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Scalping ES, need help


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Scalping ES, need help

  #11 (permalink)
Chino Valley AZ
 
Experience: Intermediate
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GarySeven's Avatar
 
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There is really no such thing as "scalping" anymore. This was a term used in pit trading before everything changed.

Even if you take a hundred trades a day you are not a scalper but a day trader.

Jim Dalton can explain it better than I can. The whole video is good but he explains the difference in trading at 5:30

https://jimdaltontrading.com/jul-31-2019-webinar/


And some final thoughts on overtrading...

Trading should be called waiting, because that's the biggest part of the game. If you are always trading, you will lose over time.

Being right but being early is the same as being wrong.


Last edited by GarySeven; August 5th, 2019 at 11:44 AM.
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  #12 (permalink)
Indianapolis, IN
 
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Scalp

@ALC77 When I did the 1 tick drill with JigS, I had some days ending with net profit but most of the days were losers. Peter does mention that this can't be converted into a strategy. This is only a drill to get experience under your belt and train your eyes on watching the JigS DOM. I did like the Cut and Reverse drill, it helped me to come over my short term trading psychology and to stay in trades for longer.

I think you can still make it out as a short term trader(scalper) but would need atleast a 1:1 Risk to Reward ratio initially. I have heard interviews with traders on ChatWithTraders that they scalp short term and do just fine. Goes back to what your trading style is and where you are comfortable.

I give a week to a new concept and stick to it for the entire week and then analyze the net results at the end. At the moment, I watch out for aggressive buyers or sellers, hitting with large order(50+) on the tape mostly around previous highs and lows on a tick chart, and scalp a few ticks 3-8.

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  #13 (permalink)
Legendary Market Wizard
Chicago Illinois USA
 
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That is right...


"trading" is difficult to define and certainly not what it used to be. What Dalton did on the CBOE/CBOT was indeed trading. Now it seems as though there is no trading, rather short term directional speculation.



GarySeven View Post
There is really no such thing as "scalping" anymore. This was a term used in pit trading before everything changed.

Even if you take a hundred trades a day you are not a scalper but a day trader.

Jim Dalton can explain it better than I can. The whole video is good but he explains the difference in trading at 5:30

https://jimdaltontrading.com/jul-31-2019-webinar/


And some final thoughts on overtrading...

Trading should be called waiting, because that's the biggest part of the game. If you are always trading, you will lose over time.

Being right but being early is the same as being wrong.


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  #14 (permalink)
Market Wizard
Columbus OHIO
 
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akuush View Post
@ALC77 When I did the 1 tick drill with JigS, I had some days ending with net profit but most of the days were losers. Peter does mention that this can't be converted into a strategy. This is only a drill to get experience under your belt and train your eyes on watching the JigS DOM. I did like the Cut and Reverse drill, it helped me to come over my short term trading psychology and to stay in trades for longer.

I think you can still make it out as a short term trader(scalper) but would need atleast a 1:1 Risk to Reward ratio initially. I have heard interviews with traders on ChatWithTraders that they scalp short term and do just fine. Goes back to what your trading style is and where you are comfortable.

I give a week to a new concept and stick to it for the entire week and then analyze the net results at the end. At the moment, I watch out for aggressive buyers or sellers, hitting with large order(50+) on the tape mostly around previous highs and lows on a tick chart, and scalp a few ticks 3-8.

about 50% of my trades are all 1:1.. all the trades I took today were 1:1

The biggest factor to this is making sure you cut losers when signaled out.

I wouldn't define my self as a scalper but I'm defiantly very short term

-P

"Truth is not what you want it to be; it is what it is, and you must bend to its power or live a lie"-Miyamoto Musashi
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  #15 (permalink)
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Hey man...

I am concerned that you give a week to a concept and stick to it for the ENTIRE week. How in the world do you maintain that kind of discipline?

The shortest time frame...what you are referring to as scalping is dominated by the HFT crowd. If you are able to enter and exit within seconds or a minute I would suggest to you that you are simply lucky and in the way. I'm not saying that a person cant build some type of model that COULD provide some type of edge...I'm saying that it would take a very high level effort over a significant period of time.

If you like to be in ES for a few ticks and do that repeatedly all day long I would suggest that you identify trend and simply get in the way. Perhaps have your closing orders as resting limits and hit or take as momentum (volatility) comes or goes. If you do nothing but get filled on your resting orders designed to close you could probably hit or take ad post hoc.

Does that make any sense?



akuush View Post
@ALC77 When I did the 1 tick drill with JigS, I had some days ending with net profit but most of the days were losers. Peter does mention that this can't be converted into a strategy. This is only a drill to get experience under your belt and train your eyes on watching the JigS DOM. I did like the Cut and Reverse drill, it helped me to come over my short term trading psychology and to stay in trades for longer.

