Scalping on futures, features of applying the strategy in practice
Almost every novice trader has at least once heard about this style of trading called scalping.
The main distinguishing feature of this trading method is its high profitability, compared to passive investments and long-term earning strategies.
Successful scalping on futures can actually be the key to monthly growth of your initial investment by 15-20%.
However, we should not forget that high risks are an integral part of short-term trading with the fixation of insignificant financial results.
What is scalping in the futures market?
The use of scalping strategies in practice involves working with low chart periods and opening trades with an insignificant financial result recorded.
This factor is a significant obstacle to the correct operation of indicators. Even the use of classical methods technical analysis at low periods of the chart in most cases it is not justified.
This trading style is applicable to any type of financial instrument.
Features of using scalping on futures
There are several rules developed by successful and experienced traders that must be followed when using scalping strategies in everyday trading:
1 . Maximum control of the level of risks - To do this, you will need to exclude from trading dubious methods of optimizing losses, which include the Martingale and averaging strategies .
The risk per transaction should be no more than 0.5% of the capital, and the issuance of safety orders is mandatory.
Constant monitoring of the current market situation even in the absence of open trading positions.
The practical application of scalping requires extreme concentration and the ability to quickly make trading decisions. That is why this style of trading is considered to be the pinnacle of trading skill.
2. Work only with liquid assets, such as futures for currencies, precious metals or commodities.
The fact is that these assets experience the greatest volatility , which creates favorable conditions for making significant profits during trading.
In a calm market, scalping in the futures market is ineffective, since insignificant profits are “eaten up” by the commission of the broker and the exchange itself.
3. Mandatory use of high leverage, which will significantly increase the profit potential.
The integrated use of indicators is an integral part of short-term strategies, and it is important to combine the work of trend analytical tools and oscillators.
In addition, experienced traders recommend using cluster charts to accurately determine target levels and monitor changes in trading volumes.
Conclusion
It is worth saying that novice traders should consider the practical application of scalping strategies exclusively in demonstration mode.
Otherwise, there is a high risk of losing the entire deposit within the first month. Effective use of scalping on exchange futures requires solid trading experience. To acquire basic skills in working with financial instruments, only long-term earning strategies .
At the same time, it is permissible to hone your short-term trading skills on a demo account. You should switch to working with real funds only after several months of receiving stable profits. Otherwise, the result will not meet expectations.