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Who makes more money. Scalpers or Point Traders
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Who makes more money. Scalpers or Point Traders

  #131 (permalink)
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PandaWarrior View Post
I think indicator based scalping is break even at best. It can take a long time to figure this out though.

Basically if you are scalping 3 ticks with a 3 tick stop, your win rate needs to much better than 50% sustained over time. GS and other large firms spend millions staying ahead of the curve. A discretionary scalper surely has the deck stacked well against them.

My win rate is under 40% and I'm making money. But it took me longer than I care to admit to figure this out.

In short, the holy grail is as simple and complex as letting your winners run and cutting your losers short. You need to win 3-5 times more than you lose. Otherwise your just spinning your wheels.

Sorry.

For myself, I think I agree with PandaWarrior. I've scalped euro/usd, TF, and CL for several years. Had some great days, some fair days and some bad days. Had many winning weeks as well. But over several months time, I never made much profit..and I consider myself a very good scalper. By scalping, I mean anywhere from 5 to 10 ticks on average. But a few months back, I switched to a system where my profit target was at least 3 times greater than my stop. I trade only Cl now, and it lends itself well to this system. My results are way superior to my scalping..and less stressful as well. No more white knuckled trades..with my adrenaline and Blood pressure going through the roof. I do very little in the way of trade management now..except maybe breakeven when I'm up over 20 ticks.
However, If there are people out there that can trade huge contracts and make 5 tick scalps all day long, then more power to them. For me, the 3:1 risk reward ratio is working very well.

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  #132 (permalink)
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lancelottrader View Post
For myself, I think I agree with PandaWarrior. I've scalped euro/usd, TF, and CL for several years. Had some great days, some fair days and some bad days. Had many winning weeks as well. But over several months time, I never made much profit..and I consider myself a very good scalper. By scalping, I mean anywhere from 5 to 10 ticks on average. But a few months back, I switched to a system where my profit target was at least 3 times greater than my stop. I trade only Cl now, and it lends itself well to this system. My results are way superior to my scalping..and less stressful as well. No more white knuckled trades..with my adrenaline and Blood pressure going through the roof. I do very little in the way of trade management now..except maybe breakeven when I'm up over 20 ticks.
However, If there are people out there that can trade huge contracts and make 5 tick scalps all day long, then more power to them. For me, the 3:1 risk reward ratio is working very well.

How funny that I am on a similar path. I have been trading order flow last 2 years and whole this year doing tape reading. Naturally I leaned to small stops and targets. I tried 10 tick target1 and 20 tick or so runner with 6 tick stop. It makes sense from pure tape reading point. But sometimes it just does not work no matter how you try to twist it. Depends on volatility, liquidity, participation level. It was too hard to adjust to market state constantly, even harder for managing trades. Now I work on using larger stop like 15 tick and two targets based on market structure and price action, volatility. And no break even or stop trailing. Only sensible targets with 1-2 RR for 1st and 2-4 RR for second.

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  #133 (permalink)
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Cl moves in 30-50 tick legs. You should consider that as a minimum. Trust me, you'll be glad you did.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #134 (permalink)
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PandaWarrior View Post
Cl moves in 30-50 tick legs. You should consider that as a minimum. Trust me, you'll be glad you did.

I focus on dax and cl. But I dont take a trade on the other point of the swing, I wait for absorption level and momentum pick up, so some of these ticks will be spent. I look for 1st target to be hit on first move my way and finance the second half. Break even for this method is a way to remove any chance of winning as it retests entry usually few tumes. I try to get first target hit before the retest with a sound tape entry.

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  #135 (permalink)
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lancelottrader View Post
For myself, I think I agree with PandaWarrior. I've scalped euro/usd, TF, and CL for several years. Had some great days, some fair days and some bad days. Had many winning weeks as well. But over several months time, I never made much profit..and I consider myself a very good scalper. By scalping, I mean anywhere from 5 to 10 ticks on average. But a few months back, I switched to a system where my profit target was at least 3 times greater than my stop. I trade only Cl now, and it lends itself well to this system. My results are way superior to my scalping..and less stressful as well. No more white knuckled trades..with my adrenaline and Blood pressure going through the roof. I do very little in the way of trade management now..except maybe breakeven when I'm up over 20 ticks.
However, If there are people out there that can trade huge contracts and make 5 tick scalps all day long, then more power to them. For me, the 3:1 risk reward ratio is working very well.

