Scalping ES for less than one point

November 19th, 2014, 06:54 PM

It is OK to scalp ES for less than one point per trade?
Brokerage fees will add up but the wins will offset the costs...
Also aiming to make 3 or 4 points per session is achievable?

November 19th, 2014, 07:12 PM

hirtop

It is OK to scalp ES for less than one point per trade?
Brokerage fees will add up but the wins will offset the costs...
Also aiming to make 3 or 4 points per session is achievable?

Throw in slippage, limit orders not filled at time target,and the scalps gone wrong and it doesn't sound as appealing.
But as you say if your win % is good enough then you could override your brokers fees.
One appealing thing i find about the scalping concept is that you limit your exposure to the volatile moves.
I scalped well on SIM but in real time it was much more diffulcult.
I find order flow trading appealing as it focuses on short term moves but lets the runners develop.
Kind of like a hybrid scalping methodology.
There are some good vids here about order flow.

Free [AUTOLINK]Tape Reading[/AUTOLINK] and [AUTOLINK]Order Flow[/AUTOLINK] Training Materials

Plus good vids on this forum if you search em.

November 19th, 2014, 07:22 PM

hirtop

It is OK to scalp ES for less than one point per trade?
Brokerage fees will add up but the wins will offset the costs...
Also aiming to make 3 or 4 points per session is achievable?

Your chances of taking 3 to 4 points on the ES with less than 1 point per trade are slim to none, unless you are a very seasoned scalper and if you were you would not be asking this.

Remember that with commission and spread you are starting over 0.50 a point in the hole, not to mention covering your losers. Tough to make any money with that kind of handicap.

November 20th, 2014, 12:34 AM

"less than 1 point " implies a profit target of 2 or 3 ticks

given that, what would your stop loss be on the trade ?

the larger your average stop loss, the greater your win% will have to be.

For example, lets say you use a 1:1 risk:reward profile and try for a 3 tick profit target with a 3 tick stop loss. In this case, your average winning trade nets you 2 1/2 ticks of profit after broker commissions and exchange fees. And your average losing trade costs you 3 1/2 ticks (including comm & fees). So in this case your winning percentage would have to greater than 60% to show any measurable profit.

Taking this one step further, let's say your trading 1 ES contract per trade attempt, and you can produce a 60% win rate with the 3 tick profit target:3 tick stop loss strategy. In a typical trading day perhaps you take 10 one lot scalp trades netting $37.50 (=$187.50 net profit - $150 net loss). So to achieve your "3 or 4 points" profit per day goal, (3 ES points = $150), you would need to trade a minimum of 40 contracts per day (where 40 contracts =$150 net profit per day / $3.75 net profit per contract). So you will have to figure out how many valid trade setups you see in a typical trading session, then work that number into your equation to figure out how many contracts per trade would be required to net out $150 per trading session.

Scalping ES for less than one point

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Scalping ES for less than one point