scalping profit

How to Profit from Scalping: A Winning Futures Trading Strategy

Digitex Futures
Trading
• Adam Todd
April 2, 2021

Digitex CEO Adam Todd has made his career on the back of a trading technique called scalping. It’s a highly successful futures trading strategy for short-term traders – under the right conditions. However, when the conditions are right, you can learn to win at scalping in any market. Here, Adam shares his tips and insights for how to implement your own winning scalping trading strategy. 

As a successful futures and sports betting trader, my trading style was always focused more on avoiding losing trades than on riding the winners. And the way I did that was to make my trades as short-term as possible. I discovered that the longer I held a position, the bigger the risk that my position would turn into a loser. 

There seemed to be a direct link between my success, and how little time I held a position before going flat again. The shorter the amount of time in a position, the better chance I had of that trade not being a loser. This was most likely due to the nature of my trade selection process which was to be flat for most of the time, occasionally darting in and out of the market stealing single tick profits from larger moves when momentum picked up.

My scalping strategy basically involved judging when the momentum is high enough to keep the move going for another 30 seconds. If I didn’t get at least a single tick profit within that timeframe there was no reason to stay in that trade.

Successful Scalpers Don’t Get Tied Up in Learning About the Asset

As a young pit trader, I had no idea what a Bund futures contract actually was or why it moved around so much. Later, as a sports betting trader, I wouldn’t even know the name of the horse on which I was placing and laying hundreds of bets. Yet, I would go weeks and sometimes months of full-time trading as a scalper without having a single losing day. 

Short-term scalping requires no fundamental knowledge of the underlying instrument on which you’re trading. As soon as you have entered a position you’re looking to exit it, hopefully with a one or two tick profit but willing to scratch it or lose a tick without any emotional attachment to the trade. 

This style of ultra short term, manual trading is labor-intensive and requires the full concentration and attention of the trader. You can’t be checking emails and looking on Facebook and reading random crypto trading articles while you’re scalping to win. 

Besides, you don’t need to know what’s going on out there. It doesn’t matter why a price is moving when you’re a scalp trader because whichever way it goes you’re going to be following it. 

Scalping shouldn’t be a contrary style of trading because the active approach means you can get yourself in a huge mess very quickly. The safest style of scalping is simply following the price, jumping in when momentum is at its highest and then getting out quickly. 

It’s actually better to have no opinion or knowledge of the long term price direction of the underlying instrument so that it doesn’t affect your ability to go against that opinion in these short term scalp trades.

How Fees Ravage Profits

The scalping style of trading described here is the easiest to learn, requires no specialized knowledge about the underlying instrument and will give you steadier, less volatile results. But the big problem is that this style of trading is particularly susceptible to the ravages of the maker and taker fee model of crypto futures exchanges. 

It was possible for me to successfully scalp trade traditional futures markets in this manner because the futures tick value of one tick on the Bund was 25 Deutsch Marks and the commission to buy and sell one futures contract was less than 3 Deutsch Marks and I got a scratch trade rebate every time I bought and sold at the same price. 

All I had to do was make one tick for every 10 round turns to break even, and anything I made over that was profit. It was a lot harder than it sounds. But it was possible because the commission fee to buy and sell one futures contract was one-tenth of the value of one tick. 

However, the taker fee model used on every other crypto futures exchange has established commissions that are astronomically high. Currently, my style of short term scalping to win is literally impossible. The commission cost of buying and selling one futures contract with a taker order is more like ten times the value of one tick. 

That’s absolutely crazy. It’s literally impossible to beat odds like that running against you. At the exact moment you enter a trade, you’re ten ticks offside already. There’s a built-in mechanical edge that you cannot beat, and which guarantees you will lose over the long run. 

On Bitmex, the taker fee is 0.075% of the notional value of the underlying instrument. That may look small, but if you’re trading with 100x leverage that’s actually 7.5% of the margin you put down to enter the trade. If you exit the trade with a Taker order then your trading fees are 15% of the order value! 

For example, total fees on a $1,000 trade with 100x leverage are $150 [100 x $1,000 x 0.00075 x 2]. How can you ever expect to beat a 15% edge working against you?

A typical trade for a short term scalper might go like this: the price starts moving fast so I enter a trade quickly with a taker order that either smash the bid or lifts the offer. Then I immediately place a maker order to join the bid or offer to get out. If it’s not filled within seconds then I’ll cancel that and lift the offer or hit the bid with another taker order to exit the trade. 

