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Do scalpers make money in the long run?

  • #81
  • Apr 25, 2014 6:01am Apr 25, 2014 6:01am
That's a bit like saying:
I could cure my terminal illness in one shot but instead I choose to just take enough medicine to keep me alive 24 hours, every 24 hours... because I'm comfortable with that dosage.

Quoting DavidRP
{quote} In his post he says is not compounding and taking profits every week: "The point you have made that this typical dickhead will never read is that I do NOT scale up my trades, and have not done so for more than 1 year. I trade 500 lots, I do that with my trusted brokers, and I take out my money each and every week...."
  • #82
  • Apr 25, 2014 6:06am Apr 25, 2014 6:06am
"As for someone selling at the same time as you are buying.... this is how any trade takes place."

Technically you're right. But the person I was referring too wasn't the bank. What if you buy 100 millions lots and another person sell 100 million lots at the same time, the bank is the middle man, what would happen then, would the market go up down, or stay the same? That's the tricky question, if you calculate the market volume then you would see that the pip movement doesn't add up, the tokyo session alone has 250 billion in transaction but the market doesn't even want to budge sometimes. Just food for thought.

So in the NY/London session his lot sizes could be swallowed and you probably won't even notice it.
Being a trader is lonely, but being a great trader is lonelier still
  • #83
  • Apr 25, 2014 6:28am Apr 25, 2014 6:28am
My original example was used to show how liquidity works when you enter the market as the previous poster JM was implying you can't just scale due to liquidity so we are talking about two different things here.

On your point... yes you're right, not all orders move the market because they are matching bids/offers.

Quoting saneblane
"As for someone selling at the same time as you are buying.... this is how any trade takes place." Technically you're right. But the person I was referring too wasn't the bank. What if you buy 100 millions lots and another person sell 100 million lots at the same time, the bank is the middle man, what would happen then, would the market go up down, or stay the same? That's the tricky question, if you calculate the market volume then you would see that the pip movement doesn't add up, the tokyo session alone has 250 billion in transaction but the...
  • #84
  • Apr 25, 2014 6:33am Apr 25, 2014 6:33am
in traditional market, when someone sell at the price 10 and the buyer want at the price 6 if the agreed price is 8 then the initial ask / bid price is not the price they pay/get
so if we put position big enough to move the market, i wonder how the broker can keep their price (a..k.a 'no requote').
  • #85
  • Apr 25, 2014 7:01am Apr 25, 2014 7:01am
I mostly do NOT have any execution problems or slippage at 500 lots.The Forex market is 5.3 Trillion dollars a DAY. That is 53,000,000 lots per DAY.I trade the Eur:US$, which accounts for about 60% of the total Forex market. That equates to 3.18 Trillion dollars aday; or 31,800,000 lots per DAYMy 500 lots is trivial against a daily market of 31,800,000 lots traded in the Eur:US$.It's not complicated.
Quoting saneblane
"As for someone selling at the same time as you are buying.... this is how any trade takes place." Technically you're right. But the person I was referring too wasn't the bank. What if you buy 100 millions lots and another person sell 100 million lots at the same time, the bank is the middle man, what would happen then, would the market go up down, or stay the same? That's the tricky question, if you calculate the market volume then you would see that the pip movement doesn't add up, the tokyo session alone has 250 billion in transaction...
  • #86
  • Apr 25, 2014 7:29am Apr 25, 2014 7:29am
Quoting TranceTrader
{quote}
No need to worry about me - I do just excellent. However, the disparaging comment was unnecessary and I apologize for that. I still think that that 12 week plan sounds unreasonable for the reasons mentioned concerning liquidity - its just not possible to trade large enough size in a single market to make $14M a week, let alone $4B [barring an obscene volatility]. Further, we haven't yet touched on the emotional aspect of increasing your trading size. Whether we want to say so or not, we all hit a level where increasing size beyond what we have been trading ellicits a greater emotional response than we are accustomed to.
Small disciplines repeated with consistency lead to great achievements.
  • #87
  • Apr 25, 2014 7:45am Apr 25, 2014 7:45am
Spot forex is actually closer to $2 trillion a day.

Quoting dancingphil
I mostly do NOT have any execution problems or slippage at 500 lots.The Forex market is 5.3 Trillion dollars a DAY. That is 53,000,000 lots per DAY.I trade the Eur:US$, which accounts for about 60% of the total Forex market. That equates to 3.18 Trillion dollars aday; or 31,800,000 lots per DAYMy 500 lots is trivial against a daily market of 31,800,000 lots traded in the Eur:US$.It's not complicated.{quote}
  • #88
  • Apr 25, 2014 8:30am Apr 25, 2014 8:30am
Do scalpers make money = Yes.
Do swing traders make money = Yes.

