The following article on futures trading scalping strategies is the opinion of Optimus Futures. Scalping is a trading strategy that involves capturing profits from small price movements–as small as one to a few ticks. In order to make a profit, you often have to execute a substantial amount of trades a day.
What is Futures Scalping Strategy?
It is the rapid trading of any instrument where a trader looks to capture small price movements on a relatively high volume of trades. The futures market can be a great environment to try this type of trading as it is a highly liquid market with excellent liquidity.
Futures scambling strategy is a great way to help bridge the gap in trading account size. Trading a micro size contract (position sizing) will help the trader focus on adding to a trading account in the futures market, one small profit at a time and in turn will aid them in being able to trade a larger position size. This will in effect help them to work their way up to larger sized contracts and then possibly even outright futures positions.
Futures scalping is more to do with timing the entries and exits and trades. There are no guarantees in trading. Any trader who claims to be entirely successful in all trades every time is either lying or the lucky one in a million.
Successful scalping in the futures market is more to do with the psychology of trading. It’s a mindset that is comparable to a martial arts discipline; be ready and prepared to battle on a daily basis. You will come across numerous situations that require you to make split decisions, as being prepared and ready for these situations can sometimes literally make the difference between life and death.
Fixed price contracts are a real plus when it comes to the futures scalping strategy. You can think of them as a door to many possible futures contracts. You don’t have to predict the direction of the market to make money you just have to make sure the price you are trading conforms to the money you have invested in it.
As always, before you start day trading or even entering a futures market, you should consult a futures trading advisor who has more experience and knowledge on futures trading and is familiar with the risk and the reward associated with trading decisions.
Futures Price Action Scalping Strategy?
For a retail trader, focusing on establishing a futures price action scalping strategy can be an exciting as well as challenging experience. This type of strategy involves taking small profits in a relatively short period of time. The risk is usually aggressive and requires excellent timing and disciplined execution.
The majority of retail traders who use this kind of strategy are able to place over 100 trades in a 24-hour period. This kind of activity is only possible with the use of multiple brokerage platforms and the use of an auto-trader. Using these kinds of strategies, a trader can go from red to black overnight with a few winning trades and the use of a trading bot (algorithm) in their account. The challenge then becomes what kind of strategy will get the trader back to black?
Trading the futures market can be an exciting and challenging experience regardless of size or experience. If you’re new to the market, then stay alert, look for patterns and trends and experiment with different trading methods. You will have a better chance of ensuring a long-term success if you learn to trade with your favorite techniques.
There are several types of intra-market futures scalping strategies in the futures market with the main one being the tick charting. This involves hours, days, weeks and even months of futures charting. It is important to remember that there are many indicators on charts and if you use too many, you will be clouding your judgment and bound to be confused and unsure, which will ultimately lead to loss of profits.
1/3 of your trading time is spent watching the live displays and the rest on your trade, which is a great way to lose money! You should always strive to use the best trading tools to improve your chances of a successful trading experience.
Limit the number of indicators you are using and try to keep a clear picture of your trade approach. You should also consider the various futures price indicators such as the stochastics, MACD and RSI in order to help with your future trades.
How to Day Trade Forex – Scalping Strategy?
Forex scalping is similar to that of futures scalping but the difference is that there are no fixed price contracts in forex trading. That means that you must predict the direction of the market in order to make trading profits.
Forex trading requires less capital than futures trading, but the risk is higher. Scalping in the forex market involves the use of a highly liquid and volatile market in order to capture a few pips (i.e. one pip = 0.0001) in a short period of time. If you’re correct in your trade prediction, then you’ve just made the profit of one pip for every contract (lot) you own.
Usually, you can make a profit of 100-200 pips on a single trade, depending on the nature of the trade. There are numerous currency pairs to choose from and you have to be able to predict the direction of the greater trend. You must realize, however, that you can’t make money in a down market.
To be a successful forex scalper, you need to have an account with a reliable forex broker. You should have a trading platform, forex charting software, a good Internet connection and the best technical analysis and charting tools.
Remember that your number one priority as a trader is to survive the trading activity. Think of every trade you enter as a battle that you must win, whether you win small or win big. If you can implement those simple strategies you will get your fair share of winning trades.
You have to be ready to trade an intra market and be able to make money in a down market. You have to know when to stay as well as when to go with your winning trade. You might win big or win small but you must always ensure that you win!
