Is it me or does this method tend to be frowned on. If so, why? I’ve been studying FX for over a year and have recently started some back testing. I also opened a demo account which has been invaluable. But the thing I seem to be finding, is that even if my signals are all correct, If I’m going for a larger gain (i.e. 20-30 pips) I tend to get about halfway there then it turns on me. I realize this is always a potential risk, but today I decided to set my goals lower…get in, get out. I had 6 winning trades and 2 losers this morning in about 45 minutes with a net gain of 30 pips. So it seems to me that this isn’t necessarily a bad thing, especially considering that I gross about $200/day at my 40 hr/wk job. Am I missing something?
If that’s the trading style that suits you, go for it.
Only triangular arbitrage type scalping that takes advantage of a possible feed lag is frowned upon by brokers.
Just doing “quick” trades with short take profits like you are doing is fine.
hey just do what works for you and stick with it.
M2P doesnt take advantage of price feed. It takes advantage of the currency not being in proportion. As in 1USD = 1.05 CAD and 1.05 CAD= 1.20 AUD and 1. 20 AUD= 1.03 USD. If you can find a broker that does triangle trading let me know.
bkr1969 scalping is frowned upon. Its like winning a big poker hand then leaving the table they have little chance of getting it back. Theree is always a bank on the other sid eof your trade. Keep scalping I just scalp and its very profitable. Its the only way I know to make consistent profits. What your missing is trading fulltime. Become a trader and stay at home.
I am defitiely going to keep pursuing the scalping idea. This morning I had 3 trades, 2 of which were 5 lots. All three ended with 5 pip gains so in under 10 minutes I made $750. Not too shabby.
To [B]Bkr1969[/B] :
I agree with Mytwopips.
If you like the scalping method, go ahead.
But be warned, it is an experts only area.
It is very important that you gain a little more knowledge about how to correctly use this method.
Money management with scalping is critical.
You cannot afford to get this part of your trading method wrong!! :eek:
Go to post #325 on page 33 of my thread and read on from there…
http://forums.babypips.com/newbie-island/10812-joy-candlestick-trading-learning-experience.html
It should give you some special insights.
Experts only not really but you do need to practice money management
bkr1969…what timeframe you use? and how many pips are your TP and SL?
[B]Wrong Pablopluto.[/B]
The attrition rate of scalpers is huge.
[U]In fact, I wish to take back that statement that I made encouraging Bkr1969 to go scalping.[/U]
[U]I now say to Bkr1969 to stay away from scalping.[/U]
Volatility is random and prices can and do, go anywhere. You can’t get the odds in your favour (risk/reward and win/loss) and you will lose over time.
What draws people to scalping - greed.
Traders actually think that with no effort and with a small bank account, they can make $umpteen a month, scalp 50 pips each day and then they end up disappointed as the market gives them their reality check.
Scalping is a great story and so are Donald Duck comics but I don’t actually believe this sort of activity brings success in the long term.
There are a lot of scalping systems advertized out there.
None of them work in the [U]long term [/U]and the person who really profits is the seller of the system.
I do not outline a scalping system on my candlestick thread.
A correct risk/reward ratio is effectively impossible to produce.
I trade the 1 and 2 minute charts so I suppose you could define it as scalping as my typical trade lasts only a few bars.
I personally like scalping… But I also have been learning the markets for awhile now… I scalp patterns others use as entries for there systems. So I get in get out and don’t wait for those trades that turn on you. If you want to scalp, DON’T forget the education. YOU HAVE TO KNOW what the currencies are going to do next, to a degree.
I like to trade naked as they say. Very empty charts. Look for support and resistance areas large numbers. 20,50,80, 00. then candlestick patterns. My goal is to be able to trade with this only. Money management is critical in all trading. Of any kind stocks forex etc…
There are numerouse threads on Babypips with great strategies to teach these. Tymen’s is one I like ( But got bogged down with indicators for me though they don’t call them indicators).
Jame’s 40 to 100 pips a day is also very good… and My favorite for learning the market movements is Alternative Techincal Templates. Which was a spin off of Jame’s thread… By Tess , Tony , Joceylyn and others.
Good luck to you. But all advice is good advice and has merit…
PS. Tymen ; Read your post no. 6 on your thread.
Hi Kennth,
Do you find that 80 is more significant than 75, and 20 better than 25?
Thanks
Something important to note here is that what is constantly referred to as “scalping” on this forum is not scalping as the wider industry understands the term, either in the manipulative or spread arbitrage senses of the term. This is day trading.
That’s an important distinction because “day trading” is a purposely vague phrase, whereas “scalping”, besides being something entirely different, is much more precise. Day trading, as the name implies, is a duration-focused approach to trading that comfortably makes room for any number of strategies. Trades can last minutes, or hours, or days on rare occasion. That is all at the discretion of the trader.
