Do you prefer scalping instead of long term? if yes with how much you want to start? | Forex Factory

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Do you prefer scalping instead of long term? if yes with how much you want to start?

  • Poll

  • Which amount you prefer to start Scalping ?
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  • #1
  • First Post: Nov 21, 2010 12:20pm Nov 21, 2010 12:20pm
Do you prefer scalping instead of long term ?

if yes with how much you want to start :

Which amount is good for you to scalping ?

Please submit your answer in poll .
  • #2
  • Nov 22, 2010 1:24am Nov 22, 2010 1:24am
any one use scalping here ?
  • #3
  • Nov 22, 2010 1:34am Nov 22, 2010 1:34am
I don't scalp because too much goes into slippage and commissions that way. It's cheaper for me to go longer term.

Who knows maybe when i grow my account my broker will reduce my costs, but that few years down the road.
ok Friendo? This is madness!?!? - THIS, IS, FOREX!!!
  • #4
  • Nov 22, 2010 1:52am Nov 22, 2010 1:52am
Quoting Liger86
I don't scalp because too much goes into slippage and commissions that way. It's cheaper for me to go longer term.

Who knows maybe when i grow my account my broker will reduce my costs, but that few years down the road.
but i think have a good strategy is important think in scalping , do you think the broker is the problem ?
  • #5
  • Nov 22, 2010 3:44am Nov 22, 2010 3:44am
This "thing" scalping have been discussed as long as i remember, and no one really have come up with convincing arguments, for why this would work fine for anyone.

I mean;

 

  1. who would like to sit tight and tied in front of the screen 8-10 hours a day?
  2. Who would like to risk large part of their trading capital several times a day, for just a small gain?
  3. Who would like to pay hugh amounts of round turn costs?


I tried many years ago, and I can say; I would not like to enter into scalping again.

If you should gain anything out of scalping, €10.000 with a hugh leverage, would not even be worth the work and the stress.

  • #6
  • Nov 22, 2010 4:29am Nov 22, 2010 4:29am
Retail traders don't scalp the spot market because its expensive and carries a high risk of loss due to many variable that has been put in place by retail brokers.

If you think scalping a pair worth 0.9 pips is a good decision, then you're nuts. True scalpers prefer very small spread (something around 0.2 or 0.0) w/ commission. You're never gonna get that small of a spread and competitive negotiable commission price playing with retail brokers. True scalpers looks to big banks for these deals. In order to get great commission rates and wonder spread, traders usually seek accounts with banks/prime brokerages accounts. Bank/PB will negotiate a deal with you for small commission/spread but there is usually a minimum volume attached to the contract. True scalpers are able to trade 300-500 or more trades a day, easily meeting banks/prime brokerages minimum volume requirements. True scalpers pay a very high price to trade the way they do but they also enjoy Instant Execution (very low latency data feed) and direct access to Banks Order Management/Routing.

Scalping with anything less than that, and you're gambling your money away to Market Makers. Whats ironic is retail traders truly think a 0.9 spread is scalp-able. Try scalping 500 or more trades per day successfully with your Market Maker account, see how fast you account gets closed. Remember, MM are taking the other side of your scalps. If they can't keep up with your volume, then they'll close your account. If you're successful in scalping then they're losing money and can't keep up with your trading volume. Theres a huge misconception about MM only making money from the spread. That is NOT true. MM make money by taking the other side of your failed trades. The spread is just added interest for a MM broker. MM has got the retail market setup to where you'll fail scalping.

If you're serious about scalping, traders really need to get the Bank/Prime Brokerage setup. Otherwise, if you planning on sticking with your MM trade a medium to longterm strategy would be your best bet.
  • #7
  • Nov 22, 2010 4:37am Nov 22, 2010 4:37am
Scalping is pretty tough:
- Significant expenses to overcome
- Low margin for error
- Requires fast decision making.

Not the highest probability situation one can place themselves in.

Quote
who would like to sit tight and tied in front of the screen 8-10 hours a day?

Since when does a scalper have to sit in front of a screen for 8-10 hours?

Quote
Who would like to risk large part of their trading capital several times a day, for just a small gain?

Turnover isn't an issue. The only "risk" is the greater slippage a scalper may experience relative to their capital, and that's why a scalper must be relatively more conservative.

