Why scalping beats any other trading style

Smaller moves are easier to obtain....

over and over and over again???

 

I scalp ES and S&P futures but it's difficult to maintain

a reasonable profit if you try for smaller and smaller moves.

You got to trade above noise and the intra ATR or else you would

be in and out every few minutes and losing trades will soon

overtake the winners.


You can only go so low, or so small in scalping, or else

it becomes a case of throwing the dice or coin.

 

I agree. One needs to watch larger time frames for major s/r levels to be aware of any major moves.

 

This thread started over a year and a half ago,and is still breathing with some life,but is especially relevant to me as a student and newbie trader.
Ive been studying forex only,so far,and (eur/usd) foremostly,trying to 'master' the one currency idea. for 9 months now.

The first trading forum I discovered was ET and the first successful trader /teacher posts I discovered were those of Yoohoo,(this thread's OP). His teaching in the CFerret journal is a tremendous gift for anyone wanting to learn the art of scalping. This thread here barely scratches the surface about scalping compared to the CFerret journal.

It could take 3 months study time just to reread the cferret journal.

I've read all the posts here,and would like to add my own thoughts about scalping.

Scalping is so far,the only 'trading style' Ive focused on,so I dont know if I would be more successful as a swing trader.

My observations about scalping are that in order to be successful at it ,winning consistently, one has to Master the craft.a high level of mastery is crucial.it requires a 'complete vision' of price action,a very high level skill at candlestick analysis,along with whatever indicators you choose to understand.
It requires Mastery of the mind and emotions,complete balance in ones inner psychology.any kind of weakness,in the form of restlessness,impatience,anger,frustration,fear,etc....will lead to wrong entry times,wrong judgements,and losses. It can take months (years?) to overcome fear alone.

The entire 9 months of my study, the more I learned, the better I got,and the more I realized that its not a quick process ,its a long learning process.At first,I thought I would 'get it down' after 3 months of study. Now I realize that 9 months is Nothing. It could take another 9 months just to perfect PA watching.

So patience is more than a virtue in trading forex, it is critical.

But what is the nature of scalping ,it is a fast and quick exercise.in judgement,execution,vision, one minute is an eternity. The idea itself is not condusive to the emotion of patience. So the whole forex trading trip is a big test of the mind.being quick and patient at the same time.

Random thoughts.The market is a rigged game. You see a trend channel,you think it is safe to play.Then suddenly the energy changes and becomes choppy,sometimes with little warning.or no warning.
I have been especially keen to notice that in these recent giant waves,300 pips, the move was begun by the slightest weakness in a one minute candle, like falling short of a previous high by a quarter pip,half a pip... or fails a s/r point by half a pip, that sort of thingand then price falls 200 pips from there.
But just prior to this sort of action,trendlines indicate the other direction, and price action would be moving with the trend,often on the new hour,or just before the reversal,is what I'm trying to say, just before the reversal, price continues,and becomes a fake out as direction reverses. different time frames indicate still different things....the price action barely shows you the signal,and gives you one minute to act on it. that is what scalping is about. and
It can take months of screen time study just to identify these different 'energy' movements.slight movements.Its all very subtle at the key moment of 'catching tops and bottoms'.

Months of study to learn to recognize wave tops and bottoms.
and all the skills have to be Mastered in order to succeed at scalping.
Months of intense study to learn how to find the exact right entry moment.And the right exit moment.

Just like when Yoohoo said about learning martial arts,his teacher said getting the black belt was just the beginning.

Ive now learned to catch the tops and bottoms and still,I'm not making profit yet.(I'm setting my stops too tight)

Ive learned to see the long range target ,with about 90 % accuracy ( seeing the most powerful key s/r points and fib levels,on multiple time frames) ...and still not making profit....because I'm trying to 'scalp' to the next s/r point.in a 10 minute trade. So now I'm learning to 'go with the flow'.

This whole learning process is both exciting and extremely frustrating at the same time. I'm always so close to the gold mine but too often miss the train when the door opens...the one minute candle that allows the door to open. thats all it is usually, you get one minute to pull the trigger. at the exact right moment.
Thats what scalping is. if you blink or tuen away from the screen for one minute, you miss the train. and you might have to wait an hour for the next one.

People,including experts, in the early summer,when Euro/usd was in the 153 to 160 zone, were proclaiming that it was going to ride all the way to 170 .but surprise surprise, the euro came crashing down to where it is now.
Was that a flawed fundamental analysis,Yoohoo, that made you predict that one? or will it be happening next spring.
I know youre a master of the scalping art.

Is it harder to scalp forex ,compared with other vehicles?
Is scalping the best way to trade forex?
Can you talk more about Mastering the art of scalping?
Ive found that often times, the things you have said,have saved me months of study time.
I think new students need that kind of help from those who are experienced.
and the CFerret journal provides students with a great learning process.

If you start this thread by proclaiming the virtue of scalping....shouldnt you give us a few more crumbs to chew on so we can understand better?
I would start with my question....is forex as good (better or worse?) vehicle for scalping?
are there other forums that are 'easier' than forex?

disclaimer: granted, you started this thread over a year and a half ago, so if you havent the time now to make it worthwile, thats ok.(no its not) .....

