Is price movement really random and unpredictable?

[ironchef]

Just because someone might target only one tick on ES doesn't mean they have to make 100 trades per day. And they wouldn't have to trade using a tick chart, either. They could use a 15s, 30s, or even 1m chart.

The biggest danger with 1-tick trading is... you better not lose!!

But then are you still "scalping"?

 

[SimpleMeLike]

That's an exaggerated example.

If you're using a discount broker, on a one-tick target, you should net at least $7.50/contract. On 10 contracts, that's $75 (net) x 4 (trades per day) x 20 (days per month) x 12 (months) is $72,000 (year).

So if you're buying your broker rib-eyes, you're buying yourself rib-eyes, as well.

Just because someone might target only one tick on ES doesn't mean they have to make 100 trades per day. And they wouldn't have to trade using a tick chart, either. They could use a 15s, 30s, or even 1m chart.

The biggest danger with 1-tick trading is... you better not lose!!

Hello ondafringe,

Good write up and explanation.

Yes, one loss and it will be a big challenge to recover.

 

[ondafringe]

But then are you still "scalping"?

IMO, if you're scalping, the chart's time frame, or number of trades per day, is irrelevant. And in 1-tick trading, the more you trade, the more likely you are to lose one. So once you've hit your target for the day... stop trading. Who cares about the label?

 

[doubledoubledoublecup]

And here is what happened after my trades. While I was annotating the chart. See that move back down. We are in a range. So called chop and noise. Untradeable. Me thinks not!
View attachment 333466

You like scalp range? There's some good action and trend after the open

 

[volpri]

See all that noise? Can it be traded? Profitably?

Or should we sit twiddling our thumbs waiting for that BO to come?

Why not trade the noise AND the coming BO?

 

[ironchef]

Here is how I scalp those so-called random moves and noise and make the cash register jingle.

Price is in a developing range after ORBO and 2 legged MM up. It is morphing into a TR.

Entry#1 on BO of previous two bars expecting at least a scalp up to near the top of the range. That failed to give me enough so I added.

Entry#2 added long twice as many contracts as previous entry. So averaged down. Scaled in to sound nice!

Entry#3 Now at the bottom of developing TR. Take a chance and bet we will go back up enough to make money on entry #2 and #3 and then leave entry#1 as a bit of a runner.

Exits:

Bar 10:50 I exit both entry#2 and #3 with profits. After 3rd attempt up i.e. a HH than the previous bar (higher high). Usually after 2 or 3 attempts at something then market will do something else. Plus it is getting close to the upper end of a developing TR. So, I just wanna grab that money! (Remember.. the concept of the market probing to find more transactions and traders) Look at any noise that pundits say not tradeable and you will see a lot of volume. Somebody is still trading or vol would be dry up. Guess who?

Bar 10:55 I exit entry #1 grabbing more profit. I exit this because at the top 1/4 of an established range (21 bars sideways..count them). Odds favor a move back down now to the bottom of the range as 80% of BOs of a TR fail and price goes back into or towards the range within 5 bar.

Got things to do so may not trade any more today. But this is how I look at markets for scalping, using averaging down and context. Of course, there are times I am wrong on my read but I have strategies to deal with that too.



View attachment 333465

And here is what happened after my trades. While I was annotating the chart. See that move back down. We are in a range. So called chop and noise. Untradeable. Me thinks not!
View attachment 333466

Thank you for sharing.

Like Kenny Roger's song:

You got to know when to hold 'em, know when to fold 'em
Know when to walk away and know when to run
You never count your money when you're sittin' at the table
There'll be time enough for countin' when the dealing's done

Most of us retails don't.

I think this applies to trend following too. You give ma some ideas to look into.

Take care.

 

[volpri]

You like scalp range? There's some good action and trend after the open

I trade both trends and ranges. By the time I fired up the computer we were well into a developing range. In addition, even after a GAP open one should wait to see if the opposite side succeeds in making that fail and closes the gap. Then look at taking a position depending on what happens to that gap. And after ORBO has been done.

 

[ironchef]

See all that noise? Can it be traded? Profitably?

Or should we sit twiddling our thumbs waiting for that BO to come?

Why not trade the noise AND the coming BO?

View attachment 333469

In real time in the thick of the battle, it is easy to be wrong, out of sync, e.g. sell @09:35 and SL at a loss? Maybe a wider SL but then I could end up with bigger cum loss at the end of the day?

It comes down to experience and technique.

 

[NoahA]

Of course, there are times I am wrong on my read but I have strategies to deal with that too.

I think this is really the key. Once a trader gets half decent at taking the correct trade and at the right time, its knowing what to do if its not working that makes you profitable in the long run or not. Doubling up and reversing is a solid strategy, but once again, you have to know where to do it. My reversals often don't turn out well, but its mostly because the original entry wasn't ideal, and then the move against my position isn't yet a reason to consider a reversal. But you do a very good job of showing how it should be done!

 

[ironchef]

My reversals often don't turn out well, but its mostly because the original entry wasn't ideal, and then the move against my position isn't yet a reason to consider a reversal.

Me too.