i've searched thru all of ET for scalping threads...

Discussion in 'Trading' started by MoneyGod, Jan 30, 2009.

  1. People that say scalping does not work have no clue. I can consistently scalp any fast moving stock. Today I traded GS exclusively for 100-300 share lots and made $800 net after commissions.

    The trick is to buy on the bid on the pullbacks and sell into the up moves. Never, ever pay the offers. My average scalping profit is anywhere from 10 cents to 50 cents. When I'm wrong I lose 3 to 10 cents. I'm usually right with my entry points about 60% of the time and I'm super quick to take my losses and try again. The average length of a trade is anywhere from 10 seconds to a few minutes. Therefore, your charts should be 1 or 3 minute tick charts.

    You need to be lightning quick on your keyboard and trade on a platform like Lightspeed or Anvil. All of the other trading platforms are too slow to scalp successfully. You don't need the New York Open Book. All you need to see are the prints and the Level 2 screen. Charts are only necessary if you're looking to make a trend play or need to see areas of potential support and resistance. I'd also have the SPY chart up because this will influence whether you should scalp with a long bias or a short bias.

    It takes many, many hours of experience to learn how to develop a "feel" for a fast moving stock. You have to be in tune with the ebb and flow, or the rhythm of the stock. Right now, my favorite scalping stocks are GS and MON. But I can scalp anything with good volume and multi point intra-day moves. I prefer to scalp listed stocks since the Nasdaq stocks tend to be a bit too noisy to accurately read the tape. This is due to the many buy/sell programs that seem to infest the Nasdaq stocks.

    Scalping is a consistently profitable way to trade stocks. I can scalp and be net positive every single day. In today's market, scalping is my bread and butter technique to pay the bills. I also supplement it with support/resistance plays and intra day trend following techniques.

    I don't think I'd recommend scalping from home as opposed to an office with T-1 internet. The split second latency between remote trading and office trading can spell the difference between a profitable and an unprofitable entry point.
     
    #21     Jan 30, 2009
  2. OzMega

    OzMega


    Interesting test. The first few times I was over 200ms, but was able to consistently hit 187ms thereafter. My best was 172ms...

    Thanks for the link!
     
    #22     Jan 30, 2009
  3. Kovacs

    Kovacs

    Internalize this, OP. ET is next to useless.

    If you want to trade successfully, you'll have to find out how for yourself. Charlatans and wannabes abound always ready to bray the same tired maxims in popular trading lore.

    You want to scalp? Then TRY scalping and see for yourself whether it suits you. Don't blindly believe all the "advice" here. 95% failure rate = 95% drivel.
     
    #23     Jan 30, 2009
  4. Listen to goldenarm.
    He/she hit it perfectly. Can not be said it better.!!!!!!!!!!! You got the KEY to the Safe on his/her advice. Re-read it. Print it. (I'm going to post it next to my monitor) Thnaks goldernarm.

    :D
     
    #24     Jan 30, 2009
  5. GoldenArm, nice post.

    From what I read, I scalp differently. My average holding time is probabiliy similar to yours, but I'm flipping 5000-10,000 share lots of cheaper stocks. I probability utilize similar BP. My style does not work with a high commission rate.

    There is no one way to scalp that is "correct," all that is correct is what works for you. The style goldenarm vaguely describes, I used to trade, however I had problems with handling my emotions with that style. The style is perfectly valid. Many who can scalp that way, might not be able to trade my style - it might require too much discipline, downtime, and boredom. The reality is there is no one correct way to scalp.

    If you choose to trade from an office out of a belief that you will get a faster fill and therefore be more likely able to make money, make sure you test that it actually is faster than trading form home. I'll take a cable line where I'm the only user on it over a crowded t-3 with too many users any day. Some offices may office a slight, slight advantage vs trading from home (5-10% of your visual reaction time), while other offices may actually be worse than home because of a crowded internet line.
     
    #25     Jan 31, 2009
  6. Scalping is a thing of the past. Before decimalization, you could scalp for eights or quarters. But now, it's all about the futures. The futures pull the strings of stocks due to program trading and index arb. So, until you learn to trade the price action of futures according to a sector, you're just another churn and burn. People will get technical with indicatoritis, but it doesn't work. You can get luck a few times, but you're fighting a huge headwind. Commissions alone will eat into any of your lucky breaks.
     
    #26     Jan 31, 2009
  7. rjiecs

    rjiecs

    how do you place orders in Lightspeed that quickly? i tried the demo but didnt see anything like 'single click trading'..

    thanks
     
    #27     Jan 31, 2009
  8. You have to map your orders to hot keys on your keyboard. Example: shift+L equals bid on ARCA, shift+S equals offer on ARCA, etc.

    It's like playing a videogame. If you try to enter your orders with a mouse, you're doomed. It's just WAAAY too slow!
     
    #28     Jan 31, 2009
  9. MoneyGod

    MoneyGod

    goldenarm, what broker or setup do you use to scalp? and where do you do it from? home or office?
     
    #29     Jan 31, 2009
  10. bighog

    bighog Guest

    For starters change your handle from MoneyGod to "How the fuck will i ever make a dime trading anything when i consider myself a MoneyGod when i am a raw rookie"

    Try this for starters in the ES if you still have that 50k account.

    Trade 1 single car with a goal of daytrading and grabbing 4 times daily 6 tick increments. Get a live chart service and sit there for a few months and focus on the individual bars as they relate to the previous bar or few last bars. It is extremly boring to do if you are completly focused for a new trader. It becomes easier when you gain trading skillset and far less boring but always intense.

    This is NOT scalping and it is NOT catching the "RUNS" from the breakouts which is your long term goal. This method is a training tool while under fire.

    As you review the charts and see what is possible you ask yourself the question. Can i do this? Can i really do this? Do i have what it takes to take on average 5 handles + enough to cover commissions a day?

    If you answer yes to the above questions be ready for one of the toughest learning episodes in your entire life. You can do it, i know you can because i did it.

    Do the math, yes starting with a single car is no big deal but if you can do 1 car and make the daily goal, the rest is easy to comprehend.

    The easy part is telling you how easy this goal is, the hard part would be explaining all the extra stuff about your own wiring in order to get the job done.

    First thing to do is unhook the wire you have connecting money and god. There is no moneygod, never has been, never will be. Ok, once that is unhooked, the rest is up to you. Get in the dogfight and watch your own ass as you get aggressive seeking out targets to shoot down. 4 times 6 ticks a day is no biggie but it is no easy task in the beginning either.

    goldenarm: You are blowing smoke. Speed is not as important as you IMAGINE because you go on to state that you wilol be in the trade for at least 10 seconds or minutes and also do runs etc, etc. What do you smoke during the day?

    PS: The SLOWEST part of the FASTEST computer setup is YOU. You need to receive the info, process it, make a decision what to do with the info, etc, etc etc. Then AFTER the decision is made you must act on the info by moving the finger to the mouse, click the mouse, etc, etc, etc. By the time any of our orders are filled we ARE LATE> Deal with the tools you have and not pretend to be superman. :)
     
    #30     Jan 31, 2009