I think you can still make it out as a short term trader(scalper) but would need atleast a 1:1 Risk to Reward ratio initially. I have heard interviews with traders on ChatWithTraders that they scalp short term and do just fine. Goes back to what your trading style is and where you are comfortable.

I give a week to a new concept and stick to it for the entire week and then analyze the net results at the end. At the moment, I watch out for aggressive buyers or sellers, hitting with large order(50+) on the tape mostly around previous highs and lows on a tick chart, and scalp a few ticks 3-8.


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  #16 (permalink)
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So...

as the most basic first point of reference, below is a 1600 tick chart (a century to HFT guys) If you look at the gold as the signal line and buy when the green goes above gold and sell when green goes below gold you have the STARTING basis for a "scalp" method.

Of course you are going to get killed when the trade line crosses back and fourth...indicator folks call that "chop" and will search for a "filter" and ultimately add indicator or secret settings until their money or their desire is gone.

The next step in sophistication would be a macd rate of change. IMO this is chasing the wind. Again, I'm not saying that it can't be done...it can, for sure. The issue is that very sophisticated firms have high level programmers that program on the fly (intra-day) to adjust for prevailing conditions.


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  #17 (permalink)
Indianapolis, IN
 
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wldman View Post
I am concerned that you give a week to a concept and stick to it for the ENTIRE week. How in the world do you maintain that kind of discipline?

The shortest time frame...what you are referring to as scalping is dominated by the HFT crowd. If you are able to enter and exit within seconds or a minute I would suggest to you that you are simply lucky and in the way. I'm not saying that a person cant build some type of model that COULD provide some type of edge...I'm saying that it would take a very high level effort over a significant period of time.

If you like to be in ES for a few ticks and do that repeatedly all day long I would suggest that you identify trend and simply get in the way. Perhaps have your closing orders as resting limits and hit or take as momentum (volatility) comes or goes. If you do nothing but get filled on your resting orders designed to close you could probably hit or take ad post hoc.

Does that make any sense?

I'm just trying the idea that Peter shared in his webinars, take an idea that you have observed and apply it for 2 weeks in the markets, don't change it, stick to it and at the end of the 2 weeks analyze your results.

After completing the Pice Ladder training with JigSaw and Axia Futures, I'm just trying to follow what I have learned so far. Most of the patterns they teach in the Price Ladder course are relatively short term trading(3-10 ticks). I would definitely say it was a surprise watching how these traders trade.

Like you said, I might be simply getting lucky and in the way. But until I fail and see the results myself this will haunt me and be stuck in my head forever.


I can try what you are suggesting, not quite sure what you mean in the last sentence though
wldman View Post
'If you do nothing but get filled on your resting orders designed to close you could probably hit or take ad post hoc.'


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  #18 (permalink)
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Sorry man...

I don't want you to try that...I want you to find what works for you.

I guess a better question for me to ask you is why scalp? Why try to compete in the most difficult arena possible?

There is a fair amount to overcome. Trade expenses and spread for example. For me, on ES. If I give up the spread its minimum 2 ticks. I have a fractional tick in commissions and fees. Say conservatively I give up 2.5 ticks to the spread and trade related costs. It is fair to expect at least 1 tick in slippage on either side unless you are resting orders in the book. So say you have to overcome 3.5 ticks per round trip to break even.

Do you see that and agree, or no?

Break even is now 4 ticks.

I could be missing it, but don't you have to be right almost all of the time and for at least 5 ticks to make 12.50 per trade?

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  #19 (permalink)
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wldman View Post
I guess a better question for me to ask you is why scalp? Why try to compete in the most difficult arena possible?


ALC77 View Post
I've been led to believe that scalping is the quickest way to get profitable.


This should generate some interesting discussion.

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  #20 (permalink)
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Well..



xplorer View Post
This should generate some interesting discussion.

That is a theory that could be debated.

But...wldman does not have the fortitude.

I recognize that my posts today might be a little terse.

The ONLY edge in actual scalping was in that you could be on the inside market executing simultaneously in a somewhat riskless manner.

Scalping is not defined by the "teeny" it was defined by the ability to have both hands in the air at the same time taking 'em in and putting 'em out at the same time. The edge was being on the inside market when "paper" came in. WE ARE the paper, not the trading crowd.

Super short term directional speculation is perhaps the least likely way to "become" profitable. Using a prior theoretical edge is NOT a connotation for small move or short term directional speculation.

The reason most people "scalp" the micro contract is because they do not have a deposit large enough for over nite carry. This is a complete and unmitigated disaster waiting to happen....mostly because it takes time out of the equation. Time is your friend, not your enemy in trading.

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