Scalping and Trading
- Thread starter AllenZ
- Start date
Allen:
1. You may have stated it but I didn't find it in any posts - what is your "maximum loss per day" if you have one. My worst days have been trying to make up for early losses and then just contributing to them. I believe that some days the market giveth and somedays it taketh - I'd like to set a number that will tell me when to just stop and book my losses for the day. Using a % of account size is probably best as that will include the number of contracts.
2. Curious as to how you find scalp trades using 3min, 30min and 60min charts - I'd think a tick, 1min, 2min would be better for scalping?
Thanks very much.
1. You may have stated it but I didn't find it in any posts - what is your "maximum loss per day" if you have one. My worst days have been trying to make up for early losses and then just contributing to them. I believe that some days the market giveth and somedays it taketh - I'd like to set a number that will tell me when to just stop and book my losses for the day. Using a % of account size is probably best as that will include the number of contracts.
2. Curious as to how you find scalp trades using 3min, 30min and 60min charts - I'd think a tick, 1min, 2min would be better for scalping?
Thanks very much.
This a reply to the previous post.
1. The maximum stop ( daily ) I will use is 10% of my entire account. I use a fairly small trading account ( I have more personally than i keep there that is allotted for trading I have just found that the bigger my account is the more i tend to oversize my trades ) so this is not really a huge number ( to me ). I came up with this number the following way. I go back over past 90 days of trading and look for the largest daily gains ( top 3-4 per month ) and then I use approx 75% of that numbers as my daily stop loss maximum. Reasoning is that I want to be able to come back fairly easily from losses and the best way is to keep them controllable. This number ( 10% ) is large enough where it doesn't happen very often perhaps 1 a month and small enough where my next good day usually will eclipse the "stop" day.
2. As far as scalps, this is the way I am currently approaching them. First of all as you may have noticed I use a trading system comprised of several core setups designed to take advantage of 3-4 trend moves a day, when possible. This means that my scalps occur in a time when the market is usually basing. Thus the reason for my breakeven record with scalps. They usually keep my focus until my setup comes along and once in while I am in a scalp as setup occurs and if in the right direction I can hold with the superior entry. If in the wrong direction I quickly exit and flip the trade assuming the setup entry. Now assuming there is no immanent setup I generally have a somewhat simple approach for scalps. I look for about 2-3 points ( NQ's ) with a similar stop
( I use a 1:1 risk/reward ratio on scalps as I expect to see a higher win rate with them near 60-65% ) and for my entry I will concentrate more on the stop than on the entry. This simply means I will enter against the 1-3minute trend and generally with the 5-15 minute trend looking for a snap back off of support/resistance levels. I am a moving average lover and will watch those in conjunction with the S/R levels to make scalp decisions. Hope this answered the question.
AllenZ
1. The maximum stop ( daily ) I will use is 10% of my entire account. I use a fairly small trading account ( I have more personally than i keep there that is allotted for trading I have just found that the bigger my account is the more i tend to oversize my trades ) so this is not really a huge number ( to me ). I came up with this number the following way. I go back over past 90 days of trading and look for the largest daily gains ( top 3-4 per month ) and then I use approx 75% of that numbers as my daily stop loss maximum. Reasoning is that I want to be able to come back fairly easily from losses and the best way is to keep them controllable. This number ( 10% ) is large enough where it doesn't happen very often perhaps 1 a month and small enough where my next good day usually will eclipse the "stop" day.
2. As far as scalps, this is the way I am currently approaching them. First of all as you may have noticed I use a trading system comprised of several core setups designed to take advantage of 3-4 trend moves a day, when possible. This means that my scalps occur in a time when the market is usually basing. Thus the reason for my breakeven record with scalps. They usually keep my focus until my setup comes along and once in while I am in a scalp as setup occurs and if in the right direction I can hold with the superior entry. If in the wrong direction I quickly exit and flip the trade assuming the setup entry. Now assuming there is no immanent setup I generally have a somewhat simple approach for scalps. I look for about 2-3 points ( NQ's ) with a similar stop
( I use a 1:1 risk/reward ratio on scalps as I expect to see a higher win rate with them near 60-65% ) and for my entry I will concentrate more on the stop than on the entry. This simply means I will enter against the 1-3minute trend and generally with the 5-15 minute trend looking for a snap back off of support/resistance levels. I am a moving average lover and will watch those in conjunction with the S/R levels to make scalp decisions. Hope this answered the question.
