ES Emini Trading: The Scalping Style
One of the toughest occupations to define is that of a trader. There are countless variations on methods for trading the ES Emini contract. Most forms of trading differ in the length of time the trader holds a given contract. Of course, all traders attempt to accomplish the same goal: profit by moves in the market. It is simply the manner in which traders quantify moves in the market the delineates them from each other.
Before I continue much further, I should state that I am a dedicated scalper. I never hold contracts overnight, and my average trade seldom lasts more than twenty minutes. I am looking to snatch small 2-3 point moves in the market and cash in on them. Generally speaking, I am unconcerned about the fundamentals of the market and concentrate solely on trading the chart in front of me, with little consideration for what the market is going to do tomorrow, next week or next year. My time frame in trading is strictly "now."
Scalp trading is about making many small gains throughout the day and never about trying to hit a "home run" on a trade. Scalpers also rely heavily upon technical indicators and thus, most scalpers are experienced traders. Scalp traders risks are minimal and are an effective use of trading capital since this method of trading usually generates more winning trades than traditional day trading. Scalpers generally run very tight stops and limits and are extremely risk averse. I would also point out that beginning traders can make use of scalping techniques. I point novice traders in the direction of scalping because of the lower risks involved with this style of trading. Still, even Scalping takes a high level of self discipline to be successful.
One component of scalping that is often overlooked is the high degree of concentration that is required to scalp effectively. The chance to make sizable gains sometimes comes rapidly and the trader has to be prepared to exit his trade when the correct opportunity rises...because you may only get once chance to make the winning trade in a given trading sequence.
The technical indicators most scalpers use vary widely from trader to trader, and are generally not shared with others. It is sort of like having a great fishing spot and not wanting to share it with an army of fisherman who would fish it out quickly. Generally speaking though, scalpers use momentum indicators set to very short time periods. The CCI, MACD, Stochastic indicator and RSI are all common oscillators the scalper utilizes in various capacities. Of course, support and resistance are among the most important tools the scalper uses, along with pivot points and theoretical support and resistance calculated from the pivot point.
It takes some practice, but scalping can be as profitable as any trading method, and there are a lot less headaches. You don't lose any sleep on overnight trades because you never have a trade overnight. It is my style of choice.
Questions and Answers
Day trading does not necessarily have to do with stocks and you really don't need to have a big trading account to succeed at it. But you need to choose a proper trading instrument and the best one for this purpose seems to be emini futures.
In baseball terms, scalpers are singles hitters. Nothing more. We may hit an occasional home run, but the is the exception, not the rule. The goal of a scalper is to extra small chunks 5-8 times a day from the market.
There are a multitude of futures contracts available to trade, and choosing the proper contract is a matter of great importance. Each contract has a distinct personality and pattern of price action. It is little wonder that novice trader bounce from futures contract to futures contract trying to find a profitable formula to trade.
Day trading emini contracts is not simply a matter of finding good trades and hoping for the best. You need to develop a coherent trading philosophy and implement that philosophy into an effective trading style
Emini contracts are traded in highly leverage form and this leverage can great enhance your profits, but remember that it can also great enhance your losses. It is a double edge sword with a vicious bite.
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The stock market is mostly used to create money. . I am sharing my investment strategy as a retail investor. Most financial experts recommend investors to initially contact a financial advisor. Able to provide advice, it can ensure that the money an investor get a good return or not.
This article has discussed about the importance of Stop orders. Stop orders act like the life jackets
It is not unusual to hear individuals ask about trading the "high probability" gap trades. It seems that there is a perception (by some traders) that e-mini gap trading falls into the sure-fire trade class of trades. Note: I have yet to locate a sure-fire trade in several decades of trading.
I've been writing some about trend lines lately and noted my observation, in several of the articles, of the declining use of this valuable charting tool. I don't have any illusions that a couple of articles by a relatively unknown author will have any effect on the use of these lines; but if just a couple of traders see the value of trending lines and e-mini trading, then I suppose I have done my job.
I like trading indicators that help me understand e-mini trading in real time. I can think of no better real time trading experience than watching price action move toward a known area of support/resistance (SAR) and evaluating what the possible outcomes may be when price collides with support lines or resistance lines.
Given a choice of just one e-mini trading indicator/chart pattern I would select, hands down, support and resistance. In my little world of trading, support and resistance (SAR) reign supreme.
Trend breakouts and breakout volume share two important factors (among a list of other important variables) in shaping the likelihood of a successful trend breakout or breakdown. For obvious reasons, volume in a specific direction is a key ingredient in a successful trade.
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