This page will provide all the information you need to get started trading the new PowerEmini Power Scalper System
May 5th, 2023 – Please read this section first.
On April 18th, 2023 we released a brand-new version of the Alert Software 4.7.0 and NinjaTrader 8 companion indicator. The new version is the culmination of over 5-years of work – since we first introduced the Power Emini Alert Software in its current form. As such, some of of the documentation / Help was created a couple / few years back. But it’s still completely relevant. So we are leaving a lot of it up – and also revising lots of other parts.
The Momentum System section of this site is mostly updated with all-new material, corresponding to the new v4.7 software. The Scalper section will be undergoing revision as we move forward, however most of the videos and documentation (including below) are still completely relevant to trading with the system. So bear with us and be patient. The scalper training and videos are extremely time consuming and labor intensive and “re-doing” a lot of the training would only change the dates and numbers – the concepts are still the same.
With that said, there are some very important points we want to make up-front about trading the scalper – before you dive into all the training.
The concept of the Power Scalper is the same as the Momentum System. We are looking for a breakout of the current range – with enough follow-through to get to at least the first target – and breakeven. Since the Momentum System is the flagship algo in the software – and trading the scalper is based on it – the better you understand how the Momentum System is designed and works, the better your success will be trading the Power Scalper.
DO NOT attempt to trade every single Range Break in the Scalper
We didn’t design the Scalper so that every single range break you see is expected to continue in the direction of the break – and score you big points. The idea is to “be very selective” and use the range breakouts to get you in on the leading edge of a move that has a good chance of following-through.
You have to gauge the market conditions and ATR’s to decide where to set stops and targets.
Avoid Dull Market Conditions. Certain times of day aren’t as conducive as others. Dull markets are not easy to scalp. If the range is like 2-4 points there’s no action in the market – best to avoid trading. If the market is basically trading sideways on a 5-minute chart – avoid trying to scalp range breaks until conditions improve.
To trade the Scalper successfully, you want to adjust your strategies based on the width of the range and the action in the market at the time. In other words if the range is just a couple points, the price is likely to just chop around on both sides of the range and you “shouldn’t expect” that all of a sudden you’re going to get a huge move in the direction of the range break.
In fast / volatile markets you will see days where the ES 5-minute price bar ATR’s are like 6-10 points. It makes sense that you would want to trade differently in those conditions. In other words if the 5-minute ATR’s are 10 points, you don’t want to use a 6-tick stop, you’ll just get knocked-out from normal price fluctuation.
The amount of “traction” that a range break will get is based on the volume, activity and participation in the market at the time. Avoid trading dull lunchtime or overnight Globex ranges. Adjust your expectations based on the width of the current range you’re trading.
Fast markets are a LOT better to trade tham slow markets, where the price is just meandering around with no visible trending action. The key to trading the scalper successfully is to gauge the market conditions and only attempt to trade range breakouts when the market itself is demonstrating decent price movement. Sure there are times in dull markets where the price can drift out of the range and move several points or more, but if the participation is low, it’s less likely the “participants” are going to run the market significantly in the direction of the range break.
Dull market conditions are pretty easy to spot on the chart – and we all know what a fast market looks like. Fast market are where the points are scored and slow, dull markets are where you get chopped up.
So the idea isn’t that every single range break, every 20-minutes “around the clock” is going to a big winning trade. The idea is that when the market is about to make a nice / significant trending move in one direction or the other, it’s going to definitely break out of the range – and just keep going. So you have to be – want to be – selective. DO NOT OVERTRADE just because you think that’s what scalping is supposed to be.
The 20-second range can get us in on the cutting-edge of any potential directional moves.
Watch This Video to Learn How to Trade with the Scalper
(Click the Play Button)
The ES / MES Power Scalper System runs on the ES-S tab in the Alert Software
The Scalper is Designed to Be Traded Off A 20-Second Chart
We want to be zoomed into the price action and trading at the “micro level” using a 20-second chart. The system generates a new Dynamic Trigger Range every 20-minutes.
A New Dynamic Trigger Range is Generated Every 20-Minutes
When the countdown timer in the Alert Software reaches 0:00 the system will automatically create a new Trigger Range and plot 2 vertical lines on your NinjaTrader Chart. If you are using a different platform simply plot 2 horizontal lines on your chart at the Range High and Range Low.
