Maybe he forgot to mention his "sitting" lost him BIG money too.
Maybe his no thinking too handed him big losses???
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Scalping is Risky?
- Thread starter Coner1980
- Start date
Maybe his no thinking too handed him big losses???
Scalping requires a lot of market pattern study and a proper risk management strategy. Since there are numerous trades involved, traders have to deal with several entry and exit points. I think people have a better chance to reap bigger profits in swing trading than scalping.
Yes, that’s true. Scalping is difficult because you have to execute several trades per day within a few minutes and hours. It requires a trader to be highly experienced in forex trading to be able to make quick trading decisions.
Every kind of trading is risky.
Scalping has some advantages and disadvantages. As for pros, I think that it is the full control over the current situation and opened deals. So, the trader always follow the charts and he is able to close the deal any minute. More than that, the risks in a single deal are quite low. A scalper aims to take several decades of pips and he can risk only several pips.
However, I don't think that such 'low' risks are real. Apart from the actual risks, a trader also takes psychological risks. I mean that sitting in front of the computer all day long affects the psychology of a trader which makes him take illogical decisions which base on his emotions. Such thing is very dangerous for the budget and it can blow the deposit. In addition to that, there is also the risk of making wrong analysis of the market because of the tight deadlines.
That is why I think that traders should trade long time in order to make more comprehensive and reasonable analysis of the market and spend less time following the charts in order to have the opportunity to enjoy their lives outside trading.
Scalping has some advantages and disadvantages. As for pros, I think that it is the full control over the current situation and opened deals. So, the trader always follow the charts and he is able to close the deal any minute. More than that, the risks in a single deal are quite low. A scalper aims to take several decades of pips and he can risk only several pips.
However, I don't think that such 'low' risks are real. Apart from the actual risks, a trader also takes psychological risks. I mean that sitting in front of the computer all day long affects the psychology of a trader which makes him take illogical decisions which base on his emotions. Such thing is very dangerous for the budget and it can blow the deposit. In addition to that, there is also the risk of making wrong analysis of the market because of the tight deadlines.
That is why I think that traders should trade long time in order to make more comprehensive and reasonable analysis of the market and spend less time following the charts in order to have the opportunity to enjoy their lives outside trading.
I was not born with emotions in conscience state, my subconscious has feeling. But when I have had six figure loses cause I average down on all trades, I will upchuck subconsciously. The risks are certainly there in scalping, it is the hardest IMHO to learn and yet so many flock to it with least amount of experience, I find this amusing. You do spend 80-100 hours a week for years to get screen time, years goes by to increase knowledge and at some point you get smart enough to automate it. I only manually trade now when I have made a different scalping system.
But if I had to do it over again, I would have just traded long term commodities, learn to hedge is my edge.
The best thing about scalping is that your risk per trade is lower, and you won’t have to dedicate much time to trading. At the same time I think it’s risky because most of the time we don’t even realise the small losses until they add up to become a huge amount.
yes it is risky. you are paying the bid/ask spread on a random coin flip, which means the trade has a negative skew (the more you trade the more you lose). having an edge can give you a positive skew, but you cannot get an edge from public information because it is already priced in. for example, if you are seeing a momentum pattern emerge, by the time you trade to participate, the bid/ask spread has moved and you are back to 50/50 coin flip.
If you want to "scalp" then I recommend looking into ULL HFT , arbitrage, risk arb, and stats arb strategies. They do exist, but the opportunities typically aren't very large and don't last a long time. Your advantage is that you are small and nimble, and should focus on trades that are too small for institutional money (e.g. the trade might be capped at $500k or $1MM). A good example would be looking at certain CEFs vs. held companies, small mutual funds and redemption policies (esp. if trading at a significant discount or premium to nav), very small ETFs, etc.
In larger, more liquid markets, like ES et al, you will just lose money, as you are too slow and too uninformed.
If you want to "scalp" then I recommend looking into ULL HFT , arbitrage, risk arb, and stats arb strategies. They do exist, but the opportunities typically aren't very large and don't last a long time. Your advantage is that you are small and nimble, and should focus on trades that are too small for institutional money (e.g. the trade might be capped at $500k or $1MM). A good example would be looking at certain CEFs vs. held companies, small mutual funds and redemption policies (esp. if trading at a significant discount or premium to nav), very small ETFs, etc.
In larger, more liquid markets, like ES et al, you will just lose money, as you are too slow and too uninformed.