Scalping strategies

[intradaybill]

Quote from econometrics:

hi there,

I am more into spread trading, but turning interested in scalping.

i have never done any scalping before.

Let's discuss what sorta approaches/strategies people use in scalping?

Why are you looking into chasing ticks with basically no infrastructure for competting with "upstairs" when you can take positions in the market and profit from larger moves?

I know, most will say that they don't like overnight open positions but to me this is an excuse for their "addiction".

 

[mikesmithv]

Quote from Cheese:

Lets assume a volatile and liquid futures market (eg NG, CL). You would set up a system with the following ingredients: a fairly fast chart configuration, medium paced triggers for 'buy' and 'sell' and fast triggers for 'buy' and 'sell', and a small target of points for each trade. Now to play. When the medium signal goes on say for a buy, you take the next fast signal for a buy. You run it to the target points and exit. You will find that this can be repeated several times in a session. In a corporate/professional enviroment you can use such a system as an introduction in developing a trainee (or you can assign him or her to this form of trading).

To the honorable Mr. Cheese,

I have been thinking about this statement for days and how it jives with your other posts. Are you suggesting this could be a starting point for developing a system which exploits higher gyrations or do you see this as another strategy entirely. To state it another way, do you view what is commonly referred to as "consolidating" days vs. "trending" days as simply days with gyrations of smaller magnitude vs. gyrations of greater magnitude? Same strategy, different parameters?

 

[trader#21]

Quote from econometrics:

hi there,

I am more into spread trading, but turning interested in scalping.

i have never done any scalping before.

Let's discuss what sorta approaches/strategies people use in scalping?

Plenty of opportunities there in first and last 30 mins, I hope you are fast on your keyboard. Those who really know wont post them here because they're sensitive to execution. Work out yourself. PM me if you have some specific Qs.

 

[Cheese]

Quote from mikesmithv:
I have been thinking about this statement for days and how it jives with your other posts. Are you suggesting this could be a starting point for developing a system which exploits higher gyrations or do you see this as another strategy entirely. To state it another way, do you view what is commonly referred to as "consolidating" days vs. "trending" days as simply days with gyrations of smaller magnitude vs. gyrations of greater magnitude? Same strategy, different parameters?

Normally, as you will know, I always suggest the general principle of buying the upmoves and selling the downmoves using a system that is giving you reliable signals to do that in a volatile and liquid futures market. Here you exploit the gyrations, the swings up and down, as they follow each other.

I don’t need to distinguish between a range day or a so-called trend day. Within a swing there will be very small (or may be not so small retracements) which you can refer to as minor gyrations within larger gyrations. But, no, I do not suggest either different parameters or a different strategy to buying the upmoves and selling the downmoves, as a general principle.

The previous post of mine, to which you refer, was just an answer to the question, how to scalp. Here I was showing that a rational and logical mode can be adopted by the individual trader to take very good trading results, day on day, with short term trading targets. Naturally it is related to the markets gyrations because those are the facts of price movement in a market. However you could also use this modus operandi as an alternative to get yourself going.

 

[mikesmithv]

Quote from trader#21:

Plenty of opportunities there in first and last 30 mins, I hope you are fast on your keyboard. Those who really know wont post them here because they're sensitive to execution. Work out yourself. PM me if you have some specific Qs.

No matter how fast you are on the keyboard a bot will be faster. Whatever setup you see the bot will see it before you do. I hope you did not say too much in your PM because scalping strategies are the most suitable for automated trading and that space is getting pretty crowded so there is an army of people looking for fresh ideas. Every fraction of a % counts.

Computers are best at short term predictions. For example the weather service computers can look at chaotic data and predict that it is going to be 5 degrees cooler tomorrow within a degree or two - and yet it does not have a clue about a year from tomorrow. Same with trading. The shortest timeframes have the highest concentration of bots for that reason. They can react almost instantaneously on a few simple rules, can be installed closer to the exchange computers than most humans, and can work around the clock without distractions. I would think the longer intraday timeframes (like what Cheese *normally* preaches) have way more possibilities but that's just a theory.

 

[rosy2]

write a program that puts limit orders around a hundreds of stocks. adjust your limits depending on position. everyone is doing this in one form or another.

 

[mikesmithv]

And exit the position shortly thereafter? Profitably? Or are you serious?

 

[jack hershey]

Quote from mikesmithv:

And exit the position shortly thereafter? Profitably? Or are you serious?

rosy just explained to you the relationship of Support and Resistance.

The bracket trade is used to capture moves as the S/R range shifts to a new S/R range.

In time, you may recognize that the S/R order of events is such that one replaces the other in trends.

cheese pointed out to you that the first move across a S/R range is followed by a second similar move across the second progressing S/R range.

you will "get it" with experience in obsrvation and then having a mental vocabulary that allows you to communicate with others on their turf instead of jusr rexpressing things in terms of your more narrow turf.

 

[mikesmithv]

I've been down that road of "writing a program that puts a limit order on 100 stocks" and whatever edge that has gets wiped out in one bad day over and over so I don't think rosy2 was serious, but I am curious. Why did you decide to go on the attack two months after I posted that?