Scalping (USE AT YOUR OWN RISK)

[RahmanSL]

Ehhh, I just entered 5 trades about 1.5hrs ago all at 0.2 lots and closed 3 of them (eur/usd, gdp/usd, & aud/usd all at “Buy”)at USD50, 68, & 56. Is this any good and also can this be an indication of what to expect in real live trading??

Once again, I entered when the tick chart shows it was at high points.

I have not yet closed 3 other positions which (right now) shows USD64.20, 8.85, & 10.62 profits (eur/jpy, eur/aud/ & eur/aud).

Both times I traded manually (I seldom pre-set entry points)….and once again, I set the SL at a distance, but left the TP alone.

 

[RahmanSL]

cowmadagan ,

I just closed the other 3 positions (eur/jpy, eur/aud/ & eur/aud) at USD84.10, 97.57, & 95.80.
Geezzzz, can this happen in real live trading??? I would have made USD451.47 profits with just 6 trades!...and doing that while posting comments in FPA at the same time.

Hmmmmm, interesting! Am I ready for real live forex trading??????

 

[Music Man]

One way to limit scalping risk is by multiple time frame confirmation. If you put Bollinger Bands on your chart and switch back and forth between several time frames, and all of them are looking like the price action is at the peak or the valley -- at either the upper or lower BB line, then you are more likely to win.

If you add Fib lines as well, you know where your TP and SL may need to be. On some time frames, you may see the BB range fitting right in between 2 Fib lines. This is when you can get an idea where your TP and SL ought to go.

It's not foolproof. The price action can walk up the BB band line and pierce the Fib support/resistance, if it switches to a trending mode. However, this is usually because of some news event, or perhaps a big player making a move. That accounts for about 30% of price action. The other 70% is bouncing between the BB lines, where scalping is (I think) most effective.

MM

 

[cowmadagan]

Ok, it sounds like you're using the strategy of having close t/p and far s/l, and that's a bad idea. Make sure that one bad trade won't wipe out a week or more's work.

I don't have enough information to know if you're ready or not, but I do have three things I can say.

1. Now that you've made $451.47 in 6 trades, could you handle losing $451.47 several days in a row? Losing streaks WILL happen eventually.
2. Have you been using your demos for months, and backtraded your strategy, including seeing and understanding situations like Dubai or the Dec. 09 NFP reversal?
3. Make sure you go in baby steps, so when you do eventually go live, risk as little as you can per trade at first. Don't think that because you stayed afloat using standard lots for a month that you can handle standard lots live. Try nanolots or microlots to see if you can actually emotionally deal with losing real money before you move up.

If you hurry, you'll look back and see that the only reason to hurry things is if you want to hurry up and lose all your money.

 

[clem699]

cowmadagan ,

I just closed the other 3 positions (eur/jpy, eur/aud/ & eur/aud) at USD84.10, 97.57, & 95.80.
Geezzzz, can this happen in real live trading??? I would have made USD451.47 profits with just 6 trades!...and doing that while posting comments in FPA at the same time.

Hmmmmm, interesting! Am I ready for real live forex trading??????

Cowmadagan has told you almost everything besides,you only said you left your stop loss at a long distance but did not state how long in terms of pips value vis a vis its percentage based on your intended capital.Ordinarily,if the stop loss value is not more than 5%,2-3% is better,then you may have developed a good system which also included risk management.

For instance,if you intend to start with micro/nonalots with say 300 USD,do not risk more than 15USD maximum on a trade.Since you said 0.2lots,then your stop loss should be 75pips.

If this is what you did and you have that result,fantastic.

 

[RahmanSL]

Hi Music Man, to be perfectly honest, at this point in time, I have not much idea what are “Bollinger Bands & Fib lines” are, let alone how to set them. But I presume I’ve to learn what they are and how to utilize these tools.

Cowmadagan, I appreciate your advises and frank opinion whether I am ready for live account trading. I still have to learn how to calculate risk percentage against my available money margin. Right now, I am shooting in the dark and “hoping” to hit something. I have tried Demo trading with microlots (o.o1 lots), but I don’t have the patience in small gains. This is indeed my biggest worry as I might tend to gamble instead of trading in live account. This is the “gambler” side of me which can become rather reckless and even risking all for more or nothing. Losing USD451.47 several days in a row?? Well, for a couple of days, maybe, but I don’t think I’ll allow that to happen in live trading as more than likely, I would have closed any positions with more than USD50 loss at any one time.

Clem699, I don’t know what was my SL factor as I just press the button to set that either much lower or higher than 20 pips and set them. I think I have to learn how to set the SL properly and correctly.

Below was what I traded yesterday with profits:
All in 0.20 lots trade:
1) eur/usd: Type: Buy – Price: 1.3897 – S/L: 0.0000 (forgot to set) – T/P: 0.000 Closed: Price: 1.3922 – Profit: 50.00
2) eur/jpy : Type: Buy - Price: 125.52 – S/L: 124.69 – T/P: 0.000 Closed: Price: 125.90 – Profit: 84.00
3) gbp/usd: Type: Buy - Price: 1.5881 – S/L: 1.5771 – T/P: 0.000 Closed: Price: 1.5915 – Profit: 68.00
4) aud/usd: Type: Buy - Price: 0.8823 – S/L: 0.8770 – T/P: 0.000 Closed: Price: 0.8851 – Profit: 56.00
5) eur/aud: Type: Sell - Price: 1.5751 – S/L: 1.5829 – T/P: 0.000 Closed: Price: 1.5696 – Profit: 97.57
6) eur/aud: Type: Sell - Price: 1.5752 – S/L: 1.5849 – T/P: 0.000 Closed: Price: 1.5698 – Profit: 95.80
One thing I have managed to learn from my +4 months Demo trading is the ability to walk away, after making some profits, when I think the market might turn against me.

