Updated November, 2024
What is Futures Scalping?
Futures Scalping is a specific tactic used by traders for capturing small quick price moves. The goal is to accumulate point gains, little by little using rapid fire, in-out trades with quick targets throughout the day as opportunities present themselves, vs. taking positions in an attempt to hold for bigger targets (often called runners). Your typical scalp targets attempt to grab 1-2 points out of a sudden price move while utilizing tight stops of equal or lesser distance. Scalp trades can last only 30 seconds to a few minutes.
What is Futures Scalping Good For?
Scalp Trades can be utilized in a variety of ways in your trading approach. Some traders exclusively employ scalp trading in their methodology while others may use scalping as a way to build a few points of risk capital and as a means of testing the waters early on in the trading session. Taking a few high probability scalp entries can help a trader make up a drawdown from a previous stop-out in a non-trending market. (How do you eat an elephant? One bite at a time.) Or maybe a trader has had a fantastic high-point scoring day, and going for a few well positioned, 1-2 point Scalp Trades can be a nice way to put a little icing on the cake. And don’t forget, that during sketchy price action in an erratic, non-trending market, Scalping may be the ONLY way to score any points during the day if you are going to participate in the game.
The Pros and Cons of Futures Scalping
Like anything else, there are advantages and disadvantages to the Futures scalping approach. One advantage to scalping is that it may be a superior way to pull profits out of a tough market. A dull market may provide little trending action, but instead lots of up and down wiggles and waves during the session that can be exploited utilizing quick in and out Scalp Trades. And some beginning traders might find it easier to master these quick trades with easier targets, helping them to build their confidence while getting the mechanics of order placement down.
The obvious negative to scalping is that if you are always taking your trades off the table at fixed targets of 1-2 points, you will never be able to participate in a massive trend move that could make you 20 points when holding a runner. If you are doing lots of in and out Scalp trades during the day you may end up paying a higher ratio of commissions per points gained, however this is not really the big concern some people immediately think it is, because if you can only make money scalping and can’t making any money attempting to hold runners in a non-trending market, then the debate about commissions is a moot point.
Futures Scalping Could Be More Work
Finally, Scalping may take more work to win the same amount of points. For instance, a trader that goes for runners may be able to pull 6-8 points out of the market with 1-2 well placed runners while the scalper may need 10-15 trades to net the same number points – (the number of trades is totally dependent on how many stops get taken in the process). On the other hand, a skillful scalp trader may be able to pull a desired quota of points out of a non-trending market within the first 2 hours of the session, while a trend-trader might have to sit around all day long attempting to catch the trend runners, in the end not catching anything.
A Futures Scalper Must Maintain A High Win Ratio
To be profitable over the long run with Futures scalping, a trader must maintain a high win ratio and be vigilant about preventing catastrophic losses to their account, which means ALWAYS taking stop-outs quickly. Like a disciplined sniper, you as a scalp trader will be taking one-shot, one-kill entries, not trusting the market further than you can throw a grand piano. (One big accidental drawdown could take you 20-30 scalp trades just to get back to break-even). All scalp trades should have a predefined hard stop-loss, as you never want a trade to get away from you and wipe out a weeks worth of your winners. A high win ratio is necessary to be profitable in scalp trading.
3 Types of Futures Scalp Trades
There are literally hundreds of different entry setups that traders could potentially use to Scalp the Emini Futures, however they all breakdown into one of 3 main groups. (1.) Breakouts, (2.) Pullbacks, (3.) Fades. So for instance, many scalpers play price breakouts from visible congestion zones for example. At times the market gets locked down tight in between a rock and a hard spot of support and resistance. Scalpers attempt to jump on board when they see the market setting itself for quick and forceful move out of that congestion zone. Some times scalpers employ scalp setups that occur on price pullbacks in a trending market. When the market is experiencing a strong intra-day trend, more often than not, after the first big momentum wave up or down, we see a short rest break occur in which price will pullback or retrace a certain distance. The savvy scalper knows just when to enter the market ahead of a trend-continuation pop, and grab a point or two as the trend wave attempts to resume. A final way to scalp the market is to fade strong price moves as they run out of steam and encounter resistance or support levels. These are counter-trend scalps and can be taken right at the point a trader thinks the market is ready to make a quick reversal of at least a few points.
Integrating Scalping Futures Into Your Trading
After experimenting with Scalping concepts on SIM mode for awhile, you as a trader may wish to incorporate Scalp Trading into your daily toolkit of Emini Futures Trading Strategies. You should decide if you are going to dedicate all of your trading to scalp trades or include them in with other forms of Emini Trade Entries, from larger targets or holding runners during strong trends. You will also want to review for what purpose you wish to include scalp trades into your approach and in what manner you wish to use them. It might be to build a few points of risk capital in the morning while market direction is unsure, make up some drawdown on a full stop-out, or putting a little icing on the cake on a winning day.
