Continuing yesterdayâs commentaryâ¦
After getting stopped out a couple of times trying to enter directional trades, I decided to spend some time practicing a scalping technique that Iâve been reading about. I know, Iâve previously stated that I had poor results in my prior attempts at scalping, but this technique appears to show promise and I may add it to my arsenal of trading tactics to supplement the longer-term intraday methods Iâve been trying to use. Still, Iâm not sure if Iâm ready to mix trading styles, or even if mixing styles is a good thing, period, so Iâm just experimenting with this for the time being. Only time and experience will tell.
Anyhow, the technique is called Sabaki Micro-trading and it was developed by Dr. Richard McCall, the author of the book, The Way of the Warrior Trader. Dr. McCall was recently interviewed by Innerworth.com. The basic premise of the scalping technique is intensity through time compression. In other words, you trade very aggressively, but you limit yourself to just one hour of trading a day. McCall prefers the first hour of trading from 9:30 to 10:30 because he finds there are a lot of quick volatility swings in the opening hour, but the trader can chose any one-hour time period that he/she likes. The reason for the ultra short-term trading window is to limit both the monetary risk that stems from overtrading and the psychological stress of intense scalping. In fact, the key to the success of the method, according to McCall, is the strict adherence to the one-hour trading period. He claims to average 3-4 points a day with virtually no down days. I canât confirm this, however. So the usual âguruâ grain of salt disclaimer applies here!! His view of ES trading is that if you can get yourself to the point where you are consistently making 2 to 4 points a day with seldom a losing day, all you have to do to make bigger profits is to scale up your size incrementally over time as you become more comfortable with more contracts.
So, basically, the last few trades I made yesterday were just testing out this guyâs scalping method. I wasnât super strict about the one-hour limitation. More I was trying to see if his combinations of technical indicators have any validity. Well the juryâs still out, although I did make 2 points in 3 trades. But three trades does not a valid sample population make. It just as easily been dumb luck.
After getting stopped out a couple of times trying to enter directional trades, I decided to spend some time practicing a scalping technique that Iâve been reading about. I know, Iâve previously stated that I had poor results in my prior attempts at scalping, but this technique appears to show promise and I may add it to my arsenal of trading tactics to supplement the longer-term intraday methods Iâve been trying to use. Still, Iâm not sure if Iâm ready to mix trading styles, or even if mixing styles is a good thing, period, so Iâm just experimenting with this for the time being. Only time and experience will tell.
Anyhow, the technique is called Sabaki Micro-trading and it was developed by Dr. Richard McCall, the author of the book, The Way of the Warrior Trader. Dr. McCall was recently interviewed by Innerworth.com. The basic premise of the scalping technique is intensity through time compression. In other words, you trade very aggressively, but you limit yourself to just one hour of trading a day. McCall prefers the first hour of trading from 9:30 to 10:30 because he finds there are a lot of quick volatility swings in the opening hour, but the trader can chose any one-hour time period that he/she likes. The reason for the ultra short-term trading window is to limit both the monetary risk that stems from overtrading and the psychological stress of intense scalping. In fact, the key to the success of the method, according to McCall, is the strict adherence to the one-hour trading period. He claims to average 3-4 points a day with virtually no down days. I canât confirm this, however. So the usual âguruâ grain of salt disclaimer applies here!! His view of ES trading is that if you can get yourself to the point where you are consistently making 2 to 4 points a day with seldom a losing day, all you have to do to make bigger profits is to scale up your size incrementally over time as you become more comfortable with more contracts.
So, basically, the last few trades I made yesterday were just testing out this guyâs scalping method. I wasnât super strict about the one-hour limitation. More I was trying to see if his combinations of technical indicators have any validity. Well the juryâs still out, although I did make 2 points in 3 trades. But three trades does not a valid sample population make. It just as easily been dumb luck.
