Scalping - The Real Deal - The Best Trade This Summertime?

[humbletrader2016]

[QUOTE=" if you repeat something 100 times a day, you will improve faster than if you repeat once a day."[/QUOTE]

Scalping 100 times a day works only when you constantly scan stocks to find those matching your scalping setup to trade. I find it extremely insane to scalp 100 times a day on Futures market, leave alone to newbies who will burn their accounts in a matter of days before they realize what it means by overtrading.

 

[volpri]

[QUOTE=" if you repeat something 100 times a day, you will improve faster than if you repeat once a day."

Scalping 100 times a day works only when you constantly scan stocks to find those matching your scalping setup to trade. I find it extremely insane to scalp 100 times a day on Futures market, leave alone to newbies who will burn their accounts in a matter of days before they realize what it means by overtrading.[/QUOTE]
I generally get 8 to 20 scalping opportunities on ES 5 minute chart during RTH’s. But my scalps are 1 to 4 points. Usually 1 to 2.

 

[JigsawTrading]

Then I would offer a second criticism {"observation"??} being, that one of the things that clued me to the presentation likely being 'for real' was the comment of having flexibly placed entries being a good drop (long) or pop (short) away from the market, such that if you're entering long, you enter on a relatively unexpected downstroke, or if short, on a similar surprising upstroke. These give you plenty of time to either 1) harvest a tick or three as the market recovers to its prior path up (or down), or 2) that if things are gathering for a (short-term) reversal, you have plenty of time to either minimize the loss, get out flat, or even pick up a tick regardless of the 1-minute-to-5-minute trend. That is a trading policy that might *seem* so obvious, yet I have not seen it enunciated in general trading discussions. ("Weird.") And so, "Kudos!"

One coinciding idea here is that the market have sufficient "wash" to it -- which I define as, regardless of an overarching trend, a price action 'true range' that would let me reliably take ticks no matter of direction -- if I'm seeking only a single 0.25 tick, I want 0.75 to 1.00 to insure that when I enter, even if I'm wrong on direction, I can hold for a minute, and leave on the next wave, regardless of the tide.

The only thing that gets that wave action -- that "wash" -- is the ATR. BOY was I late in picking that up. BUT I DID! ("Woot!") Brought me solid results for a long time. AND, importantly, told me to stay the hell out of markets without sufficient wash: If you enter, you'll get trapped in the tar of it, and slowly killed.

There are many other scalper-appropo' lessons from watching an ATR through the day, but we'll save that for another time....

We all look at the markets in different ways and with different tools. Some are useful and some are "lucky rabbits feet".

One of my "lucky rabbits feet" is discretion. I can't prove it's more than just a mental thing but I can tell you why from my discretionary head doesn't use ATR.

The market shifts gears constantly - it did in the video. So when it does start running. it'll be the volatility profile for the previous run on the same day that I'll be most interested in. An ATR that contains the slow period we are breaking from would (to me) not be as accurate as the discretionary eyeballing I'd given the markets that day. You can hear me say in the video that 10 ticks trail to sweep into a trade didn't seem enough for the day - so that was my "watched the markets, squinted my eyes and eyeballed it" ATR.

Not very scientific but like I say - I am more for feel than math. So that guesstimate gives me more confidence than the ATR would. Hence the lucky rabbits foot.

 

[JigsawTrading]

[QUOTE=" if you repeat something 100 times a day, you will improve faster than if you repeat once a day."

Scalping 100 times a day works only when you constantly scan stocks to find those matching your scalping setup to trade. I find it extremely insane to scalp 100 times a day on Futures market, leave alone to newbies who will burn their accounts in a matter of days before they realize what it means by overtrading.

We all have opinions here. I am not going to say you are right or wrong, I can merely give my own experiences.

I started out day trading stocks. Part of that was using briefing.com/earnings calendars to find stocks in play. Then as the day wore on, using scanners.

It's a laborious task in my opinion. Half the time, the pre-market analysis stuff was a wash after the open because the stocks put in all their move in the pre-market session. The scanners were OK - but you'd very often get the signal off the scanner when the opportunity was done.

The most successful trader I saw doing this was trading about US$30M of boutique fund money. He was day traded news/earnings stocks - obviously with a lot more size - but he had 4 full-time researchers working for him. I think if you are going to scalp stocks in this way, you need what he has OR be part of a prop firm that's helping with discovering stocks in play.

As for scalping 100 times a day on futures - the upside is the fact that you get to know the market and it's nuances intimately. That's the upside of futures in general IMO.

As for overtrading/blowing an account. There is never a need for that. With a CQG demo account or a decent simulator, you'll get realistic fills. Then it comes down to having the discipline to hone the skills on SIM consistently before you even try on a live account. Once live, you need the appropriate cut-offs in place to return to SIM if it doesn't work out.

It's pretty foolish to blow an account.

 

[LukeZen]

The idea that making 50 ticks a trade is easier than 5 has always confused me.

Agreed, it is easier to try to predict what the market is going to do in the next minute than try to predict what is going to do in the next 2 hours.

Still respected members of this site laugh at the idea of scalping done at retail level, fighting over the definition of what scalping is, like if we were in the business of making some financial dictionary out of this rather than making money!

 

[traider]

Agreed, it is easier to try to predict what the market is going to do in the next minute than try to predict what is going to do in the next 2 hours.

Still respected members of this site laugh at the idea of scalping done at retail level, fighting over the definition of what scalping is, like if we were in the business of making some financial dictionary out of this rather than making money!

Part of the problem is beating the costs of overtrading. How do you beat the spread and the comms you pay if you are just nicking off a few ticks?

 

[traider]

We all have opinions here. I am not going to say you are right or wrong, I can merely give my own experiences.

I started out day trading stocks. Part of that was using briefing.com/earnings calendars to find stocks in play. Then as the day wore on, using scanners.

It's a laborious task in my opinion. Half the time, the pre-market analysis stuff was a wash after the open because the stocks put in all their move in the pre-market session. The scanners were OK - but you'd very often get the signal off the scanner when the opportunity was done.

The most successful trader I saw doing this was trading about US$30M of boutique fund money. He was day traded news/earnings stocks - obviously with a lot more size - but he had 4 full-time researchers working for him. I think if you are going to scalp stocks in this way, you need what he has OR be part of a prop firm that's helping with discovering stocks in play.

As for scalping 100 times a day on futures - the upside is the fact that you get to know the market and it's nuances intimately. That's the upside of futures in general IMO.

As for overtrading/blowing an account. There is never a need for that. With a CQG demo account or a decent simulator, you'll get realistic fills. Then it comes down to having the discipline to hone the skills on SIM consistently before you even try on a live account. Once live, you need the appropriate cut-offs in place to return to SIM if it doesn't work out.

It's pretty foolish to blow an account.

What's a good realistic SIM for level 2, I would think there aren't many out there that are free. A good SIM has to take into account the exchange order book matching algo. Also there is a big difference if you have DMA or not when determining your fill rates.

Also what advantages does a human have against a hft algo which is factoring multiple markets at the same time when trading at scalping speeds?

 

[traderslair]

Part of the problem is beating the costs of overtrading. How do you beat the spread and the comms you pay if you are just nicking off a few ticks?

By not paying commissions, there are future brokers now that you pay a fixed monthly fee whatever amount of trades you place.

Scalpers use limit orders or enter on the bid or the ask at the level they want they have no problem with spreads