Apakhabar,
my take on scalping part of your post in regard of danger for newer traders.
Trader should not start learning scalping before he/she understands underlying reasons for stock movements. I am talking about support/resistance read by any of methods (chart formations or tape reading). When one understands how reading is done one is free to elect any time frame one is comfortable with, or any style of taking profit/loss one's risk tolerance leads him into.
What Alan refers to (I guess), and I am totally agree with it: leading newbies to scalping without any understanding of stock movement, to attempts to profit from very superficial things that are served as highest trading wisdom. I faced this disgusting approach recently. About two months ago guy came to my office to watch for a day. His background was: zero of trading experience, 2 or 3 weeks of courses provided by his broker. I was looking at stock that slid slowly to the level where plenty of participants were bidding the stock while just 1 was offering it at inside. I commented: I am waiting for fast selling that would take stock down under this support to enter long on reversal. Guy said: huh?? Level 2 shows it goes up from here, what are you talking about?? 15 players are bidding, just one is offering! And that was the training he paid couple thousands for! Indeed stock broke support, went down about 3/8 and paused, giving me an enter with fast 1/2 bounce. His reaction was: "OK, now I am confused more than ever... I would have entered it above support and stopped out where you bought." His brain was also totally littered with scalping techniques 5 years old, SOES bandits times... I was shocked to learn that some still teach this and serve it as highly sophisticated approach, condemning unsuspecting neophytes to imminent failure.
Vadym |
