Futures trading is a unique form of day trading because it is not as though you are trading a company’s stock directly or engaging in transactions associated with a currency valuation. Futures are a derivative type market. It is quite possible that many at-home traders do not really consider or care about the future price of grain unless the cost of food becomes unaffordable. So, in that sense, the underlying asset(s) traded in futures are often an abstraction. Many traders think about the E-mini vs. the Crude Oil markets in terms of tick valuation, quirky behavior, best times of the day to trade, and what is believed to encourage the most profit. Is there a disconnect from the big picture? Perhaps. Do many people think about where their money actually comes from and how the financial systems of the world are structured? One could say there is a huge disconnect here, but perhaps that is a topic for another time. Hopefully, the point has been made – one does not need to be a financial markets expert to successfully follow a trading system.
Likewise, we can view certain trading methodologies with a large lens. Various trading systems focus on various styles of trading: swing trading, scalping, intraday, and so forth; and this does not begin to describe the more technical aspects such as channels, oscillators, and other constituents of the larger “genres” of trading systems.
To scalp trade futures every day, one has to trade at a fairly rapid pace. After all, scalping means taking only a portion at a point in time. DayTradeToWin’s Trade Scalper trading system does just that – it’s profit-taking goals are smaller than the other systems they provide. A more conservative approach, per trade, has its benefits. However, one should consider broker costs per trade. NinjaTrader Brokerage should be able to provide a quote or estimation of all applicable fees per market, such as the E-mini S&P 500. At the end of the day, or even better – month or months – the trading system should demonstrate an acceptable level of performance.
In this video, John Paul from DayTradeToWin displays around five signals for the day. In the later portion, he shares a real-time scalping trade. He is using five contracts. These contracts act as a multiplier of profit and loss depending on which way the trade goes. He was fortunate the trade worked in his favor, resulting in over $300 for several minutes of waiting/trade management. With the E-mini, each tick is worth $12.50 and four ticks represent one point. Therefore, one point represents $50. Factor in the contract multiplier, and the profit target or stop loss and you can get a sense of the financial goal and risk per trade.