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Scalping or Swing trading

  • #1
  • First Post: Jul 28, 2008 12:28pm Jul 28, 2008 12:28pm
Please post you REASONS here why you think SCALPING is more profit-able than SWING TRADING or why you think SWING TRADING is more profit-able than SCALPING.

Please give reasons or some numbers to you why one is profit-able than the other.
  • #2
  • Jul 28, 2008 1:21pm Jul 28, 2008 1:21pm
Assuming you have a decent scalping method and are not a newbie chasing the market, I'd say scalpers earn more as while a swing trader would encompass the daily move up 100 pips, we all know that move probably involved the price going up 30, down 20, up 70, down 30 etc. A decent scalper could grab each of those moves. I should add: in theory.
The market reveals who we really are...
  • #3
  • Jul 28, 2008 2:40pm Jul 28, 2008 2:40pm
imho,

to be a more successfull sclaper than a swing-trader u MUST be a REALLY good scalper.

since -as stated before- swing traders could EVEN manage some times to "guess" nearly top and bottoms, they can enjoy the whole ride... only with one ticket...

but all the sub-stops the trend makes COULD be grabbed somehow... here is where scalpers... if they are REALLY good -again-, could have opened a position near the lows of the day and closing it nearly close the top of the day... and BESIDES... scalp the little movements to the downside and upside...

i figure that should be really stressing... at least... my finger would hurt!

lol

anyway, the most scalpers i know DO NOT trade the whole session... they are only aiming a profit here and there... for lets say the first two hours of a london session.

maybe some proffessional traders working in brokerages are PAID to stay 8 hours infront of a computer trading... i imagine they are making quick scalpers trades too... cause i dont think they are paid only to watch a single trade go green...

but there is something that must be clearified:

either -scalping or swinging- is easier than the other...

both are complete different worlds... scalping based on the momentum while swing-traders disregard partially this...

both styles are profitable....

but again.. if u manage to be a swing trader AND sclap all the way... well... u r a super trader... and u r truely maximizing ur profits...

question is... u really want to do this? i mean... becoming a private investor also was supposed to include not only financial independence... but TIME independence.. if u trade both styles same time... or sclaping whole session.. well.. u might have 1 ferrari bought everyday... but u WONT HAVE ANY SECOND TO ENJOY UR WEALTH!

2 cents

iiivb
  • #4
  • Jul 28, 2008 2:48pm Jul 28, 2008 2:48pm
Quoting forextrend
Please post you REASONS here why you think SCALPING is more profit-able than SWING TRADING or why you think SWING TRADING is more profit-able than SCALPING.

Please give reasons or some numbers to you why one is profit-able than the other.
When I first began forex trading 5 years ago, I was always focusing on swing trading 100 plus pips per trade. I developed many mechanical systems with this goal in mind.

Psycohologically it completely destroyed me, especially when my TP was missed by less than one pip. I continued in this way and blew apart many accounts ( not a few bucks either ).
The results seemed to always come back to the same thing.
What worked one year didn't work the next.

Then one day I decided to focus only on scalping, and developed once again many systems, until I found the one that I truly like and use. Drawdown is very small and psycohologically very easy to deal with.

Now I make an average of 2 percent per day scalping.

How many times would you have to be successful to achieve 40 % per month swing trading ?

I hope this helps to answer the question.
  • #5
  • Jul 28, 2008 2:53pm Jul 28, 2008 2:53pm
I believe that you should have both in your arsenal. Swing trading is easier in my opinion.

What I usually do is scalp while I am waiting on swing trade set ups. But only a few hours a day just for fun.

Is scalping more profitable?? I think based on pips per hour in front of the computer not really. Swing trading I can catch reasonably big moves and I can go do something else while I am waiting for a set up. While I am scalping I am constantly in front of the computer monitoring and adjusting my trades. Its fun if there is nothing else going on. If nothing else but for the challenge of it.

If you have the time to invest in scalping and you were good at it, you would most likely see a higher return than with swing trading.
  • #6
  • Jul 28, 2008 4:25pm Jul 28, 2008 4:25pm
A sprinter do not run the 25Km events.
A marathoner do not run the 100m dash.

