Is Scalping or High Frequency Trading Less Risky?

If you go for 2 ticks profits, how big is your stop loss? Do you increase position after every loss or still trade 4 contracts?

 

tyrant,

There is a one picture of two charts on Page 2 of this thread. The Right hand chart is a 10 tick Scalping chart....see the Short Yellow lines and the explanation. The Stops are not always the same. Sometimes it may be 2 ticks....sometimes up to 4 or 5 ticks....but not usually more. Actually....I set my Initial Stop on the NinjaTrader Dome....at 20 ticks....a Disaster Stop....just in case the Internet goes down. However....as soon as I Enter a trade....I can....with a Single Click....move my Stop....as shown on the chart. Most of the time....I am out of the trade....before I move the Stop. Scalping like this....requires a Fast Reaction time....to what you see on your Chart and Dome. It is not for all traders. I have many traders wanting me to teach them to Scalp like this....but most traders....once they see what I am doing....get a little nervous about this type of Scalping.

No....I Do Not increase my position size after a loss. You just need to accept the loss....and follow your Rules and Plan. No reason to panic. Increasing position size....basically puts you into trading more on Emotion....trying to make up for the loss....and when you start doing that....you_me....will probably lose. I have done everything I can to take the Emotion out of my trading.

I started as an Investor (Buy_Hold)....went to Position_Swing trading....then back in the late 90's....got into Day trading....then almost total Scalping. Now I Scalp and Trend trade....whatever I need to do to reach my Net Daily Goal. I will say this....For Me....this is the most Relaxing and Safest way to trade. I have been in a few trading rooms in the Seattle area....over the years. Some of my trading friends thought I was crazy to try to Scalp....until they saw the results. Now several of them trade very similar methods.

Good trading to you.

VSTscalper

 

Hi VSTscalper,

I have no idea how truthful you are but you are doing everything that are considered detrimental to profitability: scalping incurs most commission, and the fact that you use market orders most of the time only worsens the situation. I have never seen any system that trades frequently and on MARKET orders to be profitable over the long run. So, I will keep such possibility at the back of my mind. Who knows, there might be a time in the future when I change my opinions. And another question, are there market makers in ER2? Do they pose a problem to your profitability?

 

I have looked at VSTscalper's set-ups first hand, and I can see why he is so successful....he has very defined rules and really good self-created indicators (the best kind imo).

VSTscalper is placing himself into trades with a high probability outcome, from alignment with very short term price momentum (and the price movement "noise" itself can get you your two ticks alone on many occasions......that is using the market against itself and I like that mentality). He is also taking advantage of bid/ask ratio's on a micro scale, and that is another edge to what he is doing......smart man if you ask me.

 

Hi bill,

If you use NinjaTrader with Zen Fire and Tradestation for charts, you haven't quotes or charts lag compared to Zen Fire feed in the DOM ?

Regards.
Ludo.

 

tyrant,

I understand what you are saying about....”considered detrimental to profitability”....and I will not attempt to change your opinion. Scalping really gets a Bad Rap....mainly because many traders have tried....it did not work for them....so they think that it cannot be done. Actually....when I first started Scalping....many years ago....I felt the same way. Why?....mainly because I was not doing it right. I experimented with many different set-ups....indicators....etc....and finally found a way to do it....and make money doing it. At one time....I almost gave up....and I had much the same opinion as you do.

I think traders get hung up too much on Commissions. For me....Commissions are almost Irrelevant....when you are going for a Specific Net Profit....Per Trade. Sure....you want the best possible commissions you can get....but what is much more important....is actually making a Profit on the trade....once you deduct the Commissions. I believe I explained what I do in a previous post....but I will do so again.

Example:

~Round Trip Commissions = $5.00 per contract (I actually pay $3.90 RT....but lets use $5.00)....if a trader is paying more than $5.00 RT Commissions....then he_she is getting screwed by their broker
~Trade 4 contracts
Therefore $5.00 times 4 contracts equal $20.00 in RT Commissions

~ER = $10.00 per Tick
~Profit Target = 2 tick
Therefore....Total Gross Profit per Contract = $10.00 times 2 ticks = $20.00
Therefore $20 Gross Profit per Contract times 4 Contracts = $80.00 Gross Profit per trade
Therefore $80.00 Gross Profit minus $20.00 in RT Commissions = $60.00 Net Profit per trade

System and Market Orders:
~If you mean System....as in Automated....then I might agree
~If you mean Hands On trading....you pulling the Trigger....then I Totally Disagree

I am always aware of what Big Money_Big Contract traders are doing. I watch the Dome....see what Orders are actually traded....see what Orders are being Added and Pulled on the different levels....always watching the Game that is being played. I look at it this way....it is me against the Market....I am either right or wrong. If I am Right....I make money....Wrong....I lose.

I have said the following....many times....Discipline....based on Strict and Specific Trading Rules....is the Key to Successful trading. Not Charts and Indicators....not Commissions....not a lot of the BS that you read in Trading Books. I believe I have said this also....over the years....I bought way too many Trading Books....bought many Trading Videos....taken many Expensive Trading Classes....and for the most part....I learned how to Lose Money. I am very serious about that. My trading methods work for me....been doing the same thing for many years now.

Good trading to you.

VSTscalper

 

Surfeur,

Tradestation does lag at times....but it still works for me. Been using Tradestation for many years....sometimes I think about going to another platform....but other platforms have their own problems. Besides....I have programmed my indicators for Tradestation....don't want to take the time do re-program them for another charting platform. All I care about is....making a good living....and being independent.

I do really like the Zen Fire data feed. I do trade without charts when I travel....really don't need them....just use the Dome....for Scalping only. But....I do like looking at charts.

VSTscalper