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Scalpers, how many trades?

  • #21
  • Apr 3, 2009 10:55pm Apr 3, 2009 10:55pm
True "scalping" is capturing part of the spread between bid and ask. You have to be able to buy on the bid and sell on the ask. Deal desks don't permit this.

What we are doing is "churning" - in/out quick for tiny profits. ECN is the only way to do this. Fixed spreads stack the deck against you.

If you can net 1 pip on a 2 or 3 pip gross, then 100 minilots means you can print $100 bills.
TRO
  • #22
  • Apr 4, 2009 2:31am Apr 4, 2009 2:31am
  •  zykas
  • | Joined Oct 2008 | Status: ... measure thrice, but cut once | 196 Posts
Interesting, but my friends broker allows scalping and you can ride on with it if their plateform does not hang you up for 20mins if you want to exit or so and after making a certain number of scalping a day then you receive a compusory 7days off from them...How about that? But I wonder shouldnt they be happy that you enter a trade 50 times and pay spread on each entry . My two cent.
I like the Big Dogs because I trade like them
  • #23
  • Apr 4, 2009 12:09pm Apr 4, 2009 12:09pm
Quoting daytrading
...by not having to go through the average broker.

If you knew that there are platforms that let you put on instant orders with 1 pip take-profit in one click on futures than you wouldn't ask that question.

On FX cash you can do it with a little more risk if you have a fast finger as well.

regards
daytrading
Thanks for the reply, much appreciated.
What broker allows you to scalp a few pips?
Currency Futures maybe? the new mini cme currency futures perhaps to practice on?
Your opinion would be appreciated.
Thanks in advance.
every Saint has a past. Every Sinner has a Future
  • #24
  • Apr 4, 2009 1:27pm Apr 4, 2009 1:27pm
Quoting turnip15
Thanks for the reply, much appreciated.
What broker allows you to scalp a few pips?
Currency Futures maybe? the new mini cme currency futures perhaps to practice on?
Your opinion would be appreciated.
Thanks in advance.
Hi,

Google 'MD-Trader' from TT (Trading Technologies) - they are the main tool for futures traders linked to CME (Chic. Mercant. Exch.)

If you want to try it in the fx cash market, you need a decent clearing house behind any of the following platforms: Barx, Lava, Currenex, HotSpotFX, Baxter or FXall. I am sure there are more now but the difference lies in which banks are the suppliers of liquidity. The prices are fed to those platforms through the 'Electronic Communications Network' or ECN. That means if one of the contributing banks for example offers at a certain price level, the order goes out to all the platforms - and gets (part) filled on first come first serve basis until the order is cleared. Theoretically, it doesn't matter which ECN platform is used - as long as you're quick and your size is 'regular', you'll get filled instantly.

Hope that helps.

regards
daytrading
Enter Signature
  • #25
  • Apr 4, 2009 1:34pm Apr 4, 2009 1:34pm
Quoting Leonlorenzo
I read somewhere that the original definition of scalping is capturing a negative spread oportunity, could someone explain to me where this scenario exists? Tier one?
Quoting Toddfx
True "scalping" is capturing part of the spread between bid and ask. You have to be able to buy on the bid and sell on the ask. Deal desks don't permit this.

What we are doing is "churning" - in/out quick for tiny profits. ECN is the only way to do this. Fixed spreads stack the deck against you.

If you can net 1 pip on a 2 or 3 pip gross, then 100 minilots means you can print $100 bills.

This is correct, and is my definition of scalping. I have not studied this area of research because to profit from it means competing with professional programs designed to exploit such inefficiencies at astronomical rates. I have not the technological background to do such a thing. However, when it does occur, it would most likely be on the interbank level, but it could technically happen with retail dealers as well, though I would not count on it. The reasons between the two would be different.

On the interbank level, it is quite possible for there to be a point when a the most competitive buyer is willing to buy at a higher rate than the most competitive seller is willing to sell (or vice versa). Since the spread on this market is determined by the most competitive rates, then a negative spread would occur, resulting is the ability for you to buy the bid and sell the ask for a quick risk free profit. This situation would only last as long as there is liquidity supplied at those levels. But be assured that anyone with half a brain watching price will see that offer and take advantage of it, or more likely a computer program will be waiting with infinite patience for price to behave like this. Because of this, the liquidity will be taken and the spread will return to normal very quickly.

If this happens with a retail dealer, and I have only rumors that it ever has, then this is a momentary gap in the dealers pricing system that would open them up for direct losses from wise customers. As technology advances, I would guess that this would be a rare occurring event.

This is at least my basic understanding of scalping. In theory it sounds great, but getting to a level of actually making it happen is beyond my skill level.
Headline: USD drops due to news of USD dropping!
  • #26
  • Apr 4, 2009 2:04pm Apr 4, 2009 2:04pm
Scalping has nothing to do with rare and momentary occurrences of inverse price relationships. They do happen more often than believed in the new ECN trading arena and sometimes stay for longer than minutes. The reason behind that is (for example if a bid is higher than an offer), that the size discrepancy is extreme and the bid (in this case) does not accept part-fills under a certain size - so that allows very small offers to go below the bid - which will be eaten up quickly usually by other smaller bids once discovered in the system.

It used to happen in the open outcry market as well - price was 10 - 11 for normal size but 11 or 12 bid for a huge clip. (we used to often shout: 11 choice, bid for a clip of 50), while the normal bid for 5 was at 10.