To each his own.
  • #7
  • Jul 28, 2008 7:20pm Jul 28, 2008 7:20pm
Quoting magnumfreak
I believe that you should have both in your arsenal. Swing trading is easier in my opinion.

What I usually do is scalp while I am waiting on swing trade set ups. But only a few hours a day just for fun.

Is scalping more profitable?? I think based on pips per hour in front of the computer not really. Swing trading I can catch reasonably big moves and I can go do something else while I am waiting for a set up. While I am scalping I am constantly in front of the computer monitoring and adjusting my trades. Its fun if there is nothing else going on. If nothing else but for the challenge of it.

If you have the time to invest in scalping and you were good at it, you would most likely see a higher return than with swing trading.
but how do you define scalping? Do you define scalping as 3pips per trade or 10-11 pips profit per trade?

Also, when scalping, do you agree that you should only make a scalp after it has moved in a particular direction. Kind of like lining it up and then making the trade going along with the momentum?

I guess the balance issue is in ensuring that you don't 'chase' the market.
  • #8
  • Jul 28, 2008 7:43pm Jul 28, 2008 7:43pm
Quoting altrader
but how do you define scalping? Do you define scalping as 3pips per trade or 10-11 pips profit per trade?

Also, when scalping, do you agree that you should only make a scalp after it has moved in a particular direction. Kind of like lining it up and then making the trade going along with the momentum?

I guess the balance issue is in ensuring that you don't 'chase' the market.
i define scalping based on the time frame I am trading. if I am on a 5 min chart then I am scalping, 60 min chart swing trading.

I wait for an indicator to go to an extreme (i.e. stochastics overbought or oversold). I then wait for an entry confirmation. I do not just arbitrarily set a limit or a stop. Stops are based on the previous swing high or swing low. It never has made much sense to me to take a trade and then jump out after 5-10 pips. Why not see how far it will go? I use a process called "stop funding". Lets say the last swing high was 12 pips above my entry point. As soon as my profit hits 12 pips I take 50% of my trade off the table. I let the rest run leaving my stop where it was for a while. If it comes back and takes me out, oh well, I broke even. Last nights trades on the gbpjpy yielded about 200 pips in 4 trades. Price will come back and hit my stop about 5 percent of the time.

I will adjust my stops based on how price is moving. Monthly and yearly pivots or pauses in price movement are great places to move a stop. Price drops pauses for a few candles then starts moving down again, I move the stop to just above the pause.

I know this is not the standard way of thinking for scalping. Most will say to get out quickly and if that is the way you want to trade go right ahead, do whatever works for you. But I have to ask would you rather make 20 trades for 200 pips or 4?
  • #9
  • Jul 28, 2008 8:00pm Jul 28, 2008 8:00pm
Quoting magnumfreak
i define scalping based on the time frame I am trading. if I am on a 5 min chart then I am scalping, 60 min chart swing trading.

I wait for an indicator to go to an extreme (i.e. stochastics overbought or oversold). I then wait for an entry confirmation. I do not just arbitrarily set a limit or a stop. Stops are based on the previous swing high or swing low. It never has made much sense to me to take a trade and then jump out after 5-10 pips. Why not see how far it will go? I use a process called "stop funding". Lets say the last swing high was 12 pips above my entry point. As soon as my profit hits 12 pips I take 50% of my trade off the table. I let the rest run leaving my stop where it was for a while. If it comes back and takes me out, oh well, I broke even. Last nights trades on the gbpjpy yielded about 200 pips in 4 trades. Price will come back and hit my stop about 5 percent of the time.

I will adjust my stops based on how price is moving. Monthly and yearly pivots or pauses in price movement are great places to move a stop. Price drops pauses for a few candles then starts moving down again, I move the stop to just above the pause.

I know this is not the standard way of thinking for scalping. Most will say to get out quickly and if that is the way you want to trade go right ahead, do whatever works for you. But I have to ask would you rather make 20 trades for 200 pips or 4?
Figuring out where to set the stop is a tricky thing for me at the moment. I look for stops based on support and resistance that is identifed immediately before the candlestick that is currently in motion. For example, imagine being on the 30min time frame and then you look back at the last few candles and where you see a noticable peak or low, then that peak would be resistance and the low would be support. So. the distinction I make is to look at the support like or resistance line immediately before the current candle stick and use that as a stop or take profit point.

