Quote from FireWalker:
For the index intraday traders out there: How would you categorize someone who trades from pivot to pivot? Using divergence or candles at pivot points or S/R for entry and then exiting at the next pivot? Is that considered scalping?
Under what conditions do you hold through a pivot point or S/R area as a longer term trade? Or are these mutually exclusive methods of trading?
Specifically I'm experiencing conflict in exiting a trade at the target (pivot) with the desire to "let your winners run".
BTW, I'm not a fan of scaling out as you have your largest position on when you lose and your smallest when you win, so I'm assuming fixed size. Or is this wrong thinking?
FireWalker,
The definition of scalping has nothing to do with pivot points, candlesticks, divergence nor s/r levels.
Also, there's hundreds of ways to compute pivot points...
You haven't provided any info about your computation of pivots nor posted a clear example (chart is the easiest way).
With that said...most scalpers I know are using some sort'uv special execution platform more suitable for fast trades...
In and out in a matter of seconds.
Most scalpers I know do not enter a trade trying to capture some big trend...
They enter a trade to scalp a few ticks.
Most scalpers I know are trading very high volume (more than +25 rt's per day) and getting some sort'uv special commission rate.
Then I saw you using the term
longer term trade.
You went from scalping to possible position trading or swing trading.
These are very different trading styles and can cause major problems for beginners that try to do both styles at the same time...
Very difficult to manage trades and to stay discipline.
More often than not...problems will occurs such as entering a trade as a scalper...doesn't go your way...you convert position into a position trade or worst (overnight hold).
You need to sit down and figure out what your trading style is going to be...
Master one style or go at it long enough to the point where you know its not something suitable for you before taking on a different trading style.
Simply, if your big concern is about
letting your winners run...
You should not be scalping...way too much conflict.
Also...you asked...
Under what conditions do you hold through a pivot point or S/R area as a longer term trade?
After you figure out what type of trader you are...you'll be able to better manage those situations.
However, it's absolutely critical you trade via a plan.
Specific details that has criteria for when to exit (reversal signals, profit targets, trailing stops or initial stops).
Example...if your Long ES @ 1111.00 and your methodology tells you your target is 1115.00 and there's a pivot point at 1114.00
Why would you exit at 1114.00 preventing you from your goal.
Yet, if pivot points and s/r levels are part of your trading plan...
I know some traders that move their stop to a pivot point trailing stop once price passes through it.
If it retraces back to the pivot...they're stopped out for whatever profit they had...
If it continues without retracing back...
Guess what...they've caught a runner.
However, if your profit target occurs prior to a pivot or s/r level...you need to respect your trading plan and exit when that target is reach...
Nothing wrong with following the plan.
I'm not saying that's how you use pivots nor am I telling you how to use pivots...
I am suggesting you should not be entering trades without a destination point...at the minimum.
Once you become more experience...you can add something like...do not enter trades without a contingency plan (re-entry signal)...
We as trader's too often in the Index Futures will exit a trade for whatever reason (small profit, stop out for loss) to only do nothing when price reverses and goes their way without them on the train.
"One's destination is never a place but rather a new way of looking at things."--Henry Miller
NihabaAshi