I entered the trade with a taker order so now I need to make ten ticks just to break even. And if I exit the trade with a taker order I’ve got to make 20 ticks profit just to break even. That’s just impossible for a short-term scalp trade. 

I can still place trades as maker orders only but it’s impossible to trade profitably when you’re limited to only maker orders. This is especially true in very volatile markets – like crypto – and you will constantly not be getting filled on the good moves. 

Simply put, the maker fee and taker fee model generate large commissions for the exchange and makes it impossible for profitable short-term scalping. A huge number of traders are unable to participate and the massive liquidity they would provide is suffocated by the exchange’s need to charge high fees on turnover. 

As a scalper, I shouldn’t be paying a percentage of the notional value of the underlying instrument. I’m providing liquidity and should be encouraged, not squeezed out of the market entirely.

How Digitex Enables Profitable Scalp Trading

The Digitex Futures exchange is a short-term trader’s paradise. With absolutely no trading fees of any kind on taker orders, traders are free to pursue day trading futures strategies like scalping that are not viable anywhere else, creating massive liquidity in the process. 

That liquidity isn’t constantly drained by the exchange in the form of commissions. Instead, it continues to churn around in the trading ecosystem until it is won by the better traders. As a result, the chances of becoming a winning scalp trader on Digitex are far higher because we’re not siphoning off commission fees as percentages of the notional value of traded contracts. 

The viral marketing potential of a futures exchange that doesn’t have any built-in mechanical edge working against its traders is massive. The effective deployment of user-generated content combined with viral marketing techniques is starting to create a very large and active userbase, further increasing liquidity. 

Living a Traders Dream

Successful trading is a dream of many millions of people and Digitex wants to help make many of those dreams come true. We hope that many thousands of people will experience the unbridled freedom and excitement of becoming a profitable short-term trader who gets to live a lifestyle that most people will only dream of. 

Imagine if you can consistently make $50 a day or $200 a day or $500 a day from trading? How much would that change your life and the lives of everyone around you for the better? 

If you want to start implementing your own successful scalp trading strategy with zero fees, sign up for an account now and start living the trader’s dream.

April 2, 2021
Digitex Futures
Trading

How to Profit from Scalping: A Winning Futures Trading Strategy

Adam Todd
scalping profit

Digitex CEO Adam Todd has made his career on the back of a trading technique called scalping. It’s a highly successful futures trading strategy for short-term traders – under the right conditions. However, when the conditions are right, you can learn to win at scalping in any market. Here, Adam shares his tips and insights for how to implement your own winning scalping trading strategy. 

As a successful futures and sports betting trader, my trading style was always focused more on avoiding losing trades than on riding the winners. And the way I did that was to make my trades as short-term as possible. I discovered that the longer I held a position, the bigger the risk that my position would turn into a loser. 

There seemed to be a direct link between my success, and how little time I held a position before going flat again. The shorter the amount of time in a position, the better chance I had of that trade not being a loser. This was most likely due to the nature of my trade selection process which was to be flat for most of the time, occasionally darting in and out of the market stealing single tick profits from larger moves when momentum picked up.

My scalping strategy basically involved judging when the momentum is high enough to keep the move going for another 30 seconds. If I didn’t get at least a single tick profit within that timeframe there was no reason to stay in that trade.

Successful Scalpers Don’t Get Tied Up in Learning About the Asset

As a young pit trader, I had no idea what a Bund futures contract actually was or why it moved around so much. Later, as a sports betting trader, I wouldn’t even know the name of the horse on which I was placing and laying hundreds of bets. Yet, I would go weeks and sometimes months of full-time trading as a scalper without having a single losing day. 

Short-term scalping requires no fundamental knowledge of the underlying instrument on which you’re trading. As soon as you have entered a position you’re looking to exit it, hopefully with a one or two tick profit but willing to scratch it or lose a tick without any emotional attachment to the trade. 

This style of ultra short term, manual trading is labor-intensive and requires the full concentration and attention of the trader. You can’t be checking emails and looking on Facebook and reading random crypto trading articles while you’re scalping to win. 

Besides, you don’t need to know what’s going on out there. It doesn’t matter why a price is moving when you’re a scalp trader because whichever way it goes you’re going to be following it. 

