Hello

[Rocket2004 10]

:doh:Hello,

 

I am new to this forum.

 

 

I have been practice trading with Paper Money in the ThinkorSwim progam. I know this is going to turn out to be a stupid question, but please bear with me. I have traded stocks and options for about 10 years at another brokerage firm.

 

I am now learning about Emini Futures.

 

When I trade the Emini Futures on a practice session, I trade one contract with a chart set at daily, one minute. I use the TTM_Scalper and the TTM_squeeze studies. My question is: Why does this seem so easy to scalp a few ticks and show a small profit most of the time? This cannot possibly be this easy??????? Help????? Rocket.

 

I have not gone live yet, I am still practicing, but it seems too

easy…to make small profits a few times a day…

 

I have lived off the markets for the last 20 years, but this has me

baffled??

 

Please advise.

 

Richard

[TheNegotiator 13]

I suspect your sim is a fill on touch.

[djohnsonhot 10]

Sim trading, if you take any heat, is just simply not the same. Anyway, most traders including myself will then push the threshold and try then for 6 ticks and then 8. It gets to be that way. Recently, I have returned to my earlier trading plan: I am trying for at least 6 to 8 ticks on the ES and my exits are rather quicker if the price action touches a retracement against my long or short for more than so many ticks where it was points. I am also entering on tighter rules and looking for a particular set-up, called an ambush trade which is similar to an Al Brooks' pullback trade on a 5 minute chart, with three other indications of a continuation of trend or a reversal of a primary trend. If I sound confused, then I probably am as I took a couple of terrible losses last week on some whipsaw action and am re-thinking this thing.

[squishy 10]

My experience trying to trade for very small scalps is that you don't get the same fills real world as the simulator. You really should try it for yourself to see the difference, nothing teaches better than having real money on the line.

[chulaihuey 10]

Instead of using TOS's Paper Money have you tried the OnDemand function? It allows you to backtest a strategy. I am not certain, but I think Paper Money does exit on a touch of price, whereas OnDemand is more like realtime trading and requires a move thru price to trigger. That is something I have been meaning to verify, but for now its an idea worth trying.

[Tradewinds 12]

Do NOT look at your profit and loss numbers. Look at your CASH BALANCE!!! In scalping, you can show a "Profit", and actually have lost money because of trading fees. The cash balance deducts the trading fees.

 

TheNegotiator mentioned fills on touch. You have to understand what that means. Normally, for your order to fill in real trading, the price needs to "trade through" the price, not just be at that price. For example, you are long, and decide to exit the order at a profit. You enter a sell order. In TOS paper money, that sell order will fill instantly when the price is hit. In real trading, that will NOT happen. So you will need to hope the price goes higher than your target, so the order will fill, or sell at a lower price, or sell with a market order and risk slippage, that will give you less profit at a worse price. And you have very, very little time to make that decision when you are scalping. If you make the decision after the market has already show signs of turning against you, then in real trading, you would be way too late. In paper money, you could make a decision way too late, get a "touch fill", show a profit, and think you are doing just fine. When you start trading live, that behavior that you have been programed into, will be a disaster. Touch fills in paper money program you for failure. You become accustomed to trading a certain way that becomes hard wired into your brain. Then you have to unlearn it.

[jtrader88 10]

You'll need to set your profit target at least 3 to 4 ticks higher in Paper Money to cover slippage and commissions. If your strategy is still profitable, then go for it.

[djohnsonhot 10]

I think that "through the price" can be better explained. If you are closing a long position, I believe that your SELL has to reach the bid price and if you are closing a short position, your buy (to close the trade) has to hit the ASK price.

 

Sell at the bid

Buy at the ask.

 

Someone needs to verify this. I know what you are saying though, because I have seen the price action hit my exit and not fill. Therefore, we are really saying the same thing: we need our price, on a buy, to penetrate up to the BID price.

 

I use ALERTS all the time on TOS and the price will touch, but the alert will not sound (with email sent, as well) until the price achieves the bid or ask on either side (alert if at or above or at or below).....

 

DJ

[Tradewinds 12]

I think that "through the price" can be better explained. If you are closing a long position, I believe that your SELL has to reach the bid price and if you are closing a short position, your buy (to close the trade) has to hit the ASK price.

 

Sell at the bid

Buy at the ask.

 

Someone needs to verify this. I know what you are saying though, because I have seen the price action hit my exit and not fill. Therefore, we are really saying the same thing: we need our price, on a buy, to penetrate up to the BID price.

 

I use ALERTS all the time on TOS and the price will touch, but the alert will not sound (with email sent, as well) until the price achieves the bid or ask on either side (alert if at or above or at or below).....

 

DJ

 

Good point. And that point does need to be made. Technically, the price does not need to go past the order price for your order to fill. The bid and the ask can move up and down, without the price moving at all. And depending upon whether the bid and ask move up or down, your order can get filled or not, even if the price does not change.

 

Ask Definition

 

Bid Definition

 

If you use the Active Trader ladder in TOS, you can see the bid and ask shift directions, even as the price stays the same.

[$5DAW 10]

I know what you are saying though, because I have seen the price action hit my exit and not fill.

 

I'm NOT an E-mini trader, or a tick scalper for that matter. But the comments about the simulated platforms raised my brow, particularly the "if touched" fills (a lot of other good stuff too). The quote above "smells" like real live trading and I'll tell you why, order flow and the queue.

 

It's a good idea to know how the exchange (e.g. CBOT CME) processes orders in the market you're trading , many are FiFo (first in first out) but not all, some benefit larger orders. IF the market is FiFo and I place a limit order on a (target) price as prices approach that price, my order is now sitting on the bottom of the list (queue). Depending on the instrument I'm trading I may be the 20th contract (Mini Dow) in line to be filled or the 2000th (T Bonds). As djohnsonhot stated earlier watching prices trade on your target and not fill is a real dilemma, watching that target get hit 2,3 and 4 times and "burn off" a 1000 or 1500 contracts and still NOT GET FILLED, feels demoralizing. So you drag your target below the market and take profits.

 

A final comment about programed strategies. Many traders have found themselves in positions they didn't intend to be in because their stop was trailing "to close" when their target was filled. The markets move fast these days, but that target has to be "reported back" to the broker as filled before the stop is canceled. And a tight 3 to 5 tick trailing sell stop on a long position (for instance) CAN BE FILLED if prices hit your target and find enthusiastic resistance causing prices to "zip" down and trigger your stop order BEFORE the target order is verified as filled and the order to cancel the stop is sent. I'm just saying, it does happen.

[marytee 10]

In the real world (at least as I understand it), your order goes into the queue and it's executed in the order it comes in. In a real trade, you could see some slippage entering the trade versus sim where you probably don't. I used to see this all the time. Then I changed my strategy to get away from scalping where I now use limit orders (set it and "almost" forget it) at previous levels where I expect price to turn--just so I can get my order in ahead the crowd. Made a HUGE difference on fills for me.

 

The best test is to try it in a real trade. That will give you great insight to the viability of your strategy. Good luck--hope it works for you!

[Tradewinds 12]

. . I now use limit orders (set it and "almost" forget it) at previous levels where I expect price to turn--just so I can get my order in ahead the crowd. Made a HUGE difference on fills for me.

 

I think that "getting into line", and trying to be at the front of the line really does make a difference. Well, it has to.

 

The downside to having an order in to early, is that it could minimize your profit if price goes way past your target. But trying to maximize profit and trying to squeeze out every last penny has it's downside also. So there is a never ending risk/reward decision to make.