Search result for:  minimum scalp

... the encyclopedia and study the e-slides Al updates. You blew 70$(on an E-micro) and commissions. That is almost worth a month in the trading room. If you absolutely must trade, join the trading room. Study what is being said in the trading room. If you do not join the trading room, switch to the SPY ETF and trade far lesser quantities where you don't stand to lose more than a couple bucks a day(if you absolutely must trade). To be honest, it will not be very productive at your current level to trade more than you study. Coming to your trades, you should b ...

I don't do it that way, but that's an interesting way of going about it. minimum scalps for me are half the size of an average bar. This would accommodate for changes in volatility faster than going based on average daily range.

The two trades that you are pointing out are both a swing and a scalp. Therefore you decide before taking the trade what will be your strategy and manage accordingly. Yes, sometimes the swing profit will be reached and you will think that you let a lot of money on the table, and this is completely right, but other times the MKT will turn at the scalp profit and go back to your entry or even to your stop-loss without reaching the swing target. When a trade is both a swing and a scalp, one strategy is to exit half off at the scalp profit, move your stop to BE and leave the remaining to see if you are in one of the 40% of the time where the MKT will reach the swing profit.

I have a doubt. When do you expect TBTL? I understand that Al says that the minimum goal of a MTR is TBTL Is TBTL the minimum goal for all reversal patterns? thanks!

What is missing from this discussion is probability and inserting it into the "mix" clarifies many points. 1. Turning a swing trade into a scalp. A swing trade has a lower probability of winning (in most cases). Additionally the stop, with the exception of existing at the beginning of a move, will be larger. The position sizing then will often be smaller to account for where the stop loss has to go, and an amount of time is allotted for the trade to attempt to work. As the probability is lower, many of a swing trade is a small win or loss, which is offset by the fewer larger wins. However, if the profit target is taken as a scalp, the traders equation is never satisfied because the larger winners will not happen. 2. The other side is turning a scalp into a swing trade. This is a problem because a scalp will have a closer stop, as it doesn't allow for retraces, and the position sizing then is often larger. Because of this, if a trade doesn't work, if one moves the stop to be a swing stop, the position size is too large resulting in large losses. Now, at price "turning points" in price, both swing and scalp trades may overlap where higher probability may briefly exist. This is where both swing and scalp trades briefly exist, and some traders will scalp out a portion and allow for the swing trade portion to have a longer period of time to work for larger targets. In the older PA slides which Al marked up, these were given "blue boxes" and named - Best Trades (for beginners). Really, "for beginners" means, "all you need are these to become profitable", which puts you in the top 5% of all traders :). Hopefully helpful and good trades to you!  

Very good point. I am not taking high probability trades because I usually cannot successfully put a specific number on the probability of a trade, even initially, and also when it changes during the trade. I am aware of these signs, as I have studied the books, and the lists are truly excellent. However, I find it difficult to assess their significance in relation to putting a specific number on the probability. In the trade room recordings, I have heard Al say "Right now, I think the probability of x is 50 percent". He is good at putting a specific number on the probability. If I always have the trader's equation in mind, I should be able to put a number on what I believe the probability is - a specific number. So if I take that reversal trade above B10 and my assessment of the initial probability of 2IR puts it at 40 percent, what is the probability of 2IR when B11 closes on its high, is it now 45 percent, 50 percent, 55 percent etc.? And what is it when B12 closes as a bull doji? I really appreciate it,Andreas

... are closer to 25 points, then that minimum scalp size would get closer to 10-12 points. So it's a mix of the overall chart plus the most recent bars that I'm considering. It's not exact, but, as you know, the point is to accommodate the targets based on the current market conditions so that the size of the target relative to the risk of the trade is reasonable. Change the position sizing based on these parameters too.

A wider stop means higher probability of a profitable trade (because the chance of it being hit is lower compared to when you use a tighter stop). But using a wider stop means bigger risk, unless you decrease your position size accordingly (otherwise, if your stop does get hit your risk is big and the pressure is real). And decreasing your position size means less risk, but also much less reward (assuming that you use a scalp profit). So it's a trade-off: yes less risk, but also much less reward, so bad risk-reward, so higher probability (because the chance of reaching a scalp profit before reaching a swing stop is high). And if you want to make more (swing profit), then the probability also drops In all markets you can choose your risk (wide or tight stop & small or big position size) and your reward (scalp or swing profit), and this subsequently has an effect on your probability of success. Because a bad r/r-ratio (going for scalp profit compared to scalp stop or even swing stop) means higher probability; and a better r/r-ratio (swing profit compared to scalp stop or swing stop) means lower probability. So when Al says big risk, high probability, he means big risk compared to reward, high probability

If the “minimum stop ” has been hit,do i need to exit?

