Rachel Trader

Scalping Trading – Fast Profits?

Scalping Trading

Can you make money from the markets by scalping trading? If you don’t know what scalping the markets is, it is when you are in the markets for short periods of time and you look to take a small amount of points profit out of each trade with limited liability.

Recently I have been looking at a how you can make money from scalping trading the DAX.

Although this is not a strategy I have used before, I was interested to see if I could find a way to make it profitable.

If it was or is indeed profitable I wanted to create the strategy in full and add it to my member’s area.

Is Scalping Trading Profitable

Well, if we are looking over the last few weeks of my practising then yes it may be. However, as said this isn’t something that I have practised long term yet. But the theory is most certainly positive.

I have been monitoring the DAX with 30 minute candles to look for scalping opportunities.

I have used simple price action to look for entry points.

The entry positions I have found [sometimes opened a trade] have been mostly profitable.

I used a 2/1 profit loss strategy meaning that whatever the stop loss was, then I’d only take profit if the target of 2 x was met.

So if my stop loss was 20 points my target was 40 points.

So far this has been working well.

One of the downsides to this strategy that I can see at the moment is that you will need to pay close attention to the markets whenever you are looking to find a trade.

This means checking the chart every 30 minutes; although you can easily set a timer to remind you to do so if you are on the move.

On the up side, once you have found and entered a trade, you can walk away from the position. You will either win or lose [obviously]

The really good thing about this type of trading is that you are stacking the odds in your favour.

If you only ever get half of your predictions correct, you will make a profit over the long term.

This is because you are setting yourself up to earn double the amount that you could ever lose.

The only other downside that seems visible is that you will never be in on the large moves… but scalping trading is not like that anyway. You are in and out the markets very quickly overall.

Back Testing

I will do some detailed back testing over the coming week and will also look to keep finding trades as I go.

I will do a detailed update of my findings soon after.

At the moment though, scalping trading does look doable… although it may take some effort as in time wise to find the trades.