The Ultimate DAX Scalping Discussion Thread!
- Thread starter Scientist
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steve46, I suspect you have security protection in place to protect you against worst-case scenarios? What I mean isn't just a "hedging account". Indeed, you can't always know your position in the moment your platform goes down. That's why you use protective stops. I'm not being cynical, what I mean is "emergency stops" that are placed a certain (high) distance from your entry point, so that if your broker dies, you have a "net" to fall on. You use IB? On ButtonTrader, that's easy, you can fill in "maximum loss per contracts" in the strategy editor, and you automatically have a protective emergency bracket that's server-based, rather than home-PC based. But what if even that server goes down? Well, that's another reason for trading Eurex. On Globex, stops can only be simulated. On Eurex, all stops are native. You enter them, they're there.
Scientist
This is not a thread about semantics. This is a thread about scalping the DAX.
Not quite correct. Why? Because on the other side, scalpers have a lot more winners, too, and a lot more often. There is no "perfect style". Your style is determined by what suits you best, and nothing else. Not opinions about any style from tick trading to position trading, and no logics. Only you.
I like to scalp, because it suits me. I am young, I am fast, I am a long-practicing, ranked martial artist (Karate) and love the challenge of fast-paced action and reaction. I was an enthusiast for arcades & video games for a long time, I love the "quick reaction on the screen" stuff. Surely, most other people wouldn't be the same as me. Few understand my motivation to scalp. I do. It's the world's best video game; It's always fun, challenging, fast, you always get better and better enemies and you never play it all the way through. Just another concentration game. Most people can't concentrate for 5 minutes straight. Scalping isn't for those. Some people like doing deep analysis and take it easy. They swing trade. They can drink chardonnay while trading. Well, isn't it great! Sure why not? You never can as a scalper.
Forget about which 'style is the best'. Find the style that's best for you.
And by the way, scalpers don't necessarily "always cut their profits". I did take a 4-point trade in my exec log which I posted, while most trades were just ticks. I just looked at velocity_trader's exec log. You'll see that he, too actually took over 4 points on some few trades, but most were just for ticks, too.
So with both VT and me we already have two scalpers who don't really "cut their profits short". Any comments?
For the Ego and the Id,
Scientist.
Thanks, Cutten. Yours, too!
Your posts, as usual, shine with experience. They always seem to reflect and verify "something that you kind of knew in your head a long time ago, but were never really sure about". It's the voice of "yeah, seen a lot of $hit."... Thanks for sharing!
I just discussed this with one of my best trading friends, who is a very high volume prop scalper. He was like: "Good if you found an edge in secondary markets, but I would rather start off with the primary and most difficult markets to start with, and then, once I'm good, up my size. You start off with an easy market, but then later on, you can't really do size, like several hundred contracts on the DAX, for example."
Well, he has a point. I truly understand it, because it's the way I used to think till recently ... "Best market or none". On the other hand, it's about taking what's there. DAX offers great enough liquidity for a (relatively) low volume home-based scalper. For the size I do, DAX is fine. It is, comparatively, a damn easy market full of opps, and since I started, I've used only a few contracts so far, and I'm making more than I was on 10+ cars on ES at times. Admitted, by the time I try to scalp with 20-lots of DAX, things might be a little different. But then I can still move on to a more liquid market, and doubt that'd be my main problem then, anyway.
Velocity_Trader, for example, trades DAX with up to 20 contracts at times - that looks like plenty of upside for me, in the field of scalping. If not, there's always longer-term trading, too. And how about depth games? Once you've got a decent contract size, you can deploy lots of "fake depth" on the sides of the market where you want price to go, then pull it quickly as things turn around. Any player does it on any big market. It's always been a big dream of mine to play such games with small traders, to actually be big enough to scare other traders into decisions. Unfortunately, it takes several hundred or thousand contracts margin power to do this on ES, besides a lot of experience and balls of steel. On DAX, this might happen a lot earlier.
Apart from the fact that on DAX, all orders are "native", rather than stops etc being simulated, as they are on Globex. Another reason for trading the "secondary market".
I went into a long on DAX a few days ago, which yielded me ~30pts. But price went that far in but less than a few seconds. Exciting, but of course a minute earlier I had no idea this would happen. It was a pure probability play, I was expecting maybe 5-10 pts at best. I had moved my target way "out of range" at 30 pts in order to avoid it getting hit before I choose to close out manually. But some several-hundred-contract buyers hit my ask (target!) right there, within seconds of the move, then it kept moving further several points more. What if price had gone the other way? Happens often enough on DAX. Well, you can have protective stops in place to avoid the worst. But on Globex, they aren't just there. They are simulated, and they need to be transmitted, and possibly re-transmitted, before they can fire. How much can this cost you in the meantime? Am I getting something wrong here? What's your experience with that, Cutten?