I like trading WTI Oil, and yesterday was one of those days that I especially like as I bought in (with Demo account of course) at USD72.700 to 72.840 of 1,000 barrels each with trades. No SL & TP was set as I expected oil not to fall below the USD71.50 p/barrel.
Now these 4 positions show USD7,070 profits but I’ll not close them as I believe Oil will go to USD81 p/barrel.

That’s the gambler’s side of me taking over and which wiped me out 3 times before of over USD250k of virtual money.

Thanks for all your guidance and help guys!

 

[cowmadagan]

Awesome Rahman, your self-awareness is your best protection. What you need to do is honestly pretend that you only have, say only $100 or $50 or some small amount in your demo microlots.
It's better if you choose your 'pretend' account balance by some scale of what you actually have to risk. (I personally trade with ten percent of my savings as margin in my brokered accounts)
I remember recommending to someone else to set up a competition with a friend on a demo account rather than going live, but if you don't know anyone that has the time and prerequisite or lack of skills then you should make a bet against yourself that constitutes a financial sacrifice. For example, If I'm in the red after a month of aiming for a 1% profit month on month, I'll buy my girlfriend/wife/friend/gimp something that's worth enough to make me grit my teeth.
Sorry for the gimp thing...
Bollinger bands are easy, as they in actuality bear a lot of similarity to SMA lines. BB's simply draw three lines meaning that 'if' the price hits an outer one, it's far more likely than not that it will bounce to a mid line.
Fib lines only bear any relevance if you pick the right peak or what I call inverse peak (valley makes it sound flat). If you have practice, then I expect you'll get used to finding it, but you should know that Fib lines are meant to show likely 'pause' prices in the price action. That makes them good spots to take profit, or you can place stop losses slightly beyond them with some reassurance that the market will need more conviction to blow through them than an arbitrary number of pips like 30.

It's really important to place your stop loss where there's some kind of graphical proof that people are getting involved at that level.
A good spot is a few pips below a really long flat part in the graph..

 

[munnuru]

Cowmadagan.....i agree scalping is not boring..even am scalping from 2 months making gud profits(90%).....As am making profits my brokers sent me an warning email that scalping is not allowed.....
and I registered for another broker...
yesterday which for AUD news which was a 100 pips news...
i setup stop sell.....but it didnot get take at that point instead it executed my order after 70pips...i would have been in a big loss..

so what my question is which broker r using as you said you are scalping from past 4 months...and aslo is order executed immediately.......

i believe scalping is gud way to earn quick money....

 

[cowmadagan]

I just finished reading your trades, and there are two things I have to say.
One is that I believe that commodities trade in patterns that are a combination of both more than one chart, and more importantly a combination more weighted on producers (cartels in some cases), importers, and exporters than the banks and traders. If you want to get really into it, I also expect that the hedge funds (like credit default swap dealers) have enough fingers in enough pies to have more clout than banks and are able to affect prices on a close to even keel as producers and exporters, but I think conspiracy theories are giving the benefit of the doubt as far as the intelligence and foresight.
My point is that maybe price movements in commodities are predictable, but in my opinion they aren't predictable short term.
If you're hooked on commodities, it could sink your account.
Maybe you saw that I'm biased against them because I was on the wrong side of gold on Monday for the last time, but I should say that it still only hit me for 5% of my account (fortunately I made 2.5% back today) but that's still far more than I should've allowed it.
I only say only because I want to show that I'm not jaded from being wiped out, but because I've had too many up 2%, down 3%, up 4%, down 3% situations with commodities.

People still trade commodities successfully, but that's because 1) they have bigger stop losses than I'm content with, and 2) they aren't as hell-bent on trying to max out the profit of their account as I am.

 

[cowmadagan]

munnuru,

My broker hasn't earned my loyalty enough to pass it along, so I'd recommend using the strategy of reading the contract before you deposit cash, deposit a small amount of cash (maybe 1/10th of what you intend to keep as margin, unless you're loaded and want to trade with enough to buy a house in the country; where I'd recommend depositing no more than $2K US as an absolute max. [go ahead and call me a socialist, but I feel that if you can throw more than $2K US to the next potential Madoff as an unsuspecting investor then it can be better spent]) trade and then pull out some of your profit.
If you're loaded, then you really won't care about the cost of the transaction...the point is, can you get money from your broker.
Next, both with strategy and investment, work in baby steps.
Sure, your broker will pay you your request of $100USD...will they do $1000?, $5000?
(ok, I wish getting 5K back from my broker was something I had to consider, but withdrawing more often is a good idea in many aspects.)
Some brokers advertise the fact that they allow scalping and news trading, but there's one thing you can be sure of:
There's no way you can do news trading or scalping (in the sense of holding positions for only a matter of seconds) unless your broker has serious infrastructure, which means they have a whole whack of dough and have spent it on servers and operating systems, because they won't be profitable.

Have you ever met someone who opens a business to give away their money in return for less than they make?