Scalping - Momentum, Reinforcement and Speed

[PeterLe]

Anyway, like you I'm just providing feedback that might benefit newbies, and I hope there are no bad feelings.

Jeff

Hi Jeff
We've all known each other long enough on here not to take any offence.
I guess Im hardened by the corporate world after 25 years!
Regards
Peter

[herbie]

you can tell the busy horse racing season is over

[LeTiss]

Get a grip ladies!

Trading is not for the feint hearted. If you start taking offence over comments on a forum, then your chances of being mentally strong enough to beat the competition in the markets is below average

[steven1976]

Anyway, like you I'm just providing feedback that might benefit newbies, and I hope there are no bad feelings.

Jeff

Hi Jeff
We've all known each other long enough on here not to take any offence.
I guess Im hardened by the corporate world after 25 years!
Regards
Peter

Milk rounds aren't included Peter!

[gutuami]

JayBee your initial post now deviated from your initial statements. I've got a few questions to you if you don't mind:

1. how many bf horse markets have you traded

2. You would like to find out if scalping is profitable or not. What conclusion did you come to?

I am not here to name-call scalpers but to determine how they actually profit, if at all.

3. If you did not analyze any data what makes you to believe that scalping is a random walk

I have not had time to collect data ...

[James1st]

(to Jaybee)] Can you therefore describe what a scalp is and how you would scalp because it seems to be different to a lot of peoples definition?

Is it safe to raise a head above the parapet yet?

If so, I would love to read a few answers to this question. FWIW Wikipedia definition:

"Scalpers attempt to act like traditional market makers or specialists. To make the spread means to buy at the Bid price and sell at the Ask price, in order to gain the bid/ask difference. This procedure allows for profit even when the bid and ask don't move at all, as long as there are traders who are willing to take market prices. It normally involves establishing and liquidating a position quickly, usually within minutes or even seconds."

[Iron]

Hi JayBee

I think you and other contributors to this thread may have been talking at cross purposes.

From this original blog post (and your replies to my questions beneath it), I would say that you do believe in the effectiveness of what traders here would regard as scalping:

I'm not quite sure what you see scalping as being, but most people in this forum would regard what you describe in that post as being scalping.

Jeff

[rogerlisa]

James1st
To kick it off, my definition is quite simply explained by clicking the 'make market' button. This quickly fires two bets into the market one on each side. I normally look for a stableish market and before major money comes in. I also wait for low sums to appear on each side of the book before I enter so I aint in that long. Once I start seeing 4 figure sums coming in I turn my back on it. If my initial fire doesnt happen I may fire it again, and then once again, but never more. I will wait for a bit and if I get a green from any of my outstanding, I green up or take a small loss and then start a fresh. Now I know that might be ignoring that I may be turning my back on what might be a good position if I waited longer but until I can read markets better I am not going to try (been burnt you see).
Roger

[Euler]

whereby High Frequency Trading bots ramp up the price so that latecomers have to pay more for the stock, thereafter the price reverts. Although being the fastest trader on Betfair is not illegal, it would be interesting to see how successful the best traders would be if the playing field was level for all traders.

The playing field is level as you can only poll price 5 times a second at Betfair. Any faster than this and you return stale data. Its the most level playing field there is from a trading perspective. HFT traders on the stock market have no such obligation and some of the trading floors pay a fortune just to be a ms in-front of somebody else.

[switesh]

...Once I start seeing 4 figure sums coming in I turn my back on it...
Roger

I can see where you're coming from Roger. I was fearful of big money too initially, until I began increasing my own stakes (in Aus racing).

I then realized I didn't need to be afraid of the big fellas, why let them have all the fun? I could be one of them too, and began leveraging my stakes/positions accordingly (but keeping slightly under the market digestion threshold), not out of irrationality, but out of a challenge to push my fear out.

At first few attempts I had my heart pacing quite a bit, but gradually felt comfortable and realized that it was necessary to do that in order to reach bigger PL's or higher turnover. As long as I maintained control over my slip-up's I felt fine handling bigger amounts.

Don't turn your back on seeing big money. You can be it too!

[redtra]

and began leveraging my stakes/positions

Don't turn your back on seeing big money. You can be it too!

i like the sound of that switesh but what do you mean by "leveraging" Have heard the term in financial markets but not here.

[switesh]

Sorry I should've used a better word there. Not leveraging in terms of financial markets, but simply recycling my bank, or 'flippin' it over'

[Euler]

This thread reminds when of when I was invited to talk at a maths society. They were completely convinced it was impossible to trade any market, not just betfair (but that's how we got talking) because the markets exhibited completely random movements.

They put forward a very convincing case as to why the market was random, showed why and proved that, unless you had some sort of unfair advantage, you couldn't trade them for profit long term. Within a few minutes of my response they realised they had made a couple of a really horrible errors.

It just goes to show you that people tend to find what they are looking for. In fact the skill is to have an open mind and make sure you don't pollute your data with your thinking.

I had to discover it too though, so in the past I had made similar mistakes and made a bit of a prat of myself, but it was my ability to constantly challenge myself and ask "why?" that led me to where I am now.

[Iron]

'It can be very expensive to try to convince the markets you are right.'
Ed Seykota

It just goes to show you that people tend to find what they are looking for. In fact the skill is to have an open mind and make sure you don't pollute your data with your thinking.
.

[redtra]

Sorry I should've used a better word there. Not leveraging in terms of financial markets, but simply recycling my bank, or 'flippin' it over'

ah yes, i see what you mean and i have done that a few times too.