The great thing about Futures trading is that it can be whatever you want it to be – and you can decide on the right mix and types of trades you employ in your approach. Futures Scalping is is great way to get started as it is the least risky way to play the market in the beginning.. and it also comes in useful when we go through dull or erratic patches in the market. Best to think of scalp trades as just one part of a balanced diet.. where the larger 4+ point moves are like the meat and potatoes and your scalp trades are like low hanging fruit. Easy to grab and sweet at the end of larger meal. As you get more experience in the market you will find that a healthy mix of these two approaches to day trade is really the way to go.
Futures Scalping Tips
Start off on Sim
If you’re a beginner Futures scalper you definitely want to start off on Sim (another term for paper trading) and the good news is that just about every broker and platform these days offers Sim trading. Scalping Futures might seem easy based on what you’ve read or seen on the Internet, but it’s not. First of all you need to get familiar with your trading platform and how to place trades and set stops. Learning how to scalp futures involves getting the mechanics of your trading down pat and that takes time and practice. Plus you need to experience all sorts of different market conditions because sometimes the price action moves slow and other times it’s so fast that ES can move 4+ points in the blink of an eye.
Trade the Micro Contracts
Most traders that are learning to scalp Futures should trade MES or MNQ. MES is the Micro Contract for ES and the movement is equivalent to $5 per point per Contract. ES is $50 per point and should only be traded by experienced Futures traders with large accounts. Even if you are trading with a Prop firm, you should trade MES or MNQ because of the drawdown limits.
There are several benefits to trading the Micro Contracts when scalping Futures:
1) You can trade multiple Contracts and scale out of scalp trades, shooting for bigger targets or runners with some contracts.
2) You can adjust your position sizes based on market conditions and the overall market environment. When the ATR’s and ranges in the market are smaller, you can trade more contracts without having to use wide stops. When the market is volatile and maybe MES is moving 8-10 points every 5-minutes, you can trade smaller size and reduce your risk.
3) Scaling multiple Contracts allows you to get your trades to breakeven quickly by moving your stop.
Avoid Overtrading
If you’re a Beginner Futures scalper I guarantee you are going to have a tendency to attempt too many trades. It’s partly human nature and part myth that an active Futures day trader is supposed to be trading all the time. Take it from me – someone with a decade of experience. The more selective you are with your trades, the better off your results will be. One of the #1 ways new Futures traders end up blowing up their accounts, is by trying to trade every wiggle on the chart.
Another tip for a new Futures scalper is to set a max drawdown limit for each session. And it should be small to start – not just the daily limit on your Prop account. To get the proper perspective you might think about setting a maximum number of trades you allow yourself to take in any one session and also a max drawdown amount. Forcing yourself to set these two limits will go a long way to helping you maintain a proper regimen and add some structure to your trading.
Develop a Strategy and Methodology
When you first start, as mentioned above, you are going to want to click a lot and just buy and sell over and over and that’s fine – when trading on Sim and learning the mechanics and getting familiar with your trading platform. But as you move on to trading live, it will become apparent that the only way to be successful scalping futures is to use a strategy. You want to have structure to your trading and not just try to make decisions on the fly. Scalping Futures using complete discretion is extremely difficult, even if you have the best trade setup ever invented and the best Futures scalping indicators.
Introducing the PowerEmini Power Scalper System.
Let me be perfectly honest… Scalping Futures is pretty tough for beginner traders.
That doesn’t stop everyone from trying to sell you expensive “training courses” or trying to get you to “join a Discord trading room”. But you’ve probably discovered by now that these things just don’t seem to pan out in the end. The Futures market moves so fast at times, there’s almost no way to scalp Futures based on alerts called out in a trading room.
We created our Futures Scalping Software as an alternative to “trading rooms” because of all the pitfalls and drawbacks.
First of all, trying to replicate scalp trades from a trading room is obviously hit or miss. As fast as the ES moves there’s just no way someone can “call out a trade” that gives you time to react on a consistent basis.
You and I both know ES can move 2-3 points in the blink of an eye.
In addition, sitting around in a trading room listening to someone talk for hours gets tedious quickly. After a while it just becomes repetitive and you’ve heard the same things over and over. A lot of Discord Trading Rooms just end up as distractions with so many people posting comments. When you’re scalping Futures you need to be focused on the charts and the price action.
Trading Rooms aren’t all they’re cracked up to be in most cases – especially when it comes to Scalping Futures.
This is why our Automated Alert Software is a much better way to approach scalping Futures.
The PowerEmini Power Scalper System.
