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Mathematical reasons why MOST DayTraders & scalpers fail?

  • #161
  • Aug 13, 2007 8:24pm Aug 13, 2007 8:24pm
Quoting tonyj
Megadave 5000.... You are right in part of your argument. Evidently you are
not a Point and Line Trader...better known as a P&L'er.
No, I am not a point and line trader.

Quoting tonyj
What do you think that number on the chart is...if it's not the price? And what is it
down on the bottom of the chart. It's "time"....Price equals the function of
time. You said it....the run and rise.
I think the number on the vertical axis represents price. I also think the number on the horizontal axis represents time. But I do not think that price is a function of time. I think that price is independent of time, therefore there is no functional relationship.

Take a simple f(x) relationship. Say f(x) = 3x (or y=3x). You know every (y,x) pair on the line no matter what. In this case, y is a function of x (and only x). In this example, y is not dependent on z, or q, or the position of the moon, since they are defined in our function.

If x is 3, y must be 9. It MUST be 9. But this function isn't a time series graph like price/time charts are. You don't plug in 12:00 GMT on 1/04/2008 into an equation to compute the price on 1/04/2008 at 12:00GMT like we did by plugging in 3 for the x-variable to compute the f(x) value.

Like I said before, price and time are plotted on a time series graph, not on a coordinate plane like a function. The time intervals on a time series graph are discrete (i.e. days, hours, 4-hrs, 1-minute, etc), so are the price points (pips). Coordinate planes allow for continuous variables. We do not plot continuous pips as we do not use coordinate planes. We use time series charts.

Perhaps you and I have a language barrier here. You are claiming to be able to plot price as a function of time on a time-series graph using discrete intervals and independent variables. Forgive me if I just don't "get it".

Also, such a function P(t) would be able to perfectly predict the future. It would be a clear crystal ball metaphorically extending "forever". We would be able to call up any time in the future and our function would give us the price at that time with zero error. We could also "back-test" such a relationship by enterring 3:14pm 120,000 BC for "time" and computing the "price" of, say, the GBP/USD. The function should compute to "undefined" since there were no GBPs or USDs in 120,000 BC. Such a function would also be able to tell me the exact price that the GBP/USD will be trading at on my 40th birthday (12/2/2019) at high noon central time. If your "function" cannot do that today, then it is not a mathematical function. There is no such ambiguity in f(x) = 3x.

But, I have been wrong in the past. If some such crystal ball were available, I would surely like to see it, as the moment I laid my eyes upon it I would be seeing the future. At that point, I would not hesitate to eat my words and I would be the first to admit that I was dead wrong.
I desire to be educated further in the P(t) = mt + b ways
  • #162
  • Aug 15, 2007 7:49am Aug 15, 2007 7:49am
Dave: Evidently you've got a lot to learn. I suggest you try to obtain
Kaufmann's "Commodity Trading System and Methods"....and if you can
find the book by J.M. Hurst "The Profit Magic of Stock Transaction Timing".
I'm working on my own book that deals with Cartesian Coordinates Method
and another one I intend naming "Poorman's Currency Trading". Thus my
interest and debate for this section of the forum "Scalping".
Most newbies don't have the capital to trade the market. The irony is that
to do any "High Flying" requires sufficient expertise. Chances that the newbie
has neither the capital nor the expertise. In both of my books I am piously
being adamant, "Stay out of trading the market...you probably don't
belong in it". But if you insist....there is a way. But the odds are tremenously
against you. Odds are that most who read this will end up looking soon for
another hobby.
ciao
Tonyj
  • #163
  • Aug 15, 2007 9:12am Aug 15, 2007 9:12am
Quoting tonyj
Dave: Evidently you've got a lot to learn.
As I said, I have been known to be wrong in the past. My knowledge isn't perfect. I also invited you to explain your price-time function to me. I am still waiting.

