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

  #1 (permalink)
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Who makes more money. Scalpers or Point Traders

Ok dont want to over complicate this question, assume trader is profitable and manages Risk to Reward etc, we all know a scalper is usually 1to1 or 2to1, guys trading bigger time frames are 1to3 or 1to4. Only referring to day traders not holding for days, weeks etc. Who makes the most $$$$$ ?

Im not finding much as far as reference articles but Im looking for ranking of these traders and their styles. Im posting something to start us off. Any and all links greatly appreciated

http://online.barrons.com/report/top-financial-advisors/1000

I know this has been discussed many times and i understand the pros and cons just wanted to see if anyone had real data. I know in my link these traders have hold positions, just something I threw out as a beginning link


Last edited by Rad4633; October 15th, 2012 at 11:51 PM.
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  #2 (permalink)
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  #3 (permalink)
Identify Evaluate Execute
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Answer
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Hi, as far as retail traders go, the larger your targets and stops the higher the probability of profitability in my opinion and experience. Unfortunately few retail scalpers truly comprehend how direct overhead (slippage and commissions) will slowly bleed their accounts dry. Here is an example in this post comparing scalping with slightly larger targets.

https://futures.io/ninjatrader/23778-autotrading-slippage-compared-replay.html#post271841

Cheers
DJ

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  #4 (permalink)
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Answer
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futures.io (formerly BMT) poll a couple months ago

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I am not sure focusing on profit is really the best way to measure things. You probably don't buy a car based on its top speed, and in the corporate world you probably don't take a job solely based on salary. There are other things to consider.

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

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  #5 (permalink)
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Big Mike View Post
futures.io (formerly BMT) poll a couple months ago

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I am not sure focusing on profit is really the best way to measure things. You probably don't buy a car based on its top speed, and in the corporate world you probably don't take a job solely based on salary. There are other things to consider.

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

lol, I was going to mention you in this thread but didnt, yes I know your opinion which I dont disagree with. Your right with it being more than just the money, ie. I like scalping ticks to 4 pts bc i can sit down and trade in mins and be done for day, where as if I have to wait for areas to do business it takes longer more thought is needed to "predict" big target 7-10 pts away, you have to take retracement heat on longer moves,also i dont like leaving trades live while Im not at pc and with my schedule I would have to on longer runs.

But what I want to know is what traders are doing X number, ie. the trader that made 60mil scalping currencies, or trader doing 80mil holding. Info like this is hard to come by. One might ask why would a person want this info. Trading is my business and if I want to increase my profitability then I look at others that have achieved what Im looking to do in todays market.

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  #6 (permalink)
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Rad4633 View Post
One might ask why would a person want this info. Trading is my business and if I want to increase my profitability then I look at others that have achieved what Im looking to do in todays market.

I understand. But the problem is, you are not them.

I mean the general rules of trading are simple, almost all the big traders will agree - cut your losers quick, let your winners run. Don't add to a bad trade. etc. Beyond this, every traders style is unique to them and is a very personal thing. Copying someone else's methodology is not likely to offer you much success.

So personally I don't care that John made 60 million scalping, and Fred made 80 million swing trading. What I care about is how Big Mike made his millions And that is not going to be copying John or Fred, but instead creating my own path. Just like John and Fred did not copy someone else, they made their own way.

Mike

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help?
1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first.
2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses.
3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make.
4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance.
5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers.
6)
Help using the forum? Watch this video to learn general tips on using the site.

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  #7 (permalink)
Identify Evaluate Execute
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I couldn't agree more. My golden rule is I will never put on a trade where the cost of doing business (slippage and commission) is greater than the house odds of an American style roulette wheel.

The wheel has 35 numbers and 2 zeros so the cost of my trade (commissions and slippage on the stop) cannot be more than 5.7%. To be able to achieve this based on my typical winning percentages the minimum targets and stops are:

Stop 30 ticks
Target 1 30 ticks
Target 2 60 Ticks

This will ensure I do not exceed 6%.

I know that if I start trading smaller targets the odds are turning drastically against me to the point that the odds of winning over the longer term are virtually zero. Now of course using much larger targets such as this swing trade here the overhead cost is just over 1%. This type of trading approach means I am working smarter and not harder. This is what I'm trying to gravitate to for all trades.

https://futures.io/traders-hideout/23779-day-trading-support-resistance-levels-e-mini-s-p500-futures-2.html#post271989

My background as a licensed CPA brought me in contact with many business owners who got into trouble financially. The common theme was many allowed their overheads to spiral out of control whereby their sales were simply insufficient to support their bloated cost structures. Some survived through drastic cost reductions and many had to close down. I remember one example where a business owner spent $30k on a Persian rug which meant he couldn't make payroll for that month.