Small gain? You think scalpers put up with it to achieve similar or lesser returns to traders on other timeframes?
  • #8
  • Nov 22, 2010 5:11am Nov 22, 2010 5:11am
Quoting Jhig

If you're serious about scalping, traders really need to get the Bank/Prime Brokerage setup. Otherwise, if you planning on sticking with your MM trade a medium to longterm strategy would be your best bet.
we talk about retail market not huge banks , if you want to have 0.2 spread you must invest 1 million dollar with jpmorgan for example ,,,but with 1000 or 10000$ the lowest spread brokers are oanda , mbtrading ,dukascopy or some others .
i think there are professional scalpers that get profit from these kind of brokers with scalping
even they are few , but it seems you are not agree
with that and you think we can get profit with scalping method in retail forex brokers like the once above .
  • #9
  • Nov 22, 2010 5:43am Nov 22, 2010 5:43am
Quoting MRmojtaba
we talk about retail market not huge banks , if you want to have 0.2 spread you must invest 1 million dollar with jpmorgan for example ,,,but with 1000 or 10000$ the lowest spread brokers are oanda , mbtrading ,dukascopy or some others .
i think there are professional scalpers that get profit from these kind of brokers with scalping
even they are few , but it seems you are not agree
with that and you think we can get profit with scalping method in retail forex brokers like the once above .
I would say ignore half these people. Everyone that says Can't, ignore. Anything is possible and anything can be done. There are 10000 ways to trade. You have to figure out what works for you and stick to it. There are severl scalpers that are making a killing.

And people that say "oh sitting in front of the screen 10 hours a day sounds like a lot of fun" .. why would you have to sit in front of the screen all day? By using more of your account you don't have to make as many pips. 3-5 pips a day compounds into a huge return. An hour a day is all you need (open of london or new york) then go golf as linuxtroll would say.

Good luck
Joe
  • #10
  • Nov 22, 2010 6:05am Nov 22, 2010 6:05am
Quoting beehivesjoe
. Anything is possible and anything can be done.
Joe
i agree with this part
  • #11
  • Nov 22, 2010 6:33am Nov 22, 2010 6:33am
Quoting beehivesjoe
I would say ignore half these people. Everyone that says Can't, ignore. Anything is possible and anything can be done. There are 10000 ways to trade. You have to figure out what works for you and stick to it. There are severl scalpers that are making a killing.

And people that say "oh sitting in front of the screen 10 hours a day sounds like a lot of fun" .. why would you have to sit in front of the screen all day? By using more of your account you don't have to make as many pips. 3-5 pips a day compounds into a huge return. An hour a day...
You wanna make a living in trading by just devoting 1 hour daily then go to play golf? With all due respect Sir, please pm me when you're able to do so?
Trading is the game of fear and greed.
  • #12
  • Nov 22, 2010 6:37am Nov 22, 2010 6:37am
Quoting Fx chartist
You wanna make a living in trading by just devoting 1 hour daily then go to play golf? With all due respect Sir, please pm me when you're able to do so?
Some people put in way less.. it just depends on how you trade! If you want to trade the daily time frame, you get up check your few pairs place your orders and leave.

If you want to trade an hour a day, get up during london open, turn on your 5 second chart, wait for volatility to kick in, get in with that direction and make your few pips for the day and leave.

People think they have to make 100 pips a day to live.. you only need a few pips a day.. people haven't figured that out yet.
  • #13
  • Nov 22, 2010 6:44am Nov 22, 2010 6:44am
Hi Jhig, whats your definition of scalping? scalping for 1pip? or 3 to 5 pips or more?

Quoting Jhig
Retail traders don't scalp the spot market because its expensive and carries a high risk of loss due to many variable that has been put in place by retail brokers.

If you think scalping a pair worth 0.9 pips is a good decision, then you're nuts. True scalpers prefer very small spread (something around 0.2 or 0.0) w/ commission. You're never gonna get that small of a spread and competitive negotiable commission price playing with retail brokers. True scalpers looks to big banks for these deals. In order to get great commission rates and wonder spread,...
  • #14
  • Nov 22, 2010 12:14pm Nov 22, 2010 12:14pm
Quoting Mr J
Scalping is pretty tough:
- Significant expenses to overcome
- Low margin for error
- Requires fast decision making.

Not the highest probability situation one can place themselves in.

