Scalper's Forum

[traderwiz]

Excellent post trader111. You are in the right path. You talked about market depth. When I worked with a proprietary day trading firm in New York City, there was a group in my company that only specialized on NYSE stocks. I had the opportunity to sit with them and talked with the head trader about strategies. All they did was "read the tape" for price patterns. Of course, like you had mentioned, this game on NSE is a little bit different since there are no specialist involved unlike the NYSE. So in my opinion watching the bid size and the ask size is very important. But again, there is no holy grail or magic formula here. This is where it becomes like a poker game. Is the bid size and the ask size telling the truth? or is it fake? I have heard that professional poker players are also very skilled in day trading since it requires a very similar mindset and skills i.e. in poker you need to figure out "is he bluffing? or is he telling the truth?", same thing right here when u look at this market depth the million dollar question is "is it telling the truth? or is it faking?" So how can you tell this? This is where experience comes into play.

So is it humanly possible to watch 50 stocks for market depth? I don't think so. I think you have to specialize here. Just like you have a brain surgeon who just works with brains. You cannot walk in and trade reliance one day and ongc the next and some thing else the day after unless you have some kind of a system that can read and analyze this market micro structure. These are all hidden clues. Like sherlock homes trying to find clues to solve a mystery. We traders have to solve the puzzle if you want to be good at this game. But some times, the bacteria and other DNA is really not visible to the naked eye. Thats why we have the microscope. So should we take a microscope and look at a one minute bar for some kind of hidden patterns?

[traderwiz]

Also trader 111: I have also seen trading groups that only trade the news. i.e. every day there is some kind of news. It's not the news itself. Trading is about how you react to this news. Thats what counts. Right now there was news this past friday that inflation was 8.75% in India. This is bad news in my opinion since this is an all time high. So should I short the NIFTY? or should i go long the NIFTY? How would the majority of the people react to this news. How come the market had a good support on Friday when there was this bad news? I know I am trying to ask a reason or find logic. The market is always right and I shouldn't be asking any questions.

[sanx]

Originally Posted by traderwiz

So is it humanly possible to watch 50 stocks for market depth? I don't think so. I think you have to specialize here. Just like you have a brain surgeon who just works with brains. You cannot walk in and trade reliance one day and ongc the next and some thing else the day after unless you have some kind of a system that can read and analyze this market micro structure. These are all hidden clues. Like sherlock homes trying to find clues to solve a mystery. We traders have to solve the puzzle if you want to be good at this game. But some times, the bacteria and other DNA is really not visible to the naked eye. Thats why we have the microscope. So should we take a microscope and look at a one minute bar for some kind of hidden patterns?

Hmmm , what If you don't get any news at all, you are stuck ? . Also I believe if you are able to understand the basis you should be able to trade any stock for that matter . Its like driving a car , if you can ride in roads of mumbai, you should be able to ride some other car at some other place like Delhi or US of a ,as long as you know driving . Right ? no ? . I am/want to learning proper driving ,so that I can drive any where .

[trader111]

Originally Posted by traderwiz

Right now there was news this past friday that inflation was 8.75% in India. This is bad news in my opinion since this is an all time high. So should I short the NIFTY?

I don't usually come online on weekends, pretty happy that I read this

Wiseguy, you have been talking all the time about Simons' hiring style, beta, correlation of NF with DOW, anomalies, unit root test, GARCH, change in microstructure ! ok I guess u use this stuff for ur scalping.

If you can predict how far the news (impact) is going to take ur ticker why to bother about what order book tells or what the tick graph tells? hmm... looks ur scalping style allows u enuf time to do 'analysis'.

Or maybe. Wakeup.

[Cactus]

haath bhar ke fasle ko umar bhar chalna pada.

Making a bridge over sea is easier than intraday........

(that is what I could understand after reading the thread)

[deb99891]

carry on trader111
i am learning from u
looking fw for ur next post

[traderwiz]

Originally Posted by trader111

I don't usually come online on weekends, pretty happy that I read this

Wiseguy, you have been talking all the time about Simons' hiring style, beta, correlation of NF with DOW, anomalies, unit root test, GARCH, change in microstructure ! ok I guess u use this stuff for ur scalping.

If you can predict how far the news (impact) is going to take ur ticker why to bother about what order book tells or what the tick graph tells? hmm... looks ur scalping style allows u enuf time to do 'analysis'.

Or maybe. Wakeup.

It's all about gaining an edge. Whatever gives you "an edge" you do it. If you have read Market Wizards book (part I or part II) you will know that there are all types of
traders and all sorts of techniques.

My point in bringing up all this is to show that:

1) Even James Simmon's hedge fund they do intra day scalping or what is known as "high frequency trading". Yes, they have all those complex models. Thats institutional.

