The Ultimate DAX Scalping Discussion Thread!

Discussion in 'Index Futures' started by Scientist, Dec 28, 2003.

  1. traderob

    traderob

    Thanks for opening this thread scientist.
    I trade in a similar way to you (though not succssfully , yet) and mainly rely on support/resistance , price action and DOM.

    Just to finish our earlier conversation: As I said on T-rex thread I scalp the Hang seng also. I look almost exclusively at the Dom for that. Put in a limit order based on what I think will be a turning point and then take it back another 10 points. Then after 30sec I move it away another 3 or 4 points.:) It is volatile!
     
    #51     Dec 28, 2003
  2.  
    #52     Dec 28, 2003
  3. DOM = Depth Of Market
     
    #53     Dec 28, 2003
  4. traderob

    traderob

    The es might have been a program trade coming in on momentum?
    I think ESTX suits the patient trader and Dax is for the man looking for action. To me estx is too slow. I like movement; and make it fast.
     
    #54     Dec 28, 2003
  5. Why do you use limit orders - and not market orders?
     
    #55     Dec 29, 2003
  6. Hmm. Similarly to phoenix_rising, I don't quite understand why he does that. Why not just wait for the open and then put on a single gap trade? Could it be to avoid execution (entry) problems before they start? Or maybe just the psychological factor?

    Maybe I'm just completely stupid and simply not getting it.

    As for the Napoleon Hill quote: Excellent!!! I think everybody should read "Think And Grow Rich" by the same author.

    Scientist.
     
    #56     Dec 29, 2003
  7. traderob

    traderob

    The advantage of this tactic is that it lowers risk. see file.
     
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    #57     Dec 29, 2003
  8. klutz

    klutz

    your chart sez "exit long here big bucks"
    "exit short here small loss "

    the size of the profit/loss is not dependent on the entry but on the second trade of the day i.e. the closing trade

    also, your entry is at the wrong level. dax was at 22.5 at close on 23rd

    agree with Scientist, I do'nt see how this strategy reduces risk
     
    #58     Dec 29, 2003
  9. traderob

    traderob

    I put the entry on the day just to simplify things as a visual guide only.

    Let us do the maths.
    Say dax closes at 3000 and the trader is long one contract, short another. The next day it gaps up to 3050. Trader closes long trade out for 50point profit.
    He then waits for dax to head down and close the gap and closes out short trade for small loss or break even.the total of the 2 trades adds up to a profit. that is the theory anyway as I see it.
    It is less risky than going long with one contract because he isn't sure that it will go long.
     
    #59     Dec 29, 2003
  10. Hmm. OK, to be quite honest, I still don't get the point. Nice chart, but mind you, its really nothing for a scalping thread - I seriously think that strategy by itself is worth opening another thread for - So please anybody make the plunge to start it and feel free to post the link to it here! OK? :)

    To illustrate why, here is what I look at; I hardly anymore look at charts so long-term the way you guys do. I look more at pure ultra-short-term tick movement and executions.

    I am clearly not planning to do a journal here, but because a few people kept consistently nagging me via PM to post some executions, in order to see what I'm looking at, I gave in and attached below how I handled the movements for the morning move from 4:15 EST (I think 10:15 German time) onwards. My last trade there was 5:57 EST (~12:00 German time). As you can see, I basically bounced within that move, selling the tops and buying the bottoms. There is also to be seen that stupid bund trade on 10 cars which I shouldn't have taken, and particularly not closed so early (LOL) but yeah. Stupid. I do something stupid everyday. The way I look at it that's the only way to constantly improve, though. Never beat yourself up. Who dares wins!

    My total for the morning was EUR 1,785 (without that stupid bund trade) so E 686 / ~27pts per DAX car with an average of 2.6 contracts per trade. This is quite OK performance for sim trading and decent for real trading IMO.

    In this case, it was sim trading, I'm not trading real today. I have made sim trading a very integral and crucial part of my trading regime, and will regularly trade the sim, to fine-tune new techniques and focus on testing things, this works very well for me. I also trade recorded sessions after-hours for additional training. When I haven't traded for a few days, don't feel well or simply have a bad feeling, I will sim-trade, too. After all, it's not about what you make, it's about what you don't lose. So don't push it, or your subconscious will play dirty tricks on you.

    I have also found (with great excitement) that the realism of sim trading is much higher on DAX than on the ES. The way I calculate it (by relative comparison), on the DAX my sim:real realism ratio is about 1.25:1, meaning my sim performance is about 25% better than real trading. On the ES, my ratio is about 1.75:1 or even 2:1, being 75%-100% better, simply because that market is very deep and the simulator execution engine will regularly give you premature fills, although your real execution may never have ticked through that level, because there were still a few hundred issues in front of you! So watch out!

    On the log, you will see how I traded 2/4 contracts most of the time, then less towards the end, like 1-2 contracts. This is also typical for me. Whether the market is extremely wild and unpredictable - Or simply quite illiquid and lacking direction - In both cases I will cut down my size. It sounds idiosyncratic, but it works for me. Only when the "perfect balance" of volatility and direction is there, will I go full size. This is very discretionary indeed. Also, when I've made very good profits for the day, I will also cut down, simply in order to not give it all back / protect profits. I find this works well, too (I used to make huge sums throughout the day and then lose it all again... so yeah) My usual size on DAX is 2-3 contracts per click. My maximum is 10 cars, but I don't usually go beyond 6, at least not right now. I've only started the DAX about a month ago, and I like taking it slowly. Mark trades my maximum size on a regular basis, and does up to 20+ cars. But I'll get there, too. Don't you worry. :)

    Any good questions or comments?

    S


    P.S: Sorry for the bad image again : My Photoshop is still f*cked and I did it in the very limited paint, so yes. The "grey" fields are supposed to be green (wins), and the red ones (with the huge numbers) are losses.
     
    #60     Dec 29, 2003