Palmer's Scalping Journal

*Please DO NOT POST in this journal!*

Hey,

This is the sister thread to my long term trading journal. This journal is designed for scalping trades (my definition is described below). In this first post I will announce and update my:

Trade criteria
Total returns
Completed trades

In the continuing posts I will post my trades AFTER/WHILE I enter them, all of them, and I will include my charting/analysis. Recently I've realized that a lot of my trades aren't met- price never reaches my entry. So for this thread I will only post trades after they have been entered. I realize this isn't very predictive like the 4 Hour thread, but that's the nature of my scalping.

I ask that you don't post comments here, even encouragement, as this is my bookkeeping page. I will open a second thread, "Palmer's Live Trading Discussion" for discussions or encouragement.

Acknowledgement:
See the Long Term Trading post.

Methodology:
This is a tough one, but important so I'll try to be concise.
I review the Monthly, Weekly and Daily charts for major trends. If any one of those three don't agree that suggests a short term reversal (my terminology, not sure if I'm using the words incorrectly). This is perfect for a scalp of 30-100 pips in my opinion. A lot of the "scalps" I take will actually be 4 hour trades with weak or no signals so I can't enter those trades according to my long term trading system (see "Long Term" journal). I am using different criteria to identify trades for scalping, so there's really two layers here. First I identify trades I like using the 4 Hour, Weekly, Daily and Monthly charts on Metatrader. Then the ones with strong signals (1-3 times per week on average) I take using my long term trading system. The ones that lack signals or are really just trend reversals I pass on to this system.

*Typically people look at scalps as smaller 5-10 pip trades. Because I get charged 1-5 pips on Oanda every time I trade scalping trades need to reduce this charge to 1-10% of my profit otherwise it's not worth trading. Keep in mind I only get 50:1 leverage on Oanda, so I can't effectively use a large position to turn a regular 10 pip scalp into a significant profit. In addition- I only have $100 in my account, so again I can't use large leverage to turn small pip gains into profit- the spread will eat up my profit over time.

Trade signals:
1 Hour chart
4 Hour/Daily/Weekly chart with signals too weak for the Long Term criteria
Short term reversals (hours to a day)
Weekly oscillations without entry signals

Trade entry points:
Market entry usually
4 Hour Tunnel take profit points

Trade exit points:
Based on 4 hour tunnel MT4 program.
Retrace points (fib retracements)
Predefined amounts (30 pips, or 50 pips, or 100 pips)

Always update the stop/loss daily!
*Because this is scalping with frequent weak signals the name of the game is minimizing loss.

Money Management:
Leveraged account balance: $500
Actual deposited funds: $100

Risk .2-1% ($1-5) per trade


Date: 4/10/8

Current balances:
__________________Start_____Current _____Total Change
USD________________100______106.06_________$6.06
% Acct Gain___________________$6.06__________%6.06



2008___________
May
$ Gain______________ $4.74
% Acct Gain___________%4.74

June
$ Gain______________ $5.36
% Acct Gain___________ %5.36
July
$ Gain______________ -$3.67
% Acct Gain___________ -%3.67

Entry: 99.7480
Stop Loss: 99.95
Take Profit: 98.95
Position size: .8%
Trade: B

Prediction:

The recent TBH and TBL have set a bounding range- price will bounce between these two until it breaks out (see the 4 hour chart). In retrospect I should have placed a long term trade on the breakout long because the long term trades were indicating that, but because I was viewing this from a scalping term I went with the short term Bearish outside bar signal. You may notice a second trade on the graphs- this trade wasn't triggered. The trade listed here is the actual scalp order that was placed using market orders. Scalping is the only time I use market orders.

The Monthly, Weekly, and Daily graphs show a strong uptrend suggesting that over the long and medium term price will increase.

The 4 Hour chart shows both a TBLHC and a QBHLC. Based on the development of these new support/resistances I believe price will bounce between them, in the short term, until price breaks out. The short term trading signal I am using is the Bearish outside bar, suggesting that price will drop down to touch the new support.

Exit point- the support AND 4 hour tunnel take profit point (55 EMA pink line).

Entry: 99.7480
Stop Loss: 99.26
Account Gain:1.84%
Amount Gain:$9.20

I moved the stop loss up to prevent losses and was stopped out at 99.26. I wasn't keeping track of this so no pictures, sorry.

Entry: 99.744
Stop Loss: 100.05
Take Profit: 98.98
Position size: .8%

This trade is a re-entry of the previous, expecting the same oscillation to continue between support and resistance.

**Correction this trade is from 5/27/8

Entry: 99.7480
Stop Loss: 100.05
Account Loss:-.892%
Amount Loss:-4.46

Price broke out- this I should have seen coming, looks like I need to work on communication between the scalping trader and long term trader.

Entry: 1.9543
Stop Loss: 1.9563
Take Profit: None
Position size: .4%
Trade: B

Prediction:

The recent strong downtrend on the Daily and 4 hour suggest that price may go down in the short term. Based on the bearish outside bar on the 4 hour chart I have set a market Short entry, without an exit point. I don't yet know what my exit strategy on this trade will be because my scalping system isn't defined. I'm working the system out as I trade.