Scalping in a Foreign Exchange Market
Scalping the forex market is different from scalping the futures market as you must also predict the movement of the major currencies in order to make a profit. In the forex market, scalping can involve a single trade in a single currency pair.
Since you are in the market to capture a few pips on a small position size then the margin can be very low but your risk is high. The advantage with scalping in the forex market is the speed of execution of a trade and the simplicity of account management. If you’re used to trading in the futures market then you will probably have an easier time trading in the forex market.
The question is what type of trading should you be looking for when you choose to scalping? A “dealer scalper” might pose a problem because you want to provide some liquidity to the need market. A “drag-the-skates” salesman is someone who is slow moving in position sizing strategies, as they might take days before they exit the position. This can cause problems in a fast moving market.
The main advantage of trading in a forex market is the superior liquidity. This liquidity is the ability to buy and sell currency pairs at any time throughout the day. Because you’re entering a deal in a smaller position size, you have less margin to meet higher margin demands, thus making it possible for you to profit in a small amount of time.
A forex trader should be placing intra-day trades in a forex market instead of closing an overnight position in a single currency pair. While it is true that you can make a profit using the right strategies, scalping in a single currency pair is a risky affair. So what can you do to make the right decision?
You also have to realize that scalping is not trading a trend as your trades are intra-day and once the market moves against you, the position can be closed. You will not be able to make money in a downward trend, because you won’t have the time to ride through the trend.
The question you have to ask yourself is if you want to be a scalper or a longer-term position trader? Many traders think position trading is boring and not worth the time, therefore they resort to scalping the market. If you can find a position trading system that fits your lifestyle, then that might be the way for you to go.
One of the disadvantages of scalping is that it requires a fast computer or plenty of time to watch your position. Market volatility may cause profits to change on a daily basis, so you should be ready to keep up with your position size.
Use your indicators by keeping an eye on your charts, be ready to place your trades and get your stops in place. Don’t trade without using good stops as you may find yourself changing them frequently.
Use price action, delayed prices, order-handling and stop-entry orders to guarantee your scalping strategy. You can also use the price scale and your intraday chart to take your maximum profit on each trade. Once you have placed your trade, don’t be surprised if your trading platform gives you a warning.
Take the time to review your trading system, trade method, the trading platform you’re using, and modify your trading rules. Do this before jumping into the market¡¦you know the old saying, “fool me once, shame on you. Fool me twice, shame on me!”
You can use a number of forex brokers to trade the FX market and some of the better ones offer a risk-free trading environment with no commission or maintenance fees. You should check each broker thoroughly before making your decision.
Be sure you watch for the use of leverage at the brokerage firms you are considering. It is common to see the highest leverage offered by FX brokers in the Forex Trading arena. The average level is 20 – 1.
Use a trading or brokerage company that is reputable and one that you can trust with your money! Stay away from money-for-trading schemes and any promises of 20 % returns in 14 days. These are all too good to be true!
Online information about trading and the forex market is easy to find but is it reliable? For instance, you can find out that trading in the forex market has a high level of risk, much higher than other markets such as stocks, futures and options. You can also find out that the forex market has a number of advantages, along with its disadvantages. Forex traders should find the information they need and avoid the rest.
Scalping in Forex Trading is Different
The forex market is the highest-capitalized financial market in the world. Although it is based on trading in a single currency pair, it is just as risky as trading in a commodity or futures market. Still, many forex traders place a large percentage of their investments in this market because of its liquidity.
If your forex brokerage firm does not offer good service then you should change to another firm. Check with the Better Business Bureau and with online consumer reports to make sure you’re dealing with a reputable broker.
Exchanges cater to retail traders in order to stay in business. They have specialists on hand to assist you and they will help you learn how to trade a position. If you choose to scalp in the forex market and use a dealer scalper, you can reap the profits of other traders.
A “drag-the-skates” salesman is someone who is slow moving in position sizing strategies, as they might take days before they exit the position. This can cause problems in a fast moving market. This is one of the reasons why you should refrain from scalping.
If they have a problem with your accounts, they won’t tell you. Of course, you should realize that part of the profits you make is your own fault. You should only look to profit in the market and you will have to hedge against losses yourself.
Forex scalping is a very illiquid form of trading that can net a low-risking profit if executed properly. The gains made from these types of trades are usually small but the outcome can be significant. This type of trading is not an easy one. You need a deep understanding of the markets to do well in forex trading.
