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explain 'scalping' to a newbie
- Thread starter pauk
- Start date
Quote from intradaybill:
You are dreaming...the problem is you convey your dreams to others as reality...
No, you just don't understand market dynamics and microscture and are clutching onto straws as you've been (yet again) publicly proven a fool.
Explain how I'm dreaming? Or how just so far today I've made the spread on size and gotten rebates today over 20 times with only 2 one-cent losers all day? Clearly I'm dreaming.
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Quote from NY0BScalper:
No, you just don't understand market dynamics and microscture and are clutching onto straws as you've been (yet again) publicly proven a fool.
Explain how I'm dreaming? Or how just so far today I've made the spread on size and gotten rebates today over 20 times with only 2 one-cent losers all day? Clearly I'm dreaming.
Nice trading! Are you trading this parity hotspot at 4.38?
Quote from pauk:
Can someone explain the concept of 'scalping'
Now, by scalping, I am talking about earning the spread.
(I always thought scalping was just trading using a very small timeframe charts, but im told its all about theroretically becoming a marketmaker and providing liquidity)
How does it actually work though?
Say the ES is trading at 1288 bid x 1288.25 ask
You'd put a limit buy in at the bid and a limit sell in at the ask? correct?
So if they both get hit then you have earnt the spread. A Successful scalp.
But what if you get filled on your long at the bid and then price just plummets without getting filled on your sell limit order? YOu're screwed, no?
Or is there a way of timing the trade using information to have a good possibility of getting hit on both of your orders.
When people discuss this concept of 'scalping' 'earning the spread' etc, they make it sound like 'free money'.
Am I right in my example above?
im a newbie but its just something that i want to at least get my head around, because at the moment, i dont get it.
Is this how the big banks make their money?
More than 90% of small traders trading the futures market lose. One of the reason is small traders do not have the MOST ADVANCED SOPHISTICATED ALGOR SUPER COMPUTER PLATFORM one of it kind in public (HFT Traders). Small traders will have to settle for cheap platforms with generic data feeds.
You can forget about learning how to make money scalping within the bid/ask spread unless you are worth $100 million.
Quote from NY0BScalper:
No, you just don't understand market dynamics and microscture and are clutching onto straws as you've been (yet again) publicly proven a fool.
Explain how I'm dreaming? Or how just so far today I've made the spread on size and gotten rebates today over 20 times with only 2 one-cent losers all day? Clearly I'm dreaming.
You are dreaming because making some spread is not equivalent to making the spread all the time, which was the original question of the OP.
I highly doubt that you trade. If you have ever traded you would know that if it was possible to make the spread on a consistent basis, which I repeat was the OP question, the spread would be exactly 0.
Quote from NY0BScalper:
No, you just don't understand market dynamics and microscture and are clutching onto straws as you've been (yet again) publicly proven a fool.
Explain how I'm dreaming? Or how just so far today I've made the spread on size and gotten rebates today over 20 times with only 2 one-cent losers all day? Clearly I'm dreaming.
awesome.
Teach me how to do that!
Quote from intradaybill:
You are dreaming because making some spread is not equivalent to making the spread all the time, which was the original question of the OP.
I highly doubt that you trade. If you have ever traded you would know that if it was possible to make the spread on a consistent basis, which I repeat was the OP question, the spread would be exactly 0.
i believe nyob is a prop trader using somekind of algor platform specifically for his scalping trade only.
Quote from emg:
i believe nyob is a prop trader using somekind of algor platform specifically for his scalping trade only.
That is different from the average guy trying to make the spread. Being able to place limit orders at the bid and ask does not necessarily mean you make the spread. I was trying to help a newbie understand what those prices are. I also said that
"Assuming you are a big player you can make markets but that is not without risks."
It is curious that he equated making the spread to being able to place limit orders. Only a fool and basically retarded person would claim that. Scalping is way much more than placing limit orders. It is about speed, order flow and many other parameters.
What is also curious is that once in a while some guy starts a wired thread about scalping and these characters jump in suddenly, all together, attacking everyone who says scalping is hard and claiming they are very profitable with it. I am not sure if they are fooling anyone but they are not fooling me for sure.
Quote from intradaybill:
That is different from the average guy trying to make the spread. Being able to place limit orders at the bid and ask does not necessarily mean you make the spread. I was trying to help a newbie understand what those prices are. I also said that
"Assuming you are a big player you can make markets but that is not without risks."
It is curious that he equated making the spread to being able to place limit orders. Only a fool and basically retarded person would claim that. Scalping is way much more than placing limit orders. It is about speed, order flow and many other parameters.
What is also curious is that once in a while some guy starts a wired thread about scalping and these characters jump in suddenly, all together, attacking everyone who says scalping is hard and claiming they are very profitable with it. I am not sure if they are fooling anyone but they are not fooling me for sure.
if u want to help him out, have him watched this movie:
http://flooredthemovie.com/community/
Maybe, he will become a grain floor trader trading within the bid/ask spread in the pits.
Or perhaps, trade the big SP 500 in the pits
As for electronic trading, leave that up to HFT Traders
Where does he say that?
"Before you get further you have to understand the basics, which you don't.
The bid is the price at which people are willing to buy from you and the ask is the price at which people will sell to you.
If you come to the market, you can buy at the ask and sell at the bid. You immediately lose the spread. You cannot win the spread.
Brokers make the spread because they match buyers and sellers. They use the inventoty of the sellers to fill the orders of the buyers. They even pay for inventory (liquidity) a share of the spread.
Assuming you are a big player you can make markets but that is not without risks.
"Before you get further you have to understand the basics, which you don't.
The bid is the price at which people are willing to buy from you and the ask is the price at which people will sell to you.
If you come to the market, you can buy at the ask and sell at the bid. You immediately lose the spread. You cannot win the spread.
Brokers make the spread because they match buyers and sellers. They use the inventoty of the sellers to fill the orders of the buyers. They even pay for inventory (liquidity) a share of the spread.
Assuming you are a big player you can make markets but that is not without risks.
Quote from NY0BScalper:
Uhh the part saying retail traders can't enter limit order ECNs (which is what he says... not being able to earn the spread means not being able to place limit orders on ECNs).