I never traded spreads so I cant really comment. I know some guys who are spread traders and do very well, are very very consistent. I am a true believer of "position trading", even if it only lasts as little as an hour or so. Waiting for good entry points (using whatever method works for you), getting in, giving the position the correct breathing room, and taking as much as you can out of it. Trailing stops are a great way of riding a trend. Scalping the euro for a tick or 2 is way away too difficult. Add in commissions and you are fighting a losing battle. Position trading cuts back on your costs, cuts down your stress level, amd lets you think much more clearly.
The problem with this route is that reducing our targets doesn't necessarily lower risk -- what happens is that we start to jump after every move because they fit within our typical profit targets, and our selectivity skills begin to wane.
Thanks for your feedback. I am afraid sometimes Eur/Usd would have crazy huge movements within less than a few seconds. That alone potentially could be black swans to scalpers.
...but if you really worked at a big 'chicago prop shop' you would know that costs are minimal - which makes scalping for 1 or 2 ticks viable (ie 0.50c or less)
these ar mostly news related though. the others are stop running usually - and the astute trader can position himself accordingly if he truely understands his craft. sure - there may be the odd move that is unexplained, but then thats risk honey.
Lobster, Don't give up now. Not many days are like yesterday. I hate days like that. I like days when the market trades over a small range, constantly retracing itself. I think you scalping system will work really well if used during the right time of day. You need to wait until the market has exhausted itself and wants to trade in congestion. Often this will happen in the late afternoon New York time, say 2pm to 5pm. There is usually a run during the asian secession but if you wait until they go for lunch or about 10:30pm eastern the market is often in congestion until 1:30am, when the blokes in London sit down. If there is no 4:30 am news then there is often are period of congestion from about 4am to 7am. During these times someone with your scalping skills should be able to make a lot of money.
No problem....look at todays/yesterday action....big moves in Euro....why take 1-3 ticks when you can pull 30-40 if you get in good...if I was gonna scalp something, would be something thick that doesnt have much vol..maybe eurodollars,5 yrs, 2 yrs....