Trading volatile FUTS, <10 second trades, "price action" only?

[lastninja2 10]

If anyone here trades in this manner, I'd like to hear your thoughts on this approach, if you are willing to share.

 

Get rid of indicators, market profile etc, maybe just a few simple charts to keep track of the most important levels, but otherwise price ladders all the way. Not watching for reloading bids/offers per se (which lend itself, IMO, to trade lasting >10 seconds). Possibly heavy use of market orders during big momentum moves?

 

I know it can be done, I'm just curious to dig a little deeper in to this approach. Do such traders wait for stop runs, or perhaps regard stop runs as "artificial momentum" so to speak, and best avoided?

 

Realise its a peculiar thread - and I'm not holding my breath. But maybe, just maybe, a couple of guys have experience with this.

[Obsidian 10]

trades less than 10 secs? why such a rush?

 

just out of curiosity, what is r/r for such trades?

[lastninja2 10]

r/r far less than 1 I believe.

The rush being, the longer you are in the market, the greater the risk.

I like the idea of a low r/r because I think it aligns itself more closely with human nature ...

i.e. "better to snatch those profits from the table before the market steals them away from me"

[wrbtrader 10]

r/r far less than 1 I believe.

The rush being, the longer you are in the market, the greater the risk.

I like the idea of a low r/r because I think it aligns itself more closely with human nature ...

i.e. "better to snatch those profits from the table before the market steals them away from me"

 

You're essentially talking about scalping that's different than typical day trading.

 

For scalping to work, you need a special low commission rates that the typical day trader doesn't get (e.g. high contract trader, exchange seat). In addition, you need to have a high percentage of winners because scalpers aren't usually trying to capture points...they're usually trying to capture ticks. Also, you need to be using a broker platform and charting/data software that's suitable for scalping.

 

If the above isn't in place...don't bother getting into scalping. You'll be better off just doing typical day trading.

 

P.S. I wonder why you didn't use the word "scalping".

[lastninja2 10]

hi

 

I have access to favourable comms, platforms and execution speeds.

No conspiracy behind lack of using the word "scalping". To be honest I have a natural dislike for terms like price action, scalping. As someone brought up in another thread, its not always clear what a person means when they use these terms.

 

Taking 7 ticks on a slow mover like FESX over the course of 5 minutes, is to me, well... I pretty much still call it scalping.

[futurescalper 10]

If anyone here trades in this manner, I'd like to hear your thoughts on this approach, if you are willing to share.

 

Get rid of indicators, market profile etc, maybe just a few simple charts to keep track of the most important levels, but otherwise price ladders all the way. Not watching for reloading bids/offers per se (which lend itself, IMO, to trade lasting >10 seconds). Possibly heavy use of market orders during big momentum moves?

 

I know it can be done, I'm just curious to dig a little deeper in to this approach. Do such traders wait for stop runs, or perhaps regard stop runs as "artificial momentum" so to speak, and best avoided?

 

Realise its a peculiar thread - and I'm not holding my breath. But maybe, just maybe, a couple of guys have experience with this.

 

Micro scalping is my specialty. The first problem is that Futures traders are overly committed at a given price and, therefore, stop out frequently, because you will be wrong a proportion of the time, and any market will move against you.

 

In theory, your approach sounds good, but it fails miserably because of the inevitability of Stop Losses. This is not obvious, but once you understand it, you can develop a Survivable and Profitable method of trading, but you have to reduce your Risk and move into a trading instrument which allows you to greatly reduce the Risk which leads to Stop Outs.

 

The only solution to making money in trading is to Stop Out rarely.

 

The only way to do that is to have the ability to distribute your risk over a wide range of pricing, and Futures traders do not have the capital to do this.

 

Solution: In my case, move from Euro futures to EUR/USD Forex with an ECN brokerage, which is MB Trading. With specialized software, and Forex precision I can spread my risk of 1 Euro FX contract widely, in increments of 1/10th or even 1/100th of a Euro FX contract commitment. I can sustain price movements against me of 20, 30, 40 ticks or pips without breaking a sweat. And I do not have to pay commission, but I actually EARN CREDIT for 95% of my Entries and Exits through adding liquidity to their ECN.

 

Result: I almost never have to Stop Out with a loss. If I do have to "reduce" my position, that is the same thing as a Partial Stop, and affects only a small proportion of my position. In the meantime, any Entry which I make that goes into Profit, is immediately profit-taken and that residual income offsets my open position, which may be underwater.

 

Eventually these partial profits outweigh any drawdowns and Net profit is positive.

 

This is the only Survivable way to trade, and it defines a "Risk Envelope" within which you are comfortable, which MUST be planned to permit you comfortably to sustain a WIDE range of pricing against you, which will occur. It is at these times of "price adversity" that you must AVOID Stop Losses.

 

HyperScalper

[uexkuell 10]

And I do not have to pay commission, but I actually EARN CREDIT for 95% of my Entries and Exits through adding liquidity to their ECN.

 

Thanks. Interesting.