Scalping Wall Street

[lukeaye]

Hi guys,

Just thought id share a little scalp i had lat night on wall street, and i will include a statement to prove that i did do it.

Last night, i was watching wall street cash, and had thought about opening a short earlier on to hedge my longs from yesterday, i missed my oppurtunity during the day, and so decided to try and scalp some money from the index to cover myself that way.

Now we all know that wall street is looking very bullish with its close over 10,000. There were alot of reports due last night which could have a huge impact on the overall index's performance. I think it was around 9.30 last night, i noticed the index start to drastically fall from a decent move up which i have circled and labaled 1.

Now you have to ask yourself, why has this happened? there are no reports due for an hour? obivosuly some information has been leaked that the reports will be bad? that seems far to obvious doesnt it? So my thinking is that the people who may have this information, have started to try and create some fear, to get all the bears out of the market, to better position themselves for realease of the reports. it looked succesful. Based on the previous nights report frm JP morgan, there was every likelyhood that the companies earnings would exceed tonight as well?

So unlike everyone else, (apparently), i saw this as a perfect positioning point, and i entered a long position at the spot labeled 2, this was 5 mins before the reports were due. i set a stop loss 10 pips below entry, and had a target of 1059.

I came about this target by using a fibonacci extension, i took the high of 10029 - the low of 9,963, x by 0.618. then to be slightly conservative i dropped it back 10 ticks to account for spreads and then 1060 being a round rumber. And thanking my lucky stars, the high was 1059!

I dont know if i got lucky, but its seemed to follow my plan and thinking very well.

So I have used a bit of techincal analysis and psychological analysis to scalp the market, does anybody else, use a method similar to this?

 

[Sugar Dunkaton]

Although in theory your guesses about the market were right, I would say that it is quite pure chance that you picked the Entry and the Exit PERFECTLY. But good job, making money is never a bad thing, i would just not expect to make hit those triggers so perfectly every time.

 

[lukeaye]

I know, my system is not exactly measureable and i can not really generate an expectancy from it.

But im interested if anyone else trades using psychological or discretionary methods such as this, when trading indexes. Surely with enough experience a fairly smart person can read what the market is doing. This is obviously what technicals can tell us i guess, but i think also knowing the "psychological" resons behind the technicals could better improve our trading?

 

[prawn_86]

Search for posts and threads started by the user 'trembling hand'

 

[MRC & Co]

Luk,

Never heard of 'scalping wall street' before, lol.

But I think you will find this is how many professional scalpers will trade.

So you are on the right track, BUT, your entire reasoning was wrong. You will find the S&P sold off at precisely 10:15pm, which was the Goldman Sacks report, which 'beat the street', however that is always already factored in (as they always beat the street), and considering JP beat the street so easily the previous night, it was once again expected. However, there was rumours that EPS would be $6 (based on the strength of the JP IB side of it's business, as opposed to it's average commercial performance side), which the figures did not live up too.

Just a bout of profit taking on previous longs I think, those positioning into the IBs results, I know, I did it. The long from the bottom began when oil inventories came out at a drawdown as opposed to a build, a small leading indicator to underlying economic strength.

 

[lukeaye]

well there goes that idea. thanks for bursting my bubble! back to the technicals for me i think then! hahaha

so i guess i can put it down to devine luck. Although i guess even though i didnt really know the story/fundamentals, the technicals gave me the right picture.

and i meant wall street cash :S

 

[MRC & Co]

Well you have the right idea as far as reading the underlying psychological flows (i.e. Goldman results probably would have been sold off regardless of what they were), technicals are for the most part BS. You have to know the underlying drivers behind them, hence, every market will have different 'technicals' depending on what it's big players normally do. But basic ideas like support/resistance and trend are generally the same, the main thing that will change are the patterns of how they go about flushing those levels out or how a market will trend.

You just have to be more precise on what time the figures come out and what they are and how the market normally reacts around them if you are going to try and trade them. You can do this by intense research or implict knowledge.

GL.

 

[AzzaB80]

I know, my system is not exactly measureable and i can not really generate an expectancy from it.

But im interested if anyone else trades using psychological or discretionary methods such as this, when trading indexes. Surely with enough experience a fairly smart person can read what the market is doing. This is obviously what technicals can tell us i guess, but i think also knowing the "psychological" resons behind the technicals could better improve our trading?

Discretionary and psychological methods make up a great deal of my trading ideas however if the move happened at 21:30 I would say the move is due to something happening in the European market rather than the US.

