A few one-point scalps each day?
BPA trading room Q&A: April 11, 2016
One-point scalps are a hot topic. Questions keep coming from traders so this extract gives more discussion along with chart scalp examples.
Question: In your first book you say that a person can make a decent living by taking a one point scalp, if they are trading enough size. Do you think it’s Ok and realistic to have an objective of taking one or two one-point scalps a day?
Video duration: 2min 00sec
Hard to scalp
I think it’s really hard to do. And in my career, I’ve only known one trader who did it. About fifteen or twenty years ago, I was trading in a trading room, he was one of the guys in it. And he was trying to get one or two, one-point scalps a day, trading with tick divergences – I’ll talk about that when I see one come up. And he was just trying to scalp. He was trading 25 contracts, and his thought was that if he makes one point a day, trading 25 contracts, he’s making a thousand dollars a day, US$200,000 a year, and it’s a decent living.
Take more trades, lower size
My thought is that there are a whole bunch more then one or two one-point scalps. And if you’re going be a one or two point scalper, why not instead of trying to trade 25 contracts, why not trade 3 or 4 contracts and try to make 10 or 15 points. I think the chance of you making a lot of money is higher, if you have a high winning percentage, and you keep applying it time and time again, than it is just waiting all day long for a one or two point scalp.
Today’s one-point scalps
If I was taking a one or two point scalp today, what would I have done? I would have sold 15 close, 16 close. Sold above 19. Bought above 28. Bought below 31. Maybe buy the 40 close, 41 close. Sell 48, sell above 49. Sell 68 and sell above 71. So there are a lot of pretty high probability one-point scalps, so why limit yourself to one?
So, yes it’s possible, but if you’re going to be watching all day looking for one or two one-point scalps, I would train my eye to get better at spotting one-point scalps, and try to take 5, or 10, or 20 of them a day.
Related Ask Al audio on topic. Search ‘scalp’ above for others.