TheNegotiator

We have had threads in the past where people post something like "bought x stop y target z" before. That's fine. If people want to do that then that's up to them. But as an exercise in helping other traders and each other in terms of how we view the market and the types of trade we take, I don't believe it is especially useful. In any case, if you bought it simply as a reversal, I'm not sure I follow your logic entirely. If however, you had said something along the lines of you bought in anticipation of a possible reversal in the area of yesterday's closing range low, close, vpoc given and that we seem to have moved into vertical exploration you were looking for a good opportunity to go long, so when price was temporarily lower post figures release and you'd spotted price action supporting your assessment, then that may have been more convincing. I'm not saying those were your reasons at all. I'd love to hear what your reasons were as I'm sure others would too.

Seriously, I'm not saying you can't post in this way. I'm saying you can't post in this way in this thread. You are more than welcome to start an additional thread in the forum.

Ronin, in this thread I started it as a place to discuss things about trading. If you state things without backing them up you can actually do a lot of harm to individuals who have little experience. In fact, without explaining any reason why you traded where you did, what you actually posted looked like averaging. Not very clever. I'm not saying that you were as this may have been part of a well considered plan. I'm not even saying the trade wasn't a good one. I am saying you must explain things more. Perhaps you might benefit from discussing the markets in various ways too. There are lots of highly experienced traders with a wealth of knowledge on methods different from yours. As they say, "there's more than one way to skin a cat".

I can assure you that certain futures markets used to be heavily scalped by smallish traders electronically. It was very profitable in the past and to some extent still is.

Excuse me? I'm not judging anyone. One you need to explain things when you post, otherwise you are spamming my thread. Two, differences of opinion and debate are what drive thought and process enhancement. If you want to discuss things, post. If you don't, then don't post.

Simply buying or selling possible levels based on short term price markers doesn't necessarily constitute a "low risk" point of entry. It has to be in context with what the market has done and its behaviour around the price in question.

How exactly does tracking other traders' MAE/MFE help your trading? Or was that not your point?

For what reason ?

Interesting thing to note is in spite of the strong start, there was no follow through in the afternoon and also close was below 70 and the low vol/singles zone. It looks like we might get a test of that again today but remember there are figures out at 10am

Yeah, it's a good point. However, if you can pick good areas then you can normally get a few ticks on side in most cases, whether or not they end up being good to run. Plus you might be able to take the trade 3/4/5 times before the market moves away from the area properly. The list isn't in a particular order. Just some thoughts.

That kind of assumes that a scalper always has to be right no? Scalping is about talking advantage of a change in order flow, meaning they are just hopping in front of others to make a quick buck. No need to be so huge to reverse the market at all.

The game has moved way beyond being over for the pit trader in many cases (in terms of scalping). It's really product dependent though. But even for the screen-based locals the game has changed massively.

why ?

Definitely agree with those points. One of the best risk management tools available to all traders is their ability to not be in the market. Equallt you need to know when you should be in the market, taking advantage of certain conditions. Trade selection ties in with this but also covers additional information depending on how you trade, leading up to and during the setup.

Fairly tight range so far overnight (6.75 pts) and Bernanke again later. Same thing as usual but House might give him some different questions.

So far today we've had mixed housing US housing data and a bunch of earnings reports as in image:- It might be worthwhile keeping an eye on financials throughout the day to see if they take the lead at all. Although 40's yesterday rejected and we subsequently took out the 57's, there wasn't much follow through. I'd be interested to see what if any reaction we get on a retest of the 57's as it looks like we'll be once again opening below.