Bottom line, I'm home-based and want to make maximum return on minimum contracts. Prop traders have "unlimited" size and little or no commissions, so they worry about other things, more like net $ per day or the like, rather than #of contracts. They don't mind putting on size very quickly, and there goes the 'edge' of the secondary market. But then they can use sheer buying power and play fear&greed games with people, so everything's got its ups & downs. Now the new order limit is 400-lots a clip on ES!
I agree on your "liquidity" point, and will be looking at the "secondary" markets for a while. I've never even looked at the FTSE, Gilt etc though. What are they like? The FTSE would be quite liquid in comparison, wouldn't it?
Cheers and Happy New Year!
Scientist
Thanks for asking, Michael. But this was a "HUGE" post! Could you be so kind and open a new thread for us, maybe called "Electric asks Jack", or just "AskJack" or the like, so we can move these huge re-quotes and questions there and have them answered and discussed in more detail seperately? I think that elaborate points do belong into this thread. I do not believe that even more elaborate questions on entire re-quotes from those who didn't understand their points should belong here. Unfortunately, we can't do sub-threads on ET, everything is parallel only. So please, don't turn this thread into a gigantic "I want all this answered, tought & translated" thread.
No doubt, it's a really great discussion, but it's fleeting off-topic and off-scale. I'd love to see another thread for just this discussion.
Have a Happy New Year!
Scientist.
This is a very typical Einstein quote. He talked exactly like that. I know how strange Einstein seemed to people, because it was hard to get his views across - particularly in brief. In the end, Einstein could put everything into one simple little formula. But to explain it to people, exactly how relativity or nuclear physics worked, was a task for him like exploring the entire universe and writing a story about it. But then, there was a reason there. The super-short "E=mc^2" is in its entirety a formula that covers several blackboards in small writing, with greeks, symbols and funny numbers throughout. I am happy I had the opportunity to study and understand Einstein in his (my) mother language, German, it gave me a lot of clues about the character of genius.
Jack isn't Einstein. But for all his knowledge and discoveries in the field of trading being so vast - Damn Jack, you can be damn tough to read and fully understand at times!
But I am amazed how well Jack has explained things to Electric in this thread. I think the discussion and knowledge found therein deserves its own thread, moderated by Jack, which I could ask a moderator to transfer all the huge treasure posts to.
Your quote so could have been said by Einstein. But I searched my probably hundreds of Einstein quotes and didn't find it.
S
There's lots of interesting stuff in all the posts you made on here. I love the way you explained fractals and the yellow brick road to Electric...
To say, AMT always comes up in the discussion. AMT is a much better trader than me. Yes, ultimately AMT's style is something I really want to be able to do, somewhere I want to go. AMT is as close to Jack's fractal-based encapsulation approach (the fractalized glass spheres) as anyone on ET gets. AMT is a role-model for me. He is a true mega-trader. He lets everything run as far as it will. If a position goes "against him", he will add instead of subtract. The more it goes against him, the more he adds. He will do this at times even being down over 10points on the ES. But most of the time, he'll get it all back, and scale back out as things go his way again.
People say AMT has just got balls of steel. The thing is I don't believe that at all. More like the complete opposite is the case. I've tried to pick his brain before, from what I've found he "doesn't care". He's like "so it goes against me heavily - so what?", kind of just shrugs. You see, that's exactly what makes the world's most successful traders. They simply "don't care". The point is not "feeling pain", as most beginning traders do. Read Trading in the Zone, and you'll understand exactly what makes AMT so successfuly.
Anybody who thinks he's conquered all his trading fears, can put them to the ultimate test trading like AMT. He holds futures overnight, whether things are in his favour or not. 20-point gaps? so what! AMT has held positions of 150 cars ES overnight, no worries. Apparently, he has no troubles sleeping. That is a truly self-mastered trader. Therefore, AMT doesn't necessarily have, or need "ball of steel", simply because he has eliminated fear from his trading. He knows his style, and just executes. He even loves it. He's always eager to play.
If you read "Trading in the Zone", you will understand exactly why AMT is so successful.
The reason why people like Trend_Fader, for example, really hate Jack Hershey, is because they don't understand any of this. They don't understand how fractal trading works, or what the "yellow brick road" is. They are the same traders that believe that "adding to losers" or turning day trades into position trades is a no-no - As most 'edge' traders do. Well, anybody who has followed AMT for even a short time, will know that AMT does exactly these things - Add to 'losers', the more losing, the more he adds, then scales back out, and he lets his scalps turn into day trades or position trades. For most edge traders, this is insanity. For him, it's normal. All AMT does is wash his way in and out of trades and go flat only when he thinks the overall direction has changed. Then, as time passes, he works his way up the "yellow brick road", letting his trades get bigger and bigger. This is true SCT trading in a sense. No stops, no trails. Just washing.
The advantage of AMT's style, which is completely contrary to the limited minds and methods of 'edge traders', becomes very apparent in his performance. AMT consistently outperforms any trader I know of. He consistently outperforms NihabaAshi, another ace trader in his room who has averaged 7+ points per day on ES for the last 3 months. AMT will pull 10-30 pts out of the ES every other halfway decent day, on very decent size, and prove this with live posts.