The Power Scalper algo is different than anything else out there.
It’s automated on the back-end and it gives you “range breakouts” every 20-minutes that you can use to scalp futures – day and night.
The Power Scalper is Designed to Be Traded Off A 20-Second Chart
This way you are zoomed into the leading edge of the price action and trading at the “micro level” using the 20-second chart. The system generates a new Dynamic Trigger Range every 20-minutes. So you are trading off 3 candlesticks every minute and when the price breaks out of the range, it presents a new opportunity.
Have you ever traded off a 20-second chart? It opens up a whole new world to scalping and we developed this “system” to take advantage of that. Imagine the level of precision you can achieve trading off the 20-second chart. But keep in mind that the Dynamic Trigger Range is what makes it feasible – without that it’s useless to try and find trade setups off that small of a timeframe.
This Futures Scalping System Consists of Two Parts.
1) The 1st is what we call our “Dynamic Trigger Range” automatically calculated by our back-end indicators. The Trigger Range uses current real-time “market structure” to determine the zone where price is likely to break out of and go on to make a quick price move.
When the price is trapped inside the range it’s a “no trade zone” because the price action is just noise. We enter a scalp trade when the price breaks out of this range – Long on a break past the Range High and Short on a break below the Range Low.
2) The 2nd part to trading our Futures scalping system is knowing exactly when to enter the trade – and how to set stops and targets. This is the “execution strategy” which is just as important as a trade setup.
You can’t attempt to scalp ES Futures by just “winging-it”. Maybe you’ve already learned that.
You need trade setups that work – coupled with a consistent strategy for trade execution and money-management.
While everyone else is trying to sell you “training” or “indicators” for thousands of dollars – we include both for our users – at a fraction of the price. We include our NinjaTrader indicator because we don’t believe in upsells. We don’t have different “price levels” – our members get everything we have with no big up-front cost.
These strategies are designed to work with the Scalper Alerts in our software and take everything to a new level.
If you’re not using the “Delta Neutral breakeven” strategy for your Scalping – you’re doing it wrong.
I explained why in an article which you can read on our Blog.
We spent the last 5-years refining our existing indicators into a revolutionary new Scalper System and you won’t find anything else like it anywhere.
Armed with Precision Trade Setups from our Desktop Alert Software, specific entry techniques we’ve developed, and the powerful Futures trading strategies in our training videos, you’ll finally be equipped with everything you need to be a successful Scalp Trader.
You’ll have an end-to-end decision support system.
Last thing…
I hate to break it to you – but Scalping involves a slight degree of discretion. In other words there’s just no way for everyone to replicate exact trades in a fast-moving environment like scalping ES or NQ. No group of traders will have the same results and that’s simply the nature of the business.
Reaction times, slippage and no-fills are always going to vary.
No trading system will achieve the same results in all market conditions. That’s why there’s no such thing as the Holy Grail.
Individual traders use different trade sizes and configurations and may vary their approach from time to time based on the market environment. One of the best things about our system is that it allows for some flexibility so you aren’t locked into only one way to trade.
A successful Scalp Trader stays in tune with the current market environment and that’s where discretion comes in. If the market is dull with low volume and trading in a sideways choppy range, a smart trader knows to avoid getting chopped up and wait for conditions to improve. Discretionary traders gauge market conditions and know when to trade aggressively in a hot market, and when to back off or sit on the sidelines. Again, that’s just the nature of the market and it’s your job to develop a feel for the price action and trade accordingly.
To be a successful scalper you need the right tools and a consistent strategy – and then you have to make it work for you.
This is exactly what our service will give you you. All you have to do is take it for a test-drive and give it a try for a month – trade it on Sim or with the Micro contract – track your results and prove to yourself that it works.
Range Breakout Trading With New Trade Setups at 20-Minute Intervals
Our Unique Scalping Strategy uses a 20-second chart and our revolutionary Dynamic Trigger Range. Trading off the 20-second chart is perfect for Scalping because we’re zoomed into the price action on the micro-level.
Here’s What Makes This System So Unique:
1) It’s super-easy to Trade Along With This System.
Just open the Alert Software and check the Countdown Timer. You will know exactly when the next trade setup will occur. There’s a Trade Alert at 9:20 AM (Eastern Time) in pre-market and then then the first Alert of the Cash Session is at 9:40 every day (10 minutes after market open). After a trade is completed just check the Countdown Timer and you’ll know exactly when the next trade setup will hit. That frees you up to do other things, maybe grab some coffee or make breakfast and you’ll never miss an alert. You don’t have to sit in front of the screen watching every wiggle on the chart all day because you will have a timed regimen for trading. Every 20-minutes throughout the day you get a new trade setup.
