Scalping a 1 lot - Why go big ? Didn't work for me.

[iscalp]

I still class myself as a novice trader and to think otherwise would be foolish. Like all good apprenticeships, you have to serve your time.

I'm scalping momentum, observing the Dom and looking to take a small profit. I think minimizing exposure is the best way to go when only trading a 1 lot.

Heres my trades for today.

 

[JcGilbert]

Hey iscalp, just watched your video.
I definitely agree that reducing your exposure will help you reduce the pressure you might feel while trading, however I truly believe that if you have a trading strategy, risk management which you know are bringing you consistent results on the long term, there is really no reason to feel any pressure, you just have to execute your strategy over and over. What do you think ?

 

[iscalp]

Hi JCGilbert,

Thanks for the reply. I strongly believe strategies have a shelf life and erode with time. Take the emini S&P500 for example, it went from 1000+ per av depth to recently 500, and now 100-200. It is way more volatile and less liquid. The strategy I adapted then, no longer works. With all the news, trump tweets etc and erratic moves, it is a different beast. For me, trading a 1 lot the best way to trade this is with as little exposure to the above mentioned as possible, hop on when momentum shows its hand and take a humble profit. Once a beginner has built up their account and can afford a 2 lot, then it is definitely worth stretching your legs.

Regards

 

[JcGilbert]

Hi JCGilbert,

Thanks for the reply. I strongly believe strategies have a shelf life and erode with time. Take the emini S&P500 for example, it went from 1000+ per av depth to recently 500, and now 100-200. It is way more volatile and less liquid. The strategy I adapted then, no longer works. With all the news, trump tweets etc and erratic moves, it is a different beast. For me, trading a 1 lot the best way to trade this is with as little exposure to the above mentioned as possible, hop on when momentum shows its hand and take a humble profit. Once a beginner has built up their account and can afford a 2 lot, then it is definitely worth stretching your legs.

Regards

I understand what you mean, but I think any strategy in trading is only about probabilities, like there are winning streaks and losing streaks, and at the end of the day, only the average of all the trades matter. That's why I don't really care about the outcomes of few trades, I prefer to focus on the global outcome rather than each trade outcome.

 

[iscalp]

Agree, it is about probabilities. It's also about the preservation of capital, which I consider a traders number one priority. A winning strategy is a method that has been tested / proven to put the odds in your favour. My ability to scalp the DOM for modest profit has given me a high win to loss ratio. This would then be considered a winning strategy.

 

[JcGilbert]

Agree, it is about probabilities. It's also about the preservation of capital, which I consider a traders number one priority. A winning strategy is a method that has been tested / proven to put the odds in your favour. My ability to scalp the DOM for modest profit has given me a high win to loss ratio. This would then be considered a winning strategy.

I totally agree with you, as it is made of probabilities, someone who's over exposing himself, and so has a bad risk management will blow up his account sooner or later!!

Great sharing with you

 

[iscalp]

And you.

Best wishes

 

[NVP]

Agree, it is about probabilities. It's also about the preservation of capital, which I consider a traders number one priority. A winning strategy is a method that has been tested / proven to put the odds in your favour. My ability to scalp the DOM for modest profit has given me a high win to loss ratio. This would then be considered a winning strategy.

hey there !

profit is about 3 things

win loss ratio
average RR on winners
transaction costs per trade

if you can get a system that allows you to still b/e at around 35-40% win rate you are in with a chance .....the reason most scalpers fail is they have to be hitting 70%+ win rates .......you will get killed some days

N

 

[wallstreetwarrior87]

Hi JCGilbert,

Thanks for the reply. I strongly believe strategies have a shelf life and erode with time. Take the emini S&P500 for example, it went from 1000+ per av depth to recently 500, and now 100-200. It is way more volatile and less liquid. The strategy I adapted then, no longer works. With all the news, trump tweets etc and erratic moves, it is a different beast. For me, trading a 1 lot the best way to trade this is with as little exposure to the above mentioned as possible, hop on when momentum shows its hand and take a humble profit. Once a beginner has built up their account and can afford a 2 lot, then it is definitely worth stretching your legs.

Regards

With regards to your observation about the average depth - the longer you do this the quicker you will be in terms of noticing and gauging that when the volatility increases, the depth weakens, and when the volatility calms down, the depth will return to as it was prior (1000+). The best way to describe it is as a fractal. They increase and decrease based on underlying volatility.

So by my reckoning, we are currently trading a depth of 4 handles on the S&P currently Vs the average of 1 (as the norm).

The only issue with smaller size is that you have to make the 1 lot work across 4 handles rather than 1. Where as, if you did a minimum of 2, you would space out the trades over 4 handles.

So rather than a strategy having a shelf life - it is more to do with adapting to a market when it takes on a new form, and then noticing when it changes back again.

Most traders think strategy first then apply it to the market. But it far more powerful to look at the market first, then chose the strategy.

For example, pure scalping (for a tick) needs a tight range as the underlying condition. If not then you will blow your winnings with just one of two book sweeps (for 4 ticks).

But the key point being is the fact that you NOTICED what is and was happening. That is the starting point to real self development!