Scalping and Analysing your trades
- Thread starter douwe
- Start date
FT71,
Dont know if you're still watching this thread or not, but I wanted to ask about this.
It sounds like you believe that time in winners versus losers is a key metric for scalpers. I was wondering if you would be willing to elaborate on what "good" numbers look like for these figures. IE, are you looking to see that time in losers is significantly less than time in winners ?
-T
Time in trades is not as important as the size of the average winner and the percentage of winners. However, the time in winners/losers tells me if the trader is too focused on making money and has confidence issues, etc. If a trader follows what he deems to be a plan that works, then he should easily be able to hold on when he has a winning trade working for him and he should be able to cut losses fairly quickly. Eventually, he will learn to completely trust the fact that he will not ride out a loser and this opens the doorway to pressing winners (adding to winning trades while keeping an eye on where his average lies in the big picture).
Generally, I don't have a time ratio with winners and losers. However, I need to see that the combined percentage of winners and scratches is well above 70%. In other words, due to the frequency a scalper trades, you must not be wrong more than 30% or less of the time. When you are wrong (which is inevitable), you have to make sure that you are cutting those trades with complete abandonment even if they happen in a streak. If you do hit a streak of 3 or more losing trades, you need to get up, walk around or walk away for a few minutes, come back and review your trades and the charts from the highest timeframe you trade to the lowest. This will help you refocus on what the market is trying to say.
I hope that helps.
A few words of caution that I have mentioned again and again: Scalping is a tough way to trade unless you have the right infrastructure, cost structure/memberships and mindset. Scalping is not for someone trading at a retail level on an internet line. Some people can do this, but your edge is partly due to the fact that you are as fast as a guy sitting at a prop shop.
Good luck.