Scalping

[osho67]

I would like to understand more about scalping methods. Any suggestion for books, articles, message boards and any other links would be much appreciated.

Is scalping a viable strategy for YM intraday trading ? I am using 1 or 5 min chart with 10 ema. I am using QT and IB for data. Over last four days I made about 20 points per day - 2/3 trades per day so the commission was not very high as well. I would like to improve on my strategy and guidance from other traders would be much welcome.

Thanks so much

 

[Grey1]

The risk involved with scalping is huge.. Those who scalpe often have a larger exposure to market to make the trade worthwhile . Should you have a poor entry ( High risk ) then the damage could be huge..
My feeling is traders should start with lower risk profile trades such as Swing trades of up to few days originally then them move into shorter time frame of perhaps few minutes.. As a genaral rule the shorter the time frame the more dangerous the game..

 

[osho67]

To limit losses I enter 5-10 points stop loss . Please explain more about swing trading.

 

[sidinuk]

I agree with Grey1, scalping is one of the hardest possible ways to make money from the markets. It requires a large amount of skill, judgment and concentration. Best left to the ex-pit traders who thrive on the excitement and understand how and why the market moves.

 

[Halo]

Lecter - are you insinuating that the LIFFE floor pit traders used the influence of pit relationships to deprive off floor traders of quality fills. If such a thing were to exist now I would call such a tactic trading "on the elbow"...luckily i don't believe that sort of thing would ever occur.

Osho - risk/reward is the thing you've got to think about - if you're stops are 5/10 ticks away, where's your take profit target?

 

[roberk]

Osho,
I tried to be a swing trader but found that scalping is what suits my nature.
When you say you are making money already, are you talking about real trades or simulated. Real trading is very different from paper trading. If you can make 20 points a day consistently then in a year you will be a millionaire because you can keep increasing postion size. Basically things are not so easy though.

I scalp futures everyday including YM. In fact I am not making money consistently yet but many people are. Probably over 95% of those who start to do this professionally will give up because it is hard, it takes capital, time, and character.
Unlike most professions it is both skill and gamble - and not everyone can accept that.
I think Ym is not the best market as the tick return is only $5 so you have to make over a tick to be profitable (becuase of commission) and the volume is thin, but is good for beginners as losses will be smaller than say ZB (bonds) where the tick size is over $30, or the nikkei where is is almost $100. And you will lose for the first few months or more.
there are many good chatrooms where Ym, Nq, Es ZB are traded in real time . You could try woodies, as this is free, to begin.
I have put about $40,000 as my investment in learning , capital etc. And expect to spend considerably more before becoming a real trader.
If the market moves against me by 2 or 3 ticks I am out. Or if it is too slow in doing what I expect it to do.
I dont use stops much because I am ready to close out at the blink of an eye, an average trade is 3 minutes but could be only 5 seconds and sometimes an hour and a half.
I trade almost entirely off price action and volume, seeing the patterns that the market makes. Along with support/resistance pivots and fibonnacci .

 

[madasafish]

Read this about Dax scalping...

fascinating
http://www.elitetrader.com/vb/showthread.php?s=&threadid=25416&highlight=dax

 

[roberk]

Thanks very much Masasafish,
compelling reading for me. Lately I am trying to stay away from dax until I perfect my style on the less volatile markets but the Dax is the one I love most of all.
Confidence building to see that a real pro is trading in a similar style to the one that has been evolving for me.