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How to scalp small pips?

  • #21
  • Nov 4, 2010 7:43pm Nov 4, 2010 7:43pm
Quoting exking
Sorry if I'm confusing you, I'm somehow a newbie and I don't have enough experience and knowledge, and also excuse my language.
I want a system for trading on 1min chart eur/usd
I want to catch even 3pips moves
is it possible or reasonable?

Reread my post above. If you're a complete newbie at FX, then you still have at least a thousand hours of study time ahead of you. Nothing in FX comes easy.
  • #22
  • Nov 4, 2010 8:06pm Nov 4, 2010 8:06pm
this is with hindsight as I didn't trade this but its the kind of thing I would look for. After Euro clears 1.3972 its obviously going up. So the next step is to look for ways to get long with defined risk. Notice that the market pulls back and then pushes up. You have to try and enter as price is climbing.

Its unrealistic to think you can trade with a 2 pip stop. Both these trades could have been taken with 10-15 pip stops. Probably stopped out on the first trade at breakeven. But second could have been 20-40 pips depending on how long you held it.

You'd have to look at a 5 min chart to see why I focused on this breakout. The entry triggers are very simple. The skill lies in deciding which break-outs to chase.
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  • #23
  • Nov 4, 2010 9:03pm Nov 4, 2010 9:03pm
Quoting UnnamedPlayr

Day time, volatility, liquidity areas, currency (money) shifting, possible correlations, market depth (bluffing,spoofing,real intentions), order flow and overall net positions for potential stop hunting terms.
I agree with all of the above. Just my two cents; mark the daily open level on your M1 chart. Works wonder on some days....
  • #24
  • Nov 4, 2010 11:00pm Nov 4, 2010 11:00pm
If you want to learn to scalp, here's your homework assignment.

1. Download Ninjatrader at www.ninjatrader.com
2. Register for a demo account at Mirius Futures
3. Open dynamic DOM, time and Sales and level 2
4. Stare at it for 4 hours per day, 5 days per week for a full year. I'd suggest learning the E-Mini.

Not joking. This is how it's done on many, many prop shop floors...

...and that's what scalping is.

Not promoting any of the above companies, but those are the steps I did to find a free way to learn that type of trading. I did it for maybe 10 hours or so and then decided that type wasn't for me. But, if you want to scalp, that type of trading will open the door at many day-trading firms.
  • #25
  • Nov 5, 2010 8:57am Nov 5, 2010 8:57am
Scalping is definitly not for begginers. Moody has very good insight and u should take heed to his posts!

I know the market may be boring to wait all day for a trade signal to be true to your specific trading system and it is alot more fun to jump in and out of trades on a 1M chart and watch all those crazy candlesticks form little waves but if you are here to have fun and spend money isnt that what a casino is for?

Take time to do your homework, study study study and apply everything you learn along the way on a demo account and if scalping appeals to you that much then be sure to trade successfully on a demo for a few months and master ONE currency pair as opposed to have general knowledge of several.

Happy Pippin
-Scotty pippin-
  • #26
  • Nov 5, 2010 12:09pm Nov 5, 2010 12:09pm
Quoting UnnamedPlayr
Scalping is one of the most difficult trading methods that requires high accuracy,good win rate and a risk reward of 1:1 or better....
Best advice I have seen so far on this thread, as far as strategy.

The MACD/trend following TA thing, forget that crap. If you don't understand the market and why it's moving you'll never be consistent. Maybe you'll get lucky enough to profit for a little while, but you'll give it all back sooner or later. You think you're just going to follow a lagging indicator and buy on pullbacks and be consistent after you work out you're psych issues and MM? I don't think so.

To scalp spot fx for 'small pips', besides strategy, you'll need tight spreads and commissions, a good tier 2 broker with a good amount of liquidity providers (which they have no problem telling you) and a good ECN such as fxtrades CNX or EBS. You'll need at least 20k-50k to start up. As far as commissions, I would say you're good with < $20/M... should not have a problem getting 16-18/M, anything over that is rape. You may have to negotiate, show them volume, etc.

If you're going to scalp level 2 on futures, I would suggest an instrument that doesn't move too much or too little and is liquid. Maybe even check out stocks, EFT's...

But really, for currencies... I think if you have the cash, costs can be lower trading spot fx, as well as some other advantages.
  • #27
  • Edited 12:54pm Nov 5, 2010 12:40pm | Edited 12:54pm
Good trading videos

These will show you some live trading of the stock market...essentially 20 minute trades or so that make decent money.

Edit: so yeah, TA/MM does make money, you really just have to know how to use it.