Scalping shouldn’t be a contrary style of trading because the active approach means you can get yourself in a huge mess very quickly. The safest style of scalping is simply following the price, jumping in when momentum is at its highest and then getting out quickly. 

It’s actually better to have no opinion or knowledge of the long term price direction of the underlying instrument so that it doesn’t affect your ability to go against that opinion in these short term scalp trades.

How Fees Ravage Profits

The scalping style of trading described here is the easiest to learn, requires no specialized knowledge about the underlying instrument and will give you steadier, less volatile results. But the big problem is that this style of trading is particularly susceptible to the ravages of the maker and taker fee model of crypto futures exchanges. 

It was possible for me to successfully scalp trade traditional futures markets in this manner because the futures tick value of one tick on the Bund was 25 Deutsch Marks and the commission to buy and sell one futures contract was less than 3 Deutsch Marks and I got a scratch trade rebate every time I bought and sold at the same price. 

All I had to do was make one tick for every 10 round turns to break even, and anything I made over that was profit. It was a lot harder than it sounds. But it was possible because the commission fee to buy and sell one futures contract was one-tenth of the value of one tick. 

However, the taker fee model used on every other crypto futures exchange has established commissions that are astronomically high. Currently, my style of short term scalping to win is literally impossible. The commission cost of buying and selling one futures contract with a taker order is more like ten times the value of one tick. 

That’s absolutely crazy. It’s literally impossible to beat odds like that running against you. At the exact moment you enter a trade, you’re ten ticks offside already. There’s a built-in mechanical edge that you cannot beat, and which guarantees you will lose over the long run. 

On Bitmex, the taker fee is 0.075% of the notional value of the underlying instrument. That may look small, but if you’re trading with 100x leverage that’s actually 7.5% of the margin you put down to enter the trade. If you exit the trade with a Taker order then your trading fees are 15% of the order value! 

For example, total fees on a $1,000 trade with 100x leverage are $150 [100 x $1,000 x 0.00075 x 2]. How can you ever expect to beat a 15% edge working against you?

A typical trade for a short term scalper might go like this: the price starts moving fast so I enter a trade quickly with a taker order that either smash the bid or lifts the offer. Then I immediately place a maker order to join the bid or offer to get out. If it’s not filled within seconds then I’ll cancel that and lift the offer or hit the bid with another taker order to exit the trade. 

I entered the trade with a taker order so now I need to make ten ticks just to break even. And if I exit the trade with a taker order I’ve got to make 20 ticks profit just to break even. That’s just impossible for a short-term scalp trade. 

I can still place trades as maker orders only but it’s impossible to trade profitably when you’re limited to only maker orders. This is especially true in very volatile markets – like crypto – and you will constantly not be getting filled on the good moves. 

Simply put, the maker fee and taker fee model generate large commissions for the exchange and makes it impossible for profitable short-term scalping. A huge number of traders are unable to participate and the massive liquidity they would provide is suffocated by the exchange’s need to charge high fees on turnover. 

As a scalper, I shouldn’t be paying a percentage of the notional value of the underlying instrument. I’m providing liquidity and should be encouraged, not squeezed out of the market entirely.

How Digitex Enables Profitable Scalp Trading

The Digitex Futures exchange is a short-term trader’s paradise. With absolutely no trading fees of any kind on taker orders, traders are free to pursue day trading futures strategies like scalping that are not viable anywhere else, creating massive liquidity in the process. 

That liquidity isn’t constantly drained by the exchange in the form of commissions. Instead, it continues to churn around in the trading ecosystem until it is won by the better traders. As a result, the chances of becoming a winning scalp trader on Digitex are far higher because we’re not siphoning off commission fees as percentages of the notional value of traded contracts. 

The viral marketing potential of a futures exchange that doesn’t have any built-in mechanical edge working against its traders is massive. The effective deployment of user-generated content combined with viral marketing techniques is starting to create a very large and active userbase, further increasing liquidity. 

Living a Traders Dream

Successful trading is a dream of many millions of people and Digitex wants to help make many of those dreams come true. We hope that many thousands of people will experience the unbridled freedom and excitement of becoming a profitable short-term trader who gets to live a lifestyle that most people will only dream of. 

Imagine if you can consistently make $50 a day or $200 a day or $500 a day from trading? How much would that change your life and the lives of everyone around you for the better? 

