6 ema of the atr?
Wait, is this actually how people scalp?
- Thread starter 1a2b3cppp
- Start date
how scalpers work?
typically they work in trading house; they pay for the desk space & high speed internet.
most of them don't use charts. they stare at perhaps tens of ladders.
I see that most of them likes TT trading platform.
they trade hundreds of lots in a day.
Interestingly those traders in trading house do similar things (they copy from each other ?!?!).
typically they work in trading house; they pay for the desk space & high speed internet.
most of them don't use charts. they stare at perhaps tens of ladders.
I see that most of them likes TT trading platform.
they trade hundreds of lots in a day.
Interestingly those traders in trading house do similar things (they copy from each other ?!?!).
@1a2b3cppp
Trading for 4 points with 10 point stop is not scalping. It may be considered scalping during a flash crash type of event, where price jumps 10 points within seconds. But in regular, everyday trading, 4 points is what I would call trading intraday swings.
Bone explained the origins of scalping, what it was in the old pit world. With screen trading this changed. You did not have anymore the advantage the pit traders had before.
But trading on the computer offered other, new possibilities. A new way of scalping. Basically it is pretty simple: you do very short term trades under the assumption that the short term volatility is stronger than the (intraday) long term volatility. Clever guys like Paul Rotter (the Flipper) discovered ways to increase short term volatility in their favour, to make their scalping game even more profitable or work at all.
In today's markets, scalping is probably not as easy as it used to be. But since these electronic markets of today are all I know, I grew up with them and had to play and learn with what is there in front of me. Even though there are many here who say scalping is dead, it is exactly what I do (almost) every day. It is not easy, but there is also no rocket science involved. Dont overcomplicate stuff, dont try do solve this in an analytical way. To me, scalping in the markets is all about experience, about being engaged actively in the market hour after hour, day after day for many years. With no indicators, no charts, no funny tool at all. Just a DOM to follow the pure market action and get a feel for it.
You can scalp almost every liquid market that is out there these days, but to me it is so much more easy and fun (and fun is very important to stick to something for a long time) to scalp fast, volatile markets like the FDAX, CL, NQ or ES. There are also people who prefer ZN, FGBM or FESX. Those can be fine too, you can play these markets with serious size, but you wont get that many opportunities per day and thats what makes it kind of boring to me.
Scalping to me is going for 1 tick or 2, in very fast markets like the FDAX, NQ or CL you sometimes get lucky and the market snaps back in your favour and you get instant 10 ticks or something like that as bonus. But the bread and butter is 1-3 ticks, even in these markets.
To trade these small moves and be net profitable at the end of the day, you need a good cost structure. With RT fees of 4 EUR/ USD you can forget about it. You have to trade some volume, so you can negotiate low commissions with your broker. And/ or you can get an exchange membership, which is pretty cheap to lease on CME. On Eurex, you can even get exchange fee rebates for free ! No matter how you do it, to really scalp without too much worries from the cost/ fee side, your total cost per ROUNDTURN should be around 2 USD for CME products, and 1 EUR for Eurex products.
Greetings,
CALLumbus
Trading for 4 points with 10 point stop is not scalping. It may be considered scalping during a flash crash type of event, where price jumps 10 points within seconds. But in regular, everyday trading, 4 points is what I would call trading intraday swings.
Bone explained the origins of scalping, what it was in the old pit world. With screen trading this changed. You did not have anymore the advantage the pit traders had before.
But trading on the computer offered other, new possibilities. A new way of scalping. Basically it is pretty simple: you do very short term trades under the assumption that the short term volatility is stronger than the (intraday) long term volatility. Clever guys like Paul Rotter (the Flipper) discovered ways to increase short term volatility in their favour, to make their scalping game even more profitable or work at all.
In today's markets, scalping is probably not as easy as it used to be. But since these electronic markets of today are all I know, I grew up with them and had to play and learn with what is there in front of me. Even though there are many here who say scalping is dead, it is exactly what I do (almost) every day. It is not easy, but there is also no rocket science involved. Dont overcomplicate stuff, dont try do solve this in an analytical way. To me, scalping in the markets is all about experience, about being engaged actively in the market hour after hour, day after day for many years. With no indicators, no charts, no funny tool at all. Just a DOM to follow the pure market action and get a feel for it.
