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walterw

Scalper Daily Target

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Hello everyone, want to make a little comment here on some scalping money management that has a great impact on the technical trading as on the traders psichology...

 

First of all let me make clear that this considerations are ONLY for scalpers.. it will clearly not apply for a daytrader by no means...

 

As you all know I am a scalper myself... I love scalping ¡¡¡ I enjoy making little money everyday, its a life style... and when you master a method its so exciting to sit down on your trading room an say, I know what I am technically looking for, I know how much money I want... I have understanding of what this is all about... I trade, get to my target and STOP trading live, from there on I do research...

 

So from this point of view, a scalper MUST have a daily target... so lets say for example this : trading ER a daily target of 60 dollars per contract its a very tangible and worth seeking target... some of you may say its too little, well not necesary... if you trade up to 30 contracts it can give you a steady monthly income of 36k... wich I dont regret....

 

60 dollars its equivalent to 6 net ticks after comisions, depending what comissions your broker is charging you, you will need 1 or two ticks more to cover costs...

 

If you look at ER range, 6 ticks is a stupid amount of money to make.... BUT sometimes its not that way... if you got stopped lets say two times on -5 ticks each... now you have to work 160 dollars to your target...

 

So you see, making 60 dollars per day contract some days may be a joke others will make you swet some... I call this easy or hard days...

 

Now, if your method has a good RRR embeded on its apraoch should you do fine...

 

On the other hand, having such low expectations for the day makes you much more selective on your trading... you will only take the best setups that most probably with one or two trades will make your day...

 

As day makes target and other day so does, week makes it month too, trader gets confident on his system and he is not greedy to take more than his daily target... here comes self-restriction not to trade.... In this types of ocations the trader is tempted to make more... going behind that temptation is something that will hurt the most valuable asset he can have : NO GREED... greed destroys... it does in all aspects of life, so in trading...

 

Most downward equities at some point where ok, you got so enthusiastic about that you thought you could trade everything that came in front of you... well no, it wasnt the case...

 

Scalping bussiness is more a conservation than creation of capital bussinness, and selfrestriccion does the job...

 

You want more than 36k month...? no problem, trade more contracts or consider trading ES or forex (hi liquidity)... but keep your daily target very low...

 

As any system , recomendation or experience, some things work for some traders as for others dont...

 

The Scalper Daily Target is a lifestyle.... cheers Walter.

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Walter, I just wonder why a daily target rather than a target per one trade? ( I am not a scalper). I mean if a setup occurs the trader takes it and exits at the target if the latter is reached. As a result there are days with no setups and therefore no money won or lost, and there are days with above average number of trades. So, what precisely is the role of a daily target in one's trading - how does it help? Cheers

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working backwards yields a similar figure.

 

RUS is trading near 850. forget leverage for a minute. a 1% return per month is 8.5 pts (would equal 12.7%/year). Assume 20 trading days and you need to avg 4.3 ticks per day to get there -- 5-6 ticks with trading costs.

 

So I agree that 6 ticks per day for RUS is a good goal if you can do that with 'surgical strikes' -- not being in the market very much and can do it with reasonable stop-losses. Compounding 6 ticks per day is powerful on its own if you can do it with low variance. Then just add contract size and you can leverage returns while maintaining the same low variance.

 

But this doesn't necessarily mean the profit target for a trade is always 6 ticks. You might have a 1 pt target for a set-up. Or a 1.2 pt target. Linda Rashke says their modeling shows that you should be targeting 0.5 to 1.0 ATR to optimize your results. Depending on the timeframe you trade, this probably isn't all that much. Another way to do this is to make sure to take 1/3 or 1/2 your position off for a small scalp (0.5 - 1.0 ATR) and then play the other 1/2 to 2/3 for normal profit goal. This might yield the 6 tick target and your risk in dollars drops exponentially if you can get a small profit at very high % on 1/2 your position.

 

You need to also occassionally have big wins to offset those dead fat profile days when the market trades narrow range. But I agree that if you wait for a really choice set-up, they aren't going to come around much more than once per day -- per market you watch. Sometimes twice. Very rarely three times.

 

Wait patiently. Get in with your surgical strike and get out. It might not achieve your trade target (which is likely higher than your daily goal) on the first entry -- but if it does, strongly consider calling it a day. Trading one time per day, per market is a beautiful thing.

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I think that Dogpile got the clear idea... now Jake there is something interesting here and we call it "momentum"... when he declares himself at the momentum areas... you want to leave a runner working... this will normally exceed your daily expectations, wich you can use it as a cushion on future stops... now calling a day in this case is a smart thing to do specially when you know that for a scalper the next 2 hours may have such a diferent climate that you have more chances of getting stoped than making any profits...

