MarketLife Ep 19 – Short term trading: what works for me

Podcast-Cover300This episode continues my look at short term (intraday and daytrading) systems and ideas. Here are the episode notes:

What’s really happening intraday

  • Academic studies of market behavior show departures from random walk on lower timeframe
  • These are distortions, but don’t assume that this makes for easy trading
  • Highly competitive and very noisy.
  • There does not have to be “a guy” on the other side of your trade! <= This is one of the persistent misconceptions about trading.

Styles of daytrading

  • In a way, nothing new here, conceptually. We have:
    • With trend
    • Countertrend
  • Countertrend often requires scaling in against moves. “Fade traders”


  • Whatever you’re going to do, it’s got to get done between the open and close. This brings some challenges regarding length of swings.
  • It’s hard
    • People exaggerate and lie (win ratio is a big one)
  • Time spent at the screen vs. payoff. Would you do better with a longer timeframe?
  • Be careful of marketing hype.

My experience

  • Scalping was a dead end. Maybe someone is doing it, but I haven’t found that person.
  • The less I did, the better.
  • Having a daily setup/gameplan is critical (maybe trade against that plan!)
  • Both with trend and countertrend approaches worked
    • Pullbacks
    • Fading new highs / new lows during certain time windows
  • Plays around the open

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Also, if you like the music for this podcast, then be sure to check out Brian Ashley Jones, my friend, and a fantastic singer-songwriter.

Enjoy the show:


Adam Grimes has over two decades of experience in the industry as a trader, analyst and system developer. The author of a best-selling trading book, he has traded for his own account, for a top prop firm, and spent several years at the New York Mercantile Exchange. He focuses on the intersection of quantitative analysis and discretionary trading, and has a talent for teaching and helping traders find their own way in the market.

This Post Has 2 Comments

  1. SamB

    What happened to the intro song??? Good stuff!

  2. George Selinsky

    Adam, thank you thank you thank you for nailing this oft repeated ‘who’s on the other side of your trade’ baloney. I can’t even begin to tell you how annoying this can be to hear over and over again, in some cases uttered by some pretty respectable individuals sadly to say.

    Regarding ‘scalping’, I find it difficult to have a true definition of what it is. For some, it’s gaming the order book, for others, it’s shooting for relatively small profit targets with the finger fast on the exits. I do believe it’s possible to score well doing relatively small profit targets (e.g. 1-2 pts in the ES, sort of what you mention about fade trading the ES), I’ve seen some people do it, but it’s very hard and it takes a lot of concentration and flexibility. I think it definitely makes better sense to shoot for the one big move of the day, much easier on the psyche.

    It would also be interesting if you elaborated on the psychology of trading multiple versus one instrument. I’ve noticed a problem that when you focus on one instrument, there’s this miopia that can be an invitation to over-trade. Such a style also demands that you be an expert in several different styles of trading, which may not be the best path for many. I know there are at times many days when the ES may not offer more than one clean 2-4 pt move a day if that, while other markets will be trending.

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