Absolute noob - seems I am scalping? - dancing with the devil

Discussion in 'Trading' started by Fudd_Boomer, Jun 29, 2020 at 10:19 PM.

  1. Please excuse my first post - hoping for your (kind) opinions/confirmation - don't have any friends that trade.

    Started trading 3 weeks ago - read about indicators, analysis, etc. - watched videos - paper traded for a day or two - started out live with just 10 shares of stock (NCLH).

    "Blue line crossed above the red line" - jumped in - the trade quickly went against me and stopped out - stared at the indicators again, MACD, RSI, etc. - thought "real hard" and jumped in again - same result - flummoxed - sat back and watched the candles/DOM for while - noticed how the tug-o-war between bids/asks was really like a dance - rhythmic/cyclic patterns - on a hunch started sliding orders into the trade from outside the spread only when the price movement looked "right" - rode the patterns - trades only lasted some seconds - made sure to pull the trade "into the fire" as soon as it felt like the price would turn against me - wow - crazy - winning - fun!

    Been doing "it" for the last 3 weeks and now only take losses when I try to get fancy, use something "new" that I read about, or try to analyze what I am doing. The simple move that "happened" during first hour of my "trading life" now seems to land a solid 3~5% every morning (only able to trade in morning - got to work!). Keeping my stops tight but don't seem to hit them anymore - staying in control of the trade. Looks like my basis will double in this first month (including some big learning curve losses).

    Did not even know what "scalping" was until I googled it.

    What's making me nuts is I can't seem to find ANYTHING in books/websites/videos about doing it like this - truly weird.

    So...ditched the indicators - don't even care anymore about fundamentals/analysis - just looking in FinViz for a stock that is active with good volume - no longer afraid of the noisy stuff - check chart for trend/breakouts/reversals/waves/resistance - watch last 3 candles and DOM to get the rhythm/range - clear my head - no fear - no emotion - dancing with the devil!

    So sorry for the long ramble - I just gotta know!..Is anyone else out there doing it like this...?
     
    Last edited: Jun 29, 2020 at 10:40 PM
  2. guru

    guru

    Not sure if "like this" because you didn't provide full details while other traders also may not share every detail. But sure there are people trading using tape reading, and scalping. Both scalping and tape reading may be related but not always the same.
    SMB Capital did several videos on scalping:
    https://www.smbtraining.com/blog/tag/scalping
    And tape reading:
    https://www.smbtraining.com/blog/tag/tape-reading

    There are books and articles on tape reading:
    https://www.investopedia.com/terms/t/tape-reading.asp
    And I think Nick Fabrio may be trading using similar approach (he doesn't share all details):
    https://twitter.com/longhorncapital
     
  3. easymon1

    easymon1

    ...Like what?
    What would you say are a few of the main tenets or rules that you use to enter and exit trades?

    Good on you, keep up the good work.
    Book 'em.
     
    Last edited: Jun 30, 2020 at 12:30 AM
  4. Thanks - have watched some of the SMB videos but could not really assimilate much on a "physical" level.

    My introduction to trading was completely different than what I envisioned - engineer working in analysis of wireless network performance data that is heavily based on charts - was thinking that trading would be something like that - mostly technical - "flying by instrument" if you will.

    Well, it's been quite a seat-of-the-pants barnstorming experience - more like playing a heavy fish on light tackle than playing a piano from sheet music. I have been sliding orders up and down the DOM like it is a video game - really quite wild at times - some of the fast moving stocks really fly on opening. It has been a lot of fun - learning when to hover, when to fade, and most importantly, when to quickly pull the trade inside the spread to exit quickly.

    I was showing my wife today how to "dance" with the bouncing and sweeping of trading actions on the ladder - something that evades a verbal explanation but is really simple and elegant to the eye.

    So, I have been looking - hoping to see a video of someone actually doing this kind of thing - so dynamic - like dancing - or stalking a rampaging beast through a dark jungle...really!

    It has been a lot fun - the tiny victories add up nicely and the breakouts are like a galloping sleigh ride.

    Thanks again for your kind reply - cheers!
     
  5. Thanks - that is good question and used to be part of my intended course of learning/study - as well as the use of indicators and confirmation on entry.

