Scalping Trading with Emini S&P Futures
Sunday, March 14th, 2010Recently many traders starting to use scalping methods such as the Emini Scalp Trader while trading the Emini S&P. There are many advantages to scalping methods as oppose to long term or even day trades that can last for hours.
For one, emini S&P can and will provide opportunities for a “fast†grab of ticks or points while having the ability not to risk a lot. Scalper can use the early morning hours to take advantage of market uncertainty and lack of direction while all the early morning news are being digested.
Also, traders who scalp use methods such as Price Action which relies on real time bar setups as oppose to traditional technical analysis tools. Traders can use minute bars, momentum bars, and/or range bars.
There are a number of challenges that an emini trading scalper would face:  The increased number of transactions could add up substantially. A scalp trader should seek competitive commissions that could potentially accommodate the scalp trading methodology.
At times, a scalp trader would want to increase his/her number of futures contracts used, use small margin to equity ration and that in itself would increases the risk.
This where a trader could realize how leveraged his positions is, and how risk could potentially increase when trying gain short-term momentum with increased number of contracts. No doubt, beginners should only use a small number of contracts in the initial stages of scalp trading.
The discipline and mind set required for scalp trading is of the highest degrees of discipline, understanding that risk and reward are not divided equally and a trader could potentially have higher risk than reward on each trade. The trade set ups, have to have a high degree of success to succeed on trades such as these.
Lastly, high-speed connectivity, unfiltered data for the emini SP is required in order to succeed in the emini SP. Platfroms such as NinjaTrader or others that could be connected to a high data stream.
