Are you trying to scalp your way to trading success?
Allot of traders skip right to scalping because the risk per trade is smaller on a scalp trade. The problem with skipping right to the scalping without knowing how to read the overall market is the fact that most of your scalping trades will be 100% counter trend. Why is this? It is because the majority of new traders that are trying to scalp is that they wait for something to happen then try to go against it. In doing this you are trying to pick to the top and bottom of the markets on a very small scale.
It seems like scalping would be easier because you only have to be right for a very small period of time, maybe 20 seconds to one minute. But the truth is with scalping you are breaking it down so small that if you timing is off by 10 seconds you will lose even if the price ultimately goes in your direction. There is always good and bad with every method it is just you knowing the pros and cons then make a plan around the odds.
When we talk about scalping we are talking about trading for 1 to 3 points on the NQ, ES or TF. We are not talking about scalping for ticks. If you are trying to trade electronically for 1 or 2 ticks we believe that this is very hard to do consistently and it promotes very bad long term trading habits.
We have made a scalper method and an indicator specifically for scalping but if we are going to scalp a trade we go into that trade using the scalping rules and mindset. The worse thing anyone can do is enter a trade with one intention and then mid-trade change those intentions. With scalping you must have a clear objective and your job is to stick with that mindset until the trade is complete and no shoulda, woulda, coulda thoughts after the trade is over. Scalping is just that you are scalping a little out of the middle of the move. Notice how I said the middle of the move NOT the top or bottom!
We believe that scalping the right way is to know how to read the bigger trend and pattern and only trade the scalper charts in the overall direction. The problem is that when you are looking at scalper timeframes there will be counter trend signals and it is your job as a professional trader to know those trades are counter trend with low odds and skip them. The best trades with scalping and the low odd trades that you skip.
Is your daily goal overriding logic? Just because you want to make a certain amount of points everyday does not mean the market will give you the opportunity to make those points. Again, it is your job to know the bigger pattern and if that pattern is basing out (contracting) then you must acknowledge that the opportunities might be limited and it is important to not force something that is not there.
Do you know the bigger pattern? Or are you just looking at the last 40 bars on a small time frame trying to figure out which high or low is a breakout?
Know that profit potential is limited with scalping so we must have realistic expectations on what the trade could produce.
How we scalp:
We break down each market into a different view. The TF, ES and NQ cannot be broken down the same they need to be broken down specifically for that symbol because they all trade differently with different ranges.
Simple Scalping Rules:
Only take a scalper in the direction of the 3 and 10 minute charts. If the 3 minute is green and the 10 minute is red there is confusion at that time and we do not want to trade confusion. We use the Kill Zone indicator for the 3 and 10 minute charts. In doing this we force ourselves to only trade with the strength of the market. Then we break down each symbol into our specific scalper chart and we have different entries for each symbol because they all trade differently.
If you are a breakout scalp trader know that the ES is probably the worst market for you. The ES is very hedged and everyone is trading it meaning; there are more opinions at every level, so it is a struggle for the ES to actually make a move on a scalping basis.
Remember that scalping is a very quick process so you want to trade the thinner volatile symbols like the NQ and TF. We want the whippier action so we can profit on minor price spikes. We know that everyone was taught to only look at the ES but try looking at the NQ and TF because the points are easier to get and the movement is faster.
People say that the NQ and TF are not liquid which not the case. Sure they might have less volume that the ES but this will work in your favor. Someone once told me that the NQ didn’t have enough volume for him to trade. Then he told me he was trading only 3 lots!
Think about that and how people are programmed to think something before they even try it for themselves. The point is sometimes with trading it is best to make your own conclusion because it is you trading and your money. Think about it do you really care if you buy a ES or a NQ? All we are trading is price it does not matter what the symbol represents.
Learn how to get the bigger direction then only scalp in that direction. With trading everyone is looking for a confirmation on the smaller chart but you might be looking at it wrong. With scalping you need the confirmation to be on the bigger charts because that is your confirmation. The point is having a fast indicator on the smallest chart will do you more harm than good.
If you do have indicators are on your fast chart try doubling or tripling the settings to make them bigger. We want to slow down the scalper chart and wait for trades not force or chase them. That is when trading turns into overtrading very easily.
Why do we need to know the bigger patterns and how to read them? So we know when to stop scalping long or short. Would you enter a long scalp right at a bigger resistance sell zone? You might say no, but without knowing that we are at that level how can you actually use the question and answer in real time?
Confirm with the Kill Zone indicator then use the Turbo Scalper indicator on the smaller charts for the best results!
Happy Trading,
www.eMiniSchool.com
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