While I no longer scalp much due to the time commitment scalping generally takes (particularly in instruments most effectively traded during the NY session), I used to scalp a great deal when I was in spot forex.
The simplest scalping technique I have come across and used exclusively was the "fingertrap method." Although I am not sure who is the originator of the technique, I learned about it from DailyFx's James Stanley. There are no doubt numerous videos of his scalping sessions on YouTube and the like where you can look at what he does with this method with real-time trades. There are various subjective components to the strategy that are difficult to communicate here, so it is probably best to spend some time watching his videos to get an idea of what these are (angle of EMAs, separation between the EMAs, etc.). Although he uses the technique for trading spot forex, I can see no particular reason why it couldn't be used with /ES, /NQ, /ZB, etc., although scaling up to a position size such that you can "peel off" portions of the original position may be more difficult in some instruments than others.
From a charting standpoint, it is about as simple as you can make it and consists of two EMA's -- the 8 and 34, along with horizontal support and resistance drawn on from various time frames that might be relevant to where price is at during the scalping session.
The rules are quite basic:
1. Look at the 1H chart. If the 8 EMA is above the 34, look to go long; if below, look for short opportunities.
2. Look at the 5 min. chart. Look for trades in the direction of the 1H trend.
3. Entries. For entries, look to enter on a break of the 8 EMA.
4. SL Management. For longs, place your SL below the last swing low on the 5 min; for shorts, above the last swing high. Assuming that price moves in the direction of your trade, move the SL in the direction of the trade so as to get to a break even stop as soon as practicable. Continue to move your SL in the direction of your trade.
5. Peel offs. To the extent you are able, peel off pieces of your trade as price moves favorably in the direction of your trade (e.g., 1/3rd after 4 ticks, 1/3rd after 8 ticks, etc.), leaving the last third to ride if your stop is at or above break even.
6. Additions to position. Consider adding to your position if you are at break even as prices moves in the direction of your original trade on breaks of the 8 EMA, moving the SL to BE for the entire position (original trade + additions) and continuing to peel off portions of your position as price moves favorably in your direction.
this time i googled scalping futures.....
second hit.
as the algo becomes ready i figure i shold check out existing knowledge before i reinvent scalping
NaughtyPines
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@gb50k, The way I look at it: it "mechanizes" the point of entry (retrace to the EMA) and the conditions under which an entry should be considered (5m trend consistent directionally with 1H trend + lack of nearby horizontal support/resistance such that the reward is arguably limited or subjectively "not worth it").
dime
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Interesting! Any research studies done on the probability or win rate for this technique?
@husinabdul, I think it works best with spot forex and don't do much of that any more since it requires more screen time than I'm willing to devote to trading. If I scalp nowadays, it's usually /ES (e-mini S&P futures) using 1 min. TICK.
husinabdul
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@NaughtyPines, Yep 1 min timeframe is a good place to grab some quick ticks. I think this method is better implemented on high volatile pair (forex) and as you said also on ES.
second hit.
as the algo becomes ready i figure i shold check out existing knowledge before i reinvent scalping