The point is trading is a business and overheads (commission and slippage) must be kept under control or the trader will, like any business have cash flow problems and have to close down. The problem is many traders continue to employ scalping strategies blowing up account after account blissfully unaware the impact of slippage and commissions.

Cheers
DJ

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  #8 (permalink)
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Big Mike View Post
I understand. But the problem is, you are not them.

I mean the general rules of trading are simple, almost all the big traders will agree - cut your losers quick, let your winners run. Don't add to a bad trade. etc. Beyond this, every traders style is unique to them and is a very personal thing. Copying someone else's methodology is not likely to offer you much success.

So personally I don't care that John made 60 million scalping, and Fred made 80 million swing trading. What I care about is how Big Mike made his millions And that is not going to be copying John or Fred, but instead creating my own path. Just like John and Fred did not copy someone else, they made their own way.

Mike

I agree, I have NEVER followed the same path as the majority. Hence my questions on futures.io (formerly BMT) I get what your saying. i dont know John who made 60mil scalping but I do know John who makes 500k yr and i do know Fred who did 80mil last yr. Im not wanting to copy someones method, i was wanting to see if there was a ranking,articles etc out there that read 750 Johns that made 500k to 1.5 mil scalping and 2300 Freds that made 4 to 400mil trading for pts.

I was always told its never a dumb question unless you dont ask it.

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  #9 (permalink)
Identify Evaluate Execute
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Rad4633 View Post
I like scalping ticks to 4 pts bc i can sit down and trade in mins and be done for day,

I think that is good in theory. I mean look at the typical ATR on oil over the last few years for each 30 minutes of the trading day. 4 ticks on oil when the ATR for each 30 minutes is over 50 ticks.

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The problem with oil as well if you are in a trade and a gust of volatility rears its ugly head and stops you out you can incur slippage of 5 ticks plus. My average slippage on oil for losing trades is 2 ticks which is quite unattractive. The only reason I can withstand this type of rape is because my trades are few and targets larger therefore averaging down my net trading costs.

This is the beauty of position trading, is you pretty much avoid these issues. Plus when a swing trade goes on, I can go and do something else for the day and have some fun with my kids. If I'm going to be glued to the screen all day fretting about a few ticks here and there I may as well have a day job. Sometimes I wake up in the morning or come back down a few k but the winners make up for it.


Rad4633 View Post
But what I want to know is what traders are doing X number, ie. the trader that made 60mil scalping currencies, or trader doing 80mil holding. Info like this is hard to come by. One might ask why would a person want this info. Trading is my business and if I want to increase my profitability then I look at others that have achieved what Im looking to do in todays market.

How will knowing this information make you a better trader?

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  #10 (permalink)
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djkiwi View Post
I couldn't agree more. My golden rule is I will never put on a trade where the cost of doing business (slippage and commission) is greater than the house odds of an American style roulette wheel.

The wheel has 35 numbers and 2 zeros so the cost of my trade (commissions and slippage on the stop) cannot be more than 5.7%. To be able to achieve this based on my typical winning percentages the minimum targets and stops are:

Stop 30 ticks
Target 1 30 ticks
Target 2 60 Ticks

This will ensure I do not exceed 6%.

I know that if I start trading smaller targets the odds are turning drastically against me to the point that the odds of winning over the longer term are virtually zero. Now of course using much larger targets such as this swing trade here the overhead cost is just over 1%. This type of trading approach means I am working smarter and not harder. This is what I'm trying to gravitate to for all trades.

https://futures.io/traders-hideout/23779-day-trading-support-resistance-levels-e-mini-s-p500-futures-2.html#post271989

My background as a licensed CPA brought me in contact with many business owners who got into trouble financially. The common theme was many allowed their overheads to spiral out of control whereby their sales were simply insufficient to support their bloated cost structures. Some survived through drastic cost reductions and many had to close down. I remember one example where a business owner spent $30k on a Persian rug which meant he couldn't make payroll for that month.

The point is trading is a business and overheads (commission and slippage) must be kept under control or the trader will, like any business have cash flow problems and have to close down. The problem is many traders continue to employ scalping strategies blowing up account after account blissfully unaware the impact of slippage and commissions.

Cheers
DJ

Perfectly worded I couldnt agree more, I understand everything you said which most dont....Being from CPA world, you and I are the same, I have always started my small businesses from the ground up. I was CFO first so Im used to not having a steady income unless I made the funds come in. Maybe alot of people on here come from salary based jobs Idk but a few days ago I had to help out a close friend that was unside down on a bid contract. Made me think of trading everyone says there isnt other jobs like trading. Hummm what about bid work, government, military, education you bid it sign contract and its up to you to build to spec. so you better have margins built in or pass on it,. Sounds like trading doesnt it, you win or lose big with this type of work


Last edited by Rad4633; October 16th, 2012 at 01:39 AM.
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