Advise me on R:R for scalping 0.02 and 0.03

[trader99]

When heavy scalping the ES I am learning that about half the time many trades start out with 1 contract and end up with 2, 3 or 4 or contracts in the end. Why do you think we have a ladder (DOM)? When the trade set is over and you get one tick over/under the average you end up with 1, 2 or 3 losing trades and 1 winning trade. The length of this trade depends upon if you trade the day session (under 1 minute) or night session (up to 10 minutes). In the day session you may have to wait for each trade to present itself each 5 minutes on average, night session maybe 15 minutes average.

You have a 6k account with a company like Tradovate that will give you a DOM with all the bells and whistles and free charting for $2.58 R/T "all in" plus $2,400.00 year membership prepaid. The commission is important then you lease a spot from the exchange eventually.

I'm beginning to believe in scalping. I lose every time when I try to predict and hold long term. I think if you are willing to risk a little more and wait longer you can get more than one tick. On NQ at least, you can easily get a few points! At least in this volatile market. I've been sim scalping/trading NQ. I think with just 5-10 lots per RT you can make several thousands a day without a sweat. And that's not being superaggressive. If you want to be more active that numbers go up. But I understand you gotta account for losses.


At least for me, I don't believe in 1 tick profit. Occasionally, I get out for 1 tick when I see things are not going my way. Better to exit for small profits then let losses come.

For best of both worlds, you can scalp for 1-2 hours in the morning and go about your job. Stability of income plus bonus kicker from scalping.

Not there yet with the multiple thousands per day on real account. Practicing and honing my scalping skills on sim first.

Tradovate looks interesting. At this level of activity, IB commissions will be prohibitive.

 

[ElectricSavant]

trader99,

I agree, That waiting...hoping...etc...not for me.
I do not even use charts anymore!

ES

 

[birdman]

.02 on 3000 shares is $60....after commission and taxes PLUS losses because no way you are batting 1.000....cannot see you making a living except for your broker.

1) I have a living, am just bored and wanting to learn intraday.
2) Note i said usually 5000 shares and when i gain confidence 10,000.
3) Broker gets 6.95 per side regardless of size.
4) I never give trading advice. Not qualified in the least. Thread title was "Need advice".
5) I've been intraday trading for 7 months now. I'm profitable and have had a lot of fun learning. I'm not at the level to make a full time income yet, but i don't have to. I'll keep plugging away.

 

[ElectricSavant]

I think the best advice that I can give is is to take out 50% of your R:R and spend it! Let the other 50% ride AFTER LABOR. Always pay yourself first.

ES

P. S. I am flat now...I am up 75 bucks thus far after commish. I am typing this in between simulated trades! Folks this is a lot of patience. Day trading is better. But I am training now and must find my way. For the first time in decades I have found a way to trade and a way to enter that truly can change my life...funny I have told Wifey this before Mrs Savant is a member and we may hear from her....but not tonight.

 

[El OchoCinco]

1) I have a living, am just bored and wanting to learn intraday.
2) Note i said usually 5000 shares and when i gain confidence 10,000.
3) Broker gets 6.95 per side regardless of size.
4) I never give trading advice. Not qualified in the least. Thread title was "Need advice".
5) I've been intraday trading for 7 months now. I'm profitable and have had a lot of fun learning. I'm not at the level to make a full time income yet, but i don't have to. I'll keep plugging away.

I meant money not a living.

I still think you should go for more than .02 target and stop because even with a .01 spread you could get stopped out pretty quick... For every loss you will have to have 2 3 wins just to get ahead.

 

[2rosy]

1) I have a living, am just bored and wanting to learn intraday.
2) Note i said usually 5000 shares and when i gain confidence 10,000.

what stock is liquid enough to allow buying/selling 5000+ shares with no impact?

 

[birdman]

what stock is liquid enough to allow buying/selling 5000+ shares with no impact?

The top 10 average volume stocks and etfs. Most often top 20. Take the top 20 from each day and put in a portfoilo at SeekingAlpha.com Do it every day for a week or 2. Portfolio will show both volume and average volume. Cull the stocks and etfs that don't suit you, until you are left with 5 or 10 with consistent high volume. I see trades of 30,000 at a time that do not impact.

 

[2rosy]

The top 10 average volume stocks and etfs. Most often top 20. Take the top 20 from each day and put in a portfoilo at SeekingAlpha.com Do it every day for a week or 2. Portfolio will show both volume and average volume. Cull the stocks and etfs that don't suit you, until you are left with 5 or 10 with consistent high volume. I see trades of 30,000 at a time that do not impact.

you can see time and sales for different stocks/etfs. average trade is less than 300 usually around 100

https://www.nasdaq.com/symbol/spy/time-sales

 

[birdman]

I still think you should go for more than .02 target and stop because even with a .01 spread you could get stopped out pretty quick... For every loss you will have to have 2 3 wins just to get ahead.

You make a good point and i think you are probably right. I have a lot to learn.

I also think i must have did a poor job of wording my original post. My target and stop have not been 1:1. My stop has been double and larger than my target, which i was asking for comments upon. I was able to glean some info about R:R. The factor i didn't bring up is, my target and stop amount changes with instrument, because of the different price of instruments, but R:R ratio, i think should be the same for all i trade.

Today i tried to be more patient. I had 3 round trips of 5000 shares each in the first 35 minutes and decided to quit for the day.
+ 0.0416
+ 0.0432
+ 0.0357

 

[birdman]

you can see time and sales for different stocks/etfs. average trade is less than 300 usually around 100

True, but on a high volume stock, there are many small traders trading at every price level. If you watch the trades on a stock or etf with a 1 cent spread (with a price between $10 and $60) you can see total number of shares traded, jumping by 30k and more without the price changing (no impact).