Learning to trade by scalping?

Discussion in 'Trading' started by Biomech, Mar 7, 2002.

  1. Biomech


    I have been spending the last few months reading and studying everything I can get my hands on with regards to trading. I have never done any trading, only some investing.

    My question is in regards to what time frame people would recommend that I start in. My thinking is that I would like to start with scalping because that seems like it might be the best fit to my personality, but I have heard a few people say that this is not the best way to start because of the difficulty. After I get a good feel for scalping (hopefully before I am out of money :eek: ), I would increase the time frame I was trading in to try that out and see if I liked it better or it was more profitable for me.

    Did anyone else start this way? Would you recommend it? Is it more typical to start by swing trading or longer term day trading? I realize that this may be a tough row to hoe, but I think it will be better for me long term.
  2. Go ahead and try scalping. Should only take a day or two to realize your mistake.:) Elder recommends learning to swing first but its hard to hold overnites these days so that really only leaves one alternative which is position trading for a few minutes to a few hours.
  3. arky


    Since you are not accepting emails I can't help you. I am about one year ahead of you, and from my experience you need to begin with a modified version of scalping. If you intend to swing trade, either intraday or over one to five days, you better have a strong stomach. I can also tell you that you are starting under the most difficult conditions since I began this fun endeavor. Now I have been doing this for several months I can almost understand some of the sarcastic replies to my posts asking for guidance. To post here just opens you up to a plethora of varied opinions, some sincere and some not. Good luck, you will need it.

  4. A word to the wise.

    Though trading stocks in ANY timeframe is a challenge, short term scalping is probably the HARDEST skill to master.

    For one thing , commissions are a large factor, even if you pay 1 cent a share.

    And, you are competing directly with the pros who are in business to take your money.

    Swing and long term trading avoids some of that problem, but you can still be shaken from a good trade by the wild swings that are common today.
  5. axehawk


    First of all, if you're asking this question, it probably means you're a retail trader trading from home in which you have no chance of scalping successfully against a professional on the floor or at a prop firm. Secondly, to go from go from scalping to swing trading would be a mistake. The two disciplines are so far apart it would be like comparing daytrading to buy-and-hold investing.

    Good luck.

  6. If you are trading with a time frame of longer than intraday from 1 to 5 and it's causing you to have a weak stomach It's obvious you need to reduce your position size even go to odd lots to keep your risk in control with the further away stops. You are risking too much per trade if you are that emotional

    Robert Tharp
  7. NYSEat21


    Biomech, I tend agree with stock777's thinking in the fact that your commissions will be HUGE and kill your profits while trying to scalp. Although I do tend to scalp a few stocks sometimes I will usually never purposely enter a trade just to get a few cents out of it. About the only stocks that I will scalp are CPN and MIR because I can get in and out near the bid and ask easily. In my opinion, it is easier and less costly to position trade rather than flip 1/4 million shares a day and churn up $5000 in commissions. Take what the market gives you. If you can only get a few cents then take it because those few cents might be enough to cover your commissions. If the market wants to run, then let the stock run for a few seconds, minutes or all day long if it wants to. Why pay the house any more than you have to.

  8. quote:
    Originally posted by arky
    If you intend to swing trade, either intraday or over one to five days, you better have a strong stomach.


    Those are two different things. Intraday swing trading is just another kind of daytrading. Scalping isn't the only way to daytrade and I personally find intraday swing trading is less unnerving than doing the smash and grab for fractions involved in scalping. But to each their own though - differences is what makes a market.

    On the otherhand, multiday swing trading might not be for everyone's temperment. Overnight holds in this market may unnerve some - although position sizing and only carrying over positions that aren't likely to gap open huge against you goes a long way to making it more palitable. You could also look at setting up risk limiting combinations using options if it's a big concern - especially if you trade the same securities all the time.
  9. Biomech


    Thanks for the replies.

    I have a longer term view of what I mean by scalping. Threei defined scalping as not letting a position move against you. I think he said he made less than 10 trades per day. I was thinking of trying a system like he uses to determine setups that would allow the potential of at least a .20 move. (Actually, I am planning on joining his room for a while to learn his methods.) I suppose many people have a different definition of what scalping is.

    Many people say that overcoming emotional obstacles while trading is the most difficult part. Obviously I haven't tried this yet so I am guessing here, but it seems that the shorter the time you are in a stock, the less potential you have of your emotions affecting the trade. Is this not true? I personally can't imagine starting out swing trading. I would constantly be thinking about my positions and wouldn't want to leave the computer.

    That sounds about like what I was thinking.

    P.S. - Sorry about the email arky. It is on now.
  10. biomech -

    The old adage "Plan your trade and trade your plan" is the first step in controlling your emotions. Know exactly when and why you'll enter, when and why you'll exit if it doesn't go you're way, and when you'll take some profits off the table and how you'll manage the position overall before you take the trade. Then you'll be far less likely to second guessing and letting your emotions drive your actions.

    Everyone's different of course, but my perspective is that a lot of people would probably be more prone to letting emotions affect their actions the less time they're in a trade because they're probably going in with less wiggle room at the entry, they're more execution rather than technically driven, and scalping seems to have a higher overall frenzy factor to begin with - so there might be a greater tendency to emotionally react to price fluctuations.

    It's more about the individual's personal composition and tolerance than a blanket "this is better than that".

    Lots of people have tapped out going the scalping route so it's unlikely that it's any safer than any other form of daytrading.
    #10     Mar 8, 2002