Is Scalping Allowed?

[new_trader]

OK, if it makes you feel better, they love scalpers and never put them on dealer intervention - happy now?

No, I'm not happy. What I find uncanny is how they know you are going to hold your trade for only 2 minutes or less...or whatever the predefined time limit is that makes you a scalper...do you tell them before you enter your order?

 

[x4x]

No, I'm not happy. What I find uncanny is how they know you are going to hold your trade for only 2 minutes or less...or whatever the predefined time limit is that makes you a scalper...do you tell them before you enter your order?

I don't think you're quite getting it......I'll have a look for some information for you seeing you seem to be really interested.

 

[new_trader]

I don't think you're quite getting it......I'll have a look for some information for you seeing you seem to be really interested.

Interested....baffled...To be honest, I don't think you are quite getting it.

 

[DT]

Most brokers don't like scalpers - they will put you on dealer intervention to stop you from scalping.

I believe the other poster you quoted was referring to actual brokers, they do indeed like scalpers for the reason he stated.

You're talking about bucket shops - most retail FX and spread betting firm. These firms aren't brokers. Attempting to scalp with them is probably not a good idea in the long run, in fact trading with them at all is probably not a good idea in general.

 

[x4x]

I believe the other poster you quoted was referring to actual brokers, they do indeed like scalpers for the reason he stated.

You're talking about bucket shops - most retail FX and spread betting firm. These firms aren't brokers. Attempting to scalp with them is probably not a good idea in the long run, in fact trading with them at all is probably not a good idea in general.

The OP is asking about spread betting - he confirmed this at post no.3.

 

[new_trader]

I believe the other poster you quoted was referring to actual brokers, they do indeed like scalpers for the reason he stated.

You're talking about bucket shops - most retail FX and spread betting firm. These firms aren't brokers. Attempting to scalp with them is probably not a good idea in the long run, in fact trading with them at all is probably not a good idea in general.

The point is DT, spread-betters who have never traded DMA have no reference to base their assumptions on. I trade both a DMA account and a spread-betting account so I can at least give a fully informed opinion. The evidence given so far, like 1) Slow fills and 2) slippage...can and do happen on DMA depending on when you enter. I've seen things on DMA that would make your eyes water had you entered at that time, and I'm certain if a spread better had they'd be bitchin' about their broker.

The point is, spread-betting 'scalpers' attempt to catch price 'spikes' and then moan when their order isn't filled...or they get a bad fill and then have insult rubbed into injury with slippage. All I can suggest is you get a DMA account and see the real world before trying to use your spread betting broker as the scapegoat for your losses. Then, spend some time learning how to scalp properly because I've got news for you, trying to catch a few points on every price spike is the surest road to poverty...whether you are trading DMA or spread-betting.

 

[DT]

I don't spreadbet...

I trade both a DMA account and a spread-betting account so I can at least give a fully informed opinion. The evidence given so far, like 1) Slow fills and 2) slippage...can and do happen on DMA depending on when you enter.

Not usually. Depends on your feed/broker/software/connection to your broker. if you're using a normal Internet connection and your broker is based in the US then you migt well have some issues.

 

[DT]

The OP is asking about spread betting - he confirmed this at post no.3.

Yes, but the guy you quoted wasn't.

 

[new_trader]

Not usually. Depends on your feed/broker/software/connection to your broker. if you're using a normal Internet connection and your broker is based in the US then you migt well have some issues.

The point is, it has taken me years to figure out when to 'scalp' so as to maximise my chance for a good fill and a profit. First and foremost you need FULL transparency (which you won't get from ANY S/B) if you are to have any hope of success and this why I can't take any spread-better seriously when they say that SB brokers don't like scalpers. Anyway, I have done my best to put people on the right path...if they want to continue bitchin' about their broker that is their prerogative.

 

[DT]

Well they're right in most cases - SB firms generally won't like 'scalpers'. Bucket shops just hedge their overall exposure to an instrument, someone entering a series of short trades and making money from it (whether down to luck or otherwise) isn't good for business. They will either want to always hedge you or just cause you problems.

 

[VielGeld]

^^ NT, I'm curious, what do you mean by "full transparency"? Does it mean scalping is less likely to be profitable in Forex as there is no DoM/etc. to speak of? (Not sure that has to be it since you stated you don't use DoM. Still curious.)

