Can scalping make you rich?

[fayalac]

That depends on your strategy.

 

[zoo]

More trades with less profits or less trades with more profits?
On longer timeframes, signals are usually cleaner and surer but I am used to thinking that the less you stay in the market, the better since there is less chance to lose.


From many years of experience I can say that scalping doesn't work at the retail level especially, sorry to crush anyone's dreams, I'm just being realistic. Of course, you can suceed at scalping in the same way that someone can have a fantastic streak on blackjack or roulette, but eventially it will catch up with you. There are so many reasons why scalping won't work, but I'm afraid I don't have time to go through it in detail now. Good luck though if you want to give it a try, sometimes its best to experience things first hand rather than listen to other people's comments.

 

[Fabius]

From many years of experience I can say that scalping doesn't work at the retail level especially, sorry to crush anyone's dreams, I'm just being realistic. Of course, you can suceed at scalping in the same way that someone can have a fantastic streak on blackjack or roulette, but eventially it will catch up with you. There are so many reasons why scalping won't work, but I'm afraid I don't have time to go through it in detail now. Good luck though if you want to give it a try, sometimes its best to experience things first hand rather than listen to other people's comments.

I agree with you but since it's impossible to get all the experience of the world, other people's comments are always welcome .
Here it is my experience for those who may be interested in:
actually I am having great success with two morning strategies: one on London Opening and the other one before it http://www.trade2win.com/boards/trading-journals/101770-forexmorningtrade-journal.html

Short term trading is still to be fixed since I earn and soon after I lose what I've earned before .
I personally would prefer short term trading (from few minutes to fwe hours -pure scalping makes me feel sick-) but unfortunately I am not ready yet and have a lot more to learn

I am practicing also swing trading and long term trading and here you are an actual screenshot of one trade taken this night on Eur/Usd and still running :cheesy:

Maybe should I take this as a sign to enjoy more my free time?

 

[fayalac]

I have to disagree with zoo.
Scalping, as any other trading method, depends on so many factors, some at our control and many out of our control, and as a result it is hard to say it will work as it is hard to say it will not. Of course, its easier to deny things instead finding out the way those things can work.
Anyone trying to catch the next move will lose hes money faster than he thinks, so the question to be answered should be how does scalping work?, how could it be profitable?, hard to say.
I´ve been scalping and making intraday for some years now, i can say i have made a lot more at intraday than scalping but since some months ago i started asking myself what makes my scalping strategies to eventually fail?, since then i´ve been working on how to solve those eventualities, and i guess with a very good result by now backtesting, i still have to forwardtest the strategy but it seems promissing, at least i could scalp with a very high degree of probability of success.
Everything depends on your method, even countertrend trading.

 

[Paulie_5]

More trades with less profits or less trades with more profits?
On longer timeframes, signals are usually cleaner and surer but I am used to thinking that the less you stay in the market, the better since there is less chance to lose.


From many years of experience I can say that scalping doesn't work at the retail level especially, sorry to crush anyone's dreams, I'm just being realistic. Of course, you can suceed at scalping in the same way that someone can have a fantastic streak on blackjack or roulette, but eventially it will catch up with you. There are so many reasons why scalping won't work, but I'm afraid I don't have time to go through it in detail now. Good luck though if you want to give it a try, sometimes its best to experience things first hand rather than listen to other people's comments.

Totally disagree.

It may not work for you. But it does work for some people. Retail traders included.

 

[Fabius]

Update:
I closed my looooong trade with 68 pips gained; total time: 9 hours 28 minutes and this late morning I gained 30 pips on Gbp/Usd on M15 chart in countertrend; total time: 49 minutes.
SO, today I have been in profit with a long (?) and a short (but not scalping) strategy.
I guess that it's a matter of attitude, personal preferences and different trading times + some other things that I don't feel like thinking of because now I am rather sleepy .
I do not have all the trading experiences of most of you, I know that my journey is just started even know I have already blew two accounts because of lack of almost everything needed in trading.

I think both ways have advantages and disadvantages: it's how everyone manages in dealing with these factors that make a system profitable or not.
In my personal opinion, of course

 

[fayalac]

You´re rigth.
Personally i avoid countertrend trading, but many people likes it.
Instead countertrend i use some indicators and price action to try to foresee pull backs or trend changes, it has paid me a lot, these week i got 2 150 pip runs and that was because it was at 2:00 am for me, otherwise i would rallied with those trends. I made over 600 pips these week, most looking for trend changes. the three birds are so helpfull, for that.
I like scalping either but i dont like those operations closed within seconds, yesterday i made a couple of scalping operations that paid me about 50 pips each at no more than one and a half hour.
You dont need too much experience, just be wise and not too much ambitious, money will follow.

 

[Chartsy]

scalping forex...must be really hard...you'e got nothing to 'look at' if you get me, just a chart of price and maybe a DOM from your ecn's bank which is probably 0.01% of total volume so a bit useless.
in futures/stocks you have so much more, the tape, a reliable DOM etc
edit: yeh you can get rich scalping

 

[The_Snowman]

I see you are no longer taking offence to my comment.

To clarify what you have written. It is not a question of what I like or dislike.

Indicators and charts are not fractal in nature! You can not even say that about an indicator. An indicator is what it is, "an indicator". Put in your thinking, an indicator merely describes a chart at certain discrete points, perhaps "continuouss" in time.

It is the chart that you should really be interested in. A chart can be deterministic or nondeterministic but not fractal. I will not bother with the definition of a fractal here. Charts are actually nondeterministic and run according to an underlying motion/motive which is random in its nature. It is then the task of the trader to make some sense of chart data through indicators, albeit on short term intervals. A fractal on the other hand is something completely different.

