Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : NetCurrents NTCS -- Ignore unavailable to you. Want to Upgrade?

To: Chris who wrote (132)	10/2/2000 1:48:46 PM
From: Teresa Lo	Respond to of 8925

Technical Scalp: "What determines the difference between knowing that you are entering a trade for a "technical scalp" where you are looking for a quick trade and "trading the trend" where you are looking for a bigger move for an intraday emini trade?" First of all, before the market opens, I look at the daily, 45M, 15M and 5M charts of the futures contracts. I then know if it is trending or not in the big timeframes. If so, we look to set up trades in the direction of the bigger timeframes, and we give it room. If there is no trend in the bigger time frames, I tend to scalp. There are also special conditions for the first hour. I have them here quickly encapsulated. NOTE ON TECHNICAL SCALPS: The scalp is a set up best made during the first hour of trading, taking advantage of running other traders' stop orders at the high and low of the first half hour's trading range. They are all for 2-3 points, so if it does not go in your direction right away <em>(within a single, five-minute bar)</em> after you are filled, you should be looking to get out. There should be an almost immediate thrust in your direction. IF there are stops there to run, THEN it should move quickly with a blast of volume. **Note that you should NOT be trying to do this on the big futures contracts on the floor. Use this technique ONLY on the eminis. Always enter using a STOP LIMIT order. You want to limit your losses to half the reward, so the maximum that you will allow a trade go against you is 1 - 1.5 points. Scalping, by definition, is not trading with the trend, and therefore, a lower percentage play. In response, you will have to move your protective stop to breakeven very fast, because limiting your losses is the only way to deal with this. You cannot give a scalp trade any "room", unlike trading with a trend. You will also have to accept being stopped out and then seeing it go without you quite often. Those who can't stand missing trades should take the 1 - 1.5 point risk and let the market stop them out. Those who hate losing money can use a quick move in your direction to set protective stop order to breakeven, since they don't mind missing. Once the trade reaches target, it's up to the individual trader to decide what to do, take the money, or hold on for a bonus. For most, it's best to simply lower the protective stops and let the market guide us. While I can tell you the setups, I can't make the decision for you in terms of personal style. A lot of times, I think I should just stop putting in my own trades, since that might influence you and teach you my bad habits. I hate losing money and don't mind missing opportunities, but I think that is certainly not the case for the majority of traders. I have a lot of patience and would rather wait for a trend than to scalp. The immediate price targets are about the same, but the odds of a winning trade are higher, and the potential for bonus is <em>much</em> higher. This is the eternal struggle of the trader. You need to know which category you fit in and stay consistent. Hope this helps. Teresa