fwiw, I've had limited time with QM but never a bad experience with it. Have held overnight a few times and, if my stop hit, it was without slippage generally, even in the wee hours. One more thought to further limit risk is to sell a CL option credit spread against the QM position. (There are no options on QM.) Allows a wider stop for holding, and offers the time decay component. I got the idea from tastytrade. Here's a link to that video below. (fyi, they've also done similar shows on other futures with same idea, quite a lot of futures and options on futures content on their site.) If you can afford to trade CL then no reason to use QM, least not for short in/out day trades. I've a small account, could not consider holding CL overnight but in presence of other option hedges on CL futures then a QM offers a nice half-sized way to be in the market with that buffer in place. Or, can go to two QM's instead of one CL to give the flexibility of taking one off and leaving the other. Just a long winded way of saying it can just offer you another tool in the toolbox.

https://tastytrade.com/tt/shows/closing-the-gap-futures-edition/episodes/mini-crude-reducing-cost-basis-04-08-2016

HoopyTrading 

Inletcap, interesting you mentioned the QM. I just started looking at it, and I am kinda' not liking it's movement based on it's risks. Seems to me just plain old full-sized oil would give better potential. That would take time and research to verify however. But neat that someone else has been looking at it.

@bmtrading9 uses qm for day and swing trading. I can't think of a time I've heard any complaints about bad fills or liquidity but he is not "scalping for ticks" where that would make a huge difference. I believe under these circumstances QM would be a viable alternative to CL if one wants to have the benefit of scaling in and out but cannot afford ( logically) to trade ~ $43,000 per contract notional value times several contracts. I believe the charts are identical, with obvious liquidity "issues" that could impact the ultra short term timeframe traders.

Inletcap 

I believe the charts are identical, with obvious liquidity "issues" that could impact the ultra short term timeframe traders.

Hello Inletcap,

thank you for your thoughtful input.

Trading CL I am trying to figure out how to scale in/out with not too much associated risk. I even tried CFD with 1/10th of a CL futures contract, but CFd come with 5 or more ticks spread and up to 10 $ halfturn per contract (of course depending on the brokerage) - and I need to use unusable execution platforms.

I am holding positions between 10 minutes and one ore two hours - depending on the market stopping the position out; and aim for 20 - 40 ticks with a risk of around 10 ticks.
I looked at QM and got the same feeling HoopyTrading stated.

So I wonder what you consider "ultra short term timeframe" trading in regard to QM? Do you have any parameters?

Thank you for your consideration, Best, Chris

.

chrismuc 

Hello Inletcap, thank you for your thoughtful input. Trading CL I am trying to figure out how to scale in/out with not too much associated risk. I even tried CFD with 1/10th of a CL futures contract, but CFd come with 5 or more ticks spread and up to 10 $ halfturn per contract (of course depending on the brokerage) - and I need to use unusable execution platforms. I am holding positions between 10 minutes and one ore two hours - depending on the market stopping the position out; and aim for 20 - 40 ticks with a risk of around 10 ticks. I looked at QM and got the same feeling HoopyTrading stated. So I wonder what you consider "ultra short term timeframe" trading in regard to QM? Do you have any parameters? Thank you for your consideration, Best, Chris .

Just saying that a scalper would be very concerned with that type of slippage whereas someone trading for larger swings would be impacted, but could certainly still be profitable. (i.e.- someone looking to get 5-10 t twenty times per day would get really hurt with a few ticks slippage on either side)

Inletcap 

@bmtrading9 uses qm for day and swing trading. I can't think of a time I've heard any complaints about bad fills or liquidity but he is not "scalping for ticks" where that would make a huge difference. I believe under these circumstances QM would be a viable alternative to CL if one wants to have the benefit of scaling in and out but cannot afford ( logically) to trade ~ $43,000 per contract notional value times several contracts. I believe the charts are identical, with obvious liquidity "issues" that could impact the ultra short term timeframe traders.

QM is the best for Swing and short term trading if you don't want to see yourself (small account traders) puking and re-puking by these CL movements. It moves simultaneously with CL. Moreover you can scale-in an scale-out contracts and sometimes you can use it as a hedge to reduce overnight margin requirements too, if needed.

The three big differences between CL and QM are

• Contract Size: CL 1000 bbls vs QM 500 bbls
• Minimum Price Change, CL 1c/bbl vs, QM 2.5c/bbl (which means tick sizes are CL $10 vs QM $12.50)
• Settlement, CL is physical vs QM is penultimate financial.

In terms of trade-ability the prompt two months of QM are nearly always 1 tick wide, even at night it's often 1 tic wide, worst 2 tics wide. Do not look at a QM chart and think that because there are gaps that it's illiquid or that the slippage will be high because that's not the case. Just because QM didn't trade at every tick CL does, it doesn't mean the liquidity wasn't there. Market-Makers keep these contracts in-line. As mentioned before elsewhere on these forums trading QM but using a CL chart is a very viable option.

I would advise against trading the forward months though. You will get picked off, and slippage can be high, and you may or may not be able to get out quickly when you need to.

sands 

Open a day trading margin futures account with a broker data feed, with let's say AMP futures for example. You'll typically need $500 or there abouts to commit to your education and you are away to start trading to a sim platform (you'll need to review the providers software options as these will vary). Start seriously with a futures acc and a decent liquid market and you'll have the best chance to progress.

Hi Sands, I actually decided to to this. Gonna keep trading oil on CFD but have a demo futures account with a data feed. Unfortunately AMP were being discriminatory with me due to my nationality despite being a Canadian resident. But it was probably a blessing in disguise as I was about to open a 3k account without the proper trading plan ready.

Only reason I wanted AMP was for the TT platform but I'm gonna go with NinjaTrader now.

Unfortunately it's not uncommon for people to find certain brokers aren a good fit for them and others are a much better fit. Personally I've tried many and only ever had a problem with one (which wasn't AMP), others have been much more competent and professional thankfully. Consequently I've grown into the view that you've got to go through certain negative experiences to see where you're business is valued and who you personally can trust and where there is mutual respect because surely that's vital. Thus I'd say if it didn't work out for you just persevere and try another and I'm sure your experiences will improve.

Good luck


I'd just add that xtrader is a v good tool but likely not necessary at the beginning of your trading career, you'll likely find any other decent software will do the job you need (to help you learn) and save you some cost. Eg ninjatrader/Sierra/etc are great to start off with whether on live or demo.

Thank you Sands, one last noobi question. The main reason I want a futures platform is so I can learn market profile. Will this be an issue on demo since it's not same volume?

You can watch the daily volume and bid/ask spreads to see liquidity. Cannon Trading offers lower day margins, but the overnight is set by the exchange.