[MC]

Originally Posted by brownsfan019 »

My view is simple Bear - if you can make money trading, would you rather have $12.50/tick or $5/tick? All things being equal, I want $12.50.

This is assuming of course your system makes money over time.

As a noob I look at it the opposite. Would I rather risk $5 per tick or risk $12.50 per tick? But I often think about fills and slippage between the 2. I'm a small timer so either could absorb my impact without a trace.

If/when I move up in lot size or feel my system is good to go I'll switch over to the ES and keep the YM for hedging use mainly.

[brownsfan019]

Originally Posted by mcichocki_ »

As a noob I look at it the opposite. Would I rather risk $5 per tick or risk $12.50 per tick? But I often think about fills and slippage between the 2. I'm a small timer so either could absorb my impact without a trace.

That was my point MC.

Until you are confident in your trading, 'only losing' $5/tick is the most attractive option.

[MC]

Originally Posted by brownsfan019 »

That was my point MC.

Until you are confident in your trading, 'only losing' $5/tick is the most attractive option.

Are you calling me a f'in loser?



J/K

[The Bear]

Originally Posted by mcichocki_ »

As a noob I look at it the opposite. Would I rather risk $5 per tick or risk $12.50 per tick? But I often think about fills and slippage between the 2. I'm a small timer so either could absorb my impact without a trace.

If/when I move up in lot size or feel my system is good to go I'll switch over to the ES and keep the YM for hedging use mainly.

True - the main concern should be how much you will lose. But i will say that with YM, I find small stops tend to get whipsawed alot, unless it's one of those crazy days when the trends are perfect, but these days rarely happen.

The thing with ES is, there are less ticks for equivalent distance of YM right? So this may completely change my dynamics. Meaning, let's assume YM is moving in tandem with ES. There's more ticks for YM because the resolution is finer right? Does anyone know if the asset value of the contract itself is similar to YM in size?

[BlowFish]

The more important thing is the range of movement over the time frame your interested in. Volatility if you like.

In an ideal world you would want small tick size (granularity) large range and volatility within that range. Its easy to see why the ER was popular. Oh and or course you want thick volume traded so can you can get in or out easily (S&P certainly has that in spades). A higher $ value per tick can be good in so far as it helps keep commissions down (compared to amount traded). However if there is no volatility its tough making money. Still imo its better to have large $ swings with a lot of small ticks rather than large $ swings with a few big ticks. Worse is small $ swings with large tick size.

It's probably worth considering margin requirements too though personally that's seldom an issue for me as I tend to trade small compared to my account size. (Actually it needed considering if I required overnight DAX margin sometimes and foolishly IB used to count after 4.15 GMT overnight)

Looking at any of these parameters without consideration to how they all interrelate is not likely to yield wise decisions. Also dynamics change sometimes quite frequently and radically. The S&P for example is quite a different animal last I looked to when I traded it. In those days 20 or even 30 point runs where not unusual last I looked (some months back) 8 point daily ranges wherent uncommon. I would guess its enjoying a bit more volatility again now.

It's all important stuff (along with time frame you focus on) to get something that suits your own personality and risk tolerance.