Calling all Scalpers !

Discussion in 'Strategy Development' started by lavalois3378, Jun 30, 2007.

  1. Hello all,

    I’m still at the research stage of my trading career and there are a few things I can’t seam to find anywhere. I read books, searched the web and this forum but I never found a clear answer to my question.

    Scalping is the trading strategy I find most appealing (Buy and sell in just a few minutes or even seconds). And according to a book I read on the subject, real-time market indexes (Nasdaq, NYSE, etc..) , industry indexes (Energy, financial , Healthcare, etc.) and their corresponding Tick and Trin indicators are extremely valuable tools for scalping.

    I would like to know how big of a part these indicators play in your scalping strategy. And most importantly where can I find them? (My broker doesn’t offer them) If the answer to my question is on this forum and for some reason i missed it, i apologies.

  2. Im a scalper and all I do Is trade the CL, as far as your question goes I wasnt to clear and what you wanted to know. But I can tell you there are some people here who will tell you there is no way you can beat the market scalping. And some will swear by it so you have to find out what works best for you. I for instance make very good money scalping the CL. Some guys make great money swing trading the YM or S&P. I prefer to scalp and go to cash at the end of each trading day, this is something your going to learn through actually doing it with real money not researching it.
  3. I'm mainly an equities scalper and I'm also not sure what you are wanting to know. I do pay a lot of attention to the TICK and TRIN of the NYSE and Nasdaq, for what it's worth. But, since I am just trying to capture a few cents at a time, what matters most to me is the current bid/ask price, depth, and size, along with the rate at which recent trades are printing.

    I agree with the previous reply that the only way to learn it is to just give it a try. What book are you reading? I've never seen a simulated account that gave realistic enough fills for you to even try to "paper-scalp"... you've just got to decide when you think you know what you're doing and jump in.

    Keep very accurate notes about what you did and try to learn from them. Do a video-capture of your screen during your trades if possible, so you can review your trades as they actually happened. I find scalping depends a lot on dynamic, real-time factors, so it's hard to review after-the-fact just by looking at the charts.

    Try not to make the same mistake twice (keeping in mind that a lot of results are only statistical so losing money is definitely not always the result of a "mistake").
  4. To your question on where you can find them? Most of your bigger charting packages like Esignal and Tradestation allow you to get the real-time data for the TICK and TRIN. I have never seen a broker who has this on their platform but that doesn't mean there isn't one. A lot of your simulation accounts now are just like trading real-time, the fills are like you were actually trading money. They used to not be but recently more and more brokers are offering a simulation account that will give fills just like if you were using real money. For instance, the price has to move past your limit order price in order to get filled. This is as close to the real thing as possible. The only difference may be your place in que, by this I mean if you are at the beginning of the line for people wating to get filled, your order may be filled if the limit price is touched and not surpassed. This is how it works when you are trading a live account with limit orders. I myself use Market-if-touched orders which eliminates the necessity for the price to trade through your limit price but not all brokers offer this feature. LIke the person in the above response said, fills are very important when scalping. Good luick on your journey.

  5. would u mind tell me how to set u stop loss for u scalper? 1 cent or 10 cents? and how much profit u will take? because i find stock become fast after everybody can short and level2 is so tricky right now. I just wander how those trader in prop firm handle this problem?
  6. nkhoi

    nkhoi Moderator

    if you can read the volume you can do any style you want from scalping to swinging, just search on volume.
  7. elroch


    There are people who scalp for a living successfully and others who lose money, as on every time scale. Some claim that a smaller percentage makes money at short time scales but it is difficult to get accurate statistics.

    Key things to bear in mind are these:

    1. Trading Costs
    Every trade has a cost which you have to beat before making a profit, made up of commission, spread, slippage... If you trade at a very short time scale, you have to get much better results to make a profit, because the trading costs are relatively much bigger. For example, if every trade costs $20 and you make $100 for a win and lose $100 for a loss (ignoring costs), you need to get 60% percent success just to break even ($(100+20): $(100-20) = 3:2)

    2. Speed of Reaction
    For very long time scales, you analyse the market at your leisure and set up your trades with no pressure at all. At very short time scales you have your finger on the trigger hoping to fire before the opportunity has disappeared. Even for somewhat longer time frames, opportunities can pass untraded, because they do not last long.

    3. Capital and Potential
    Very long term trading requires large amounts of capital and has only a relatively small percentage likely return. However this return is, as was mentioned above, positive with higher probability than very short term trading.

    4. How about Medium Term Trading?
    Of course, what is medium term depends on your viewpoint and the chosen market, but I would say the middle ground is a good place to be, in general.