Is there a day trading (scalping) technique with proven success ratio ? is it available for FREE ?
Is there a SIMPLE day trading technique where one can scalp out 5-10 pips relatively safely ??
If yes, please provide....thanks
Clarification added 3 months ago:
This quest of mine (for the last 3 years) reminds me of Indian yogis who renunciate everything in pursuit of God realisation......
Clarification added 2 months ago:
If yes, please provide....thanks
Answers (16)
I suggest you go to futures magazine and sign up for the futures I trade show. If you can still view the May show, watch the presentation by Albert Brooks. Brooks is a University of Chicago trained MD who sold his practice to trade full time. He is one of the best daytraders I have ever encountered. Most successful traders do not publish or sell products. There is simply no incentive.
Learn price action.
Look for traders like Al that are willing to share ideas and charge nothing. If their is a fee for education, you can bet it does not work in the real world.
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Quick and simple answer: No.
If this technique existed, everyone would use it and then it would no longer work. Life is like that. No free lunch.
Hi Lokesh, I would suggest you read the following books on trading and market understanding:
- the new market wizards, by Jack D. Schwager
- Jesse Livermore, World's Greatest Stock Trader
or Jesse Livermore, Who to Trade in Stocks - both by Richard Smitten
- The Winning Investment Habits of Warren Buffet and George Soros.
As I have traded many products for many years - I would say the most important skills are disciplin, disciplin and disciplin !! and get involved - everything changes when you have money on the table.
Final advice would be to stay in very liquid stocks and only play a small number of stocks, bonds, currencies in order to stay focused.....
Good luck
Fortunately for all of us, there is no such thing!
If such technique would be available for free, everyone would use it and it will quickly become unprofitable.
There are proprietary day trading algorithms (quite sophisticated) that work exceptionally well, but they are successful only because they are kept secret.
If someone will give you successful day trading algorithm you will be able take the portion of his profits, so he will never do it for free.
Arthur A. H
Senior Consultant/Project Manager/Program Manager/Financial Advisor/Entrepreneur
Clearly no, 1) if there was, everyone would be doing it and 2) day trading for most is a losing scenario anyway. Just look at all the mutual fund managers constantly struggling to beat the indexes.
Sure, some people can have some success day trading for a period of time, but what period of time determines success? 6 months?......over the long haul, most lose money.
But, if one is going to trade that frequently, I would recommend trading currencies and/or sector ETFs. At least their movements are usually based more on fundamentals and less on hype.
Steven J
Head of Financial Engineering, FX Solutions
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To expand on the answers that some have already given --
it is possible (although unlikely) for such a technique to exist, but only if it is kept secret. Once it becomes general knowledge then "everyone would use it and then it would no longer work."
Larry J
Consumer Electronics Consultant and Contractor
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The eternal search for a free lunch goes on!
Best of fortunes in your speculating.
No there isn't and there never will be. Unless you have an institutional arbitrage (such as being a market maker in a security) all trading and investing carries risk that can't be hedged away fully. The only genuine advantage available to a small investor is time. Many try to trade and the overwhelming majority fail because they lack focus, discipline and maturity (brains are not nearly as important as those three).
But, if you really feel you must trade, track your daily real-time hypothetical results (brokerage and spreads) for a minimum of three consecutive months, divide those results by at least two and you'll get a sense of your likely pre-tax returns. Unless you are trading off a capital base in excess of $500k, pre-tax returns from full time day trading under 100% a year are inferior to having a job and investing in index funds.
Just one trader's opinion...
James C Brandon J
Owner, JCB Capital Performance - Personal Wealth Management
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Hi Lokesh,
Yes. Arbitrage - any true arbitrage play.
JC Brandon
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Short answer: No.
If there was a successful technique, why would you think it would be available for free?
The nature of the markets, even the currency markets, is that advantages such as this will have a limited capacity, even if they persist. Thus, a secret like this could not be made avaialbe to many others, especially for free.
I'm not suggesting this as a procedure, but you could look at simulated results of simply placing simultaneous bids and offers, and make a tic or a pip in that manner. Floor traders do something like this all day on the Chicago exchanges. Since you undoubtedly trade electronically, you may have seen that all of the bids or all of the offers don't all get accepted. Thus, once in a while, the trade will get away from you. In that case, you'd have to determine what you'd do, given the leferage in the market.
