I guess all the top Ibanks, HFs, and private traders employing high frequency trading models/methods dont understand markets. They should all be heading to spike500 to learn how to trade.
IMO,it is not a matter of understanding the market. More then anything else, I think, scalpers are unable to take the heat. I consider scalping inferior method of trading for simple reason that it's not scalable.
As long as the scalper is making $$$ does it matter whether it's inferior or superior. Honestly, it's neither. Scalping is a very rewarding trading strategy from my experience. I personally could not sit in front of my screen watching a stock tick over 1-2 cs every day and still hold for days. I prefer to take small profits and re-enter the trade. Consistent small profits accumulate in big profits.
I have tried some light scalping, but the slippage is enourmous. It is very difficult to operate with limit orders and take small profits in a fast market. This is regardless of the fact that the underlying will actually trade at my limit price yet my lot never gets executed? Is this do to the brokerage or my connection to the markets, I use IB? Is it impossible for a retail trader like myself to expect to make tight trades due to the fact that my computer is not plugged right into the exchange? Anybody have any suggestion on becoming overall more efficient?
im not sure what spike considers an edge to be....where I come from if your bid was hit or offer was lifted without the market turning on you, you were getting an egde. Stock scalpers use all kinds of tools including automating their applications and keyboards, they catch turns to get an edge in the same way a "local " does. They usually are human ATM machines. Having said that, Ive been doing it for 5 years and am getting tired so ill be looking longer term
sorry it took so long to get back, I've been travelling all day. when commissions are less that .01, it doesn't really hurt that much. If you can get a 50% win rate, make .03 and lose .02 on avg, then you're a winner in the long run. with my commissions (.006/share) I can win .018 and lose .032 - not as good. So you see why I have to keep such a tight stop.... until I can up my win rate, the stop will be that tight....
Well i think scalping is pretty tuff It all depend on you win and loose ratio but i know scalping is very exciting and it all depend on you style luck and how much backing you have $$$$$
I trade an average of 200,000 shares per day trading only NYSE stocks. Despite the large volume I have I'm profitable due to the great commissions I enjoy. My average P/L allows me to pay my commissions, SEC fees, and put money in my pocket which I use to take positions overnight in stocks that attract my attention. Is scalping the best way to trade? Maybe not, but it works for me and you have to trade in a way that not only works for you but that also fits your personality. I'm a very anxious guy so for me being in a trade for more than 30 seconds is an eternity. My Holy Grail is to cut my loses at the speed of light, before taking a position I define my exit which is always a few cents away from where I enter and I follow it without hesitation. When a position is going my way I add more and more shares because as George Soros says, "When you are right you never have enough". I don't have a profit target, I just let it roll until I think the tide is going to change.