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BillyG.

Scalping Technique???

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Hello; My name is Billy. I just turned 53 and my body doesn't want to do construction anymore. I'm getting ready to enter the trading arena again and have sworn never to hold anything overnite since I got wiped out back in 1999. I've always fancied how scalpers trade and am wondering if there are any scalpers here. Maybe scalper isn't the perfect word but as long as I'm all cash by the close I'm in there. Now I've found some interesting material on the net but I'm leery to throw money their way unless I've heard some good unbiased testimonials that are convincing. Can anyone here guide me to some honest information in this type of daytrading? Are there indicators or software that can alert me to which direction a stock is poised to move in the next few minutes? What would be my best windows setup to be watching for this type of trading? I have an account with Fidelity but I'm thinking Interactive Brokers might be faster on execution. Any thoughts anyone? Thanks; Billy

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Welcome Billy.

 

I suggest you spend some time here on TL and research as much as possible and then use google.

 

Here's the snapshot of what you are asking - the holy grail does not exist. In other words, sometimes some indicators work and sometimes they don't. Most people will not give them a chance to work. If you come here to find that magical software that prints money like an ATM, I think you may have come to the wrong place. Most here are here to trade on their own w/o relying on some program or software package. Most of those type of programs will die a quick and painful death sooner or later. If it was as easy to just turn it on and walk away, would you sell it?

 

Trading is another full-time job and then some. I'm sure some days after construction you feel physically tired and beat up. Trading will do the same - but on your brain and emotions.

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Hi BillyG,

 

As a starting intraday trader, scalping is the last skill you want to master as this is an advanced level of trading and will surely wipe out your account. Like brownsfan mentioned there is no holy grail in trading. Relying on a system or indicator is a good way to follow a program and never learn how to trade. In order to trade successfully you must treat your trading like a self-owned business. You will need to determine which market you are going to trade, which market will fit your personality, your style of trading, your amount of risk capital, risk per trade, etc...

 

Think in terms of strategy, strategy, and strategy. Study price and volume. Remember you never need to stay in the markets constantly. Grabbing one intraday swing a day is enough to live off day trading. So practice capturing these intraday swings as if they are your bread and butter. In other words, start by being a intraday positition trader.

 

Learning to trade takes time.... I think it takes as long as going to a 4 year university. Tuition? Depending on how reckless one is... it could be cheaper or alot more expensive. Good luck Billy and post any questions you may have. There are plenty of good people here.

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Welcome Billy.

 

I suggest you spend some time here on TL and research as much as possible and then use google.

 

Here's the snapshot of what you are asking - the holy grail does not exist. In other words, sometimes some indicators work and sometimes they don't. Most people will not give them a chance to work. If you come here to find that magical software that prints money like an ATM, I think you may have come to the wrong place. Most here are here to trade on their own w/o relying on some program or software package. Most of those type of programs will die a quick and painful death sooner or later. If it was as easy to just turn it on and walk away, would you sell it?

 

Trading is another full-time job and then some. I'm sure some days after construction you feel physically tired and beat up. Trading will do the same - but on your brain and emotions.[/quote/]

 

Brownsfan; Thanks for the reply. Yes I know the Holy Grail and the magical ATM does not exist and I'm not looking for that. I'm looking for the latest useful stuff to set up my computer with and what to watch. What to put up on my screen; what to focus on, what to suscribe to, etc. The basic package if you will. Like: Do I need java to get level 2 or is there something better now? When I traded before I was part of a team that followed one persons pics and therefore I suffered when the crap hit the fan. Now I am ready to develop my own style of trading and not follow, but I've been away from all that for 8 years. My search is for intraday trading tools. Billy

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Hello Soultrader; Lets see if I get this post correct. You mentioned:

>>Grabbing one intraday swing a day is enough to live off day trading. So practice capturing these intraday swings as if they are your bread and butter. In other words, start by being a intraday positition trader.<<

This sounds good to me and I would like to ask you where do I start? How should I set myself as far as computer screens, programs, brokers. I'm at a very basic point right now and I don't want to load any programs unless they are useful. I mostly just look at clearstation for stock charts. For instance: I like the candlestick charts but don't know where top go to get one or which one is the best. Any suggestions? Do I need level 2 ? Where do I go to get it? Whats my best price and volume source? Is IB a good broker? You see I want to start out right so I don't waste time. Am I making any sense or am I asking the wrong questions? Thanks, Billy

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Billy,

A few questions if I may:

 

1) What are you planning to trade? Stocks, options, futures, forex?

