Emini Scalping - Why You Should Consider a Shorter Time Frame When Trading Index Futures

The index futures markets have seen a boom in trading participants over the last decade since their inception in 1997. Once only an arena for those with boat loads of expendable cash, futures trading is now used by small investors to make short term cash in the financial markets. The emini contract is a smaller version of the large index contract and brokerage accounts can often be opened for as little as $500 since margin requirements are much lower for the emini contract.

Index futures are highly liquid which makes them excellent trading instruments for capitalizing on daily market moves with multiple opportunities to profit everyday. Some traders will only trade the first hour and a half of the morning and return after the New York lunch hour has ended with floor traders returning to the exchange floors when action picks up once again. Others will often trade throughout the entire day although the lunch hour very often is slow but profitable trade set ups often appear during this time.

When people first start trading the index futures markets, they should always have a trading system in place. One such system or method often used by veteran traders is emini scalping. Scalping is a method that capitalizes on smaller moves with the participant entering and exiting positions very quickly. Time frames can be from a few seconds to a few minutes. Focus is entirely on "scalping" a few points and banking the profit quickly while reducing exposure time.

Rookies should concentrate on trading only one contract until they gain the confidence to increase the amount of contracts with each trade. By trading only one contract, losses are limited since the scalping method is designed to be a short term emini strategy which prevents large losses since the trader exits quickly if the trade goes against him.

By implementing a scalping methodology, the rookie eliminates the tendency to swing for the fences, trying to hit a home run with one trade. The trader knows if he starts the day committing himself to only scalp trades, he understands whichever way the market goes, he will be out of the market quickly within a few points of entry. Although profits will not be huge, neither will losses. Those just starting out very often blow out their trading accounts before they even begin to get a feel for the market because they don’t have a system in place to take them out of the market quickly should it turn against them.

With time, proficiency and confidence builds and the trader can begin to add additional contracts to increase profit potential. Although the scalping time frame does not change, additional contracts increase profits but can also increase the amount of losses. However, if the trader has followed a emini scalping methodology with one contract and tasted success, he should be equally successful with additional contracts added to each trade. Although scalping is used mostly by veterans, the method can be used by rookies as a way to learn how to trade emini contracts.

Are you searching for a way to increase your chances of becoming profitable in the index futures market? Do you have the discipline to stick to a proven system to become successful? Learn how emini scalping is used by experienced traders to profit in the emini futures markets on the S&P 500, NASDAQ and DOW exchanges.