Does any of them make money with money and risk management = No.
  • #89
  • Apr 25, 2014 9:03am Apr 25, 2014 9:03am
Quoting dancingphil
I mostly do NOT have any execution problems or slippage at 500 lots.The Forex market is 5.3 Trillion dollars a DAY. That is 53,000,000 lots per DAY.I trade the Eur:US$, which accounts for about 60% of the total Forex market. That equates to 3.18 Trillion dollars aday; or 31,800,000 lots per DAYMy 500 lots is trivial against a daily market of 31,800,000 lots traded in the Eur:US$.It's not complicated.{quote}
to be honest i'm just not buying it either
500lots is for hedge funds and institutions

one would need around 50million before leverage and even after, still too much to make sense
and anyone that says over 20 contacts is pushing it to be believed

id say you trade around 5 lots max
  • #90
  • Apr 25, 2014 9:15am Apr 25, 2014 9:15am
Quoting Gwan
in traditional market, when someone sell at the price 10 and the buyer want at the price 6 if the agreed price is 8 then the initial ask / bid price is not the price they pay/get so if we put position big enough to move the market, i wonder how the broker can keep their price (a..k.a 'no requote').
On a retail broker, no amount of position will move the market, you are trading not the actual FX market, its a CFD.
  • #91
  • Apr 25, 2014 11:55am Apr 25, 2014 11:55am
Quoting megamo
{quote} On a retail broker, no amount of position will move the market, you are trading not the actual FX market, its a CFD.
Not even on a ECN broker?
  • #92
  • Apr 25, 2014 4:01pm Apr 25, 2014 4:01pm
Quoting megamo
{quote} On a retail broker, no amount of position will move the market, you are trading not the actual FX market, its a CFD.
You know I still wonder about that, but then you hear ECN bank like Dukas who can swallow 250 mill in currency without missing a beat, so where does that money go? does it just disappear? I mean the whole point of the Liquidity partners is to be able to swallow those kind of positions, and what about the other brokers who can't take on all that risk, and they hedge their positions in the market again where does that money go? shouldn't that have an effect on the market.

I am not denying it, but it's just hard to believe that "independent" entities are taking on so much risk without going bust. Even if a bank tell me that's how it works I still probably wouldn't believe it, somethings just don't add up I guess. The only thing I believe in the market is the charts nothing else.
Being a trader is lonely, but being a great trader is lonelier still
  • #93
  • Apr 25, 2014 6:20pm Apr 25, 2014 6:20pm
Quoting dancingphil
I most certainly do. I am not only a scalper, but also a Counter Trend (CT) scalper. I don't aim for 5-10 pip scalps, but if that is all I get I am always happy. The most important thing for me is that at some point, my trades do at least get to a 5 pip profit level. I trade 500 lots, at 400:1 leverage. I run a very tight Beak Even +1 pip at 5 pips profit with an EA. I trade at 2.5 lots per $1,000 of account equity. Each week I start each of my 5 trading accounts with $40,000, $200,000 collectively. A 10 pip trade to me is 25% equity profit. I generally...
And I bet you're also a bajillionaire by now. Baloney. And if it's true, you're not doing something sustainable, much like martingale and other gambling tricks.

