I think I know why as I just went through it myself.
When I started on a practice account many months back I knew next to nothing - so if it was going up I bought (duh!) and if going down I sold (duh!)
sounds obvious but what I found myself doing later on (and ouch on pips) was all this theory started making me “see” reversals in trends often - of which I was convinced!
Its an insult\shame to my IQ to look back and see how often I bet against trends for a period of time…
but as a reply to original post - do what works for you - after all its your money… but what I´m finding is that its easier on the lifestyle to trade larger periods and maybe return to the screen hourly…
I myself am not a scalper, over the last few months i tried it to begin with and i know i can do it, but to be honest i don’t really like it for myself, i was able to generate good pips at the right time, but i prefer trading hourly, which does mean i hav to let my trades go over night sometimes, but to be honest the hourly eur/usd set up i use now is much more my style than scalping, its just down to personalities. If you prefer scalping go for it, im sure there are lots of scalpers are great at scalping but awful at trading hourly or daily or weekly trades. I know myself anything more that daily i would not like myself.
But like all the veterans here say whatever works works for you, stick with it and go for it! Thats what im doing and my strategy is working so far.
For lifestyle got to agree here with Luigy. As i work during the day the hourly trades work for me.
After losing my shirt, I went back to demo trading and learned how to be a longer player! Sorry… with a thread title like that I simply couldn’t resist! LOL!!!
Mist… Scalping in its true form is ‘in and out’ for a few pips. But in retail it can mean anything from perhaps 5 - 25 pips i.e. in and out in relatively short trades probably off the 5m or 15m tf charts. It can be done no doubt but the broker stats of shorter tf trades are … err… not good!
The true definition of scalping is capturing the difference between bid, and ask.
In retail forex, that is impossible, so technically, no one that thinks they are a scalper really is one.
But the term “scalping” has turned into a generic term. There’s no hard fast description, it’s just a loosely used word to describe quick turn around trading.
Scalping is fun! I love the fast paced environment. I always have, even in past jobs. I tried both early on and putting on a trade to leave on for hours, or even days just isn’t for me. I like to be able to sit down, and get my work done for the day. When I’m finished, my p&l is realized, so I can finish my day not having to think about any open trades. Everyone has their preferences!
If you scalp, #1, your entry MUST BE PRECISE, #2, You MUST make EACH TRADE COUNT, meaning, Bet the house, because ultimately, Referring to #1, Its not risky in reality.
Well, LOL, actually, in reality, if your wrong, your in trouble, in a way… Your Stops MUST BE TIGHT,
I personally try to Break even as fast as possible, THEN, see what happens. Pay close attention to momentum, or ADX or something like that, to look for Exits…
But really, short term scalping like this isnt advised. It does sharpin the brain, because your sooooo focused, so in the future, you kinda see things forming, even if your tradin 5M tF…
Yep, I thought I’d be a swing trader, but seem to have strayed into the scalper camp. Love the pace of it and you really do get a feel for the character of a currency pair. Though there are plenty of surprises to keep you on your toes.
Do most of my scalping on my iPad with Forex.com’s app. Handy when on the go and on dull meetings
Have you tried the trade interceptor app? I also like the GFT app. Lots of options. I started with forced.com’s app, and then sorta ‘graduated’ to trade interceptor.
I know I’ll be banned for disagreeing with an FX-Men Honorary Member, so this may be my last post First of all, capturing the Bid/Ask spread I don’t think is the definition of scalping. Scalping is going for “relatively” near targets, and taking more of these shorter term trades. Many who say they are “scalpers” are very much ill-equipped to be successful. There really isn’t any software available for the retail trader, which is specifically for close scalping. I had to write my own.
Most “scalpers” are “chasers”. They try to chase the market’s moves, buying in an up move and selling on a down move, and it just this chasing which means they will be whipsawed and will be doomed to lose. A successful scalper cannot win by “chasing”, but must be able to anticipate and deal with short term turns so is usually entering slightly “counter trend” to get good entry pricing. (Buying from Sellers, and Selling to Buyers, but this can be dangerous.)
Without highly specialized software, retail traders should not contemplate being “scalpers”. They just can’t win. Chasing is a loser’s game. Trend following over longer periods of time might be a winning game, and that’s probably what most traders should try to achieve.
I am able to Buy the bid, and Sell the ask, or at least not pay commission. This is with MB Trading, but there are some liquidity issues which make that difficult and, again, precision order control is required, otherwise, again, you can’t win.
I advocate Incremental Scalping which involves Entering and Exiting positions in partial lots, taking any profits which are available and spreading risk so that price adversity can be tolerated as part of the trading plan. Anything which minimizes Stop Outs, and allows the scalper to tolerate price adversity while waiting for the trade to move in his/her favor.
