I think it works on every timeframe. It feels much more comfortable to me not having to be right at the first try.. If I would just take small losses all the time, I would lose my shirt (if i didn't have a serious edge). Which I don;t btw. And I don't think I need. 1) psychology 2) money management 3) "technical" edge
The Ultimate DAX Scalping Discussion Thread!
- Thread starter Scientist
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I think it works on every timeframe. It feels much more comfortable to me not having to be right at the first try.. If I would just take small losses all the time, I would lose my shirt (if i didn't have a serious edge). Which I don;t btw. And I don't think I need. 1) psychology 2) money management 3) "technical" edge
No good ones specifically about scalping futures that I am aware of, although there are some on daytrading futures which contain some references to scalping (e.g. "The Logical Trader", "The Trader's Edge", "How I Trade for a Living"). There are also some on daytrading equities that cover scalping to some degree, but those techniques were highly correlated to the boom and are not as profitable now with decimalisation, no bullets, lower volatility etc. Try "Electronic Daytraders Secrets".
In any case, scalping is not really that complex. There are a few core principles, but it is the consisted, rigorous, and focused *application* of those principles which generates profits - simply knowing what those principles are is only 20% of the game. The other major factor is avoiding mistakes.
Generally, scalping is secretive because if you publish a winning approach, others will copy your methods and compete your edge away. Unlike longer-term trading and investing, there is limited liquidity intraday. If I see a 5 lot of Dax going begging at an inefficient price, then I am less likely to be able to hit that order if 50 other people who read my "Scalp the Dax in 6 easy steps" book are continually scanning the market looking for the same thing. If I ever did publish a book, it would be either because my edge disappeared and I wanted to make a quick buck as a chatroom vendor, because I had started a brokerage firm and wanted to attract traders to pay commission, or because I have given up scalping for something preferable (e.g. longer-term trading, or early retirement due to profits). Most trading books are written for the first 2 reasons.
Finally, if you have a profitable and *teachable* system (the first is possible but the latter is much harder), it is probably better to hire some trainees, train them thoroughly using all your knowledge, and then get them to trade your method for you. If your method is good, this should provide more profits than selling the method for $20 to a bunch of pikers.
You don't need a book.
When it comes to scalping 80% of it is discipline. You have to "eat " your losers quick and never let winners turn into losers.
The other 20% is getting a feel for the market. The best way to do that is watch it day in and day out and write down your observations.
No book will ever teach you how to be disciplined and stay in control of your emotions. Most people can't do these things and that is why there are so many losers.
You must identify what your "trading demons" and get rid of them, it's hard though because most are embedded deep within your belief system and its uncomfortable,e even if it makes you money, to get away from what you have always done.
Ouch! Tell me about it. Isn't my best day either, don't worry.
Did very very well in the Teutonic morning, did really unusually bad since US open.
Did some of my worst ever stupidities, though. Sold into the 10:00 EST news etc... Whew!
Am just over BE now, see how it goes, about 1h left...
I'll reply to the posts here later on, take care!
I have no personal bias there, but I've only heard bad things about eSignal. I've used TradeStation and now hate it with passion (also the feed), there is hardly competition for eSignal (particularly now that IDCO has its fingers in it). eSignal used to be a "beginner toy" not long ago. Now it's become a seriously powerful software and highly reliable datafeed. Also, no other software I've tried crashes as rarely (I use XP Pro OS).
I know exactly what you mean. I have my session archive full of "cryptically named" sessions that I'll only know which one it was when I look closely at the name of it, or trade it. After about 1-2 weeks, I do forget enough to "re-play" it.
However, that isn't really my point. My point really was "reliving" the market day like a close memory. Remembering is exactly what you want here. It's like a drill. But every time, you get better. And for that matter, reading a DOM recording for scalping isn't as easy to fully remember as a whole day of clear 1-minute chart with distinctive trends, for example (very easy).
It doesn't really matter. Scalper, tick-trader. High-or-low volume scalper, there are too many. You are whatever you feel like. In your sense, I am a "hybrid scalper", too. In that I'll take good moves if they're there. A "true" tick scalper, I think, would always use "targets" of a few ticks maximum. I hardly use targets at all anymore. You know why? Because on the DAX, for example, you will have moves that go so fast, they just move 10pts or more in a few seconds. Long or short, you can hardly react. The problem is that if your stop gets hit too late, you can lose quite a bit. On the other hand, those times where price goes your way instead, you could make quite a bit. But by using fixed targets, you're cutting off that opportunity and sabotaging yourself, because you allow the occassional mega-move to go hard against you but, but the profitable ones only light in your favor. This, IMO, is stupid. You know what I'm getting at? Like my DAX trade a few days ago. I had a target 30pts (ludicrous) away and to my surprise it got hit. Had I had a 3, 5, 10, 15, 20, or 25pt target in place, I would have kicked myself. DAX moved a massive 40pts in about a few seconds. On DAX, you must ride the biggies when they come, or your bottom line suffers from those that sting you hard. Well, that's one my personal rules I play by, anyway.
