Good Morning volpri, You are correct about the SL placement, it has to be correct. Using fixed ticks SL makes very hard to trade and win consistently. But so many trading education recommend tight SL and keep losses small. But 2-3 or more losses in a row, very hard to recover that.
Have you ever tried to automate your trading? I don't have any algo for scalping and would like to try to build one. If you are interested I can give you access to my repo so you can see the rules I am applying.
Here are the two videos: one regarding trading with a set SL and a set PT (profit target) and a second video regarding the dynamic SL and dynamic PT. The way I scalp it just works better for me to use a dynamic SL and PT. On the hard SL and PT video I lost 21.25 points in ten trades. 8 trades were losers a 2 were winners. My profits made were bleed out by the 8 paper cuts losing trades. The SL on that video was 20 ticks or 5 points and the Profit target was 40 ticks or 10 points. They were hard set and I didn't move them. I just let them play out however they would play out. However, using a dynamic SL and PT I captured 81.50 points in the MNQ on a 30 second chart in around 20 minutes. All 10 trade were winners. This just as well could have been the NQ at $20.00 a point. You will notice in the dynamic SL and PT video recording that R:R (reward to risk) was decent. In most trades at least 2:1. On some probably more than that. That is if you count the R:R after the entry and exit by looking at the adverse move the trade took before exiting with a profit. If you compare that move with the profit move you can visually see that the "actual risk" was in most, if not all the trades less that the reward. You can also just visually watch this happen live on the video as the trade takes place by just observing how much price moves against my position before I get out with a profit. I have also enclosed a snapshot of the 10 trades on the Dynamic SL and PT video if you want to figure the R:R amount with a calculator. I don't have time to. I just can look at the trades as they are taking place and can visually see most had at least a 2:1 (reward to risk). That is the reward being at least twice the same of the actual risk the trade endured. Please know I traded both sets of trades the same way I normally would trade when scalping even though they were not the exact segment of the chart. The first set (video) is with the SET SL and set PT the trades were done and executed as I normally would when scalping. The same thing for the second set or video although they came in a subsequent section of the chart a few minutes after the first video. The SET SL AND SET PT TARGET VIDEO: https://studio.youtube.com/video/MRnLdBxE6M0/edit THE DYNAMIC SL AND PT VIDEO: https://studio.youtube.com/video/OYv2MRLLRf0/edit Screenshot of DYNAMIC SL and PT trades. Disclaimer: All of these videos on this YouTube channel including this video are for entertainment and information purpose only that show how I like to scalp. I am not advising anyone to use these techniques. You may not get the same results as shown in all these videos and you can even lose all your money plus more.
Good Morning Volpri, Thank you sooooo much. I look forward to watching these videos today. Do you mind giving some feed back on your personal experience with using SET SL AND SET PT versus DYNAMIC SL AND PT? I am curious why you do not use Set SL and Set PT for all your trades. Set SL and Set PT does seems more relaxing in trading, but I am unsure if that works long term. Just my opinion, I do not know. Thank you
The videos should show why I can't make set SLs and Set PTs work for me. I cannot use a tight SL to give me a R:R that is 2:1 or more in scalping without bleeding to death with a thousand paper cuts. This is because of two things: 1) the incessantly probing of price up and down on individual bars or groups of bars. I have to stay far enough out of the way of unfavorable probes towards my position that will take me out before I am ready to get out. 2) I am going for small profits over and over (FOT) on favorable probes. The negative probes will wipe that possibility out. I think the first video demonstrates that scenario. I cannot keep a profit. I make a profit on two out of 10 trades and lose it all on 8 out of the 10 trades. So why don't I just widen the set SL from 5 points to 10 points? Because then to maintain at least a 2:1 reward to risk I have to go for set "market probes"of 20 points. That dilutes my concept of making money on FOT and is getting me close to being out of what I consider a good scalping range of probes that embrace making gains on FOT feasible. Look at my second video. 10 winners 100% win rate. Never close to 20 points profit on any single trade. Yet pulling 81.50 points out of MNQ in around 20 minutes of screen time. That could have just as well been NQ at $20.00 a point in around 20 minutes. That translates to $1630.00 in less than a 1/2 hour on the NQ and translates to $163.00 in the MNQ. So why would I want to do what I did in video 1 using a set SL and Set PT and get those results when video 2 gives me much better results AND best of all the REST of the session will have piles and piles of more opportunities to trade a 30 second chart. Even if this same thing were done on 2m or 5m chart I would see many more potential trades available. For me screw swing trading. I will employ scalping in ways that embrace FOT and render me a multitude of opportunities in the session to make even more wins or recuperate any losses and to do so quickly. Why would I want to make one bad swing trade with maybe a large DD then spend a few days trying to get the loss back? Of course swing traders will say don't allow big DD. Well I have done that and been there and for me it is not easy to not have larger DD than I want to experience when swing trading.. I cannot make swing trading work for me unless it is small swing trades intraday with say 2 legs and 10 bars. Look at it this way. Suppose in that second video of 10 trades using a dynamic SL and PT I made major mistakes in judging price action and had lost $1630.00 instead of making 1630 in around 20 minutes. How many 20 minutes periods are left in the session? To get back that 1630 loss and get to the good by the market close. See not only does the principle of FOT over time interval give opportunities for profit but it also renders opportunities to get back losses because of missteps in earlier trades. I think traders would do well to give deep consideration to what the J.M. Hurst excerpts say that I posted in Laissez Faire thread on R:R. I suspect many look at it as some outdated old principles that are no longer relevant. IMO that is where they would be making a grave strategic and tactical mistake. This IMO would be a mistake that any scalper, swing trader, or investor could make by dismissing Hurst's concepts he so clearly elucidated for us.
Good Evening Volpri. I agree with you, swing trading, me do not like!!!!! Swing Trading = Live In Drawdown
Hello Volpri, Great write up. I appreciate your experiment. Question please: 1. Have you ever tried using fixed SL and PT to scalp, and not swing trading ? For example, a set PT and SL of always PT - 5 points and SL - 20 points. This way 1 loss, only requires 4 wins in a row to recover. Thank you,