 

Tom, that is the most encouraging thing I’ve seen you post. It’s obvious you have entered into the arena where you realise how much you don’t know as well as how close you are to cracking it. That gives you a chance to dig for answers but you sure ask some questions lol.

I was surprised to see this thread make reappearance again and sorry I don’t have time to go into much depth, but the Fx thread will get you into profits if you continue to study it.

So was my analysis fundamentally flawed for the Eur to push on up? There was trend line space on the monthly charts for more upside but if you read the last few posts of the thread…




1)“remember very toppy cycles. Run your TL along those 1 Hr highs that really stick up proud.”
2)Quote from yoohoo:

...this push up is giving mature cycles right from 1 hr thru to the weekly.

... Very mature cycles so will it be a break up and trend or a big reversal?

One thing's for sure, we are in for some very big moves in the near future. Funny thing is if you can read the 15 min chart or lower TF you will be in the right trade at the right time.

3)When a market makes a new high as in the Euro, most will play the long trade. I went top fishing because all the cycles were mature. But I’m not so bloody-minded that if it goes up I’m lost about what to do – I’d find it easy to take the long and change my view AFTER the TF’s roll over. That way I’m not lost, standing on the sidelines with holes in my PIB. As I said, taking the next “bus” keeps you on the right side of the market but anytime you pick up what the majority view is – get ready to do the opposite. That’s where ET can be a great real-time sentiment indicator.




So I did see big downside potential in the cycles that could roll the 1 hr chart into weeks of downside action and went short. The thing is I am not interested in prediction but only in nailing the trade in the 1 min chart and then deciding if it’s a scalp or a keeper.

Do I think I know what will happen next spring – nope. Many times I wrote there’s no profit in being a prophet.

Harder to scalp Fx? – nope.

Is scalping the best way? This thread was poking a bit of fun at all us traders to stimulate debate and perhaps learning something. Best is like beauty… it’s up to the individual but also depends on time, needs, ability etc.

Can I talk more about mastering scalping? My style is intensive and as you as discovering requires months just to learn the basics, so going on to mastering trades is beyond what I can possibly do here.

Shouldn’t I give a few more crumbs? Cheeky pup! I got involved in a thread that was not mine and stayed for hundreds of pages detailing how to make it trading down from the 1 hr to the 1 min level, so I think I’ve done my bit, not to mention answering PM’s, so there’s no guilt about not paying it forward.

Something easier than Fx? I don’t think so; one is as easy as the other but Fx goes round the clock so you can have a job and still learn to trade.

So with that I’ll bow out of getting involved in detailing more how-to’s because as I said in the Fx thread, time pressure from expanding opportunities simply won’t allow it.

Good trading

 

Thanks very much for the feedback. much appreciated. Of Course youve payed it forward ,with a brilliant gift.
but you cant fault a student for wanting more.
kind regards,T

 

I strongly encourage any new traders and students to go find the CFerret journal, and read the whole thing....three times...! if you are interested in learning about scalping. Yoohoo's posts start on page 4 (april 2,2008)

I think the first one says something like...."No,No,!! you idiot ! youre doing it all wrong !!?#@!?! " something like that.

 

I suggest we start a discussion on scalping ES or NQ

 

Go for it Jahajee... give us the first post

 

AN INTRO, rambling on...

I use 1-m, 5-m, and 60-m ES and NQ charts. Lately, I have
focused on Es scalping.

I prefer scalping against the trend. I particularly enjoy scalping against markets that are dropping or rising quickly, in a big range day, like this week. It seems to me that markets moving quickly tend to overshoot, especially on the downside,

The key to scalping is to keep losses small, and to actually take these losses rather than 'hope' for the markets to come back to you. It may eventually do so but by that time you would have ruined the trading day by holding on to your cherished egoistic position that you want to prove that you got it right.

My position size is 8 lots, usually entering all immediately or in two entries but I begin to scale out as soon as I have 2 or 3 points profit and set a stop at break even on the rest. Commissions are quite low so I feel free to trade as much as I wish without being bothered with commissions & slippage. With less liquid markets or in fact any market other than ES and NQ you would consider the cost of commissions & slippage.

My tools: a momentum indicator - basically a 10-bar momentum on the ES 1-m chart, with a 4-bar average of momentum and an upper and lower momentum band that is the 30-bar average of momentum. I have oversold and overbot momentum lines at 30 and 70 % of the momentum average.

Next I have overlaid on the above a very ST RSI - 5 or 7 bars

And, I find quite useful the Awesome Chaos oscillator which is a 5/34 oscillator, you can select other values.

MY price chart is 1m ES candlestick, with ST MA - 5bar, and long MA - 200 bar. I have 10-bar breakout high and low indicators and pivot high and low 5, 10, and 20 bars.

I also have a 1-m TICK and VIX chart on another PC and several charts on another, and Bloomberg online TV and NY TIMES etc on another.

I have Multicharts and TOS, as well as backup to broker.

I have a trading system running live based on the Awesome Oscillator but I am a discretionary trader; the tools provide me with a visual image of what is happening, the trading system buys and sells and exits allow me to track what is happening and than make decisions as to enter and exit.

My trades may last as long as 5 minutes and as short as 30 seconds. I only care about market direction during the duration of a trade, I do not care if the market is going up or down in the next 15 minutes or hour or tomorrow. My policy is to take profits and move on to the next trade. Exit quickly - win or lose, and get on to the next trade.