Tick trading

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what about the spreads and commissions though ?
 
Lorentzos Roussos #:
what about the spreads and commissions though ?
Enough momentum will overcome those
 
Jasper Tidigu #:
Enough momentum will overcome those
You will have hundreds of orders in a few minutes. How do you sustain margin requirements over a time, let's say 1 hour?

Every tick has a bid and an ask price, which of them is for long and which is for short to be changed?

You know a tick is generated whenever there is a change, right?

Take a look at the hour tick volume, how often will there be a position?
 
Jasper Tidigu #:
30 a minute..i expect a profit in less than 10 minutes so thats 300 positions and the deeper i go the closer i reach a profit because the lot sizes get more potent...now that that concern is taken care of..anyone know a good ea for this
Sorry, no. There are way to many questions unanswered still.

TA:

What is significant ASK or BID of tick?
Where is the SL going?
What's the TP or TP Strategy?

How to deal with freeze and stop zone?

MM:
Where is the volume cap? IE: 300 positions with 0.01 Lot each on a 1:30 Leverage would accumulate to about 10k margin requirements.

What's the percentage risk? (Where do the SLs go?)

TM:
What symbols?
What times/sessions (L/NY/SY)

Overall thoughts:
Execution speeds will be a concern here, what about slippage, deviation, requotes? This system is screaming for requotes.

How do you factory in trading costs? Commission or Spread.

What about News events? Exclude or trade?
How to deal with swaps? Avoid or ignore?

What are the main goals for overnight? (Sessions, Times)

And some hints, for what needs to be considered for ticks:

What kind of tick update do you want to consider in the first place? Only full updates IE when both ASK and BID change, or ... (TA)

I think you should answer these outlined questions and I am sure there will be more to cover once you have some details for these.


EDIT:
How do you come up with 30 positions a minute? If I look at tick volume, that's really higher then just 30 ticks per minute.
 
Dominik Christian Egert #:
Sorry, no. There are way to many questions unanswered still.

TA:

What is significant ASK or BID of tick?
Where is the SL going?
What's the TP or TP Strategy?

How to deal with freeze and stop zone?

MM:
Where is the volume cap? IE: 300 positions with 0.01 Lot each on a 1:30 Leverage would accumulate to about 10k margin requirements.

What's the percentage risk? (Where do the SLs go?)

TM:
What symbols?
What times/sessions (L/NY/SY)

Overall thoughts:
Execution speeds will be a concern here, what about slippage, deviation, requotes? This system is screaming for requotes.

How do you factory in trading costs? Commission or Spread.

What about News events? Exclude or trade?
How to deal with swaps? Avoid or ignore?

What are the main goals for overnight? (Sessions, Times)

And some hints, for what needs to be considered for ticks:

What kind of tick update do you want to consider in the first place? Only full updates IE when both ASK and BID change, or ... (TA)

I think you should answer these outlined questions and I am sure there will be more to cover once you have some details for these.


EDIT:
How do you come up with 30 positions a minute? If I look at tick volume, that's really higher then just 30 ticks per minute.
Sk is significant,that being said the system works on upward or downward tick on a symbol that has fixed spreads so its really not a concern

TP or SL is taken on a cycle of a string of positions in $ not set at every position

Your margin requirement dont account for hedging...from what iv seen,for example if you put in 1000 positions 400 are bound to be sells and 600 are bound to be buy if the market is going up so essentially youre in the market at 200 of whatever lot size you use,which is wherenyou get the profit and the cancelation of all those margins too

Trades whenever the market is open..all time zones as its really all about movement news is of little  importance

Ingnore swaps
 
Jasper Tidigu #:
Sk is significant,that being said the system works on upward or downward tick on a symbol that has fixed spreads so its really not a concern

TP or SL is taken on a cycle of a string of positions in $ not set at every position

Your margin requirement dont account for hedging...from what iv seen,for example if you put in 1000 positions 400 are bound to be sells and 600 are bound to be buy if the market is going up so essentially youre in the market at 200 of whatever lot size you use,which is wherenyou get the profit and the cancelation of all those margins too

Trades whenever the market is open..all time zones as its really all about movement news is of little  importance

Ingnore swaps
OK.

You'll be blown off market at night. Spread widens.

Any broker offering fixed spreads have mostly much larger spreads than floating spread brokers. Also you have very limited broker selection.

As far as I know, no ECN account has fixed spreads. But for such scalping you for sure want only ECN accounts. Else you will have real trouble with execution.

Margin does not always cancel out. There are brokers which will keep the margin running for every position.

Hedging on same symbol will blow your profits out the window. Example:

200 long positions. 400 short positions. - spread: EURUSD 7 points:

7 * 600 = 4200 points of spread paid. 4200 / 200 profit positions = 210 points per position.

This means every position you are net gaining profit from must at least have 210 points of profit. That is just to go break even... Nothing on the account for you, only your broker made money.

And, btw, with such a small moving strategy, a move of 210 points is huge. - if you have an ATR of EURUSD around 30, that would mean, you need at least!!! 7 candles in your direction.

You will not have such moves very often. Especially, you need to consider these candles need to stack up each other as well.

Let's say, you have 200 open positions at 2 lot total, because the other cancel each other out. You would face a margin of (Leverage 1:100) 2000 $. You might need to have around 3000$ on the account, round about.

You will get about 420$ profit from 210 points. But only if these 210 points add on top of your break even point.

So you would need to have a total of 420 points into profit for all your positions. And since they do not open all at the same price, but with a change in tick, your worst scenario might look something like this:


First position opens at $1.00000. Let's be generous and say market makes following move: 2 down 1 up until it reaches $0.99800.

