All the "strategies" I'm trying to come up with on an intraday timeframe don't involve capturing big moves. Therefore, 100-200 share lots would not be profitable after comissions. I'm shooting for 5-10 cent moves, NOT $1 moves. Am I going about this entirely wrong? I get worried over 1-2 cent moves in the wrong direction because that's a decent amount of the move I'm trying to capture. Should I use smaller $ amounts and try to get capture bigger moves? The last 5 trades were only over 4 stocks (the only stocks I've traded intraday): RMBS YHOO INTC AMR I like these stocks and I'm having trouble finding more like them. Here's why I like them: - Price between $15-30 share (ok, not AMR sometimes) - Not usually choppy/decent swings - Candlestick range within those swings usually between 2-5 cents. My "strategy" and capital do not allow me to trade $50-100 stocks that are only moving 2 cents at a time. For example, AAPL is like $85. If I was using $15k, I could buy 176 shares. A 10 cent move (huge on RMBS) would net me $17.6 before commissions. I don't have the capital to buy enough to make that profitable.
Ok, So you're buying a large number of shares for any stock under 50.00, looking for a 5-10 cent move intraday. If you're looking for only a 5-10 cent move, swings of 1-2 cents are going to happen A lOT!. what i do is this... You trade yhoo so i'll give this example. I assume that you use some combination of a 1 min chart..and another, like a 5 or 10?.. * On the 10 min, I see support at 30.30, and 30.60 as resistance. I'd buy it back at 30.3 with a .10 cent stop, and sell at 30.60 with a .30 cent gain. I dont trade intra-day. Too fast for me for now. IMO, you need to STOP scalping when you're paying 14.00 round trip, Especailly sinse you're worried about a 1-2 cent move. The good thing about your strategy is just about ALL stocks will go up 5-10 cents in a day... hundreds of times..maybe this is why you like the idea of this strategy so much?...fast money flipping stocks?.. .. that's fine, but look for more than 5- 10 cents...maybe 15- 30 cents?... again I dont trade intraday, talk to a scalper about this. I'm risking little over 4 pts to make a 14pt gain shorting sndk... Am I sweating right now cuz sndk doesn't look like its going down anytime soon?..yes. I will lose this months gains, as well as last month, but thats the risk. cm
I don't want to scalp, tho. I said I'm looking for 5-10 cent moves. Is that considered scalping? Maybe my definition is wrong... I think of scalping as buying HUGE amounts of a stock and selling almost right away after a +1 cent move. The positions have to be huge to allow decent gains after a 1 cent move. I mean, assuming your goal is to make x dollars per day, is it a higher percentage move to use a smaller lot size and try for a 30 cent move as opposed to a smaller lot size and try for a 5-10 cent move? I would assume it would be based on your system. My 5-10 cent moves usually take 10-30 minutes. Assuming I was trading full time, I really wouldn't want to trade more than maybe 3-4 times a day. So, a 10 cent move is a 10 cent move regardless of how much the stock costs. But I cannot afford enough shares of an expensive stock to make a 10 cent move worthwhile. That's why I like the cheaper stocks that still make big moves. Like XMSR, for example, except it moves too quickly and with a huge range in price so I'm scared of it. Agreed, I need to ditch the $14 round trips. If I chance from Scottrade to IB can I get my open longterm positions moved to IB as well so I don't have to sell and then rebuy?