Quoting TranceTrader
JM, you seem like a rational person so I will break it down for you. Lets imagine dancingphil is trading 500 lot positions (which he isn't).. but if he was in some magical world then he would be holding 500x100,000 = $50mln position in currency. In the real world, when someone takes a position in the market of that size, it would very likely consume significant bids/offers, enough to drive price in the direction of your order (this isn't a guarantee but it's very likely) so the even though liquidity levels would determine the average price that you were filled at... any movement in relation to insignificant liquidity to fill at the intended price would actually make the position money (you would push price in your direction essentially) so this is not a problem when getting into the market. Liquidity is only a problem when getting out of the market. With the above explained, the compounding example over a 6 month period is not "to infinity" because you only need 6 months to become the richest man in the world if you can generate 200% per week from $10,000 compounded. Let's make it more digestible and just do 3 months, which encompasses 12 weeks, here are the results for $10k at 200% per week: Week 1 $30,000.00 Week 2 $90,000.00 Week 3 $270,000.00 Week 4 $810,000.00 Week 5 $2,430,000.00 Week 6 $7,290,000.00 Week 7 $21,870,000.00 Week 8 $65,610,000.00 Week 9 $196,830,000.00 Week 10 $590,490,000.00 Week 11 $1,771,470,000.00 Week 12 $5,314,410,000.00 Now of course you have the practical considerations such as average fill price, commissions etc... but do you see what I'm trying to show you here? Do not let these people fool you into thinking these pipe dreams are real because THEY ARE NOT. Forums like this are a breeding ground for these inflated returns myths which immediately distort the expectations of the readers, the reality is very different. With regards to the $30,000 statement ..It looks like you read my post out of context with regards to the 200% on 10k... if you read the previous conversation you will see I'm talking about compounding which at a return of 200% a week would make him the richest man in the world in 6 months. I'm worried for you JM, specifically your disparaging comments towards the end assuming that anyone who is critical is automatically unsuccessful. Scrutiny is very important in finance, just as important as it is in any other field. Do not be scared to challenge the status quo because on these forums as other people have said... 99% of the material is bullshit. The best thing you can do is get off these type of forums and approach trading & speculation as an academic pursuit to give you understanding of what is actually going on and why the markets exist... only then should you be contemplating risking your own money. The people on here and forums alike have very little to offer you apart from confirmation bias and fantasy stories. {quote}
Good to see a rational response here. 200% is possible on a very lucky occasion. It's not possible to make 200%-300% "average" every week unless you're a crook or a Time Lord.

Quoting dkrock
{quote} Where did he mention compounding that weekly? It is not very difficult to make big returns. You are assuming he never withdraws any money and tries to constantly make 200% on the account balance. Sure, that is ludicrous. However, if your account balance is the same week after week and you withdraw all the profit over what you started the week with, then why would you not make 200% per week? Not everyone is a scammer.
Whether or not he's compounding it weekly, something isn't adding up here. That said, it's reasonable to assume someone with an apparently ingenious method of breaking the market is going to capitalize on it while they have the chance. Only a fool wouldn't.
  • #94
  • Apr 25, 2014 6:40pm Apr 25, 2014 6:40pm
"Exactly and this is because the market maker is sitting on the trades until the next session or the one after that. If they actually traded the transactions as they occurred, then everyone would catch on and be able to profit easily. That is why you see compression and expansion in different sessions on different days on different weeks on different months. They have to mix it up or we would all know when to trade."

That's an interesting theory and it does make some sense. Everyone keeps saying that "You should think like a bank" but as soon as anything against the ordinary comes up it is shot down. Thanks for that out of the box theory, I have my suspicions and I am researching this and other aspects of the market also.
Being a trader is lonely, but being a great trader is lonelier still
  • #95
  • Apr 25, 2014 7:09pm Apr 25, 2014 7:09pm
Quoting dkrock
Just because a few of you have never figured out how to make 200% in a week does not mean it is not possible. And just because another few of you use pen and paper Wall Street trading methods and money management advice, does not mean you know what you are doing. The key is to find a happy liquidity lot size. Until you reach that point, why in the world are you trading 2% of your account? This is advice from Wall Street where they are mostly salesmen trading with other people's money. So, to keep from being beat up or killed, they do not lose too...
You sure type a lot and have quite the haughty opinion of yourself for someone who doesn't understand a basic concept like drawdown. That's the reason you don't trade more than a certain percentage of your account, and you don't raise that percent until you have some really solid statistical data on your trading success. It's a safety mechanism that ensures that your inevitable losing streak from pure bad luck isn't going to bankrupt your account.

Quote
I understand that I am on a entirely different level than most of you, but you need to know the difference between marketing talk and trading talk.

Of course, I didn't mean to embarrass you for your lack of experience. I'm sure you'll be up to our level in a few years though, after you've had your arrogance beaten out of you by the market.

Quote
I have no idea if dancingphil is legit or not, and frankly it doesn't even matter to me. What matters to me is all the short sightedness I am reading. Expand your freaking minds and learn to trade so you can make responsible comments and not attack people. When you attack traders, it only shows you are clueless. You can never be successful by throwing insults at people or by closing your mind to new possibilities. Never. The universe does not work that way. Success involves creating masterminds where people who have talents different, or greater,...

People like you are why people like me quit visiting this forum. It's full of idiots who think they've cracked the vault to Fort Knox after a lucky win streak, kind of like the people who gave it all up to "trade" in the dot com bubble. I guess I can give you a cookie for your enthusiasm, though.