2) How are you planning to trade? A few trades per day or many more?

3) What style of trading will you be using? With trend, against trend, pivots, market profile, candles, etc. etc.

 

You'll need to divulge the specifics of what you plan to do in order for anyone to suggest brokers, platforms, etc.

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Hello brownsfan019;

>>1) What are you planning to trade? Stocks, options, futures, forex?

Right now I'm leaning toward Stocks with high volume, high volatility. So I will be looking at a program to pick those most active at the open.

>>2) How are you planning to trade? A few trades per day or many more?

That will be based on how fast I learn to be profitable. 1-2/day to start with tight stops.

>>3) What style of trading will you be using? With trend, against trend, pivots, market profile, candles, etc. etc.

I don't know how to answer this question. With trend or against trend sounds too long for me; pivots maybe; market profile not sure; candles yes for charts. Lets say if it looks like its headed up or down I'm in for a quick 1/4 point or more, long or short. I would like to base support for direction with pre-trade chart formations or a platform if its available. All I am aware of right now is Level 2 but don't know if that will be as effective as say something newer.

Thanks for helping; Billy

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Hello brownsfan019;

>>1) What are you planning to trade? Stocks, options, futures, forex?

Right now I'm leaning toward Stocks with high volume, high volatility. So I will be looking at a program to pick those most active at the open.

>>2) How are you planning to trade? A few trades per day or many more?

That will be based on how fast I learn to be profitable. 1-2/day to start with tight stops.

>>3) What style of trading will you be using? With trend, against trend, pivots, market profile, candles, etc. etc.

I don't know how to answer this question. With trend or against trend sounds too long for me; pivots maybe; market profile not sure; candles yes for charts. Lets say if it looks like its headed up or down I'm in for a quick 1/4 point or more, long or short. I would like to base support for direction with pre-trade chart formations or a platform if its available. All I am aware of right now is Level 2 but don't know if that will be as effective as say something newer.

Thanks for helping; Billy

 

Billy,

I think you'll find much of the info here on TL geared towards Futures and Forex. Not that you can't use the info here, but some of your specific questions may be better answered elsewhere. For example, I'm not sure what's a good stock trading platform b/c I haven't actively traded stocks for quite a while.

 

With that being said, you are headed in the 'normal' path - many start with stocks b/c that's easy, you'll then want more bang for your buck and look at options and then one day you'll see futures and/or forex as a way to get some great leverage.

 

So take a look around and see what interests you and start building from there. There's plenty of FREE information all over the internet, so I would just see what catches your attention and then go from there before shelling out major bucks. What you are looking for is something that grabs your attention and you say - yeah, I could see myself trading like that. You either want to hop on the trend of the day and ride it or you want to find when the trend may be ending and look to catch the reversal. In the end, trades are either with the trend or against it. Of course, how you define trend is subjective. ;)

 

Good luck and be ready to spend some serious time getting your trading biz in place.

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brownsfan019; Thanks for the reply. I will poke around a bit and see what I can find here. I see you have a section on Stocks. Billy

 

Hi Billy I am a scalper by nature... I am doing research on forex at this time arround some new innovative indicators called vma... so far I presented some strategies like "vmar icons", "5 min laddering" trades... I will soon also reveal my scalper method derived from this research...(probably new thread)...

 

On the above techniques you will find simplicity and optimization..(straight forward methods) hope to be of help.... any questions feel free to make them cheers Walter.

 

PD :My signature has a link to get started on all this process of vma...

