Scalper's Forum

[Saint]

Originally Posted by trader111

Saint,
I cannot find words to compliment you. Seriously
Always making a thorough effort, learning silently, a thing or two from your posts

Ah,you not serious at all,my friend........nothing really to learn from my posts.Just some old TA concepts put together.

Have learnt a thing or two from your posts and looking fwd to more....

Saint

[trader111]

yeah old TA concepts need to be remembered always

[traderwiz]

Trader111: Great Initiative....

From what I know James Simmons was a mathematical genius......His firm hires the best and the brightest Ph.D's from any part of the world. They don't hire MBA's. They hire Ph.d's in Mathematics, Physics, Theoretical Physics and Statistics. They then come up with all the models to trade. And they also make you sign a bond so that when you leave them, you cannot use their trading methods/strategies. They even sued 2 traders who left to start their own....and those 2 traders settled for an amount.

The million dollar question is this: Is scalping possible in the Indian markets? Just like Rakesh has mentioned. I have traded in New York and I know it is easy there when compared to the Indian markets (due to hefty taxes). In the U.S. you can get a rate of as little as 0.003 per share if you trade as much as 40,000 shares a day. So your break even point is 0.006 (round trip) and it is not that difficult to find a stock that moves say 30-40 cents in minutes. Now I am on a vacation in India and trying to duplicate my methods here only to see these hefty STT and also the rates are not dependent on just the number of shares alone but also the price. Try scalping a high price stock and all you are doing is making your broker very wealthy.

This method may work if they come out with a proprietary trading groups where say a company comes up with a deal i.e. profit split. So if i make 1 lakh a day, my company takes 30,000 Rupees or whatever. But I haven't seen any thing like that here in India. Such companies do exist in the U.S. and other parts of the world.

The best thing you can do is open an account with R.K. Global for a flat rate of Rs 999 per month. I have tried this but their servers are not reliable. It cuts me off like 20 times in a day!!!!!!!!!!!!!! Combine this with power cuts in India and if you are a big time trader you may get your ass kicked within a few minutes due to circumstances beyond your control.

Also, to answer my other question, do you need a ph.d. in theoretical physics to be a profitable scalper? probably not. I have seen a high school drop out in the U.S., scalp every day profitably. This kid was recruited by a company because he was a video game genius. This kid won some kind of a video game tournament and was recruited by a scalping day trading company. This was way back in 1999 when internet was some thing new...I met him in 2003 and he has had only a few down days and has been CONSISTENTLY profitable every single month.

Question for the rest of the members:

1) Do you still think it is possible to do scalping with todays brokerage rates?

2) If so, which instrument? are we talking NIFTY? or some other scrib?

3) Please post some numbers and all of us can see whether if this would be possible?

Great Thread. I am looking to learn more and more participation.

Rajesh

[sanx]

Rajesh , stuck to chair ,right ,need to get the basics first . Now your turn .

[traderwiz]

OK.

So, first do we have to choose a broker for intra day trading? or do we have to look at the 1 minute chart to find the hidden "micro structure" in the markets? or do we have to use some statistical theory and then we have to test it to see whether if it works or not. Can some body elaborate what exactly would be the starting point for this technique?

From that pdf article that trader111 has posted, it would make sense to find stocks or the "right instruments" that exhibit some kind of co-relation. I completely agree that if u are trading the right instrument, then the strategies doesn't have to be complicated (just like it mentioned in that article). Draw a simple channel, and when the price breaks out, simply trade. Let James Simmons hire the brightest Ph.D's and let them use some chaos theory and fluid dynamics to trade the same stock or instrument. At the same time, a lot of individual investors would be using simple moving averages, RSI, channel breakouts etc. to trade the same instrument. I guess any strategy would work.

[the tape]

In my personal opinion, brokerage and taxes are not a big concern for a scalper, they may be for an arbirager. If u r profitable, i believe u r made. raising up the positon size or finding competitive brokerage is a piece of cake compared to becoming profitable.........

[vkmishra]

Dear Trader 111,

Thanks for enlightening us on scalping. However I am unable to open / download the suggested url :

http://www.************/file/5118229...ading_ppt.html
(replace stars with 4 shared . com)

Pls. help . Thanks in advance.

Rgrds

VM

[traderwiz]

ALL,

Could we please discuss the "nuts and bolts" and the "meat" of the scalping techniques??

I am actively trading every day and am really excited about this thread........

[traderwiz]

Hmm... you have used the word "inefficiencies". The million dollar question is how to find it? If NIFTY goes up by say 100 points and if a strong stock (fundamentally speaking) goes down by say 20 points, could this be considered as an "inefficiency" and would you keep buying? I would. Of course, this is "my theory" and "my assumption".

Logic: is that well, if a fundamentally good stock is going down, then may be it shouldn't. Also, there are hundreds of stocks like this. How do you find it in real time? It is impossible for a human eye to monitor more than a few stocks. So may be a scanner that can spit out the stocks in real time that you can configure it to your parameters would help....

We need to first determine how to determine inefficiencies. What are these inefficiencies based on? This word is too broad and I would assume that if not properly defined then could become subjective just like those Elliot wave counts or gann or technical analysis.
What you think is inefficient, some one may not. Then again, this is the reason why markets exist in the first place.

Lets consider this scenario: The market goes down big time (NIFTY down by say 200 points, and a stock is going up by 30 points. So in this example what should a trader do? Should the trader simply short it thinking it is "inefficient"? Is this inefficient? May be there are some insiders with some information that no body knows. May be the company is fundamentally strong..may be the broker cartels (like Harshad Mehta or Ketan Parekh) are pumping and dumping it..who knows. In this case what would you do? or what do you recommend others to do?

My take: I would look at the chart patterns. But honestly, these charts are so unreliable. Text books say all those candles and doji and harami patterns or whatever, but those patterns only work on long term. Short term?

I saw this "video game kid" trade, scalp. Every minute he used to punch that key board and he had this key board set up with all hot keys. And in u.s. markets you have ECN's and you can route your order to a particular market maker or ECN and he was quick. Not sure if such skills would help for a scalper to survive in the Indian market.

[traderwiz]

Is there a website that can give me a stocks "beta"?? When I go to ***** finance india only the price is available and there is no fundamental info about a scrib../stock.