If you are pointing to me, I apologize for dropping in like that but I must tell you I was a scalper too for some time when I was a newbie because I thought that was a cool way to trade. Thank God I did not lose that much. So if you mean currently active scalpers I am not one but if you mean people that have tried scalping in general I fall into this category. IMO current scalpers is a group with constantly changing members as the life of a scalper in the markets is very short. 99% fail very hard, they lose it all in a couple of trades...But anyway, thanks and good luck...
The Art of Scalping
- Thread starter schizo
- Start date
If you are pointing to me, I apologize for dropping in like that but I must tell you I was a scalper too for some time when I was a newbie because I thought that was a cool way to trade. Thank God I did not lose that much. So if you mean currently active scalpers I am not one but if you mean people that have tried scalping in general I fall into this category. IMO current scalpers is a group with constantly changing members as the life of a scalper in the markets is very short. 99% fail very hard, they lose it all in a couple of trades...But anyway, thanks and good luck...
I trade a lot in pre/post market in stocks.
Scalping is about having a very good read of order flow, erroneous orders, prominent algo driven orders, transient panic and stability, bid/ask patterns as they suggest the information asymmetry b/w buyers and sellers. In essence good scalping is about being a surrogate specialist.
Scalpers tend to specialize in a symbol, like I had a friend who played only GOOG a couple of years.
For the one who is technically not so sophisticated, scalping in illiquid instruments should be preferred.
Target moves can vary greatly depending on the situation. In earnings its not unusual to capture a 5% move.
Risk management is of utmost importance to counter the leveraged equity exposure.
There was a very good ET member FuturesTrader71, I suggest you go through his posts.
and yes one IMPORTANT thing. Every time there is a change is market structure a LOT of beginner level and some mid level scalpers are thrown out of the market. Many lost when NYSE became hybrid, and again last year when volatility came crashing down.
Scalping is about having a very good read of order flow, erroneous orders, prominent algo driven orders, transient panic and stability, bid/ask patterns as they suggest the information asymmetry b/w buyers and sellers. In essence good scalping is about being a surrogate specialist.
Scalpers tend to specialize in a symbol, like I had a friend who played only GOOG a couple of years.
For the one who is technically not so sophisticated, scalping in illiquid instruments should be preferred.
Target moves can vary greatly depending on the situation. In earnings its not unusual to capture a 5% move.
Risk management is of utmost importance to counter the leveraged equity exposure.
There was a very good ET member FuturesTrader71, I suggest you go through his posts.
and yes one IMPORTANT thing. Every time there is a change is market structure a LOT of beginner level and some mid level scalpers are thrown out of the market. Many lost when NYSE became hybrid, and again last year when volatility came crashing down.
Thanks to you tyrant.
Well, ehm. Ok you are actually asking for the Holy Grail ;-)
As I have anticipated everyone is able to pocket a profitable scalp.
The whole "art of scalping", evoked by schizo, is actually (to me) the "art of hedging".
Or, more precisely, "the art of scalping, while arranging other scalps in such a way they provide protection for current open positions". Don't look for this definition: I made it up for this very occasion!
I do not have the Holy Grail, but we could discuss together about some methods to arrange scalps so that the whole system is able to "auto-hedge", instead of using deadly stops.
In my personal view, I prefer considering a strategy where there are multiple "traders" all kept alive programmatically and all maintain their own (virtual) positions. (Just like there were several person trading the same account and each one following his own strategy.)
For simplicity, each trader would have similar scalp action but working in different direction (and with possibly different positions). A centralized "logic" system would "coordinate" the entries (and/or exit) of the "traders" with appropriate semaphores (buy only/sell only) or entry position change (1,2, ..., n contracts) in order to achieve the minimum drawdown, while all traders are scalping simultaneously.
A simple example? Maybe interlace scalps in alternating Buy/Sells:
........s ----
........../
........./.....
......../......*s ----
......./........../
....../........../
*B---........./
.............../
............../
............./
.........B----
and/or find ways to keep positions (buys / sells) balanced ....
Other ideas ?
Tom
Well, ehm. Ok you are actually asking for the Holy Grail ;-)
As I have anticipated everyone is able to pocket a profitable scalp.
The whole "art of scalping", evoked by schizo, is actually (to me) the "art of hedging".
Or, more precisely, "the art of scalping, while arranging other scalps in such a way they provide protection for current open positions". Don't look for this definition: I made it up for this very occasion!
I do not have the Holy Grail, but we could discuss together about some methods to arrange scalps so that the whole system is able to "auto-hedge", instead of using deadly stops.
In my personal view, I prefer considering a strategy where there are multiple "traders" all kept alive programmatically and all maintain their own (virtual) positions. (Just like there were several person trading the same account and each one following his own strategy.)
For simplicity, each trader would have similar scalp action but working in different direction (and with possibly different positions). A centralized "logic" system would "coordinate" the entries (and/or exit) of the "traders" with appropriate semaphores (buy only/sell only) or entry position change (1,2, ..., n contracts) in order to achieve the minimum drawdown, while all traders are scalping simultaneously.
A simple example? Maybe interlace scalps in alternating Buy/Sells:
........s ----
........../
........./.....
......../......*s ----
......./........../
....../........../
*B---........./
.............../
............../
............./
.........B----
and/or find ways to keep positions (buys / sells) balanced ....
Other ideas ?
Tom
I think what most will get from FuturesTrader71 posts is that they are not set up to scalp futures. He goes into everything he has at his disposal to be successful, from very low commissions to direct Acess to exchanges to a dedicated office and large margin account. I took futurestrader71 advise and realized I wasn't prepaird or set up to scalp futures. His posts are reccommended reading for those wanting to start scalping futures .
Scalpers, what moving average indicators do you use. Primarily I hardly ever base my scalping trades on the MA but it is something good to take a glance at. Currently been using 13,21,50.
Personally, I don't use indicators to base my trading decisions. However, I do monitor SMA(50) for no other reason that that it's widely followed by others.
On that note, is there any scalper who trades without charts? I come from the PA camp and I cannot even fathom trading without the aid of charts. But I also keep my eyes on T&S window. Although difficult, I don't believe it's impossible to score a few ticks solely by using the T&S alone.
blag, I like your writing style. Very clear and to the point.Quote from blaggles:
20 EMA +1
3 TMA +1
With regards to your chart, it appears that you are mainly trading the MA crossover. A couple questions I would like you to address. First, what timeframe is this (tick, 1-, 5-minute chart)? Also what is TMA? Triple MA? As you may already know, a scalper doesn't have the luxury of time and, by definition, moving averages are lagging indicators. How are you currently using them to your advantage?
Second, I don't quite understand the paintbar brushed with "bullish" and "bearish" signals at the top of the chart. I see blue candles in the bearish area and red candles in the bullish territory. How am I supposed to interpret this?