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Disco Scottie

Better for scalping: ES or YM?

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For pure scalping and smaller positions YM is better in my opinion. ES becomes better when trading higher volume or longer intraday swings. However, it all comes down to what works best with YOUR system/strategy.

Edited by Hlm

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I would say it's much easier to grab 4 ticks with the YM than 2 with the ES. Technically because price needs to trade through your bid/ask on ES you technically need three ticks in your favor to garner a two tick profit.

 

Although, I personally think trying to grab a couple ticks at a time is ridiculous unless you are a truly skilled scalper doing it hundreds of times a day.

 

:)

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It's a tough call as Hlm said b/c a part of your question is a function of the volume being traded. I would say the YM is probably 'easier' to get those ticks but you are also limited by how many contracts you can easily scalp on the YM as well. With the ES, the sky is the limit.

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I would say it's much easier to grab 4 ticks with a YM than an ES. Technically because price needs to trade through your bid/ask on ES you technically need three ticks in your favor to garner a two tick profit.

 

Although, I personally think trying to grab a couple ticks at a time is ridiculous unless you are a truly skilled scalper doing it hundreds of times a day.

 

:)

 

MrPaul brings up a completely separate discussion of the merits of scalping. Grabbing 4 ticks on the YM looks great on paper but turning that into a regularly consistent profitable trading plan is a different story.

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50 contracts for scalping would be pushing it on the YM (not saying it isn't possible). ES would be a much better instrument. Also, what is your definition of "scalping"? Is it for ticks or was that just an example?

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50 contracts for scalping would be pushing it on the YM (not saying it isn't possible). ES would be a much better instrument. Also, what is your definition of "scalping"? Is it for ticks or was that just an example?

 

Glad you brought that up, as I was going to ask what the true definition of scalping is (if there is one). Even if my profit target is 1 point, that's only 4 ticks... well, technically 5 to push through the price level. But it's still only a couple more ticks than what I originally asked about. So what's the cutoff between a scalp, and something larger?

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Sorry, should have given a reference point on size of trades... 50 contracts at a time, so it sounds like YM is no good for that volume?

I hope that is a hypothetical question. The reason you are asking this question is probably that you don't have enough experience under your belt and you are already trading 50 contracts ? Do you know that 50 contracts controls about $3 million. A 1% move, which can easily happen in less than a couple hours given today's volatility, means a $30,000 swing in your account. And you are doing this from your car with a wireless card and a laptop ?

Well, you must be a very wealthy man.

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I've been scalping both recently, and honestly I find the ES a little easier since it seems to honor s/r better. But it really comes down to what works best for you and what you consider scalping. Everyone has their own views on the topic.

 

But for the YM on scalping, I personally prefer a 243 VBC chart and a simple oscillator. Yet on the ES I use a 3 min and 15min.

 

One more thing, after I've come to realize time and time again that I tend to scalp naturally I don't think it's the way to go. I've seen others such as HLM take A LOT more profit then I do when we enter the same time, simply because I am so conservative and I want the quick points whereas he is looking for the longer trade. So a trade I get +2.00 ES he is getting +4.00 or more, and that really adds up at the end of the day. The other drawback of scalping is your entry is absolutely crucial, bad fill and your scalp can bust. I know you didn't ask that, but I thought I would throw it in anyways.

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I hope that is a hypothetical question. The reason you are asking this question is probably that you don't have enough experience under your belt and you are already trading 50 contracts ? Do you know that 50 contracts controls about $3 million. A 1% move, which can easily happen in less than a couple hours given today's volatility, means a $30,000 swing in your account. And you are doing this from your car with a wireless card and a laptop ?

Well, you must be a very wealthy man.

 

I have a few bucks. :o

 

I'm very careful about my entries, and I look for small profits so my exposure is limited. I don't randomly scalp, I watch for very specific setups which will usually give me a minimum of 2 points... but I tend to get out early, a few ticks with 50 contracts is a nice profit. I had five good entry points today with my strategy, traded four of them for 2 ticks each... so a total of 2 points on the day.

 

And I should have clarified in my intro post about the laptop in the car - I'm home for the morning session, usually until about noon. I try not to trade the lunch hour, so I'm only doing the car thing during the last couple hours. And the trades that occur during this time tend to happen when I'm parked somewhere (but I'll admit, I have done some at stoplights).

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I have a few bucks. :o

 

I'm very careful about my entries, and I look for small profits so my exposure is limited. I don't randomly scalp, I watch for very specific setups which will usually give me a minimum of 2 points... but I tend to get out early, a few ticks with 50 contracts is a nice profit. I had five good entry points today with my strategy, traded four of them for 2 ticks each... so a total of 2 points on the day.

 

And I should have clarified in my intro post about the laptop in the car - I'm home for the morning session, usually until about noon. I try not to trade the lunch hour, so I'm only doing the car thing during the last couple hours. And the trades that occur during this time tend to happen when I'm parked somewhere (but I'll admit, I have done some at stoplights).