Just my 2 cents, but as for me its very difficult or even impossible to read order flow at which thin markets like 6E and CL. Did you learned from anybody to use order flow for such instruments??
Because as usual such techniques are used for ES, ZN, ZB and Eurex..

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  #136 (permalink)
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yafed68 View Post
Just my 2 cents, but as for me its very difficult or even impossible to read order flow at which thin markets like 6E and CL. Did you learned from anybody to use order flow for such instruments??
Because as usual such techniques are used for ES, ZN, ZB and Eurex..

Most of my earlier scalping with Cl and euro/usd didn't rely as much on confirmable order flow indicators. I used price action setups and learned to gauge immediate market momentum merely from hours of screentime, observing certain patterns that would regularly occur. Also, I found that there were specific times of the day for a particular instrument, where a decent move was most likely to occur. So for me, my best results were achieved when a combination of certain price setups occurred along with the particular type of market condition that they worked best in. I learned some invaluable techniques working with "Cyrox Scalping" originally, then incorporating some things I learned with a program called Logical Forex..Neither of these systems relied on order flow, in the conventional sense.

I quit trading euro/usd a few years back because I discovered Crude Oil. The more I traded it, I eventually came to the conclusion that trading for 10 tick profits with 10 tick stops was not the best way to trade this instrument. From my ability to use price action and time my entries on small time frames, I was effectively able to trade it with a 10 tick stop..but I decided to test reaching larger targets. I tried 20 tick targets and 10 tick stops. It worked well, but I noticed the majority of my winners would at least go on for 30 ticks. That's when I came up with my current system of 30 tick target, 10 tick stop. I sim traded it for over 3 months with excellent results. Now, live trading is showing it will continue to work. Again, if I hadn't learned to use price action from scalping, I could probably never trade cl with a 10 tick stop. It's not easy, believe me. But if I widen my stops, I definitely lose the benefits of my risk/reward ratio.

I do like an indicator called Tick Strike for order flow. It really shows when orders are coming in fast and volume is huge. It has a meter showing various strengths and it has a ticking sound that indicates heavy buying or selling pressure.
I also use Time and sales set to a filter of at least 3 contracts and I use the simple ninja trader Up Down volume indicator on 1 minute and 15 second charts. Sometimes you can see volume start spiking on the 15 second chart..way before the 1 minute gives it's reading.

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  #137 (permalink)
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New poll posted

Why do you scalp?

Total votes: 238
 


The majority of traders on futures.io (formerly BMT) are scalpers. I'd like to discuss why. Please vote and comment.

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  #138 (permalink)
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I would like to add "because i found scalping to be the most comfortable method according to my personality as trader".

I used to trade (profitable) daily charts and do day trading (with price action and volume profile) but i never felt comfortable with leaving positions open even when i had placed my stop. I always felt like "there has to be a way of knowing faster when i'm right or wrong".

I always kept my distance with scalping methods because of all people saying scalping is not for beginners, something that now i understand and consider to be true. Before deciding to do scalping i spent a lot of time studying order flow while still trading bigger timeframes, so, trading bigger timeframes gave me the feeling and the general knowledge about how the markets behave and scalping gave me the confidence to shot.

I don't do it because i would like to become a one day rich, in fact i trade small positions and only take 3 or 4 trades per day.

My 2 cents.

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  #139 (permalink)
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difficult to vote. it depends what you're trading (stocks, options, futures etc). in case of futures trading, I would need multiple choices:

- it's the lowest risk
- it's the most profitable

but it shouldn't matter because both are proven facts


Last edited by Silvester17; July 26th, 2014 at 05:41 PM.
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  #140 (permalink)
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Big Mike View Post

I am in the minority on futures.io (formerly BMT), I don't scalp. I tried that a few years ago and have spent the last couple of years unlearning that behavior and returning to longer term positions, which I find not only more profitable but also far easier to manage.

Mike

I agree and I am a real minority here, I imagine, because my long term holds last not days or weeks but usually months and in many cases a year or more.

I find such trading more relaxed and less pressure/more life. I can, once I review/resettle my portfolio, ignore my holdings while I go somewhere or do something and expect to see my holdings have increased as a total...sure one or two stocks may of failed but usually the ship moves forward. It is also why I like playing decent dividend paying stocks.

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