Re: Scapling Strategies
I have recently decided to try out scalping and i found a few challenges that needed to be resolved before i could venture into it.
The first thing a scalper needs is low break even cost and speed of execution / modification. I had opened an account wt Reliance to reduce the cost but their terminal isnt suited for scalping. My regular account is with Indiabulls and they offer me 0.02% as brokerage which works to 2.75 as breakeven in nifty inclusive of taxes. Their trading terminal (pib) is suitable for scalping but still i feel the brokerage is on the expensive side (for scalping). On recommendation of a scalper, I have recently opened an account with r k global and their break even in nifty inclusive of taxes works out to 1.45 and they use odin as their terminal which is fast and reliable.
Next step is to ensure that i get RT data of nifty futures in amibroker. I use TDI as my Rt data source and i get to see only the spot prices that too with a lag of 5-10 sec sometimes. Since the futures premium fluctuates wildly, trading futures based on spot is not ideal. Again, he helped on that font too.
Next step is methodology. Thats basically a work in progress but so far trend break-out of rsi-21 , cross of rsi(5) and 7 ema of rsi(5) and cci-trend break has been short listed as possible entry triggers. Break out from a price range looks appealing as well.
Target is set for 6.5 points (1.5 as brokerage and 5 Rs as profit) . No of Lots :4. Thats 20 points in one trade. No of trades per day : 10 (initially)
There wont be a stop loss as the duration of the trade is supposed to last for max 2-3 min. After a call is executed, i place the exit target orders immediately. If the target is not hit within a few min...i exit.
The one thing i realized is that scalpers are excellent chart readers. They can sense order flow and they trade very fast. Its hard and very difficult to master. Its a different style of trading all together and i am only eager to learn by experience.