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Hi Walter; Well I have to say I read your links and it sounds great but way over my head right now. Put my brain on overload it did. I like the rainbow graphing and see where it will be a great tool for trading but would have to see it in action to understand it more I guess. Remember I haven't even ventured into loading a charting platform yet. I would love to try your technique when it is complete. I know you said your research is on Forex but what are you scalping? Maybe you could recommend a Stock charting platform. Thanks; Billy

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BillyG

For stocks I don't think you could do much better than TC2007. You get scanning and charting all in one. They have unmatched tech. support. Also, for affordability Quotetracker is a good option and you can feed it real time data from almost any broker. Thanks.

Mark

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BillyG

Also, for affordability Quotetracker is a good option and you can feed it real time data from almost any broker. Thanks.

Mark

 

QuoteTracker is a very sophisticated program. The Paintbar feature is awesome. I used to play with it and my charts looked like they came off TradeStation.

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Hi Walter; Well I have to say I read your links and it sounds great but way over my head right now. Put my brain on overload it did. I like the rainbow graphing and see where it will be a great tool for trading but would have to see it in action to understand it more I guess. Remember I haven't even ventured into loading a charting platform yet. I would love to try your technique when it is complete. I know you said your research is on Forex but what are you scalping? Maybe you could recommend a Stock charting platform. Thanks; Billy

 

well Billy, in terms of scalping I have posted a lot of my methods being done on futures, here are some links to the most clasic ones :

 

http://www.traderslaboratory.com/forums/f34/the-flip-trade-support-and-resistance-1714.html

 

http://www.traderslaboratory.com/forums/f34/the-abc-trade-1940.html

 

http://www.traderslaboratory.com/forums/f34/the-lazy-trade-1942.html

 

I know it is a lot of information... only going thru the vma takes about 9 hours worth of reading and videos :doh:....

 

The new scalping will be arround forex... but as vma is evolving there will be also another thread on a longer term type method :confused: thats me... I am on all alternatives getting my nose...

 

All the futures methods linked above can be used on liquid stocks as well... enjoy have fun¡¡ cheers Walter.

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Hi Billy - Great questions - It is all very confusing. Here is what i had to do to keep my mind .

 

The way it works for the hardware/software side of trading , after much research I decided on an asus laptop , running 4 gig ram , large hard drive , and running vista. Vista is a little quirky but seems to be working well so far, and they have an installed program that lets me upstep my memory with out actually installing memory hardware. Asus also had a 2 year part and labor warranty , is a gaming system , and has a great customer service reputation.

 

Next We all have to connect our computers to something to start trading. The way this works ( for me , some people connect direct to exchanges ) I used interactive brokers for my broker , my broker then feeds me information that my software programs will use to chart , and trade. I then signed up with another data supplier to make sure i always had a backup. There are a lot off good suggestions on this site for data suppliers.

 

Now Software - Two peices i use , many are the options. Sierra charts for charting was not to expensive and a pretty good charting program. Next i use what is called front end software , it is called button trader. The user interface on the button trader is incredable , but a little expensive . There are other front ends out there that are good as well and a little cheaper . Button trader was better for my trading style.

 

You put all those together with the internet , a lot of practice and tinkering and you have the trade initiation system. im no expert but thats what has worked for me.

 

Man long post , so much of this stuff - As far as actually trading . I keep it very simple. A chart , 8 to 11 period moving average with 5 or 1 min candles. I like the first two hours of trading , I like to play gaps. Briefing dot com has a morning report with their platinum program that reports gappers . With that style trade i watch the five minute candles . If the gap was up i wait for the first five minute candle that closes inside the last 5 minute candle , then i short . That style trade works out about 60 percent of the time , and you will have to get out of the trade if it does not do what you think it should do

( really important ) .

I also like the 30 minute bulls trade . That one you mark the high and the low for the first 30 minutes of the session. When it breaks those points its a buy signal. This is a easier trade but again money management is cruicial , if it is not doing what you think , get out.

What else has helped , I picked a basket of stocks 20, in various sectors , and just watched them all day on the one minute charts. after around six months i really started to get a feel for the stocks and the market , and the market makers for those stocks. Practice Practice Practice.

