Scalping Vs. Runners

tommcginnis said:
Tick-scalping requires a minimum ATR of 2-3 ticks (and 4-5 is better), such that you can get in and out, all day long, and mill money even if *your* evaluation of the market is wrong.
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I switched from swing trading to intraday 9 months ago. I have been tempted to go back but I'm not too big on giving up and i have the time and enjoy the challenge.

I have determined i do far better on the 2 to 5 cent targets than i do with runners. I trade stocks and ETFs.

Now I'm trying to define when to go for 2 or 3 or when i can get 4 or 5.
 
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birdman said:
I switched from swing trading to intraday 9 months ago. I have been tempted to go back but I'm not too big on giving up and i have the time and enjoy the challenge.

I have determined i do far better on the 2 to 5 cent targets than i do with runners.

Now I'm trying to define when to go for 2 or 3 or when i can get 4 or 5.
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Momentum is a key factor to consider when deciding to let a position run abit, nevertheless if I can stay and watch the markets i prefer multiple entries and exits based on pb’s because much more can be made through multiple entries and exits instead of just hanging on to a runner. Here is a chart illustrating both. Of course the way I define runners (in my world of scalping) may be quite different from how you see a runner.

In the range we see momentum as it trades down to the bottom of the range box on a large bear bar closing on its low. The entry is on the next bar 1 tick below the close of that large bear bar. This is a potential runner. Potential IF there is follow through and if the first PB stays pretty much out of the range. On the left in blue is the results (per contract) hanging onto the runner. A single entry and exit. On the right in green is the results (per contract) of multiple entries and exits during a momentum move. This is multiple entries and exits in the direction of the momentum move and entries and exits on pullbacks. I will take the latter any day. However, one has to be there to watch it.

Even if one does not take entries and exits on 2 and 4 (i.e. the pb’s) only does 1, 3, and 5 on the down moves one still makes 960 minus comm on 48 points as opposed to 640 on 32 points a single entry runner.


Another tactic is on down move entries (i.e. 1,3,5) take the entries and exits but on entry 3 double or triple the size of entry 1 and on entry 5 double or triple size of entry 3.

Another tactical approach which i will use but is more often than not highly disdained in the trading world is in momentum moves i will hold the first position and add more positions to the first and second..etc..when the market moves against the first position in the pb’s or moves against my paper profits already made from the first position. That is I will average down on moves against any potential profits I could have locked in. Then I will exit the entire positions accumulated in one wack when it appears the move may be ending. But I generally prefer multiple entries and exits in the momentum move down as i just like locking in profits.

The chart is NQ

4107F0F5-E017-4668-BED9-99C7DCF4C259.png
 
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I like to trade based on my equity curve. Grind/scalp up to some threshold, but try to catch runners after that. Nothing lifts your spirit like sitting back and watching the runner outpace your wildest expectations. Worth all the stop outs.
 
I go for the runners in the first 60 to 90 minutes of the day, and see how far it goes for the rest of the day. I first look for a opening breakout and if that fails, I look for that turn around in the low or high of the day and when I nail one or the other, it is a great day in dollars. If I do not nail that, I have a losing day in dollars. That is okay for me. I do not like to spend the day in front of the computer, unless I see my account growing. 3 a 4 trades a day is my maximum attempt to get that runner.
 
John9999 said:
Here is an age old issue that I continue to consider.

As a Day Trader... do I scalp or do I go for runners?

I can argue both sides. Scalp is good because I am booking a profit. Runner good because the winning trades are bigger than the losing trades.

Personality wise... I do not wish to trade and trade all day long... so the runner strategy is good for my personality.

what are your thoughts?
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In trading complete and incomplete trends and trend segments, 'and' is better than 'or', a complete system trades both.
 
Runners, aka taking your biggest amount of risk when you know the least about a trade working out for you and then "peeling off contracts" as the trade goes your way, IS REVERSE POSITION SIZING. It is bad trading math. Don't do it. Either go all-in / all-out or add to a winning trade when you are in a trend (anti-martingale).
 
SteveH said:
Runners, aka taking your biggest amount of risk when you know the least about a trade working out for you and then "peeling off contracts" as the trade goes your way, IS REVERSE POSITION SIZING.
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Sorry, I don't understand. I thought when you have a runner you are playing with market's money ... You are risking unrealized gains only. The trade already worked out. What am I missing?
 
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