If you want to start implementing your own successful scalp trading strategy with zero fees, sign up for an account now and start living the trader’s dream.

Latest News

Top 5 Crypto Trading Strategies You Should Know About 1

Top 5 Crypto Trading Strategies You Should Know About

Digitex Futures
• Christina Comben
July 9, 2019

Choosing trading strategies can be tough, especially if you’re starting out. You’ll need to ask yourself several questions starting with how hands on you want to be, how great a return you’re looking for and how quickly–and how much stress you can handle. Choosing a trading strategy is probably one of the most important decisions you will make as a trader, so it pays to do some research before you commit. Continue reading

July 9, 2019
Digitex Futures

Top 5 Crypto Trading Strategies You Should Know About

Christina Comben
Top 5 Crypto Trading Strategies You Should Know About 2

Choosing trading strategies can be tough, especially if you’re starting out. You’ll need to ask yourself several questions starting with how hands on you want to be, how great a return you’re looking for and how quickly–and how much stress you can handle. Choosing a trading strategy is probably one of the most important decisions you will make as a trader, so it pays to do some research before you commit. Continue reading

Latest News

The Various Trading Styles and How They Work 3

The Various Trading Styles and How They Work

Digitex Futures
Trading
• Dave Reiter
February 20, 2019

One of the most difficult things to accomplish is becoming a successful trader. Based on industry research, approximately 80% of all traders lose money across all asset classes, including stocks, commodities, alternative investments, and cryptocurrencies. Why? Traders often lack the discipline or support to follow their trading approach on a consistent basis — and they frequently have a mechanical edge working against them.
At Digitex Futures, our mission is to produce more successful traders. We will help you become better through our state-of-the-art user interface and commission-free trading. And since our interests are aligned with our traders (we both want token appreciation) our exchange will increase your chances of winning over other futures exchanges. Continue reading

February 20, 2019
Digitex Futures
Trading

The Various Trading Styles and How They Work

Dave Reiter
The Various Trading Styles and How They Work 4

One of the most difficult things to accomplish is becoming a successful trader. Based on industry research, approximately 80% of all traders lose money across all asset classes, including stocks, commodities, alternative investments, and cryptocurrencies. Why? Traders often lack the discipline or support to follow their trading approach on a consistent basis — and they frequently have a mechanical edge working against them.
At Digitex Futures, our mission is to produce more successful traders. We will help you become better through our state-of-the-art user interface and commission-free trading. And since our interests are aligned with our traders (we both want token appreciation) our exchange will increase your chances of winning over other futures exchanges. Continue reading

Latest News

Are Traders Born or Made? 5

Are Traders Born or Made?

Digitex Futures
Trading
• admin
February 18, 2019

We wanted to learn a little more about our community. So we asked you guys your level of trading experience, what strategies and trading tools you use, and, most importantly, whether you think that traders are born or made. Thank you very much to the 1,600+ who took the time to respond to our survey. Here’s what we found out.

In Terms of Trading Experience

As you can see from the chart below, much of our community is quite new to the concept of trading. Some 32.1% responded that they were new to this, with 18.5% very experienced, and almost half, at 47.6%, with some experience.
This is great to know because Digitex is planning to lower the barrier for traders and make trading futures possible for anyone, whether they’re seasoned traders or beginners.
Once the platform launches, and in the run-up before, we’ll be putting out trading videos, how-to style articles, tips from Adam, and other educational material.
So, for those of you who feel like you want or need to know more to trade comfortably, don’t worry. You’ll get up to speed in no time and once you trade with the one-click ladder, you’ll never look back again!

Looking at Trading Technique

When we asked about your trading technique, an overwhelming majority of you prefer to trade manually, with just around 20% of you responding that you either use exclusively bots or both manual and bot trading.
Again, this is really useful information for us, and we’ll be putting out an article tomorrow about bot versus manual trading. This will give you further details about what they are and the pros and cons of both. Some of the most common bots used were Cryptohopper, Gunbot, and CryptoTrader.org.

What’s Your Trading Style?

There are plenty of different trading styles out there and we wanted to glean an idea of yours. While many of you may not have one particular style, it’s clear that day trading won out here, with some swing and scalp trading also among the results.
We’ll be exploring different trading styles in more detail later on this week, so check back here to find out what you don’t know and see what kind of style you think might suit you better.