Quoting tonyj
and if you can
find the book by J.M. Hurst "The Profit Magic of Stock Transaction Timing".
Yes I am familiar with it. It's just a shame that Hurst wrote the book in a time when not a lot of people were gung-ho about the stock market. Most folks would probably finish his book and only think they read about something relating to stock cycles. What I found most valuable is the technique of displacing moving averages to the left by half their period.

Quoting tonyj
Chances that the newbie has neither the capital nor the expertise.
That's why they call them "newbies" I guess you have to start somewhere, huh? I mean, I didn't know how to run or stand on one leg when I was 8 months old - I didn't have the physically ability to run very fast and I certainly didn't have the coordination or experience. But I tried. And I walked first. And I fell down a lot. Now I can run quite a bit - I made sure today by going for a morning jog. I don't think I'll win any marathons or Olympic track & field events, but then again I don't need to be the best trader in the world to replace the income I make from my 9 to 5!



Quoting tonyj
Odds are that most who read this will end up looking soon for another hobby.
Amen. We agree on one thing!

Tony, when you say that price is a function of time, you are saying that the price of a currency depends on the TIME of day. So, at the close yesterday the GBP/USD was trading at 1.9966 (according to my charts). If price is a function of time, and time alone, then no matter what else happened in the world at 5pm eastern time the GBP/USD was bound to trade at 1.9966 - it HAD to if price is a function of time.

I say different. I think there are lots of things that could have happened that would have put price at a different level. Therefore, price is more than just a mere function of time. It is a function of the aggregate attitudes, emotions, thoughts and actions of all of the traders in the world at that specific time. What if a bomb had gone of in downtown London at 5pm eastern? Or Washington DC? Would price STILL have closed at 1.9966? Unlikely.

A function has one dependent and at least one independent variable. If you say that time is the independent variable, then price is completely dependent on time. Unless you say that price is a function of time and a few other things. Then there are more independent variables (price remains the lone dependent variable). What about this am I not understanding? Help me out. So far you've just told me how ingnorant I am for relying on basic mathematics to illustrate how price does not depend on time in a functional manner. Ok, fine, let's pretend I'm ignorant- I assure you I'm not stupid or lazy. Explain to me how I am wrong. Illustrate to me how price and time have a functional relationship.
  • #164
  • Edited 3:08pm Aug 15, 2007 2:58pm | Edited 3:08pm
Dave:
An important trait of the time-series is its sequential dependence, which
means the values of successive elements in the time-series are somehow
dependent on the values of prior elements. In mathematical terms one may
say that a relationship exists such that P[i]=F(P[i-1], P[i-2]....., P[1])
P[i]....price at time = i
P[1]...price at time = 1
F is.......a mathematical formula combining P[i] thru P[i-1]
Look....don't get bogged down with my definition of P=f(t)...we're making a
mountain out of a mole hill. Of course I couldn't and can't explain my reason
for saying that. My whole premise is that the only truth is the "tick". The
next "tick" makes the tick before it..."history". The market is open for a
certain time. (Again, the word 'time'). The forex market is open 24 hours...
while the stock and commodity market is open a few hours. Consequently,
you get a discontinuous line when it has a "gap". In other words...there are
holes in the line. Y=mx+b is a line....but the market doesn't always follow
a straight line going up or down...and not even side ways. There is a
straight line between two points. On either side of the straight line are your
expontial or logarithmic...so called "curves". To get the slope we have to
get the "points on either side of the "price" as close as possible. The line
drawn between them is the "slope". I look at the market as a "day time"
practice. We humans go by the day....and in the forex market it goes
from 5 o'clock EST to 5 o'clock EST in a 24 hour cycle. The market "opens"
at 5:00 EST and "closes" (I think) a second before the "open" again. So
to me, the most important "time" is the "open". So the first "tick" in the
"open" is the line drawn in the sand...between the 1st quadrant and the
4th quadrant. The whole day can function in only these 2 quadrants.
The next day...the market slips into either the 2nd or 3rd quadrant and
all the days after. Right at the "open"....the "tick" lasts until it is replaced
by the following "tick". "Time" is involved. After one minute you now have
the one minute "time frame". Then the rest of the "time frames"...5, 15,
30, one hour etc. If the "tick" stays above the "open" you are pretty
much in an up-trend. But it is certain that the "tick" will go below the
"open" to establish the "low". It is almost certain that it will go back up
to break the last "high". (One important note: Did and when did the
days "tick" go above "yesterdays High"...if it intends to be an up-trend.)
The only TRUTH is the "tick". It is the "tick" that establishes the highest
HIGH (resistance) and lowest LOW (support) in all the time frames...weekly,
monthly, yearly. But all of this ends up in the 2nd and 3rd quadrant. Thus...
we start to get into cycles. Long term and especially the lower time frames.
It's in the "ticks" that I came up with my "sitting ducks". It's how the
sitting ducks jump back and forth on one roost to another. It's how long
of a "time" do they sit or stay at one particular roost. It's this "length of
time" that determines the "slope".....and the number of "prices" that appear
in the WINDOW. It's when the ducks start to fly that you as a "scalper"
make your move. You can now see why it's so hard to "scalp"....and yet
a newbie with only a minuscule capital has a chance only striving for 5
or 6 ticks above the spread...and then only later for leverage. The real
"scalper" that have appeared on this forum have the expertise. What you
long time traders aren't aware, is that "scalper" will go "long time" if he
sees a chance to do so. He will bring up his stop to break even...and
will then keep moving his stop up, if the market becomes a run. There is
another thing that the "scalper" trades by. He knows by the "running of
the TIME"....from one price to another....and the "past range" of the
"time frame". If he is playing the 5 minute time frame....(depending on
what trend)....he will get out of the market no matter where the market
may be at the end of five minutes.. This takes guts. I think I'm getting a scripters diarrhea...so must end.
ciao
Tonyj
  • #165
  • Aug 15, 2007 3:41pm Aug 15, 2007 3:41pm
Quoting tonyj
Dave:
Look....don't get bogged down with my definition of P=f(t)...we're making a
mountain out of a mole hill.
I was beginning to get the feeling we were doing as such. My apologies

