Scalping

This is a discussion on Scalping within the First Steps forums, part of the Reception category; Originally Posted by DionysusToast Can I ask why? There may be no T&S, DoM or Order Book on FX... But ...

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Old Mar 4, 2012, 6:01pm   #15
 
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Re: Scalping

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Originally Posted by DionysusToast View Post
Can I ask why?
There may be no T&S, DoM or Order Book on FX... But this goes for everyone else as well!

I agree, trading futures would probably be a better idea in the long run. But for now, I don't have the capital for futures, and scalping by chart isn't that difficult once you get used to it, imo. You might enter more BE trades as a result, but it's hardly impossible to scalp FX.

Take it this way. If you trade with the trend and/or in the direction of weakness, then you're putting chances on your side. Then you can check a low t/f for confirmation that a move is about to begin. It's not precise, but I've found it works for me so far.

Yes, the spread can be prohibitive, which is why I stick to Eur/Usd for US open and Eur/Jpy for Asian session. I go for anywhere between 5 - 15+ pips, so this is ok. Spreads of more than 2 can really amplify those losers, though, especially if you do the kind of leverage scalping implies.

In the future I might switch to an exchange-based vehicle for the order book advantage. For now, I've found currencies aren't too hard to wrap your head around.

(As an aside, I would wonder if futures are that much better than FX given how much trickery is involved in the order book... Sounds like there's as much guessing going on there as in FX!)
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Old Mar 4, 2012, 6:14pm   #16
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Re: Scalping

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(As an aside, I would wonder if futures are that much better than FX...)
Futures are much better than FX for a very obvious reason.

If you trade spot FX with a retail broker, how exactly is the price determined?
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Old Mar 4, 2012, 6:36pm   #17
 
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Re: Scalping

^ I don't see how that would be an issue. The broker gives you a price, and he must honour that price if he's to receive business.

At least, that's how I see it.
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Old Mar 4, 2012, 6:41pm   #18
 
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Re: Scalping

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Originally Posted by VielGeld View Post
There may be no T&S, DoM or Order Book on FX... But this goes for everyone else as well!
let me 'help' you out. Find out what % of the FX market is retail trading (clue - it's under 5%). The rest is interbank and they can see orders in the market and volumes going through.
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Old Mar 4, 2012, 7:00pm   #19
 
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Re: Scalping

I'm well aware of that. As far as I know, market participants don't have access to that kind of information. It's like saying brokers know where the orders and volume is... Of course they know it.

Oh, some brokers provide access to their order book but I haven't had much evidence those things are practical for every day trading.
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Old Mar 4, 2012, 7:29pm   #20
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Re: Scalping

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Originally Posted by VielGeld View Post
^ I don't see how that would be an issue. The broker gives you a price, and he must honour that price if he's to receive business.

At least, that's how I see it.


Umm, OK. Good luck.
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Old Mar 4, 2012, 8:39pm   #21
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Re: Scalping

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There may be no T&S, DoM or Order Book on FX... But this goes for everyone else as well!
Everyone else except the broker.....

Quote:
Originally Posted by VielGeld View Post
^ I don't see how that would be an issue. The broker gives you a price, and he must honour that price if he's to receive business.

At least, that's how I see it.
That's just not how it works. Their business comes from uninformed new traders and there are a constant, steady stream of them.

You can make money scalping the futures markets, but only if you have the right broker, the right software, the right data and you know which markets to scalp and which to stay away from.
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