 

RE: commissions, unless you are a local or have a membership at the exchange, or somehow have access to the extremely low commissions that these traders have, scalping becomes difficult in the long run for the retail trader. Typically, scalpers who do it for a living make hundreds of round turns a day with a hold time lasting seconds.

 

Now if this is just a hobby of yours, by all means. But watch the commissions closely, you could be spending thousands in a month.

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Bear brings up a great point - if trading many lots and/or round trips per day, leasing a seat is highly recommended as an option to keep costs down. It takes a little footwork to get it all done, but well worth it in my opinion if trying to drive down your costs.

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Another point could be the tick/point value.

 

If you are a very short term trader and you scale out or exit on a discretionary basis, then making 1 tick in the ES would mean that you are still profitable, assuming $5 commissions...

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Another point could be the tick/point value.

 

If you are a very short term trader and you scale out or exit on a discretionary basis, then making 1 tick in the ES would mean that you are still profitable, assuming $5 commissions...

 

That's assuming he never has losing trades and he occasionally has 1 tick losses. Alot of scalpers don't use stops, so if the market runs away on you....ooops.

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That's assuming he never has losing trades and he occasionally has 1 tick losses. Alot of scalpers don't use stops, so if the market runs away on you....ooops.

 

We don't have to talk about stops here, this is essential, but you have to be fast and when you see big orders comming in against you, you have to be quick and get out - even with one tick...

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I have been trading for over 15 years in futures now and there is no way to make money in the ES with just a 2-3 tick target. Comission and Slippage will take you out.

 

That is open for debate.

 

If you lease a seat (or purchase one) and get your commissions under $3 round trip and focus on the ES, I think slippage is not an issue.

 

So if going for 2-3 ticks = $25-$37.50 profit - $3 commission = $22 - $24.50 in profits each trade. Trade some decent size and all of a sudden there's a system that works. And you wouldn't need to trade 1000 contracts to hit a good income. Even so, I've been instructed by a number of brokers that you can hit the ES with 1000 contracts during regular volume times and be fine.

 

Of course, the keys are what size are your losses and how often do you take a loss. But the numbers can work if used in a robust system.

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That is open for debate.

 

If you lease a seat (or purchase one) and get your commissions under $3 round trip and focus on the ES, I think slippage is not an issue.

 

So if going for 2-3 ticks = $25-$37.50 profit - $3 commission = $22 - $24.50 in profits each trade. Trade some decent size and all of a sudden there's a system that works. And you wouldn't need to trade 1000 contracts to hit a good income. Even so, I've been instructed by a number of brokers that you can hit the ES with 1000 contracts during regular volume times and be fine.

 

Of course, the keys are what size are your losses and how often do you take a loss. But the numbers can work if used in a robust system.

 

The main problem is that you will always be last in line on your entries and exits even if you place them right away. Escpecially in the ES. Like it has been said before here the market has to actually go through your price for a fill. No matter how small your comissions are, this will take you out..trust me

 

Besides that you have to work with a stop, even a soft stop will get you killed in this market. It might work out most of the time with a soft stop but the one time will take away all your wins in one move.

 

I developed trading systems for funds which scalp the market and they play orders at the beginning of the day and pull them once the price gets close so when they need them they are first in line on the ES. I garantee you that no trading system with targets below 2points on the ES will make money on the long run (without hedging).

 

Good luck!

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Besides that you have to work with a stop, even a soft stop will get you killed in this market. It might work out most of the time with a soft stop but the one time will take away all your wins in one move.

 

I agree with you on this part. It may look good theoretically - 1000 contacts 2 ticks-1 tick or whatever, but this isn't good unless he has a near 100% accuracy rate, and nobody has that.

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The main problem is that you will always be last in line on your entries and exits even if you place them right away. Escpecially in the ES. Like it has been said before here the market has to actually go through your price for a fill. No matter how small your comissions are, this will take you out..trust me

 

Besides that you have to work with a stop, even a soft stop will get you killed in this market. It might work out most of the time with a soft stop but the one time will take away all your wins in one move.

 

I developed trading systems for funds which scalp the market and they play orders at the beginning of the day and pull them once the price gets close so when they need them they are first in line on the ES. I garantee you that no trading system with targets below 2points on the ES will make money on the long run (without hedging).

 

Good luck!

I scalp the e-minis everyday and I must correct some statements that you made above. The Globex routing algorithm is first in first out. Additionally, you can get filled on limit orders without price trading through them. As long as the bid or ask moves to your order level, you do have a chance of getting filled. I know this first hand as I experience it on a regular basis...

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I have been trading for over 15 years in futures now and there is no way to make money in the ES with just a 2-3 tick target. Comission and Slippage will take you out.

 

I beg to differ as I trade with a small group of traders everyday doing exactly what you profess to be impossible - scalping the ES for 2 ticks per trade.

 

The key is knowing when to walk away for the day. Make your income and go home...

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good point rcfran, we are not looking for homeruns, but consistently green days...this will build an account up...just look at friday morning, the bsc trouble gave you the chance to be done in 30 mins.

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