FUTURES SCALPING
Overview
Take many small trades throughout the day, targeting 1-4 tick profits with minimal time in the market. Scalpers use speed and order flow reading to extract small edges hundreds of times per session. Requires the tightest spreads, fastest execution, and iron emotional discipline.
Setup
- 1.Trade only the most liquid contracts: ES, NQ, or CL where spreads are 1 tick and fills are instant.
- 2.Use a Depth of Market (DOM) ladder and time-and-sales to read real-time order flow.
- 3.Define a strict setup: VWAP reclaim, absorption at a key level, iceberg order, or bid/ask stacking.
- 4.Target 1-3 ticks profit with a 2-4 tick max stop — risk/reward is small per trade but must be positive.
- 5.Set a daily trade limit (e.g., 20 trades) and a daily loss limit — overtrading destroys scalpers.
Max profit
1-4 ticks per trade × many trades. Professional scalpers might target $200-500 per day on a small account.
Max loss
Defined by per-trade stop. Cumulative losses mount quickly if win rate drops — daily loss limit is critical.
Breakeven
Entry price plus commissions — commission costs are a major factor; negotiate per-trade rates aggressively.
When to use
During the first 90 minutes after the US open (9:30-11:00 AM ET) and the last 30 minutes before close (3:30-4:00 PM ET) when liquidity and volatility are highest.
When to avoid
During lunch hours (12:00-2:00 PM ET) — spreads widen and moves are choppy and directionless. Without a direct access broker with sub-millisecond fill confirmation.