Quoting tonyj
An important trait of the time-series is its sequential dependence, which
means the values of successive elements in the time-series are somehow
dependent on the values of prior elements. In mathematical terms one may
say that a relationship exists such that P=F(P[i-1], P[i-2]....., P[1])
[i]P....price at time = i
P[1]...price at time = 1
[i]F is.......a mathematical formula combining P thru P[i-1]
[i]I added emphasis above. Not all time series data sets exhibit such dependence, others much more so. I'd agree that in regards to trading, price movement to be specific, the data exhibit a gigantic amount of dependence like you describe. Tomorrow's closing price depends heavily on today's closing price. I agree 100%.

Quoting tonyj
Of course I couldn't and can't explain my reason <snip> I think I'm getting a scripters diarrhea...so must end.
ciao
Tonyj
Well, Tony, I asked for an explanation and I got it! I'll have to re-read your post but I think I get the gist of it. What I gather is that most scalpers fail because they don't have the expertise and the knowledge to scalp. Fair enough - but I am curious about something. You mentioned in a previous post about Hurst, Kaufmann, and point-and-line trading. While I'm familiar with Hurst, I am less so with Kaufmann and point-and-line trading. Can you offer any explanation on what these two are and how you use them? I appreciate your help!!
  • #166
  • Aug 16, 2007 5:34am Aug 16, 2007 5:34am
Quoting tonyj
Dave: Evidently you've got a lot to learn. I suggest you try to obtain
Kaufmann's "Commodity Trading System and Methods"....and if you can
find the book by J.M. Hurst "The Profit Magic of Stock Transaction Timing".
I'm working on my own book that deals with Cartesian Coordinates Method
and another one I intend naming "Poorman's Currency Trading". Thus my
interest and debate for this section of the forum "Scalping".
Most newbies don't have the capital to trade the market. The irony is that
to do any "High Flying" requires sufficient expertise. Chances that the newbie
has neither the capital nor the expertise. In both of my books I am piously
being adamant, "Stay out of trading the market...you probably don't
belong in it". But if you insist....there is a way. But the odds are tremenously
against you. Odds are that most who read this will end up looking soon for
another hobby.
ciao
Tonyj
You are right about the newbie not having the expertise. When you finally get to the reality of professional scalpers, you discover the fact that like any professional, we have skills which go beyond our knowledge. I found it very interesting when I tuned into a web-seminar sponsored by CBOT featuring an experienced professional trader who had previously been a floor trader before electronic trading. He trades without charts! Completely by feel. He never uses indicators, and the only charts he uses are daily and weekly. He is a scalper. Lots of short term trades, usually a profit goal of 3 ticks. Go Figure.

