Futures Scalping

killthesunshine · Sep 20, 2009

it's getting in with the intention of getting out after a tick or three, or failing that closing out after a few seconds.

anything lasting more than a few secs is swinging for the fences; not scalping

gifropan · Sep 20, 2009

Quote from killthesunshine:

it's getting in with the intention of getting out after a tick or three, or failing that closing out after a few seconds.

anything lasting more than a few secs is swinging for the fences; not scalping

I think the traditional definition of scalping was pocketing the differecne between the bid and ask which the floor traders (locals) were very good at. This was because they could move much faster and execute trades much quicker than a retail trader who had to phone his/her broker to put a trade into the pit. Although, with the advent of online trading and electronic markets and the reduction of commisions the retail trader is better off these days.

Some futures exchanges have no pit trading anymore e.g. the FTSE in the UK. However the locals or market makers are still there to provide liquidity. I think the answer to whether it is possible to make money from scalping must depend on the percentage of successful trades and the amount of commision as percentage of profit and loss per trade. The lower this percentage and the higher the percentage of your winning trades the higher the chances of success.

OkComp · Sep 23, 2009

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

Although the info discussed in this thread was of highly valuable information, no one actually suggested a trading platform system. Does anyone have any suggestions?

Swan Noir · Sep 23, 2009

I use X-Trader and it is totally reliable. My deal is an "all in" one @$4.50 for ES, NQ etc. so the platform has no monthly charge.

I use Sierra Charts as well as I don't think the charts on X make sense for an intraday trader. Many have said X is now outdated ... they might be right. There is an X vs CQG thread on here you might check out.

I hope you'll give us your opinion when you have one.

Quote from OkComp:

Although the info discussed in this thread was of highly valuable information, no one actually suggested a trading platform system. Does anyone have any suggestions?

OkComp · Sep 23, 2009

Quote from Swan Noir:

I use X-Trader and it is totally reliable. My deal is an "all in" one @$4.50 for ES, NQ etc. so the platform has no monthly charge.

I use Sierra Charts as well as I don't think the charts on X make sense for an intraday trader. Many have said X is now outdated ... they might be right. There is an X vs CQG thread on here you might check out.

I hope you'll give us your opinion when you have one.

Thanks Swan Noir, I'll check it out. Which broker do you use?

piezoe · Sep 23, 2009

Quote from gifropan:

I think the traditional definition of scalping was pocketing the differecne between the bid and ask which the floor traders (locals) were very good at. This was because they could move much faster and execute trades much quicker than a retail trader who had to phone his/her broker to put a trade into the pit. Although, with the advent of online trading and electronic markets and the reduction of commisions the retail trader is better off these days.

Some futures exchanges have no pit trading anymore e.g. the FTSE in the UK. However the locals or market makers are still there to provide liquidity. I think the answer to whether it is possible to make money from scalping must depend on the percentage of successful trades and the amount of commision as percentage of profit and loss per trade. The lower this percentage and the higher the percentage of your winning trades the higher the chances of success.

That's my understanding exactly. Well said. A lot of old timers consider scalping to be exactly as you suggest. In this forum we have learned that now what is meant by scalping varies from trader to trader.

ammo · Sep 23, 2009

in this day and age vs the floor days, a scalper is a daytrader for the most part, that could be a 6 tick move or a 6 point move, it depends on the daily range of the instrument you are trading, daytraders were also considered scalpers because they rarely carried a position overnight

dtrader98 · Sep 23, 2009

Quote from gifropan:

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?

Just to clarify, long term returns do not have a zero mean. Hence the upward drift and buy and hold philosophy.

Therefore, in answer to your question, No.

bighog · Sep 24, 2009

http://www.wired.com/gadgetlab/2009/09/intel-22-nanometer/

Getting itchy to build a new computer.

Integrating graphics and other stuff into the cpu and getting rid of the southbridge chip should be a challenge at first for intel. Thus i am willing to wait until the bugs are ironed out................but itchy none the less.

FYI: http://www.wired.com/gadgetlab/2009/07/atom-processor-phones/

boid-dog · Dec 27, 2009

Quote from piezoe:

That's my understanding exactly. Well said. A lot of old timers consider scalping to be exactly as you suggest. In this forum we have learned that now what is meant by scalping varies from trader to trader.

I second this definition as well, or would say it is most accurate. Also use TT, which is all you need as they provide charting. Don't forget interest rates; they can provide more bang for buck. Locals don't necessarily trade for 1 tick rather look for early trades when you can get a few ticks and occasionally more. Your day can be done by 9:30 CT. Same principles apply to indexes but they are either skittish or subject to pressure of large traders who squeeze or push markets toward their own end. [I did not mean to imply that large traders don't don't do the same in interest rates only that I find it more visible and also they tend to hold levels]

It takes time to learn and you will have to pay some dues. Watch out for charlatans or the plain uninformed. Not many here have traded through 2000 and before (first lesson for me: the Iranian Revolution).

Learn to read order flow, consult charts as necessary but trade with the book. Fast connection and low bandwidth also helps, even rent desk, especially in Chicago.

Futures Scalping

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