Scalping MSFT, too expensive. Cheaper stock suggestion?

[Alec1974]

More than a YEAR I have been trading successfully (NOT bragging about it) only one stock - MSFT. I scalp it for $0.03 difference , the only problem, my profit is way too small. I use $40,000 Buying Power (its all i have for Overnight Buying Power, I don't wanna use Day Power - too risky). And it means that from one trade I can only make $42 (-$6 fee) = $36 profit.

I usually do 1 , sometimes 2 trades a day. It's way too little money to cut my days at work lol. I love MSFT because it moves no where the whole year, and making $0.03 profit on this stock is very easy. I live this stock and breathe this stock day after day.

My question is - can someone recommend stock like MSFT but twice or three times cheaper? In $10-$15 range where I can possibly do the same Scalping Trades in $0.03 range? The stock that like MSFT is not moving anywhere?

Thank you so much !!!!!

 

[timsk]

Hi Alec,
To scalp stocks like MSFT you need to trade with size and, unless you have a very large account, the only way I know to achieve size is through the leverage offered by a margin account. Greater risk of course, but you'll get more bang for your buck.

As for other stocks like MSFT but cheaper - almost any site with basic scan capabilities will throw up likely candidates. You could scan for very high market cap stocks with huge daily volume and a very low beta or average true range (ATR). Try: StockCharts or StockRover or Yahoo Finance - the list goes on . . . If you're going to trade more than one stock at a time, I recommend to check their correlation - both to one another and to an appropriate equity index.
Tim.

 

[Tradesight]

More than a YEAR I have been trading successfully (NOT bragging about it) only one stock - MSFT. I scalp it for $0.03 difference , the only problem, my profit is way too small. I use $40,000 Buying Power (its all i have for Overnight Buying Power, I don't wanna use Day Power - too risky). And it means that from one trade I can only make $42 (-$6 fee) = $36 profit.

I usually do 1 , sometimes 2 trades a day. It's way too little money to cut my days at work lol. I love MSFT because it moves no where the whole year, and making $0.03 profit on this stock is very easy. I live this stock and breathe this stock day after day.

My question is - can someone recommend stock like MSFT but twice or three times cheaper? In $10-$15 range where I can possibly do the same Scalping Trades in $0.03 range? The stock that like MSFT is not moving anywhere?

Thank you so much !!!!!

Alec,

I don't think you are going to find much success "scalping" in this fashion. In my opinion what you are trying to do is really market making. Quite a while ago this used to work to some degree when ECNs were actually paying you for your orders. This is know as "rebate trading"...think of it like a reverse commission. The ECNs did this to attract liquidity to their platforms but they don't offer that to small individuals any longer. So now what you are doing is shooting against the bigger (better funded) market makers and high frequency traders. This really puts you at a capitalization and speed disadvantage.

If you wanted to continue down this path you might find that you can make some more with a higher beta stock like QCOM or AMGN. They are both liquid and stable traders.

With a $40k account I'm sure that you could do better with some pure scalps in liquid stocks that are either breaking out of or down form legitimate technical patterns. Get in at a trigger price and get out a reasonable target. This technique has been proven over time and keeps you form just competing against the market makers and high computerized high frequency traders.

Best of luck,

Rich