 

[new_trader]

Well they're right in most cases - SB firms generally won't like 'scalpers'. Bucket shops just hedge their overall exposure to an instrument, someone entering a series of short trades and making money from it (whether down to luck or otherwise) isn't good for business. They will either want to always hedge you or just cause you problems.

Until I hear it straight from the horses mouth I will have my doubts about what they like or don't like. All I can say is that from my experience they don't need to do anything to make it difficult for someone to make money from the market.

 

[Mata Nui]

Short term trades do not affect the ability of a spreadbet bookie to offset the risk despite this being a common reason claimed for them not likeing such trades. Everyone knows they only offset any net risk (and they even have limits on that) on the books not every trade. The software used to determine such risk works in microseconds so a trade of 2 mins is not a problem. Also most spread betters do not trade in enough size to skew the risk either.

I am not commenting on if they do or dont make it impossible to scalp as i simply do not have the experience. I am simply saying there is no practical reason why they should. Although a successful scalper could take them to the cleaners in a matter or weeks simply by virtue of the number of wins where a swing trader trading dailys may take much longer.

 

[wallstreetwarrior87]

WHY???? - because most brokers don't like it.

WHO TOLD YOU THAT???? - no one - I've experienced it.

Definition is very important.

Which BROKER have you experienced this with? IB, Global, Mirus, Berkley, Velocity etc?


Genuinely interested as I dont see how you can be on dealer referral if you scalp directly in the book.

Thanks

 

[new_trader]

^^ NT, I'm curious, what do you mean by "full transparency"? Does it mean scalping is less likely to be profitable in Forex as there is no DoM/etc. to speak of? (Not sure that has to be it since you stated you don't use DoM. Still curious.)

Basically whatever real-time trading information is available from the exchange, best bid, best ask, price, volume.

 

[N Rothschild]

scalping is banned on most exchanges.

 

[new_trader]

Short term trades do not affect the ability of a spreadbet bookie to offset the risk despite this being a common reason claimed for them not likeing such trades. Everyone knows they only offset any net risk (and they even have limits on that) on the books not every trade. The software used to determine such risk works in microseconds so a trade of 2 mins is not a problem. Also most spread betters do not trade in enough size to skew the risk either.

I am not commenting on if they do or dont make it impossible to scalp as i simply do not have the experience. I am simply saying there is no practical reason why they should. Although a successful scalper could take them to the cleaners in a matter or weeks simply by virtue of the number of wins where a swing trader trading dailys may take much longer.

Right or wrong, this is the most logical and credible thing I've read so far about spread betting brokers.

 

[DT]

I've never worked at an SB firm so I'm just going on what a couple if ex colleagues have told me (this might be a few years out of date too) but they will look into people seemingly making money. In the past this could have been people taking advantage of delays in a price feed or other anomalies (note they don't offer APIs). They're not generally going to want adjust their positions in the underlying so frequently as to react to every trade placed by a 'scalper' though a few people who are seemingly profitable and trading sufficient size will be hedged against.

The fact they are on the other side of your trade and are offering a parallel market that they control is enough for me, in itself, not to have ever bothered using them.

 

[x4x]

The point is DT, spread-betters who have never traded DMA have no reference to base their assumptions on. I trade both a DMA account and a spread-betting account so I can at least give a fully informed opinion. The evidence given so far, like 1) Slow fills and 2) slippage...can and do happen on DMA depending on when you enter. I've seen things on DMA that would make your eyes water had you entered at that time, and I'm certain if a spread better had they'd be bitchin' about their broker.

The point is, spread-betting 'scalpers' attempt to catch price 'spikes' and then moan when their order isn't filled...or they get a bad fill and then have insult rubbed into injury with slippage. All I can suggest is you get a DMA account and see the real world before trying to use your spread betting broker as the scapegoat for your losses. Then, spend some time learning how to scalp properly because I've got news for you, trying to catch a few points on every price spike is the surest road to poverty...whether you are trading DMA or spread-betting.

You talk so much bollox it's unbelievable - how do you know what spread betting scalpers do - you have no idea what they do other than what is in your very narrow head.

I don't need market depth or anything else to make money, - all I need is cross market momentum and then I get in on pull-backs, simple easy and very profitable. It wasn't a price spike because it was confirmed on the 4 correlated markets I monitor.

 

[x4x]

There you go - a very easy 23.4 points, no market depth, no need for 'full transparency', no volume, no moaning, no slippage, no problem with getting in. Just good old fashioned logic that says if the markets are going up, go long.....with a very tight stop.