Day-trade "scalping" techniques

Hi Guys, anyone like to share better than 50:50 day-trade “scalping” techniques?

Doesn’t the 0.5% stamp duty on stock buys make it super hard to make profit off small price changes?

0.5% is tiny compared to hourly returns.

Best to scalp the ETF not the stock itself, therefore more momentum and wider moves to profit from.

And with ETFs there’s no tax on buying and selling? You just have to pay the fees of £1 to buy and sell instantly on Freetrade. Never looked at doing short term trading really.

There is tax on profit, I’m not adverse to tax, tax supports organised society :slight_smile:

are you day trading with Freetrade?

does the free-instant-trades update make ‘day trading’ more feasible on FT?

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That doesn’t make sense, you’ll be paying 0.5% every time you buy a share. What sort of hourly returns are you getting and how many trades would you be doing?

Technically speaking if you had an increase of 0.6% and therefore only made a profit in one day of 0.1% you can count on compounding to return an equivalent Apr of around 28% (warning, my math sucks) over 250 trading days.

Problem with day trading is catching the falling knife. Imo

Scalping typically involves buying and selling shares multiple times per day, I will be surprised if you can make profits on this. Unless he’s referring to CFD’s and spread betting as opposed to buying actual shares. I’m not knowledgable on those types of instruments.

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You only need to look at the stats to see how to the regular investor, cfd’s and spread betting is a bad idea. I think i read somewhere that 75% of people on a particular cfd platform lose money

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Same goes for day trading though. Most people lose money. And for the rest, a normal job would probably give them a higher return.

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Agree with you there.

Sounds like you’ll be fighting elephants for peanuts

GLHF!

Traders’ quest for the slimmest sliver of advantage is as old as markets. In the 19th century, Reuters used carrier pigeons to speed the delivery of stock prices. More recently, Chicago pit traders donned platform shoes so they could see and be seen better on crowded trading floors. Today, getting an edge is all about the speed of light: 186,282 miles per second.
Bloomberg Businessweek

I’d recommend buying Flash Boys by Michael Lewis instead. Investing in yourself is the best investment noone can take from you, even the front-running HFT shops - they are faster then thou by seconds, they want to be faster than their competitors by milliseconds. Even if your trades are done via FT which uses IEX (the exchange set up by the main guy from Flash Boys). HFT algo funds make money when shares go up and down and volatility is on their side. They make money by preying on our orders, even if the client is a huge asset manager. The can go home at the end of the day and sleep well not worrying about their positions - because they may not have any before trading closes.

“Market-taking, not market-making”


(Source)

Another thesis:

“However, some high-frequency traders are leveraging the technological and informational advantages created by a two-tiered marketplace to prey on other investors. These high-frequency traders are paying for expensive services like colocation and direct data feeds that give them an information and speed advantage that can be used to front-run the trades of institutional investors. This informational asymmetry has resulted in a two-tiered system in which the privileged class is receiving market information before everyone else. High- frequency traders are using this premier access to information to prey on institutional investors. By jumping in front of these orders, high- frequency traders enact a pseudo-tax on other investors without providing any benefit in return.”

Source - https://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=1291&context=dltr

No market is immune to tech and, unlike our brains, tech can scale well.

Also, watch this movie about HFTs with some Hollywood actors. Building a direct straight cable to be closer to the exchange to gain milliseconds used to a thing:

Now they go wireless.

https://www.bloomberg.com/news/features/2019-03-08/the-gazillion-dollar-standoff-over-two-high-frequency-trading-towers

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