2) On the other hand, i.e. at the retail level, I have witnessed a high school drop out but a pro in video games, make money every day scalping. He doesn't know a thing about standard deviations or correlation co-efficient.

3) I have worked for proprietary day trading firms during the internet boom (way back in 1999) and have seen many scalpers make money. Within the same company, I have seen different trading groups. They all do different things. My roommate was also a day trader once and he traded just the news. He also only scalped the NYSE stocks. I have seen people reading only the depth of the market and trading and making a living.

The whole point is this: what works out for you may not work out for me. Pete Sampras was a serve and volleyer. Agassi was a base liner. They both were professional tennis players. Imagine Agassi trying to "duplicate" Sampras or vice versa!!!! Wouldn't that be insane?

Trading is very similar to professional sports. You have to identify what suits "you".

I used to be a tennis pro and once had the opportuinty to teach a famous hedge fund manger. I carried steve nisson's "candlesticks" book and he laughed at me......And this was a guy who used to work for Soros. His approach was purely statistical and mathematical.

I also know many people who use candlesticks and are profitable. There is no holy grail......

[traderwiz]

Originally Posted by sanx

Hmmm , what If you don't get any news at all, you are stuck ? . Also I believe if you are able to understand the basis you should be able to trade any stock for that matter . Its like driving a car , if you can ride in roads of mumbai, you should be able to ride some other car at some other place like Delhi or US of a ,as long as you know driving . Right ? no ? . I am/want to learning proper driving ,so that I can drive any where .

Dude honestly if some one can drive in India, they should be able to drive "in any part" of the world!!!!! Its much harder to drive a car here!!!!!!!!

[trader111]

Originally Posted by Cactus

haath bhar ke fasle ko umar bhar chalna pada.

Making a bridge over sea is easier than intraday........

(that is what I could understand after reading the thread)

aisa bhi nahi .... teething troubles... 2 pal rukiye.

lekin agar car driving jitna aasan hot to mazaa hi kya

ek sawaal: for every 100 successful traders u meet, hw many are intermediate term, hw many swing traders, hw many day traders and most imp hw many scalpers?

awaiting reply

Originally Posted by traderwiz

It's all about gaining an edge. Whatever gives you "an edge" you do it. If you have read Market Wizards book (part I or part II) you will know that there are all types of traders and all sorts of techniques.

I read it pretty long ago and is still a favorite but I don't think u read my last few posts.

My point in bringing up all this is to show that:

1) Even James Simmon's hedge fund they do intra day scalping or what is known as "high frequency trading". Yes, they have all those complex models. Thats institutional.

2) On the other hand, i.e. at the retail level, I have witnessed a high school drop out but a pro in video games, make money every day scalping. He doesn't know a thing about standard deviations or correlation co-efficient.

that is a relief... culd'nt realize u required so many nowhere-to-go posts on 'advanced' stuff.

I have worked for proprietary day trading firms during the internet boom (way back in 1999)

u still has many misconceptions (plz dnt mind). If u still trade NYSE actively come for chat during trading hours and I can help u.

The whole point is this: what works out for you may not work out for me. Pete Sampras was a serve and volleyer. Agassi was a base liner. They both were professional tennis players. Imagine Agassi trying to "duplicate" Sampras or vice versa!!!! Wouldn't that be insane?

exactly that! it matters little over here what matters for u and what matters for me!

It will be worthy if we can work out few aspects of price behavior which work for everone.

also @ cactus,traderwiz
Fast stochastics gives impressionable signals for NF on EOD time frame. Alternative: The mathematical construction of stochastics makes it go to extreme region if there is a one-sided move for 5 consecutive bars. In short term it is very often that a ticker makes a one sided move for seemingly extended period. This makes fast stochastics unworthy on 5 min. time frame, more so for stocks. For stocks even on EOD time frame it requires a lot of combining with other methods, if used for swing trading. However index futures show a more mature behavior, a one sided move is atleast met by healthy retracement or a top/bottom reversal for range bound market on next larger time frame.

Got the difference! One simple statement versus a seemingly difficult full pahragraph.

Good trading is'nt about finding a 'good' system. It is about understanding market behavior.

Why is Saint unanimously respected ? He tells a method for trend identification on all time frames and all tickers.

Scalping can prove to be very expensive if things are not started from scratch

[traderwiz]

Trader111
Good observation on your part. My experience is that even for short time frame say minute bars, there should be some indicator that could give a trader some kind of a clue. Thing is that trader has to tweak these indicators and play with it a little bit. Most of these software packages are pre-configured for a swing trader or a position trader. And the standard settings for say a fast stochastics may not be appropriate for a scalper. This is where experience and skills come into play. I would like to have 3 non-correlated indicators for scalping. Can some one tell me what 3 would be uncorrelated indicators? This in addition to observing the market depth.