Hey Saiyang, I get what you mean I'm from India so trading E-mini is pretty tough for me and forex like EURUSD range is very small as well. I only look to trade XAUUSD it has good range all 3 sessions. my opinion About scalping, If you are really confident that you have nothing extra to learn in swing trading you should try scalping with a demo account before trying to scalp with real money.

Each trade has to be looked at in terms of probability of that trade being a win. One's general win rate has nothing to do with the traders equation.   Reward is the distance to your profit target and risk is the distance to your stop loss. But there is another component and that is the probability. To use the traders equation you have to assign the probability of success (your best guess of the chances of price hitting your profit target before it would hit your stop loss) and you have to assign the probability of failure to each individual trade (the probability of price hitting your stop loss before would hit your profit target). It has little to do win one's general in rate. You may have a general win rate of 75% but let's say a particular trade has a probability of 60% of being successful within the context of which it is found. Therefore you have to use the assigned probability in the equation not your general win rate. Each trade is different in terms of assigned probability and to arrive at the probability figure you have to look at context which includes last 3 bars...along with price patterns (such as trends, flags, triangles)...and finally the larger context i.e. the market cycle. In addition look at "how" price is acting i.e. volatility (fast and big slow and grinding) and momentum (especially for scalpers) to determine if a particular setup has a good enough likelihood of the trade being a winner.   So the traders equation is: Probability of success x the potential reward (>needs to be greater) than the probability of failure x the risk. If it is then you have a positive traders equation. In high probability trades the profit target needs to be smaller. Why?because much of the move has already been made. So not much is left before a probe in the opposite direction or a strong reversal. The market is constantly probing in both bullish and bearish directions. A scalper wants to capture a portion of the probe. So let's look at your trade. From the context looking at the previous move down (top left of your chart to your L2 short. I would assign a 70% PROVISIONAL probability of a successful scalp being likely. How much depends on if I can structure a positive traders equation. Let's pretend your chart is the ES. Let's plug in the figures into the traders equation. Your initial PT and SL is you are going to risk 9 points to gain 3 points. So:   70x3=210 and 30X9=270 (note 30: is the probability of failure) 210 is less than 270 so not a positive traders equation. So what do you do? you have four options. 1) Reduce the risk (use a tighter SL) 2) reduce the reward (smaller PT) 3) Reduce both reward and risk to render a positive traders equation. 4) increase the probability of success and decrease the probability of failure and in this case I would do neither as I think bask upon context there exists a 70% chance for a successful scalp.   Since your SL is 3 times your reward I would adjust the risk first. Reduce SL to 6 points since probability is fairly high for a successful scalp. So: (70X3=210) (30x6=180) 210 is > 180 so now a positive traders equation,. Therefore even though it is an upside down R:R of 3:6 (3 being the reward and 6 being the risk} you can still maintain a positive traders equation to take the trade. Now before taking the trade I ask myself does price have a better chance of hitting my PT BEFORE it would hit my SL and in this case I would answer YES and take the trade. In the first calculation I would likely answer NO because it is not a positive traders equation and R:R is way upside down. You could reduce your reward and increase probability and reduce risk some too if going for a small quick scalp. and doing so would make the positive traders equation go up even more thus increasing the likelihood of a quick and successful scalp.   (90X1 point) > (10X5 points) 90 is greater than 50. R:R is 1:5 upside down but still positive traders equation. Quick locked in scalp. However if you assign higher probability of a successful trade you have to accept smaller reward. Many traders understand this right backwards. They think higher probability means bigger rewards but it is right the opposite. Maybe this will help?  

Patrick, Al does briefly mention quick decision making after dissapointing follow through before the desired Reward is reached in the video 31D , "Converting Swings into scalps", but i do agree with you that it is frustrating to scalp out only to see the market go your way, it also happens to me and I wish the course had more details and examples about when it's a good idea to scalp out or not. So what i have found personally as of now is that if I judge that the bull leg i am buying in has a lot of momentum (like at least 3 consecutive bull bars in it) i hold through dissapointing follow through and don't scalp out at BE and just wait for a opposite signal before exiting. The other situation is if I have entered a reversal trade with great context, like a short at the top of a Range, even if the immediate follow through is not great , i'll hold and not scalp out BE because I assume that the context still favors a bear Breakout. So basically to not scalp out at BE, I either want a lot of momentum on my side, or i want great context that favors my trade. In other words, I only scalp out at BE and put a limit order at my entry price, if I judge that it is a decent limit order entry for opposite traders.

Hi everyone! In the slide below, Al mentions that you can swing or scalp in this scenario. As a scalper, you can sell on each of those bear BO bars and take profits on their close, using the swing stop on each trade. Attachment : image.png To me, it seems like the end result would probably be the same between swinging and scalping here. Is that correct? Or perhaps one approach is better than the other? Thanks in advance 🙂

Yes, Risk = Reward is a scalp.

In 30, are all the trades that Rewards = Risk is scalp? Because Swing Trade reward at least twice risk.