this post is intended for opinions from scalpers; however, i welcome all comments so please distinguish if you are or are not primarily a scalper.
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I've read left and right that scalping can be strenuous, hard money, trading upwards of 100,000's in volume each day in an effort to make a living (exact profit is not important right now).
Here is my approach and would like feedback.
First I am assuming that avg. profit is greater than avg. loss.
My personal perception is that the average scalper trades upwards of 100,000 in volume each day and can hold up to and sometimes over a dozen holdings at any given time. They do this in an attempt to get as many winners as possible (of course with as few losers). However, I think there is a misconception for the majority of scalpers (even profitable ones) that you need a very large volume to reach maximum profit potential (P.P).
I believe that you should scalp only up to 5 trades per day (none at the same time) and use close to 100% buying power each trade. The main reason for this is that I believe when your volume increases in that attempt to reach maximum profits, your maximum profit potential (P.P.) drops for several reasons.
1)Most importantly, your "trading quality" drops with large volume. You cannot focus all of your efforts on one trade and follow it intently. I think many traders do not realize this and this creates a small P.P drop in each trade.
2) Commisions should be lower.
3)less time with open positions = more time to research/analyze and focus on those three or four trades you will do during the day. If you have other open positions, you may not study the technicals as much as you should and may miss important info.
4) It eliminates most of the straight 9-4 stress that many scalpers endure.
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So in summary, I think that in the long run, you should be more profitable trying to pick 2-5 of the surest entry points each day and having more focus on each trade. In theory as a good trader, by having fewer trades, the number of winners:losers should increase and therefore create higher potential profits. 1% gain on your account each day is close to 700% annum Don't you think it's easier to focus on making one correct swing of 0.75% each day than just trying to manage more winners than losers?
~RT
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I've read left and right that scalping can be strenuous, hard money, trading upwards of 100,000's in volume each day in an effort to make a living (exact profit is not important right now).
Here is my approach and would like feedback.
First I am assuming that avg. profit is greater than avg. loss.
My personal perception is that the average scalper trades upwards of 100,000 in volume each day and can hold up to and sometimes over a dozen holdings at any given time. They do this in an attempt to get as many winners as possible (of course with as few losers). However, I think there is a misconception for the majority of scalpers (even profitable ones) that you need a very large volume to reach maximum profit potential (P.P).
I believe that you should scalp only up to 5 trades per day (none at the same time) and use close to 100% buying power each trade. The main reason for this is that I believe when your volume increases in that attempt to reach maximum profits, your maximum profit potential (P.P.) drops for several reasons.
1)Most importantly, your "trading quality" drops with large volume. You cannot focus all of your efforts on one trade and follow it intently. I think many traders do not realize this and this creates a small P.P drop in each trade.
2) Commisions should be lower.
3)less time with open positions = more time to research/analyze and focus on those three or four trades you will do during the day. If you have other open positions, you may not study the technicals as much as you should and may miss important info.
4) It eliminates most of the straight 9-4 stress that many scalpers endure.
---------------------------------------------------------------------------
So in summary, I think that in the long run, you should be more profitable trying to pick 2-5 of the surest entry points each day and having more focus on each trade. In theory as a good trader, by having fewer trades, the number of winners:losers should increase and therefore create higher potential profits. 1% gain on your account each day is close to 700% annum Don't you think it's easier to focus on making one correct swing of 0.75% each day than just trying to manage more winners than losers?
~RT
