Not Cashing In On Pay Day

Just for the record in this market I would trade for a dime all day long if I could get a win rate that was fairly high in the 70% area or so. This would really add up trading 2-3K shares at a time in say 10-15 trades a day. It is like the cockroach style of trading where it is not very pretty but survives to play another day. Actually if you work the numbers out it turns into pretty good money if you could do it consistently.

Now only if I knew a strategy that could consistently do this. The old "tapereading" method does not seem to be working that well for me lately.
 
Quote from chasinfla:

"cockroach" style? eeeyuck. I'd think it deserves a more dignified name than that. even 'grinder' was better than that.
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Cockroach came from that fact for the most part scalpers/grinders have been able to survive most market conditions, even bad markets because they are willing to except 10 cent moves as winning trades where a lot of other styles looked at that as a scatch trade. Cockroaches seem to be able to survive every environment thrown at them too.
 
I *want* to be a cockroach. I think that's gonna be my trading style. I've never made more than 500 bucks a week take home in my entire life. Long stretches of depression-inducing unemployment and underemployment post-Internet, post-crash, post-9/11... yeah, sign me up for my antennae and extra legs.

Loxley
 
Quote from cornholetrading:

Just for the record in this market I would trade for a dime all day long if I could get a win rate that was fairly high in the 70% area or so. This would really add up trading 2-3K shares at a time in say 10-15 trades a day. It is like the cockroach style of trading where it is not very pretty but survives to play another day. Actually if you work the numbers out it turns into pretty good money if you could do it consistently.

Now only if I knew a strategy that could consistently do this. The old "tapereading" method does not seem to be working that well for me lately.
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oh man, don't say that! :(

i hope it's just cos you're a bad tape reader! (no offence) i can't afford to let go of the idea that tape reading at a skilled enough level could reach 70%.

what kind of losses do you have in mind? apart from the thick, heavy volume pigs that 30c ranges all day (like intc, ge, csco) i don't see you getting 10c wins @ 70% with much less than 10c stops.
but to really stand a good chance for the long haul, i think you'd have to get losses below 10c. otherwise, with 10c wins and losses, you'd need 60% winners just to break even. (with 2c r/t's)
at 70% on 20 trades, 2k shares, you make $800, but
at 9 wins, 11 losses (55%) for the day, 2k shares, you've dropped $400.
given that you are gonna have days where you stink, if you intend to take all wins at 10c, your good days will need to be about 80% to compensate. i suppose that's doable (i've done it with 2:1 reward:risk a couple of times) every now and then, but how hard would it be to do consistently (like 2 or 3 times a week?)
 
Quote from daniel_m:



oh man, don't say that! :(

i hope it's just cos you're a bad tape reader! (no offence) i can't afford to let go of the idea that tape reading at a skilled enough level could reach 70%.

what kind of losses do you have in mind? apart from the thick, heavy volume pigs that 30c ranges all day (like intc, ge, csco) i don't see you getting 10c wins @ 70% with much less than 10c stops.
but to really stand a good chance for the long haul, i think you'd have to get losses below 10c. otherwise, with 10c wins and losses, you'd need 60% winners just to break even. (with 2c r/t's)
at 70% on 20 trades, 2k shares, you make $800, but
at 9 wins, 11 losses (55%) for the day, 2k shares, you've dropped $400.
given that you are gonna have days where you stink, if you intend to take all wins at 10c, your good days will need to be about 80% to compensate. i suppose that's doable (i've done it with 2:1 reward:risk a couple of times) every now and then, but how hard would it be to do consistently (like 2 or 3 times a week?)
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Even 70% is not necessary when scalping... you can get away with 60% and still make reasonable money...

If you scalp in size, it is not unreasonable to risk $750 per trade as your stop loss... if your target is the same as your stop loss and you are getting 60% of your trades right, then your gross expectancy is (0.6 x $750) - (0.4 x $750) = $150... trade that 10+ times a day and its not bad money at all... and add to that the occasional trend day where you hold on for points, and it all works out pretty well, even after commissions...

But I as previously alluded to, its the large size which ensures a favorable per trade expectancy...
 
Quote from candletrader:



Even 70% is not necessary when scalping... you can get away with 60% and still make reasonable money...

If you scalp in size, it is not unreasonable to risk $750 per trade as your stop loss... if your target is the same as your stop loss and you are getting 60% of your trades right, then your gross expectancy is (0.6 x $750) - (0.4 x $750) = $150... trade that 10+ times a day and its not bad money at all... and add to that the occasional trend day where you hold on for points, and it all works out pretty well, even after commissions...

But I as previously alluded to, its the large size which ensures a favorable per trade expectancy...
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$750 per trade?

so for a 10c win you'd need 7500 shares? how many stocks can you do that on? (i don't know, i'm not that skilled to time it so good that i'll get my shares, not move the price (much) and still get follow through on direction. but i guess some guys can do it)

your example obviously ignores commissions, which isn't smart. so the only way your large size is going to "improve your expectancy" is if the commission's capped. so far i'm only aware of commission caps for listed stocks. anyone know of any for naz?
without the caps, the larger size is irrelevant with respect to expectancy, and in your example, even with .015/share r/t's the return would be $400 on 10 trades. "not bad money at all", given that you're trading 5-10k shares? that's not what i'd call it

and, of course, your "if you scalp in size, $750 is not unreasonable to risk $750 per trade" would really only apply to someone with at least $150k equity. whether the kind of return they can expect from this kind of trading is "not bad money at all" is something i'd question... especially considering that after a couple of years at it, the yearly % return goes way down (unless they can somehow "scalp" with 50k shares). but, with everyone here so focused on short term results, i'm sure you'll get a lot of agreement.
 
Quote from daniel_m:



$750 per trade?

so for a 10c win you'd need 7500 shares? how many stocks can you do that on? (i don't know, i'm not that skilled to time it so good that i'll get my shares, not move the price (much) and still get follow through on direction. but i guess some guys can do it)

your example obviously ignores commissions, which isn't smart. so the only way your large size is going to "improve your expectancy" is if the commission's capped. so far i'm only aware of commission caps for listed stocks. anyone know of any for naz?
without the caps, the larger size is irrelevant with respect to expectancy, and in your example, even with .015/share r/t's the return would be $400 on 10 trades. "not bad money at all", given that you're trading 5-10k shares? that's not what i'd call it

and, of course, your "if you scalp in size, $750 is not unreasonable to risk $750 per trade" would really only apply to someone with at least $150k equity. whether the kind of return they can expect from this kind of trading is "not bad money at all" is something i'd question... especially considering that after a couple of years at it, the yearly % return goes way down (unless they can somehow "scalp" with 50k shares). but, with everyone here so focused on short term results, i'm sure you'll get a lot of agreement.
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0.015 / share is daylight robbery... and as for doing size, it is perfectly feasible on larger issues... obviously the fill price on the various tranches of the position are often not the same and neither are the exit prices (but with limits on the entries and exits you can get all or the vast majority of your line filled)... but the net result is a dime or so on a good trade...
 
.015/share ROUND TURN dude.

and yes, you can get better, but .0075 is still considered a pretty good rate isn't it? (considering firms like Bright only hand it out to their highest volume traders)
 
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