AllenZ
The following is a reply to a question I was recently asked in another forum but i thought the ideas were pretty good and wanted to share them. If anyone has comments or ideas please share them.
In the same vein that I want to share my knowledge and experience as a trader I also want to learn more and grow as a trader, as well as a person.
I will admit I have not yet achieved the profitability level in futures I enjoyed at my peak in stocks and while I feel that is a product of the current market and my approach to, as well as respect for, the futures market. I still wanted to make that clear. I also believe than profitability is greater in futures simply as a result of the leverage available to the average trader. ( retail )
Trading futures will do 1 very important thing in my experience. It will expose ANY and ALL weaknesses you have as a trader. If you blow stops, overtrade, don't understand risk, trade when there is no trade, have no edge, cant pull the trigger, cant read charts, cant tape read, don't understand volume, have no confidence, have too much confidence, have no plan, have a bad plan. You get the idea. Futures are for traders, from what I can see. A good trader will make money there in the long run, a good trader will make money in anything and in any market. A bad trader can get lucky from time to time but in the end will suffer losses and eventually get out of the game.
Bottom line, a good trader will succeed no matter the market or vehicle. If your chosen vehicle is futures, then attempt to understand who you are as a trader and what you are trying to do. Know your weaknesses and strengths and how to exploit or control them. Trading futures is much more an exercise in risk control and trade management than in gambling and gunslinging which is a lot of the trading I see newbies doing. Find your edge, find your discipline, understand the market and why it does what it does.
All above advice is general in nature, but if trading is for you, and futures are for you, you will quickly find what you are looking for in the above statements. There is simply something of a freedom ( and imprisonment ) in trading the same vehicle day an day out that exposes you as a trader. Some people have told me that you should trade stocks prior to trading futures, but from the experience I have had in both I can say with reasonable certainty that the opposite is true. Good luck.
AllenZ
In the same vein that I want to share my knowledge and experience as a trader I also want to learn more and grow as a trader, as well as a person.
I will admit I have not yet achieved the profitability level in futures I enjoyed at my peak in stocks and while I feel that is a product of the current market and my approach to, as well as respect for, the futures market. I still wanted to make that clear. I also believe than profitability is greater in futures simply as a result of the leverage available to the average trader. ( retail )
Trading futures will do 1 very important thing in my experience. It will expose ANY and ALL weaknesses you have as a trader. If you blow stops, overtrade, don't understand risk, trade when there is no trade, have no edge, cant pull the trigger, cant read charts, cant tape read, don't understand volume, have no confidence, have too much confidence, have no plan, have a bad plan. You get the idea. Futures are for traders, from what I can see. A good trader will make money there in the long run, a good trader will make money in anything and in any market. A bad trader can get lucky from time to time but in the end will suffer losses and eventually get out of the game.
Bottom line, a good trader will succeed no matter the market or vehicle. If your chosen vehicle is futures, then attempt to understand who you are as a trader and what you are trying to do. Know your weaknesses and strengths and how to exploit or control them. Trading futures is much more an exercise in risk control and trade management than in gambling and gunslinging which is a lot of the trading I see newbies doing. Find your edge, find your discipline, understand the market and why it does what it does.
All above advice is general in nature, but if trading is for you, and futures are for you, you will quickly find what you are looking for in the above statements. There is simply something of a freedom ( and imprisonment ) in trading the same vehicle day an day out that exposes you as a trader. Some people have told me that you should trade stocks prior to trading futures, but from the experience I have had in both I can say with reasonable certainty that the opposite is true. Good luck.
AllenZ