I have been scalping for a living for 20+ years, and I do use charts. However, I do not use them like most traders in these forums. Skill, in any profession requires a lot of practice. And the professional usually recognizes fundamental factors completely unseen by the amateur. From what I see, the amateur concentrates on an abundance of technical knowledge. I concentrate on methods to counter the biggest danger to traders: market manipulation. Determining which way a market should go is easy. Determining when and how manipulators are creating illusions is another thing, and it is very, very, very common. Amateurs are clueless. Professionals are aware. Training, as compared to education, takes a lot of time and work, and a lot of money. It is not a good hobby.
  • #167
  • Aug 16, 2007 10:59am Aug 16, 2007 10:59am
Dave:
P.J. Kaufman wrote "Commodity Trading Systems and Methods" way back in
the early 1970's. I imagine you could find a copy at your local library or
perhaps purchase at Amazon. The Point and Line Methodology was created
by Charles Drummond. You will not find any of his books via the normal
book publishers. He published volumes of his works by his personal printing
press. I became his disciple in 1960...and it took me 20 years to understand
it. So I don't know how I would be able to explain it in just a few words let
alone in this forum. I made mine in commodities with Charlie D's "P&L" and
have been financially independent since over 20 years ago. I can try to
explain it from another perspective as well what I discovered. Charles
Drummand is a genius...way above all the market literati that you would find
on the scene....including all those in the past. P&L really starts with the
"pivot point"....same as that used by Peter Baine, Bob Hunt and a bunch
of others. Drummond probably is the first one to come up with the pivot.
The heart and soul of the P&L is the "Dot"....which is the 3SMA of the
pivot point. The R/S used in the pivot point is a line from the daily high
down thru the pivot point and extended out to the next period...which is
"S" (support). "R" (resistance) would be done the same from the "Low"
and extended up. All this is the easy stuff. The rough going is trying to
understand the "LINES" and how to use them. It will contest your mind
.....challenge your "will" to the point of bafflement...and yet it works.
The most amazing factor of the P&L is the "Dot". Take for instant the
EUR/USD. The P&Ler would have been given notice at 1.3775 that the
momentum was turning...but don't "short" until it closed below 1.3781.
Which it did when it closed way below. Had it closed near 1.3781 then it
would have indicated that the market could be entering congestion. It
would be here that all the lines....5-1, 5-2, 5-9, 6-2, 6-6's...come in.
But the most difficult part is understanding what these lines are telling you about the market. Yep....the EUR/USD is on the down trend....but the P&L won't say so until at the "close" today....even though it's appears a trend.
There are only two kinds of "markets"....(trend and congestion)....and
only 5 kinds of trade. (1) run (up or down), (2) end of a run (the Dot will
tell you), (3) congestion entrance (4) congestion action (5) congest exit.
Each one of these are different kinds and ways of trading in them. But all
of this has been plotted before you even get into the market. Like right
now in the EUR/USD you don't do anything except sit back and wait for
the market to challenge the "Dot"....and it will when it will retrace. I'm
not trading right now because I'm working on my book. But with just using
the "Dot"....some time back...trading GBP/USD going short...I made a
bundle. Even though I wasn't and am not now in trying to make money.
I'm going to get off the subject. Look....the stock market is in trouble.
Real trouble....with all the Bubbleonians, the Goldilocksters and their
failure at their Jam Jobs being nailed to the wall. Try to add this book
to your library: "Manias, Panics & Crashes" by Charles P. Kindleberger and
Robert Aliber. In fact...all you on this forum read this book. It's a history
of finanical crises...going all the way back to the Romans. This book will
give you a new modus operandi. It is not too late to get and read the book...
even though the stock market is getting bombed. And what could be
something that has been predicted for years about the USA and its
debt ridden coffers. All of you guys.....try to protect yourself....including
all of you in other countries. If the USA tanks....your country will also
do its dippy-dole. The rooster is eyeing that "chick" doing her soft shoe
dance in front. The same rooster that gargles before he leans against the
fence and "crows".
ciao
Tonyj
  • #168
  • Aug 16, 2007 11:35am Aug 16, 2007 11:35am
A notation from a high frequency trading. Normally an experienced trader is
classed in the Horatio Alger group, telling you as little as possible of what
they really do and talk around the issue. It's hard to do so in such a place as
this forum....especially when it took years to gain that experience. And how
does one do it in a couple minutes? Trading is like hunting the Rhino. You
lift up the heavy gun and you shoot him right in the middle of his head. You
shoot again....and he is still coming at you. NOW WHO IS IN TROUBLE?
ciao
Tony j

