Can scalping make you rich?

[GCC]

Why is this?

Because you have to use high leverage to this. If you don't know how to control your loss you get wiped out.

I also scalp ocassionally, but I do this only when I am sure that the market is not going anywhere so that I can sell at the top and buy at the bottom. You can easily double your account in a month if you scalp frequent enough and use huge leverage (100:1 is what I use when I scalp, and sometimes higher).

So to answer my own question: scalping can really make you rich, in theory. The reason I still start the thread to ask this question is because of the risk involve, since I am not sure if those occasional big losses can wipe you out. But the answers I've got so far is that scalping can really make you rich and those losses can be kept under control.

And actually, I would recommend beginners to scalp with a demo account because: 1) it teaches how random the market could be, and 2) it's fun.

 

[TheHoneyMonster]

Scalping can make you rich if you are good at it.

 

[jmarkham]

I scalped with a demo account for around a month and have recently gone live. Im doing ok, but every now and again I break one of my rules and chase or let one run, and it just f*cks up your day.
So I would only reccomend scalping if you are sure that you are going to make your rules, like when to get out of a trade if it goes offside, and are definately going to stick to them.

 

[jojo]

Three opportunities on just the one stock alone:
on the way up, on the way down, on the bounce.

Now compare with "opportunities" on the daily.......
Richard

I want to trade the mini dow intraday for about 10 points or so .......can you recommend a spread better with really tight spreads ?

 

[Mr. Charts]

I want to trade the mini dow intraday for about 10 points or so .......can you recommend a spread better with really tight spreads ?

Nope, I trade US stocks - much more profitable
Richard

 

[GCC]

So I would only reccomend scalping if you are sure that you are going to make your rules, like when to get out of a trade if it goes offside, and are definately going to stick to them.

I would say it is true for whatever way you trade, but this is especially important for scalping, because of intraday volatility, long time in front of the screen and low reward-risk ratio. This is one reason why although I like the idea of multiplying your wealth quickly, I doubt if I can make a great scalper, at least for the time being.

 

[wackypete2]

I scalped with a demo account for around a month and have recently gone live. Im doing ok, but every now and again I break one of my rules and chase or let one run, and it just f*cks up your day.

I absolutely agree that it f*cks up your day. Been there and done that. When I first started daytrading I approached it more like position trading but unfortunately the day ended before I could make a profit! I've learned to work through my flaws and adjust position size and stop loss. A demo account helps but I would recommend using a live micro account if trading forex. You wont lose much trading pennies, but even at that level you'd be surprised how much emotion you can have with real money on the line.

Peter

 

[GCC]

I absolutely agree that it f*cks up your day. Been there and done that. When I first started daytrading I approached it more like position trading but unfortunately the day ended before I could make a profit! I've learned to work through my flaws and adjust position size and stop loss. A demo account helps but I would recommend using a live micro account if trading forex. You wont lose much trading pennies, but even at that level you'd be surprised how much emotion you can have with real money on the line.

I guess such loss is unavoidable even for pros. The points is, except for controlling emotions, it is also important to trade a large enough number of times so that the probability favours your side (enough small wins to cover big loss). That's why a scalper has to trade many times a day, and it is even more exhausting than day trading.

But again, it all comes down to your personality. It is like grass vs clay in tennis, one is slow, one is fast, seldom you have players who can play both, unless you are the very very best like Borg, Federer and Nadal. For most of us we tend to be better in one of the style.

 

[laptop1]

I can scalp the YM

Scalp to the long side with the trend
Scalp to the short side with the trend

I base my trades on Volatility filter, my stops and targets are different from day to day, depending on the market........some days, I scalp as low as 5 points other days I scalp as much as 20 points

Trading today, the YM is only good for around 7 points scalps based on what I look for.

Note! I don't think one can have fixed stops and targets everyday, it just don not work that way, "well for me, further, after I have got a few quid in the bag, the last 3 trades of the day I try to catch one of them for all they're worth, even holding overnight, even though it was a scalp set up to start with.

Hope that makes scene.

 

[jojo]

I can scalp the YM

Scalp to the long side with the trend
Scalp to the short side with the trend

I base my trades on Volatility filter, my stops and targets are different from day to day, depending on the market........some days, I scalp as low as 5 points other days I scalp as much as 20 points

Trading today, the YM is only good for around 7 points scalps based on what I look for.

Note! I don't think one can have fixed stops and targets everyday, it just don not work that way, "well for me, further, after I have got a few quid in the bag, the last 3 trades of the day I try to catch one of them for all they're worth, even holding overnight, even though it was a scalp set up to start with.

Hope that makes scene.

I am trying to scalp the Dow for between 10 and 17 points
. can you recommend a good spreadbetter ?

 

[laptop1]

I am trying to scalp the Dow for between 10 and 17 points
. can you recommend a good spreadbetter ?

I dot not recommend any spreadbetting firm to scalp the Dow.

 

[jokepie]

Recently there is a post on position trading by Ingot54. He describes that he had success with position/swing trading but was not very well with intraday or scalping. Although he acknowledged that there are successful scalpers, he went on to quote from some people that short-term trading is not as profitable as long-term trading.

