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If I'm trading an expensive stock such as Amazon, how do I determine the minimum scalp size?
I use the following reasoning for any instrument. If we assume our edge has a 60% probability of winning 1R and 40% of losing 1R, then after 10 trades, 6 winners and 4 losers, we net 2R (2 times the initial risk), thus the minimum scalp size must be so that the spread + commissions don't exceed 1/10 of an R or else we net less than 1R after 10 trades.
So in short, add your typical spread + commission and take that 10 times, that's the minimum scalp for me. Not sure if this is how Al defines it though.