ciao
Tonyj
  • #169
  • Aug 16, 2007 12:15pm Aug 16, 2007 12:15pm
Quoting tonyj
Dave:
P.J. Kaufman wrote "Commodity Trading Systems and Methods" way back in
the early 1970's. I imagine you could find a copy at your local library or
perhaps purchase at Amazon. The Point and Line Methodology was created
by Charles Drummond.
Tony, thanks for the overview! I think I've seen point & line explained before, but not to the extent here. I will have to give this a second, more thorough look.

Quoting tonyj
Try to add this book
to your library: "Manias, Panics & Crashes" by Charles P. Kindleberger and
Robert Aliber. In fact...all you on this forum read this book. It's a history
of finanical crises...going all the way back to the Romans.
I'll check it out!

Quoting tonyj
even though the stock market is getting bombed.
The best quote I've read today is, "The market is going down like free beer."
Crazy - the Dow Jones is in negative 300 point territory today even with another multi-billion dollar injection.
  • #170
  • Edited 11:46am Aug 17, 2007 11:24am | Edited 11:46am
Dave:
Now you see what is happening in the currency market with the PPM and the
Fed stepping in to dislodge the "free market". Smith's Theorem asserts that a
selfish price taker competing with others "intends only his own gain, and he
is in this led by an invisible hand to promote an end which was no part of his
intention," (Adam Smith, The Wealth of Nations) namely, a better price for
his customers and an efficient exchange. Capitalism is altruistic, not in intent
but in result. The point on the contract curve (y=mx+b) that the intersection
of "bulls" and "bears" is not necessarily the best point. Smith's Theorem ,
however, does not guarantee social bliss. The EUR/DLS is heading north...
way past (my DOT) because of the Fed lowering the rate half a point. The
exponential and logarithm is on the outside of this EQUILIBRIUM (y=mx+b)...
and it is this fact that 'we as traders' try to take advantage for our own
gain. My argument, at least for the time being, has been that P=f(t). Right
at this moment....the EUR/DLS is at 1.3489. My DOT is telling me that the
market has to close over 1.3485....and depending how close it is to that
point whether it will going into congestion or reverse. So you see how a
trader needs something to alert him to the events and what proposals
are available according to the plan. Again, this could be a result of an
explosion to the down side...and instead of being a reversal it could
continue even though the "tick" is above a point signifing the opposite.
Right now the "ducks" had been jumping back and forth around my 1.3485
...from one roost from another...which is telling me that they will go
soon up or down. It has gone up....if I was scalping I would go with the
"ducks flying up".....it has also established a "trend" for this time frame.
I'm sure that Patrick_Rhodes is using "fast fingers" over on the futures.
In other words....you have to have a plan and stick to it. If the market
doesn't do what the plan says it should do....then it's doing the opposite.
It's not as easy as saying it....all because of our minds.
ciao
Tony
addendum: Again on the EUR/DLS.....yesterday's high has been cracked but not the low. In fact
todays "low" stopped at yesterdays. Today's "open" was at 1.3426....and the market has been all
this time above the "open". Surely....you should know what the market is saying...at least for the
moment, and could be establishing another point. Is it gonna go into a congestion.....? Hell....let's
wait and see what kind of "golf club" it is going to use. He may try to putt with a club.
  • #171
  • Aug 17, 2007 12:01pm Aug 17, 2007 12:01pm
Quoting megadave5000
The best quote I've read today is, "The market is going down like free beer."
Crazy - the Dow Jones is in negative 300 point territory today even with another multi-billion dollar injection.
And just like free beer, it came back up again....
  • #172
  • Aug 17, 2007 12:21pm Aug 17, 2007 12:21pm
Quoting HalifaxCB
And just like free beer, it came back up again....
Yep, and today we're 200+ points in the black right now. I love volatility!
  • #173
  • Edited 11:31am Aug 18, 2007 11:20am | Edited 11:31am
Quoting HalifaxCB
And just like free beer, it came back up again....
This an example of our "FREE MARKET". We have the PPM...plunge protection
member. To protect WHO? Surely not the little man. But you are a trader...
you can take advantage of it. Just make sure that if you're going to go to
the dance....that the band hasn't already left. And the gal that you were
suppose to meet, isn't that female ambulance driver with hairy arms.
You know....that one from Hoboken!
ciao
tonyj
  • #174
  • Aug 19, 2007 2:14am Aug 19, 2007 2:14am
Hehe, day trader, scalper mathematical calculation discussion has become time and price calculation formula..