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  • #96
  • Edited 8:10pm Apr 25, 2014 7:16pm | Edited 8:10pm
I may use the term marker maker and bank interchangeable because banks are the biggest market makers in Forex. What you are saying there is true no doubt about it, but those tricks affect some currency pairs more than others. However most traders don't research to find the least affected by manipulation and only pay attention to large pip movement.
Learning to read the chart and research can minimize losses to certain extent. And that's why I just can't understand why it's so hard for people to believe that a guy can make a good return every week from forex, and I believe it has more to do with personal biases than anything else. If these same people had proof they would shut up and start asking for advice. I have been following FF long before I joined and made my first post, and there has been some great traders who left because of this same kind of behavior, and these were guys who knew there stuff you can just tell from what they say. A guy a few years ago made 40 million in one year from trading a few thousands, so I don't see what the hoopler is. I am not saying I believe him or not, but it is possible.
Being a trader is lonely, but being a great trader is lonelier still
  • #97
  • Edited 7:45pm Apr 25, 2014 7:29pm | Edited 7:45pm
Quoting dkrock
{quote} I suppose you are right about my arrogance. Some people, like you, mistakenly define arrogance for confidence. I am not sweating you or any opinion of me you create. It is ridiculous to create opinions of people when we are supposed to be evaluating trading methods though. You think? Oh, no, you don't think. You just like running your mouth. You should be commenting on news sites, not here. Where is your advice? None! All we get is remorse from being subjected to your wickedness. I understand drawdown, but I don't trade pen and paper like...
I like how you protect your delicate little ego by putting me on your ignore list. I guess that saves me the hassle of making a serious reply to your troll posts. Really, what a clown.

For those of you still reading, though, I want to point out that his concept of drawdown is either completely flawed or that he doesn't take losses until they bankrupt him. Drawdown can be from tolerating losses to a point or by a series of losing trades. Unless you have a 100% win rate you'll always experience some form of it.

Edit: I also noticed from his profile that he's hawking a personal blog. I'm sure he has nothing to gain from pumping himself up in terms of advertising revenue...
  • #98
  • Apr 25, 2014 8:03pm Apr 25, 2014 8:03pm
Quoting Kanzler
{quote} Edit: I also noticed from his profile that he's hawking a personal blog. I'm sure he has nothing to gain from pumping himself up in terms of advertising revenue...
Not all people earn money from their blogs. Many of us don't - we do it to simply keep a journal of what we are doing, to help others, or for later review. I haven't looked at his, but we don't all have blogs to try to get revenue.
Small disciplines repeated with consistency lead to great achievements.
  • #99
  • Apr 25, 2014 8:08pm Apr 25, 2014 8:08pm
Quoting jmflukeiii
{quote} Not all people earn money from their blogs. Many of us don't - we do it to simply keep a journal of what we are doing, to help others, or for later review. I haven't looked at his, but we don't all have blogs to try to get revenue.
Oh, my apologies - you're right, many and most people don't. But I've developed an eye for BSers on here and he fits the profile. Let me show you how much he really "knows" about the market from an earlier post he made that I discovered.
Quoting dkrock
I am a range trader, so I can respond to your question. I don't trade 4Hr ranges though, like a previous poster referenced. In order to know the general direction of the market I use two tools. One, I place a moving average on top of my indicators that allows me to see trend exit points. This way, I can trade ranges when the market is ranging, and see the trend exits when the market is trending. For instance, if you use a CCI set to 14, then find the highs and lows of your time period and experiment with a moving average that the CCI will cross...
Let's take a look here. Ranges vs. Trending (both completely arbitrary and meaningless terms), CCIs, moving averages, bollinger bands, PSARs....a total newb fest. Classic technical failnalysis with no concept of order flow or what that might look like on a chart, and nothing even close representing advanced analysis of such. Someone you really want to listen to? I hope not.
  • #100
  • Apr 25, 2014 8:10pm Apr 25, 2014 8:10pm
Quoting dkrock
{quote} Wow. Thank you so much for your comments. First, my blog is private to non-trolls. Remember, people like you are why I can never respond to threads, so I had to make my own. I am not selling anything, but once again, thank you so much for pretending to know anything about me!!!! Dude, you should be reading fortunes or talking to the dead shouldn't you? Have another beer, toke, or restart your video game. I understand you like to be the bully at your house, but guess what!! You screwed up and stuck your pie hole where it doesn't belong. Ah,...
I don't need to decipher your indicator-laden junk to know that you have drawdown. Or are you telling me all your account balance does is go up, up, up? You're full of crapola, stop before you embarrass yourself further.
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