Summertime trading time again! For many newer traders, that means huge losses as they try to trade the same system in different market conditions. There’s no doubt that traders need to change their approach for these markets – and there are many benefits to taking a shorter term approach to your trades.
There’s a popular misconception that scalping is something you should do when you are more experienced as a trader. In the majority of proprietary firms, scalping is considered the first step to getting profitable as a trader.
One advantage of scalping is that it isn’t about guessing what the market is going to do next. It’s about trading the ‘right here, right now’. That’s a very different proposition from what most aspiring retail traders are trying to do – figure out where the market will turn around.
Another other benefit of scalping is the rate of repetition. You experience more trades per day and so progress at a much faster rate than someone taking 1 or 2 trades a day. If you are recording the results properly and getting to know what works for you and what doesn’t, more trading experience will see you improve at a much faster rate.
As we are slowing down into the summertime trading period, we have another good reason to consider scalping. On many markets, momentum fades and the days can be very choppy after the initial move off the open. That’s a lot of time sitting on your hands, which you could use to take mid-range scalps or at least start to develop your scalping skills. If nothing else, it’ll stop you from taking boredom trades which is common when a market slows down.
So where to start? Well, there’s a lot of videos on the Jigsaw site and our recommendation is to start with the following video from Alex Haywood at Axia Futures (a London based prop trading firm). In the video Alex gives a huge amount of information on how to read order flow in different environments. This video is from a webinar hosted by the futures.io forum which was sponsored by us here at Jigsaw…