When I first started trading, many traders pretty much scalped in one form or another. Trading near to an exchange/exchange hub with mostly just other traders to worry about (far fewer algos) gave a disciplined and skilled trader a very good edge. Doing 50+ trades per day was not especially unusual, but never really looking for more than a few ticks at a time either. I ask myself what has changed. I know a good number of people changed their styles somewhere in the last few years given the change in conditions. There are certainly more algorithmic systems these days. I think the level of volatility is higher. Also the way prices move has changed. This could just be due to algos mind, but also a criticism of some markets was that in certain conditions they were ‘manipulated’. I believe that although traders were way too quick to blame their losses on manipulation which probably didn’t exist, there were certainly times when specific markets were ‘played’ with. However, the line between dark manipulation and natural rebalancing of books such as a short squeeze is not always well defined. Anyway. So things are quite different now but could it be done again and what would be required to do it? Scalpers certainly still exist. The question is how successful are they compared with the past? My feeling is that if I were to scalp now it wouldn’t be a whole heap different from how I would take any other position. That would equally apply to any other of the various methods used by traders. But it would have to be taking a trade at a place where there is good potential for a reaction. The difference being over a normal trade that you would only give it a little space. So you’d let it run if it moved straight for you, but take the trade off quickly if it didn’t or started reversing. Here’s a list of factors I feel are important:- Realization that you cannot lean on the order book (a limit order fill is not an edge). - It used to be that a limit order fill let you take at least a tick and sometimes more on most trades so long as you had a good position in the queue. This is why EPIQ came about for X-Trader and OrderQ (if I remember correctly) was popular before it. Not anymore. If you get filled on a limit you have to assume it will trade through you. If you’re accurate with your entry however, this isn’t necessarily a bad thing. Accuracy in prediction of possible supply and demand changes at specific prices/times/indicator values/whatever else. - To make sure you have the best chance at taking at least a few ticks whether or not the market moves much further from any given price, you will need to identify good areas to trade. This can be based on any method, but should show a high level of some sort of reaction at the areas you identify. Ability to read any reaction and change in supply and demand in real-time. - Nothing always works. With scalping you need to get a good win rate. Your wins are never likely to be huge so they need to be plentiful. To improve your chances it is important to be able to see what is happening at you potential point of entry. If you have a DOM with good information (TT X-Trader historically was the best for this) you see it here, or if you have a bid x ask footprint as popularized by Market delta, you will be able to get a good idea from this too. Simple equivolume candles can help too and watching cumulative volume delta and how it changes relative to price is also useful. A liquid and lag free market. - Scalpers need to react quickly. A market which ‘jumps’ for any reason can particularly hurt a scalper if they have no time to react to the market (i.e. it moves before they see it move). Scalping the likes of the Dax or Crude is possible, but because of how they move most of the time changes to your methodology are necessary to be successful. Not saying it can’t be done. I know people who do it. Also, is it possible to scalp on a high quality retail feed over the internet or is it necessary to trade say from an arcade or somewhere with a leased line at least? My feeling is probably it can be done retail depending on your feed, your ISP and your hardware quality. Identification of favourable conditions for scalping. - It’s very important in my mind to make sure you are trying to trade in the right way given different conditions. If for example you position trade and you sell at a good level into a market which has bolted from open, you’ll probably take a hit and a standard stop out. Do that as a scalper and you might have to take a larger than normal loss. Strong risk control. - You simply must get out when the market moves against you whether you think you are right or wrong. Scalping is a numbers game and you must minimize your losses. Quick and easy order entry platform. - To react quickly you are going to need a quick and easy order entry platform. So that means no delays whatsoever on order entry/mod/cancel (obvious this depends on the connection too) and if means you should be able to alter orders easily and accurately (preferably with keyboard function trading in addition to mouse). Low trading costs. - As I’ve already said, scalping is about numbers of trades. So your costs per trade must not be prohibitive to making a profit. You couldn’t scalp if you were paying $5 per round trip or more for example or it would make it very difficult at the very least. Mental focus. - Trading requires mental focus at the best of times. Scalping requires even more. You have to be able to concentrate for long periods sometimes and that can be tough. If you're at all interested in scalping, I hope this information is useful to you in some way. If anyone has any other important points to discuss, please share them. If you’re currently a scalper, it’d be great to hear your thoughts on how it is and what your challenges are these days.

Just a little chart update for you guys. If we were to get above 57.00 and show renewed buying interest, there could be some work to be done in the upper portion of the balance profile (blue).

Not a lot. Watching vpoc/vwap 46.25 and mid 48.00.

watching IB low/44.50 level for any sort of reaction if it retests.

It's not something I normally do, but occasionally it's worthwhile. I took almost exactly the same trade basically as a punt on the fact that we'd moved lower already and anything positive from big ben would send us to the moon. Then, given the flag break and the fact that not especially bad comments had us tanking, I double reversed out at 49.50 with a short stop above 51 and a target of 40.25 area. Sometimes the best trades really test your resolve when they're reversing on you, but if there's sound logic backing them up it's worthwhile hanging on for just that little bit longer than you normally would.

possibly 62.5 ..........

Above 49/52 I have 66 for dollar index. Just FYI.

If we make new lows from the 47's, there's 44.50 then possibly an important test of 40.25.

Ah, oh well .....