New FREE Scalping Room

L

LivToTrade

I haven’t seen any rooms dedicated to scalping in which traders share their collective insights on a stock for the purpose of learning how to scalp in an atmosphere of friendly competition. So I decided to start one.

Basically this is how it will work: I have several NYSE stocks whose average daily range over the last five days is greater than a buck and whose average volume is greater than and million a day. Together we’ll pick one of them and focus on just that stock for a period of weeks. We’ll share where we get in and where we get out and why. (Paper trading, at least at the start is advised.)

The goal is to develop the ability to observe the stock and the specialist’s characteristics, patterns and idiosyncrasies. We’ll be watching for tape resistance and support points, and try to determine if the specialist is long or short. What games does he like to play? Is the action of the tape, volume, and the specialist telling us we’re in a period of accumulation, distribution, consolidation, or congestion? Although no two stocks or specialists are alike, there are common threads. Once you master one stock, others will be easier. It’s a matter of getting over the hump, and everyone must do that by himself. I’d just like to shorten the learning curve for you and myself.

As I said before, the only reason that I’m starting this room is that I can’t find one like it. I’ve known a couple of very successful scalper’s, but usually the ones that know won’t tell and the ones who tell don’t know. (But may still charge.) I’ve nothing to sell. I’ve already told you why I would like to start this.

If you know of a room like the one I’m proposing, please enlighten me so I can go there. It would save me time and effort. I have no desire to compete against any room being offered on this site or elsewhere. If, however, you find this project interesting and would like to be a part of it, e-mail me today. As soon as I get ten traders I’ll start the room. Good luck and better trading. LIV

By the way, if your not interested in a room strictly devoted to scalping, I can recommend
http://www.traderalliance.com/
http://clubs.yahoo.com/clubs/elitetradinginaction

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What is, Is.
 
LivToTrade,

Conventional scalping primarily involves level2 and with the rare glimpse at an intraday chart to see you are not entering too late into a move.

As Babak has correctly pointed out, decimalisation has considerably diminished the profitability of level2 scalping. These days stocks have to traverse perhaps 5 times as many levels for the same price change as in the old days for the SAME profit.

Moreover, scalping level2 can only be done effectively with large size (as opposed to chart trading, where large size is not a prerequisite). The fact that you need large size to scalp level2 is made extremely difficult by decimalisation because of the high probability of partial fills at whatever price level you are attempting to enter.

So if you wish to scalp level2, you must ensure that commissions are on a per share basis. As a result of partial fills on scalping oriented size, ticket-based charging schedules will tremendously reduce the profitability of a scalping strategy. You most certainly need a per share price schedule. And even with per share pricing the sheer physical effort involved in getting filled to large size makes each day more of a chore than a pleasure.

There may be some scope for futures based scalping on the larger cap NYSE stocks, where you are dealing with the New York specialist and won'y have a major problem with partials if your trading is in sync (or ideally anticipatory) with the S&P futures. Stocks like IBM come to mind as viable candidates. But I suggest that Nasdaq scalping is now a severely dented strategy.
 
Liv2trade,
I wish you the best of luck with your chat room. I do however have to agree that scalping is probably a thing of the past. At least with nasdaq. Listed stocks may be different. I don't know because I only trade nasdaq. I would however be extremely interested in a chat room on trading the e-mini. Do you know of any or would you consider doing one on that? I'm just under the limit for the new margin rules and may be forced to move there anyway. It would be nice to see what others are doing. You may have a better response with a room like that anyway in that a lot of traders will be forced to move to futures. I also think there are better opps to make money with the tight spreads and liquidity.
 
I've also decided to concentrate on NYSE stocks - currently looking at 3 stocks trying to get the feel for movements. Nasdaq doesn't apply for me, because of the fills etc. Large size on NYSE is easier (not that i'm doing large size yet, mind).

Maybe the term 'Scalping' has misled some people - are you intending to try to get ~ 8-10 cents per share or looking for bigger moves like 1/4 and up? Personally i'm trying to look for the 1/4's and up; this allows 'reasonable'? stops.

Of course there's no easy way to get the feel for these stocks, there are several successful NYSE traders in Elite from what i can tell, and they all find it difficult to explain why or when (to buy/sell). I don't think it's because they want to keep it to themselves, it's just you have to get the feel for yourself...unfortunately i'm not there yet :o


good luck,

coops
 
Livtotrade,

One suggestion on scalping is to focus on stocks with mid-to-low volume. The active stocks that trade several million shares a day are so liquid and competitive that scalping is often difficult, if not impossible. Instead, look at stocks that have been overlooked by other traders.

Htrader
 
I think that scalping on the nyse is very possible. You may have more success with less liquid names. May I suggest kkd. I think that you can make 3+ pts a day on 500 or so shares. I tried it for 2 days and had good success with under a k shares, but once I tried to pull 3-5k shares, I moved it too much. The thing is that you have to decide how to trade that stock. Some stocks just are averaged into. Something like dis, you can just as easilly average into. Something more volatile, you need to decide exact entries and exits.
 
Pretorian2 and others. I've found KKD EXTREMELY difficult to read, but that is just me. Thought I'd warn others.

There are stocks that are a lot easier to read. I used to scalp F (FORD) a lot but with all the news lately stopped.

rtharp
 
Tharp, you missed it on tues, I took 40c on almost 20k of f. That bugger is gettin volatile lately. But I asume that once it settles down a bit, it'll be useless. At 20 a share, the intraday ranges will be too small. I think kkd is a goodie, but you have to practice. I found one paculiar thing about him, that you can pray on and really steal $$$ from the guy, but I never could get more than a k shares when I wanted 5k or so, so i just gave up.
 
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