Scalping with Lay Triggers

[NorthView]

Hi,

I've started using Lay triggers before the off and in play with a stop loss, hoping to scalp a few ticks.

The possibility of a stop loss not firing in play because the runner has surged to the front is giving me cause for concern. Does anyone think it's unwise to use in play triggers like this?

All opinions welcome, thanks.

[doris_day]

In-play is much tougher than a couple of years ago because of the increase in volatility, probably due to the decrease in liquidity in many markets. It can work in your favour of course but you need to be either lucky or have some very well worked out algorithm that can use the volatility to its advantage.

[Captain Sensible]

I'd agree with Doris, the IR markets are more volatile these days due to a variety of factor from lower liquidty to the cross matcher. Automated scalping is a risky strategy on any markets let alone in running. If your algorithm isn't well thought out you'll get picked off by others looking for chinks in any bots armour.

Picking off other bots can be very profitable if they're badly coded and their liabilities not properly written

[NorthView]

doris and CS, thanks for your advice, which coming from two of the mainstays of this forum I will take very seriously.

So... am I right in thinking it might be more profitable and less risky to scalp manually by learning (somehow!) to read the markets (instead of trying to develop an algorithm)? Is this what you both do? (I'm not asking about your strategies, just trying to get a very high-level view of what I should be focusing my time on so I don't spend even more of it than I have already fruitlessly looking for methods that won't work).

Many thanks.

[Captain Sensible]

Personally I currently make more manually than automated but also run automated stuff so dropping one or the other would make me less profitable , if that makes sense.

Both have their advantages and disadvantages, you can never truely automate what you do manually as you react to things you may not have coded up for one reason or another and managing liabilities is a lot less fraught than letting a bot run unattended with a large bank where rule 4's can wipe out a large part of your bank. Obviously bots don't get tired, don't care about reds and will happily take small amounts per market most of us wouldn't switch the pc on for manually.

I'd have thought anyone able to trade successfully manually would make more per market doing it manually than automated but not the same amount of markets etc. So in short there's no easy answer as to what's most profitable as it depends on your own mindset and skillset.

[NorthView]

Very helpful, thanks CS. I guess R4's are mainly a problem when making a book before the off.

[iceman]

Hi, NorthView
I think it depends also from you attitude.
In last few years I traded both manually and with automated VBA code, and I personally prefer the automated way for some reasons: first of all because I have not time to do this manually every day and in my opinion the best way to validate a scalping/trading strategy is check the method on a lot of markets for some days…..
The second reason is that if you scalp manually you must have the methodical capacity of close red positions without hesitations that could be bad for your bankroll and your mood. I think that this aspect is not so implied.