Scalping

This is a discussion on Scalping within the First Steps forums, part of the Reception category; Originally Posted by VielGeld There may be no T&S, DoM or Order Book on FX... But this goes for everyone ...

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Old Mar 4, 2012, 9:39pm   #21
Joined Jan 2009
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!
Everyone else except the broker.....

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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.
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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Old Mar 4, 2012, 9:45pm   #22
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Re: Scalping

It is said there is no available order book or depth for spot forex so what is this?

OrderBookFX | Real-Time Forex Market Depth

If they would just send me the damn email so I could get the seven day free trial.
I suppose Friday was not the best day to submit the request.
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Old Mar 4, 2012, 9:52pm   #23
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Re: Scalping

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Originally Posted by MoonRocket View Post
It is said there is no available order book or depth for spot forex so what is this?

OrderBookFX | Real-Time Forex Market Depth

If they would just send me the damn email so I could get the seven day free trial.
I suppose Friday was not the best day to submit the request.
I posted in the thread you made on this software that it is another scam. It is. So what if their book says the market is bid for 100 at 25. Hit the bid with 101 and see if the price changes. It will not.
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Old Mar 4, 2012, 10:12pm   #24
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Re: Scalping

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Originally Posted by MoonRocket View Post
It is said there is no available order book or depth for spot forex so what is this?

OrderBookFX | Real-Time Forex Market Depth

If they would just send me the damn email so I could get the seven day free trial.
I suppose Friday was not the best day to submit the request.
What is this? A load of boll0cks.
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Old Mar 5, 2012, 3:38am   #25
 
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Re: Scalping

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Originally Posted by lewis86 View Post
Everyone else except the broker.....

[...]

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.
I see this often that brokers somehow purposely stop-hunt. I have yet to see any evidence of it. Yes, I've seen those videos of MT4 having embedded broker options to push prices around, but all that proves is that their software has these options, not that they've used it.

Nonetheless, I use Oanda whom I've researched and found nothing substantial against them. As far as I can tell, they are honest dealers, allow scalping, and my experience with them has been nothing but positive so far.

Not to say that you might not be right; just saying that my experience has been the opposite of being fleeced by dishonest bucket shops and have yet to see any tangible evidence saying otherwise.
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Old Mar 5, 2012, 3:55am   #26
 
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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!

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.
The trouble is - you won't have b/e trades, you'll give the spread on each one of them. The spread will eat away at your account and your tiny targets mean that the spread will force you to aim for a ridiculous hit-rate in a market that doesn't give you sufficient information to trade off.

You being under-capitalised is not something the markets care about. You should either aim to trade as best you can or not at all. The markets are not kind places. Taking a second best approach to scalping because of your account size will guarantee you a smaller account.

In reality I don't think it's possible to be under-capitalised. There's markets you can scalp with a $2 r/t and a $31.25 tick size. You could aim for 1 tick trades in that market with an account less than $1000. I wouldn't recommend it but it sure beats Forex.

At this point, I think what you should focus on (but you won't) is understanding your place in the food chain, or even that there is a food chain, or even that you are on the menu.

There's a book that describes is beautifully.

Tape Reading & Market Tactics by Humphery B Neill.

This book was written in the 30's. It has the best description I've ever read of the game of trading and the retailers place in that game. I know you won't believe me if I tell you that the markets are specifically engineered to separate you from your money - but maybe you'll believe this dead guy.

They ARE out to get you and if you don't go in armed to the teeth - you WILL be buying their dinner.


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Originally Posted by VielGeld View Post
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!)
I'm confused. Two posts back you were asking for advice and saying you were gravitating towards this style. Now you are a successful forex scalper? Gravity must be quite strong where you are.

Trade with the trend? Check a lower Timeframe that a move is about to begin? How will any timeframe tell you that something is about to begin?

A change in order flow preceeds a change in price.

By the time you see it in a chart, the chance to scalp it has gone. You cannot apply position day trading rules to scalping.

As Leopard said – your chances are slim. Your competition is paying almost zero spread. If you trade futures, you will be paying $2-$4 per r/t and your competition will be paying 30c.

