Starting from scratch

[JScott]

Quote from Swan Noir:

Rather than be fixated on whether this style is realistic -- scalping NQ -- maybe I should be asking contract a novice should be trying to scalp.

That said, I want to start small -- a single contract -- and scalp so that the stops are manageable.

Any insight will be helpful.

If you decide on futures over stocks, then NQ and YM are the obvious choices for the new guy.

"Scalping" is subject to interpretation, but true scalping is done by the algo/program/rebate trading houses. You need to plan on at least 12-20 ticks for stops. That's today. If we get back to a lot higher volatility, plan on adjusting that. If your targets are in the 4-5 tick range (scalping by some measures), plan on eventual ruin.

Keep trading.

JS

 

[Thunderdog]

Quote from JScott:

...You need to plan on at least 12-20 ticks for stops...

I believe that's method and time frame dependent.

 

[JScott]

Quote from Thunderdog:

I believe that's method and time frame dependent.

Agreed...my small point is that I don't think there's a viable approach for a new guy where you'd risk less than that b'cause then there's too much focus on "scalping" and making way too many trades per day.

 

[Swan Noir]

Quote from JScott:

If you decide on futures over stocks, then NQ and YM are the obvious choices for the new guy.

"Scalping" is subject to interpretation, but true scalping is done by the algo/program/rebate trading houses. You need to plan on at least 12-20 ticks for stops. That's today. If we get back to a lot higher volatility, plan on adjusting that. If your targets are in the 4-5 tick range (scalping by some measures), plan on eventual ruin.

Keep trading.

JS

My intention is to continue to paper trade switching the focus to NQ from ES with a target of 7 to 10 ticks and a maximum stop of 16 ticks.

I have characterized this as a scalp (maybe incorrectly) because it clearly is of lessor duration than a swing trade.

You say with 4-5 tick targets to plan on eventual ruin. Do you believe that 7 to 10 tick targets are also too tight?

Over the last five years I have spent approximately 3,000 hours in front of the screen with the last 4.5 months being a steady 8 to 10 hours a day and I'm not there yet.

 

[R. Raskolnikov]

One of the biggest misconceptions is that you MUST have a positive reward/risk when trading futures...........I'll leave it at that.

 

[Swan Noir]

I forgot to mention that I am using a 5 minute chart.

 

[Swan Noir]

Quote from R. Raskolnikov:

One of the biggest misconceptions is that you MUST have a positive risk/reward when trading futures...........I'll leave it at that. [/QUOTE


By that do you mean that your stop can (or even should) be greater than your target? Or is there some other risk/reward equation at work that I am missing?

 

[R. Raskolnikov]

I edited my post after you quoted me. The point I meant to make was that people will always tell you you MUST shoot to make like 2 pts while "risking" only 1 and so forth.

Complete bullshit. All that matters is being right, in the end that means profitable. Doesnt matter how, only that it works and you can quantify it.

Quote from Swan Noir:

Quote from R. Raskolnikov:

One of the biggest misconceptions is that you MUST have a positive risk/reward when trading futures...........I'll leave it at that. [/QUOTE


By that do you mean that your stop can (or even should) be greater than your target? Or is there some other risk/reward equation at work that I am missing?

 

[Swan Noir]

Quote from R. Raskolnikov:

I edited my post after you quoted me. The point I meant to make was that people will always tell you you MUST shoot to make like 2 pts while "risking" only 1 and so forth.

Complete bullshit.

Yes Raskolnikov, that is clearly complete bullshit. But is risking 2 pts to make 1 an illusion?

Lot's of things in life seem to work but in the fray they end up not quite delivering. I know there are successful traders that risk a point or even 1.5 pts. to make 1. But are there guys that go as far as to routinely risk 2 pts. to make 1 (clearly counting on a very high winning percentage) day in and day out that are successful.

I am attempting to step past what is theoretically possible into the real world where traders know certain things happen and other things don't quite get it done.

 

[R. Raskolnikov]

No, it's not an illusion. I'm just not of the philosophy that its necessary for great success and actually can be a hindrance to those starting out. There is a lot of "traditional" advice that is out there for trading that I've found to be less than optimal to what I do, which is not traditional.

The main point is, no matter who you are, you MUST spent thousands of hours watching the market. And not JUST watching it, but quantifying everything that happens and evaluating it against previous information to weed out what doesnt work from what does and then build upon that knowledge to further refine your method. Eventually, you'll be in tune with what I like to call the algo of life, or the algo of crowd behavior.

Then again, this is just how I approach things. There are many ways to skin the cat. My point is don't get suckered in to traditional advice because if that advice were so great in the first place, why is the success rate so damn low

Quote from Swan Noir:

Yes Raskolnikov, that is clearly complete bullshit. But is risking 2 pts to make 1 an illusion?

Lot's of things in life seem to work but in the fray they end up not quite delivering. I know there are successful traders that risk a point or even 1.5 pts. to make 1. But are there guys that go as far as to routinely risk 2 pts. to make 1 (clearly counting on a very high winning percentage) day in and day out that are successful.

I am attempting to step past what is theoretically possible into the real world where traders know certain things happen and other things don't quite get it done.