I have ploughed through the forum and I found there are people trading intraday successfully, like Mr Chart (see his method). However, I am more interested in the profitability of the two kinds of trading. I would like to ask experienced traders of both styles:

1. Do you think, in the long run, swing/position trading makes more money than intraday trading (including scalping)?
2. Do you think the pipwise difference in target profits in the two kinds of trading can be compensated with higher leverage, without risk more volatility?
3. Suppose you trade both styles, and you are trading fulltime, which style makes you more profit? Or if you were to quit your job and trade professtionally, which style would you prefer?
4. Finally, a question for the full-time scalpers: what makes you choose scalping over position/swing?

It is quite a long list of questions, and it certainly rivals a boring job interview, I confess. However, I am sincerely interested in this topic, since I myself is trying to choose between the two as well. I appreciate your time in advance.

Its all in your R/R ratio and hit rate,
Stops are gods for scalping.
:smart:

 

[springheeledjack]

Recently there is a post on position trading by Ingot54. He describes that he had success with position/swing trading but was not very well with intraday or scalping. Although he acknowledged that there are successful scalpers, he went on to quote from some people that short-term trading is not as profitable as long-term trading.

I have ploughed through the forum and I found there are people trading intraday successfully, like Mr Chart (see his method). However, I am more interested in the profitability of the two kinds of trading. I would like to ask experienced traders of both styles:

1. Do you think, in the long run, swing/position trading makes more money than intraday trading (including scalping)?
2. Do you think the pipwise difference in target profits in the two kinds of trading can be compensated with higher leverage, without risk more volatility?
3. Suppose you trade both styles, and you are trading fulltime, which style makes you more profit? Or if you were to quit your job and trade professtionally, which style would you prefer?
4. Finally, a question for the full-time scalpers: what makes you choose scalping over position/swing?

It is quite a long list of questions, and it certainly rivals a boring job interview, I confess. However, I am sincerely interested in this topic, since I myself is trying to choose between the two as well. I appreciate your time in advance.

I quit my job two years ago to trade full time.

I think you are asking the wrong questions. Of far greater importance is knowing oneself and deciding whether you are pyschologically better suited to day, swing or position trading. Many, many people are wholly unsuited to day trading. You only have to look at wash-out rates in day trading after 6 months -only 10% survive, let alone turn in a profit. It has a habit of attracting the most impulsive, least-disciplined, get-rich-quick individuals on the planet. If you are any of those, stay away from day-trading.

Assuming you have been trading multiple time frames for a while, then have a look at your trading log. Which are you better at? What are you performance stats? What is the average gain per trade in various styles? How long were you in the trades for? Where have the worst losses been? Analysing these will give you the answer to as to what time period, if any, to specialise in.

I tend to use day trading to cover living expenses and swing/positon trading to increase equity. The relative profits of each depend on your skill. There is no doubt, however, that the hourly pay rate of day trading is much lower than other time periods -it feels more like a job.

 

[new_trader]

I tend to use day trading to cover living expenses and swing/positon trading to increase equity.

I wouldn't recommend this to anyone. You need to operate as one or the other or your judgement will be affected. You(springheeledjack) might be able take positions that are in the opposite direction to each other but it isn't something I would recommend to anyone. If you want to hold a position for an intermediate trend then commit the capital to make it worthwhile, don't spare any for day trading. Just MHO...of course!

 

[springheeledjack]

I wouldn't recommend this to anyone. You need to operate as one or the other or your judgement will be affected. You(springheeledjack) might be able take positions that are in the opposite direction to each other but it isn't something I would recommend to anyone. If you want to hold a position for an intermediate trend then commit the capital to make it worthwhile, don't spare any for day trading. Just MHO...of course!

Perhaps I should clarify: I trade equities only, not indicies or forex. I don't see anything contradictory about going long in Cisco for a two hour intraday trade and shorting Experian, for example, for a 3-4 day swing trade. I probably wouldn't hold dual positions in the same security though, you're right.

 

[fayalac]

It migth be late to tell, but i agree with these guys, i scalp the markets with a very good rate of succes. If my position id left behind, i hold it. Once i said i didnt had loosing positions - for long - and some laugh, but it is true, I can hold a position for the long time and the market eventually will go back ( on either way ), so a combination of intraday and long therm can be good depending on you.
If someone is wise enough listen to laptop1 advice, It works, but you have to find the trend timeframe that better fits you. Well i trade forex.

 

[KillPhil08]

swine flu gone to your head.

 

[fayalac]

No, believe me.

 

[fayalac]

I´ve been working and profitting consistently these way for over six months

 

[jokepie]

I can't make consistent profit every day... And want to ask successful traders, how many days in a row you can afford to lose for yourself??

Gogol,

I think I know what you mean....I had similar problem. Dont worry of the stop outs (if you have daily loss limit set)..just look at your winning trades and see - Did you take you profits too early ? do you see the trend moving in you faour even after you exited the trade. This is very important because. 1 you will be trading less trades when you stick with your winners. JUst scale out after a certain target is reached. I know its harder than said but its a key to improve your win/loss ratio.
Also, i am sure you mange your stops actively - as in when the move is in your favour - you move your stops slowly - this reduces your expouser per trade.

Remember daytrading is just like another job -- swing trade or position trade could be a hobby.

If you are getting loosing days in a row.. there must be something that you are doing wrong. This only means you are on the wrong side of the MARKET - MOST of the times... which means against the TREND. make sure you are not trying to FADE the maket moves. In last few weeks market has been really strong- no large retracements.

lemme know if this helps
Guru