hi there, I am more into spread trading, but turning interested in scalping. i have never done any scalping before. Let's discuss what sorta approaches/strategies people use in scalping?
Kinda hard to do that now with high frequency trading and sub-pennying that you won't have access to: http://www.defendtrading.com/SubpennyinginDarkPoolsCompromisingNBBO.pdf
almost non-existent right now, scalping is based on interpreting order flow. watch and learn the L2 hard if you want to get into this but as a floor trader said on bloomberg or cnbc,there has been almost no retail inflow in the market for 15 mths straight
spread trading is simply scalping spreads- try and convert your strategy if you already have a winning one
The tape has been taken over by the bots - not like the old days. I have seen the term scalp used to define spread trading and trading quick moves off short minute charts. Either way learn something about tape reading if you want to do short term as your main edge. Also consider charting floor pivots, previous HOD and LODS, etc.
Scalping, if it means anything, is taking small or very small gains, with a high frequency, from a market as a practised form of trading. By definition a scalping trade is not going to last long. If it is an individual trading then a scalping trade may be inside a minute or it may last minutes. Lets go to practicalities for an individual trader. A market consists of gyrations in price, open to close, a gyration being a swing up followed by a swing down (or vice versa). I won't use the word scalping. But how could very short term trading be played? Lets assume a volatile and liquid futures market (eg NG, CL). You would set up a system with the following ingredients: a fairly fast chart configuration, medium paced triggers for 'buy' and 'sell' and fast triggers for 'buy' and 'sell', and a small target of points for each trade. Now to play. When the medium signal goes on say for a buy, you take the next fast signal for a buy. You run it to the target points and exit. You will find that this can be repeated several times in a session. In a corporate/professional enviroment you can use such a system as an introduction in developing a trainee (or you can assign him or her to this form of trading).