Scalping profitable?

[shadowninja]

Please read this post before voting.

Ok, this thread might seem on the face of it to be the cry of someone in desperation (you've seen those threads posted hundreds of times) but a couple of months ago I decided to stop wasting time (and money) trying to scalp and stick to swing trading (my account has had a healthier disposition since). And I've seen many, many scalpers come and go since starting day trading. (I do, however, believe it is possible to scalp profitably and consistently.)

This is really, therefore, for the newbies who are embarking on their trading journey. A chance to see if they are wasting their time and partly because someone mentioned in a private conversation that scalping as a retail trader was very difficult to remain profitable on a consistent basis. Let's make this the definitive poll.

And so, to answer the poll you will have been scalping (or attempting to scalp for at least two years). I don't care about exact techniques. I am not interested in your strategy. And the poll voting is anonymous. Please only reply if you have been scalping (or attempting to scalp) for two years minimum to avoid skewing the results.

Definition: By scalping, I simply mean that you hold trades for anything from a second to a couple of minutes, rather than the true definition of scalping.

 

[Black Swan]

Scalping never worked for me, moved v. quickly to trading off 15 min charts (does that constitute scalping?) and/or 4 hour. However, I can see how it does work but your disciplines would have to be totally re-aligned. if you have no stop costs, low cost of spread, I can't see why it wouldnt work TBH.... just not for me.

*
P.S. I didn't fit the criteria of your poll therefore didnt answer.

 

[shadowninja]

Thanks for your reply. I tend to agree with you if one is to be profitable for years.

The current results are curious. I wonder if the swingers and trend traders are all still in bed.

 

[shadowninja]

So currently 70% of experienced traders can scalp profitably.

I suspect those who can't scalp don't like to admit they can't do something.

 

[BSD]

I wonder what the success percentages at some of the better prop shops are that teach their traders to scalp.

Anyone care to share what sort of a failure driven fluctuation rate they have ?

I'd guess that as pretty much everyhwere in life it's a pretty inverted pyramid, ie ca 20% if we want to take Pareto's word for it make it, while the rest fade away.

I do remember TWI - a real pro we have here - saying that when he was at a prop firm the really good guys there made between 25 to 50% returns per month. Non-compounding of course, but still absolutely outstanding.

 

[BSD]

Oops.

Got the numbers wrong:

Many people think if you make 20-30% a year that you are doing brilliantly well. Many here will make 50-100% per month. It is not a methodology you could apply to large amounts of capital such as fund trading but for individuals accounts it cannot be bettered.

That is really superb.

And true enough.

Remember this after all:

55000 % in ONE month !

 

[shadowninja]

Yes, would be interesting to see. Only thing is they trade different instruments to what retail traders normally choose to trade, don't they?

 

[Phil Mibbutz]

Profitable scalping is possible, but don't bother trying with spreadbetting.

 

[arabianights]

easy peasey lemon squeezy

(note that consistent may not apply to today )

 

[shadowninja]

You're not a retail trader. Bog off back to your office!

 

[zigglewigler]

I like to describe my trading as quick turn, rather than scalping.

I like to come to the table and eat. Not wait for the bleeding menu or be told that the oven needs warming up.

And once I've left the table and paid the bill, not worry that the waiter's coming after me with a knife.

I am still talking about trading, you get that right? fftopic:

 

[Neoripley]

I didn't vote because I'm neither one nor the other. I prefer short term because it's lower risk with quick return/loss but I can't always trade this way. I've answered because I was trading short term spread betting profitably this way last year. I agree that it can be very profitable but requires multiple trades and low risk/return. In fact I think that's where the consistency comes in - you have to almost trade consistently i.e. always have a position or at least be ready to most the time.

 

[shadowninja]

That was one of my problems with scalping... because I wasn't paying attention all the time, I missed about 30-50% of the trades which skewed the results severely enough to make things unprofitable.

 

[zigglewigler]

That was one of my problems with scalping... because I wasn't paying attention all the time, I missed about 30-50% of the trades which skewed the results severely enough to make things unprofitable.

Your avatar should indicate a perfect disposition for scalping, a cat lying in wait ready to strike.

For successful quick fire trading, you need immense patience and extreme focus. If that's absent you have to walk away from the screens or adopt a different strategy.

 

[wackypete2]

I've scalped stocks with reasonable success for many years. I'm currently working on forex and the emini. I have found stocks to be easier but it was much better before the $25,000 minimum restriction. I don't claim any mega-riches nor do I trade for a living. I believe this has been a part of my success since there's no stress or urgency to make any money or even trade at all on any given day. I define reasonable success as being able to bump up my standard of living a notch or 2 and save a few pennies to boot.

Peter

 

[Neoripley]

That was one of my problems with scalping... because I wasn't paying attention all the time, I missed about 30-50% of the trades which skewed the results severely enough to make things unprofitable.

That's the thing, you've got to take them all because you don't know which will be the winners and which the losers. If you don't follow a system or set of rules you may end up taking only the bad trades or only the good or a skewed percentage of the total you should have taken according to your system and backtests - either way your results will not be accurate. But yes, that's the difficulty, no time to test the water before leaping in - the best you can do is have a good exit plan so you can get out FAST if the water's too hot/cold. Thing is, then you've got to be ready/prepared to jump in AGAIN the next time while you're still scalding/shivering (and if your last experience was unpleasant, you're probably going to want to test the water this time - but by then it's too late. Opportunity missed. And that will be the one most likely to recover your loss and put you back in profit, just to rub salt in the wound).

 

[shadowninja]

Your avatar should indicate a perfect disposition for scalping, a cat lying in wait ready to strike.

For successful quick fire trading, you need immense patience and extreme focus. If that's absent you have to walk away from the screens or adopt a different strategy.

Except the cat has a little sniper rifle waiting for the perfect shot... which is more relevant to swing trading...

 

[shadowninja]

That's the thing, you've got to take them all because you don't know which will be the winners and which the losers. If you don't follow a system or set of rules you may end up taking only the bad trades or only the good or a skewed percentage of the total you should have taken according to your system and backtests - either way your results will not be accurate. But yeah, that's the difficulty, no time to test the water before leaping in - the best you can do is have a good exit plan so you can get out FAST if the water's too hot/cold. Thing is, then you've got to be ready/prepared to jump in AGAIN the next time while you're still scalding/shivering (and if your last experience was unpleasant, you're probably going to want to test the water this time - but by then it's too late. Opportunity missed. And that will be the one most likely to recover your loss and put you back in profit, just to rub salt in the wound).

Yes, that's exactly the "problem" I had and that is why I stick to swing trading, now. If I miss one trade, it doesn't skew the results too badly, which means I can live my life.

 

[BSD]

You're not a retail trader. Bog off back to your office!

Think the general numbers are the same everywhere, doesn't matter if you work for yourself, for somebody else, want a rowdy group around you or prefer your splendid isolation, start a hedge fund where the largest majority goes on to blow up, no matter in what environment it's pretty much the same: many feel chosen, but only very few are called to actually succeed consistently over the long term.

 

[shadowninja]

But we're talking about scalping vs swinging as a retail trader because the instruments are different and the equipment and psychology is different (you don't have a manager to drag you away from your desk screaming, "NOOOOO! MRS MIGGINS! NOOOOOO! NOT THE CAMEL!!!!")