Scalping the Index - Pointers Please

[dazers]

Can anyone give me some pointers on scalping the Australian Cash index.

So far I've tried that Eric Kratzer mans method of the divergence of the 7 and 15 minute EMAs.

Then I started I started looking for Resistance and Support on the minute charts, with entry being the first move beyond those points, and exit being the next sign of R/S.

I'd be happy with just a few points in the day. If some scalpers can make more than the whole days range, can someone give us some guidance on achieving just a few points? Is there a 100% foolproof way of getting at least one point?

 

[nat]

Hi dazers , your question, Is there a 100% foolproof way of getting at least one point?,,,,,,No

But plenty of people are making money on 30 to 60 % way of trading probabilities. Nothings 100% except death and taxes sothey say .

My advice is practise practise practise ,until you will eventually find a method that suits you or you give up .

Go to sfe site where you can use there buy sell simulator for free ,you obviuosly have access to charting ,and document trades each day ,c what you did right what you did wrong .

or open ib account and use there simm .

trembling hand has plenty on what it takes to do such things and others on this site , check out the trading the spi thread ,but there is no easy road im afraid or at least i havent found it ,Nathan

 

[nat]

A couple of pointers from me ,but mightnt help you ,Is put in monthly and weekly pivot points ,support and res on 1 hour chart 200 and 20ema and same on 1 min and say 5 min chart .Is marking gapping up or down for day? . How is price interacting with these things on charts at given areas ?. Candlestick chart by the way .And again observe trade observe trade maybe in months, years ,it will all come together. Nathan

 

[korrupt_1]

If you can come up with a 100% fool proof way of scalping, then you could make 1 HUGE trade and quit... cos it's 100% fool proof....

As Nat said, practice is the key... watch/study your instrument you are trading. Each one has a distinctive way of moving. Get intimiate with it... study it from all levels of magnification. If you are scalping, daily/weekly charts are useless... use 1sec to 1hr charts. By all means still use the daily charts to get an idea of overall trend and identify key levels, but scalping should be done mainly on 1sec to 5min charts.

Generally, combine good risk and capital management with proven and backtested entry/exit strategies - mostly some kind of technical indicators - like RSI, MACD, STOCHASTICS, BOLLINGER, MOVING AVERAGES, SUPPORT/RESISTANCE, ETC.... a tonne of indicators to use... Remember, different time scales also give different indicators. One chart might be oversold, but another one is nowhere near it.

The more indicators that gives a green light for entry, the higher the probability of success (but still not 100%)... However waiting for too many indicators means not many trades as well.

There's a thread on Scalping the FX... contains useful information there. Also as Nat said... look up TremblingHand's blog... a gold mine of info in there.

 

[tech/a]

Generally, combine good risk and capital management with proven and backtested entry/exit strategies - mostly some kind of technical indicators - like RSI, MACD, STOCHASTICS, BOLLINGER, MOVING AVERAGES, SUPPORT/RESISTANCE, ETC.... a tonne of indicators to use... Remember, different time scales also give different indicators. One chart might be oversold, but another one is nowhere near it.

There should be a warning with indicators.
Warning Overdose will result in DEATH.

Learn VSA.
Invest in the software.
If you cant read the tape you'll
be market fodder.

 

[dazers]

Any quick directions on where can I find volume indication for the ASX 200 as a whole? As I am scalping via IGs CFDs where there is no volume offerred. I have tried looking at volume for individual stocks to try and correlate but this wont do.

 

[Rockon2]

Hello dazers . Volume on xjo is available on Market Analyser Pro
http://www.mdsnews.com/australia/

Im not endorsing there product. Just stating the fact that its available.

I too trade/scalp the index using IG markets.

And this is my 2 bobs worth

For a start, there is no such thing as 100% foolproof, stop looking imo.
I agree with tech/A , I dont use any indicators.
To trade intraday i use 5 min charts, and look for patterns, IE: ascending / decending triangles, Flag breakouts etc ... You must learn S & R, nothing else matters imo.
You also must know where to exit your trade on a stop BEFORE entry, ( in other words you must know imediatly if your trade is incorrect )

When you trade intraday using breakouts, you must have 2 things in mind (1) your exit if wrong. (2) your target if right... its very easy to measure targets once a patten has completed.... This takes learning and experience... Lots of it.... But very rewarding when you get it right.

 

[Rockon2]

Oh ! and 1 more thing, you must know how to read a BAR, wether it be a candle or a OHLC bar..

 

[Andy_aus]

Get loads and loads of screentime

Learn to tape read and identify a few high probability patterns

Dont get indicator heavy and stay away from market makers

Own the market

 

[Rockon2]

Agree with Andy.

A trade today that went well,, not on the index, but a pattern trade nontheless was BOL.

I had a conditional buy order placed at 0.85, which is the breakout from the pattern.. 2 Easy.

If you look at 0.85 price break on a 5 min chart, you will see the volume increase, ( meaning, i wasnt the only one to see it coming)

Cheers and TYMFTR

 

[diliff]

Agree with Andy.

A trade today that went well,, not on the index, but a pattern trade nontheless was BOL.

I had a conditional buy order placed at 0.85, which is the breakout from the pattern.. 2 Easy.

If you look at 0.85 price break on a 5 min chart, you will see the volume increase, ( meaning, i wasnt the only one to see it coming)

Cheers and TYMFTR

May I ask exactly what the pattern was that you spotted? It looked fairly flat to me... but I suppose by that you mean it had well defined support and resistance lines and therefore broke out of that containment?