Which Markets Do You Trade?

The really cool news for us from these responses is that, while cryptocurrencies overwhelmingly take the lion’s share when it comes to trading futures markets, plenty of you also trade Forex, stocks, and other markets.
This means that when we added additional traditional futures markets to the exchange, there will already be some experience and plenty of interest. Remember, we’ll be providing plenty of educational material to fill in any gaps. That includes the low-down on traditional futures markets as well.

When it came to exchanges, Binance, HitBTC, Mercatox, and Coinbase took the top four slots, with some other popular exchanges among our community including Kucoin, Bitstamp, and Bitfinex.

Are Traders Born or Made?

To really see the results of this, check out our Twitter poll below. An overwhelming 85% of you believe that traders are made. And we couldn’t agree more!

While a trader must undoubtedly learn to manage their emotions and not succumb to FOMO and FUD, with patience and practice, you can learn to become a successful trader.
This is what we plan at Digitex. To help as many of you become confident traders who can make a living from trading on our exchange. We want to provide financial freedom, success, and to produce a happy community of traders that grows and grows, as the token price rises.
Many thanks for staying with us, we can’t wait to see you on the live exchange!
PS – We’ll be contacting our winners this week who took part in our survey to receive the official Digitex Futures hat. Cheers!

February 18, 2019
Digitex Futures
Trading

Are Traders Born or Made?

admin
Are Traders Born or Made? 6

We wanted to learn a little more about our community. So we asked you guys your level of trading experience, what strategies and trading tools you use, and, most importantly, whether you think that traders are born or made. Thank you very much to the 1,600+ who took the time to respond to our survey. Here’s what we found out.

In Terms of Trading Experience

As you can see from the chart below, much of our community is quite new to the concept of trading. Some 32.1% responded that they were new to this, with 18.5% very experienced, and almost half, at 47.6%, with some experience.
This is great to know because Digitex is planning to lower the barrier for traders and make trading futures possible for anyone, whether they’re seasoned traders or beginners.
Once the platform launches, and in the run-up before, we’ll be putting out trading videos, how-to style articles, tips from Adam, and other educational material.
So, for those of you who feel like you want or need to know more to trade comfortably, don’t worry. You’ll get up to speed in no time and once you trade with the one-click ladder, you’ll never look back again!

Looking at Trading Technique

When we asked about your trading technique, an overwhelming majority of you prefer to trade manually, with just around 20% of you responding that you either use exclusively bots or both manual and bot trading.
Again, this is really useful information for us, and we’ll be putting out an article tomorrow about bot versus manual trading. This will give you further details about what they are and the pros and cons of both. Some of the most common bots used were Cryptohopper, Gunbot, and CryptoTrader.org.

What’s Your Trading Style?

There are plenty of different trading styles out there and we wanted to glean an idea of yours. While many of you may not have one particular style, it’s clear that day trading won out here, with some swing and scalp trading also among the results.
We’ll be exploring different trading styles in more detail later on this week, so check back here to find out what you don’t know and see what kind of style you think might suit you better.

Which Markets Do You Trade?

The really cool news for us from these responses is that, while cryptocurrencies overwhelmingly take the lion’s share when it comes to trading futures markets, plenty of you also trade Forex, stocks, and other markets.
This means that when we added additional traditional futures markets to the exchange, there will already be some experience and plenty of interest. Remember, we’ll be providing plenty of educational material to fill in any gaps. That includes the low-down on traditional futures markets as well.

When it came to exchanges, Binance, HitBTC, Mercatox, and Coinbase took the top four slots, with some other popular exchanges among our community including Kucoin, Bitstamp, and Bitfinex.

Are Traders Born or Made?

To really see the results of this, check out our Twitter poll below. An overwhelming 85% of you believe that traders are made. And we couldn’t agree more!

While a trader must undoubtedly learn to manage their emotions and not succumb to FOMO and FUD, with patience and practice, you can learn to become a successful trader.
This is what we plan at Digitex. To help as many of you become confident traders who can make a living from trading on our exchange. We want to provide financial freedom, success, and to produce a happy community of traders that grows and grows, as the token price rises.
Many thanks for staying with us, we can’t wait to see you on the live exchange!
PS – We’ll be contacting our winners this week who took part in our survey to receive the official Digitex Futures hat. Cheers!

Latest News