Real Scalping, Impossible?

The purpose of this thread is to just bring up something intersting.

As anyone who has ever studied tickcharts and how price moves on them will know price stalls and zigzags 1pip up and down at sup/res.

Im 95% sure that 'the powers that be' have covered this angle, but if a trader could buy/sell when the price touches the sup/res again and have a TP for the bounce (1pip) then it may work out. For this to work a spread of 0.5pip would be needed, And the only places I have seen that is ECN's..... but the commision kills that idea.

In the scenario that you had a 0.5 spread
every win would be worth 0.5pips
and every loss 1.5pips
But I seriously think the W/L ratio could be 90%
and if this was the case then per 100scalps there would be 30pips profit.
and there would be 1000s of possible trades a day.

If only!

Hmmm, I wonder if theres a broker that will agree to just take a % of my profits and charge no spread! lol. Then i realy would be in the money!

Anyone with any info or interesting ideas on this subject please feel free to comment

Leon

Trade futures...


jjrvat

The chart shows 1 pip but there are smaller movement increments.

Oanda calls them "pipettes".

Some brokers have 0.5 pip spreads at times, and at times it shows as 0 spread. Might actually be 0, I don't know. Interactive Brokers is this way, but their user interface is so crappy, by the time you got your order placed to get your half pip, it would be gone!

Apart from the fact that scalping does have anything to with serious trading but is a form of gambling it is not recommended to try this on Forex

You can try scalping stocks , at least the broker is able to guarantee execution there and on Forex you have a significant counterparty risk

I agree that you will need to trade through a broker that offers 0 commission and Pipettes. So far, only Oanda fits this model.

Leon,

I think you may have already answered your question... The primary difficulty with scalping is Transactional Impact (the size of the spread) or, the cost of the trade itself on the profits that are earned.

On a completely different side of things; I've never really seen many trader be able to mentally handle scalping for any great length of time. It takes an overwhelming amount of concentration and dedication to be able to do it and at the end of the day, because of the TI it rarely produces better results than slower models.

Imagine sitting in front of the monitor day in and day out, trading maybe 50 to 100 times, six days a week, 20 days a month, for maybe 20 net pips at months end... After a while, the results just don't match the effort and slower more methodical models tend to look a lot better after a few months of that. Usually the first big loosing month at scalping will kick people out of it; as with any approach, there are always a few that succeed though, above and beyond the norm.

Most if not all brokers will close the account of anyone the spot scalping so even if you find one that works then you may find yourself kicked off pretty quickly if all you do is scalp the trades.

Yup... that happens a lot when a broker has a dealing desk: they often have to fill the trade amounts at much larger volumes than what is being scalped so they have to allow for other trades to come into play to make the off-setting volume in the intrebank market... the scalper is often in and out before the broker can even address the first trade. If they are taking the other side of the trade (which has inherent conflict of interest issues) or off-setting from other internal trades its a little different, but if they are pooling those trades and moving the volume into the market it becomes a massive issue.

Scalping will eat you up by the end of the day; it's a very exhausting work. Just imagine having to push prices your way mentally every time it went the wrong way, about every 2 seconds, not counting false breakout every couple of trades. It's very tough tough going, not recommended for everyone.

scalpt

What are you guys defining as scalping? 1 pips moves or just getting in and out of a trade within a certain period of time, say, 2min?

From other threads, I think any time frame below 5 min is considered
scalping.

Clearing something up,
Banks will class anyone who trades Intraday as scalpers, I posted an article on another thread where this was the case.
Some people, like scalpt said class under 5mins to be scalping.
And some people class grabbing 1 pip as scalping, like the pit traders.

Its just like the 'trend', the trend is different to everyone, it depends what TF you look at!

Leon

Yes , the trend is different for everyone but if you try to trade tiny time frames on Forex you are gonna have a problem with the broker sooner or later (rather sooner)

And the bad thing about this is that no matter what scalping method you want to use you can't test it on a demo as your would not get reliable results there

Altough I respect this opinion, I disagree, I think It's a matter of personality and time available of the trader.

I've read tons of comments that scalping it's risky, and exhausting, (and might be true, but not for all people), my best results have been always scalping, and ask Linuxtroll and other 1KT members here, it's possible.

So my opinion is, open a demo in Oanda, if you can be profitable after a month, put some small money in it, if it's still working, go forward, that means scalping really works FOR YOU.

A *very* short career as a scalper on my first mini account taught me that same lesson.

I know a good scalper or two; some can do it, but i think most people are better off taking it easy.