Is Scalping possible?

Discussion in 'Index Futures' started by tommo, Oct 6, 2005.

  1. tommo



    I am new to the world of futures. One advantage futures have is its transparent market and tight spreads.

    I was wondering if it is possible to scalp (in the traditional sense) at retail level? By this i mean taking trades with no real regard to overal market direction, just purely making profit on the spread. buy the bid sell the offer?
    Many people have said with this is impossible at retail level but thought i'd ask some active traders if they are able to do it?

    And if it is possible is it as straight forward as placing limit orders to buy at the bid and take profit at the ask? Surely there is more to it than that.

    This is an area of trading i'm fascinated by and would like to know more about, sorry if i'm a little off in my assumptions of scalping i would appreciate your comments on the topic,

  2. oy vey...
  3. EPrado


    Trying to buy the bid and sell the offer is basically a journey to Brokeville. On the way you can stop off at exit "suprise news comes out" where you will lose 10 times what your average winner is. Also dont forget to stop by exit " buried in commissions"...self explanatory. Last but not least you have exit" Big trader trying to spook market/work his position" where some trader with too much money will hit your bid and put up huge fake offers to scare you the hell out of your position. I am sure there are plenty more exits on this journey to brokeville.

    Save your money.....or learn how to trade.
  4. gnome


    SCALPING IS STUPID! Accept it, and save yourself some grief.

    (Yea, I know, 1 out of 1000 of you guys will chime in an tell me how great you're doing with your scalps. Do us all a favor and just save it.)
  5. Do a little math. ES spread is 12.50 so you make (rounded off) 7.50 when you win and lose 17.50 when you lose using IB commsisions. You have two strikes against you from the gitgo.
  6. tommo


    haha so i guess the answer to is scapling possible? that'll be a no!

    Thanks for the responses, the main reason for asking is i am a spot forex trader and currently trade intraday 2-3 trades a day daily target of about 20 points. I'm pretty successful but futures is an interesting option because of such tight spreads and the ability to see market depth i was hoping i could utilise these added bonuses of trading futures by making more trades for smaller profits but smaller losses, overall a lower risk trading approach, but it seems from your responses so far what you save in spreads in futures you make up for in comission costs and a intraday trading approaches are probably similar between the two.
  7. Oneinten


    Scalping is possible but not in the traditional sense. If you take yesterday's control point as the last trade price and sell above that value point or buy below it then you can indeed scalp the market. It's the same idea as buying the dumps and selling the humps.

    It's all a matter of time frame, but scalping is alive and well if you understand value in the market.

    Scalps on a weekly time frame can net you 100s of ticks at a time with only 10-20 tick losers if you're wrong. If you trade the middle of the bell curve you get screwed.. The money is in being able to deal with the leptokurtosis and sticking with 3 sigma entry levels.

    It's just a question of standing back from the tickitis that most traders get screwed by ...Day in Day out.

    Stare at the screen all day and let it suck you dry....if you wish....However,it's much cheaper just to listen to white noise on a blank TV screen........ Just a thought!!!!

    Alternatively you'll have to be a better bully than Mr P.Rotter.

    But I suspect his days are numbered. There were alot of bullies like him on the floor of LIFFE....where are they now? Prolly driving minicabs......

    Hope that helps.



  8. Hmmm.... I'm in the "stupid" business then. I had to find out some day, I guess.


    1. Scalping is not for retail traders. The cost structure will not let you be profitable. It is very hard to compete against pros out there who are paying exchange/clearing fees plus $0.05 per turn commish. This means that the YM would cost around $0.30 per turn for a pro and around $4 or $5 to you.

    2. Scalping is not buying the bid/selling the offer. There is more to it than that.

    3. Learning to scalp without guidance or a mentor is a good way to just give away your money.

    4. Scalping requires excellent connectivity and network structure. It is not something you want to do over the internet if you will be active.

    5. It is not for the faint of heart. Complacency in scalping is fatal to your account and so are psychological barriers with accepting losses.

    You will most likely do better trading intraday swings with no overnight exposure. You can work up to the point where you can add size and diminish the effect of higher commissions.
  9. I dunno.
    SCALPING is one of these over-popular vapor term loved by losers and understood by none.
    I'll keep on doing my own thing in my no-nonsense way.

  10. Jeeeez... now I'm a loser too. :D

    Can you help us understand what scalping is from your perspective?
    #10     Oct 6, 2005