xaugh

Thanks Phantom. I like range bars but have never tried using large ones. The key in your success, I would venture, is the use of what many would consider a large stop. Have you ever tested the viability of reversing at your stop? Xaugh

My two cents. (skip if you don't like long winded posts) Under certain market conditions it is possible to make good money scalping. First you need a volatile instrument like the CL or the DAX. The CL will tend to oscillate at least 10 ticks as it moves; the DAX will oscillate at least 12 ticks as it moves (in a two sided market). For the purposes of scalping you must stay away from grinding directional markets or tightly coiled range markets. Second you must use a hidden stop (one that is generated by your platform) because with these instruments, even though the liquidity is good, the depth and volatility allows the movers who can see your stops to grab them. You must use a secondary disaster stop, far from price action, that triggers a market order and sits at the exchange to protect against possible huge momentum moves that can materialize without warning. (With these instruments that means more than $750 to $1200 per contract depending on slippage). You have to stand in front of price during a pull back using the current oscillation magnitude as a guide. You cannot wait for a momentum indicator because by then the low risk scalping opportunity will be gone. Skilled reading of price action on the DOM can help. You must be willing to double down on a momentary spike against you and then scratch (covering commissions) on the reaction. Then evaluate if a reversal is beginning. If the sudden move against you just briefly pauses and keeps going then that is what the hidden stop is for. You will want a tighter stop on the double down entry obviously and this all has to be done automatically since the market can and often does move too fast to manually react. Sophisticated front ends can be leased at a very reasonable rates to accomplish this. There is no room for any hesitation and your success will depend on your "feel" for the market. High levels of skill and trading experience are also a prerequisite. Use of real time market metrics and current inter-market relationships are required to increase the odds that you are on the right side of the market at the moment. A scalp in these contracts should net you about $80 per contract and only take a few seconds. This minimizes commission and spread effects. Only scalp in the direction you feel the market may break or is already moving. After a period of range bound trading and based on "feel", experience, indicators (dare I say discretion) you can leave an open target to take advantage of initial momentum moves (no pullbacks) of $250 to $750 per contract. These moves are relatively common with the above mentioned contracts and serve to counter the loosing trades. Once a trade is in the green never let turn into a loser. You will scratch many trades but my definition of a scratch includes covering commissions so you will also make $6 or $8 per contract. Often these markets will pull back just before making a big move (to make sure as few traders as possible are on the right side of the move). In order to stay in the market it is often possible to double down, lowering the BE, and scratch half on volatility. This can be done several times if there are still sound reasons for being on that side. When the move comes it will usually be explosive and with your superior trade position you can trail a stop at 30 ticks or more often capturing a gain of thousands of dollars per contract. Sometimes you will even have the double position when this happens. This is bonus time. It goes without saying that if attempting to trade these types of contracts with wide stops one needs a minimum account balance of 80 to 100 thousand dollars, if only to be able to handle the huge numbers psychologically.