There you go. The answer to scalp trading. Padu has outlined the process I understand so well. the market dangles "carrots" to lure the aggressive (greedy) traders the wrong way (fade) and then they move in towards the real market price. So, first you see as they (the big boys) want you (the retail trader) to see and then the market moves according to actual market mechanics. I trade from 10;30 - 3:30 est. I find the edges of the day less stable than the terribly unstable day. Also applies to intraday trends. Effective scalping is about picking a spot in and out, before you enter. So I set a bracket. How many tics do I want and how many tics will I risk. That's and individual choice called risk tolerance. Trade at 1, 2, 0r 3 tics profit and say 3 loss, and see how you do on demo. Does any method produce + results. Even losing in all three scenarios may produce a small thought for investigation. Padu's post, to me, is the one you needed to hear. It's a path close to mine and others i have seen grown from no profit to some profit. Excluding myself, these guys all have track records of being hard working, smart, successful, and even tempered. Those qualities help everywhere. most important concept in scalp trading, to me, is padu's claim, "ALSO BE AWARE THAT THE MARKET DOES NOT TURN ON A DIME. I do not beware that priciple, I embrace it. Find me a market that rapidly moving in either direction and I will jump on and jump off ASAP. Sometimes, a single tic in less than a second. recently had a day, 6 for 6, training my sons friend. All single tic trades. the average trade time was 39 seconds for all 6 trades. Longest one was not long, 98 seconds. Cannot lose capital while on the sidelines. being in the S and P, you biggest risk is just being in, subject to high volatility. So, 3.5 years, 10,000 trades, 10,000 study hours and a no quit attitude has gotten me this far. I am pleased with my progress. Going to try scaling in January. Hard results makes unclear statements so much clearer. Anyone skeptic is challenged to reproduce my results. $58 bucks, Jason's end, 1k in margin, been trading live 8 days only with 2 weeks demo practice. I think he is going to do well. Hope the same for you.
I’ll try to expand. For a black box strategy, it would indeed be easy, but I’ve yet to discover one with a sustainable life cycle. I assumed everyone here would assume that. Not saying it doesn’t exist though. It’s a big world out there. Personally, I’ve found gray box strategies provide the most robust solution. It limits the degrees of freedom to specific inputs, and allows you to focus on the quant analysis and execution. A white box can work, with more work, but can lead you down a slippery slope of tweaking the script into a universe of clusterfuck, not to mention a curve fitting nightmare. That said, I hope you realize how difficult it is to run efficient walk-forward analysis with the latter approaches, as they require periodical parameter adjustments. Add in context, news, AI, none of which I can, or want to manage, and it becomes obvious that a team effort is required. I work very hard to keep up with my gray box strategies, but my analysis is very multi-layered and expansive, with the idea that I never end up with a dry well. Not fun, or exciting anymore. Just routine and boring.
The only true edge in trading is utilization of prudent risk management. There is no other edge period.