Dont over-trade. Trade only when you can handle the price action. Remain stoic at all times. Get out of losers immediately and scale out of your winners. Do not average losers. Scratching a trade is ok. Trade with the trend. Try to use que priority to your advantage if you are trading a market with a FIFO style order-routing system.
Define your strengths. Maybe you are good at trading slow markets. Maybe you are only good at trading break-out situations. Maybe you are only good at trading clearly defined technical patterns. Maybe you trade "opens" or "numbers" well.. Define your weaknesses and stay away from situations that you consistently get burned. Your experience and unbiased observation will help you define these situations. Discipline will allow you to stay away from them.
Trade for small gains, ie only try to take 2 tics out of an 8 tic move. Any profit is good profit, especially in the beginning. Do that enough so that you recognize those situations and then try scaling out of the move. But more importantly be aware of when the move you are looking for isnt materializing, ie define and adhere to risk parameters. Never let a winning trade turn into a losing trade.
If you get a defeated, "this always happens to me," "oh of course THIS time is does it," "oh of course this time it doesnt go" etc attitude.. stop trading and reconsider a new career.
If you dont have a positive attitude and the understanding that most of the time you are "wrong" and that it is how you handle the non-profitable or losing trades that make the difference you will never make it to the level where you learn the discipline to ride your winners, trade around a position and make more money than you lose.
It is a zero-sum game. Remind yourself of that every day.
Successful trading is more akin to learning an art, such as guitar playing, than it is to building an erector set. You need to know the notes and the basic chords before you can make your own music. Being a great guitar player takes both practice and talent; trading is the same.
It is as much a mental game as it is anything else. So, because of that component, I know not of a simple, safe technique to scalp 1 tic out of the market
I know of no simple, safe (I presume you mean nearly risk-free) technique that can scalp 1 tic out of them market, let alone many.
Scalping does work in trading, BUT you have to be very nimble.
Market makers and/or specialist don't care about if there are scalpers in the crowd, if there is volume in a stock everybody can make money. I have never seen a market maker pissed because a scalper or a scalper's order was in a crowd.
They only risk to being a scalper is the lack of being nimble and like all traders not disciplined. You have to be willing to take a very small profit, especially if you have to pay fees/commissions or don't get break on either one.
It's a different way of trading. Some of the best scalpers i've met doesn't even look at charts, not even fundamentals. They look at level 2 bid/ask and trade accordingly.
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Short answer : NO
Long answer : There are no free lunches !!
Yes Lokesh, of course there is this brewery that serves FREE BEER all day long. Good service, free parking, helpful staff, and of course totally free beer. How could you not know about it ? Everyone knows about it....
Karel B
Dutchmen AEX Market Neutral Alpha Fund: 2007/37%- 2008/85% - dutchmencapital.web-log.nl/kacobeelaerts@zonnet.nl
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As in most businesses the 80/20 rule is applicable. So as 80% of daytraders in the end lose money there is a technique with proven succes, do not daytrade!.
Daytraders lose against the other 20%, the much smarter and resourcefull market makers, investment banks with their computer program trading and succesfull hedge funds with proprietary algorithm trading. (Medallion Fund).
Look for momentum in trends either on the upside or down side. Much easier, and forces you the have a longer perspective than only one day which will make you a slave of your tradingcomputer.
Ainandil A
In Search of a Punchline
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Lokesh,
Good question. I've had excellent results the past several years with a system of technical analysis derived from carefully scanning The Zohar. You'd better start by learning the Hebrew alphabet -- any good library will do ya. The Zohar may be found here:
https://www.kabbalah.com/k/index.php/p=zohar/zohar&vol=1&sec=1
You can find a free sample chart -- point of fact it's the one to which I refer daily -- for 2007-08 here:
http://www.kabbalah.com/scanchart07-08.pdf
However the above won't make a lick of sense to you unless you've read the Sepher Yetzirah -- here:
http://emol.org/kabbalah/seferyetzirah/text/index.html
You will also need to pay attention to which signs of the zodiac Sol and Luna are in when you do your scanning.
TANSTAAFL. Thanks for playing.
-- Ainandil
