Is Scalping or High Frequency Trading Less Risky?
- Thread starter aeliodon
- Start date
Pretty interesting reading all the comments. Seems kind of ironic to have better profit off intraday scalping. But, I have been more profitable lately doing that as well.
I like the comment about not being subject to gaps. Seems much easier to predict intraday movement, then the following opening.
I don't see how people can do hundreds of trades intraday, unless they are using an automated system. I would think the slippage and commisions would devour profits using that strategy, and the minute gains expected from it.
I find only a few 1-2% intraday swings are neccessary to have a profitable day.
I like the comment about not being subject to gaps. Seems much easier to predict intraday movement, then the following opening.
I don't see how people can do hundreds of trades intraday, unless they are using an automated system. I would think the slippage and commisions would devour profits using that strategy, and the minute gains expected from it.
I find only a few 1-2% intraday swings are neccessary to have a profitable day.
Trading is only stressful when you lack confidence and faith in your system. I think longer term position trading can be just as stressful as HFT because sometimes you just have to wait and wait and wait for a move to happen - it may never happen - and you have to endure whipsaws and drawdowns that can wipe out most of your profit.
I do agree that the big money is made on position trading by averaging up on huge moves - but those moves are few and far between.
The thing about position trading is that most of those systems are 50% or sub 50%. That is psychologically devastating as each trade is just like a coin flip. A 50% system is a psychologically devastating system to trade over time as it inspires very little confidence even if the money is good cause the temptation will always be there to second guess the system when each trade is just a coin flip.
Thats why i thing your 'base' system has to be a 75%+ HFT system that makes money every single day baring some kind of system error. Then when you have that consistency and confidence you can play around with some 40% position trading systems that make the big money a few times a month.
Very few people on ET trade for a living. Its just a hobby for most who work full-time and someday wish to quit to trade full time. Even fewer people make a decent living trading. Many folks talk, but the only guys that have proven by posting consistantly positive blotters have been HFT traders - which conventional wisdom says is the riskiest way to trade.
apex82,
I always Enter with a Market Order. If you tried Limit Orders....you couldn't Scalp the way I do. My Enties have to be "timed"....for lack of a better word....and you need to React to what you see....can't Over Analyze the Indicator or ACV....if you do....you lose. Also....you need to have Trust in your Indicator.
You might think there would be too much Slippage with a Market Order....but if you "time" it right....you can usually get One Tick Slippage at the most....or more often than not....No Slippage at all.
If you have a Slow connection....or Slow Data Feed....it probably won't work. For instance....I use TradeStation for Charting....but if I tried to use their Stoneage Matrix for my type of Scalping....I would probably Lose....most of the time. Been there....done that. I use another trading platform....and I keep it on a separate computer....from TradeStation....due to TS freezing at times.
Bill
VSTscalper
Thanks for the reply. I scalp the er2 mainly with auto systems and all my trades are limit orders, except for stops. I havent found a scalping system that can be profitable trading 10 contracts+ without missing fills or acquiring too much slippage.
I have ninja with a direct connection to the exhange through a fix adapter with TT. Can you get any faster then that?
How did you get that cool add on for TS that shows the time in other parts of the world?
I scalp intra-day, swing-trade for a day to a week(s), and position trade for the long-run.
Scalping is about 90% profitable for me. The key to my success was removing the deer in the headlights stubborn unable to take a loss behavior. Having said that with discipline I think you can make money every day and on some breakeven after commish or slightly negative after commish. But it's work. Get sloppy and you lose. Get greedy and you lose. You're basically taking money out based on market structure and understanding the ebb and flow of money as it moves through a day.
Scalping is about 90% profitable for me. The key to my success was removing the deer in the headlights stubborn unable to take a loss behavior. Having said that with discipline I think you can make money every day and on some breakeven after commish or slightly negative after commish. But it's work. Get sloppy and you lose. Get greedy and you lose. You're basically taking money out based on market structure and understanding the ebb and flow of money as it moves through a day.
apex82,
I use NinjaTrader....with Zen Fire....much faster than my J-Trader with Patsystems data feed. I don't Auto Trade....prefer hands-on. Getting rid of Slippage is why I try to...."time" the trade....based on my indicator. The indicator has to be set-up right....to do that....and it takes some practice to get good at it....but it is not really that hard to do.
As I said....I usually trade 4 contracts....no need to trade more. I have a fairly high Net Daily Goal....and can usually reach it within a couple hours after the open....unless I am talking with someone in Skype....or drawing on my charts for someone in hotComm.
Not an add on for TS....a separate program. I just keep it at the top of my screen....shows up when I do a Print Screen.
www.qlock.com
Bill
VSTscalper
Neet,
I did use the Matrix....had too many problems. My Scalping may be somewhat different than yours. Sometimes....say in a five minute period....I may have 10 or more trades....usually 2 ticks. It all depends on what I see with my indicators and the ACV.
If Price starts Trending....I will jump in and ride the Trend....but as I said....I need to be convinced that it is worth it to stop Scalping.
Is your Bracket....+ or - 5 ticks?
Good trading to you.
Bill
VSTscalper