 

Fixed profits for a trade itself would keep you of taking this momentum situations... maybe you can take a fixed profit for the first 1/3 of position as many do here... the rest if you see momentum should you hold until you get a technical exit signal.... cheers Walter.

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Assuming that your going in for a small surgical strike as you put it, how many different markets do you watch to make sure that one of your setups appears at least once or twice a day?

 

I've been daytrading only recently and have been playing with 233t charts and 5 min charts of the "main" market im trading and I trade the longer term intraday movements with a 55t chart to time entries with a daily target of between 10-20 points (YM points) or equivalent.

 

Taking 5-7 points at a time scalping with a daily target of 10+ points over 2-3 trades is somewhere I want to end up in the future once I build my account up slowly.

 

Walter, did you start out scalping or did you ease your way into it? Reason being is that if I went for my daily target atm by scalping my way there, then the commissions paid on 3-4 in/out trades per day would eat away a lot of my account.

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Assuming that your going in for a small surgical strike as you put it, how many different markets do you watch to make sure that one of your setups appears at least once or twice a day?

 

I've been daytrading only recently and have been playing with 233t charts and 5 min charts of the "main" market im trading and I trade the longer term intraday movements with a 55t chart to time entries with a daily target of between 10-20 points (YM points) or equivalent.

 

Taking 5-7 points at a time scalping with a daily target of 10+ points over 2-3 trades is somewhere I want to end up in the future once I build my account up slowly.

 

Walter, did you start out scalping or did you ease your way into it? Reason being is that if I went for my daily target atm by scalping my way there, then the commissions paid on 3-4 in/out trades per day would eat away a lot of my account.

 

 

Hi Nick, it took me some kind of process to get eficient in scalping... I originally was a swing trader (in Buenos Aires ), evolved to day trader and then became scalper...

 

The concepts behind swing and day trading where the same, just switched to a smaller time universe... got confortable with it and finded my place in the market...

 

I still believe I can have more better performance if my "timing" methods could be optimized... I am working now in a very cool tool that Raul ( feb2865) has introduced here and I know it will make a revolution on my timing methods as I still know they can be much more optimized...

 

About comisions in futures you should not pay more than 3.5 Round trip... in that case for example 1 point YM (minimal fluctuation) still is profitable...

 

It can be done... takes time, optimism and perseverence... and specially greed control...

 

I am only following YM... plenty of oportunities +15 oportunities per day... just take the best ones and make my day 50-60 bucks per contract.. makes a midle class living here in my country, for the millons I am working on a Forex project together with Don... cheers Walter.

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I realized I'm a scalper, and changed my trading plan to adapt and I'm doing much better.

 

Now I do have a question, what about days like today? Normally I would take 20 YM pts and be done, but today I'm up nearly 40 YM. Setups keep coming up and I keep taking them, I felt a bit of greed when I noticed I wanted more so I left the desk for 30 minutes. But if the market is willing to give me 40, why not take it? I understand that that gives me the opportunity to lose more, but I still think there are only a few days a month where you can make good money and you should take full advantage of those days.

 

I'm just curious as to what your feedback on that is.

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I still think there are only a few days a month where you can make good money and you should take full advantage of those days.

 

 

Hi James... the above statement is where a scalper probably is diferentiated from a day trader... scalper make money every day... day traders need big super days to curve their acct. balance...

 

You can not base your trading future on magnific days like today because unfortunately the market has very few partys like today... you must be prepared and programmed to trade succesfully on the very slow and normal days... thats where scalpers have an edge on daytraders... we dont care if today is a super day or not... we walk out everyday with our daily normal profit...

 

obviously when you detect momentum conditions you may want to take a little more gains, but unfortunately it is the exception... normally this bussiness is more boring than exciting... the target its not the excitment, the target is the money... cheers Walter.

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Okay, I see what you're saying.

 

My setups kept coming up today, and I kept taking them like I would any normal day. I go for 20 YM everyday and usually hit everyday, no big deal and it works out well for me. Thats my target.

 

I stopped trading today because of fear of over trading. I'm up nearly 100 YM points and I think that is more than enough, I made two emotional trades then immediately quit. I guess it takes an enormous amount of discipline to stand back on a day like today if you have already hit your target. That is something I don't yet have, and something that could end up wiping out my account one day.

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James, you should check out that Linda Rashke cbot webinar that dogpile was refering too, its really good. The cool thing about setting a target at 1 or .5 atr is the target will be dynamic with the market conditions as opposed to just an arbitrary number. She also says to immediatly put in an offer at a limit of 1-.5 atr to take some the emotion out. When you can put on more contracts scaling will take care of alot too as mentioned. To me you just have to look at today how a momentum player would view a range bound choppy market, it just wasnt your optimal market strategy wise but 100 points, kick ass :)

I imagine once you trade for 20 years there would have been clues today to move to a higher time frame and just ride the trend but I don't see how making that switch can be done without just alot of market experience.

