Scalping ideas

Bigbusiness

Experienced member
1,408 23
Hope we can share some ideas. I have read about a few traders making nice profits scalping but I haven't had much success. This is one idea I have for the YM. Use a 1min chart and a 4 RSI. Look for a recent high/low move and set fib levels. Buy when the RSI goes below 15, a fib level is reached and the index starts to bounce. Use a tight trailing stop. Do the opposite for Sells. This is just a rough idea and needs more work before I would trade it.
 

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wisestguy

Well-known member
471 0
excuse me for my ignorance ,I am an ex institutional proprietary trader but I have been thinking a lot about scalping lately and I can't see why the reward / risk is higher than it would be swingtrading ?
 

stevet

Established member
917 5
scalping is only for professional traders who pay cents per side and who have direct access into the exchange

swing trading is only for those who are putting off the inevitable
 

TraderPattern

Well-known member
339 7
stevet said:
scalping is only for professional traders who pay cents per side and who have direct access into the exchange

swing trading is only for those who are putting off the inevitable

Retail commissions are viable enough for home-based direct access scalpers.
 

stevet

Established member
917 5
professional fees are a consequence of high volume trading - and scalping is high volume trading - so anyone who is making money at scalping is going to be on professional fees - so by extension - anyone paying retail fees is not scalping
 

TWI

Senior member
2,536 254
Totally agree with stevet. If I run the figs it is clear that if I was paying even 15p/lot more than I do it would be very difficult to make money scalping. You really do need sub 50p/lot commissions to make scalping work and you need to be doing 20,000+ lots/month.
Suppose it depends on your definition of scalping. In my case costs are greater than my net PnL most months.
 

Newtron Bomb

Experienced member
1,602 87
I know this was meant to be a dow thread but here is the FX scalping strat I am currently using. I dont see any reason whay you cant use it on the dow.

1 minute chart
macd standard or personalised (using bbmacs 8-12-8 suggestion)
looking for basic TA... support, resistance, trend breaks, patterns etc
MACD divergence to confirm turn (although this can be a separate signal in itself)
The bolly band are for show so ignore them

GBP chart shows my set up for the afternoon.
15 mn chart showed 1-2-3 target (which i missed) @ 8405 and expecting a sell off there.

1 minute chart shows price stall at that point (and a favourite round number trade)
Trend break & macd divergence to confirm turn
green circle for entry took profit on +10 (all i was going for)
With hind sight could have stayed with trend for a lot more.

Next entry, again using macd divergence, early entry long off the high of Doji bar (green circle) or on trend break.
Other long reasons would have been pivot reaction and also previous s/r area. I never took this particular trade as missed early entry as i was on the phone.

I intend to scalp trade price & macd divergences confirmation off s/r area's in this way and looks promising when combined with my other chart analysis and trading on other time frames.

Enjoy

Happy trading

NB
 

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TraderPattern

Well-known member
339 7
stevet said:
professional fees are a consequence of high volume trading - and scalping is high volume trading - so anyone who is making money at scalping is going to be on professional fees - so by extension - anyone paying retail fees is not scalping

Its all a matter of definitions. I am a "retail scalper" and I make healthy profits.

If you are defining scalping as hundreds of trades (on the stock, not futures markets) a day then, yes, I agree with you.

I think of scalping as a rapid-fire intraday technique, but I don't do hundreds of trades a day. I am stretched to do more than a handful per day. Given that I am a futures scalper, I can trade the equivalent of thousands of shares, but pay tiny commissions e.g. I can trade a face value of $1 million for a commission of $50 each way (e.g. 10,000 shares of the spiders via the Emini). So retail commissions are not a major consideration.
 
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stevet

Established member
917 5
its not just the number of trades - you pay per contract per r/t - so anyone scalping succesfully would be pushing size on each trade and doing professional volume
 

TraderPattern

Well-known member
339 7
stevet said:
its not just the number of trades - you pay per contract per r/t - so anyone scalping succesfully would be pushing size on each trade and doing professional volume

I added a note about the fact that I trade futures, not stocks. It changes the commissions equation.
 

TraderPattern

Well-known member
339 7
I would add that I used to trade Nasdaq Level 2, prior to the SECs decimalisation of prices (decimalisation, which occurred a few years ago, spoiled the bid-ask spread scalping game).

I used Cybertrader in the good ole days. Even with their relatively high retail commissions (which, over the years, they reduced), I was still able to make a good living.
 

TraderPattern

Well-known member
339 7
mr.marcus said:
......scalping here is being used with a broader brush stroke obviously....it doesnt matter what sort of trader you are...no label will make you a success...so from that aspect i argue the term is irrelevant(to me anyway).we know the sort of ideas were gonna discuss here within this lose definition. i would however be interested in a strict definition as a matter of interest.also hoping stevet/twalker can help with making the most cost wise personally......cheers mark j :cool:

Very well put. I fully agree with you about "labels". No label will make a trader a success. Labels simply describe a mode of trading, which is why it is important to be specific about definitions.
 

wisestguy

Well-known member
471 0
OK , i've just spoken to an ex collegue of mine , and have found the answers to my own question.

Dow emini comms for Refco = $ 8 per order .

not sure what it is for the large contract , irrelevant in anycase unless you like trading 3 bid against 5 offer , ie ) illiquid contract.
 
 
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