Of course scalping is profitable.
The only question is whether you can do it.
The only question is whether you can do it.
Is scalping still profitable?
- Thread starter qlai
- Start date
Hmm, haven't really thought about it in this light. It sounds really practical and worthy of been tried out!
Be meaning to ask, I saw somewhere that scalping is more profitable when you do it on multiple trades. How true is this? any experience on this?
I been scalping since 1993-ish, tried day trading at that time and just couldn't do well enough to justify as there was no ES(started in Sept '97), it was calling down to floor and each 0.05 tick was $25 and margins were $20k for S&P 500 futures. Brokerage was $25 for roundturn then. Daily ranges were seldom more than 4 points, but compared to today, was easier as charting held for patterns better than today. It was easier to day trade currency futures then as they moved better and were $12.50 tick. But scalping then was more of going for 5-6 ticks and do several times in a day.
Today's scalping much tougher, by far hardest of all time frames IMHO. When I read so many are trying it, I love it. And if you doing retail, all the worst. Need to lease/buy a seat, have your system on a server in exchange building or half mile away. Now for me to have the same bang as in the 1990s, have to be doing 10 ES for 1 Big S&P contract. I had to learn to adapt to HFT's, hedge funds and retail traders having $3k accounts and no charting skills(they think they do). I had to relearn Physics/programmed Time and Sales indicators, not so much to trade as others, but to better understand when conditions are ripe for them to trade and often get out of the way or place limits based on waves of HFTs. Scalping has become more Math complicated, better you know your enemy, best to wait or use limits. You learn different ways to enter to better hide what you are doing. For me it has definitely become more challenging, my age I can not do 300 trades as I use to between 2002 and 2012 manually-age does catch up to humans, tick goal between 0-3 ticks in most markets depending on ATR(at times it has to go to 3 points cause risk goes up), time limits of 2.5 minutes and less, and often under one minute. And concentrate on seldom losing. Automation way to go for me, diversify symbols, go for only the very best stats.
The amount of information to memorize is staggering for scalping. If I was in my 20's right now, I would do Swing trading on commodities/hedged and learn options well. Have a life outside of trading and with automation, life much better.
Today's scalping much tougher, by far hardest of all time frames IMHO. When I read so many are trying it, I love it. And if you doing retail, all the worst. Need to lease/buy a seat, have your system on a server in exchange building or half mile away. Now for me to have the same bang as in the 1990s, have to be doing 10 ES for 1 Big S&P contract. I had to learn to adapt to HFT's, hedge funds and retail traders having $3k accounts and no charting skills(they think they do). I had to relearn Physics/programmed Time and Sales indicators, not so much to trade as others, but to better understand when conditions are ripe for them to trade and often get out of the way or place limits based on waves of HFTs. Scalping has become more Math complicated, better you know your enemy, best to wait or use limits. You learn different ways to enter to better hide what you are doing. For me it has definitely become more challenging, my age I can not do 300 trades as I use to between 2002 and 2012 manually-age does catch up to humans, tick goal between 0-3 ticks in most markets depending on ATR(at times it has to go to 3 points cause risk goes up), time limits of 2.5 minutes and less, and often under one minute. And concentrate on seldom losing. Automation way to go for me, diversify symbols, go for only the very best stats.
The amount of information to memorize is staggering for scalping. If I was in my 20's right now, I would do Swing trading on commodities/hedged and learn options well. Have a life outside of trading and with automation, life much better.
Of course, scalping with just one single trade doesn't really yield much, but on multiples trades the results can be massive.
I've actually found that on a one minute chart a high volume bar on the way down is often a sign of a reversal or at least a slowing of the selling same on an up move
I see, it's something to consider then. And I'll do more findings on this so I don't risk it all for no gain.
For an independent trader, working with longer time frames will most likely yield better risk vs reward simply because you're not at the mercy of highly automated and algo-driven order flows. Which means a strategy more akin to swing trading than legit "scalping".
You need to know what your edge is. You sitting there with your hand on a mouse cursor zipping around a DOM order ticket and mixing it up with highly capitalized and specialized bots is likely not a good hand to play if you have other choices. In fact, your first clue should be the price of your ECN versus the price of Geneva's, or Jump's, or Belvedere's or Peak 6's ECN. They spend more on an ECN in one month than most people earn in years. It is NOT a level playing field.
But there are ways to minimize or even eliminate that imbalance - you can use the time component to your advantage.
You need to know what your edge is. You sitting there with your hand on a mouse cursor zipping around a DOM order ticket and mixing it up with highly capitalized and specialized bots is likely not a good hand to play if you have other choices. In fact, your first clue should be the price of your ECN versus the price of Geneva's, or Jump's, or Belvedere's or Peak 6's ECN. They spend more on an ECN in one month than most people earn in years. It is NOT a level playing field.
But there are ways to minimize or even eliminate that imbalance - you can use the time component to your advantage.
Last edited:
One other thing to consider with scalping is remembering one fact, which is;
Not every trading system is going to be appropriate for every trader. There are some key qualities that a good scalper must possess.
One must be calm under pressure and able to make snap decisions with good judgment. As we all know, it requires great speed to scalp, so you need to be super fast and be ready to make snappy decisions along the way.
Not every trading system is going to be appropriate for every trader. There are some key qualities that a good scalper must possess.
One must be calm under pressure and able to make snap decisions with good judgment. As we all know, it requires great speed to scalp, so you need to be super fast and be ready to make snappy decisions along the way.