Futures Scalping

Quote from OkComp:

Hi,

I've been using Expo Futures' Firetip platform on a demo account. Currently I am applying scalping techniques, aiming for 3 points per position taken, which has resulted on a 2% daily return so far.

I would like some information on which platform should I use for this type of trading method. Expo Future's is good enough, but their commission fees are kinda high for this method ($4 per contract per position). I would like to have all the features Firetip provides, but for a smaller fee in total. I mean live feed, charting (ticks, 1 minute, 2 minutes, 5 minutes, 10 minutes, daily, weekly and monthly), studies in bar charts, access to different markets, advanced order placing (including obviously stop/loss). I would not mind having all of this coming from different providers (but definitely prefer if it all came from the same one as Expo Futures does). Can you please which systems will achieve this?

Thanks
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It's not clear whether you are scalping. Is it 3 points in the handle you are making or three ticks? I don't consider 3 points as scalping, but some might. I think of scalping as trading for a few ticks, not a few points. If it's ticks, it's nearly impossible to make money doing that as a retail trader.

The first thing you should do before anything else if using a demo platform is check your fills to make sure buys are being filled on the ask and sells on the bid. One of the most popular demo platforms, the TOS platform, fills the other way around (Buys on the bid) as if you were a market maker! I have a feeling it is not just the TOS platform doing this because it's to a brokers advantage to make it look easy to make money. If your platform is filling you incorrectly (backwards) then subtract two ticks from the net of every trade. Then multiply whats left by half. If you still have a profit after that when scalping the ES at 8 bucks a round trip/contract, then you are on Mars and have succeeded in going where no man has gone before.

Incidentally, these demo platforms that give backwards fills illustrate why exchange seats are so valuable.

(I noticed the TOS demo was down for a few days recently. I wonder if they were trying to fix it so that it would fill correctly. Also, someone on ET mentioned that the Ninja demo used a realistic fill algorithm.)

P.S. If you want to be a scalper, John's post immediately below has great advice for you. Also, you can lease a seat on the CME, you don't necessarily have to buy one, and that can reduce your entry cost.
 
not to discourage, really...but here is my opinion:

There's a reason almost all good scalpers start w/ a prop firm or backed in some other way....its an edge that is possible for many people to learn profitably, but the barriers to entry are huge....i.e. fees, start up costs, and being able to weather slow months (beginning of this year, for example, was incredibly slow....just less volume and if you're a scalper that means less orders to move).

If you feel you'd like to make a living doing this I'd recommend looking for a good firm first, that'll teach you and have the necessary resources to do well, and give you a draw or some security till you make money. The product you learn to trade is arguably less important than having those things first. PS I'm a cme member, I scalp and pay $0.20 per side...I'm very consistent and make great money, but without membership I couldn't trade this edge.

Cheers
 
Quote from John47:

not to discourage, really...but here is my opinion:

There's a reason almost all good scalpers start w/ a prop firm or backed in some other way....its an edge that is possible for many people to learn profitably, but the barriers to entry are huge....i.e. fees, start up costs, and being able to weather slow months (beginning of this year, for example, was incredibly slow....just less volume and if you're a scalper that means less orders to move).

If you feel you'd like to make a living doing this I'd recommend looking for a good firm first, that'll teach you and have the necessary resources to do well, and give you a draw or some security till you make money. The product you learn to trade is arguably less important than having those things first. PS I'm a cme member, I scalp and pay $0.20 per side...I'm very consistent and make great money, but without membership I couldn't trade this edge.

Cheers
More...


How much you need to become a CME member ?
 
Quote from limitupmike:

you will never make any money scapling futures. The computersa re too fast and commissions no matter how small unless youa re a member fo the cme will eventually eat you alive.. just like a casino with a 1.41 % edge.. you may have a nice winning streak but as you scalp day afteer day minute after minute you will have a negative expectantcy..

DO NOT SCALP.. no mater what platform you have access too there are hedgfunds and Goldman that will out smart your computer and will be much much faster..
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+1

THIS is the post you should be reading

With scalping you have the same roundtrip costs as holding longer (slippage, spread, commissions, errors, etc).

Scalping is something that is a nice idea, and might sim/paper trade nicely, but in the long run will find few highly profitable traders.

Remember, many people here who will "support" you are not trading sizable amounts for a long period. They are trader wannabes or "paper" tigers.
 
Quote from John47:

not to discourage, really...but here is my opinion:

There's a reason almost all good scalpers start w/ a prop firm or backed in some other way....its an edge that is possible for many people to learn profitably, but the barriers to entry are huge....i.e. fees, start up costs, and being able to weather slow months (beginning of this year, for example, was incredibly slow....just less volume and if you're a scalper that means less orders to move).

If you feel you'd like to make a living doing this I'd recommend looking for a good firm first, that'll teach you and have the necessary resources to do well, and give you a draw or some security till you make money. The product you learn to trade is arguably less important than having those things first. PS I'm a cme member, I scalp and pay $0.20 per side...I'm very consistent and make great money, but without membership I couldn't trade this edge.

Cheers
More...

Listen to this guy instead.
 
Scalping: noise trading that makes money for your broker.

How stupid one must be when he does not understand that intraday retruns on a small scale are normally distributed with a zero mean? Subtract commissions and you are a loser. You cannot be otherwise. You cannot defeat the laws of nature.
 
I agree that markets are fractal but there is one point you should pay attention to. The trading costs are constant and the shorter your time frame the higher the cost as a percentage of your profit. That is what makes scalping quite costrly, Having said that, if you have a trading/scalping strategy that produces significantly more winners than losers then there is every possibility it can work and we would all be grateful if you would share it with us.

Good Luck
 
Quote from puretruth:

How much you need to become a CME member ?
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about 2000 USD one time, 100 USD per month for H membership.

I think about 1000 USD Per month for a full seat. But that is out of my memory and may not be accurate.
 
Quote from goodgoing:

Scalping: noise trading that makes money for your broker.

How stupid one must be when he does not understand that intraday retruns on a small scale are normally distributed with a zero mean? Subtract commissions and you are a loser. You cannot be otherwise. You cannot defeat the laws of nature.
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Goodgoing,
Just an academic question. If intraday returns are normally distributed with a zero mean cannot one apply the same argument to longer term time frames. If the argument that "markets are fractal" is a valid one the does not the same statistical laws apply at every fractal level?
 
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