What are the Best Markets and Times for Scalpers?

Screen Shot 2014-06-17 at 11.12.19

Video Transcription:

Hello, traders. Welcome to the Scalping Course and the first module, “Introduction to Scalping”. Now in this lesson, we’re going to teach you what are the best markets and times to scalp. Remember that we already said that we need… We are seeking volume and volatility for us to be able to scalp, right? Because what we are trying to achieve here is take profit from small movements all throughout the session. So it’s actually very important for you to know when are the best times to scalp and what instruments you need to choose to scalp with.

So let’s start by asking us this question: “Why is it so important to choose when and what to scalp?” And first of all, liquidity. We need to trade during very liquid hours. Liquidity brings volatility to the market, which means faster, bigger moves for us to profit from. When there’s no volume, there is a lack of liquidity, so the market is very thin. And in a thin market, you actually can have big moves, because one big order will move the market in a thin environment. But that’s not what we’re looking for. What we are looking for is a very comfortable liquidity and volume to trade to. And since when we scalp, we use defined take-profit levels, we want those levels to be hit as fast as possible for us to be able to jump to the next setup. And this is key. Remember that because we are scalping, we are using a larger order size. And because we are using a larger order size, sometimes we might use a bigger percentage of our buying power. So we can’t have a ton of positions open at the same time. So we want our targets to be hit fast, so we can jump into the next setup, and so on.

When to Scalp

Not only it’s important to choose when to trade, but what instrument to focus on. We can scalp actually any financial instrument we decide to. For instance, future stocks, bonds, etc. Anything that’s tradable in the market, we can scalp it. But we want to choose the ones that are being heavily traded. Again, we seek volume. Without volume, price will not move and scalping a very thin market can be dangerous. And here’s why scalping a very thin market can be dangerous. Remember that we use defined profit-taking levels, but we also use defined stop-loss levels. And let’s say that we go long on a very thin market just because we have what seems to be a great setup. Then we have a big sell order that hits the bids. That will make the price crumble and our stop-loss levels might not get filled because of the lack of liquidity at the time. So it’s very, very dangerous to actually scalp a very thin market. What we want is a heavy volume, so price follows the ladder when it goes up and down. We are protected if the market goes against us. And we also want volume because we want our targets to be hit fast and over again and over again.

Now, we will also focus on the economic calendar and high-impact events on the wires. And we are not going to be actually scalping these events, but what we are going to be doing is piggybacking the volume that comes with these high-impact events. Remember that these high-impact events always tend to bring more volume into very specific instruments — mostly gold, major payers, and sometimes stock indices. What we’re talking about here is simple. Before you start scalping the market, you just go to the economic calendar, and if you have heavy news coming to the wires from the Bank of England, you are going to be looking to trade the GBP with the GBP/Yen, or any Great Britain Pound payer. And the same goes with the heavy or high-impact events from the Fed. You are going to choose to trade gold, USD payers, and maybe the ES, which is the E-mini contract of the S&P 500.

And you are going to learn how to do this later on this course. For the time being, I just wanted to point out the importance of choosing the time to scalp, the instrument to scalp, and how to find volume in the markets.

Screen Shot 2015-05-11 at 14.05.24

Now let’s continue with this lesson – the best time to scalp and the instruments to choose. So it doesn’t matter where in the world you are. You can always find times to scalp the markets. Just take a look at this trading session calendar. There’s two times the two sessions overlap. Here’s where you will find the biggest and fastest moves with the better setups. Right here, you can see that the Sydney and the Tokyo sessions overlap for about 4 hours. And right here, you can see that the London and the New York sessions overlap for about 4 hours, too. So it’s in these times of the date that you will find the highest volatility for you to scalp.

Now it’s not only important to now when you will find this volatility, but also what instruments you are going to be trading. During the Sydney and Tokyo overlap, you might to focus on the Aussie Dollar payers, the New Zealand Dollar payers, the Japanese Yen payers, and the Nikkei if you’re trading Futures. And the best time to scalp though is during the London and New York overlap, because with the New York Open comes the Chicago Board of Trade and the Chicago Mercantile Exchange Volume and the New York Stock Exchange Volume, which account for the biggest liquidity during this overlap. Now during this overlap, you can actually or virtually trade any assets that are traded in any market. But we will teach you which ones to choose and which ones will make you profitable in the long-term. But of course any stock listed on the New York Stock Exchange, any Futures Contract on energies, metals, financials, or stock indices, and of course virtually any major currency payer.

Comments are closed.