What are the types of daytraders?

[brownsfan019 17]

In this thread, http://www.traderslaboratory.com/forums/f34/smaller-profits-yields-better-results-1869.html - I talk about taking 1.25 pts or 5 ticks out of the ES with regularity.

 

My question here is - what are the types of daytraders? I've often referred to myself as a daytrader, but that can mean many different things.

 

I think there's 3 distinct types of daytraders (those that only trade during RTH and hold no positions overnight):

 

1)

Daytrader

- takes a handful of trades during the day.

 

2)

Scalper

- takes more trades during the day, looking for smaller moves and many of them. Trades are in the ballpark of 100 trades per day.

 

3)

Hyper-Scalper

- this is the black box or trader that is basically taking 1-2 ticks all day. Trades are in the hundreds per day.

 

I posted this in the futures forum b/c that's all I trade and all I'm interested in for purposes of this discussion.

 

So what do you think, are there other types of daytraders? Would you add/delete to my list?

 

The only purpose behind this for me at least is to figure out what kind of trader I was, am and will become. It's nothing more than just classifying yourself as a type of daytrader. I'm just wondering what I should say if another trader asks what kind of trader I am.

[TinGull 10]

I think those are good classifications. I'm definitely a day trader. I like 1-2 trades a day. Anything more and I really start to feel frazzled and overextended.

[walterw 10]

Brown, your clasification is about how many trades the trader takes, It obviously discounts the target of each trade...

 

You can have diferent combinations there : 3-4 trades with small targets could be scalper but 3-4 trades with large targets.... could be daytrader...

 

So kind of dificult to put a name to it... I asociate scalper with low targets, not necesarily large amount of trades... cheers Walter.

[Guest cooter]

1)

Daytrader

- takes a handful of trades during the day.

 

2)

Scalper

- takes more trades during the day, looking for smaller moves and many of them. Trades are in the ballpark of 100 trades per day.

 

3)

Hyper-Scalper

- this is the black box or trader that is basically taking 1-2 ticks all day. Trades are in the hundreds per day.

 

a. I agree with the Daytrader description. Could be one, or several trades taken during RTH.

 

b. Your ballpark of 100 trades per day is off for your "Scalper" label. Dozens might be more like it.

 

c. I'd agree with your 100+ trades in the HyperScalper genre. If you're taking 1-2 ticks all day long, then you'd definitely need as low a commission as possible here (especially for black box auto trading).

[brownsfan019 17]

a. I agree with the Daytrader description. Could be one, or several trades taken during RTH.

 

b. Your ballpark of 100 trades per day is off for your "Scalper" label. Dozens might be more like it.

 

c. I'd agree with your 100+ trades in the HyperScalper genre. If you're taking 1-2 ticks all day long, then you'd definitely need as low a commission as possible here (especially for black box auto trading).

 

Coot - so what do you call the guy that trades more than dozens but less than hundreds? There's a gap there that needs classification.

[Guest cooter]

Dozens is plural. One to eight dozen is under a hundred.

[brownsfan019 17]

Dozens is plural. One to eight dozen is under a hundred.

 

Ok, gotcha. We agreed even though I did not clearly specify the levels.

 

Daytrader: 1-12 trades per day

Scalper: 13-100 trades per day

Hyper Scalper - 101+ trades per day

 

That's assuming you quantify the classification based on the amount of trades being done. I think that's fair criteria and sounds like walter does not. No one is right, I was just wondering what everyone thought.

[walterw 10]

Ok, gotcha. We agreed even though I did not clearly specify the levels.

 

Daytrader: 1-12 trades per day

Scalper: 13-100 trades per day

Hyper Scalper - 101+ trades per day

 

That's assuming you quantify the classification based on the amount of trades being done. I think that's fair criteria and sounds like walter does not. No one is right, I was just wondering what everyone thought.

 

 

If I make 7 small trades... I already consider myself scalper... its my case... because the span of the trade its really small I dont think I am using "daytraders" techniques at all... I deserve to be called a scalper even thought I dont make that "much" amount of trades....

[steph 10]

I guess I'm trying to be daytrader by these definitions, but with scalper leanings. I'm only looking for 1-4 trades the morning (it's all I have time for - some of us still have to work jobs we hate for a living), and the targets are usually fairly small (5 points on YM for instance).

[brownsfan019 17]

I guess I'm trying to be daytrader by these definitions, but with scalper leanings. I'm only looking for 1-4 trades the morning (it's all I have time for - some of us still have to work jobs we hate for a living), and the targets are usually fairly small (5 points on YM for instance).

 

Steph - Assuming you can work the 9:30am - Noon EST shift and going for +5 on the YM, you can crank out some major trades with the right methodology. I personally hate the YM, but I understand the attraction.