Scalping is a game, right now you don’t understand the rules of that game but you think you can make them up by throwing in a bunch of technical analysis like our man with his blog here. There is a lot of manipulation and that is your route to understanding how other people are playing the game.
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Old Mar 5, 2012, 4:29am   #27
 
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Re: Scalping

Lol, no, I'm not a successful scalper. The method I'm going with right now is just barely becoming consistent, but it has been marginally +ve for the past month... on demo. Take that as you will.

Anyway, I was asking open-ended advice since I knew I preferred some types of trades. As it turns out, they could be qualified as scalping so I figured I'd see if someone would give useful info. I do not use any TA at all in my trading, just what I see on naked charts in different time frames.

I'm also asking what my best alternative is if I prefer forex over futures and all FX brokers are scammers. I do not doubt any side of the argument, I just want to see what's what before being all "FX is a goddamn scam!!1!" or something when that might not be true.

Now, I'm not against trading futures, just a bit reluctant since I've spent the past couple months learning something that might turn out to be junk. What I learned is hardly useless, but I'll still have to make the switch to an order book type of trading style which might take time when I could test my idea out in FX first.

Anyway, that's my bit for tonight.
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Old Mar 5, 2012, 4:35am   #28
 
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Re: Scalping

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Originally Posted by The Leopard View Post
LOL

The main thing to understand about scalping, particularly as someone new to trading, is that it is a waste of time. You WILL lose money.

You have virtually no chance of competing at this level against professional traders. You WILL be slow, clumsy and inept in comparison. You will have NO edge and you WILL be at a disadvantage.

Very few retail punters make it as traders and the number out of this small number who do so via scalping is tiny. I would be amazed if any of the well-meaning people giving you advice on this thread make a living from scalping.

There are far better ways for you to go if you wish to take trading seriously.
Yes, I agree that for a trading newbies, scalping is probably not the best way to start.

Trading is a skill, somewhat similar to driving skill or any other similar activity. You should start SLOW to learn to do things right and only after a lot of practice can you drive faster.

There's huge difference in stress level and decision making routine between swing trading and scalping with first being a lot easier.
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Old Mar 5, 2012, 4:38am   #29
 
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Re: Scalping

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Originally Posted by VielGeld View Post
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.
IMO, order book aka DOM is overvalued even on futures markets. No smart money is so stupid to just place limit orders and show everyone what they're going to do.

So most of DOM activity in liquid futures markets is flipping game anyway, the goal of which is attract the players to some side and likely open in the opposite side soon after that (as soon as they get the size they want to fill their real order, which is a market order in like 99% of time and nobody sees it until it gets executed).

So tape (T&S) has more value, but price/volume action on chart shows you the same information basically in a cute graphical way. That's why I say SCREEN TIME.

Moral of the rant: WATCH and LEARN. There are no shortcuts. Maybe with the exception of a good mentor or a prop firm which will teach you the exact tricks.

Last edited by Cornix; Mar 5, 2012 at 4:43am.
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Old Mar 5, 2012, 5:07am   #30
 
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Re: Scalping

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Originally Posted by cornixforex View Post
Yes, I agree that for a trading newbies, scalping is probably not the best way to start.

Trading is a skill, somewhat similar to driving skill or any other similar activity. You should start SLOW to learn to do things right and only after a lot of practice can you drive faster.

There's huge difference in stress level and decision making routine between swing trading and scalping with first being a lot easier.
Eh? If anything, I'd say newbies should start off with scalping.

Scalping, imo, is about market fundamentals. How do buyers and sellers interact at the most basic level of your market? If you can't figure this out, then how can you tell what's going on in higher time frames? It's not about the trading being faster or slower, or being able to make better decisions; it's about fundamentally understanding what really drives any market and how and why moves occur.

You simply cannot learn this as quickly swing or position trading because a scalper is always in the market, and as such picks up on subtleties way, way faster and learns much more quickly as a result. I think it's fine if you find out that scalping is not for you for whatever reason, but it should be the very first thing you learn since I can't see how you could operate on higher frames without this very basic knowledge.

Imo, position/swing/Buffet-style teaches you nothing about the market. Only being in there and trading the moves can you really pick up on what trading is all about.

Anyway, that's my opinion.
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