Scalping - Momentum, Reinforcement and Speed

[redtra]

To clarify the graph shows profit on the vertical axis and time, last Tues to this Monday on the horizontal axis.

Just goes to show scalping works. To go from £10 to around £120 in a week is excellent...i am going to try it. The only thing that's prevented me up to now is deciding which races are suited to scalp. So here is a question Euler, which sort of races are suitable to scalp?
Is it a race where the favourite is not too well supported or where prices are all similar? It's no use scalping a favourite because the price moves around a lot, at least that's what I've noticed.

[Iron]

Peter,

Am I right in guessing that you used a bot, given how time consuming making 1,000 scalps manually would be?

Jeff

also, the forum chart was over a period of a week with just £10 scalps? How many scalps would that have been Peter? With 1 tick it must have been well over 1000?

[steven1976]

In regards to the question, what markets can be scalped. For me, depending on stake size any market any time can be scalped. There are a number of different ways to scalp different markets.

[Euler]

Peter, how many more days did it take to reach £120?

also, the forum chart was over a period of a week with just £10 scalps? How many scalps would that have been Peter? With 1 tick it must have been well over 1000?

First trade on that graph was on the 24th and the last on the 30th. Not sure if you were asking did I reach £120? Which I passed on the fourth traded race of the next day?!?!?

I've got scalping data going back to 2004. I run the same experiment periodically to see if the market still behaves the same way. Just took the opportunity to do it while the thread was running. I used £10 as a base because that's something small enough that anybody could use.

[Euler]

I also have a question.

Why did things go so well on the last day? Was it due to randomness, or was it the case that the markets were particularly well suited to scalping on that day?

Jeff

Both! But of course you will get days that are a total stinker as well, we just got the rub of luck on that day.

[Euler]

In regards to the question, what markets can be scalped. For me, depending on stake size any market any time can be scalped. There are a number of different ways to scalp different markets.

I've copied this in response to redtra as it's more or less right. Everybody has slightly different ways of doing the same thing. But as you are only going for one tick on the upside you have to have markets that are not flying all over the place to limit your effective downside.

[Euler]

How many scalps would that have been Peter? With 1 tick it must have been well over 1000?

Not sure TBH but if I get going I can do a substantial amount in a short period. Yesterday during the course I managed nearly 150 in just one race, but I will admit I made a bit of a hash of it and lost on that occasion. But that's the way the cookie crumbles I guess.

I did successfully demonstrate scalping on a number of other races without a problem, just failed on the all guns blazing one!

[redtra]

i see what you mean Euler, thanks for the reply. I was mixing it up with very big races where the price seems to stay static..which is what i thought scalping was for. Now i am looking forward to thursday when i can have a go!

[Iron]

Yesterday during the course I managed nearly 150 in just one race

Wow!

How many horses were in the race, did you trade them all, and how many minutes were you trading for?

Jeff

[switesh]

Here's an active scalper from the 4:20 Hcap Hrd at Towcester today.

I've collaged the last 60 secs in one image. I usually read it like I were reading a book - left to right, top to bottom.

On the left column on each of these mini-ladders is the time and volume matched per second.

Area of interest around 40 secs.

[Iron]

Switesh - What am I looking for in particular?

Jeff

[steven1976]

7 & 6 seconds to me is the most obvious position at a quick glance as to understanding the very front of the market for scalping. Understand why the position in the middle is quite weak and ask your self what would happen if you entered a lay or a back in that position. Id guess the market will move against either position you take up from that set up.

[switesh]

If you understand how basic scalping works and also if you were participating in this market, it becomes easier to understand this image.

I was trading the 2nd and 3rd fav and made a blunder trading them. I forgot to keep my eye on the fav and didn't realize what was happening to it until I looked at the data afterwards.

I've used different colors to highlight the intensity of different stake sizes. That makes it easier to spot bigger amounts and read its intentions when it shifts around.

I'll try and explain what I read from this image.

I'll refer to this trader as ScalperA. There are also other scalpers in the market with him but they have smaller positions compared to him. He was active in the market much earlier than this time-frame.

At 1:00
I believe at-least 80% of the money at 4.1 belongs to ScalperA, and so does at-least 60% of the money at 4.1 and 4.2.
His intention is to get at-least 5k (if not more) scalped between these price-points, and prevent the price from going under 4 and above 4.2.
The way he intends to achieve this is by creating a 'road-block' at and around these price points.
1 successful scalp at this price-point yields $25 green per tick for 1k stake, so from this you can forecast his PL to at-least $125 if he manages to pull this off successfully.

From 1:00 to At 00:46
As ScalperA's positions slowly being to fill at 4 and 4.1 he drips in 1k to add to 4 and 4.2 in order to keep this 'road-block' in balance.

From 00:45: to 00:40
ScalperA's positions at 4.1 get filled quicker than expected and not enough gets nibbled at 4

At 00:40 - This is where the game takes a turn
ScalperA tries to scratch some of his position at 4.1 and I believe other Scalper(s) line themselves accordingly in the market to take advantage of this sliding situation.

At 00:37
ScalperA adds money at 4.3 and shifts the 'road-block' slightly back to still try and maintain the balance between his back and lay positions.

From 00:36 to 00:28
Money shifts slowly from 4 to 4.1 to adjust for a situation that might be slipping out of control.

From 00:26 to 00:20
Definitely looks like ScalperA is in a bit of hot water and other Scalpers are enjoying nibbles at his party. You can see money beginning to be removed from 4 and being added to 4.1 and 4.2

From 00:19 to 00:00
ScalperA's exited his initial position (which was over-filled by about 2k on the back side) but is still in the market (with other Scalpers in the mix) to see if he can some money matched between 4.1 and 4.4

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PS (Pro-traders): My interpretations of reading this could be hazy at certain points so please correct me if you find errors in my interpretations. I do have one doubt about how 5k got matched at 00:25. Bit puzzled there.

[Groovyelms]

Here's an active scalper from the 4:20 Hcap Hrd at Towcester today.

I've collaged the last 60 secs in one image. I usually read it like I were reading a book - left to right, top to bottom.

On the left column on each of these mini-ladders is the time and volume matched per second.

Area of interest around 40 secs.

What an interesting thread this has been to read. Strongly held views from all points of the compass! I am impressed with switesh's amazing collage which rivals Bridget Riley at her best mostly because I lack the skill to be able to present data in this way...But I am all at sea as to what we as traders might gain from this? Very simply interpretated this appears to have been a stable market and probably a good one to scalp for a tick or three....

[Iron]

Why address that question to pro-traders only?

Do you believe that they are the only people who will have a valid opinion on the matter?

Personally, I'd be interested in the thoughts of anyone, whether they are a complete newbie or an experienced pro. Pros don't have a monopoly on good ideas.

Jeff

PS (Pro-traders): My interpretations of reading this could be hazy at certain points so please correct me if you find errors in my interpretations. I do have one doubt about how 5k got matched at 00:25. Bit puzzled there.