Anyway, scalping is nothing more than entering the market when the price levels are 'cleared' from previous days stop orders, new day's limit orders and the market is starting to move by present trader's new order placements - the scalpers jump on the train with the aim to be in and out catching simply a few pips each time with the momentum (1, 2 maybe more but generally only in the trade for a few seconds to a minute or so).

Electronic algorithms have made it very difficult for traditional scalpers to gauge these order flows in the FX cash markets - but on the futures, its still happening.

regards
daytrading
Enter Signature
  • #27
  • Apr 4, 2009 2:28pm Apr 4, 2009 2:28pm
  •  zykas
  • | Joined Oct 2008 | Status: ... measure thrice, but cut once | 196 Posts
Quoting krunforex
INSTA FOREX BROKER


Hmm ?
I like the Big Dogs because I trade like them
  • #28
  • Apr 4, 2009 2:46pm Apr 4, 2009 2:46pm
Quoting daytrading
...by not having to go through the average broker.

If you knew that there are platforms that let you put on instant orders with 1 pip take-profit in one click on futures than you wouldn't ask that question.

On FX cash you can do it with a little more risk if you have a fast finger as well.

regards
daytrading
Hello daytrading, thanks for the informative posts. May I ask what the slippage is like on the up market ECNs? I've been demo testing at high frequency trading and am more then happy with the results on paper, but I am worried about the average slippage that can be expected in the "real" market. I have been told that liquidity is in fact not so good in forex and for high frequency trading I should look at futures, is there any sense in this? Any comments would be very much valued.
  • #29
  • Apr 4, 2009 2:52pm Apr 4, 2009 2:52pm
Many Thanks for the informative posts!

Scalping, for some reason, has become a term used to refer to nothing more than short duration trades.
  • #30
  • Apr 4, 2009 2:57pm Apr 4, 2009 2:57pm
use limit order
Quoting RedPadisha
Hello daytrading, thanks for the informative posts. May I ask what the slippage is like on the up market ECNs? I've been demo testing at high frequency trading and am more then happy with the results on paper, but I am worried about the average slippage that can be expected in the "real" market. I have been told that liquidity is in fact not so good in forex and for high frequency trading I should look at futures, is there any sense in this? Any comments would be very much valued.
  • #31
  • Apr 4, 2009 3:06pm Apr 4, 2009 3:06pm
Quoting RedPadisha
Hello daytrading, thanks for the informative posts. May I ask what the slippage is like on the up market ECNs? I've been demo testing at high frequency trading and am more then happy with the results on paper, but I am worried about the average slippage that can be expected in the "real" market. I have been told that liquidity is in fact not so good in forex and for high frequency trading I should look at futures, is there any sense in this? Any comments would be very much valued.

Hi,

Some ECN's guarantee instant fills for agreed sizes - mine (Barx) has a display in the order window which tells you for how much the price is good for, i.e. if your size is not bigger than the displayed size you're done once you click on the price. (spread and size varies depending on your account)

With futures, its similar - you can see how much is on offer or on the bid at each price level since its exchange traded.

regards
daytrading
Enter Signature
  • #32
  • Apr 4, 2009 3:19pm Apr 4, 2009 3:19pm
Quoting daytrading
Hi,

Some ECN's guarantee instant fills for agreed sizes - mine (Barx) has a display in the order window which tells you for how much the price is good for, i.e. if your size is not bigger than the displayed size you're done once you click on the price. (spread and size varies depending on your account)

With futures, its similar - you can see how much is on offer or on the bid at each price level since its exchange traded.

regards
daytrading
Thanks very much for the reply, it clears things up a lot. I need to sharpen
up on how they work.

Trade well
  • #33
  • Edited 4:11am Jan 31, 2010 3:29am | Edited 4:11am
bump.

daytrading said here fx futures are easier to scalp than fx spot.

do you think so?

oh, and about 5-15 per hour.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #34
  • Jan 31, 2010 5:01am Jan 31, 2010 5:01am
Quoting Gaston
This situation would only last as long as there is liquidity supplied at those levels. But be assured that anyone with half a brain watching price will see that offer and take advantage of it, or more likely a computer program will be waiting with infinite patience for price to behave like this. Because of this, the liquidity will be taken and the spread will return to normal very quickly.

Yup, that is exactly what the MBT guys say it happens when legitimate (not stale/stuck) crossed quotes appear in their platform, electronic snipers are ready and waiting for them:

http://www.forexfactory.com/showpost...postcount=4796
  • #35
  • Apr 21, 2011 4:33am Apr 21, 2011 4:33am
Hi,
i trade around 5 - 10 scalps, with 5 - 10 lots, my trading system is based on supports and resistances .. TP - 5 pips, SL - 10 pips

Have a good trades
  • #36
  • Apr 25, 2011 8:06am Apr 25, 2011 8:06am
Usually I have 3-5 trades per day, not less that 20 per 5 days week, this is for my scalper tactic and plus 2 -4 trades per week for my short therm tactic. The best way to be in profit, is to wait for good reason trade and then entry market with portions of general trade volume.
  • #37
  • Last Post: Jun 25, 2011 5:00pm Jun 25, 2011 5:00pm
Sometimes i scalp for fun .. at Friday i made 99 scalps at EUR/USD
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