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I don't think scalping FX is the way to go personally. I'd rather daytrade or swing trade FX markets cause some of the spreads those bucket shops charge are ridiculous where you end up trading more against the house than the market itself!

 

Walter, if you have a system which is netting you 50-60 a day per contract x 30-50 contracts on the YM why don't you just transport that over to the ES and up your stakes to 100+ contracts with the same profit targets? That can make your millions. Aiming for 1 ES point per day after commissions with 100 lots down is 25k per week aggregating to an average of 1.3 million a year.

 

It would be a much easier transition from YM to ES than from YM to spot FX, but then again I'm not you hehe.

 

Edit: I'm an idiot, didn't read the last bit of your OP Walter, you already said that! Sowwi.

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I don't think scalping FX is the way to go personally. I'd rather daytrade or swing trade FX markets cause some of the spreads those bucket shops charge are ridiculous where you end up trading more against the house than the market itself!

 

Walter, if you have a system which is netting you 50-60 a day per contract x 30-50 contracts on the YM why don't you just transport that over to the ES and up your stakes to 100+ contracts with the same profit targets? That can make your millions. Aiming for 1 ES point per day after commissions with 100 lots down is 25k per week aggregating to an average of 1.3 million a year.

 

It would be a much easier transition from YM to ES than from YM to spot FX, but then again I'm not you hehe.

 

Edit: I'm an idiot, didn't read the last bit of your OP Walter, you already said that! Sowwi.

 

thanks Nick for inputs, it certainly is an interesting topic where to expand horizons as a trader... ES was an alternative for me and has been considered some time ago... what happened is that technically speaking it is a hard instrument for myself to trade... It has been very dificult to take all my methods been used (originally in Russell, now on Ym) to ES... so in the need of fresh air... forex has been a very interesting aproach for me and it has a great challenge in terms of really using new technicall methods completely diferent to what I am doing now on futures... I believe that I could not say I am going to scalp forex, that probably would be misleading...

In terms of making amounts of moneys, I do have greater expectations than 1.3 M year on forex... I think much more can be done with not that much stress futures market demand... so we will see... maybe you want to join the Tokyo team.. cheers Walter.

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Walter this is a little off topic, but do you use a tick chart for scalping or a 1 minute, 3 minute, etc chart?

 

 

James you would like to check on the technical trading forums this threads : flip, false break, lazy and ABC trades all from Walterw, there is a lot of information of how I trade there... and yes I normally use Tick charts... cheers Walter.

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I just want to drop by and say hello to you, walterw and the rest of TL members. After reading your thread here, I now have a better understanding on how I can better use my new scalping approach on the eminis. Although, I usually go for the run with what I called scalp n trend technique which Alex and I often us in forex daytrading, using m5 charting. Unfortunately, having left Tradestation, I do not have the luxury yet of the tick chart. However, I am in process of converting my MT4 system indicators to Ninja Trader platform. BTW, I find it more convenient now to swing trade forex and daytrade eminis.

 

 

I maybe nearby Tokyo when you visit, so you may want to do a side trip to my Asian paradise. :)

ENJOY!

 

Z

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I just want to drop by and say hello to you, walterw and the rest of TL members. After reading your thread here, I now have a better understanding on how I can better use my new scalping approach on the eminis. Although, I usually go for the run with what I called scalp n trend technique which Alex and I often us in forex daytrading, using m5 charting. Unfortunately, having left Tradestation, I do not have the luxury yet of the tick chart. However, I am in process of converting my MT4 system indicators to Ninja Trader platform. BTW, I find it more convenient now to swing trade forex and daytrade eminis.

 

 

I maybe nearby Tokyo when you visit, so you may want to do a side trip to my Asian paradise. :)

ENJOY!

 

Z

 

 

NIce ZTrader ¡¡ Then we will meet some time in the future... about forex, I am working together with Don on some very short term aproach, we still are beta testing several alternatives and also using MT4 wich I consider a very nice platform... (lots of good indicators)... so feel free to interact with us as we evolve here... nice to hear from you and welcome aboard TL... cheers Walter.

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Thank you again Walter for this interesting thread and for sharing your scalping approach.

I like your talk and at the end your idea of "lifestyle".

Ithink I perfectliy understand the aim and I already know that being able to reach this scalping daily goal would make me happy .. :)

 

.... BUT.... I'm asking oneself whether if it's so easy to succeed as it seems ? (am not speaking about scalping technics that are supposed to be mastered BUT about the "scalper daily target" approach)

 

Mainly 3 points seem difficult for me :

 

1 / stopping today scalping (target reached) while the market has a great volatility offering (today..not like yesterday or tomorrow...) good opportunuities...

