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how much profit will i have from this scalp after factoring in slippage?


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  #1 (permalink)
shots fired
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If I enter long, for example, on a limit order with four contracts and my target is 3 ticks on the ES, how much profit would be there after factoring in slippage, and spread (please ignore commission for this example). Thank you.

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shots fired View Post
If I enter long, for example, on a limit order with four contracts and my target is 3 ticks on the ES, how much profit would be there after factoring in slippage, and spread (please ignore commission for this example). Thank you.

Hi,

Limit orders will only enter you into the market at your price or better. Meaning you dont need to worry about slippage or spread.

Therefore with the ES being $12.50 per tick, a 4 contract long trade for 3 ticks will be: $12.50 * 4 * 3 = $150

It is possible that you get filled at a better price than what you were expecting using limit orders, however the ES is so thick that will be unlikely unless you're trading at a major news release and the volume at the bid or ask on more than 1 price level suddenly disappears. Positive slippage is more common in thinner markets.

Keep in mind there is a difference between limit orders and stop limit orders.

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 skilluminati 
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Also remember that you will always be filled on your losers, so if you have to ask this question then I'd caution you against scalping for three ticks.

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Last Updated on July 9, 2013


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