A scalping strategy for options

The format of scalping on options is a fairly common way of making a profit in this area of the market. The speed of trading and its high profitability results are the main factors that attract people to this method of trading. Today we will consider the effectiveness of high-speed trading, as well as a few practical examples of scalping strategies for futures contracts that could become highly effective tools for predicting the market using short-term contracts.

How reliable is the scalping strategy for options?

The question of reliability and effectiveness of this strategy for scalping on the market is primarily related to the effectiveness of the trading signals of the system, as well as the correct risk management. In addition, the reliability of this scalping strategy is tied to the professional level of the trading terminal and the parameters of the trading conditions that are available on the operator’s platform. By picking the right technical and trading parameters for the scalping strategy you can get fairly stable and high results using this trading format. Here are a set of recommendations that contribute to the effectiveness of scalping on options:

• Use platforms for trading from professional companies — in this regard, we recommend the terminal for futures trading from the our brokers rating, where you will find all the necessary technical indicators for scalping, as well as a set of highly effective forecasting tools
• Carefully and accurately calculate the risks when registering trading positions. The correct ratio of the cost of the trade to the volume of capital will help you avoid critical losses and drawdown in your account
• To conduct trading in scalping mode, use a system with an efficiency level of at least 85% and maximum universality for all underlying assets

This list of recommendations will allow you to engage in high-frequency trading in a safe and profitable mode.

Scalping indicators for options

Market professionals recommend using technical indicators that are capable of generating signals on fast impulse changes in the price of an asset as forecast indicators for scalping trades on the futures market. In this case, the main trend indicators work perfectly, and they can be found on the many platforms:

This set of forecasting tools will allow you to build universal strategies for scalping on electronic options.

A scalping strategy for futures trades – practice

For our first practical example of a strategy for scalping on the financial market, we will show a system that uses a combination of settings of two trend indicators. This format of generating technical signals allows you to best assess the current market situation on the asset chart and opens up the possibility of determining the points of price quotes where the chart reverses to build corrections or new trends. So, let’s set the following technical forecasting tools on the asset quotes:

• EMA Indicators with technical parameters 10, 20, 30
• 2 MACD indicators — 50/75/9 and the standard configuration

We will use turbo trades with an expiration period of 120 to 240 seconds, and we will register the positions when we receive the following signals from the indicators:

For trades UP:

• EMA Indicators – a beam of movings reverses upwards on the chart after convergence in one point
• Indicator MACD 50/75/9 – the lines intersect upwards
• Standard MACD – the movings intersect level 0 upwards

Signals for trades DOWN will have the reverse building configuration. This scalping strategy format has a technical signal efficiency ratio of 90% and allows you to make the most stable earnings for short-term trading. It should be noted that the risk management parameters for this system are of the classic parameters – the maximum amount of trading funds for one trade should not exceed 3% of the total amount of capital.

Scalping in 1 minute

The next scalping strategy format for electronic options is designed to work with contracts that have the minimum expiration period of 1 minute. Here, trend indicators are also used with subtle settings parameters, allowing for the formation of two types of trading signals for turbo contracts. In this way, we will achieve high cyclicity of our technical signals and increase profit opportunities for scalping since this operating approach makes it possible to register contract packages. So, let’s install the following instruments on the trading chart:

• SMA 5 and 10 indicators — we use blue for the moving with a five-minute period of building, for the second technical tool we use the standard coloring.
• MACD indicator – standard

To register trades UP with expirations of 1 minute, we use the following types of technical indicator signals:

Signal for the 1st type:

• The technical movings of the MACD indicator intersect upwards
• The blue lines of the SMA indicator intersect the second moving upwards

Signal for the 2nd type:

• The MACD oscillator lines intersect level 0 upwards
• The SMA indicator movings diverge upwards on the chart without intersecting

Using these signals, you can register up to 40 trades with short-term options in one hour, of which 90% will close with a profitable result. This factor will make it possible for you to earn up to 300% per week on options scalping.

Let’s sum up — scalping with futures trades using the correct mode of risk management and in combination with an effective trading system is the most rapid way to increase your account balance.

TRY BINARY OPTIONS TRADING

“General Risk Warning: Binary options and cryptocurrency trading carry a high level of risk and can result in the loss of all your funds.”