way to go dude! you definitely da man then! btw, what a cool deal you've got with your job then... six figures and u can take time out to net a few quick scalps? you got it made..
Not yet six figures. I left my last job last month to join a broker/dealer as a manager/trainer. I'm training a few new traders and I only trade some mornings and the close when conditions look ripe.
In the olden days (for those fans of nostalgia amongst us), a scalp on a stock for me was usually an 1/8... now this 1/8 could be gotten by buying the ask and offering out at the ask; this technique could be called 'momentum' scalping since it required momentum to reach the next level. Alternatively, 'passive' scalping could be used to get the 1/8 (buy bid, sell ask); there was no momentum prerequisite for this latter definition of scalping, since we were working the spread, not playing for a new level... Now in this decimal world of 1-2 cent levels, things have changed somewhat. Unless you are doing very large size (e.g. 10,000 shares) on very low prices* (e.g. $5 stocks), the above definition cannot hold anymore because the profits on a captured penny may not even cover commissions. So the definition of scalping has necessarily had to move away from spread-based definitions to more of a momentum based definition... I suggest that, for all but the cheapest stocks, a scalp could feasibly be defined in terms of capturing momentum bites of 5 to 10 cents... Moving away from stocks, with the S&P eminis, you would need to be trading 10 contracts to be able to usefully scalp in accordance with the spread-based definitions encapsulated in paragraph 2 above. The 0.25point spread on 10 contracts would result in the $125 that scalping 1000 shares of a stock for an 1/8 used to give us. I have the feeling that most retail daytraders will be doing less than 10 S&P eminis, so 'their' definition of scalping cannot be spread based but is momentum based, with a higher objective than 0.25points.... * low prices only, in order to keep risk exposure at sensible levels
tnteo, I tend to agree with you. I believe the "traditional" definitions of scalpers are those who 1)work the bid/ask spread 2) take "small profits". I guess that definition varies from people to people, but that's the notions of scalpers for a long time. Now, there are people who thinks 5cent is a scalp. Others think it's a 10cents. And for some reason, given how shitty the market is anything above 15-20cents people assume it's not a scalp but a momentum trade or a longer hold. So, it all depends on your time scale and perspective. To a position trader, even a 50cents to 1pt move is a "scalp" because his profit targets are most likely much larger than 1pt. So it's all "noise" to him. But in the intraday environment, I like to classify as follows: 1) microscalpers/liquidity traders - 1-5cents 2) scalpers - 5-15-20cents 3) intraday trend/momentum trader - 15-20cents to 1 pt move do people agree?? it's kinda sad to see firms and people talking about taking a 10cents profit as though it's golden.. That tells you have small the moves are nowadays.. But there are wide ranging stocks tha tmoves multi-points intraday(1-5pts), but people seem to see that is too risky.. trader99