US futures tend to follow the European market during their cash hours. My read on last nights action was that short-term longs used higher prices to do some profit taking. Once the pull back low held on the FTSE from the previous day new longs got on board but could not get anywhere near the previous days high (the attempted rally coincided with the YM high btw). We then tested the pull back low once more but this time could not hold triggering stops of the new longs combined with some momentum shorts piling on. Hence the break in the US futures. See graphic below

I guess my point is that markets are global and my summary above could be completely incorrect, so try not to get too caught up on why price might be acting the way it is. It could be any number (or combination) of things.

 

[lukeaye]

I guess my point is that markets are global and my summary above could be completely incorrect, so try not to get too caught up on why price might be acting the way it is. It could be any number (or combination) of things.

I guess maybe the point is, you could come up with 100 theories WHY it occured, but the simple fact is the graph shoes us what is happening without needing to really theorise in such a way.

 

[Mr J]

90 points isn't scalping, unless you mean collecting scalps . In my opinion, trading the market is trading psychology, and it's just a matter of the level of thinking at which we operate. I strongly relate trading to poker in this respect.

The first level in poker is to think about what we have. The next level is to think about what we think they have. The next level is to think about what they think we have. Then we think about what we think that they think that we have, and so on.

Fortunately, in the markets we all sit at the same table regardless of our level of skill. In my opinion most participants operate at a basic level, so exploiting psychology is often straight-forward.

 

[Broadway]

Yep, what MrC said. Goldman release at 1015pm(syd). Worse than expected. ES slides 8-9 points but then hit alot of pre USmarket volume in ES YM europe charts, sycom, everywhere, between 11-1130pm.

The volume sent a message that the US isn't going down yet, and then the ES rose all session.
Oil flying up to $78 sure did help.

There are reasons for moves around that time of night, solid reasons.

I hate watching those business channels but occasionally it helps around news times.

Good luck

 

[Timmy]

Yep, what MrC said.

Good stuff Broadway - yep, MRC&Co was spot on.
$6 rumour was flying around in early London (can provide documented proof if needed ) as against consensus of $4-odd.
Release was 7.15 am NY time (10.15 Sydney).
Not everyday we get someone of the calibre of MRC&Co posting, we're lucky to have him.

 

[lukeaye]

No no, no proof needed. I am very inexperienced with index trading, i only trade set ups that i can see from a technical perspective, i am abit of a noob with following the news and annoucments.

But if these anouncements and leaks are already factored in, then knowing what the results of the reports are are not really beneificial then are they?
you are better off positioning well before the market, looking at technicals and psychology to anticipate a large move?

i dont know as i said not that good with indexes.

 

[skc]

Good stuff Broadway - yep, MRC&Co was spot on.
$6 rumour was flying around in early London (can provide documented proof if needed ) as against consensus of $4-odd.
Release was 7.15 am NY time (10.15 Sydney).
Not everyday we get someone of the calibre of MRC&Co posting, we're lucky to have him.

Since we lost TH to his 4000th post... quality intraday scalping posts are few and far between.

As a moderator, Timmy, why don't you change TH post count back to say 3290 and send him an email saying there had been an error on your website or something.

 

[nunthewiser]

Since we lost TH to his 4000th post... quality intraday scalping posts are few and far between.

As a moderator, Timmy, why don't you change TH post count back to say 3290 and send him an email saying there had been an error on your website or something.

LOL

amen!

 

[Timmy]

Since we lost TH to his 4000th post... quality intraday scalping posts are few and far between.

As a moderator, Timmy, why don't you change TH post count back to say 3290 and send him an email saying there had been an error on your website or something.

LOL - I like it!

 

[Mr J]

But if these anouncements and leaks are already factored in, then knowing what the results of the reports are are not really beneificial then are they?

The markets do move on news though, so what does that tell you?

you are better off positioning well before the market, looking at technicals and psychology to anticipate a large move?

I think so. I greatly prefer anticipation over reaction.

 

[lukeaye]

The markets do move on news though, so what does that tell you?

Do they? id have to say there are alot of moves that aren't news related.
And if you dont have the news before the market, what good is it really?
You may get general market sentiment so be able to position poissibly long term depending on the news, but short term it would be useless?

 

[Mr J]

I wasn't suggesting that it was only news that moves markets. I'm conservative about news myself, as any large move would run over any intraday position I might have.

And if you dont have the news before the market, what good is it really?

News can bring volatility, and that creates opportunities.

but short term it would be useless?

Only for those that can't trade it, and I'm not suggesting I can.

 

[swm79]

Since we lost TH to his 4000th post... quality intraday scalping posts are few and far between.

As a moderator, Timmy, why don't you change TH post count back to say 3290 and send him an email saying there had been an error on your website or something.

TH has probably cut his hands off now to relieve him from the Carpal Tunnel and RSI of making 80 trades a min

he now has bikini clad waitresses to serve him drinks and fan him while lying on the beach

.... imagine the trades he could do now with those Red BUll mini shots out