Momentum Scalps Advice

#1

Hey Guys, I have been doing scalps using Futures in demo and need some advice/tips. Reviewed the videos pertaining to momentum scalps and have set up my Dom to suggested settings and do have good days, but struggle with a few situations.

If you take each momentum scalp at 3 ticks above/below setup bar you can really cleap up on some trends. However, if you do that you are adding into a position every time you get a qualifying bar, which if it reverses on you may lose up to 2 trades. Those choppy days seem to get me stopped out the most. I realize I could only do 1 position at a time and wait till other trade makes profit before entering again, but again you may reduce profits or take a setup bar that is still within range but reverses on you. I seem to make this harder than it probably is. So, I have reverted to trying to stretch out the 1 open position for more ticks/money, which again results may vary. Anyone else do this?

Secondly, on those choppy days where bars seem to stretch out, I seem to get stopped out quite a bit. Often I find myself pushing up my stop to breakeven if it has moved 7 or 8 ticks positive so I can’t lose money or close the position out early to be positive. Hard to see your trade up 8 ticks to have it reverse and stop you out, so sometimes I move my stop or take profit early. I am looking at momentum (volume, speed, 75% range hi to low, and deviation levels). I find the more I try to stick to the ABC’s the more losses I seem to accumulate.

So, I was wondering if anyone else has experienced this as well and what insights you may have. Realize my issue is execution of trades exactly as taught and probably psychological as well. I am in demo, so real money is not being lost, yet… Overall, I am up about 6K demo money over 2 months. I tend to be up a fair amount by Wednesday, but thursdays and fridays seem to eat my lunch and I usually breakeven or I’m up or down a bit. Your experiences/results and possible tips are greatly appreciated. thank you!

Mark

#2

Mark: I’ll try to help the best I can since DM is still on vacation.

First, If you are “scalping” and add a contract or take a trade based on a valid E, you are no longer scalping. You now have a position. As obvious as that sounds, your risk just increased from scalp risk to position risk. Exit 5 ticks below the P or MVP line which i, in turn, really skews your risk reward. If you entered a scalp and volume keeps exceeding, then it’s a valid argument to hold for a lil while longer. However, if you then add a contract because things are goin in your favor and a Valid E pops up, you may have just doubled your risk exposure at the wrong time… Vol may dry up and you’re now giving $ back twice as fast. Which again just skewed your risk model. Then, if youre a normal person lol, you have a winner that turned into a small loser and hope the Valid E works out or have to take a bigger loss than expected and have to have 3-4 scalps that work out to be back to break even for the day. Been there done that lol.

As far as stops go, I came up with an ATM strategy on Ninja that insures I follow the rules on entry, but then gives me a lil leeway if volume continues to exceed shortly after I enter. It ensures that initial stop below the prior bar hi/low is there and immed take profit at 1 bar after entry. If my trade goes in my favor immed, and the original TP is not hit, my trailing stop moves up to only give back half and new TP is 2 bars. If volume slows AT ALL I just get out at the mkt. if vol keeps exceeding, I can make a few more ticks. With, in mind, the trade started as a SCALP not a position to have on more than a few mins.

It is tough to watch a winner turn into a loser mentally. I guess one obvious piece of advice and one I strictly adhere to is, don’t add size to a scalp trade. Get in and out. Then I you’re flat and want to take a valid APEX entry, do so, understanding you’re gonna have to give it significantly more room if it goes against you. Then you hay be at a point where your down more for the day than ever intended, but you have to take the next valid APEX. Math doesn’t work over the long term unless you do.

Scalping is a tough business and discipline on the losers is paramount. Once you skew the risk/reward by adding to or not exiting at max risk then the math becomes really tough. All said, I’ll take a few extra ticks when things immed go in my favor on a scalp, but NEVER add to a scalp or turn it into a position. My trailing stop after profit is one bar, moves immed to the intial profit target of 1 bar. Then trails 1/2 bar from there automatically, but as soon as voll eases up, I’m out at the mkt and oco orders are all canceled.

Hope this helps. Skype me at yogi.richardson any time, I’m not really good at typing lol

#3

Thanks for the reply Yogi. Yes, I am using the ATM settings recommended in the video. With TF for example - I enter 3 ticks above/below setup bar and take profit at 11 ticks and stop loss set to 17 ticks. With movement in my direction, stop loss moves up - got that part. Sometimes it prevents a full stop loss and other times the oscillation takes you out of trade by a tick and moves back in your favor turning out to be a winner. After seeing so many get stopped out I turned off the automatic trailing stop and left the stop at 17 ticks. I seem to have mixed results either way, so for now I leave at 17 ticks. In regards to adding into a position, I am merely trying to capture each set up bar that qualifies. With the current settings if you have sequential momentum scalps you would have two open positions at a time for a few ticks until the first scalp takes profit.

As Darrell, mentions in one of his video, he is giving the abc’s and you decide what works for you in regards to taking only one scalp at a time, letting it run, or simply taking each quick scalp by adding in at each qualifying setup bar. There lies the issue for me, trying to take each scalp adds in a contract before the other takes profit. Which again works well in a trending market, but not a choppy one. I guess if I could identify which market is which fast enough I’d be rich, but not always easy to identify right away. All work great in certain market conditions. Was just wondering if anyone had any variations to the strategy and if it was working for them.

Thanks again Yogi for your feedback. It seems the setups are concrete, but how you play it once in depends on you. I guess for now I’ll keep with one scalp at a time, and try stretching profits out when volume is in my favor.

#4

The biggest thing I can tell you is

  1. watch out for deviation levels specifically 1 deviation high to low or +1 -1 dev

  2. Watch the velocity bars - you will notice that often when there is a velocity bar - that the market will go about 2-3 more bars and then pull back to the bars high/low that was a velocity bar (this can be a good clue on when to stop adding on for the moment and also not getting nailed in a short reversal)

  3. Watch expected volume is it declining speeding up… it is a lowe volume overall day as choppy days will usually not excceed volume that much throughout the day (ie 1/5 bars or less)

Look back over your charts and see what differences these 3 things would have made.

Also great job on being up 6k in demo kudos on the patience!

#5

hope I could help a lil Mark. Have paid enough market tuition and made so many mistakes I just hope I can keep someone else from makin them lol. In the past I have struggled with new valid entry before TP on the ones I’m in. Can work out well when a strong trend is in place. However, with the recent geopolitical stuff goin on adding volatility and when volume really exceeds, it’s usually to the downside. So in this particular market I would TP on long scalps quickly if vol continues to exceed I would stay in, but AS SOON AS vol subsides at all I’d be out…Prob with adding when volatility is picking up or any news increases vol the other direction, then you have double your initial risk out and instead of workin out up a few ticks or at a scratch you are taking a loss that’s bigger that expected so you may then have to have 3-4 profitable scalps to get back to break even. Not adding should make it more comfortable staying in a trade a lil longer if vol keeps exceeding. Guess in my simple mind if I’m scalping, I have my finger on the trigger to get out AS SOON AS THE REASON I GOT IN (Exceeding vol) slows for even a sec. Then look for the next one. I always keep Time and Sales up esp when scalping. When you have Real volume on your side it’s easy to see when it let’s up. If l long and Time/sales flashing green, safe to hold for a few more ticks and vice versa for shorts. But when It stops flashing, I’m out. Made a few more safe ticks…