Price action

Discussion in 'Trading' started by ElectricSavant, Nov 14, 2003.

  1. Last night after my day job....I tried a demo on a new platform at a brokerage I have been thinking of trying. It had a dom function similar to J Trader.

    I had never traded off of one of these single-click type of waterfalls and wanted to try my hand at scalping. It was the usual low volume so I could open up 2 waterfalls and watch the ES and NQ. The ES and NQ traded in spurts and the ES had more activity compared to the NQ. I scalp traded (1-tick trading) from 20:00 cst to 04:30 cst.

    It was fun, but quickly became boring and tiring. I was trading the long side for the evening (surprisingly this turned out to be a big red candlestick bar for the NQ today). No charts hehehehe. Just price action.....the price bouncing up and down the dom. This platform was written in C++ and the flow of the trades were not the temperature of the flow could be felt.

    This is what I did ......for those of you that have a DOM type of feature and can "one click" trade from it. Say the NQ is trading at 1440.00 (last trade highlights automatically in most DOM platforms) just click the left green side at 1439.50 and wait for it to drop down and fill...... then immediately click at 1440.00 on the red side and wait for it to pump back. I did this over 200 times over the course of the evening at every opportunity that I could catch in the ES and NQ. I found this to be like a video game...simply testing my reflexes. yes, no charts....just price action....It is interesting that during the day ,when there is more volume, the more advanced traders can find the stalling point and actually trade from both sides. Also be careful about stacking trades into a rally against must really be sure about your direction and be able to handle the loss if you are wrong.

    Do not be afraid to be wrong and escape at BE. Just figure out your direction and "click" from that side. Practice at night to hone your skills as I discovered it takes a pro and low cost commissions to trade the RTH session. For us, "day workers", the night session could be an alternative.

    Try this before you laugh at this. Perhaps the demo does not mimic the way the trades go down in real trading and with "1-tick scalps" this is a key execution issue. So before I jump up and down, I want to test it more in real trading. Knowing myself, I will be more conservative and take less trades with real money. But commissions at a volume rate per RT to make $10.00 or $12.50 (1 NQ tick or ES tick respectively) seems silly and those commissions can eat half of your profits, but I walked away with over $300.00 after commish and was very tired.

    I do not like the YM so much, it seems to trade differently than the ES and NQ. The trends seem longer and no pumping back and forth in the direction of the trend makes it harder to trade the way I am discussing above. The waterfall must be centered often because the tick size is small, so I am not discussing it here. There is less volume after the RTH session on the YM, even compared to the meager volume on the ES and NQ after RTH.

    Some of you more experienced scalpers out there might share in the discussion about the noticable "rhythm" while watching the price pump back and forth.

    This type of trading can really be big business for your broker and "1 tick scalp trading" may be "stacked odds" against the retail trader...I really do not know yet.

    Michael B.
  2. You would want to make sure that you were only getting fills when the price went through the level of the limits and maybe that there is a delay until your orders "arrive" to the market.
  3. The Demo seemed to give me reports back quickly, but when the price was jumping back and forth quickly sometimes the demo would not fill me...the price had to stay on the last trade long enough to get the fill.

    I was only trading 1 contract so I do not know if the demo accounted for the volume being offered....I do not believe so as I always got filled with one contract and did not need to wait in queue to get filled.

    Michael B.

    P.S. Perhaps this way of trading needs to be used in an overheated situation to increase the probabilities of getting real-time fills and grabbing ticks
  4. A 140 bar weighted moving average on a 1 min chart could help find the scalping directional bias.

    Michael B.
  5. limit fills cant be simulated correctly in a demo. u foolin yoself homez.
  6. Say blood....take that slack, and i be puttin on the real thang.

    Michael B.

  7. oh brother.. :-|
  8. Wouldn't one of those market profile charting packages showing volume and price profiles be handy to use with scalping such as this?

    Michael B.
  9. jem


    I think it was nitro who once said that during the day to scalp es the way to do it is have your orders out there at all the different levels and then cancel them until you want to get filled. That might be even better advice at night. It was one of the most professional statements I have ever read hear on et.
  10. Well.....Nitro learned that from his polish housekeeper...

    Michael B.
    #10     Nov 15, 2003