In a small mill like that, cutting steel, realistically, it will be best to use cutters 8mm and smaller. I would look at a collet system like an ER16 up to 10.3mm collet, with the smaller compact castle nut series. The shorter the holder the more ridgid it will be and also allow slightly more room between the table and cutter. Small cutters ie 6 to 8 mm will chatter less and can run at higher rpm and in turn you can remove more material quicker.
Cutters 8 mm and smaller are also significantly cheaper than the 10mm and up cutters. I would recommend that what ever collet system you decide to buy, get the highest precision collets that they make, like in the Regofix series, I would buy their high precision ones RegoFix is the UP range. They run more concentric that the regular ones, you get longer cutter life, (very measurable) and improved surface finish for not much more initial out lay. In the Regofix series of collets, they go to larger diameters than the generic suppliers of t he ER collet series. For MT2, you can also get MT2 collets in the standard cutter sizes. The industry standard is 3mm shank for very small, also 4mm shank for the very small, then, 5mm,6mm,8mm, Some 7mm cutters are on a 7 shank, but most are on an 8mm shank. Some 5mm cutters are also on a 6mm shank. This is all for carbide cutters.
Out here in NZ, you can get carbide cutters at such reasonable prices,and very good quality for less than averge cost of HSS cutters. I have not brought any HSS milling cutters in the last 6 years at all. My last HSS cutter was a woodruff T slot cutter and a small dovetail cutter. Lots of choices.
There is advantaged to the ER system, and I would recommend buying the smallest ER system that you need rather than the bigger one that you will most likely not use. The smaller systems have shorter collets, which is really good for the smaller endmills.
Neil
Edited By Neil Lickfold on 13/01/2017 20:11:56