    This is going to sound a little crazy - but now it's just a rhythm to me - I just watch the trades move up and down the DOM - it moves fast sometimes - I just get in when it "feels" right - if I try to analyze - look at indicators - I begin to hesitate and I lose - but if I suppress the voices in my head and keep my eyes on the motion of the bids and asks I can simply react to what I am seeing and win...and win... When it's time to get out it hits me like a hunch - seem to know before I "know" it (in a logical sense) and just pull my order into the spread well before slipping to my stop - suppose it's subliminal - not a logical process (no voices in my head). Also - this is a calm experience - no emotional windup.

    Does anyone else out there do this? Once again - am I doing something that is apparently "not often done"...?

    I have tried to explain this to a friend that is also a beginning trader and he just kinda skips over what I say like he didn't hear me. He is studying indicators and strategy - I don't really use indicators (other than candlesticks with some fast VWAP and price indicators that "live" inside my candlesticks) - and I absolutely have no strategy.

    Cheers!
     
  6. easymon1

    easymon1

    how do you decide what stock to trade to start the day?
    when a stock gets wrung out, how do you find the next play?
    how many stocks do you trade per day?
    how many entry-exit cycles would you say you are booking per stock in general?
    how many cycles per day in general?

    what hours are you actively trading?
    what platform and dom do you like? it must be smokin' by the end of session. lol.
     
  7. ironchef

    ironchef

    There are literarily hundreds of way to make money trading and thousands of way to lose money trading. If you are so lucky you found a way that worked, keep doing it until it doesn't. In the mean time, make sure you take some winning off the table because sooner or later it will stop working and you need fresh capitals to start over.

    Day trading is like watching a tug of war between buyers and sellers. They are never balanced and if you can find/sense the imbalance, you print money. Just so you know, I am unable to do that so I don't day trade.

    Welcome and good luck.
     
  8. Scalping is an old-style (pre-decimalization) technique used by the specialist/market maker to simultaneously bid and offer to earn the 1/8 that used to be the minimal pip to trade. On a 1000 shares, you made 125 dollars. Sometimes you made a 1/4 and you were happy. More often or not you lost. Why? Because you were clueless of the market direction or breath short term. I made my living this way for a while in New York, with a prop group. You can still do it but it is much harder than before. We never had to bother finding a short to offer, as we cleared with the biggest NYSE firm. The average guy cannot offer a short with the firms we use as brokers. We had one guy who was doing this with bond etf's and he made 50k a month.
    I am not sure what you are doing is scalping. Maybe it is close to this but I could not ascertain reading your post. Technically, scalping is gaining a small bid/offer spread. If you can get more, dandy...no direction bias.

     
    Last edited: Jun 30, 2020 at 2:24 AM
  9. **Have been using finviz to get a list and then looking through the intraday charts for the most/biggest movements with smooth/clean runs.
    signal = volatile - shortable - volume > 1 million - price > $7

    **When stock goes sideways rotate through a half dozen or so recent favorites.

    **Last week or so have only traded a couple stocks on a given day - things have been nice and "bumpy" lately.

    **Seems like a 10~20 cycles on a stock - give or take.

    **Have a day job so have to limit myself to first 90 minutes or so - missed a lot of nice movements lately.

    **Have had pretty good luck with Norwegian Cruise Lines (NCLH) - also (INO) a couple days ago.

    **ThinkorSwim - using big 43' monitor flipped 90 degrees to give a really tall static DOM - charting last 20 minutes of 1 minute candles zoomed in big on left side of the display - nice tall T&S on the right side - toyed around charting moving average, Bollenger Bands, etc. but find I don't have time to look/process that info - now just using 2 simple moving averages setup with length = 1 - these give a single white horizontal bar for VWAP and the other is single yellow ball (H+L+Close)/3 with both on vertical centerline of each 1 min candle - this shows at a glance how price is pulling up/down on the VWAP - helps to judge movement of the present and next (future) candle.
     
  10. easymon1

    easymon1

    Great to see a complete lack of analysis paralysis.
    TorSwim dom, data feed?

    yep.
    i see a hybrid Trading station / Pinball machine in your future.

    don't think twice about "missed trades" while you are earning a living, lol.
    That work break keeps you fresh and hungry.

     
    Last edited: Jun 30, 2020 at 3:51 AM
    Spooz Top 2 likes this.