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Trying scalping with a 1000 bucks - Scalping is expensive! 39 replies

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  • Post #1
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  • First Post: Edited Sep 24, 2005 3:43am Sep 21, 2005 2:47pm | Edited Sep 24, 2005 3:43am
Hi,

Pls yours criticism :

my strategy :

I trade only on the USD/JPY with 1.7 pip spread.(fx-day-trade.com)
I take profit between 5-15 pips.

stop loss- I dont use SL , if the position going far againts me I buy the opposite direction and waite .

meanwhile I continue to trade this pair for small profit.

I trade using this method for a week - until now 110 pips profit*10= $1,100
In your post you mention if the position goes against me, you reverse and wait. First, you don't mention how far away the position goes before you cut/reverse it. Is it a specific percent, number of pips, specific loss level. or none? To be a discipline trader, you must establish good money management techniques. Your strategy might be successful in the short run, but long term you will find that your losses consistently exceed your gains, that is not profitable. There are some great books out there that will quantify your trading techniques and give you good management principles. I suggest you study them before you take a significant loss when dollar yen decides to make a big move and you are 'caught'.
  • Post #3
  • Quote
  • Edited 3:28pm Sep 21, 2005 3:17pm | Edited 3:28pm
Quoting fxdt
Hi,

Pls yours criticism :

my strategy :

I trade only on the USD/JPY with 1.7 pip spread.(fx-day-tarde.com)
I take profit between 5-15 pips.

stop loss- I dont use SL , if the position going far againts me I buy the opposite direction and waite .

meanwhile I continue to trade this pair for small profit.

I trade using this method for a week - until now 110 pips profit*10= $1,100
How does one criticise success? yes, but you could have made more money...hmmm...I think your doing ok so far. It's just how do you decide where to reverse/hedge? Do you use breaking levels associated with resistance and support? Or do you just decide enough is enough? Why do you decide to reverse or hedge, not just close? What signals do you use to enter the trade? These are all things that would help someone understand how you are trading and possibly offer advice on tweaking it to try and make better gains.

Of couse, you did have one good week. Let's hope you make it 2, then 3. Consistancy is one of the hardest things to establish. Streakiness will eat your gains as quick, if not quicker than you got them.

Sounds like you're off to a good start. Is this paper or live trading?
What else are you using to determine entry? Or are you just guessing the entry?

I don't have a problem with the lack of stop-loss. I don't use them if I'm scalping. But normally I scalp using candles and Stochastics. Sometimes throw in the Parabolic SAR if I really want to "mix it up" and get crazy!
Capital Preservation is key to long term wealth accumulation
Quoting TRIPLE TOP
I suggest you study them before you take a significant loss when dollar yen decides to make a big move and you are 'caught'.
oh yea...that $/yen pair has got some hops to it.
Thanks for your reply
I decide to hedge using support/resistance levels.
I let the position go against me max 50 pips.

I dont use MA or any indicator just support/resistance and trend line .

the reason I dont close and use SL is because many time the position go against me and after a while turn back to my favor,

Is it sound reasonable ?


Quoting TRIPLE TOP
In your post you mention if the position goes against me, you reverse and wait. First, you don't mention how far away the position goes before you cut/reverse it. Is it a specific percent, number of pips, specific loss level. or none? To be a discipline trader, you must establish good money management techniques. Your strategy might be successful in the short run, but long term you will find that your losses consistently exceed your gains, that is not profitable. There are some great books out there that will quantify your trading techniques and give you good management principles. I suggest you study them before you take a significant loss when dollar yen decides to make a big move and you are 'caught'.
My 1st question is: Are the results you mentioned (110 pips) on a "real- money" account or is it a "play-money" (demo) account? All brokers obviously don't pay attention to demo accounts, but when you start using real money and you are a very short term trader or scalper they make it as difficult as possible for you to trade profitably. (see our thread about broker manipulation)

If you are indeed using real money then congratulations and I tip my hat to you. Keep us up to date on your methods and results.

JohnFX
Yes, I trade on live account .

I'll be glad to up date my future results.

good luck to every one

Quoting JohnFX
My 1st question is: Are the results you mentioned (110 pips) on a "real- money" account or is it a "play-money" (demo) account? All brokers obviously don't pay attention to demo accounts, but when you start using real money and you are a very short term trader or scalper they make it as difficult as possible for you to trade profitably. (see our thread about broker manipulation)

If you are indeed using real money then congratulations and I tip my hat to you. Keep us up to date on your methods and results.

JohnFX
If you're willing to let a position go against you for 50 pips, then I'm assuming you're scalping with the secondary trends?



