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The S+P's are a rough market to trade for sure not just because of way it
moves, but also because of surprise moves like the one the other day when
the Fed gave their annoucements. (seemed to move more than any other market
and faster too). Higher than average slippage seems to take a it's toll
more often in this market than in any other regular day sessions futures
market. Robert's frustration is I'm sure felt by many S+P traders. But
should this discourage day trading in futures? There are other futures
markets that you can day trade. How does slippage in the Dow futures
compare to S+P? The two markets move together for the most part. I know
there are people on this list that trade the Dow yet I NEVER see any
complaints about slippage or anything else. When the Fed made their
surprise announcement the S+P moved roughly a whopping 40 points in 5
minutes or $10,000/contract while the Dow moved from 8100 to roughly 8450
that's only $3,500/contract. Bonds fell a little and currencies didn't do
anything THAT notable. Thus, a short in the Dow could have sustained a
surprise move more than the S+P trader while Bonds and Currencies would have
been safe.
So I would say that while the S+P may rape you more than you care to be,
there are other futures markets out there (several) that you can trade on a
daily basis that don't have the kind of problems the S+P does yet can give
you good daily income. I would submit that all the major currencies have at
least 2 good swings during the day -- certainly as many as the bond market.
These markets are extremely liquid and will give you the kind of hassle free
fills you would find in Stocks -- or close to it. I would even say that
you can scalp points out of Cattle, Hogs and PB (with 1-2 ticks slippage in
LC, FC and LH -- PB can be rough sometimes) each day. The S+P is in a class
by itself when it comes to tradeable swings though but that's why there so
much slipage -- the world wants to trade a market that a handful of people
control entry into and they make you pay.
Stocks are attractive because there's so many liquid markets available and
if you can trade futures succesfully (even moderately) (i.e. S+P) you should
be able to trade a market like DELL or INTC or MSFT or LU well using just
Level 1 information. But I would make certain that the reason why a felt I
wanted to switch was to reduce slippage and not some other more fundamental
trading reason. I would ask myself if faster execution is really going to
improve my bottom line.
OEX stock options can move just as fast as the S+P and slippage can be
brutal too.
Just a thought.
Brian.
-----Original Message-----
From: Robert W Cummings [mailto:robertwc@xxxxxxxxxxxxxxxxxx]
Sent: Saturday, October 31, 1998 6:53 PM
To: Jwtrader@xxxxxxx
Cc: Omega-list@xxxxxxxxxx
Subject: Re: Trading Level 2 using THE EXECUTIONER
Jwtrader you mention the only need for level 2 is the executions
capabilities. I was thinking the same if with level 1 you get the best
representative bid, ask and you can't take advantage of the MM's because
you can't believe them. Then why not just cut through the chase ignore them
and just trade as they are just an distraction. I was under the impression
you could get instant execution with level 1 as well and I've seen 7 dollar
commission per trade. So am I dreaming here are can you get just as good
executions and lower commissions by not using level 2 and just use level 1
to day trade?
Robert
Jwtrader@xxxxxxx wrote:
>it. Personally, with few exceptions, I have absolutely no use for Level II
>quotes, but the executional capabilities of Level II are imperative for
>daytrading.
> The down side of Level 2 for me is the higher commission of $20 vs $10
>per trade I could get elsewhere. In addition you will have about $350/ mth
>quote and software fees, but you get that free if you do 50 or more
trades/mth
>with THE EXECUTIONER. I get it for "free", but it's not really free to me
>'cos I feel I am paying $500 or more in higher commissions than if I do it
>elsewhere. Another bad thing about Level 2 trading for me is that it
force me
>to adjust my trading forcasting down to 1 day and I am more comfortable in
the
>1 to 5 week range. Linda Rashke burst my bubble when she said "you can't
get
>rich short-term trading". I am still trying to prove her wrong.
> Good luck. hope this help.
>
>PS:
> Does anybody on this list know if it's possible to feed this realtime
>quote feed I get thru the Internet with THE EXECUTIONER to TS 4.0 ??? It
>uses the SP Comstock data feed thru Townsend Analytical, i think.
>
>
>>Date: Thu, 29 Oct 1998 18:24:02 -0600
>>From: Robert W Cummings <robertwc@xxxxxxxxxxxxxxxxxx>
>>To: Omega-list@xxxxxxxxxx
>>Subject: Trading Level 2
>>Message-Id: <3.0.5.32.19981029182402.007dd3f0@xxxxxxxxxxxxxxxxxx>
>>Content-Type: text/plain; charset="us-ascii"
>
>>Trading level 2 is the advantage trading within the spread offered by the
>>MM? Is it the fact that you can see all the representative bids and offers
>>from the MM and from that you can get an idea of the inter strength of a
>>stock for the short term. Trying to draw some conclusions on why this
could
>>would be easier than trading commodities. One big advantage is the 2 to 7
>>second fills. This subject has been here before but for those who are
>>actually doing it can you post some advantages and disadvantages in
>>relation to trading futures. Seems like there are a lot of people willing
>>to give you an education on this subject for a fee. So much hype trying to
>>get through all the BS is a project of its own. I need a computer e mail
>>device that can detect a lie when its written to me. Maybe a picture of a
>>nose that would grow has the script continued. Any help would appreciated
>>thanks, I'm closer than I was about a decision regarding this.
>
>
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