Entry signals for scalpers?

Discussion in 'Strategy Development' started by foible, Jan 26, 2006.

  1. foible

    foible

    I'm at a prop firm and they're (strongly) encouraging me to scalp. At a minimum, they say I should be doing 100 trades per day, and looking at the figures of scalpers in the P/L thread, this seems like a bare minimum.

    I kind of enjoy the process, but I'm having some problems. I think one of the biggest one is that I don't know what signals I should be using for entries.

    Can anyone share some of their favourite signals? If not, how about trash-talking some signals that I should definately *NOT* use :)

    thanks!
     
  2. I only trade stocks btw $50-$150 and I think you trade much less expensive stocks (or so I gather from your posts) so I think our methods of scalping would be very very different.
     
  3. esmjb

    esmjb

    first of all, it would help to know what you are trading in order to give you some indicators that might be helpful.

    as far as number of trades per day, 100 is more than plenty. if you are seeing so much opportunity that you want to do more than 100, by all means do it. but i find that 100 a day is more than enough to make some good cash and plenty exhausting.
     
  4. foible

    foible

    Steve,

    I'm very curious about how you trade. True, right now I'm trading cheaper, slower stuff 'cause I'm having troubles keeping my losses under control. If you'd be able offer insight into your strategies, I'd sure appreciate it.

    And if you have any tips just for me, hey, bonus! :)
     
  5. foible

    foible

    esmjb,

    As I said to Steve, I'm trying to trade stocks that won't move much more than 0.03-0.05 in a minute so that I have a better chance of exiting my losses without taking a big hit. Currently, I've been trading EMC and JPM, but I've tried some other highly liquid NYSE stocks. Some like MOT and AMD make me money sometimes, but the few big losses steal it all back.

    I'm a really new trader, so if there are better alternatives, I'd sure like to hear it. I've been sticking with cheaper stocks to avoid the SEC fees and to keep the volatility down a bit.
     
  6. I do understand the attraction toward slower stocks, and cheaper SEC fees, but you will learn alot more trading stocks that actually move and with lower volume, around 1 - 2 mil perhaps. I am assuming that you are starting out with 100 shares, give the homebuilding sector a shot. A few stocks you can at if you want a good pace to learn would be NYSE: LEN, and something more volatile but moves similar to Lennar would be NYSE: CTX. These are 2 homebuilding stocks and follow the housing index pretty well. I dont think you will get 100 scalps out of these two stocks, but you will get at least 10 - 20 decent size momentum scalps. If you pay attention. If you are looking to scalp 5 cents with bigger size lots, and I might be wrong for suggesting the homebuilders, I guess you can apply the same methods to NYSE: GM or NYSE: MO. I hope this helps, good luck!
     
  7. Hey good thread. I've been getting my ass handed to me as I just started out at a prop firm. Well it's been a couple of months, but I still suck. Any pointers would be appreciated.
     
  8. foible

    foible

    Trader1626,

    I traded PHM (a cheaper homebuilder) today and it was nice. I enjoy the volatility and it seems like there is potential to make money off of all of the fire sales that it throws.

    These seem to be more momentum plays, and I only did about 35 trades in it today. I know many scalpers do ten times this.


    Isn't anyone willing to offer any insight into what one might use for an entry signal? Join size, crossed moving averages, retail in when a tier collapses no matter in which direction?