Otherwise, -50 could turn into -350 in a matter of days.
Capital Preservation is key to long term wealth accumulation
Quote
I trade only on the USD/JPY with 1.7 pip spread.(fx-day-tarde.com)
Hi fxdt,
The url fx-day-tarde.com does not exist. Please, can you check it again and give us the right one? Thanks!
KT
fx-day-trade.com
Capital Preservation is key to long term wealth accumulation
Quoting fxdt
Hi,

I trade using this method for a week - until now 110 pips profit*10= $1,100
A winning week is fine ...... make it a year now and then you can tell you have a strategy.
I've read a lot of negative things on the internet about trying to scalp FOREX. Many say it can't be done profitably over the long term. But, that might not be so true if you go about it in the correct manner. And simple is probably the best way to do it. Too many traders get indicator overload, and we all know that most indicators are lagging, so if you're looking for a quick scalp most times they are useless (such as oscilators, etc.)

I think if one follows the following steps, maybe scalping can be successful. When talking of scalping I'm refering to gaining about 5-15 pips and doing it on a high percentage of successful trades.

Step. 1 You have to have a broker with a narrow spread of preferably no more than 2 pips. Maybe you could get by with 3 pips.

Step. 2 Make sure it is a broker that has straight through passing of your order to the interbank network. Stay away from MM's like REFCO/FXCM who hold on to your order, trade against you and widen the spread in their favor after you open a position, especially if they suspect you're scalping.

Srep. 3 The best place to open a position is when price first reaches good support/resistance for the first time because it will get rejected a high percentage of the time, so you would fade these first attempts at good support/resistance points. If you want to be more conserative, only take scalps that are in the same direction of the overall trend or bias for that day. This should make winning trade percentage much higher. If the trade doesn't go in your favor pretty quickly, get out and wait for the next one. You have to cut your losses quickly.

Step 4. Only trade during the busy periods, such as London 2:00 AM - 5:00 AM or New York 7:00 AM - 11:30 AM. You have to have enough volume in the market to get prices to move.

Step 5. Set a daily goal (in pips). Once you reach it, stop trading for the day. Don't get greedy and end up giving back what you made. Also set a daily loss limit and if you hit it, stop trading for the day.

I know my plan sounds rather simple, but like I said simple is sometimes best. The keys to this strategy is determining good support and resistance points for that day and when to get out and take profits. From my observations good S/R do not get taken out on the first attempt a very high percentage of the time, especially if it is going against the trend. I think taking profits comes with experience, you have a "feeling" when a move or retrace is starting to die out. Fibs. are a possible good tool for this. As for time frames, probably 1 and 5 min. are best for scalping.

Anyone got any ideas or thoughts, feel free to post.

Thanks;

JohnFX
Quoting JohnFX
I've read a lot of negative things on the internet about trying to scalp FOREX. Many say it can't be done profitably over the long term. But, that might not be so true if you go about it in the correct manner. And simple is probably the best way to do it. Too many traders get indicator overload, and we all know that most indicators are lagging, so if you're looking for a quick scalp most times they are useless (such as oscilators, etc.)

I think if one follows the following steps, maybe scalping can be successful. When talking of scalping I'm refering to gaining about 5-15 pips and doing it on a high percentage of successful trades.

Step. 1 You have to have a broker with a narrow spread of preferably no more than 2 pips. Maybe you could get by with 3 pips.

Step. 2 Make sure it is a broker that has straight through passing of your order to the interbank network. Stay away from MM's like REFCO/FXCM who hold on to your order, trade against you and widen the spread in their favor after you open a position, especially if they suspect you're scalping.

Srep. 3 The best place to open a position is when price first reaches good support/resistance for the first time because it will get rejected a high percentage of the time, so you would fade these first attempts at good support/resistance points. If you want to be more conserative, only take scalps that are in the same direction of the overall trend or bias for that day. This should make winning trade percentage much higher. If the trade doesn't go in your favor pretty quickly, get out and wait for the next one. You have to cut your losses quickly.

Step 4. Only trade during the busy periods, such as London 2:00 AM - 5:00 AM or New York 7:00 AM - 11:30 AM. You have to have enough volume in the market to get prices to move.

Step 5. Set a daily goal (in pips). Once you reach it, stop trading for the day. Don't get greedy and end up giving back what you made. Also set a daily loss limit and if you hit it, stop trading for the day.

I know my plan sounds rather simple, but like I said simple is sometimes best. The keys to this strategy is determining good support and resistance points for that day and when to get out and take profits. From my observations good S/R do not get taken out on the first attempt a very high percentage of the time, especially if it is going against the trend. I think taking profits comes with experience, you have a "feeling" when a move or retrace is starting to die out. Fibs. are a possible good tool for this. As for time frames, probably 1 and 5 min. are best for scalping.

Anyone got any ideas or thoughts, feel free to post.

