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Bill Shumake wrote:
>
> Ryan,
> I read your post to the RT's group with great interest, as I have been
> using a method similar to your own but on a daily rather than inta-day
> time frame.
> I was suprised that you were day trading corn and wheat as I wouldn't
> have thought you could get enough movement from them to make it worth
> while, but obviously you are doing very well. What type moves do you
> look to capture?( 1cent, 2 cent, ?) and how do you determine when to
> get out? Also does slippage pose much of a problem for you and how
> much are you paying in commisions? Thanks
>
> All the Best !
> Bill Shumake
Hi Bill,
To answer your questions,
First, I don't see why Wheat and Corn can't be day traded. Even with
corn's average of 3-4 point range average over the last few months. 1
or 2 points profit is still $50-$100 per contract. Not bad for just
picking up the phone at the right time. If $50 isn't worth the time and
effort... trade 20 contracts. That's what I'm shooting for.
One thing I've noticed thus far is that even with only a 3 point overall
range in corn, the actual movement during the day is many multiples of
the range. That is, price goes up then down, up again, then down, etc.
This gives, multiple opportunities to trade the HI/LOW range during the
same day.
I've been collecting tick by tick data in corn and wheat now for about 4
months. Looking at an entire day's tick by tick movement (as opposed to
just the hi/low range figure for the day shows a lot more than what can
be determined from end of day data.
As far as what 'types of moves' I look to capture? I let the initial
market range of the first 30 - 45 minutes tell me what might be
reasonable. For example: If corn opened and then went up 2.5 points
before stalling...(very common), and I decided to short the market
there, I would usually be happy to bail with 1-2 points. 60% to 70%
reversals are common. In other words, I'm happy with 50% - 60% of the
initial major opening move. Really happy. (What about the money I
could have made over a longer period?) I don't worry about it. Its no
different in my eyes than if I hadn't traded the market at all. As the
saying goes: 'You can't lose something you never had.'
As far as you question about slippage? I suppose different brokers have
different track records. Here's my limited experience: Unless they are
VERY good, a relative, or have good analysis services, don't go with an
IB. Get as close to the pit as you can. My slippage is rarely over 1/2
point, and usually its right the numbers. I call directly to the arb
desk. One trick I learned: when placing a trade (or getting out) I tell
the person on the other end what I see on MY screen at that time. they
know I have real time data in front of me. I have them quote back WHAT
THEY SEE on their screen. Its then on tape, (theirs and mine). Seems to
keep everyone honest. Slippage fell dramatically when I started doing
this.
Next question. What I pay in commissions is between what I and my broker
have negotiated. Which is a good point to bring up.... EVERYTHING is
negotiable. One thing I would say though... If you pay over $25
rt...either negotiate or look around.
Anyway, hope this helps.
Regards,
Ryan Garrett
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