Is this scalping?

trillionaire · Jul 28, 2009

I've been back testing a strategy of picking up 5+ pips per spreadbet on the FTSE 100 only on Capital Spreads, using only simple support & resistance on the 30 minute time frame.

I seem to hit my initial 5 pip target sometimes within a minute and sometimes in 10.

I've read up on earlier posts that only IB or Prospreads would allow "scalping" but would
Capital spreads define my strategy as scalping also?

GladiatorX · Jul 28, 2009

trillionaire said:
I've been back testing a strategy of picking up 5+ pips per spreadbet on the FTSE 100 only on Capital Spreads, using only simple support & resistance on the 30 minute time frame.

I seem to hit my initial 5 pip target sometimes within a minute and sometimes in 10.

I've read up on earlier posts that only IB or Prospreads would allow "scalping" but would
Capital spreads define my strategy as scalping also?

No, not really... In your backtesting did you ensure that you added an understanding of the spread? If your aiming for 5 pips, you understand price has to move 7 pips in your favour.

trillionaire · Jul 28, 2009

Yes I did.. though CS offer 1 pip spread compared to IG - 2pips.

Neoripley · Jul 28, 2009

trillionaire said:
I've been back testing a strategy of picking up 5+ pips per spreadbet on the FTSE 100 only on Capital Spreads, using only simple support & resistance on the 30 minute time frame.

I seem to hit my initial 5 pip target sometimes within a minute and sometimes in 10.

I've read up on earlier posts that only IB or Prospreads would allow "scalping" but would
Capital spreads define my strategy as scalping also?

No. I do that all the time as well (just look for small moves). Scalping would be like putting a large amount per point on a 1/2 or 1 point move, literally for seconds at a time and preferably 'front running' a delayed price (many times a day). But you can't actually 'scalp' on a SB anyway (unless price is delayed) because the spread makes this impractical and the execution is not fast enough. It's simply not a scalping environment - they don't offer this capability and they're not setup to handle it which is why they don't like it if you try to scalp on price discrepancies.

GladiatorX · Jul 28, 2009

Neoripley said:
No. I do that all the time as well (just look for small moves). Scalping would be like putting a large amount per point on a 1/2 or 1 point move, literally for seconds at a time and preferably 'front running' a delayed price (many times a day). But you can't actually 'scalp' on a SB anyway (unless price is delayed) because the spread makes this impractical and the execution is not fast enough. It's simply not a scalping environment - they don't offer this capability and they're not setup to handle it which is why they don't like it if you try to scalp on price discrepancies.

Yeah... Basically if you want to scalp you need to trade real exchanges. I scalp ES, its brilliant.,

Phil Mibbutz · Jul 28, 2009

I think if you're making 5pt consistently you'll be put on dealer referral, not matter how small the stake.

ibex666 · Jul 28, 2009

scalp

trillionaire said:
I've been back testing a strategy of picking up 5+ pips per spreadbet on the FTSE 100 only on Capital Spreads, using only simple support & resistance on the 30 minute time frame.

I seem to hit my initial 5 pip target sometimes within a minute and sometimes in 10.

I've read up on earlier posts that only IB or Prospreads would allow "scalping" but would
Capital spreads define my strategy as scalping also?

its scalping !! they wont like it. uk spread firms see anything in that time frame as scalping. wether you have a £100 a point or £1 a point! plus bear in mind that if youre up and go to exit in that small time frame they will requote you or take their time in filling your exit order.

Neoripley · Jul 28, 2009

trillionaire, why don't you just phone the SB company and ask them? You can then cc a formal complaint in writing to them and the FSA if you feel they are being dishonest. Everyone will have a different opinion and experience - perhaps it's best to judge for yourself on this one?

Claudia123 · Jul 28, 2009

SB companies don't like scalpers quite simply because it don't give them time to hedge the bet elsewhere. Anyone wanting to scalp has to go DMA ,if they serious, as the SB guys will close you down if you successful.

gle101 · Jul 28, 2009

Yes, testing a SB in live trading is always best to form an individual opinion. You should not call them beforehand and reveal your trading style. You might by doing this set up a warning flag in advance for your account. Scalping is by definition a financial investment method of trading, nothing one should make a deal about with the SB, to get it approved. Such an agreement would be useless anyway. You can get flagged being a short term trader (within 10 minutes), a large number of trades will help. You don't necessarily need take take any advantage of lagging quotes (if there is any these days) or betting large sums on small moves in order to get branded.

gle101 · Jul 28, 2009

Claudia123 said:
SB companies don't like scalpers quite simply because it don't give them time to hedge the bet elsewhere. Anyone wanting to scalp has to go DMA ,if they serious, as the SB guys will close you down if you successful.

They don't need to hedge every bet. Usually they don't close down your account, they "discriminate" you by systematically delaying your trades by referring them to a dealer. There is a problem with too many traders accepting this kind of treatment from the SB. Instead they should complain, by referring to the rules of MiFID financial directives, by which "discrimination" is not a practice allowed.

Jason101 · Jul 28, 2009

Forget about it. If you become good enough, that most sb firms make it hard for you, there is always Pro spreads, who hedge each trade straight away, or there is always direct market. No it is not scalping in the purest definition.

Is this scalping?

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