I'm not sure if what I say makes much sense.

Next I look at the lengh of the candle shadows and how big the candles are, and how many or bull or bear candles are present. If I see a lot of shadows below the candle real body then I assume that there is a lot of buying push and therefore bullish. But if the shadows are on the opposite end then I assume that there is a lot of selling pressure so I get ready to go short.

Currently I like it if the RSI passes below the 50 line and if the factors above line up then I make the trade. If the RSI passes above the 50 line then it is bullish and as long as the above factors line up, I make the trade.

It is very simplistic at the moment but the thing I find most difficult with stops is the volatility. When London open happens and New York is open there can be a lot of volitality. I haven't quite figured out how to incorporate that into where to set stop losses. One thing I have learned from my records is that when ever it goes 20pips away from me during london open, then I know I'm in the wrong direction.

If I am on the Tokyo open then I use a hard 6pip stop loss for EUR/USD (in combination with where the support and resistance lines are).

You ask, why not let profits run..this is true. I do that sometimes. But I just think that basing take profit zones just before resistance levels is a good place to take profit because often when you get to resistance the trend bounces in the opposite direction. So when it hits resistance I often look to get ready to go short in the opposition direction.

As for doing 20 trades or just 4. Ofcourse I'd like to do just 4 but personally I'm not sure that that method is a good fit for me because I like to be active and know that I can continually take something from the market, even if it is just a small amount.

I'm still learning and very flexible. I'm trying to build a definitive methodology that I can consistantly apply. I'm finding that aspect challenging as well. Sometimes it can be tough to figure out if you have an edge or if it is just probablility going in your direction.
  • #10
  • Jul 29, 2008 3:43am Jul 29, 2008 3:43am
i have 2 accounts... the scalp one, gain more in short amount of time, but at the end of a month, it has less profit percentage than the other with Daily/H4 system...

So, i guess for me, scalping would be better for hit & run... but cannot be better for saver criteria...
  • #11
  • Jul 29, 2008 4:52am Jul 29, 2008 4:52am
Profitability vs time was mentioned above. If you're looking at total time dedicated to trading, then swinging is the way forward. If you're looking at just maximising the time you have, then scalping is the way forward. Personally, I have tried scalping with reasonable success - I quickly increased my account size - but I found it too stressful (I'm sure I had more hair before...). Nowadays, I'm more interested in swing trading. I like the idea of trading while going shopping, practicing martial arts, rock climbing or playing the piano. (A friend popped round for coffee the other day while I had a position open. This is me at work, I laughed as my computer beeped each time the computer moved the trailing stop. I was about to suggest, "Now you can show me how you work." but then I remembered she is a surgeon and I don't enjoy seeing inside humans.) It is also most satisfying to set an order one evening then wake up the next day to find it is in profit. The art of trading without trading, to paraphrase Bruce Lee. Or, to put it another way, having an income without doing any work... a bit like being on social security/income support but with sports cars as part of the equation.
The market reveals who we really are...
  • #12
  • Jul 29, 2008 7:42am Jul 29, 2008 7:42am
Quoting forextrend
Please post you REASONS here why you think SCALPING is more profit-able than SWING TRADING or why you think SWING TRADING is more profit-able than SCALPING.

Please give reasons or some numbers to you why one is profit-able than the other.
I don't think that one scalper can prove to a swing trader that their system is more profitable and vice versa. The way I view it is that we are going to trade with a system that we feel more comfortable with. Your going to get a lot of excellent opinions but you will never find the definitive answer to this question.

I trade swing and scalp. This is the way to trade in my opinion.

I wish you many pips
"To Be A Successful Forex Trader, You Need A Successful Forex Mentor."
  • #13
  • Jul 29, 2008 9:49pm Jul 29, 2008 9:49pm
... both are profitable... just combined, the'll give way more... why separate 'em.. both are trading... better to use 'em as stategies or tools than just as style..

wish you all good trade...
  • #14
  • Jul 29, 2008 10:39pm Jul 29, 2008 10:39pm
But as a poster below said, "YOU HAVE TO BE GOOD AT IT"




Lets take an example of why scalping is most profitable:


Trader A This trader averages 5%+ / month for him and his clients.