 

I would not rule out making some good trades and cash before you head to work. This morning yielded 29 trades for myself. That's not good or bad for you, I'm just suggesting that you don't limit your thinking and profit potential by simply saying that you only have 3 or so hours to work.

[MrPaul 10]

What about the issue of poistion size?

 

I would consider someone taking 3-4 ticks 3-4 times on 20-30 lots a scalper.

[steph 10]

Steph - Assuming you can work the 9:30am - Noon EST shift and going for +5 on the YM, you can crank out some major trades with the right methodology. I personally hate the YM, but I understand the attraction.

 

I would not rule out making some good trades and cash before you head to work. This morning yielded 29 trades for myself. That's not good or bad for you, I'm just suggesting that you don't limit your thinking and profit potential by simply saying that you only have 3 or so hours to work.

 

I've been having trouble with the YM and it's been really hit and miss for me (unfortunately more miss). Anything out there that doesn’t have wild swings?

I’d like to crank out a few major trades, but that all elusive “right methodology†is the key I haven’t been able to find yet.

 

I only have about an hour to find trades in the morning (starting 6:30 when cash markets open) before going to work. Although, I do have a lot of sick time accumulated…maybe I’ll call in and trade all day.

[walterw 10]

I've been having trouble with the YM and it's been really hit and miss for me (unfortunately more miss). Anything out there that doesn’t have wild swings?

I’d like to crank out a few major trades, but that all elusive “right methodology†is the key I haven’t been able to find yet.

 

I only have about an hour to find trades in the morning (starting 6:30 when cash markets open) before going to work. Although, I do have a lot of sick time accumulated…maybe I’ll call in and trade all day.

 

steph : should you consider trading forex when you are relaxed at home ?

 

thanks to Don I am finding that forex works like a charm on "flips"... thats my 2 cents for you... cheers Walter.

[brownsfan019 17]

I've been having trouble with the YM and it's been really hit and miss for me (unfortunately more miss). Anything out there that doesn’t have wild swings?

I’d like to crank out a few major trades, but that all elusive “right methodology†is the key I haven’t been able to find yet.

 

I only have about an hour to find trades in the morning (starting 6:30 when cash markets open) before going to work. Although, I do have a lot of sick time accumulated…maybe I’ll call in and trade all day.

 

Steph - here's my opinion on the US e-mini indexes:

 

YM/ER2 - low volume, can see more 'spikey' type moves. I think there is a correlation between wild spikes and low volume.

 

NQ - Nice market to trade, decent volume, can get 'spikey' at times as well.

 

ES - The most liquid by far. I personally think that you don't see wild swings here b/c of the volume, which of course implies that the major players are here as well. That in turn leads to more 'smoother' looking charts in my opinion. I think you'll see certain levels respected much more on the ES than the other markets, if that's your cup of tea.

 

I should note that I use VOLUME BASED CHARTS and that has helped me tremendously. Sometimes the strategy you are trading might just work a tad better if the chart was presented differently. I like VBC's to help smooth things out a bit and it's a visual representation of volume being traded. Just an idea.

[brownsfan019 17]

One other idea - you could also record the trading day while you are at work and then play it back as if it was real-time later and test out your trading moves.

[steph 10]

Thanks for the good ideas brownsfan and walter, I'll definitely consider what you both said.

[torero 10]

Well, steph has limits and commitments so he has to work around that. I think if he puts on more pressure on himself by slacking off his obligations, his trading will show sooner or later. I learned that the hard way. Make your trading as comfortable as possible, slow as possible. Right mindset is the only way to trade profitably. If you have 3 hours, then use that time to trade (but don't rush it and trade because you have 3 hours to kill). Use the 3 hours wisely each day, even watching the market without trading is already useful toward your future trades.

 

Video recording is definitely the way to go in learning. This technology is extremely helpful, wish it's been around earlier. Not sure if anyone saw the erratic jump in the ER2 early in the morning when it was dropping to the new of the day 836 and jumped right back to 840 in matters of a few seconds. I haven't seen that time and sales movement like that in a long time. I was in a trade and recorded it. I had get out quick with a small profit but man, that was scary. I'm going to replay it this weekend to see what happened.

[Guest cooter]

Make your trading as comfortable as possible, slow as possible. Right mindset is the only way to trade profitably.

 

Exactly.

 

If you don't have the stamina or wherewithal to sustain a steady pace for the entire RTH, then make an effort to take the best of the best when you are ready.

 

No need to unnecessarily push yourself to make trades just because.

 

Now before others contend that you should always take a trade when it appears before you, then I would say that you should do so only when you are mentally ready to do so.

 

A trader making trade when he or she is not in the right frame of mind is a recipe for failure and a sure way to a blown account. Sort of like trading when you're in the zone.