Some would disagree, of course, different school of thought -

http://en.wikipedia.org/wiki/Fractal_analysis

and Wayne McDonell, quote - "Fortunately, for Forex traders, one part of Chaos Theory is Fractal Geometry. Basically this means that the patterns you see on a 15-minute chart generally hold true on the hourly, daily and weekly charts—effectively all charts in all time frames. In other words, the strategy you would apply to a head & shoulders pattern on a 15-minute chart is—roughly speaking—equally applicable on a head & shoulders pattern on a daily chart."

 

[fayalac]

Good point, but as snowman´s said different points of view.

 

[tradespreads]

Some would disagree, of course, different school of thought -

http://en.wikipedia.org/wiki/Fractal_analysis

and Wayne McDonell, quote - "Fortunately, for Forex traders, one part of Chaos Theory is Fractal Geometry. Basically this means that the patterns you see on a 15-minute chart generally hold true on the hourly, daily and weekly charts—effectively all charts in all time frames. In other words, the strategy you would apply to a head & shoulders pattern on a 15-minute chart is—roughly speaking—equally applicable on a head & shoulders pattern on a daily chart."

This is not debatable. Facts speak for themselves.

I can tell you with absolute certainty, one does not see fractals in FX charts. Do not confuse repeat patterns of charts, and I stress patterns, that you see on the various time scales with fractals. If these patterns were fractal as you suggest, one would be able to play FX trades with complete certainty. The game would then be completely deterministic in nature which clearly and evidently it is not.

There is no reason to confuse the issue by introducing the term "fractal", or "fractal geometry" here because FX charts, or any other underlying market does not behave in such a fashion.

The hallmarks of Chaos Theory certainly persist in market behaviour. But Chaos Theory is not entirely comprised of Fractals. It is the study of dynamical systems, of which fractals are one sort of dynamical system. The term "Chaos" only arises because certain systems may introduce a random element into it which alters the future predictability of the system. The system is loosely said to be "Chaotic" when chaos sets in, ie. when the system is no longer under control, or predictable, as time passes. There are many more examples of chaos and indeterminacy, both artificial ones and in nature than you might think.

 

[tradespreads]

Good point, but as snowman´s said different points of view.

Bad point.

 

[fayalac]

I know we have disagreed at some points, but at these one..., good explanation!

 

[tommason]

I am doing ok but not rich. my definition of rich from scalping able to generate 200 K or more within a year. I cash 101% of my profit from January till now which is only slightly above 40k. and I am consistently scalping and scaling (averaging down or up.)

Well, if you read my starting post carefully, you shall discover that I never wanted to start a debate which one is good or bad, I'm merely trying to ask about the difference of the two styles, given their different average true range, duration, volatility and leverage involved.

Perhaps it was my fault that I did not write it carefully in my first post, so it led to some misunderstanding. Please allow me to clarify.

I think I should have renamed the title as, "Can scalping make you rich AS MUCH AS POSITION TRADING". As I stated, there are people making money in the intraday way of trading, like Mr Chart in this forum (see first post). What I want to know is, given the inherent advantage for larger target profit in swing/position trading, can intraday traders compensate for this with larger leverage? If so, do they risk more due to high involatility in short time frames?

So put it in another way, the question of whether scalping give an annual return on the par of (or even better than) swing or position trading is what really interested me. I shall reiterate than I know some people can only do one of them, so for them this question is meaningless. But suppose you can do both and your personality does not have any bias towards either, which would you prefer in terms of profitability, if you are only allowed to choose one?

 

[fayalac]

Well my friend....., 40k is not bad at all in eigth months.....
Any way regarding GCC´s question, i preffer position trading, risk/reward ratio is higher when you know how to do it.

 

[tommason]

yea if you have the money and time. I go to school as well I cannot study if I have position. haha. I do it part time. I did bad last year but this year I am all positive.

Well my friend....., 40k is not bad at all in eigth months.....
Any way regarding GCC´s question, i preffer position trading, risk/reward ratio is higher when you know how to do it.

 

[EmotionIsTheBigEvel]

I just saw someone naming a site where they made 22.5 ticks a day this year scalping the ES what is a very good performance if you have traded with just 1 contract. In the mean time his post is removed, but maybe is the guy still around and can he tell me with how many contracts that website made those trades? Because I think they used more contracts, something they didn't wrote on their site. And that will set their results in a whole other view!

 

[ijustscalp]

I just saw someone naming a site where they made 22.5 ticks a day this year scalping the ES what is a very good performance if you have traded with just 1 contract. In the mean time his post is removed, but maybe is the guy still around and can he tell me with how many contracts that website made those trades? Because I think they used more contracts, something they didn't wrote on their site. And that will set their results in a whole other view!

Well if you can average anything above 20 ticks a day on the ES CONSISTENTLY then you are saclping GOD. If I averaged that much I would never tell anyone my strategy or the indicators I was using.

Averaging 7-11 ticks a day on the ES is considered good if you are using a 2-3 contracts in my opinion.

 

[tradingRAW]

I think scalping is good but its almost you have to be perfect on each trade cause you can easily give back the scalp on a bad trade. I like to ride trends and take size. I trade equities so it might be a bit different then scalping ES. Here's an example on how I trade equities...this is not spam but an educational site gears toward tape reading where I post my daily trades to help others learn and to get my trades out to my group. I'm not the biggest trader but its money never the less.

 

[GFSignals]

There are certain scalping methods, that can really bring their user pretty big profit. But at the same time they require really much effort, but not much time. At the same time it is wide-known, that scalping is effective on small accounts only, even if the broker is said to be scalper-friendly. You know, no broker will like to see you doubling your account every month, if the account is $20k. I have tried one system on the account of $1k and it works really great. But you know, it is also the question of stress and the ability to be stay in front of your PC in several hours, when the trading can be done.