Thanks;

JohnFX
excellent post. i have scalped the sp and the dow for years with good success following this thought process. the only thing i might add to it is you can scalp conservativly by waiting for multiple levels of s/r to line up at the same level. as many of you know i like to call it confluence. jim
Thanks for your opinion -

Could you give more statistics info about you strategy -

1. what is the average round turn per day ?

2. what is the percentage of winning trade ?


Pls also give your opinion to my strategy , what's the negative side ?

- About the broker I work with - it seems that I chose good one, I work with FXDD that act as a broker ( not MM) - ( that's what they say- I hope it's true) . I am also get rebate of 0.3 pips from forex day trade ( fx-day-trade.com) so I trade with a very good condition.

hope to hear from you soon



Quoting james16
excellent post. i have scalped the sp and the dow for years with good success following this thought process. the only thing i might add to it is you can scalp conservativly by waiting for multiple levels of s/r to line up at the same level. as many of you know i like to call it confluence. jim
Quoting james16
excellent post. i have scalped the sp and the dow for years with good success following this thought process. the only thing i might add to it is you can scalp conservativly by waiting for multiple levels of s/r to line up at the same level. as many of you know i like to call it confluence. jim
Thanks for your input Jim, I'll keep that in mind. JohnFX
[quote=fxdt]Thanks for your opinion -

Could you give more statistics info about you strategy -

1. what is the average round turn per day ?

2. what is the percentage of winning trade ?


Pls also give your opinion to my strategy , what's the negative side ?

- About the broker I work with - it seems that I chose good one, I work with FXDD that act as a broker ( not MM) - ( that's what they say- I hope it's true) . I am also get rebate of 0.3 pips from forex day trade ( fx-day-trade.com) so I trade with a very good condition.

Well actually the first day I traded with this scalping mindset was this past Friday. As for my results, they were the following:

1 trade in eurjpy for + 12 pips (short)
1 trade in eurusd for + 4 pips (long)

Both trades were during the NY session

Obviously 2 trades isn't enough to make any conclusions. Also, I would like to point out I am presently using FXCM (real money), which I am presently in the process of dumping. I have been looking at InterbankFX and FXDD, but am leaning towards InterBankFX. I tend to like eurusd obviously because it has the narrowest spread and usually the most volume. I also like eurjpy because it also usually has good volume and a lot of the time it has a mind of its own with regards to trade direction. It doesn't always follow the euro or yen.

JohnFX
[quote=JohnFX]
Quoting fxdt
Thanks for your opinion -

Could you give more statistics info about you strategy -

1. what is the average round turn per day ?

2. what is the percentage of winning trade ?


Pls also give your opinion to my strategy , what's the negative side ?

- About the broker I work with - it seems that I chose good one, I work with FXDD that act as a broker ( not MM) - ( that's what they say- I hope it's true) . I am also get rebate of 0.3 pips from forex day trade ( fx-day-trade.com) so I trade with a very good condition.

Well actually the first day I traded with this scalping mindset was this past Friday. As for my results, they were the following:

1 trade in eurjpy for + 12 pips (short)
1 trade in eurusd for + 4 pips (long)

Both trades were during the NY session

Obviously 2 trades isn't enough to make any conclusions. Also, I would like to point out I am presently using FXCM (real money), which I am presently in the process of dumping. I have been looking at InterbankFX and FXDD, but am leaning towards InterBankFX. I tend to like eurusd obviously because it has the narrowest spread and usually the most volume. I also like eurjpy because it also usually has good volume and a lot of the time it has a mind of its own with regards to trade direction. It doesn't always follow the euro or yen.

JohnFX
think of it like this. you wait for two or more levels of fib ret and/or pivots to land within several pips of eachother. you will have fewer trades per day but you will have a better chance of the "rejection" of price. which is what you are looking/hoping for. two or more levels of res/support (confluence) are far more likely to reject price than one. if you are playing a 5 min chart we havnt even discussed looking for a confirming price action bar either on that time frame or say a 15 or 30. scalping is the best way for newbies to go broke if they dont have a solid trading plan and the patience and discipline to follow it. jim
True, Jim, the more confirming price action you have, the higher the probability the trade will work in your favor. As far as price bars, such as hammers, etc., I feel they are more reliable on the higher time frames, say like 15 min. and up when trading FOREX. The reason for this is because in FOREX you have so many different price data sources which can vary by several pips. Unlike in equities and futures where all price data is coming from one source (the exchange). This difference in FOREX data can cause, for instance, a very nice hammer candle on a chart being fed from one source, where that hammer may not be as well defined on someone else's chart which is being fed by a different data source. This can occur on the lower time frames like 1 min. and 5 min.


JohnFX
nice. each person has their own strategy. that's my opinion.
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