The Scenario for Scalping

[johnboy]

Hi

Please forgive me for being a bit dim but can anyone please tell me why it is suggested that scalping should take place in mid range rather than at either end. Does this mean at the point where most money has been matched and if so why?

Any suggestions would be a great help.

Thanks

Johnboy

[Euler]

In a range bound market you would guess that if you are at either extreme of the market it may move back in the other direction. Ideally you don't want up or downward pressure in either direction when scalping.

[Iron]

So are you looking for the long-term WOM to be fairly neutral?

Jeff

Ideally you don't want up or downward pressure in either direction when scalping.

[Euler]

There are no simple yes and no answer in this game unfortunately Jeff. It takes me all day to explain what I do and why.

[JollyGreen]

As Peter says this is a tricky thing to explain in a forum post. One thing I look for is where the bulk of the money trades as this will help you decide if the price is bound to a certain range. This can help you to position orders on the edge of the range and also allow you to test the water by moving closer to the money. You MUST watch out for excessive moves on other closely priced horses. As you are nearly always trading at the front of the market a sudden move on one horse (drift due to playing up or shortening due to a gamble) is likely to result in other horses i.e. the one you are trading, moving away from the recent range to which it was bound.

[johnboy]

Many thanks Euler.

Johnboy

[johnboy]

Many thanks Jolly Green

Johnboy