trade future

Every trader needs to start off as a scalper. A scalper is a trader who expects a move from point A to point B in a relatively straight line. The scalper’s aim is to get in and out with the least amount of wiggles and noises. Scalpers will tend to actually be the most risk-averse because their understanding is that the longer one is in a position, the more risk is inherent in the trade. Therefore, a scalper wants to enter and exit in the shortest time possible. The scalper style is most effective in an environment with high volume and wide channels. Volume gives the scalper liquidity and the opportunity to exit into the buyers on longs and to buy into the sellers on short covering. Scalpers love to play panics and wider-channel trends and ranges. Scalpers will always get out early, which is just an indication of their innate ability to exit without disturbing a stock’s momentum. Scalpers will mainly use the 1-minute and 3-minute charts, with a background view of the 10 or 13-minute charts.

A scalper is an expert at selling into the buyers and buying into the sellers. Excellence of timing and execution is the forte of a good scalpers. Scalpers are either taking profits or trimming losses. When supports overshoot, a scalper will be there to take advantage of the overshoots and scalp out their short covers into the sellers without thinking twice. When a pivot resistance overshoots, a scalper will take that opportunity to sell into the buyers without thinking twice because he knows that the pivot is a resistance and that the result is likely to be a backfill and a short-term peak. Scalpers are aware at all times, and this is their strength. They leave little to chance. This is an absolute foundation that every trader must start off with, for better or worse.

After being successful with scalping, a trader will eventually realize he may have quite a lot of money on the table by getting out on the shorter time frame signals. When the 1-minute stochastic peak, a scalper will take his profits before the inevitable retracement. However, after the retracement, the stock will continue to move with the trend. Eventually, a pure scalper may realize this. He will then try to use his ability to scalp by cashing out the majority of his shares based on a 1-minute chart but keeping a small number of shares to move with the 3-minuter trend, with stops in place if the 3-minute premises warrant it. This way, he gets the immediate gain from the scalp and also gets to take advantage of the trend along the way because he has pared some shares out to lock in profits but also maintained a smaller position for a longer time frame to take advantage of the trend. This trader is now moving to the stage of being a combination trader, which is a trader who can scalp and pare initial gains while riding a smaller number of shares for a larger gain.