by the way,how is it humanly possible to scalp a $50 stock. i'm asuming this is something to the effect of Microsoft..which has a maximum of 2 levels on each penny,usually one being an ECN the other being a MM... and moves at the speed of light back and forth.
It's tough to scalp MSFT but if you look for range breakouts/breakdowns you can do it. Just be prepared to have wider stops (i.e., 20 cents).
Funny to read all these posts, not one mention of short side scalps. Short patterns are much higher probability set-ups, cleaner break outs and quicker profits, after all that is what scalping is really about, quick profits. What is obivous to most is usually not worth trading on.
How do you considered this to be scalping? When you look at the spoos to see where the price is going to go...isn't this by definition momentum trading and not true scalping? It's amazing that you have all this money to throw around but you have no idea what you're saying! Somebody please correct me if I'm wrong...
So if a stock is trading at 60 cents (DYN, few months ago) and it shoots up to $1.10, this is a scalp? A scalp to me is more time-based than anything else. I am a horrible scalper. I shoot for +1 ES points and manage to risk -3 in the process. I am just now realizing I am much better at working that the other way around and accepting more losses than wins. Some people on chat rooms scalp all day. It is fun to watch them artistically work stocks and futures -- some do 5+ at one time. That's a master scalper in my eyes.
bundlemaker & goldenarm, what the hell are you on about???? scalping in its original definition meant making the spread, as has been mentioned already. once those opportunities deteriorated scalping meant getting in and out for quickly and profiting on the minor fluctuations a stock makes... - i'm assuming here that you've actually watched tick by tick price action. notice all those minor movements in price? those are what the scalper targets. and yes cubano, if this march 2000 and you're trading yhoo, then your making 2-3 point "scalps". but it's not. and as such, we measure what scalping is in the context of daily ranges. let's remember, it was bundemaker and goldenarm that came out with the blanket statement that a scalp was ANYTHING under one point. go to the prop firms and talk about scalping with your bastardized definitions and see how much agreement you get... personally, i don't think it's useful to put a point figure on what constitutes a scalp, for example 20cents is, 40cents isn't. it all depends on the daily range of the stock and how far those quick fluctuations tend to move. cos that is what you're trying to capture. the idea being u only make small profits on each trade, but you're making dozens, even hundreds, of trades a day.
Those who invented this decimalization probably wanted to get rid of scalpers who made spread and slowed movements on large cap stocks like ORCl, CSCO, SUNW , etc. Now they got even bigger army of liquidity traders who shave a f@#$ing penny, climbing on heads of each other and 5 cents is a home run for them. No wonder those stocks are worthless for daytrading now.
Those who "invented decimalization" wanted to take the so-called "economic rents" that MMs and specialists were undeservedly keeping and shift them to investors. It just happened so that scalpers of those days also used to get chunks of those rents and now can't. That was simply a side effect and not smth they really had in mind (or cared about, for that matter), b/c compared to the rents MMs/specialists were getting, was scalpers were getting was miniscule.