Anybody a successful scalper?

[David-lee]

To that end, MBTrading has instituted a limit order rebate policy where if you set a limit order that is filled, they will reward you with a rebate that seems to more than cover the commission. This can reduce the trade cost very nicely and might be something for scalpers to look at. But it has to be a limit order not a stop order.

I have a demo with them but never liked the platform, at the time the metatrader platform wasn't working. One of the reasons I never opened an account with them was because even with the tight spread the added commission pretty much gave the same cost per trade as Id get with my current broker, but this new limit order policy has definately got my attention, thanks for the heads up Do you use the metatrader platform, If so have you had any issues with it?

 

[duck]

I have a demo with them but never liked the platform, at the time the metatrader platform wasn't working. One of the reasons I never opened an account with them was because even with the tight spread the added commission pretty much gave the same cost per trade as Id get with my current broker, but this new limit order policy has definately got my attention, thanks for the heads up Do you use the metatrader platform, If so have you had any issues with it?

No, I got the desktop account. I'd like to get the MT4 account but they got some policy change that doesn't allow account openings from my country (Ecuador) and that might prevent me from changing over to an MT4 account. I guess I should be glad they didn't summarily close the account, but I'm just starting to inquire (carefully) about what's going on to see if they will help me. Carefully because I don't want to draw their attention such that they respond by closing the Desktop account because of a "your not supposed to have it" type response.

I use a demo MT4 for charting since the price feed is identical to the feed used for the live desktop, but I do have price gaps in my charts which of course irritate me. I can only assume that the live data server is better maintained but can't speak to that.

Yes, previously MBT charged $4.95 per $100K traded both ways, plus spread (which was low), but that's since been reduced to $2.95 per $100K, and now they do the limit order rebate, which comes out to about a pip, I think, or a bit less, varying with pairs. I guess the new regs for US brokers has forced them to look for incentives to keep clients.

Cheers...

 

[Ruth Berlin]

Hello everybody, I understand the concept of scalping but would just like to know whats regarded as a scalp trade, 5pips or lower, 10pips? It just seems that the odds are against you when the spreads and commissions of the various brokers out there are so high for such small profits. It seems that the only way to scalp successfully is to risk more than your potential profit target due to the inbuilt spread which means that if you lose a few trades in a row it could be very difficult to recover your losses? I suppose the main question is does anybody actually scalp trade profitably because I cant seem to figure it out ?

Hey David -lee, You are right! Scalping can be very dangerous and can cause large loses within a short period. Trades tend to think that because of the "small risk' per trade, they are safe. However, the quick trades and the huge temptation to do another one and another one eventually make it literally gambling. At the end of the day, the scalper finds himself with 100 loses of 5-10 each and no money left in his account. So I suggest that you leave this technique and concentrate on swing trading, especially if you are a beginner. Good Luck

 

[duck]

Trades tend to think that because of the "small risk' per trade, they are safe. However, the quick trades and the huge temptation to do another one and another one eventually make it literally gambling. At the end of the day, the scalper finds himself with 100 loses of 5-10 each and no money left in his account. So I suggest that you leave this technique and concentrate on swing trading, especially if you are a beginner. Good Luck

I'd disagree on the reason it can be dangerous. I'd say it's not because the losing track of so many small trades that's the problem, but the spreads & commissions. Long term traders don't really care about spreads and commissions since in setting up a trade with 200-400 pip goals and/or stop losses, those costs take only a small sliver of winning trades, and add only a tiny amount to losing trades. When scalping for 5-10 pips, on the other hand, those spreads will take a large percentage of each trade so a scalper has to have a much higher winning percentage of trades, or have the occasional winner that runs for big pip profits, in order to cover those broker costs and be profitable.

Manually backtesting a scalp strategy is hard to do because the ask price (the bid + the spread for those watching on TV) is usually not apparent on the screens, as they usually only show bid price, so what might seem like a good scalp strategy looking over historic charts may in fact be a losing strategy once the spread is accounted for. I think low spreads is really important for any strategy though, even long term, as sooner or later a large spread will be the difference between winning a trade and losing one, either because a profit target was barely missed, a stop loss was barely hit, or both. All because a spread was 4 pips instead of 3 or 3 pips instead of 2 or 2 pips instead of 1.

Cheers...

 

[geoffrey]

Re Scalping

Hi, it is 40 - 60 successful. you make 40 and loss 60. you must be extremely careful with it.

 

[WaveRider]

Scalping

It is not wise to risk 5 pips to get 0.5 pips. The spread itself makes the math of this risk reward really against the trader. I have seen some videos of traders doing this but I don't think this is a winning strategy in the long run.

Sive calls them intraday trades. I think this is the best terminology. It seems the best intraday traders make a 2 or 3 trades in a day or just 1 or 2 during the NY London overlap.

