OK, sorry to be peppering this thread with posts, but I just noticed that, as of now, the second-highest vote tally (after "I don't scalp") is "It's the lowest risk".

I am scratching my head over this. True, if you never carry a trade "overnight," you never face a big gap opening, or bad overnight news, etc. And as a short-term guy (now), I can see that... except for the fact that today, "overnight" is all of from 5:15 PM to 6:00 PM Eastern US time for equities contracts, and similarly for other contracts. There's no overnight risk because there's no "night" in "overnight" any more. (Weekends excepted.)

My view is that trading highly leveraged futures contracts with a short timeframe is very risky, and it's an inherent risk resulting from the choice of the vehicle, the leverage, and the short timeframe. The short timeframe could not be exploited without high leverage, and leverage can cut both ways, very quickly, and does.

One of the frequent posters on futures.io (formerly BMT) (I'll post who it is when I can find it) has a quote from Dr. Steenbarger in his signature, to the effect that the market must always ultimately reward risk. And it does. But only if you're one of the survivors, which is the big problem.

We know -- it's almost a cliché -- that most new businesses fail. There's a great deal of risk in starting up something new. You are saying that you can make it in a competitive market that already has a lot of established participants. When people wonder why most traders fail, I think it's the same answer, and it's very simple.

But some new ventures succeed, and I don't think just by chance (usually), and the same principle applies to trading. Risk has opportunity, but if anyone thinks there is opportunity with low risk, I have to disagree. There is such a thing as an edge, and it may shift the probabilities in your direction.... But this short-term trading, whatever you call it, is not less risky. The risk may be manageable, but it's part of being in the markets.

Bob.

Your talking about @josh.

I believe some people are trading a certain way only because they were told it was better -- and they've never proved that to themselves to be either or true, or in my opinion - most likely false.
Mike

Yes..and the "evolution" of scalping has evolved as a result of brokers lowering the industry standards in terms of margin and account minimums ($1,000?).
How could this lead to good behavior among traders? How could this set good precedence for the new generation of traders? I assume that brokers want their customers to do well in the long run.

I have seen good scalpers, but their methods are programmatic, they have servers on the exchanges (dedicated, not VPS) and they are capitalized. This is not for the masses in my honest opinion.

Matt

THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

I believe the bigger issue is that traders take a very micro look at the market, and they believe that a small time frame along with a small stop loss and small profit target (ie: scalp) are lower risk. They don't examine it from a macro perspective where I believe that would be disproven.

This is especially true when evaluating the cost of commission and slippage on a macro scale vs micro one.

The traders that are funding those $500 or $1000 accounts (and then going bust) are exactly the ones that I am trying to reach and educate. Same is true for all the traders asking about lower margins. Generally this is the audience of less experienced traders that are scalping and blowing up their account. Naturally, that is not always the case, but I believe if you read the 250k+ posts on futures.io (formerly BMT) as I have (mostly), you will find it to be overwhelming in the majority of cases.

Mike

I don't disagree and I dont need to read 250K posts to see the reality out there. The real question for me is this: What has changed that evolved to this behavior and such a belief system? I have been a broker way before futures.io (formerly BMT) evolved and I can tell you that this "scalper" mentality evolved out of somewhere. It was not there before.

I'm guilty of scalping myself for a couple of years around 5 years ago. It was when I first started trading futures, moving from the world of equities where I was never a scalper.

I believe I started down that path because it is what others were doing around me (similar to me in that they were retail and using NinjaTrader). I listed peer pressure as an option on the poll...

I finally climbed out of the scalping hole and am so much better off for it. For me, it's the resumption of "normal" in my trading career and I look at scalping as a phase. Unfortunately, part of that phase (when I started with Ninja) is also overloading indicators on my charts, using exotic bar types and tiny time frames, etc.

Anyway, I try to leave the debate to others but just make my opinion known.

Mike