Since when does a scalper have to sit in front of a screen for 8-10 hours?

Turnover isn't an issue. The only "risk" is the greater slippage a scalper may experience relative to their capital, and that's why a scalper must be relatively more conservative.

Small gain? You think scalpers put up with it to achieve similar or lesser returns to traders...
Scalpers do have to sit tight if they are serious about scalping, as no automated system which can be trusted in all aspects of scalping, has been invented yet.

If there was such a program, and you are in possession of it, it would not be nescessary for you to trade, as you would be able to sell the program for a fortune.

During my 21 years as professional trader, I have witnessed this discussion about scalping, not hundreds of times, but thousand of times, and there are so many people out there who would pay a small fortune for a automated program they could trust.

They do have to accept a small gaín, in return for a hugh risk and no room for faults.

I do not say, that it is not doable, all I say is that I have been there, and I am not going back.

Have you been scalp trading your self, and for how long?
  • #15
  • Nov 22, 2010 12:45pm Nov 22, 2010 12:45pm
Do to the huge volatility vs gains you will often need to accept 2:1 risk:reward ratio. Especially on more volatile pairs. This means that you need to make ~70% to brake even.

It's more then doable and going over 80% wins is something that people like but you have no margin for error. Going high frequency will ultimately make a 1% shift in or out of your favor a big difference. And this can be a big problem - is this shift wrong because of the market or is your model wrong?
  • #16
  • Nov 22, 2010 12:53pm Nov 22, 2010 12:53pm
Quoting Jhig
Whats ironic is retail traders truly think a 0.9 spread is scalp-able...
I think it is.
I would love to have a Bank/PB setup, but I honestly don't have that
kind of risk capital.

That 0.9 pip spread can be really inexpensive in the right kind of volatility.

I have believed retail forex to be "scalp-able" since I began trading Forex (2009).
I think the returns can be extraordinary, similar to the "pit traders" of
the recent past. Is it easy? Absolutely not.

I love this quote from a post of my own over a year ago...forgive me
for posting it again.

Quote:
Nevertheless, my belief is that the largest profit percentages are made by short-term traders who really have their psychology together. I've seen short-term traders who could make as much as 50% or more per month (on small amounts of money such as a $50,000 account) when they were in tune with the market and themselves.

page 85, Trade Your Way to Financial Freedom, 2nd Edition, Tharp
  • #17
  • Nov 22, 2010 1:43pm Nov 22, 2010 1:43pm
Quoting Intu
That 0.9 pip spread can be really inexpensive in the right kind of volatility.
This is true, but you're better off just capturing the spread or/and providing widened liquidity.
  • #18
  • Nov 23, 2010 2:51am Nov 23, 2010 2:51am
30% of the poll scalping with more than 10000$ , this is because if you invest more you have to pay less spread and you can trade also with high volume
which is mean you pay less spread also in some brokers , i believe also that professional scalpers trade with more than 10000$ but it dose not mean you cant get profit with lower amount .
  • #19
  • Nov 23, 2010 3:24am Nov 23, 2010 3:24am
Quoting Marcell
Scalpers do have to sit tight if they are serious about scalping, as no automated system which can be trusted in all aspects of scalping, has been invented yet.
I didn't mention automation, I merely questioned the assertion that scalpers sit in front of the screen 8-10 hours a day.

Quote
They do have to accept a small gaín, in return for a hugh risk and no room for faults.

The gain per trade may be less, but the significantly greater turnover will more than make up for it. Per trade, it's a low reward, but on a time basis, it's large.
  • #20
  • Nov 23, 2010 8:31am Nov 23, 2010 8:31am
Quoting Mr J
I didn't mention automation, I merely questioned the assertion that scalpers sit in front of the screen 8-10 hours a day.



The gain per trade may be less, but the significantly greater turnover will more than make up for it. Per trade, it's a low reward, but on a time basis, it's large.
First you say that you didn`t mention automation, as the reason why you question the fact, that scalpers do have to sit in front of their screen 8-10 hours a day, then you say that a significant greater turnover will make up for the low reward on each trade.

Is this argumentation fact driven?

How can a trader obtain a significant greater turnover, without automation, and not sit in front of the screen?


I scalp traded for more than 2½ year, and I sat behind my screen between 8-10 hours every single day, during the week. I do not see any other way, if you know of another, it would be great if you would share :-)
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