Jack o'Clubs
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None. I think you'll find it a quick route to the poor house if you try and scalp a derivative of price.
ValueTrader
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Exactly what the guy above said. If you try to scalp with indicators then you're just going to throw good money after bad.
A chart and indicators are historical information which is useless to a scalper. You need to make sure you've got the right tools such as a DOM which also tells you how many contracts has traded at each price.
If you're trading close to a resistance level then you need to be looking at the book. As a scalper you should be thinking about the stops above the level and running the level with the big guys. The market might be heavy on the offer but if you see someone buying everything up a few prices down, then you know it's a fake offer and the level is going to get run, so you should be buying with that guy/algo
That's the type of stuff you need to be looking at for scalping.
A chart and indicators are historical information which is useless to a scalper. You need to make sure you've got the right tools such as a DOM which also tells you how many contracts has traded at each price.
If you're trading close to a resistance level then you need to be looking at the book. As a scalper you should be thinking about the stops above the level and running the level with the big guys. The market might be heavy on the offer but if you see someone buying everything up a few prices down, then you know it's a fake offer and the level is going to get run, so you should be buying with that guy/algo
That's the type of stuff you need to be looking at for scalping.
rawrschach
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sighhhhhh
Mike Kshemaraja
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Scalping is also about timing, indicators will make you slower.
Sure, no problem. I've read books by Al Brooks and Bob Volman. Brooks scalps stocks and the emini using a 20 ema on a 5 min chart, and Volman scalps eur/usd using 20 ema on a 70 tick chart. Both are good books.
What's the old saying, that a little bit of knowledge is dangerous? So, we have the old statement that moving averages (at least for scalping) are useless, as they're a derivative (and lagging), and also that one must watch the DOM, which shows what went off at what price. Oh, and that Al Brooks scalps a 20 ema on a 5 minute chart.
Re: MA's - yes, they're a derivative, and seemingly, being so, they're even less reliable for scalping than with other methods/timeframes. But the answer is simple, particularly in our current world of historical data and charting: see if you can find a predictable-enough response to something to be able to trade it. In the case of MA's, despite being lagging and often of a longer-timeframe, they may be such that enough are watching them that you will get a predictable response. And particularly bec. the OP is speaking of scalping, enough to merit a trade. Ditto with Pivot Points, despite being maligned, if they have enough of the market aware of them, they may produce enough of a response to be able to scalp it.
As to the DOM: the DOM does not show what went off at what price; it's orders placed, but not yet filled. I can't believe that that statement is still hanging out there without a response. Substitute T&S for DOM.
Al Brooks: this was the initial allure of him and his methodology. That "all you need" is a laptop, with a single chart, with a 5-minute chart of the ES with a single 20 EMA.... Alas, what came to pass was that it was a LOT, and I say again, a LOT, LOT more complicated than that. Personally, I think the way he uses the 20 ema (as that was the OP's initial question) is simply a matter of being Fooled by Randomness (for the most part). He may be successful, but if so, it's because of the myriad of nuances to his trading that takes his method from simple to anything but. A LOT of subjectiivism is involved.
So, what do I suggest in this regard? As I said, look back on your own and find what has worked, and then forward test to confirm it. You just may find that MA's have value. I know of one trader who uses one on his charts, and the gist of his methodology is too play for the trend where price pulls back to that 2-3 times, and then prepare as it goes into a deeper pullback after that. At the same time, I know of another trader - quite aside from Al Brooks - who does a similar style of trading as Brooks. How? Because if you spend thousands of hours of screentime you can intuit things that can't be enumerated otherwise. So those subjective aspects of their trading is ingrained, yet hard (impossible?) to teach others. Okay, enough for now, I imagine we'd all agree 🙂
Re: MA's - yes, they're a derivative, and seemingly, being so, they're even less reliable for scalping than with other methods/timeframes. But the answer is simple, particularly in our current world of historical data and charting: see if you can find a predictable-enough response to something to be able to trade it. In the case of MA's, despite being lagging and often of a longer-timeframe, they may be such that enough are watching them that you will get a predictable response. And particularly bec. the OP is speaking of scalping, enough to merit a trade. Ditto with Pivot Points, despite being maligned, if they have enough of the market aware of them, they may produce enough of a response to be able to scalp it.
