Category Archives: Scalping

What Size Market Moves Should You Target?

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This may be joyriding in the obvious-mobile, but commissions and other fees/expenses are a big deal in trading.  I pointed out a few months back that it could cost you about 1/6th of your profits in the speculative alternatives portfolio to use a broker with the wrong type of commissions structure.  I want to explore that idea in a lot more depth now.  It turns out that commissions put very fundamental boundaries on what sorts of trading you can make money at.  They’re a fundamental part of the market’s structure in the same way that auction market dynamics and FIFO ordering are.  Failing to understand this point cost me a lot of money along the way – certainly many thousands of dollars.  Let me see if I can explain what I learned for that expensive tuition.

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Futures Scalping Part 2: 21 Good Ideas

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One thing I hope I’ve gotten across with this blog is that there are lots of ways to trade successfully.  It’s not that there’s one magical formula, and once you have that formula it rains money.  Rather, there’s a lot of little things that you can do wrong or right.  This is very much true in futures scalping.  If you do enough of them right, you start to make money.  As you get more right, you can make more money with less downside risk.  Here’s a list of 21 good ideas that helped me move from being a losing trader to a winner.  I’m not going to provide excruciating detail on each aspect right now.  Just enough info to get you thinking about a given topic. Continue reading →

Futures Scalping Part 1: Introduction

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Now that I’m more or less finished with the speculative alternatives to investment series it’s time to start looking at a new trading method.  I’ve chosen scalping in the futures markets because it’s about as different as you can get from what I’ve covered thus far.  Different instrument, different time scale, different philosophy.  I believe scalping is one of the most advantageous methods for small traders because it can provide large returns while requiring limited capital and having fairly well bounded risk.  Unfortunately scalping is also one of the most difficult methods to learn – it took me years to learn to scalp successfully and almost all of my initial trading losses were from failed attempts at scalping.  So I’m going to advise you to be very careful here.  But it is worth your time to learn this. Continue reading →