I too am on the same boat It's just impossible to scalp breakouts anymore. I buy the bo and immediately someone keeps on selling until I get out. So if that's the case, I said let me trade pullbacks. Same shit. Stock is strong then it drops a buck, I get in, it drops another 50 cents, I am out and it's back to where it was. Perfect ex. was ne yesterday...Some buyout rumor and of course I only knew about it after the stock had made a significant move. Nevertheless, I get in and some one is selling away forever and eventually it drops 60 cents and takes out all the day traders that bought in late and then it comes back and makes new highs. Same bullshit happened in vlo the other day when oil numbers came out.. Apparently there seems to be some kind of bot out there that trades against dot orders. Whatever it is, it is becoming increasingly efficient at what it's doing since it appears to have unlimited capital.
Like always, it's about adapting. I network with a lot of good traders. Not a single one of them makes significant money doing what I'd call 'traditional scalping'. The quick in and out, read the book, lean on size, pile on the crossed ecn's, etc. The guys who are making money are in two camps. TA trading 101, simple breakouts and trends, but on a multi-hour time frame with wide stops. Or else trading with a quant-based view. That is, lots of smaller positions, trading on odds and statistics. Again, usually with a wide time horizon or wide stops.
Reading the book? Crossing ecn's? People who do that are not traders. Their sheep. Pawns for the specialist and his floor buddys. Constantly quote chasing. Giving away a nickel trying to make 2/10 of a penny. Sheep!!!
When you say "smaller positions", can you give us an idea about how small their average positions are? Thanks.
i'd like to think that trend following would work. but i can't recall how many times i've built a nice position...it's gone positive for me...begins to pullback...to point of entry(even a little beyond)...forcing me out. it seems like if you don't take profits when you can...or walk away from the gambling tables when you can...you're going to piss away any profits you have or create a bigger hole. what i am noticing that seems to be working is playing large prints at highs or lows(after significant moves)...giving it a little time...than be prepared to reverse it.
I know one thing you can do to improve performance. You are trading tough stocks. Take a look at stuff that has moved nicely for a while on at least 5x normal volume. Something like PBY today for example. Trading news on oil/commodity stocks is one of the toughest games in town imo. This also applies to naz stocks like ENER, JOBS, ZUMZ today etc. (none of these have broken out yet, but all on the radar for later. Trade the easy stuff!
It's energy, but one stock that has been very good to me is PTEN. It's been a gold mine for my systems. Of course now that I mention it I'll probably get smacked by it...
Your view of scalpers is like my view of chart readers (self-validated prophecy). Different strokes for different folks, whatever works for you... That being said, scalping pennies is over for me with hybrid. I really miss it though, it was so engrained in my mind I had to stop for a while to try and forget the muscle memory and old familiar triggers