• Skip to primary navigation
  • Skip to content
  • Skip to footer
Daniels Trading

Trade Futures, Spreads and Options with Confidence.

Top Navigation

  • Open a Futures Account
  • Sign Up
  • Log in
  • 1.800.800.3840

Primary Navigation Menu

  • About
    • Who We Are
    • Services
    • Risk Disclosure
    • COVID-19
  • Trade
    • Broker-Assisted
    • Self-Directed / Online
    • Request Pricing
  • Hedge
    • Ag Marketing Plan
    • WASDE Analysis
    • Grain Resources
    • Livestock / Dairy Resources
    • Request Pricing
  • Invest
    • Automated Strategies
    • Managed Futures
    • Request Pricing
  • Advisories
    • GENERAL / FUNDAMENTAL
      • DT Newsletter
      • Insider Market Advisory
      • Turner’s Take Newsletter & Podcast
    • TECHNICAL ANALYSIS
      • The Cullen Outlook
      • Data Feed Trade
      • Jarboe Trading Journal
      • Trade Spotlight
    • AG MARKETING
      • Cattleman’s Advisory
      • Technical Ag Knowledge
      • Turner’s Take Ag Marketing
    • THIRD-PARTY RESOURCES
      • CFRN
      • Moore Research Center, Inc. (MRCI)
      • OptionWorks®
      • TASMarketProfile.com
  • Education
    • CME Group Resource Center
    • CME Group Offers
    • Small Exchange Resources
    • Guides
    • Frequently Asked Questions
    • Order Entry Handbook
  • Blog
    • Futures 101
    • Ag Marketing
    • Tips & Strategies
    • Trading Advisories
  • Resources
    • Trading Software
    • Quotes and Charts
    • Futures Calendars
    • Contract Specifications
    • Margin Requirements
    • Futures Calculator
  • Accounts
    • Apply
    • Access My Account
    • Funding
  • Contact
 

Keys to Becoming a Successful Scalp Trader

April 15, 2021 by Daniels Trading| Tips & Strategies

Scalping is a trading strategy designed to harvest small gains repeatedly to secure long-run profitability. Markets that feature consistent liquidity and volatility are ideal for implementing scalping strategies. As a result, scalpers commonly target such futures products as WTI crude oil, the E-mini S&P 500, and gold.

Although benefits like limited risk and regular cash flow are attractive, trade-related efficiency is vital to success. In this blog, we’ll cover a few tips on how to optimize live-market efficiency and profit as a scalper trader.

Develop a True Scalping System

Scalping systems come in a wide variety of formats and are based on countless methodologies. Although some traders choose to scalp fundamental items such as economic reports or the daily market open/close, a majority of strategies are rooted in technical analysis. However, no matter the basis, a true scalping strategy does the following:

  • Identifies a high volume of trade setups
  • Provides concrete trade management guidelines
  • Aligns risk to reward with long-run profitability in mind

At the end of the day, the success of any scalping strategy depends on precisely executing a high volume of positive-expectation trades. Thus, to make money as a scalper trader, it is important that your strategy identifies an abundance of trade setups, provides a clear-cut management structure, and focuses on beneficial risk versus reward scenarios.

Learn how our powerful software can empower your trades.

Aggressively Attack Latency

For scalpers, latency is the enemy. Anything that hinders the flow of data to and from the exchange enhances latency and undermines the strategy’s efficacy. A few profit-killing elements created by undue latency are the reception of untimely pricing data and increased order slippage. Unfortunately, both of these items negatively influence sound decision-making and sustainable profitability.

If you’re going to engage the futures markets as a scalper trader, then eliminating undue latency is a critical task. Here are a few tips on how to do just that:

  • Keep your computer hardware modern and in good working order.
  • Always update your trading software to the current version and remain glitch-free.
  • Perform periodic internet “ping” tests with brokerage and exchange servers to monitor the strength of your connection with the market.
  • Secure direct market access (DMA) to interact with the exchange free of any intermediaries.

Each of these precautions will promote efficiency by reducing trade-related latencies. Issues such as data bottlenecks and brokerage server crashes are out of your control, but it is crucial to eliminate any and all user-side latency issues.

Find an Ideal Target Market

After you have built a scalping strategy and addressed trade-related latency, it will be time to select a market. As we mentioned above, the best markets to scalp have two attributes in common:

  • Liquidity: Deep, liquid markets are ideal for scalping strategies. They feature strong order flow, which promotes tight bid/ask spreads and low slippage rates. The robust participation ensures a higher degree of efficiency when entering and exiting the market.
  • Volatility: To create a large number of trade setups, a market needs to exhibit consistent price action. Without frequent pricing fluctuations, or at least a moderate degree of elasticity, it can be challenging to find enough scalping opportunities to sustain profitability.

It is nearly impossible to understate how important market selection is to a scalper. Thin, quiet markets are best avoided in favor of deep, active venues. Without adequate market depth and consistent pricing volatility, making money as a scalper trader is a Herculean task.

Are You Ready to Give Scalping a Try?

Among the various trading styles, scalping is a unique discipline. Unlike day, swing, or long-term trading, scalping requires the utmost precision to generate intermediate and long-term results. Although scalping can be difficult, many market participants view the strategy’s limited risk and inexpensive nature to be very attractive.

Are you ready to try your hand as a scalper trader? If so, the service suite at Daniels Trading has you covered. Featuring live quotes, robust technology, and product-specific expertise, Daniels Trading has everything you need to make your scalping career a lucrative one.

Demo DT Pro Today

Filed Under: Tips & Strategies

About Daniels Trading

Daniels Trading is division of StoneX Financial Inc. located in the heart of Chicago’s financial district. Established by renowned commodity trader Andy Daniels in 1995, Daniels Trading was built on a culture of trust committed to a mission of Independence, Objectivity and Reliability.

Subscribe To The Blog

Footer

Site Navigation

  • Frequently Asked Questions
  • About Us
  • Customer Reviews
  • Contact Us
  • Futures Blog
  • Open a Futures Trading Account
  • Media Resources
  • Fund Your Account
  • Legal Notices

Contact Us

StoneX Financial Inc.
Daniels Trading Division
230 South LaSalle Suite 10-500
Chicago, IL 60604
+1.312.706.7600 Local / Int'l
+1.800.800.3840 Toll-Free
+1.312.706.7605 Fax

Connect with Us

Trustpilot
Risk Disclosure
  • Risk Disclosure
  • Privacy Policy
  • California Residents Privacy Notice
  • Terms of Use
  • Back to top