Admittedly, my trading is currently nothing like that. As you know, I'm all fixed on scalping at the moment. However, I understand and have traded fractals before, as markets were more "trendy".
AMT is a true role model for me. The "ultimate trader". A goal, defined by NLP as "Be, do, have." He is something I want to be. He does something I want to do. He has something I want to have. Besides AMT and Jack, there are no other traders on ET who do. AMT and Jack, although they're both (understandably) difficult to understand, to me they are the men on ET most worth listening to. Closely followed by Cutten and velocity_trader, both exceptionally refined and experienced 'edge' traders. Essentially, to me they represent the apex of edge trading. Close on follows T-REX, in the same branch of trading style. I am no match for any of these traders. All of them have traded at least 5 times as long as me. But I can model them. And I can learn.
LOL, 3 days worth of detailed replies in about 2 pages in just under 45 minutes... Tha's about 20 mins a page... Beat that!
For all those who didn't understand something in this post or previous - I'm eager to answer good questions. And so is Jack.
Have Fun!
Scientist
To say, AMT always comes up in the discussion. AMT is a much better trader than me. Yes, ultimately AMT's style is something I really want to be able to do, somewhere I want to go. AMT is as close to Jack's fractal-based encapsulation approach (the fractalized glass spheres) as anyone on ET gets. AMT is a role-model for me. He is a true mega-trader. He lets everything run as far as it will. If a position goes "against him", he will add instead of subtract. The more it goes against him, the more he adds. He will do this at times even being down over 10points on the ES. But most of the time, he'll get it all back, and scale back out as things go his way again.
People say AMT has just got balls of steel. The thing is I don't believe that at all. More like the complete opposite is the case. I've tried to pick his brain before, from what I've found he "doesn't care". He's like "so it goes against me heavily - so what?", kind of just shrugs. You see, that's exactly what makes the world's most successful traders. They simply "don't care". The point is not "feeling pain", as most beginning traders do. Read Trading in the Zone, and you'll understand exactly what makes AMT so successfuly.
Anybody who thinks he's conquered all his trading fears, can put them to the ultimate test trading like AMT. He holds futures overnight, whether things are in his favour or not. 20-point gaps? so what! AMT has held positions of 150 cars ES overnight, no worries. Apparently, he has no troubles sleeping. That is a truly self-mastered trader. Therefore, AMT doesn't necessarily have, or need "ball of steel", simply because he has eliminated fear from his trading. He knows his style, and just executes. He even loves it. He's always eager to play.
If you read "Trading in the Zone", you will understand exactly why AMT is so successful.
The reason why people like Trend_Fader, for example, really hate Jack Hershey, is because they don't understand any of this. They don't understand how fractal trading works, or what the "yellow brick road" is. They are the same traders that believe that "adding to losers" or turning day trades into position trades is a no-no - As most 'edge' traders do. Well, anybody who has followed AMT for even a short time, will know that AMT does exactly these things - Add to 'losers', the more losing, the more he adds, then scales back out, and he lets his scalps turn into day trades or position trades. For most edge traders, this is insanity. For him, it's normal. All AMT does is wash his way in and out of trades and go flat only when he thinks the overall direction has changed. Then, as time passes, he works his way up the "yellow brick road", letting his trades get bigger and bigger. This is true SCT trading in a sense. No stops, no trails. Just washing.
The advantage of AMT's style, which is completely contrary to the limited minds and methods of 'edge traders', becomes very apparent in his performance. AMT consistently outperforms any trader I know of. He consistently outperforms NihabaAshi, another ace trader in his room who has averaged 7+ points per day on ES for the last 3 months. AMT will pull 10-30 pts out of the ES every other halfway decent day, on very decent size, and prove this with live posts.
Admittedly, my trading is currently nothing like that. As you know, I'm all fixed on scalping at the moment. However, I understand and have traded fractals before, as markets were more "trendy".
AMT is a true role model for me. The "ultimate trader". A goal, defined by NLP as "Be, do, have." He is something I want to be. He does something I want to do. He has something I want to have. Besides AMT and Jack, there are no other traders on ET who do. AMT and Jack, although they're both (understandably) difficult to understand, to me they are the men on ET most worth listening to. Closely followed by Cutten and velocity_trader, both exceptionally refined and experienced 'edge' traders. Essentially, to me they represent the apex of edge trading. Close on follows T-REX, in the same branch of trading style. I am no match for any of these traders. All of them have traded at least 5 times as long as me. But I can model them. And I can learn.
LOL, 3 days worth of detailed replies in about 2 pages in just under 45 minutes... Tha's about 20 mins a page... Beat that!
For all those who didn't understand something in this post or previous - I'm eager to answer good questions. And so is Jack.
Have Fun!
Scientist