.. scalping is good if you like to go in and out of trade and secure profit as soon as possible, as well as getting out of the trade early if its not going the way you thought it would be.

after all, why hold on a losing trade just to see minus 200 or 300 or even 4000 like GBP/JPY last week unless, of course you can still manage the losses and joke about it like i read on papers ...

Scalping might mean 1-2 pip for some, but it could also mean 100 or 200 pip in a few second that you bail out after you enter...
  • #175
  • Aug 19, 2007 12:04pm Aug 19, 2007 12:04pm
Quoting Syafi
Hehe, day trader, scalper mathematical calculation discussion has become time and price calculation formula..

.. scalping is good if you like to go in and out of trade and secure profit as soon as possible, as well as getting out of the trade early if its not going the way you thought it would be.

after all, why hold on a losing trade just to see minus 200 or 300 or even 4000 like GBP/JPY last week unless, of course you can still manage the losses and joke about it like i read on papers ...

Scalping might mean 1-2 pip for some, but it could also mean 100 or 200 pip in a few second that you bail out after you enter...
Syafi:

Right on. One must remember that for one to "scalp" he is probably an
experienced trader...or at least, should be. Those who advocate going
"long term" as being the best alternative, are talking from one side of
their mouth. And from that side....they are right. But to go "long term"
you need "capital". Most newbies do not have sufficient capital to go
"long term"...nor the experience to "scalp". Yet, I thought I saw one
newbie mention coming in with $200 and was at the moment having
$1000 in his coffer. He detailed his plan. The guy will become a trader...
even if he loses. As a "technical" you are really a short time trader even
if you think "long term". This... even though here in the forex market you
better rely on the "fundamental" aspect. Fundamentalist are "long term"
....you should know that. Forex Factory is loaded with fundamental info.
You should be a card carrier and avoid the woes. I've been "flamed" on
other forums for stating this: "The cheapest advice you'll ever get is:
Stay out of stock and commodities...or any of the markets, because you
probably don't belong in it". I'm working on a book that starts out with
that statement. But if they insist....then I will detail the odds, and then
a possible method of trading. His best chance is with the forex and not
the stocks and commodities. This in spite of the ranting by Joe Ross...
who probably knows more about trading than I'll ever know.
ciao
tonyj
  • #176
  • Edited 1:07pm Aug 19, 2007 12:15pm | Edited 1:07pm
What % of Forex Traders are Scalpers?