At this point you will have 300 positions, none closed.

Now we let the market move up. 2 up, 1 down until we reach 1.00000$ again.

Now you have 600 positions open. You are in with 300 short and 300 long. - you are essentially screwed now. Your account equity is down 4200 points for spread of 7 points.

But no matter which direction you go, the positions are all hedged, you will not profit from any move.

On average, market oscillates, so this scenario happening is quite expectable.

You are engaging a gambling game and you will blow your account with this strategy.

That is my personal opinion on this idea.

EDIT:

In conclusion, making money on trading is not about removing risk, it's about controlling risk, and statistical outcome in the long term.

Making money involves taking risks and being persistent.

Any system that tries to remove the risk is set up to fail. Because the focus is wrong.


 
Dominik Christian Egert #:
OK.

You'll be blown off market at night. Spread widens.

Any broker offering fixed spreads have mostly much larger spreads than floating spread brokers. Also you have very limited broker selection.

As far as I know, no ECN account has fixed spreads. But for such scalping you for sure want only ECN accounts. Else you will have real trouble with execution.

Margin does not always cancel out. There are brokers which will keep the margin running for every position.

Hedging on same symbol will blow your profits out the window. Example:

200 long positions. 400 short positions. - spread: EURUSD 7 points:

7 * 600 = 4200 points of spread paid. 4200 / 200 profit positions = 210 points per position.

This means every position you are net gaining profit from must at least have 210 points of profit. That is just to go break even... Nothing on the account for you, only your broker made money.

And, btw, with such a small moving strategy, a move of 210 points is huge. - if you have an ATR of EURUSD around 30, that would mean, you need at least!!! 7 candles in your direction.

You will not have such moves very often. Especially, you need to consider these candles need to stack up each other as well.

Let's say, you have 200 open positions at 2 lot total, because the other cancel each other out. You would face a margin of (Leverage 1:100) 2000 $. You might need to have around 3000$ on the account, round about.

You will get about 420$ profit from 210 points. But only if these 210 points add on top of your break even point.

So you would need to have a total of 420 points into profit for all your positions. And since they do not open all at the same price, but with a change in tick, your worst scenario might look something like this:


First position opens at $1.00000. Let's be generous and say market makes following move: 2 down 1 up until it reaches $0.99800.

At this point you will have 300 positions, none closed.

Now we let the market move up. 2 up, 1 down until we reach 1.00000$ again.

Now you have 600 positions open. You are in with 300 short and 300 long. - you are essentially screwed now. Your account equity is down 4200 points for spread of 7 points.

But no matter which direction you go, the positions are all hedged, you will not profit from any move.

On average, market oscillates, so this scenario happening is quite expectable.

You are engaging a gambling game and you will blow your account with this strategy.

That is my personal opinion on this idea.
Most of the limitations you mentioned are totally covered by the choice in broker and symbol im implementing on...not at liberty to say which one but the only limitation you you mentioned that is relevant is having a tonne of positions and a tonne of hedge...600 on both sides..thats a lot of margin to eat il concede but it can be resolved if the 601th trade is a sell,essentially youre now cutting down that loss and not hedging and if you have even net 20 of those with a modest TP thats not too greedy you can chew into the spread and get your TP
 
Jasper Tidigu #:
Most of the limitations you mentioned are totally covered by the choice in broker and symbol im implementing on...not at liberty to say which one but the only limitation you you mentioned that is relevant is having a tonne of positions and a tonne of hedge...600 on both sides..thats a lot of margin to eat il concede but it can be resolved if the 601th trade is a sell,essentially youre now cutting down that loss and not hedging and if you have even net 20 of those with a modest TP thats not too greedy you can chew into the spread and get your TP
How?

Please provide a valid calculation for such a scenario.

I am very confident, you are mistaking something here.

Please reconsider your idea, proof it to yourself.

I myself once thought crypto exchange arbitrage would be very lucrative. After 2 years of work and running the system, it gave 500$ gross a month for staking 50k$...

It looked good, but in the end, it wasn't.

And I see similar issues with your strategy, as it is right now. You must address the issues.

EDIT:

I am not typing this to proof you wrong, but to widen your point of view, from the experience I made myself.

Maybe someone else could confirm my statements as well, or ha e some other concerns to mention.

Or maybe some ideas on how to overcome the challenges, your "system" is bringing to the table.
 
Jasper Tidigu #:
Most of the limitations you mentioned are totally covered by the choice in broker and symbol im implementing on...not at liberty to say which one but the only limitation you you mentioned that is relevant is having a tonne of positions and a tonne of hedge...600 on both sides..thats a lot of margin to eat il concede but it can be resolved if the 601th trade is a sell,essentially youre now cutting down that loss and not hedging and if you have even net 20 of those with a modest TP thats not too greedy you can chew into the spread and get your TP
Maybe you could outline the order flow?

When does a position get closed?
 
Jasper Tidigu #:
Most of the limitations you mentioned are totally covered by the choice in broker and symbol im implementing on...not at liberty to say which one but the only limitation you you mentioned that is relevant is having a tonne of positions and a tonne of hedge...600 on both sides..thats a lot of margin to eat il concede but it can be resolved if the 601th trade is a sell,essentially youre now cutting down that loss and not hedging and if you have even net 20 of those with a modest TP thats not too greedy you can chew into the spread and get your TP
You didn't notice my calculation error, did you?

It's not 4200 / 200 = 210 points, but it's 21 points.

Now things look much better.

EDIT:

The fact, you didn't notice makes me worry...
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