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Average ticks per hour using the DOM?

  #4 (permalink)

Denver
 
Trading Experience: Intermediate
Platform: Bookmap and Jigsaw DOM
Broker/Data: Stage 5 Trading
Favorite Futures: ZN
 
lax99's Avatar
 
Posts: 433 since Jun 2015
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tpredictor View Post
1) The problem you will run into scalping is that markets are very efficient. It is very difficult to overcome the costs of stop losses. Most scalpers will employee either of 2 methods: they will take a high tail risk (large risk to reward) in order to decrease the costs of the stop outs or they will trade with a larger size and smaller risk.

2) I think you cannot just scalp in a mechanical way. If you scalp you have to be able to see and trade the big trades in the market too.

3) If you scalp with the higher tail risk method then you will need a very large account to do this in futures. If you take higher tail risk, your returns will be more robust and you will be able to profit most days but some days you risk having significant losses. If you are using stops, you will have more large losing days but they will be contained in size.

4) The one good aspect is you may be able to trade with even less risk then you thought you'd need because you are not likely to be able to recover. It means if you stop early enough, when trading with the stop losses, you can might be able to make even more with less. I think you have to be able to trade whatever the market is giving you though.

1) I'm not sure why you say it's difficult to overcome the cost of stop losses. Taking a loss is part of trading, part of the business, part of the game. What do you mean by "the markets are efficient"? Surely you don't mean that there are no opportunities because the market is priced perfectly...

2) I absolutely agree with this. Scalps and trades have to be taken within the context of the market and the context of the moment. Just clicking because X<Y && Z==Q is a recipe for disaster.

3) What do you mean by higher tail risk? Does this "higher tail risk" idea revolve around not using a stop in the market?

4) Again, I have no idea what you're getting at with this. Making more with less? Trading with less risk because you can't recover? I haven't heard either of these ideas before.

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