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The e-mini scalping technique is an exciting blend of technical trading, fundamental trading, and efficient market theory, and it appears no two traders employ these components in exactly the same manner. However, in this feature, we will focus our discussion of scalping on e-mini futures contracts, and specifically, index e-mini contracts. While there are methods to scalp other equity and debt measurements, I believe index e-mini contracts have several advantages.

For large traders, scalping may refer to taking advantage of disparities in bid/ask prices of a particular equity. This is similar to arbitrage and is now achieved using computer-based trading instruments. With the emergence of Internet-based trading platforms, scalping quickly evolved into a trading technique that anyone could employ.

Now, modern e-mini scalpers predominantly enter the market either long or short in pursuit of 6-10 ticks, repeating this formula 6-8 times a day using high probability setups. This helps to accumulate a considerable daily earnings allowing scalpers, or “intra-day traders,” to adopt a range of tools including rate of change indicators, momentum oscillators, combinations of moving averages, and channel-based indicators. Of course, there are also less scientific tools such as Elliott wave theory and Gann Methodology – the list is extensive.

Regardless of the technology an e-mini scalp trader employs, their goal remains consistent – to snap up a small portion of a market move or a fraction of market momentum. This style of scalper tends to implement wider stops in their trading, typically preferring to trade in the direction of the trend, although there are some counter-trend specialists who prefer to trade against the trend; but they are a rare breed.

There is another type of e-mini scalp trader who prefers to trade a large number of contracts, attempting to gain only 3-5 points. Typically, these traders employ tight stops to protect against adverse market spikes. I find this style of trading to be less enjoyable because it places immense pressure on the trader to carefully choose their trades with precision, leaving very little margin for error.

In summary, we have examined a few different styles of trading that fall under the umbrella of scalping – from large traders looking to exploit disparities in bid/ask prices, to intra-day traders hoping to earn 6 to 8 trades every day with 6 to 10 points on each trade, and to traders who trade very large contract lots for minimal gains.
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Ihab Salloum