Is micro scalping dead?

FarkCop · Oct 8, 2009

Trying to capture 1-3 cents profit as many times as possible is what I called micro scalping. But for the past year, I found out it become more and more difficult to make money.

If you are using similar strategy, please give some feed back about the market status.

Thank you.

hoodooman · Oct 8, 2009

I'ed rather scalp for a penny than have a losing trade.

NoDoji · Oct 8, 2009

Quote from FarkCop:

Trying to capture 1-3 cents profit as many times as possible is what I called micro scalping. But for the past year, I found out it become more and more difficult to make money.

If you are using similar strategy, please give some feed back about the market status.

Thank you.

How do you capture 1-3 cents and maintain a risk:reward that allows you to be profitable? Even the slow, easy stuff I trade jumps around several cents.

jjj1000 · Oct 8, 2009

I don't know how one would be able to do it, considering that he/she is a retail investor. Now, if you have a decent commission rate (ex: IB) then 10 cents or 15 cents is possible but very hard (all succesful trading is very hard)

ang_99 · Oct 8, 2009

Quote from FarkCop:

Trying to capture 1-3 cents profit as many times as possible is what I called micro scalping. But for the past year, I found out it become more and more difficult to make money.

If you are using similar strategy, please give some feed back about the market status.

Thank you.

Its called market making and you need a sophisticated operation and cost structure to do it.

Trad'nUp · Oct 8, 2009

Doing it retail isn't hard, as long as you have the resources to trade large numbers of shares and can do so with something that you "can" move in large blocks.

I've done it and used 10k share blocks as a minimum. Makes the math easier. 1 penny = $100.

But a lot of those stocks can also go the other way, then a .10 drop hurts much more than the .01 feels good.

AyeYo · Oct 8, 2009

Quote from ang_99:

Its called market making and you need a sophisticated operation and cost structure to do it.

Or just an ass-load of leverage and balls of steel.

As far as the risk/reward, think of it this way: no matter what direction the vehicle (stock/option/currency pair) is going, it's always going to have small swings. Small swings are not a bet, they're a guarantee. The larger the move you're going for, the more likely it is that you'll be wrong, the more care you'll have to manage it as the vehicle moves around, and the more risk you'll expose yourself to simply by being in the trade longer.

MohdSalleh · Oct 8, 2009

Quote from FarkCop:

Trying to capture 1-3 cents profit as many times as possible is what I called micro scalping. But for the past year, I found out it become more and more difficult to make money.

If you are using similar strategy, please give some feed back about the market status.

Thank you.

Yes i trade in a similar way, although 1 cent is nuts, i do between 3-10 cents.
Anyway you are correct, this year has been extraordinarily difficult, the reason is liquidity has completely dried up. What we are doing is esentially scalping order flow and order flow is non-existent. i have no idea what stocks you are trading, but many "hidden" liquidity orders in MANY MANY stocks are simply gone, the flashing arcas flashing island hidden islands, many have been greatly reduced in size. They simply do not wish to fill any orders anymore. The small cap space has been completely DECIMATED.
Actually you will probably not find many answers here as most in the ET community are either paper traders, retirees with an investment account(and PLENTY of time) or at best, intra day position traders, very few true scalpers are around anymore.
The investment community's response to the Obama presidency has been stunning, and i Do not feel as long as this man is in charge, good days will return for us.
I switched to scalping ISRG and STRA to eke out a living, but beware you might have to hit/take across large spreads

MohdSalleh · Oct 8, 2009

Quote from NoDoji:

How do you capture 1-3 cents and maintain a risk:reward that allows you to be profitable? Even the slow, easy stuff I trade jumps around several cents.

yes its possible but you need to learn how to read L2. there are L2 patterns/setups that do not show up in charts at all.

clambill · Oct 8, 2009

I know this sounds wacky, but have you tried Forex? If you google "free forex charts", you'll find a site with FXTrek and ChartingStation on it. I think those are pretty good to get an idea how Forex moves. And it's also 24 hours a day so you don't need to worry about trading gaps. You may have to switch time frames but so far, I prefer Forex to the stock market.