Spreads and Scalping - How to scalp while trading spreads


#1

If you want to scalp trading Nadex spreads, first thing is to know what a scalp is. A scalp is entering then exiting for a quick small profit as opposed to staying in for a longer trend move. Typically a scalp can be around 10 - 15 ticks. This also applies to spreads.

To go for 10 - 15 ticks Darrell recommends using Power Play setups with Near The Money - NTM daily spreads. Remember that Nadex daily spreads are nice and wide and the intraday are narrower. Therefore, there is a greater distance where the spread’s price will be considered NTM and be moving the closest to the speed and in line with the underlying market. As price nears the floor and ceiling, the spread’s price movement slows down until time gets closer to expiration.

Power Play setups, and additional powerful setups eg. Power X and Power Sling Swing trades often go for decent moves. Be sure to trade your chart and not take profit based on what you want to make. Set your stop, trail it, or take profit based on what your chart is telling you. Your goal should not be to make a certain $ amount. Your GOAL IS TO TRADE WELL.

Sometimes you will make 5, 25, 50, or 150 or lose 30 etc. ALWAYS trade to trade well and the ticks will come.

Remember the movie the Karate Kid, and his training wash on wash off, wipe on, wipe off, lol. He built up muscle memory and strength being disciplined and doing a job well.

Understand too, the smaller the move you go after, the tighter you need the bid offer spread to be, and the faster you want the contract to move. Focus on the wide spreads, the dailies NTM for speed (not for how long in the trade), and make sure the bid offer spread is 5 or less ticks when scalping and going for 10 - 15 ticks.

A high number of ticks, for example say 50 ticks, can just as easily be made trading 5 contracts going for 10 ticks.