S&P past 5 years:
up 1854 points since aug 18, 2017 to aug 12, 2022 (1255 trading days)
would need to scalp 1.47 points a day to match the market
1.5 points a day would beat the market and result in 1882.5 P/L
1.75 points a day would be 2196.25
2 points a day would be 2510
if you scalped 1 point a day, you'd be beating the S&P year to date for 2022 (obviously since the market is down 516 points for the year, about 1130 points at its worst)
some of you may be asking “what does scalp a point mean”
it's pretty easy.
let's say you buy 10 shares of SPY. do it with a limit order at the last traded price (or the last ask price, usually $0.01 or $0.03 away)
you get filled at say $400
you then trigger a “one cancels the other” order. you don't need to do this but, it is a quick way to set a profit limit + a maximum potential stop loss
we just want to scalp 1 point. SPY is 1/10 SPX, so we need to divide by 10. 1 point / 10 = 0.10
we got filled at $400, we want to get out at $400.10
well, what if we are wrong and can't predict the direction of the market on a small timeframe like 30 seconds-1 minute-5 minutes-10 minutes-15 minutes, etc.
well it all depends on how much drawdown you are willing to risk
the smaller your stoploss, the more likely you are to get stopped out (and realize a loss and have to try to make it up to get back to breakeven from a trading perspective)
you could set your stop loss 2 points away (would take 2 winning trades to offset each losing trade), 5 points away (would take 5 trades to offset 1 losing trade)
how do you know what direction to go (long or short) you might ask? use things like moving averages, RSI, MACD, VWAP, bollinger bands to either predict an upcoming reversal or trade within a trend (if the market is going down, try to just get in on one candle and not be wrong. you have a 50-50% shot on a 1 minute scale since the average candle size on SPY should get you filled in and out when scalping something as small as a singular point, or half a point, etc.)
is it surefire? no. is it gambling? yes. is it kind of like a slot machine? sort of. but it's more like poker in that you can use data in front of you to try to make an educated decision. support, resistance, all that.
if you don't think you can reliably scalp a net win of 1 point on the S&P a day… i'd recommend you actually go try it before speaking on something you have no experience doing/trying for yourself
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