As to the DOM: the DOM does not show what went off at what price; it's orders placed, but not yet filled. I can't believe that that statement is still hanging out there without a response. Substitute T&S for DOM.
Al Brooks: this was the initial allure of him and his methodology. That "all you need" is a laptop, with a single chart, with a 5-minute chart of the ES with a single 20 EMA.... Alas, what came to pass was that it was a LOT, and I say again, a LOT, LOT more complicated than that. Personally, I think the way he uses the 20 ema (as that was the OP's initial question) is simply a matter of being Fooled by Randomness (for the most part). He may be successful, but if so, it's because of the myriad of nuances to his trading that takes his method from simple to anything but. A LOT of subjectiivism is involved.
So, what do I suggest in this regard? As I said, look back on your own and find what has worked, and then forward test to confirm it. You just may find that MA's have value. I know of one trader who uses one on his charts, and the gist of his methodology is too play for the trend where price pulls back to that 2-3 times, and then prepare as it goes into a deeper pullback after that. At the same time, I know of another trader - quite aside from Al Brooks - who does a similar style of trading as Brooks. How? Because if you spend thousands of hours of screentime you can intuit things that can't be enumerated otherwise. So those subjective aspects of their trading is ingrained, yet hard (impossible?) to teach others. Okay, enough for now, I imagine we'd all agree 🙂
If you get a decent DOM it does. Cumulative volume at each price. Better than T&S anyway because it's cumulative.
To borrow from The Princess Bride, re: DOM, "I do not believe that word means what you think it means". Not sure of the source of the decent DOM to which you refer - perhaps it's actually T&S, but with a cumulative feature? But you say it's better than T&S...
DOM = Depth of Market; showing the orders placed but not yet filled, which can be pulled or added to at any time, hence the reason that many find it not very useful. On that note, look up, if you're not familiar with the term, Iceberg Order.
But my point wasn't on the validity or lack of it for the DOM, merely to clarify what it shows/doesn't show, and it (again, not knowing what you're referring to, but the traditional DOM) doesn't show what HAS gone off at what price, it shows what orders have been placed. If one is referencing only the line in the DOM showing the current price being traded, then essentially you're watching T&S, and that would be a better way for the OP (the one I'm commenting on) to have referenced that, as saying DOM notes all of the orders placed above and below the market, too.
DionysusToast
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Gotta be the 1 moving average...
DionysusToast
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DionysusToast
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There's a few more subtle things you can get from it.
Like certain 'plays' people make to build a position without moving price too much.
The best place to get a description of these things is John Gradys book. It's only $40 but it is one of the very few places I've ever seen these things discussed.
wackypete2
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And by "traditional" DOM I am going by the industry standard that is used by the prop guys, where it does show cumulative traded @ price. You think you can't see an iceberg order on a DOM? lol.(10 on offer and 250 ends up printing into it and it's still 10 on offer, hence where the cumulative part comes in). Maybe you should actually try using one(a decent one) before you start preaching how good/bad they are. How is it not better than a T&S? T&S shows you like a ticker going down usually, green buying, red selling etc etc. and moving extremely fast, on DOM it shows it cumulatively adding up wherever its printing, so you can actually see it printing into the bid/offer rather than spiralling down a separate window.
Besides I never said it's better than T&S in the first place, use T&S as well, just saying there are decent ladders out there which show you all you need to know anyway.
Decent DOM = X Trader, CQG, Stellar, GZT.....basically any that cumulatively prints at each price, no need for T&S. (unless it's fixed income where spreading might be occurring, then it can come in handy).
