Dearest Brother OldTrader, Some Johnnys make a comfortable living taking their 1-2 points on futures or their 10 cents on stocks... these Johnnys know when to stay in cash and when the odds are in their favor, thereby securing at least a 70% success rate in their scalping... Johnny can make a successful living scalping if he is disciplined, understands probabilities, expectancy and other risk considerations... smart Johnnys smile contentedly at others who feel that 1minute charts are noise, since smart Johnnys somehow manage to make a profitable living from trading this very noise... smart Johnnys will readily concede that there is not much thought involved in scalping, with the trades being somewhat automatic as a result of conditioned reflexes through a lot of experience... these Johnnys appreciate that there are many ways to make money in the market, including holding a trade for a long time to extract its "full potential"... but smart Johnnys understand statistics and have calculated that the long-run aggregate statistical expectancy for scalping can be equivalent to longer-term intraday strategies... so it all boils down to aligning psychological traits with trading style... if a Johnny hates a high losing frequency, he will gravitate towards scalping... if a Johnny hates to book profits and then see a position run to the moon without him, he will gravitate towards holding stuff for longer... and it's when Johnny fails to accurately align his psychological traits with a given strategy that he is setting himself up for failure... With fraternal greetings, Candletrader
Though many Johnnies, apparently, find it next to impossible to make up their minds between one and the other. Or they switch back and forth, back and forth. They get caught unexpectedly by a trend day, during which they incorporated their scalping strategy, so they switch to their trending strategy the following day, which, of course, will be chop. Then they give up and go back to paper trading, at which everything works out just fine. But when they go back to real trades, nothing works. Because the market has changed, and they're using the wrong tactic again. Always a day late. Always reactive. Always following, though usually following the wrong crowd down the wrong road. As for whether or not something can or can't be done, those who claim that something can't be done are saying only that they themselves can't do it (daytraders can't make money). They assume that what applies to them applies to everybody. Wrong. --Db
A Johnny who keeps on switching styles has got real problems with identifying his psychological traits... a dose of Mark Douglas is recommended...
Oldtrader was making the case for longer trades versus scalping... I was suggesting that scalping is just as viable as longer trades... in a nutshell, a big reason why Johnny fails is his failure to align psychological traits with trading style... this was my conclusion and my contribution to this thread, a point which is most definitely not off topic... go back and read what I said carefully...
I'll have to go with candletrader on this one. Scalping in and of itself is no more difficult than any other trading tactic, anymore than longterm hold is a sure road to profits. Success depends on doing what one is best at. If that happens to be scalping, so be it. One man's noise is another man's pattern. Bumper sticker advice is of no help if it doesn't address the central issue, which candletrader is attempting to do. --Db
You're making an unjustified jump here. You're assuming that "Johnny will have more difficulty trading shorter timeframes because his psyche is not capable or prepared". But if he is not in "alignment", the timeframe is irrelevant. He will have just as much difficulty trading a longer timeframe. Therefore, again, his problem is a lack of compatibility, not a choice of timeframe per se. If the thrust of the thread is that Johnny can't trade because he's chosen a "bad" timeframe, that's one thing. But if the thrust is that he can't trade because he chose a shorter timeframe rather than a longer one, that's a debatable point. --Db
Its your fact... it aint 'a' categorical fact.... moreover, it is debatable, since that is what we are doing here ... indeed your blanket comment above simply reinforces my argument about the alignment of personality traits with trading style... evidently you would be more comfortable holding for longer periods of time than scalping, so I would advise you against the latter... thank you for reinforcing my case without even realising you were doing so...
Only to those who find them to be so. Those who are aligned with the demands of shorter timeframes will find them to be much easier to trade than longer timeframes, which have their own set of demands and expectations. --Db