(The Micro Trader 20 algo runs around the clock 24/6 when ES is trading – but we recommend trading only when there is sufficient volume and price movement)
2) You can trade either the MES Micro Contract or the ES Contract with this system.
We recommend that you start off with the MES Micro Contract to get the hang of trading along with this system and work your way up to the full-size ES contract. Starting off with MES will help you build your confidence and prove that it’s working for you, scoring points and profitable. Trading MES involves very little risk since it’s only $5 per point. Anyone can start trading Futures with a small account (a couple grand) and very little risk. MES is the perfect instrument for beginners learning the ropes. Build your confidence trading live with the Micro contract.
3) The Entry and Exit Strategy is Completely Mechanical – No Guesswork.
As you’ll see in the training videos, once the Countdown Timer runs down to 0:00 a new Dynamic Trigger Range is generated. Now we get ready to trade a breakout of that range – whichever way it breaks. Once the price breaks out of the Dynamic Trigger Range we simply monitor a 2-bar range for an entry. As soon as we get a 1-tick penetration of the most recent 2-bar range we take the entry. Once the trade is working, we look for 3 higher lows above the entry (for a long) to move the stop to breakeven. We’ll show you several other strategies you can use for managing trades in our documentation.
4) The Strategy Can Hook You Into Some Huge Runners.
While we are playing off the charts and ranges on the micro level, many times you will hook into a big runner – early on in the move. Frequently when the price breaks out of the micro-range it will go on to make a substantial impulse move. Using the strategies we show you in our video Training sessions, you can learn how to stay in and capture BIG points when the market is trending. Taking entries zoomed-in on the micro level can get us into a trade right at the beginning of a big move. The Trailing Stop strategies we use keep us in as long as the trend persists.
4 Advantages To Trading with the Power Scalper
– Focus in on periods of higher probability price action
– Trade at the micro precision level with tighter stops
– Gets you in a trade at the early stage of a BIG move
– Set your trading activity to the clock
Think about this – at 9:20 AM Eastern time (10 minutes before the cash session begins) the system gives you a new Trigger Range. Some days the pre-market is dull and some days there’s action. You can decide if you want to trade that one or just wait until after the open. Then each and every day at exactly 9:40 Eastern (10 minutes after the open) the system will give the 1st “Alert” of the cash session. Our back-and algorithm analyzes the Market Structure at that very moment and creates the new Dynamic Trigger Range.
Now we have something to work with…
What you’ll do is monitor the price action for a break past the Range High or Range Low. When you see price breaking out of the range use the 2-bar entry strategy to get in, set your stop and use one of the ATM strategies we’ll show you to set your stop. Keep in mind that the “entry trigger” to get in the trade won’t likely happen immediately following the “reset of the Trigger Range”. It could take a few minutes or longer before price can break out of the range. As long as the price is stuck inside the Trigger Range there’s no trade. You don’t have to take every single trade – there will be another one coming along in 20-minutes.
Take a few trades in the morning when there’s decent market action – then step out for some lunch. If the afternoon seems dull call it a day. Some days there might be a lot of good price action early on but then things flatten out for the “lunchtime lull”. No worries, just hold off for a bit and when things start to pick up, you know there’s another trade setup coming right up – every 20-minutes throughout the trading day. Trade more when there’s lots of volume and price-action and trade less during dull, narrow-range sideways markets. There’s always another trade coming down the pike and you know exactly when it will happen.
Every 20-minutes our back-end system isolates and analyzes the current “market structure” and creates a new Dynamic Trigger range to trade off of. The Countdown Clock in the Alert Software shows you exactly when the next Trade Setup will be ready.
In the 5-Years we’ve had the Power Emini Alert Software on the market, this is the most unique, cutting-edge algo we’ve ever created.
The Power Scalper in the Power Emini Desktop Alert Software runs on the following symbols: ES, NQ, YM, RTY, CL and 6E.
You can trade any of the Micro Contracts along with the Alerts in the software.
However we strongly recommend focusing your scalp trading on the Micro Contracts and specifically MNQ. NQ trades a bit more erratically than MES and is more conducive to scalp trading.
We think the Power Emini Momentum System is better for trading MES because it shoots for bigger point gains and is much easier to trade – especially for beginner Futures traders.
You Won’t Find An Easier To Use Trading System Anywhere
The Power Emini Alert Software gives you an easy to follow – highly accurate trading system.
Scalp Trade Range Breakouts
– Stand-Alone Windows Desktop Software
– You place trades on your own platform with your own broker
– No big up-front cost and no commitment
– No Upsells, Everything is Included in the price
– Takes less than 2-minutes to install
– Alert software includes both the Power Scalper and the Momentum System
PowerEmini ES Futures Daytrading Alert Software