This is the my first blog post on the site and let me be overwhelmingly honest. I have no clue as to how its going to shape up. But one has to start somewhere and here it is.
I thought of writing the first post about something that the whole site is dedicated to i.e "Scalping", and more importantly as to - Why do I do what I do? in other words - Why do I Scalp?
To understand that, we will look at Scalping through three lenses.
Personality - I think this is one of the key aspects of trading success, in the sense one has to find a strategy or method that suits their personality. One element of my personality is Risk Aversion, yes before you make that obvious expression, let me explain. Here I am referring to "Overnight Risks". I just cannot sleep in peace with open positions. That's me. Even if its just two piddly lots, it weighs on me.
A related aspect is, scalping or day trading gives you the freedom to close your day, when you want to trade and also to choose how many days you would like to trade. And as I said earlier, when you are not in trade you not in trade - its as simple.
Opportunity Cost - Since I am a full time trader, if I do not make the best use of my time, its not fair. And Scalping is the only strategy for which there are opportunities practically every minute the market is open. So to make the best use of my presence in front of the screen, I scalp and scalping gives me the best relative yield for the time invested.
Developing Expertise - This one needs a bit of an explanation. When I reflect on all the other careers/jobs I've had in my life, one thing that made me leave those jobs was the fact that most of them had changing expectations from me. One year it was some work and the other year something else, at the end you become sort of, a jack of all trades. Perhaps all corporate jobs are like that. At end you do not feel a sense of satisfaction which you get from refining and improving on a specific skill. This is where I use to envy trades/professions where there is a constant use of the hand and head, where variables in the context of practice are well within your control. In the context of trading, the markets are not in your control but everything else that you do is indeed in your control. That I think is very critical for expertise development.
So what's all this got to do with Scalping? - Well the line of reasoning goes like this - I intuitively felt that I need to be working at something where I can constantly practice a skill, and refine it over a period of time + In an environment where a fair number of variables are in my control + and (Borrowing from Malcolm Gladwell's 10,000 hour rule) - I wanted to get past the 10,000 hour threshold as early as possible. - So as to develop expertise.
Since scalping gives you innumerable opportunities to practice your craft, and if you do practice and make use of the opportunities, I guess there are fair chances that you would be able to develop some sort of expertise in it. You are not dependent on the opportunity to show up. This for me is one of the biggest advantages.
Think about it. How many professions give you such a structured and predictable opportunity set to practice?
So that's pretty much for this post. More later.
Please Note - Each of the blog posts which are categorized as "BLOGCAST" would have an accompanying audio both on SoundCloud and YouTube