Hey Guys,
I am very interested in scalping as a day trader but I got some questions.
I hear scalping is very good on the S&P 500 as there is a lot of volatility which is especially good. I hear that scalpers want to make small profits but hundreds of trades a day. They are looking to make 1 or 2 tick profits on every share and no more than 15 ticks. I have difficulty understanding this when applying it to the Emini. I mean 1 tick is the minimum wage you can make which is $0.0001 cent, this would work in penny stocks. But I can't see how 1 tick would be profitable on the Emini. The S&P 500 are not penny stocks. Stocks can cost from the low dollar up to the high dollars. As the emini are futures contracts they are only margin based and have margin calls. Let's say you wanted to make a $10 profit on every trade after commissions. And wanted to go for a 1 tick profit per share. Then because of the share being at least 6 dollars or more you would need to buy at least 200,000 shares and sell each share at 1 tick making you a $20 profit minus $5 each way for the buy and sell commission. Now even with a margin the actual cost of the share if say it was $6 a share would be a crazy $1,200,000, With the margin probably 5 or 10 percent of that you would need to deposit into your margin account. I just don't see people that interested to scalp the Emini for 1 or tick or even 15 tick.
Now unless I have got this all wrong, can someone please give me some insight to this and tell me your views.
I read so many sites on scalping the emini and just don't know what to make of it based on my views above?
Any help much appreciated
I am very interested in scalping as a day trader but I got some questions.
I hear scalping is very good on the S&P 500 as there is a lot of volatility which is especially good. I hear that scalpers want to make small profits but hundreds of trades a day. They are looking to make 1 or 2 tick profits on every share and no more than 15 ticks. I have difficulty understanding this when applying it to the Emini. I mean 1 tick is the minimum wage you can make which is $0.0001 cent, this would work in penny stocks. But I can't see how 1 tick would be profitable on the Emini. The S&P 500 are not penny stocks. Stocks can cost from the low dollar up to the high dollars. As the emini are futures contracts they are only margin based and have margin calls. Let's say you wanted to make a $10 profit on every trade after commissions. And wanted to go for a 1 tick profit per share. Then because of the share being at least 6 dollars or more you would need to buy at least 200,000 shares and sell each share at 1 tick making you a $20 profit minus $5 each way for the buy and sell commission. Now even with a margin the actual cost of the share if say it was $6 a share would be a crazy $1,200,000, With the margin probably 5 or 10 percent of that you would need to deposit into your margin account. I just don't see people that interested to scalp the Emini for 1 or tick or even 15 tick.
Now unless I have got this all wrong, can someone please give me some insight to this and tell me your views.
I read so many sites on scalping the emini and just don't know what to make of it based on my views above?
Any help much appreciated