This trader using proper money management and a minimum of 2% risk per trade.

He is a swing/position trader and has a winning percentage of about 70% of all his trades.

He takes approximately 15 trades / month and it takes him 15 trades to make this profit.

He makes his 5% / month and is very successful.


Now here comes the scalper, Trader B

Trader B also has proper money management, risks max of 2% / trade, wins 70% of trades.

BUT one thing is different. Instead of making 15 trades / month he makes 120 trades / month.

So the scalper is making 8 times as many trades / month but with the same amount of profit/loss / trade.

So he also makes 5% for every 15 trades he takes, but since he takes 120 trades / month he makes 40% profit per month.

He is no different then the position trader in regards to his results per trade, but only in the amount of trades he takes.


This is simple math and all should agree. The only point of disagreement would be this...

Can a scalper do just as well PER TRADE as a position trader? Can he average the same results PER TRADE or not?

If he can, or even if he can come close, then the above figures stand solid.


This is why if one wants the trading style with the possibility of the biggest returns then he will resort to very short term trading or SCALPING.
  • #15
  • Jul 29, 2008 10:46pm Jul 29, 2008 10:46pm
I don't deny that scalping can lead to big profits. Problem is to catch as many moves as possible you need to be in front of the computer catching each swing up or down. With scalping you need to be trading most of the time when the markets are moving (i.e. London and some of U.S.). Alot of people cannot do that due to a little thing called work. In their case, swing or position trading would be the better choice. Yes, you can scalp during Asia but I would rather watch paint dry. LOL!
  • #16
  • Sep 30, 2009 3:58am Sep 30, 2009 3:58am
forextrend. i cannot answer your question on which earns the more.skalping or swing.i would like to find out though and am starting onto swing.i skalp in a contrtarian manner according to dopey,s letter although i didnt know it at the time but all i can say is,that with only two years trading behind me,is that running the 15 and 30 min with the 4h backing a small trend works well now that i have polished my indicators .i ran in the mig world contest which closes tonight i think.after only four days i gave up as the polish guy was killing the competition so i went back to making a little real money.in that four days i hit 216,345.89 usa dollars from the 100k we were given ,2hrs in the morning and 5 at night,so the method seems to work for me.the account is still sitting there.if i can run big trends properly using fundamentals ,adding and closing ,twisting and hedging all the way up or down it would be far more profitable i think than merely skalping without the clear path.

mike dunningham

confusion say;he/she who doesnt walk in correct direction ends up with interesting home knitted jumper.
  • #17
  • Sep 30, 2009 6:46am Sep 30, 2009 6:46am
Earning small profits on more occasions is more satisfying than earning bigger amounts less often. This keeps me more motivated to improve myself. Also there are more opportunities to trade and therefore more chances to learn from mistakes. You might get 40 to 50 trades per month scalping; that would take a year with swing trading.

I tried swing trading but just got too frustrated mostly with waiting and doing nothing. Scalping keeps me mentally stimulated.
  • #18
  • Jan 22, 2011 4:02pm Jan 22, 2011 4:02pm
I am in the camp that says trading both is best. Combined, it reduces the pressures that you face when trading only one approach.

When you are capturing pips through scalping on a daily basis you can focus on taking only your highest conviction swing trades. When making profitable swing trades, you can focus on scalping only when conditions are right.

Of course, it can also work the other way if both are negative, but that is life :-)
  • #19
  • May 7, 2012 5:22pm May 7, 2012 5:22pm
Dead thread?
New voice message: Why are you calling me? If I need you, I'll call you!
  • #20
  • Oct 2, 2017 7:38am Oct 2, 2017 7:38am
imho.. if you profit using scalp technics then use it if you profit as swing trader then use it... it doesnt matter as long as you make money... but if you can be profit using both technics then use both of them.. but my recomendation is dont trade them on same acc because you'll get confused and pretty hard to track down your performance on which technics you used... happy trading guys....
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