And what % of Forex Traders are Long term holders?

And what % of these traders lose at FOREX? Is it 95%?

Well then, from which group do the 95% of traders that fail fall into? Are they SCALPERS or LONG TERM TRADERS???

The truth is, there are very few SCALPERS compared to the Long Term'ers trading the Forex Market! What does that tell you? Nothing other then that the Majority of those that consider themselves Long Term Holders are getting killed in FOREX! And the SCALPERS cannot be the majority of the 95%! Can we now say if you are a Long Term Holder, you will lose about 95% of the time? But SCALPING is a no no ....... and I wonder why?

I suspect there are many that read this thread and yet do not post and are very successful SCALPING and wouldn't have it any other way! lol And I also believe some of the MOST SUCCESSFUL FOREX TRADERS do SCALP! The SHARKS "LOAD THE BOAT" and "SCALP" for just a few pips at a time, and I wonder why?

I also believe the reason why so many scalpers have failed in the past is because of the costs and the pips charged, that eat away at their profits. And many were penalized many pips for SCALPING.

I also believe that those that have Large accts., are trading for 1 PIP or less cost and it is very profitable for them. They "LOAD THE BOAT" when everything lines up and are out just as quick to secure those profits. It's called leverage. And you trade only when those perfect setups appear. There are many of you Traders making 20k a week scalping on just a few [almost sure] trades a week.


Now who cares what I believe. What do I know about SCALPING? Very little actually as I have only been demo trading to home in my skills. But when I am sure I have it down pat, I will start trading with real money. I have been observing pairs and have been profitable scalping on paper. I will need a Broker that will not penalize me for SCALPING. I am not one to follow the crowd. I have always done great going with my own gut intuition. I have always gone down a dead end road when listening to what others think in life. But I do listen to a lot of advise on these threads. But I will not listen to those that call Scalping the sharks dinner on wheels. lol Many of you guys are really great and have Mastered this Game called the Forex! And it can be done. I am going to SCALP when all the pieces of the puzzle are in place. I am willing to bet a few k, that not the majority knows best this time and SCALPING if done correctly can be the ticket to profits. Sure when that pot gets bigger than is when I can relax and just let it run longer for the Big Moves. But SCALPING can get you started just don't bet the house; only trade what you can comfortably lose!

Conclusion: It does not matter if you SCALP or go LONGER TERM [when you have the bucks in place], both can be very profitable! But those that lose at FOREX are those that blindly throw their hard earned cash to the SHARKS while they are in their feeding frenzy! Make no mistake about it, they are present to take every cent you have! I am not a betting person, but am willing to bet that SCALPING is very profitable for those that understand it and are laughing all the way to the BANK every week!!! .... LOL ..... IMO ONLY!

Thanks,

ut2DaMax
  • #177
  • Aug 19, 2007 12:49pm Aug 19, 2007 12:49pm
Quoting ut2DaMax
What % of Forex Traders are Scalpers?

And what % of Forex Traders are Long term Traders?

And what % of these traders lose at FOREX? Is it 95%?

Well then, from which group do the 95% of traders that fail come from? Are they SCALPERS or LONG TERM TRADERS???

The truth is, there are very few SCALPERS compared to the Long Term'ers trading the Forex Market! What does that tell you? Nothing other then that the Majority of those that consider themselves Long Term Holders are getting killed in FOREX! And the SCALPERS cannot be the majority of the 95%! The SHARKS "LOAD THE BOAT" and "SCALP" for just a few pips at a time.

I susspect there are many that read this thread and yet do not post and are very successful SCALPING and wouldn't have it any other way! lol And I also believe some of the MOST SUCCESSFUL FOREX TRADERS do SCALP!

I also believe the reason why so many scalpers have failed in the past is because of the costs and the pips charged, that eat away at their profits. And many were penalized many pips for SCALPING.