Thats all folks :doh:

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My thanks to everyone that replied to my questions and posts. Since the last post I have been checking out the Russel 2000 emini and the S&P500 emini as scalping territory because of the popularity at this site. Given the lesser cash required to start with I'm leaning in that direction. I'd rather test my skills and ability to learn with 3K as opposed to 25K. I have been in contact with Infinity Brokers. My contact is Patrick. They offer Sierra charts $25/mo. and free live feed with no monthly fees. I think I'm gonna start with them. Sierra is free for the first 2 weeks to paper trade it. Not sure If I need any other paid services yet. I'm looking to scalp now with the trend; up or down; and using a simple set-up with just 2 moving Avg's. for the Russell (The 20 and 5 simple) and just the 20sma for the S&P. I'm leaning strongly toward starting with one contract until I can profit then adding another and another as I grow more confident. However quicker scalps with multiple contracts is a very tempting thought. If I can make this work and learn from it I will stick with the eminis for however long it lasts. This seems to be the road of least resistance for me now. I want to keep it as stress free as possible. Thanks for reading, Billy

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Billy,

If costs are a factor, you can get FREE charting and FREE data with an account at OpenEcry. All things being equal, this will save you money.

 

I am going to venture to say that the commissions will be lower as well. I could be wrong, but OEC is very competitive and I have never received good rate quotes from Infinity. It's just my experience so take it for what it's worth.

 

OEC site: http://www.openecry.com/

OEC rates on their site: http://www.openecry.com/rates/rates.cfm

Note that those are the published, public rates. You are probably going to pay these or close to them in the beginning, but they can be negotiated down from there over time.

OEC review here at TL: http://www.traderslaboratory.com/forums/f92/review-of-open-ecry-futures-broker-1904.html#post12570

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Hi brownsfan019; As far as costs go I am referring to the initial start-up account funding. 3K as opposed to 25K for stocks. I was impressed with Infinity by the way the broker answered the phone and not someone who knew zip about trading. I'm not saying OEC brokers don't answer the phone---that I don't know. I do know that when I was with TD Waterhouse I sometimes waited for 20 minutes to get one on the phone. The costs I think are about the same as compared to OEC for a round turn trade but $0 for softwear is hard to beat compared to$25/mo. for Sierra. However I don't know enough about the softwears of each to compare them. Do you have or know anyone on here that has had any negative first hand experience with Infinity? They also have live training using their order system which sounds helpful for me. I am not going to fund for a few weeks until after I am caught up with my outside chores. This winter will be my time to learn. Thanks for reading; Billy

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Hi brownsfan019; As far as costs go I am referring to the initial start-up account funding. 3K as opposed to 25K for stocks. I was impressed with Infinity by the way the broker answered the phone and not someone who knew zip about trading. I'm not saying OEC brokers don't answer the phone---that I don't know. I do know that when I was with TD Waterhouse I sometimes waited for 20 minutes to get one on the phone. The costs I think are about the same as compared to OEC for a round turn trade but $0 for softwear is hard to beat compared to$25/mo. for Sierra. However I don't know enough about the softwears of each to compare them. Do you have or know anyone on here that has had any negative first hand experience with Infinity? They also have live training using their order system which sounds helpful for me. I am not going to fund for a few weeks until after I am caught up with my outside chores. This winter will be my time to learn. Thanks for reading; Billy

 

Billy,

As an experienced futures trader myself and having demo'd many, many software products over the years, I would say that the OEC platform and fee structure is really hard to beat. I think the charting is sufficient depending on what you need and the fact that you get tons of FREE data is amazing to me. Not sure how infinity is with Sierra, but you may need to pay for your data feed as well. Maybe they include a limited set of feeds. But let's say one day you want to take a look at bonds, or mini gold, maybe the DAX or the STOXX or some other foreign markets... With OEC you just open the software and off you go. The data is there, in real-time for free to customers. You'll want to know how that works with Sierra and Infinity - ask about the data fee(s), if any. Ask how many market(s) you get for free if they say it's free. The free feed may only be the CBOT, which is free to everyone for now.

 

You can get a 2 week trial from OEC and if need be, you can request it be extended as well. I suggest taking it for a test spin and compare. See how it feels and reacts to Infinity. You will want to be comfortable, so go with your gut.

 

Good luck.

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