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Hi, I'll be trading live soon, and I just reviewed my last month of trades. I have a few questions about scalping in general. Im pretty new here, so I'll give some info about my trading style.
I scalp ES only for about 12 hours a day (passively setting up limits). I take about 80% of my trades with limits and the rest with market orders; however, if i take a market order it's usually in the Asian session.
My RR is before spread + commission: 5:4 ratio, but after spread and commission (commish approx 0.25 of a tick) my risk reward is 4:5.25. This sounds perfect seeing as how I've been winning at a rate of 79% right? But no. I've analyzed a month's worth trades (only have good data on a month tho I've been trading longer), and my average winner is at about 2.7 ticks and ofc average loss of 5 ticks (plus commissions). I really want to get the average tick win up to 3, at which point I'd be comfortable going live, as I know for a fact I could be profitable or breakeven at that time. To achieve this goal I plan to tighten my stop loss by one tick during the Asian session and to widen my take profit during us session by one tick. This is to counter the effect of increased and decreased volatility. Ideally it will push me to my goal of 3:5.25 with a win rate of 75%. Right now I'm above the win rate but below the tick goal. A few things I've noticed and questioned 1) a whole lot of impressive traders on here but I haven't found any that scalp. After analyzing it I've found that the margin for error is tiny, and so consistency is everything. But will that consistency carry over to live trading? When spread+margin are such a massive part of it, does scalping really make sense? Do people really do it successfully? 2) I've never seen any scalpers on here account for different volatilities during different sessions, why? Why don't scalpers include commission and spread while looking at their risk reward??? To me it seems sort of ridiculous. Anyways, I'm really hoping scalping continues to work because I don't have the mental patience to wait on trades. Thoughts and any general comments from traders are useful, thanks !
Can you help answer these questions from other members on NexusFi?
I am not sure how your platform fills simulated orders but when I was scalping this was a problem. The platform that I used marked the order between the bid and ask for sim fills. In real life that is not what I got. I have many trades where the fill alone wiped out any or most of the profit. If your platform allows I would configure it for the most adverse fill and slippage. Also consider transaction costs. I made money scalping but over time the cost of a trade versus the profits encouraged me to change my technique.
Well, it's time to step into the light. I've lurked around BMT and futures.io for a couple of years now, wandering through the journals of others, sampling indicators, hearing stories of gains and losses and feeling quite at home. I came here …
(If you are an Elite Member). They are mostly on crude but some ES.
Also agree with the post above. if most of your orders are limit fills on sim a large number of those are probably fills you wouldn't have got live, unless price went through the level. Especially on the ES though it isn't as thick as it used to be. Requiring such a high win rate and with such a small profit factor between your profits and losses means only one or two extra losses when live puts you under water.
Patience is always important either for swing or scalp. For me, if I saved time on watching the trade develop, I would need to spend more time waiting patiently for the best set up.