You can scalp almost every liquid market that is out there these days, but to me it is so much more easy and fun (and fun is very important to stick to something for a long time) to scalp fast, volatile markets like the FDAX, CL, NQ or ES. There are also people who prefer ZN, FGBM or FESX. Those can be fine too, you can play these markets with serious size, but you wont get that many opportunities per day and thats what makes it kind of boring to me.
Scalping to me is going for 1 tick or 2, in very fast markets like the FDAX, NQ or CL you sometimes get lucky and the market snaps back in your favour and you get instant 10 ticks or something like that as bonus. But the bread and butter is 1-3 ticks, even in these markets.
To trade these small moves and be net profitable at the end of the day, you need a good cost structure. With RT fees of 4 EUR/ USD you can forget about it. You have to trade some volume, so you can negotiate low commissions with your broker. And/ or you can get an exchange membership, which is pretty cheap to lease on CME. On Eurex, you can even get exchange fee rebates for free ! No matter how you do it, to really scalp without too much worries from the cost/ fee side, your total cost per ROUNDTURN should be around 2 USD for CME products, and 1 EUR for Eurex products.
Greetings,
CALLumbus
My understanding of this is that the scalping method you describe relies on being pretty certain of the 4 point raise's likelihood, giving 10 points of room beneath.
Everyone focuses on the Risk/Reward ratio, which is of course important. However the more you give a small TP and large SL, the more likely it is the TP will hit first. Imagine a buy position with a 1 tick TP and 100 tick SL, it will usually be the TP that hits. However you are risking your life for like 10 bucks.
I have wondered if this scalping strategy would work. Id be more tempted to try 6 or 8 SL though. With 4TP and 10SL youd need to be right 10 in 14 times, or over 71% of the time, and thats minus fees. While I dont feel this is impossible, it does put some heat on the trader to never make a mistake.
Everyone focuses on the Risk/Reward ratio, which is of course important. However the more you give a small TP and large SL, the more likely it is the TP will hit first. Imagine a buy position with a 1 tick TP and 100 tick SL, it will usually be the TP that hits. However you are risking your life for like 10 bucks.
I have wondered if this scalping strategy would work. Id be more tempted to try 6 or 8 SL though. With 4TP and 10SL youd need to be right 10 in 14 times, or over 71% of the time, and thats minus fees. While I dont feel this is impossible, it does put some heat on the trader to never make a mistake.
I hear you, I hear you ... I know they're good for you, but honestly, I think that after the first week, I'd probably tire of eating nuts for lunch every day ...
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It does not work on MT5 in Forex. There are two ways to load it...6SMA of the indicator itself or run a 6 SMA of the M1 imposed over the ATR using the scale of the ATR.
I got to fire up an ES chart and check what he is talking about.
it seems strange to use averaging of the Average True Range.
ES
I got to fire up an ES chart and check what he is talking about.
it seems strange to use averaging of the Average True Range.
ES
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I think "scalping" has come to mean different things to different people. It is now a sufficiently generic reference to "very" short-term intraday trading, that any meaningful discussion between two or more people requires more definition and clarification. Just to ensure that everyone is on the same page.
You can have a tighter SL on a second entry, too.
For example, if you had a 5-tick SL on a first contract, and a 2-tick SL on a second, your expectancy* (with 2-tick profit-takers) can still work out nicely. For that matter, with a second entry, you can turn your return to first entry as a profit (instead of a scratch), etc etc etc....
As mentioned above, this is best seen by working/studying the DOM -- I can't imagine trying to do this on a chart -- WOW my brain would blow up.
*major nods to Buy1Sell1 and his rant on position mgt/risk control...
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I hear you, I hear you ... I know they're good for you, but honestly, I think that after the first week, I'd probably tire of eating nuts for lunch every day ...
(That cracks me up! But in point-of-fact, I go through a 2lb canister of cashews about every 6 days -- at least one a week. {With 5 hefty shakes of habañero, 5 of garlic powder, 5 of onion.
YUM!} from a 1oz cup, so I don't much the whole thing in one sitting...
)