Another point to remember is that the strongest currency will always be the most stable and the more stable the currency, the lower the risk aversion will be. This is one of the more important lessons to learn if you’re going to choose this type of trading. You should only trade currency pairs when they are listed on a London Exchange.
When you trade in the forex market, you’re trading in an over the counter market. You’re trading privately rather than you’re trading with a brokerage firm. If you’re a scalper, you really need to be in front of your computer to monitor the market price on an hourly basis.
Scalping in a Foreign Exchange Market
Scalping the forex market is different from scalping the futures market as you must also predict the movement of the major currencies in order to make a profit. In the forex market, scalping can involve a single trade in a single currency pair. Since you are in the market to capture a few pips on a small position size then the margin can be very low but your risk is high. The advantage with scalping in the forex market is the speed of execution of a trade and the simplicity of account management.
Learn How to Leverage and Make More Money
Due to the large number of roux swappers in the forex, the effect of the leverage on a trader may not be clearly visible. Forex brokers often have special machines capable of executing thousands of trades per second. This is where the effect of leverage can be particularly dangerous to the new scalper. One bit of advice here is to learn slowly and to be prudent with your way.
The forex market is a very volatile one and the daily return on a position can be anywhere from +7 to -15. The size of the transaction can be any amount up to $1 million. Scalping in the forex market is a technical and fast-moving trading technique.
Even though trading in the forex market has a higher level of risk, it is still a good place to make money. Risk is a factor in all investments and it is also likely when you trade in the forex market. When you trade in the forex market there are no costs involved, other than the purchase of your trading position. These are readily available on the internet in many different languages.
When you decide to scalp a foreign exchange market, you have a good shot at getting good returns. This is the type of trading that is going to give you that sort of income, combined with great risks and rewards.
If you need it on the spur of the moment then scalping is going to suit you best. If you’re just going to be trading with no predictability then scalping will suit you best.
Stay away from money managers in the forex market who promise to increase your returns with less risk and no commission or other fees. You may be able to find someone who will manage your money, but you may not be able to find one who will be in business five years from now.
The role of a scalper is primarily to capture small profits that can add up over time. The role of scalping is to earn money by capturing small profits daily. The role of scalping is a very difficult position to fill.
Look at the correlation between all the currencies in the world’s financial markets to determine the market factors that indicate the future economic trends.
You must watch charts for the next 2 – 3 days prior to creating a trade. Turbulence in the currency market can deliver many opportunities for scalpers. Having said this, the reality of trading is different. During a recession, hours and hours of your time could be wasted in trying to market time.
Learn How to Identify the Best Trade
When you open an account to trade in the forex market you must learn the basics that enable you to earn profits as this is the primary goal that you are going to have.
Scalping is a very hard position to fill and it is very easy for the broker to swindle you, if you don’t do your research first. Some people claim that scalping trades is easy. It is very easy to swindle you so stay away from brokers who are not actively trading. If you are going to trade with a broker, you need to make sure that you’re trading with someone familiar with the forex.
The forex market differs from the futures market in the sense that in the forex market you are trading against firms all around the world. The forex market is a global one. The truth is the future market is not that volatile. It is the future market that is stable and not so volatile.
Most importantly, remember to stick to the trading plan that you have laid out for yourself. The counter-argument to this statement is that by scalping in the forex market you can obtain larger profits. The method of trading that you choose to use when trading in the forex market depends on the market conditions.
Your trading plan should follow the market trend, allowing you a chance to take on small-to-mid-sized positions that can be closed out very quickly. If you are going to trade in the forex market then you should know that there will be good days and bad days.
This is where you get your best return on investment. Many people trade in the forex market, but very few people are actual scalpers. With some practice, you will be able to control your emotions and focus on the market trends.
Developing a Trading Plan
The advantage of opening an account with a small brokerage firm is the lower fees that are charged to run the account. This is especially true if you are going to use a scalper. The advantage with a small account is you are not going to be imposing a great deal of risk on yourself. If you trade with a larger account, you will have to take larger positions and your risk might be greater.
If you plan on trading scalping options in the forex market you need to make sure that you have an edge over other traders. You can trade longer term trades as well which is what some people prefer.
This is the element of risk that you must learn to master in order to be a successful trader. If you are going to be a successful scalper then you need to keep a close eye on the trends. You need to watch over your trades and make sure that you’re there to pull the trigger.