

This doesn't work, for you to get filled on a profit, you have cue at that price. However, a stop is filled as soon as anything trades at that price.

Randy, trading is probably the hardest job in the world. If ideas like this worked, everyone would be a trader because it would be easy.

Keep at it, im sure you will come up with something better adter a few more months of work

 

[cm-phil]

In theory this sounds like it would work. In practice this sounds like it would not...

 

[white_goodman]

there is absolutely zero chance of this working, say you do get filled on the 50 and your not hitting market, all it takes is someone to print a 1 lot into the next price and you will be stopped out, and most likely someone will as theirs a reason your 50 is getting filled.

You would probably blow up $100k in the first week