I enjoy scalping because I am much better at predicting what will happen in the next minute, than I am predicting what will happen in the next hour. BUT MOST TRADERS SHOULD AVOID ATTEMPTING TO SCALP.
Banned? Hardly. Disagree all you want. Feel better?
Now, explain this: If you can buy the bid, and sell the ask on MB trading, how does that make my definition incorrect? You just did what has been long known as “scalping”. If you didn’t have to pay Manhattan Beach the commission, you would have made money, and still very well may.
So, short of being extremely pedantic, how did you disagree?
Me? Pedantic? Anyway, first of all, scalping may include arbitrage and such extreme strategies at the limit, but that isn’t my definition. First of all, the concept of the Bid and the Ask on an ECN doesn’t have any precise meaning anyway, but I don’t want to be “pedantic” and get into that subject.
When I say I can “buy the bid”, or “sell the offer” at Manhattan Beach that’s not strictly true. First of all, it isn’t true because the idea of “THE bid” is a convenient fiction. BUT, I can avoid paying Commission, and I can achieve a price which is inside “the spread”, even though the spread itself is a convenient fiction, as I said…
But the real point is that if you are going to “scalp”, then your transaction costs must be minimal. By using MB Trading’s “pay for limits” I achieve Credits for providing liquidity on their ECN, and there is NO commission at all. However, realistically, I often make the credit on entry and decide to pay commission on exit, so that Commission costs are ALMOST neutral. If you focus your efforts on the fact that you CAN trade with no commission, you lose out on opportunities which could be grabbed with marketable orders, where you pay the small commission of about 0.4 pips. You can be “penny wise, and pound foolish” always trying to get the Credit for limit orders and losing out on quick fills.
By keeping commission costs low, or neutral or even getting a net credit, this obviously helps scalping because if I take a 1 pip GROSS, then I can get a 1.5 pip NET in EUR/USD due to the Credit. But my objective is not arbitrage, or simply trying exploit the Bid/Ask spread in this way, because it isn’t how money is made.
I’m a Position trader, who takes positions incrementally, and takes profits incrementally, using cost basis averaging, but my targets are often just a couple of pips. But I do hundreds of trades, rather than just a handful of trades and the average target distance is probably in the range of a few pips.
But in order to do this, I have to know the micro trending of the market with a high probability, and that’s where the Analytics come in. Without that information, attempts to trade like this are doomed to failure.
But I’ve spent 10 years of my life developing software and analytics to do this, so I’ve paid my dues.
Most traders are well advised NOT to try to beat the market through precision or speed. I don’t really play that game either. I’m a scalper who tries to beat the market through Analytics and knowing where the micro trending probabilities lie, plus using a cost basis averaging approach that means NO SINGLE DECISION is all that important. The entire position management strategy is what is important, and the ability to tolerate price adversity which will happen, despite my attempts to avoid it
I might stay “in a position” for an hour, but while I am doing that, I am making continuous small scalps because I break my position sizes and price entries into small portions, and use cost basis averaging to tolerate price adversity, plus frequent profit-taking when a portion of a position goes to profit. Anybody could use those techniques, even without the analytics.
BY THE WAY, one of my complaints about the EUR/USD ECN at MB Trading is that what I call “wholesale liquidity” is very low, almost non-existent. If I go Best BID, I can sit there for a minute and never get hit. Even moving well into the spread, I’ll still not get hit. This is very suspicious to me… Now, wouldn’t you expect that some market order would be sold against me if I’m best bid? So, I’d say something is wrong, and the liquidity situation necessary to buy the BID and sell the ASK is somehow lacking on their ECN, and I don’t fully understand why. I don’t think all of their order flow is being matched against their ECN, but just thought I’d mention that, since that’s the only major drawback I have found to using MB Trading as a micro-scalping brokerage.
But see, that’s just it, and you still didn’t disagree…
The term “scalping” originated long before forex was around as a trading tool. It was coined in equities trading, and done by deep pocketed dealers. No, you, I, nor any other retail trader can ever get successful buying the bid and selling the ask, because regardless, we will still have a spread issue somewhere.
As I said in my post you “disagreed” with, scalping has taken on a generic term to mean any short term, or small profiting trade.
Yes, on re-reading your post, we do agree. Your statement that “The true definition of scalping is capturing the difference between bid, and ask.” was what I was initially concerned about, but you’ve shown this was a legitimate historic usage. Anyway, hope the interaction added some value to readers as they grapple with the meaning and appropriateness of “scalping” in their own trading. H.
First of all, capturing the Bid/Ask spread I don’t think is the definition of scalping. Scalping is going for “relatively” near targets, and taking more of these shorter term trades. Many who say they are “scalpers” are very much ill-equipped to be successful. There really isn’t any software available for the retail trader, which is specifically for close scalping. I had to write my own.