Search result for:  minimum scalp

How can one determine the minimum reward for a scalp in various markets? I am getting confused as I trade the Nifty futures in NSE India & not micro emini

If I'm trading an expensive stock such as Amazon, how do I determine the minimum scalp size?

Hi JC, Al describes what he means by scalps and swing trades in the "Glossary of Terms" under "Learn to Trade" menu. He repeats this info often throughout many videos in the course and on site.

Where does Al explain his method for finding minimum scalp/swing? I'm trying to find it, but I can't.

In a lot of the videos Al says that a 1 point is the minimum for a scalp, and this 1 point interval is quite important. However it seems that this amount is outdated, since the average move in the Emini today moves a lot more than 1 point. Any insight on this? Is there like a new number of points to watch out for, when it comes to a minimum scalp?

That’s a good point. If I’m watching 60min EURUSD, yes average bar is bigger than 10pips and I never choice 2pips as minimum. But 5min EURUSD specially these days such a tight range market (past 20days average daily bar size is 67.6 pips), If we apply the Al’s guideline which is 5-10% of day’s range as minimum, 3.4-6.8pips is the reasonable size. So, 10pips seems big also from volatile aspect. Personally, I like the idea of 10pips for Forex Market. After I use this rule I became able to see support and resistance at 10pips from reasonable entry signa ...

This only applies if you wanna make money! Yes, but have in mind that you can only scalp with a swing stop if you scale-in lower, which modifies the math. If not, you have to exit quickly, which makes it difficult to do. Not really, if the MKT goes your way you just grab the scalp profit. Rather, if it goes against you, you add more lower improving the overall trader's equation but also increasing the risk (no free lunch). All this, of course, providing you scale-in at the right time within the MKT cycle. Rather, If you scale-in lower in a bear trend you kill your account. Is this what will happen to you? Of course not! 😉 Yes, but it depends on the day's average bar's size. If you don't scale-in, you have to be quick to exit. In this example, you bought just below the prior High and instead of a another big bull bar breaking above you got a big tail and a bear bar, so you should exit below (we don't see the scale, so if you were lucky you got your scalp within the next bar's tail).

Dr. Brooks mentions using 5-10% of the range as a starting point in a video (I can't remember which one off the top of my head but likely one of the videos on scalping). So for instance, if you're trading a stock that usually has a range of $4, then your minimum scalp size would be somewhere between $0.20-0.40. If the volatility increases, then increase the size of the minimum scalp as needed. If the volatility decreases, then the spread and tick value become a greater consideration, which is why he recommends no less than 4 ticks on the ES and 10 pips in fo ...

Yes, this is not a rule, just a guideline as you said. The important matter when deciding reward is the other two variables of the trader's equation. 10 pips and 4 points are widely used scalp profit targets so that is why it is good to take them into account. Yet if your signal bar is bigger you have to shot for more or your will lose money in the long run until you are very good and can shot for a reward smaller than the risk, which needs a probability above 80% to make it work.

Is it 3 points since the MINIMUN scalp around the 2000ish level years ago was 1 point?

Al talks a lot about going for 1 point in the trading course. But the volatility was a lot lower when Emini was down around 2000 when he was recording it. In his trading room he's talks about 4-8 point scalps lately. Personally, I found that 0.7 * ATR(10) is a reasonably good for calculating scalp size. Beware that ATR will be skewed on the open if there's a big gap which would make the number too high. I've been meaning to write an indicator that excludes gaps, dojis and inside bars from the ATR calculation but haven't got round to it yet.

How do you calculate the minimum size scalp? I've read 5% of average day's range is the minimum, if that's accurate, how many of the past days should you use to calculate the average?

Oh nice. I'll set my ATR to 5. Thanks!

Suuper helpful thanks very much.

... Al’s "low probability SO the trader needs two times the risk" is not about “How to set your target”, but more like “How to evaluate how reasonable your target is”. You find a reasonable target and stop based on the PA in the chart first. Then you calc your RR and evaluate the probability of success (reaching its target before stop, in this context). If it is low probability, you need two times the risk. Therefore; If your target is at more than two times Take it Else / Your reward is too small / 2xRisk target seems absurd / Am I just being hopeful? W ...