The question then, is: what strategy do you employ? If you cannot describe it because “it” isn’t defined, then you ought not to day trade at all. But if you can: what provisions does the strategy make for money management? As Tymen and Ken have made mention of, this is an indispensable concern. If you do not trade targeting with at least a 1:1 W/L ratio, you are courting eventual disaster - that much is certain.
What is so difficult about trading for single-digit pip rewards - and the reason so many are so disdainful of trading for such small gains - is attaining at least 1:1 (1R): e.g. a take-profit of 5 pips requires a stop loss of 5 pips (this does not account for spreads/commissions).
With a little experience watching a fast market, any novice trader will notice a 10 pip range on just about any pair is highly negligible. Which will be hit first: TP or SL? A few SLs rather than TPs hit in a row trading large position sizes relative to your account’s net asset value and you may be on the ropes. Thus Tymen’s overtures about “scalping” and long-term success being mutually exclusive.
As you can see, the main concern is money management. Responsible MM can be your undoing; but trading without stops or with too wide a stop with large positions on can also break you. Trading for a few pips with large position sizing is not for the faint of heart, and is very difficult to sustain. If your day trading MM parameters are wider, then success will come more easily: the more immediate “scalping” gratification will not be there, but longevity is more probable.
In all of this, keep burned onto your retinae: above all else, protect your capital.
I watch the candles as they form and struggle for there goals… On my platform Dealbook there feed is off by 1-2 pips so all the 00 can be 98 or 102. I have found price action is always a area anyway, 20 could be 25 or such… I normally trade the 50 and 00 . Unless hsitorically the others come in play. As in a Trendline or a Support/ Resistance area… Then I will trade the others.
It is a very personal thing to trade these Bounces as you have to gauge the action. Sometimes with fast moving action ( longer candles) the price might overshoot the area and never bounce… Sometimes with slower action ( short candles) it will fall short a pip or two… This can mean a better trade as it wanted to turn there. Hence the struggle to get to that price.
In summary you need to learn the action, and nothing is written in stone. Try thinking like your opposition. (the other traders). When they hit that area ( relieve I am OUT ) Then we get the bounce. If it is strugling they throw in the towel early , why it doesn’t always hit the price spot on.
Anyway this is my take on trading large numbers… Trendlines and S/R levels are some what the same. ( Because who we are trading against are looking to either get in or out there)
Good trading to you…
Andrewunknown is correct of course, I sent a e-mail to Oanda once regarding scalping. There reply was they do not allow it. But there definition was, any means that employees electronic manitpulation to provide a means to profit from electronic lag. Not a exact quote. In other words if you had 2 feeds 1 faster than the other and used some sort of ultra fast entry system… you could take advantage of the situtation. But this is not trading at all, and should be illegal…In my humble opion…:o
Well, first of all, I do not feel I’m being greedy. If anything, the exact opposite. I have studied forex for the past year, and of course there’s always more to learn. What I’m doing is simply using signals for longer term trades (actually Cowabunga’s system with EMA crossover, RSI and Stochastics) and waiting for a clear entry signal. I trade this approach on 15 min charts. I get in the direction of the signal, but rather than wait for a 30-40 pip gain, exit with 5-10. Yes, I have to keep my stops in the 10 pip range due to short term volatility (and I don’t forget the bid/ask spread either), but I’m finding a much higher percentage of wins this way so the extra on the losses still works. I’m sorry if this is contrary to everything you learn about a 3:1 reward vs. risk ratio, but If your wins outweigh your losses 3 or 4:1, you should be able to set a 1:1 ratio for gain/loss exits and still come out ahead. Believe me, I am well aware of money management issues and I will not do this stupidly. I am still very new in the demo account phase so this is just one thing I’m trying for now. I appreciate the advice and the links to futher educate myself.
Oh…FYI, I did one trade with this approach yesterday morning (around 11:00am EST) and exited with a $300 gain (trading 5 lots). Nothing else looked even remotely good at that hour so I stopped that approach for the day. I did get into a AUD/USD long trade a couple hours later that netted 100 pips, but that was using a different approach on daily charts.
