When it's scary to scalp!

When I started this blog my first ever post was about three club monte, you can see the original blog entry here. Since I started trading, nearly nine years ago, my view has always been that there is a strategy for every market. Recognise the right one and it's a breeze, well much easier anyhow. Use the wrong one and it will make your life very hard indeed.

If you looked at yesterdays races before they started you could see pretty quickly that it wasn't exactly a scalping paradise. As the day wore on anybody trying for a one tick upside risked some pretty hefty downside movement. Looking at my stats, it was third most volatile day this year. At the end of the day, of the 35 markets I traded yesterday, a large chunk of them were the antithesis of scalping; very volatile with big movements. If you just scalped you would have had a tough day, by contrast swing traders had a field day yesterday.

The first race of the day was a classic example. The price moved from 10's to 4's and if you didn't catch that, then one of the clearest cut swing trading patterns occurred when the horses were at the post. It sent the price right back out again. It would have been a clear signal for even a die hard scalper to change styles.

Today's forecast is some more of the same. More races today are ideal for scalping so it's a bit better balanced but quite a few will exhibit characteristics that are not at all suitable. Scalp those and you could get into trouble pretty quickly. Of course everybody sits in their own comfort zone but trying to scalp a volatile market is actually a common mistake that inexperienced traders make and is best avoided.

More reason to make sure you are equipped with tools that will allow you to take advantage of what promises to be another volatile day.