So i know for sure that the style i want to learn is scalping but i am having a hard time on choosing which one will be a better option Forex or Stocks. Which one can be more profitable if all strategy, risk management, trading psychology will be implemented in a very disciplined way. Now starting capital will be a no problem for me since i have at least of 50K to put in a trading account but i don’t plan on doing this since i am a beginner. I just mentioned the capital since stocks are more capital intensive than forex. Thanks in advance for any help that you can provide.
Yes that is the idea. I plan to devote at least 6 months to a demo trading platform. I know TRADINGSIM platform i can use for stocks (market reply with level 2 data) but they dont offer forex in there, just futures and stocks. Any1 know of any similar platforms that i can use to practice forex? Also the reason why i asked is because i see a lot of day trading communities like investorsunderground, myinvestingclub and madazmoney, guys in there start their account with 50K and make some insane amounts of profits scalping, like i am talking about >2K a day. Is this achievable with scalping forex or the pairs dont move to many pips in one day to allow for these kind of gains? thanks in advance for any help that you can provide!
Depends on what you call scalping , if looking at 2 or 3 pips its a mountain to climb long , better looking for decent day trade moves of around 30 pips on forex a bit safer or even better if new look at end of day trading on 4hr and day charts
Thanks for your reply. I am reading a book now “understanding price action - Practical Analysis of the 5-minute time Frame” by Bob Volman and i am very interested in this kind of trading. I think with the 4hour or anything on a bigger time frame would bore me to death. So with this being mentioned do you think i should start the scalping journey (5 minute time frame) with forex or stocks. Thanks in advance.
I have done this a long time and to simply look at the 5 min chart would be death by 1000 cuts, as you cannot see the bigger picture. Nothing wrong with day trading but scalping breeds over trading which is an account killer. If wanting more action base your bias on the higher time frames and enter on the lower then you have a chance . I try and show this in my vids as I believe mindset is a major factor in trading and if you have a itchy trigger finger more chance of taking a bad trade.
Thanks for your response GT. I know for sure that is necessary to look at higher time frames as well just to make sure everything lines up and if so this would produce the higher probability for a successful trade since a lot of eyes would be watching the same thing. I like to look at Weekly, Monthly, Daily and if all looks good would like to use the 5 minute time frame as a decider for me in term of entries and exists. But the reason why i asked this question above is to just find out different opinions about if this style of trading would be more applicable to forex or stocks. I don’t want to end up devoting 6 months into something that is not worth it in terms of scalping because there are not enough moves daily. I know in terms of forex scalping i would have to focus on the most volatile pairs such as EUR/USD, GBP/USD, USD/CHF, and USD/JPY since they offer the tightest spreads and they move a lot. But lets just say 1 year from now with consistent simulator practice i got it all down, strategy, trading psychology, risk management etc, with a 50K account how much of profit should i expect daily, monthly? would this be more profitable than day trading stocks with a similar account size? I know i may be focused on the wrong thing for now (money) but lets face it, everyone who is new wants to know about this so bad. your help should make my decision about what to trade (forex or stocks) much easier. Once again thanks in advance for your help!
I can see your point and you just hit the nail on the head, as looking at the wrong element , money. If chasing money , I am sorry to say it will be a hard mountain to climb. The market will only give what it wants , you cannot force your will on the market and say I want 50% return sort of thing. Best advise I can give is focus on the plan & method you choose and the money will look after itself based on position size. Might be worth checking some of my vids as I touch on this a few times and explain how drilling down time frames work
Its like asking; is this style of fighting best used on an architect or a software engineer.?
What stock are you going to trade?
What currency pair are you going to trade?
If you are scalping, I am assuming that you are going to trade one stock or one currency pair consistently.
Volatility varies from stock to stock and currency pair to currency pair. Some currency pairs are more volatile than some stocks and possibly vice versa.
Put a 5 minute stock chart next to a 5 minute chart of a currency pair then ignore the instruments label and price axis…
What is the difference?
You can adjust the volume traded to make the instrument more or less profitable.
Can I just ask what is the reason why you want to scalp as opposed to say short term swing trading?
It never ceases to amaze me why newcomers want to start in a formula one racing car rather than on a push bike.
Not trying to be antagonistic but in my humble opinion beginners would be better off served taking a longer time frame approach and get profitable on that first.
The reason why i want to scalp instead of short term swing trading is because i want to be in and out of positions for the day. I would not like to hold overnight positions and get exposed to unpredictable events or anything that could happen. That scares the crap out of me. I mean this can happen in day trading (scalping) but i think its a bit more manageable.
Low float mid cap stocks with recent big volume. And no, if i go this route i most likely will not trade just one stock. I would probably have to run some finviz scanners every nights to figure out what i want to trade the following day and build a plan. Take advantage of parabolics, weak open red to green, overextended charts, beat up charts…just trade the first couple of hours 9:30 - 11 am and close 3-4 pm.
Forex i would just probably stick to EUR/USD, GBP/USD, USD/CHF, and USD/JPY.
I am not sure which route to go…forex or stocks. i have to do some more reasearch and hopefully it will be easier for me to decide.
It’s a worry for many but one totally unfounded. If it was true Warren Buffett would be a nervous wreck.
There are less reasons to be anxious on a daily chart than on a five minute one.
The longer ranges between highs and lows on a daily mostly take care of any news shocks
On a five min chart there is so much noise that the slightest news event over the wires can affect your position.
Your right that sometimes real news shocks can affect your position longer tern but thats trading, there is no certainty in the business. I admit I’m totally biased though.
I really feel comfortable taking a longer term approach than the scalpers and genuinely don’t see it as a profitable way to trade for beginners
Of course if you want to be cannon fodder for the market or want to provide a living for your broker through untold number of commissions that’s up to you.
There are some great scalpers out there but honestly I think most would advise you to avoid it at least until you can master a longer timeframe.
Demo trading for 6 months? Don’t be surprised if you spend a much longer time on there than you anticipate.
All the best though. You seem ready with a very positive mindset.