Is scalping for EVERYONE? NO ITS NOT
Is it reliable? Yes
Is it frowned upon by those who doesnt see it as True trading? Yes
Is there people who make a comfortable livin off it? YES
Hi Tymen,
scalping is trading just a any other system but you dont look for pips over 10 pips. you can still scalp on a 15 min, 1 hour charts. Scalping is very short term trading not a guess on volitility or direction. If you think that you are horribly wrong. Scalping can be applied to any system the risk reward ratio is different. Scalping is done on small time frames because there are more opportunities for entries. Tymen it is harder to acquire 30 pips than 9 pips. That is the basics of scalping to trade smaller time frames to provide more entries. As some people trade 3 hour charts is no different a scalper on a 5 min chart. They can use the same system and i can come to the conclusion the scalper will have more pips at the end of the day. As for longevity/attrition of scalpers I find it vary rare for scalpers to quit. Only scalpers I know that quit are ones who dont want to sit in front of a computer all day. Tymen I know baseball isnt that popular in Oz. I can relate swing/day traders and scalpers to baseball. Swing/day trades say to themselves triples and homeruns only count. Scalpers look for base hits. If everyone on the team can get on base everytime your gonna get more runs. If you keep aiming higher its harder to get it. Consistency is the key. If your consistent then you [U]WILL[/U] be successful long term with any trading system., I feel if you cant do it you shouldnt say others cant do it consistently. No one well I havent sold any system on scalping. The cowabunga system can be used for scalping. Greed is not a factor when you are not trying to get the max pips you would like. Its obvious to me that you dont feel scalping or short term trading is a reality. As for no effort a scalper is in front of there computer daily the swing traders on 4 hour charts looks in on there trades from time to time so tha no effort theory is not valid. It doesnt matter what you recommend in your candle stick thread you have a prejudice against scalping. A correct risk/reward is foolish. There are bad good, ok, and better. that depends on your succes rate. The reason you cant see a risk reward ratio is because scalping is not swing trading. Any technical based system that can be used on any pair is suitable for scalping. This prejudice against scalping comes from someone who hasnt even tried it is funny to me. Tymen please if you dont know what your talking about or think that short term trading is inferior get both sides of the arguement then form your opinion.
It is far better to be a steady incremental player who wins than one who goes back and forth.
Tymen tell me why you think scalping is unsustainable?
Also taking 8 pips profit how is that greed when before I seen you recommend a take profit if 35 pips? One of these says to me take more
Its true what they say I guess “Those who cant do, Teach”.
Hi Andrew,
I do not mean scalping in taking advantage of the price feed delay.
Again, I see that the most prolific posters in there
are in fact the most unsuccessful traders.
Successful scalping can be done and it also
has nothing to do with greed. It isn’t for the
weak or the incompetent however. And it
certainly isn’t for someone with less than $50,000
in their trading account either. In order to be successful
with scalping, you need to look for 5 PIP wins only, no
more and no less. And scalping can only be done if
you have the balance I mentioned and if you can
trade full-time. And trading no less than 25 standard lots
per trade. You enter the trade like everyone else
using whatever tools you are great with. Except you
take the win as soon as 5 PIPs goes your way. Take
the $1,250 win it gives you, and look for another entry
point. Do this 3 times a day and you are done. This
is the real world scalping, not the convoluted BS you
read in books written by failures.
Oh, to add more… sure you can scalp with less balance,
just adjust the lot size traded. Just don’t scalp using
nano lot sizes. Pointless. Risking over 50% clearly is a
bad idea but if you know what you are looking for, and
you see a fast running trend, you can enter and even
risk 50% knowing you will exit after getting 5 PIPs uptick.
And this usually happens within 1-5 minutes. Certainly
easier than sitting on a trade for 3 days.
Finally, I find it laughable that someone is putting down
scalping based on the scalping system that is sold
on clickbank. haha. Oh, and there are FX trading
systems that are sold that are realiable? Huh?
I hope you all know this by now, only failures sell
systems. And that is how they make money; not
from trading. And of course you cannot chart out
the reliable risk/reward, most often a win is taken
even before one single candlestick is created; even
if trading on a 1 MIN chart. What kind of a crap comment
is that? Now, if there was a 1 SEC chart, yeah.
Volatility is random and prices can and do go anywhere?
Oh really? Not when I see a fast running trend where
the price is just heading in one direction fast… look
for it, you’ll see it often on most pairs. And it sometimes
goes on and on for 30 minutes or longer or the entire
day even. You don’t need to overanalyze to make a
decent wins in trading. And sorry to disappoint but
trading is not some random volatile event. Then go
gamble instead.
[B]To ECN scalper [/B]:
Your negative reputation points says it all!! :mad: :mad: :mad:
I could just add some more, but it is a waste of using my mouse.
As the second longest serving member on this forum, I do not have to defend myself.
I have better things to do than argue with a load of gibberish.
My post on scalping stands.
I have yet to see you prove that you are actually making money.
There are several philosophers on this forum just now.
I try to be helpful with my posts.
And [B]bkr1969 [/B]is searching right now, so I will spend my time usefully trying to give some guidance based on my experience.
Again, I see that the most prolific posters in there
are in fact the most unsuccessful traders.
So how would you know?
. This
is the real world scalping, not the convoluted BS you
read in books written by failures.
A self-rightous post written by someone who is totally arrogant.
The market humbles arrogant people!!
I have never seen ECN post anything useful that would help anyone. Only thing he’s interested in sharing is angry putdowns.