 

[dazers]

Thanks so far.
Live volume for XJO is $157.25/ month from Market Analyser Pro though. Can I get it anywhere else for cheaper?
Does the volume for the SPI 200 correlate to the XJO? I'm considering opening up demo accounts with Futures Providers to see their tools

 

[Rockon2]

Spot on diliff thats exactly what im looking for.

dazers,,,, spi 200 and xjo difference... will try and explain. and hope im right.


The xjo is the index of the top 200 stocks on aust market.
The spi 200 is the futures market mirroring the xjo.

So there presumably would be a diff in price say between an OCT 08 expirery
spi future and todays xjo...

The spot month ( meaning closest month contract ) of the spi would be very close to the xjo.

p.s. I dont use volume to intraday trade the xjo.
On Equities , yes its imperative.

 

[Rockon2]

Today,, scalped 20 points from the triangle breakout
TYMFTR

See IG 5 min chart att

 

[Trembling Hand]

dazers,,,, spi 200 and xjo difference... will try and explain. and hope im right.


The xjo is the index of the top 200 stocks on aust market.
The spi 200 is the futures market mirroring the xjo.

So there presumably would be a diff in price say between an OCT 08 expirery
spi future and todays xjo...

The spot month ( meaning closest month contract ) of the spi would be very close to the xjo.

p.s. I dont use volume to intraday trade the xjo.
On Equities , yes its imperative.

Guys the CFD index instruments are not linked to the actual equity indexes. They carn't be for two reasons. In the case of the ASX they only quote the indexes every 30 seconds. secondly they lag the futures big time. If they linked them to the index you would just need to trade watching the Futs and have a 30 to 60 sec heads up to the xjo direction.

 

[Trembling Hand]

Can anyone give me some pointers on scalping the Australian Cash index.

I'd be happy with just a few points in the day. If some scalpers can make more than the whole days range, can someone give us some guidance on achieving just a few points? Is there a 100% foolproof way of getting at least one point?

The secret to getting just a few points out of the market each day is to aim to get 100 points out each day.

Never go into business with a low aim. 99% of people never get to 50% of there target when starting out in business, especially with trading. If your aim is to average 5 points per day you will end up with a good day average of 5 points and a bad day average of -15 points.

Whats going to happen if you have 50/50 good to bad days?

BLOW UP!!

 

[korrupt_1]

secondly they lag the futures big time. If they linked them to the index you would just need to trade watching the Futs and have a 30 to 60 sec heads up to the xjo direction.

Good to see you back TH... you were gone missing for about a week... noticed you changed your avatar... is that you snowboarding?

Just wondering about your comment about CFD lagging futures... if that is so,.. then if you were watching the futures, won't that give you a heads up on the CFD trade?

In other words, to negate that unfair advantage, it's in the CFD provider's best interest that they DO try to match the real Futures in real time?

 

[druss]

Forget the minute charts. Trade the tick charts. Why wait for 5minutes for a candle to appear. Minute candles give long wicks at turning points in the market.

Using tick candles the Patterns are more evident. For example at a turning point in the market you will find a double bottom/top using the tick candle. However with the 5min candles you will just find spiking wicks.

Moving Averages are a great way to scalp IMO. Especially on the 100 Tick Chart. As long as the Price remains above or below the Moving Averages you stay in the Trade.

Look for Average Daily Ranges as Turning Points in the Market. Especially when there is MACD divergence evident and Price is making higher highs or lower lows where MACD is doing the opposite. Key indicator in my book.

Nothing is more important that Support and Resistance. Fibonacci Retracements offer a great way to identify where Support and Resistance is likley to be. Using a close above or below a Moving Average at a Support or Resistance Level is important because you need confirmation that Support is actually Support and Resistance is actually Resistance.

Look for at least a 20-30 point move in one direction. Then draw your Fibonacci Retracements. Look for a pull back to the 61% and 50% levels. Then enter your trade once you get confirmation that Support or Resistance is evident.

Number one Rule. Clearly define where you will Exit. Exits are how you get Paid. Not the entries. If it goes wrong then get out. First exit when you identify it is going wrong is the cheapest.

Some thoughts

 

[skyQuake]

Good to see you back TH... you were gone missing for about a week... noticed you changed your avatar... is that you snowboarding?

Just wondering about your comment about CFD lagging futures... if that is so,.. then if you were watching the futures, won't that give you a heads up on the CFD trade?

In other words, to negate that unfair advantage, it's in the CFD provider's best interest that they DO try to match the real Futures in real time?

Think TH meant that indices will lag the futures (As a rule, indices also follow futures generally). From what i've seen, CFDs never lag futures or whatever they're following...

Druss: Good to see you have a trading plan and defined setups. Keep on it.
IG is ok, but serious analysis/trading would fail there. They make their own market and charts are slightly off, ie corrupt prices, wrong ticks - all synthetic. Plus the fact that they lack volume. A major weakness.
Secondly, not sure about your timeframe but I find it hard to scalp with IG when markets are moving fast. Since you cant buy/sell at market. You gotta type in ur entry/exit (and stop), and in that time the prices have moved. You click submit, then prices can move again... "This price is no longer available."
Just my experiences anyway.

Cheers.

 

[druss]

Secondly, not sure about your timeframe but I find it hard to scalp with IG when markets are moving fast. Since you cant buy/sell at market. You gotta type in ur entry/exit (and stop), and in that time the prices have moved. You click submit, then prices can move again... "This price is no longer available."
Just my experiences anyway.

Cheers.

Not sure what you mean by typing your price in and your exit.

They have tear off tickets, so you can have the ticket on top of your chart. You just click the buy/sell button. Then have another tear off ticket right next to the price aciton. Auto Stops only for locking in profits.