The monthly trend is down, and the weekly is up. I look to the daily for guidance.

The Daily chart shows a strong bearish bar, but not an outside bar.

The 4 Hour chart shows a bearish outside bar with price bouncing off the 55 EMA. This suggests to me that price will drop to at least the first take profit point 25 pips away.

Entry: 1.9543
Stop Loss: 1.9563
Account Loss: -$2.08
Percent Loss: -.416%

Entry: 1.0332
Stop Loss: 1.0365
Take Profit: 1.0290
Position size: .6%
Trade: B

Prediction:

My apologies- I have no records for this trade. Looking back I see I highlighted a possible DBHLC on the 4 Hour chart, and the Daily and Weekly charts both had a strong downtrend at the time. Based on those factors I bought into what appeared to be trend continuation on the 4 hour chart.

Entry: 1.0332
Stop Loss: 1.0365
Account Loss: -$3.15
Percent Loss: -.63%

Entry: 1.9589
Stop Loss: 1.9545
Take Profit: 1.9670
Position size: .6%
Trade: B

Prediction:

I hate to say this but I don't recall why I made this trade. I don't have graphs either.

Entry: 1.9589
Take Profit: 1.9670
Account Gain: $6.53
Percent Gain:1.306%

Entry: 1.0140
Stop Loss: 1.0165
Take Profit: 1.007
Position size: .5%
Trade: B

Prediction:

Based on the TBL I believe price has hit a support, which it broke, and will now descend with the support becoming a resistance. I have entered on what I believe is the beginning of a downtrend.

The Daily and Weekly show a strong downtrend.

The 4 Hour and 1 Hour graph shows the TBL that suggests a resistance because price has dropped below it. In the short term price should drop, but may rebound and test the resistance. If price breaks through I'll be stopped out. My exit point is the second 4 hour tunnel take profit point.

Entry: 1.0140
Stop Loss: 1.0165
Account Loss:-$2.45
Percent Loss:-.5%

I was wrong, but I still believe a breakout will occur. I am currently waiting for a re-entry.

Entry: 1.6170
Stop Loss: 1.6190
Take Profit: 1.6105
Position size: .5%
Trade: B

Prediction:

There is a Qunituple Bar Low (QBL) on the 4 hour suggesting a new support. I have set an entry point below this bar with my take profit set at the first 4 hour tunnel take profit- the 55 EMA. The Daily and Weekly charts show a strong uptrend suggesting this downtrend may not last long if it even occurs. I will watch this trade and move my stop/loss forward frequently.

Entry: 1.6170
Stop Loss: 1.6150
Account Gain: $1.92
Position size: .3%

I moved my stop loss up to ensure profit and was stopped out.

At this point a new account was created, carrying over the previous balance(s) and losses. This is an effort to separate my scalps from my long term trading plan.

Current account balance:$103.97

All trades will continue to be recorded and posted.

Entry: 0.7590
Stop Loss: 0.7605
Take Profit: 0.7555
Position size: .15%

Prediction:

Price will drop in the short term for a moderate reversal (no more than 100 pips) before resuming the recent uptrend.

The Monthly chart shows a strong downtrend.

The Daily and Weekly charts show a strong recent uptrend. These trends suggest that price will continue to uptrend with moderate reversals until it hits a full reversal and resumes the monthly trend.

The 4 Hour chart has a DBHLC followed by a TBLHC!!! (Double Bar High with a Lower Close, and Triple Bar Low with a Higher Close).The DBHLC suggest a signal that the monthly downtrend will win out over the monthly/weekly uptrend even if only for a short while. The TBLHC suggest a new support/resistance (Triple Bar Low) where price will pivot around. The higher close suggest that price is trying to follow an uptrend. I have placed entries above and below this pivot expecting a breakout. I cannot predict which way this trade will go and will post only trades that are actually entered.

For this trade I have set my take profit at the nearest 4 Hour tunnel exit point- a modest 50 pips away at the 55 EMA.

Entry: 0.7590
Stop Loss: 0.7605
Amount Loss:-$1.50
Percent Loss:-0.3%

It appears my stop loss was too close. Such is life. I still haven't refined the system to the point where I have a unified approach to stop/losses.

Current approach: The more volatile the market the greater the stoploss, AND the farther away I put my entry, AND the closer I put my take profit.

Right now I am averaging a 20-25 pip stop/loss.

Entry: 1.0440
Stop Loss: 1.0460
Take Profit: 1.0370
Position size: .6%

Prediction:
** This is a weekly oscillation trade!

The Monthly and Weekly chart show a strong uptrend with weekly oscillation of rising and dropping prices.

The Daily charts shows a much stronger oscillation. Based on these oscillations I believe the price will continue to oscillate in the short term.

The 4 Hour chart shows the Daily oscillations in greater detail. It looks like price will drop soon and resume the oscillation. I have set my entry below the current high, and my exit is above the recent low of the oscillation.

Entry: 1.0440
Take Profit: 1.0370
Account Gain: $10.12
Percent Gain: 2.024%

Woot!