Intraday Scalping

"What is scalping?". Simply put, scalping is a procedure which one makes a trade with a goal of only making a couple of points. Basically scalping is profiting from rather small moves in the market.

The majority of intraday scalpers tend to be futures players, as futures provide a liquid means of profiting from small moves in the market. Options traders can also perform scalping, but the options price does not always change as quickly as an index.

Below we have compiled a list of trades one could have made on April 23rd. These trades were not actually performed, but they are an example of how by following a set of rules for volume analysis and scalping one can make a handsome profit.

Remember, you can use our other indicators to do intraday scalping on many other indexes such as the NASDAQ 100, Dow Jones Industrials.

All of the above trades are either short trades (S1, S2, etc..) or long trades (B1, B2, etc...). There are two points were we found that, even though a trade could have been made, there was not enough information to make one. These points are I1 and I2, which signify indeterminate points. I1 was indeterminate because the index was trading fairly flat before the volume spike occurred. Because of this it was difficult to analyze which direction the index would move from that point. I2 was indeterminate because of a similar reason; the index was moving, but the volume moving average was fairly flat. This made it difficult to predict what the index would do next.

Below is a list of the trades seen above in more detail:

Time	Buy/ Sell	Ctrcts	Index Value	Theoretical Futures	Points Earned	Profit/Loss
10:01	S 1	3	1,111.20	1,118.10
10:08	B 1	3	1,109.20	1,116.10	+2	$1,500
10:28	B 2	3	1,106.10	1,113.00
10:32	S 2	3	1,108.10	1,115.00	+2	$1,500
10:55	S 3	2	1,110.20	1,117.10
11:04	B 3	2	1,108.20	1,115.10	+2	$1,000
11:17	S 4	2	1,109.20	1,116.10
11:24	B 4	2	1,107.20	1,114.10	+2	$1,000
12:44	B 5	3	1,105.50	1,112.40
13:28	S 5	3	1,107.50	1,114.40	+2	$1,500
13:35	S 6	3	1,108.60	1,115.50
14:11	B 6	3	1,106.60	1,113.50	+2	$1,500
15:35	B 7	2	1,101.00	1,107.90
15:55	S 7	2	1,099.00	1,105.90	-2	$1,000
Total Profit:						$7,000

Note: One earned point for S&P 500 futures (for one contract) gives $250.

1.63.1 8 Important rules to follow when index scalping with our volume indicators:

Do not open a position until the volume moving average (VMA) spike has been confirmed. Confirmation of a VMA spike is when it has leveled, or has begun to drop again.
Keep up with the current market trend. In an up-trending market, make more long trades, and conversely, in a down-trending market, make more short trades.
Always place a stop-loss order. We suggest a stop-loss of 1 or 2 points for index scalping.
Move your stop-loss orders when in profitable territory. By this we mean by this, is that when the index is moving in your favor and there is no sign it is stopping its movement, move your stop-loss. When you do this you are guaranteed your profit.
Don't make any trades in the first 30-minutes of market hours, or the last 30-minutes. This is because sometimes in these periods, the market can be difficult to predict due to the fact that there is usually a lot of volume in these periods.
Don't keep your futures positions open overnight. This can be very dangerous, as sometimes the market can open up or down several points and leave you with a substantial loss.
To be more conservative with your scalping, try to pay attention only to the larger VMA spikes.
Not every day is good for scalping. The market tends to generate very good scalping days the day after a large move in the market.