1st Strategy: every lull is followed by movement and movement is followed by lull. Wait for the lull to end, then get into the movement as it's picking up. Jump out at the next lull. Simple moving averages can be an indicator for this. Even just your eyes. NY London primetime will almost always have at least one good move a day. Sometimes it's 50 sometimes 80. I caught a 125 move a couple months ago. That's a solid thrust in one direction with little to no retracement. During primetime, the market usually wants to go somewhere. One 30 pip trade and you're done. I'd consider this scalping but many wouldn't.

Weird choppy markets: get away from the screen and do something else. A decisive week or two weeks will often be followed by a sluggish week or three days. These make for sleepy and dangerous intraday trades. Sive often says the market is choppy today, stay out. The market is making up it's mind. Let it.

2nd strategy: wait for a lull, often during the asian session, where the currency is tooling around in 20 - 25 range and you can almost trade in any direction and wait for it to hit if you don't freak out when you get behind. Best to see where the 15 min is going, snap your channel and open a position only in the direction of the 15min. ie. If the 15 min is wandering down, only open short positions. These will usually be good for just 5 pips.

I agree, the risk is lousy on little 5 pip trades. Wait for the right pitch. Sometimes the market isn't sending any pitches. Be happy with your 20 or 30 pips.

If you find anything especially useful on this topic, let me know.

 

[WaveRider]

Successful

By the way, getting anyone to admit they are a successful FX trader is like pulling teeth. In another forum a guy posted his statement results from trading off one minute charts showing he gets near 100 pips a day consistently. Then he said, "I'm successful and I'm not telling you how I do it." Nice. Others say they are successful but when you probe them further they say they are recently changing their method because they've been losing. Double nice.

I am not a successful scalper. I am streaky, but getting better. I'm down for the month but up for the week. I'll gladly share my holy grail here at FPA when I figure it out.

 

[5of7]

Back in the old days when trading futures, scalping was popular because one contract cost thousands of dollars in margin and each tick was $12.50.

So to minimize losses and get more trades per contract most of us learned with scalping trades which were tight stoplosses (to minimize the amount lost), and smallish targets to get more trades per day.

But in FOREX you can trade micros, so why the feeling of having to scalp. Why not put on multiple trades of reasonable target/stop sizes to make it easier to overcome spread and transaction costs?

 

[Eric Alyea]

Every “KILL” take a trophy.

To be a successful “Scalper” (money, not life forms, what’s the difference really), you need a $100,000 (So you won’t MARGIN OUT while riding your bad calls) war chest and be bold enough to go to war, funded or not (Why is the marching song of the French Foreign Legion, which I know the words to going in my head?):
.
You have to sweat at the computer. Getting “ALL” the reports and be totally fluent of the inner circles of politics and who's hands are greasy.
Then “hitting the buttons”, you have to be quick, it is work. Watching for the flow, riding the waves of the charts, sweating the pip (limit) that you hope to clear, so you can get out with a profit. The Walmart theory, make a penny off of every thing but, sell (trade) a million things.
Scalping is hard work.

Every “KILL” take a trophy.

PS. If it Ain’t worth your life (or your bank roll) don’t do it.
I like it.
But I know how to die!

Zen Trading
The rules, From Memory,
#1
Establish the flow of trade that you would like to do for the day, i.e. “Buy” or “Sell”. Stay with that for the day, or if you happen to be stuck with it by not being able to have all your trades closed at the end of the day. (Having all your trades closed at the end of the day is a good goal)
#2
Practice placing market orders. Once the order that you placed has “ONE” pip profit or more, cash the order out.
#3
On Tuesdays and Thursdays you follow rule #1 and do the opposite.

While practicing the timing of hitting at the tops of green candles sells. The bottoms of reds for buys. I try to space things out buy a minimum or 2-4 pips before placing another order. I get’s you so your never afraid to take a profit and if you wait to long seeing you lost you chance. You get to interpret and do what you want, Hence the Zen


Let’s see where did I leave off:





Daily Zen Trading Log June wk1
Week totals
$133,182.81 @ 15:00 6-3-10
$125,383.24 @ 15:00 6-1-10
$ 7,799.57

6-2-10 Wed.
EUR/USD
$126,732.18 @ 15:00 6-2-10
$125,383.24 @ 15:00 6-1-10
$ 1,348.94

6-3-10 Thur.
EUR/USD
$133,182.81 @ 15:00 6-3-10
$126,732.18 @ 15:00 6-2-10
$ 6,450.63

Daily Zen Trading Log June wk2
Week totals
$165.380.01 @ 10:10 6-11-10
$133,180.02 @ 15:00 6-4-10
$ 32,199.99

I must have learned something. I had to call it something. I just changed a few of the rules to make more money with less trades. Practice is still practice. Sorry for calling it Zen money making I had to call it something.

I’m working on writing “Mistakes in practice and how to make your practiced real.”

 

[jpadventure]

I thought that strategy blew two live accounts.

The problem I have with taking small wins is that slippage cannot be accounted for.
5 pips slip is sadly common on exiting, if the target was 20 pips with 10 stop loss work out the percentage of slippage. Imagine it against you.