 

2/ stopping today scalping (target reached) , not considering/forgetting that, for example, my last 2 scalping days were loosing and so knowing in advance that my "monthly lifestyle target" will not be reached.. (In fact, if I understand, each time we have one and only loosing day our monthly target cannot be reached)

 

3/ "such low expectations makes you much more selective...only take the best setup" : I like this approach again but it seems difficult to me to implement... why ?

I understand (studying your VMAR threads) that you mix "big money" trades and scalping ("conservation of capital" + fun ...which I appreciate also ;) )

so my question is :

- When and How to choose/decide between a Trade or a Scalp ?

(taking into consideration that a scalp needs to close the whole position in one time vs partial profits for Trades AND that "best setups" are by definition (and back-testing...) reserved for Trades ...)

 

BTW, you propose a crystal clear daily (profit) target to stop scalping...but you don't speak about a loosing limit that would stop scalping for the day too.

(sorry to speak about that but having not your expertise I know that I can also loose 3 "lifestyle months target" in only one scalping day ... LOL )

 

Many thanks in advance if you have time to discuss and advise.

Yours, Serge

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Ok Sorry I will try to respond here to this issues

 

>>>1 / stopping today scalping (target reached) while the market has a great volatility offering (today..not like yesterday or tomorrow...) good opportunuities... >>>>

 

greed control is a good discipline... your bussiness shouldnt be based on all what the market "supposedly" would give you... but should be based on a clear target...

 

>>>>2/ stopping today scalping (target reached) , not considering/forgetting that, for example, my last 2 scalping days were loosing and so knowing in advance that my "monthly lifestyle target" will not be reached.. (In fact, if I understand, each time we have one and only loosing day our monthly target cannot be reached)>>>>

 

Dont focus on the monthly target... focus on today... and you should be ok.. you will see how less amount of negative days you will have as you get experience... still there is no edge on giving more pressure today because yesterday I didnt get the target... just relax and enjoy.. no pressures, just good basic targets to make in a relaxed fashion...

 

>>>>3/ "such low expectations makes you much more selective...only take the best setup" : I like this approach again but it seems difficult to me to implement... why ?

I understand (studying your VMAR threads) that you mix "big money" trades and scalping ("conservation of capital" + fun ...which I appreciate also ;) )

so my question is :

- When and How to choose/decide between a Trade or a Scalp ?

(taking into consideration that a scalp needs to close the whole position in one time vs partial profits for Trades AND that "best setups" are by definition (and back-testing...) reserved for Trades ...)>>>

 

Trading and Scalping on my case use diferent moneys... separate bussiness...

they are not related and they work paralel on their trading...

Being selective means, being disciplined to take your setups that are very well formed and not the ones that are forced to look like... its about not overtrading, people with high targets DO overtrade and finally do less money..

 

 

 

>>>BTW, you propose a crystal clear daily (profit) target to stop scalping...but you don't speak about a loosing limit that would stop scalping for the day too.

(sorry to speak about that but having not your expertise I know that I can also loose 3 "lifestyle months target" in only one scalping day ... LOL )>>>

 

If you loose so much, something is wrong with your method, stop trading, revisit your technique, go paper trade till it works... normally any loosings should not exceed two or three consecutives losses... otherwise I should revisit method... so for me at least on my aproach great drawdowns = wrong method... if the method is ok, you should only experience normal stops that get recovered on the next trade by far...

 

 

Hope this helps Serge... cheers Walter.

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Thank you very much Walter. Have a nice sunday in Argentina !

 

Ok Serge... we are having a beautifull almost summer day here ¡¡ will do some barbeque ... cheers Walter.

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OMG I love barbeque's (Throw another shrimp on the barbie!). You know whats fantastic on a BBQ....Lamb marinated in nice extra virgin olive oil, onion, lemon, and oregano Greek style. That is so nice.

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Hello guys,

 

Just my 2 cents. I think it is better to set up a weekly/monthly target instead of a daily one.

The only things that i am following daily is my downdraw target, after 10% loss on my account , i am out for the day.

You cannot predict the behavior of the market for a single day. what about the days before FED annoucement or NFP, it is usually very flat.Good luck trying to achieve a high target.

 

Larry.

 

Ps: i am trading FX and e-mini's, mainly very short term.

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You cannot predict the behavior of the market for a single day. .

 

you should not predict anything... follow the cycle waves and you will laugh on your daily targets... cheers Walter.

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Meanwhile, Russia claimed fresh territorial gains in Ukraine’s Sumy region and ramped up attacks on surrounding areas—further darkening the outlook for markets.   Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Andria Pichidi HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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