I also started with scottrade a number of years agoâ¦.hmmm I found the transaction costs to be to high and the executions to slow⦠executions were especial slow when shorting. Your round trip cost for 200 shares at scottraed is $14, this is a real killer, at IB you would only be paying $2â¦â¦â¦at the end of a day of 10 or 20 or more trades you can see where this adds up not in your favor. I have been at this now for over 3 years and when I follow my rules and trade with my head I do just fine, on the other hand when I allowed my emotions to do my trading â¦.well on those days I loose my butt. Stay small till you get the hang of things and donât let your trading be controlled by fear and greed I didnt do it, it was the Otherguy
Great post Iron Fist and responses. Money is relative. Trade with the $ that is most comfortable for you; you will know that $ level when you start to hyper-ventalate! As for brokers: you might check out: 1) Zecco.com http://online.wsj.com/article/SB117275753436823375.html?mod=home_whats_news_us "You can make up to 10 trades in any one day up to a total of 40 trades a month at no cost, and after that you only have to pay a paltry $3.50 per stock trade." 2) SoGoInvest.com http://www.sogoinvest.com/home/CompareUs.aspx "Trades placed through SogoInvest take advantage of ultra-low commissions. Automatic Investments are as low as $1 per trade*, and Real-time trades are as low as $1.50* - $3.00, whether market or limit. Through economies of scale, the share volume facilitated by Genesis Securities results in much lower commissions for SogoInvest customers." I hope this helps. Tom
Iron Fist, Scalping is not just going in with one size for a one cent move, (though such trades are scalps), scalping is going for quick moves, trying to be in and out of a stock within a few seconds or minutes for cents - maybe 5, maybe 15. Scalping google, ice, or GS you can make (or most likely lose) 30-50 cents easily within a second. First off, if you are going to trade for such small amounts, YOU CAN NOT use scottrade. Get an account at interactive brokers or any other direct acecss broker that lets you control the routing of your orders and doesn't make you pay an unreasonable round trip rate. Stop trying to make money with your account and learn the game. Trade 100 shares, 200 shares if you need to be able to scale in/out. That's too expensvie to do with your scottrade account, yes, but not with an account at a proper direct access firm. You're much better off going for slightly bigger moves - I trade intraday all day, and am usually in a stock for less than a minute, but I go for 15-30 cent moves. You need to learn to read the level II and time and sales if you're going to trade for such small gains, as charts don't tell you enough on their own to make 5-10 cent trades with. Most importantly, trade to learn, not to make money, or you will blow out FAST. If you trade 100-200 shares with a proper broker, even if your strategy is still to go for 5-10 cent moves, you can do so for $1-2 roundtrip, which will allow you to actually make some money. Unless you're reading intraday supply/demand well from the tape, though, charting for 5 cent gains is just a waste. Also, using scottrade for intraday day is not just too expensive, it's highly inefficient and you will suffer terribly from slippage and bad fills.
I'm gonna stop you on that one. If you place an order, and it only gets a partial fill, the rest of the fill is free, and slippage can be prevented by using limit orders. --- If you want to go to IB, fine. If you want to stay with ST (scottrade), fine. But I hope I'm not the only one to say this, but scalping isn't the best trading style for you right now. You say you're not trading full time, so whats the problem with aiming for larger gains? cm
I understand. With such small moves, price could quickly get away from you on the -ve side, and with a larger size the loss could be significant in relation to your capital. Make sure what you risk is well in control and a small part of your capital. Commission is a problem for you as you say. You could look at other brokers, or increase your stop/target amounts so that commission becomes a relatively smaller issue, or do a combination. Any strategy should have a logical, easily understood principle or set of principles. Has yours?
thank god i have something to read this morning. What is the purpose of this thread honestly. You scalped for a nickel.... who scalps for nickels besides the MM's and IB's with absolutely ridiculously dirt cheap clearing costs. I am not even going to begin with what is wrong with this thread. Heres my first hint. HONK HONK.
Can you please explain the bolded part? Yeah, that would be more doable with cheaper commissions. So you must trade pretty expensive stocks to get a 15-30 cen move in less than a minute... right? Is it wrong that I look at the price change as a percentage and not as a cent amount? Five cents on a $20 stock or 50 cents on a $200 stock. It's the same. To learn because I'm a noob. I wasn't born a master trader like you. Helpful. I think I can stop posting on ET now because that hint has pretty much answered all the questions I have or could possibly have about trading.