Advise me on R:R for scalping 0.02 and 0.03

Discussion in 'Risk Management' started by birdman, Jul 26, 2018.

  1. birdman


    I'm still learning intraday. Today i had 9 round trips, 8 were profitable and 1 stop.

    I only trade the same 1 stock and 3 ETFs.

    Positive trades average .02 target (some .01 and some 0.03). Stats show i need double the risk to reward, or a .04 stop or even .05. Most of what i read, makes me want to limit to 1:1 R:R, but thus far, i don't see how. Maybe i should sharpen my entry skills.

    I you scalp for .02 and .03 is your R:R 2:1, 1:1 or what works for you?
  2. You make money scalping for .02 gross? what about after commissions and taxes? Just curious....
    FreakofNature and trader99 like this.
  3. trader99


    I scalp futures. But I think scalping for 2 cents is not enough to cover cost and losses. You can barely beat commissions. Even in futures, I try to go for multiple NQ/YM points when possible.
  4. maxinger


    I posted following info somewhere else.
    So I will post here too.
    I don't know what type of scalpers u are.
    you can read my posting to have some idea.

    Nowadays heavy scalpers find trading difficult because there are algos.
    Algos use powerful computers and programs with various strategies
    and tricks and secrets to beat the market.


    I classify futures day traders into 3 categories:

    light scalpers
    they trade few lots in a day.
    they look at charts. they target reward risk ratio > 2:1
    stop loss could be say 12 ticks for NQ, ES, gold

    medium scalpers
    they trade tens of lots in a day.
    they target RR > 1:1
    they take every twist and turn from the charts.
    stop loss could be say 10 ticsk for NQ, ES, gold

    heavy scalpers.
    they trade hundreds of lots in a day.
    they pay heavy commissison. so they'd better be exchange member to enjoy discount on commission. they look at ladders and not charts. they target 1 or 2 ticks profit for each trade. occassionally they might stretch target profit.
    Exchange people loves such traders.

    so there are many ways to profit from the market.
    choose whatever that suits you.
    Last edited: Jul 26, 2018
    birdman and trader99 like this.
  5. When heavy scalping the ES I am learning that about half the time many trades start out with 1 contract and end up with 2, 3 or 4 or contracts in the end. Why do you think we have a ladder (DOM)? When the trade set is over and you get one tick over/under the average you end up with 1, 2 or 3 losing trades and 1 winning trade. The length of this trade depends upon if you trade the day session (under 1 minute) or night session (up to 10 minutes). In the day session you may have to wait for each trade to present itself each 5 minutes on average, night session maybe 15 minutes average.

    You have a 6k account with a company like Tradovate that will give you a DOM with all the bells and whistles and free charting for $2.58 R/T "all in" plus $2,400.00 year membership prepaid. The commission is important then you lease a spot from the exchange eventually.

    Heavy scalpers can make a lot of money. An insane amount of money. You can calculate it from this post. At $12.50 profit (1 ES tick) for one R/T - commish of $2.58 = $9.92/RT per 6 minutes. If you work days only for 4 hours for 220 days (one year) at 10 trades per hour = $87,296.00 - $2,388.00 = $84,908.00 per year. Nights give about 3 trades/hour.

    So the terrible winrate gives you a $84,908.00 for a $6,000.00 investment. 880 hours of labor at$30.00 per hour = $26,400.00. So that leaves you $58,508.00 to reinvest in your trading account to increase your contracts. The sky then becomes the limit.


    P. S. cut everything in half if you are a negative person. The reinvestment in your trading account along the way will solve all of your negativity. Hey all that for 30 bucks an hour :)

    P.S.S. One small detail I left gotta know how to scalp for one tick and never lose a trade set :wtf: So far I have simulated 1,500 trades working day and night for 10 days practicing without losing one trade set. I have 6 months to a year to go practice practice...practice and then more practice. I beleive it will be worth it in the end don't you?
    Last edited: Jul 26, 2018
  6. trader99


    @maxinger Do you mean lots or round turns? I think RTs is a better way to classify these categories. A light scalper could be swing size. A medium scalper could be swinger less size but more frequency. A heavy scalper could be swinging size and frequency.
  7. birdman


    Need 3000 shares at a time minimum, and even then, that's just for practice. Usually 5000 and plan to work up to 10,000.
  8. birdman


    Thanks for your comments maxinger. I tried looking at ladders. It wasn't for me.
  9. maxinger


    agree. round turns is a better way to classify.
  10. .02 on 3000 shares is $60....after commission and taxes PLUS losses because no way you are batting 1.000....cannot see you making a living except for your broker.
    #10     Jul 26, 2018
    ironchef likes this.