what's the difference between scalping and market making?

Discussion in 'Index Futures' started by mizhael, Apr 4, 2009.

  1. what's the difference between scalping and market making?

    Anybody shed some lights?

    I am also interested in working on some high frequency market depth data and devise trading strategies based the statistics of the high frequency data.

    It doesn't seem to be easy to set up a back test platform, because finding such huge data is already tough, not to say back-test involves data-mining which is not truth-telling.

    Fortunately the high frequency nature of this trading style provides enough data for doing forward testing, without a full cycle of backtesting. Agree?

    But what shall my trading strategy be, as a retail level investor? The high frequency data is very noisy, probably the noisy bid-ask will eat away my edge already. So I am thinking of turn to the other side of the trade, to become a scalper and market maker, in high frequency environment, what do you think?

    At least I should have a way to devise the trading strategy to test if my model, indicator or signal works.

    Any thoughts?

    Thanks!