Edit 2: The reason I posted the above videos is to give some people hope about trading. If you are called to this, it is possible to make money doing this type of trading. Here's my challenge to you:
1) Watch 3 hours of those videos (the ones with live trading)
2) Do you see any smoke-waving or lies?
3) Understand what he does - he has a plan, he has a method, he has a way.
4) Create your own system that makes sense and fits your personality
5) Practice, practice, practice, practice, practice your system and your edge

It really is this easy. It really is. All you have to do is work. That's what can be said of all of life. All you have to do is do some work. Get your elbows dirty. Turn off these silly forums and get to work.
  • #28
  • Nov 5, 2010 1:19pm Nov 5, 2010 1:19pm
Moody gave good advise about Ninja Trader. You can not scalp with MT4, too much lag and built-in gotchas. There are brokers that will let you day-trade the ES for $500. One tick is $12.50. Two ticks is $25.00, minus a $5 commission and you have $20 net, your 4%. I have attached a 10-second chart of ES from the open at 8:30 CT for about 45 minutes. See how many 2-tick trades you can find.
Attached Image (click to enlarge)
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  • #29
  • Nov 5, 2010 1:37pm Nov 5, 2010 1:37pm
Moody, Kenz987, thank you guys. your advices are really good
  • #30
  • Nov 5, 2010 1:47pm Nov 5, 2010 1:47pm
Certainly and thank you for being open!

To explain the above chart, the ES is the S&P 500 futures contract and it represents 50 times the index value. So when the ES moves up 1 point and you're long, you make $50. A "tick" is different for various instruments, but it's 1/4 of a point on ES. So two ticks is 1/2 of a point. So yeah, there's lots of opportunity in the futures market for scalping considering that commission is less than a single tick. But I'm not encouraging you to go there! It's not as watered down as the FX market can be.

To further my advice about Ninjatrader. You can download something called "market replay data" which plays level 1 and level 2 market data as though it were happening live. (it updates every 1 second, so it's not true live, but close). Mirius Futures has 2 weeks of replay data on hand for ES last time I checked. So if you wanted, you could certainly write your method/system out, download replay data, and spend time seeing if your method actually works in the real market.
  • #31
  • Nov 5, 2010 1:58pm Nov 5, 2010 1:58pm
Quoting UnnamedPlayr
You need a lot of experience / market knowledge which allows you to classify different conditions and the ability to strike on the right time....
Quoting UnnamedPlayr
Day time, volatility, liquidity areas, currency (money) shifting, possible correlations, market depth (bluffing,spoofing,real intentions), order flow and overall net positions for potential stop hunting terms.
So what does all this mean? Is it chart interpretation, or stuff transferred from futures DOM, or what?
It sounds fascinating. If you have examples, that'd be great.
  • #32
  • Nov 5, 2010 2:58pm Nov 5, 2010 2:58pm
forex and stocks are different markets. You will need more then TA/MM to make it.

Who here has been trading purely TA in forex, just looking at charts and making good profit?

I mean 3-5 years solid profits, doing it for a living. anyone? tier 2 prime broker or a PB, with your own capital, anyone? MBT/IB is a joke... along with those videos.

basic TA on longer term charts fine, different story, as a tool, not the only thing.

Intraday trading, TA on short term charts, candles, ma's, macd, cci, rsi... scalping? lol
  • #33
  • Nov 7, 2010 6:59am Nov 7, 2010 6:59am
Quoting Kenz987
... Two ticks is $25.00, minus a $5 commission and you have $20 net, your 4%. I have attached a 10-second chart of ES from the open at 8:30 CT for about 45 minutes. See how many 2-tick trades you can find.
Don't listen to anyone who says you can make money trading for 2 ticks on ES.

After cost if you make 2 ticks then you make $20 but if you lose 2 ticks you will be -$30. So your breakeven win/loss is 60%. In fact it is worse than this because the only way to enter will be on hit the ask and to exit you will need to hit the bid. So you'll pay 1 tick in spread most of the time.
  • #34
  • Nov 10, 2010 1:13am Nov 10, 2010 1:13am
Quoting ha-pattern
So what does all this mean? Is it chart interpretation, or stuff transferred from futures DOM, or what?
It sounds fascinating. If you have examples, that'd be great.
That means to concentrate on the essential things that makes the market move and to anticipate where it is likely to go.

It is chart “interpretation” in old school way mixed with some modern "tools" ,but not drawing lines,fibs or such things what most people do.
Liquidity is not static. It is developing.

Examples, sure that would be great but I guess you guys are smart enough to figure it out yourself.
  • #35
  • Last Post: Nov 15, 2010 11:59am Nov 15, 2010 11:59am
What is scalping regarding time of order kept ?

One of my first brokers said i dont have option to scalp
on their account and they had a time limit for that,
- order had to be kept for a minimum of 2 minutes
between open and close.

I also guess you have to be pretty sure of the 5m trend and
use large size lots, like 5 or 10 ?
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