actually it stinks as there is no way for me to see a trend developing and my EMA is moving up and down like a hula hoop going to sleep soon .... good luck
Baruch, that is a well-meant, yet silly comment. I really was joking about betting the farm. How much do you think I risk on a single trade? How much do YOU risk on a single trade? I would not risk more than 1%, or, at the worst, 2%. Yesterday's EUR short never even came anywhere remotely near that. I ususally exit before I lose that much. While scalping, the relative risk factor is of course drastically reduced, if I scalp the size I currently "swing" trade, I risk less than 0.5% on any single trade. I can scalp with several times the size I can swing trade, because lower time-risk and smaller stops. Now THAT is the advantage of scalping. Unfortunately, this only applies in very liquid markets, like the ES, where the liquidity is high enough to support that. I disagree with a notion that holding on longer is what makes the big profits, as opposed to scalping. That totally depends on two factors: 1) The market you trade, 2) The money you have / size you trade. I believe if you trade a market like the DAX, for example, you can make about 10X as much by scalping it. Same for ER2 etc. The EUR is also very nice to scalp. But it's all restricted in terms of liquidity. I am sick of hearing the argument that there are no $100M-scalpers out there. Jesus, of course there aren't. What do you think how that'd work, scalp the ES with 10,000 contracts? It's all solely a matter of money velocity. In finance, the smaller you are, the more money you can make, because of more money velocity (compare 1-man fighter versus dreadnought). As you become a multi-millionaire or manage lots of money, you get to find out that it isn't all so easy anymore making a few thousand % a year as it was when you had a $10K account. When you look at it this way, finance actually becomes one of the fairest games in the world. The larger you are, the harder it gets. On the total extreme, beginners can whizz in and out of the market with 1-lots all day long, it's so easy, every market looks abundantly liquid, you always get a fill, you can buy the bid and sell the offer, and on top of that are totally invisible, because nobody would ever even notice you. Once the beginner gets over 1-lots, he will realize that it isn't so easy after all. DAX isn't that easy with 10-lots. Nor are the currency futures. If I want to enter a dozen plus contracts on the AUD, for example, I can't just put my limit in and wait. Chances are the market will move there to take the volume out and then run against me, or, never go there, because it's scared of the volume. So I have my execution platform strategies set to not send orders until price is a couple of ticks away. Admitted, you're late in the queue, but you see, that's why you can only do AUD well for swing-trading or pos trading. You gotta give up a tick or two. On the EUR, it's similar. You have to scale in preferably over several levels, so things are smooth and people don't see big orders matched or get scared by your size, or, as on AUD, see your order sitting there way in advance. Always keep low profile and camouflage yourself well. "They" are all watching you. I was talking to a very good friend and prop trader (we're in chat during RTH everyday), who scalps MSFT etc with decent size. Most of the time, he will go for 1c gains or sometimes even less. He will get liqudity rebates etc, and if you do size, it all adds up. Now, I sim-traded some MSFT for fun and found it to be a potentially very very profitable market. I asked him if it's possible to scalp MSFT with 50K (shares). Well, he told me that it's pretty tough with 50K, they really see you coming, so you will have to split your orders etc. and perhaps get in over a couple of levels. He says anything over 10K can become problematic. You see, that's just the way it is with scalping. Well, to sum it all up, I have come to a point where scalping can at times become a nuisance fill-wise, so I go for longer-term things. That has nothing to do with my "decreasing love for scalping". Scalping is the best style of all if you're really small. It's just the way it is that if you want to trade bigger, you need to give something up. The trading style you employ should not so much be a choice of preference, but more a choice of the individual market and size you wish to trade.
Hi Scientist, I am sure Jay will comment, what you are writing about scalping. I think it's OK scalping, when the market is in a trading range. If it's trending, you should follow the trend and go for bigger gains. I suppose you agree?
Man, your trading style is just so similar to mine, it's not even funny. Also the bit about which ones you day trade and which ones swing trade. I used to do well over 50+ a day on the ES, now I try to take a couple of swings a day. Yesterday, I went short in the morning, took 3/4 off for a bit over 4pts gain (posted here on thread btw), then the Al-Quaeda was sat on the pot and I was glad I had exited most. The market went to the moon, I caught a low-risk retracement and made another 5pts. In another trade, I took 4pts. And a small loser also. My total for the day was over 10pts, with just 3 or 4 low-risk, high-reward trades. The day before, I pulled 14.25 pts on ES. It's not really a lot compared to what you can make on EUR, but it's a great market, because it's "safe" because of it's liquidity and you don't have to "wait while slowly getting filled". I also had a couple of trades on NQ, two winners, one loser, all yielded +5pts. I just watch lots of markets now, and cherry-pick opportunities as they come, as opposed to staring at the same market all day and overtrading. So Baruch can get an idea what kind of targets I take these days. Not really 4T so much anymore. I try to get more, and even swing if possible. I was holding 1/4 short for a swing trade since yesterday morning, convinced the market was gonna tank over the next days. Shame (ahem) about the Al-Quaeda news, that jeopardized it totally. But that's markets for ya. Always be prepared. P.S: I think the Al-Quaeda news were really planned and ployed. Just look where the market went just before that! I bet the administration kept that one as an "ace up their sleeve" in case the bull market did another attempt at crashing... And where do you think the market would have gone without? But that might just my conspiracy theory...
No, I totally disagree. No matter if it's "ranging" or trending, there is always a wide trading range which you can exploit. The more trends you take within a trend, the more money you can make. Ideally you could all styles at the same time (SCT). Perhaps you'd care to look at smaller timeframes to visualize it. As I also don't agree with your notion on adding to winners. I really don't, and I don't agree with your anti-notion on increasing your R:R by averaging down into trades within your original stop range. You got it the wrong way 'round IMO. I disagree with a lot of things you say, but it seems I disagree with about 95% of the people on this board, anyway.
I didn't post much yesterday, I was actually quite upset (and still am) because of a missed EUR trade. I have a simple system signal which gets me into longer moves, and I ALWAYS take it, without exception. However, yesterday, I hesitated - for whatever reason - and then dropped it. I missed the entire move, from beginning to end, and the market never looked back. I tried to be calm about it, but it really got to me. I missed out on a major, major profit...
Jay, did you take the 50% retracement on EUR in the 310 area? I'm sitting in there, waiting for a good continuation, and it's starting to look like decent rejection. It was pretty much a no-brainer after that big move, really. Wonder what you think.
I agree with Scientist on adding to losers/scaling in...sometimes I take a trade but perhaps the R:R isnt as high as I would like, so I use smaller size initially, then if it goes against me but still looks a good trade overall I will add to my position, keeping the same stops and my R:R increases. It all depends on the R:R as to what size I use at each point. On the scalping issue, I think, yes you can make more profits with smaller size, but for me its just too much work and screen staring, I like to use size and just leave a trade patiently and go do something else, some of my trades last day/two, others week/two...I try to stay hourly, 4hrs etc, or...go down to 15min etc for an entry point into a longer trend, if I missed an entry point on the 4hr chart say, ill zoom down to 5, 15min or whatever looking for a entry point into it. After I get a good entry, I use very wide stops looking for the bigger trend and move it in accordance to supp/res points. Can be a lot slower going than what many traders enjoy, and in truth bores hell out of me also many times!!