Ok so, Daytrading (mostly scalping) Would it be utterly stupid and risky to: -Ignore all charts -Ignore all news -Ignore CNBC and squawk box -Ignore S&P futures Just zone in on price action in the L2 and TandS windows. Just trade price action in the L2??? I am asking for an ass kicking? I think I've seen others mention that they trade this way on ET.
Well I'm on my journey trying to figure out the best way to get into "The zone" and stay in "The zone". I mean isn't everybody else using these tools as well, so they won't they be reflected in the price action anyways?
That is a box trader. And the one thing i would never Ignore is the futures. To become a trader like this takes alot of skill and experience. And most important "discipline"(mostly what you do to encourage good behavior).
i was recently informed by a buddy of mine that I, and many others, are doing with the open what the SOES bandits did with scalping... I just laughed at him. (he works for Edward Jones) Scalping is dead. It was called decimalization. It sucked. Move on. The only thing even remotely similar (that is also PROFITABLE) to SOES scalping involves lightning fast executions in the market open. Profitable "Trading the Open" strats were around decades before I was born, but now there are relatively new tactics to approach it. Technology allows us (traders) to do simply amazing tasks that weren't available to off-floor traders before the advent of broadband. Hell, one guy with a computer on the beach can now do what three couldn't on the floor of the NYSE. But in the end, trading the open requires a lot more than simply buying and selling with limit orders. It requires knee-jerk decision making, good market sense, patience, and respect for what the market can do against the "norm". A lack of ego is a requirement. To all the young or new traders trying their hand at scalping or market open strats: "Listen, here's the thing. If you can't spot the sucker in your first half hour at the table, then you are the sucker." -Rounders Learn to use the valuable tools at your disposal. News, Index direction, screening tools, etc. Learn the internals of how the markets function. Then get your feet wet. Don't just jump in the deep end of the pool. There's more sharks than water in here, and we're always hungry.
I never enter based on charts alone. BUT... ignoring charts is dumb. Paying attention to them at least to see key levels and primarily THE TREND is necessary. I find my support/resistance intraday from the tape, before it shows up on the chart, but if a level held many times, you want to see what was holding it at that level and use your tape reading to figure out if you think it will break or not. Ignoring futures is also dumb. You can be scalping a thin stock and have a great read on it, but if suddenly the buyer losers all his aggression because the futures just tanked 5 handles... well... most buyers and sellers out there who are controlling the price of a stock by working their order (e.g. working a 300,000 share buy order in a stock with an average daily volume of 500,000) are watching the futures, so you should to... but yes, I think there is more of an edge in pure price action than in charts alone.
can you explain this?...how many 5 minute time periods must go by for you to establish a new S or R???...please explain a daytrading scenario...thanks!!