How many traders do you know that can consistently get within 1-2 cents of the exact best entries and exits? I can't. I'm happy if I get within a nickel. So if you have a nickle slop on each end, that's a dime. If your round trip trading costs are under 2 cents which is costing you more, commissions or slippage on entries and exits. And how much slippage you get depends on how good you are at reading the chart, the markets and what the other traders are doing. As far as I'm concerned, slippage has a greater impact on your trading costs than your commissions.
At IB commissions start at 2 cents per round trip and go down from there. I don't give them a second thought since slippage costs ..... never thought to quantify it, but say 3-10 times as much or possibly even more. If you get out of a trade to only watch it run another .20 cents, what cost you more, commissions or slippage? Slippage was at least 10 times the commission cost.
So what do you think the possibility of scalping the QQQ once an hour for 3 cents is? Or you could do four 4 cent trades a day. I've got my 4-5 traders that I scalp for .25-50 a day besides the e-minis that I play. And that might be one trade a day or it might take 3-4, depending on the markets. But by bumping up the size, four 4 cent 5,000 share scalps a day at IB would net $145,000 a year (50 week). Has me wondering what I'm doing screwing around with these traders for. QQQ should be liquid enough to get in and out of 5,000 shares. And using daytrading margin to the max would only have to set aside about $50,000 in your account for that. Very intriguing.
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