Basic scaling, yes. It's one of the best (particularly psychological) insurances you can buy against letting a winning trade turn into a loser. However, remember that it doesn't make any difference to the R:R ratio on your individual contracts - In fact, it can do them harm if you don't do it properly. A lot of people don't believe in scaling at all.
No offense here, but I don't think it's a good idea to scalp to "keep you sharp and entertained". Admitted, I like scalping because it's "more action", too. But, if you're serious about scalping, you really need to test and measure and get a really good 'edge' happening, I.e. a feeling for discount entries, average tick ranges, etc. I have a few pretty specifically defined methods, and I stay within these 'protective parameters', to know it's working for me. Scalping purely "out of the gut" can be iffy. Looking at Mark's exec log, for example, even he has a system - which can be put into a few rules almost. He isn't really trading "out of feel" IMO, but he's basically got the "parameters" burnt into his head, knowing what probability there is for how many ticks to gain, or how and when to exit / cut off. The patterns in the way he trades seem very consistent and quantifyable to me (as a scalper), so yes. Even a scalper needs "system parameters" in a way. Gut feel or intuition is just a myth. In reality, it's your brain recalling subconscious programs. A good example is thinking you don't need to think to drive a car. Well you don't - consciously - but you sure did have to at some stage...? But whatever works for you - No worries!
Warmest Regards,
Scientist
You need to read "Trading in the Zone" - twice! You're in a dangerous position to be in. If you read [and understand!] the book, you will know exactly what I mean.
Take a few days off, study that book, and really let it settle in. Not just read, but accept and adapt it. Douglas is awesome.
Why? Because it doesn't matter if you're the world's best analyst. All you need is get your head together.
Trading is not difficult. It is 99% in your head. If you think it's difficult, that will be your truth!
My truth: It isn't. In fact, it's quite simple. It's buy and sell.
Any difficulties that may arise, are inside your head. Nowhere else, ever.
Difficulty, fear, greed, all these things are just subjective notions.
The market doesn't care about them. The market doesn't try to harm you, because it doesn't know which trade you will take.
The market has no agenda. It just moves. It is your decision which direction to take. It is 100% your choice.
If you doubt this, answer me one question:
If you have one, or several parallel systems or approaches that you've tested to work, and you know you have an advantage, i.e. each winner is longer than a loser, you never let a loser run, or (and) your hit rate is over 50%, how can you lose???
The answer is you shouldn't. You really shouldn't. Like the casino, in the long run you should come out profitably with almost guarantee. Even with the simplest approach.
Every trouble you will encounter is inside your head. Like all the trolls that post here. They have troubles - in their heads. How about all the discussions about methods and indicators on this forum? It's all nonsense! It's only people dreaming about the grail and finding more things to analyze, as an excuse, instead of just pulling up a chart with price and volume and trading what's there. The reality is, TA, trading technology or discussions won't help you. You'd laugh if I told you I traded the ES & NQ, and before that even Nasdaq stocks, on a 28.8 dialup connection, wouldn't you? Well, I did. Scalping, too. Did it work? Sure it did!
It's good to have extra edges like X_Trader, Reuters & Bloomy - sure it'll up your bottom line. But a real trader, if need be, can trade from a single laptop, a single chart, depth and tape on a 28K connection. All this doesn't really matter other than in the heads of the people who want to sell you things, or dreams. In your own head, none of this is required. Only a full deep insight into yourself, and an understand of the power of psychology and your subconscious. Psychology is 99% of the game. The rest is fringe, marketing and hype. This forum, to be honest, won't help you become a better trader, either, since all the "knowledge" is actually more confusing than required. None is required, other than the knowledge of yourself. The principles of trading itself are easy. As for myself, I come here for entertainment, and to share a few things with like-minded, while I'm bored during RTH. It's a fun forum, but it's entertainment. Becoming a trader is only in your head.
This is the reality of trading. When you accept this reality, all the mist will clear from your head, and you will discover what's important.
Once you realize this, you will realize that trading is actually (!) quite boring. I find it really boring at times. But I love it, too. I wouldn't want to swap with anybody. I'm sure some day you will think back at me saying this, and laugh about it.
Scientist.
I don't see why you'd need a book on scalping, anyway. I think it would be a waste of time. Except of course for the person writing it.
Principles are maybe just 10% I'd say. The principles and rules of scalping are the simplest of all, and take the least amount of analysis, or even interpretation for that matter, if compared to other styles. However, the discipline and psychological impact factor is the "toughest" in scalping. You need to cut losses the fastest and not let winners turn into losers. And you quite possibly need to deal with larger positions. If you're still trading with emotions, like fear, greed etc, then you've already lost the game. And you'll bleed to death very, very quickly. Quicker than in any other style. So that's the downside.
Well, funny? Isn't that exactly what I told ElectricSavant? Still can't believe that guy spat the dummy and ran amok like that, just because I didn't show him an extensive exec log! He really seems to have a few issues to get on par with.
LOL. Yep.
Actually, this sounds like a pretty good idea. As in, opening your own prop firm? I wonder about scalping systems being teachable, though. In a way, isn't that easy at all. Simply because everybody is different (to you), and scalping brings out the "extremes" of their character in people. To find a person suitable to be trained, I'd say he'd have to be at least "on the same wavelength" - At least.
Scientist.