Noone from the outside is scalping now or has ever been able to scalp in the past. The term is a misnomer.
Is scalping still profitable?
- Thread starter qlai
- Start date
Indices have been fantastic scalping markets with the rise volatility.
Average True Range comes from ["preceeds!!"] the same variability that gives us volatility, so that, while they are computed in an entirely different fashion, with a bit of effort, they will chart nearly identically. (So, conceptually, they are the same, but computationally, they are different animals altogether.)
But to your question -- the ATR is down so much because volatility is down so much. This is true not only for the (long-term-ed) options' VIX, but for what is now termed the VIX9D (0-8 days?). But if these are tides, look at the individual waves crest-trough-crest... (Which is to say, look at the 4-hour, the 1-hour, the 1-minute charts)... and you'll see the same placidity -- which is death to scalping.
What caused it? Dunno! I think the narrative that is aimed at sub-10.0 S&P volatility works for the underlying price-action ATR as well: prices at extreme highs, pushed to follow available yield, low interest rates, high money supply. It happens to coincide with the FED's raising of rates and lowering of balance sheet levels. (But I'm reluctant to link a convenient timing of events to a cause↔effect relationship.)
Temporary or permanent? Regardless of whether you mean with respect to a low-ATR regime or a high-ATR regime, I don't think I/we need to answer that. The reason? If the low-ATR/scalping-sucks regime were to return tomorrow, I would know by looking at the low-ATR, and I would know *not*to*trade (scalp) while the market reflect insufficient waves to take me in/out of a trade. If the market stays with an ATR sufficient to wash up and down price points that I find attractive, then I'd be a fool to ignore it. (With all caveats to bracket/stops in place and all that.)
Again, though: my own guess (right now: late 2018) is that we are *returning* to the historic vol (and preceding it: price ATR) of olde -- that the *drought* of 2012-2017 in passed.
But hey: things may change.
regarding futures, it is not true that you have to be automated in order to scalp.
I assume by "outside" you mean outside of the pit/floor. In the video he is talking about "catching 5-10 ticks several times a day, not playing the book for 1-2 ticks"
---and that is not scalping. That is short term day trading.
Anyone can scalp...you need to be automated, low comissions, low latency, suitable platform for scalping to be profitable. If not automated, you better be a fast thinker when using that DOM while having those other mentioned variables in place.
wrbtrader
Are you sure that you know what you are doing ? Missed the rollover, still trading the old december contract ? And doing that kind of volume and still paying paying the fixed rates at IB ? Come on, you can do better than that.