I also believe that those that have Large accts., are trading for 1 PIP or less and it is very profitable for them. They "LOAD THE BOAT" when everything lines up and are out just as quick to secure those profits. It's called leverage. And you trade only when those perfect setups appear. There are many of you Traders making 20k a week scalping on just a few [almost sure] trades a week.


Now who cares what I believe. What do I know about SCALPING? Very little actually as I have only been demo trading to home in my skills. But when I am sure I have it down pat, I will start trading with real money. I have been observing pairs and have been profitable scalping on paper. I will need a Broker that will not penalize me for SCALPING. I am not one to follow the crowd. I have always done great going with my own gut intuition. I have always gone down a dead end road when listening to what others think in life. But I do listen to a lot of advise on these threads. Many of you guys are really great and have Mastered this Game called the Forex! And it can be done. I am going to SCALP when all the pieces of the puzzle are in place. I am willing to bet a few k, that not the majority knows best this time and SCALPING if done correctly can be the ticket to profits. Sure when that pot gets bigger than is when I can relax and just let it run longer for the Big Moves. But SCALPING can get you started just don't bet the house; only trade what you can comfortably lose!

Conclusion: It does not matter if you SCALP or go LONGER TERM [when you have the bucks in place], both can be very profitable and is! But those that lose at FOREX are those that trade blindly while throwing their hardearned cash to the SHARKS when they are in their feeding frenzy! Make no mistake about it, they are present to take every cent you have! I am not a betting person, but am willing to bet that SCALPING is very profitable for those that understand it and are laughing all the way to the BANK every week!!! Another SHARK bit the DUST .... LOL ..... IMO ONLY!

Thanks,

ut2DaMax
Max:
Finally....somebody is one of the 2%. Sociologists claim that 85% of all
the people on planet earth do not think. Of the remaining 15%, 13% think
they think and the remaining 2%...think. Got that? 2% of the total world
population actually think. And its got nothing to do with being stupid or
bright. Even stupid people can think....it's just that they don't.
ciao
tonyj
  • #178
  • Aug 20, 2007 2:08am Aug 20, 2007 2:08am
I think the most fundamental reason why scalpers and day traders fail is because of simple "HABIT". They tend to get carried away by the one sided movement until they forget the other side of the trade. Then when the opposite wave hit them they start to get confuse where they suppose to go.
  • #179
  • Aug 20, 2007 3:04am Aug 20, 2007 3:04am
There is 1 BIG reason people hate scalping & scalpers......

Scalping cost allot if commission fees.
Scalpers PAYS allot of commission to the brokers...
Scalpers WASTE their possible income to Brokers.

sometime Scalpers PAYS more then half of their income to brokers.......wasting money......

hehe.. and I condiser my self a scalper.. do I care my broker made as much as I do ? nope.
  • #180
  • Aug 20, 2007 4:37am Aug 20, 2007 4:37am
Quoting Fanat
Hello all. For a long while I have been thinking about many things trading related and ways to improve my trading... I am sure that all of you have heard the phrase that "Day trading and Scalping is not profitable and most day traders lose." So I've decided to do the math and see if it shows anything... I was surprised badly...

Lets check few things out:
Scalpers/Daytraders on average trade 5 trades per day (or 1 trade using 5 lots). I've heard some scalpers may do as many as 30 trades. Lets say that we opened a first account that is 10,000$ (we don't want to risk a lot and since we do only short term trades we do not need a big deposit.)

There are about 20 days in a month X 12 months. How many trades that make? A: 1,200.
What about the spread being paid? 1,200x3pips=3,600 pips. If you open a standard account, then it means that in a year you pay in the ballpark of 3,600x10=36,000$ spread fees!!!

36,000$ of 10,000$ account just for the spread. That means that you have to make MORE than 36k which is 360% on a 10k account just to break even. Nothing to say about the lossess which you WILL have.

Considering how tough it is to REGULARLY make 360%+ ROI, I can see that maybe this is one of the many hurdles why many short term (scalpers) lose.


Any ideas, comments?
Wow when you break it down like that it makes alot of sense, and that is why I will stick with my long term trades.Or consider becoming a broker.
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