When the price is inside the Range it’s in the “no trade” zone. We look to take an entry when the price starts breaking out of the range. It may take a few minutes or even longer before the price can start breaking out of the Range (we play the break in either direction – Long or Short).
There are times where the price stays trapped inside the range for extended periods of time – typically in a dull sideways market – and we want to avoid taking trades at times when the market is telling us that it’s unlikely to get a breakout that gets any “traction”. In a hot market you will see the price break out of the range and never look back. High volume, active participation, trending markets are the best environment to trade in and the Power Scalper system will get us in right at the beginning of big trending moves when they occur.
NOTE: When you first open the Alert Software the timer will always start at 20:00, and then it will “sync up” with the scheduled “range resets” when the very next reset occurs. For example you open your Alert Software in the morning at 9:15 AM Eastern Time and the timer starts counting down from 20:00. The back-end system timer is programmed to reset the Dynamic Range at 9:20 AM Eastern time, so your timer will “sync up” at 9:20 and the countdown will start from 20:00 again, and remain in sync with the range reset timer on our server as long as you leave the alert software open from there.
3 Types of Entries To Look For
There are several different types of entries we can look for when the price breaks above the top or below the bottom of the range. The first is the initial breakout which can occur within the first few minutes of a new range being generated. This would be trading right above or below the top or bottom of the “edge” of the range. Since it’s perfectly valid to take multiple trades on the same range, we can also look for a pullback towards the edge of the range. Say the price breaks out of the top of the range and you take a trade and complete that trade a few minutes in, you might look to take a second trade after a pullback to the edge of the top of the range. We find that using an 18-period simple moving average can also help us locate good entries when the price pulls back and to the 18-sma and then makes a move off of it.
4 Basic 20-Second Chart Patterns
Here are 4 different types of chart patterns you are likely to see on the 20-second chart and the entries for each are explained below.
The 2-Bar Range Breakout
With the 2-bar range breakout we are looking to take an entry 1-tick past the high (or low in the case of a short) of the previous two bars or candles – that have broken outside of the range. You must wait until the bar closes before you know where the high or low of the previous bar will be. This strategy is useful for taking an entry right at the edge of the Trigger Range as price begins to break out.
Long-range or Large-range Bars
Be wary of taking an entry right away after a long-range bar penetrates a Trade Barrier (the upper or lower end of the Trigger Range). Frequently you will see a pullback after a long-range bar and we can look to play a technical pattern that develops afterwards.
Pullbacks and Trendline Breaks
Many times you will see the price break out of the Trigger Range and then it works its way back towards the top or bottom of the range. You don’t always have to take an entry as soon as price breaks out of the range. Sometimes it’s advantageous to let the price consolidate and form a standard technical pattern that we can use to take the entry. The example below shows a standard trendline break entry after a consolidation above the range.
18-Period Simple Moving Average Touch
We’ve found that an 18-sma works well as a reference point on the 20-second chart. It can be used as an additional indicator to key off of when taking entries. In the example below the price initially broke out of the range and then consolidated as it ran into the 18-sma. As soon as you see one pullback that touches the 18- period sma you can look for another 2-bar range breakout entry.
Using Different Scalp Triggers
The core concept when scalping off the ranges is that we want to see price break out of the range and continue to move in that direction – what we call “traction”. In order to avoid pulling the trigger on a trade prematurely we want to see some “confirmation” that an attempt to break out of the range has potential to get follow-through. Here are some examples of price action you can use to trigger-in a trade.
The 3-Bar Breakeven Stop Move
Getting a trade to “breakeven” is one of the tactics we want to utilize to minimize risk. Once a trade is at breakeven we can’t lose money on the trade. Actively managing your stop is an important part of trading the Scalper strategy. The 3-bar breakeven stop trick is simply waiting until you see 3 consecutive “higher lows” (in the case of a Long trade) above your entry, you slide the stop up to the entry. IN the case of a Short trade you would move the stop to breakeven when you see 3 consecutive “lower-highs” below your short entry.
A 2-Bar Range Trailing Stop
Once price takes off in your favor – the first goal is to get to breakeven. Once you get to breakeven you want to actively manage your stop to capture as much of the move as possible – while attempting to stay in for a big move. The big wins with the Power Scalper strategy will happen when you get into a trending move that turns onto a big “runner”. This occurs frequently in the market and catching a runner clean up a lot of small stop-outs and commissions. Since we are playing on the micro level we want to give back as little as possible when a trade moves in our favor. Once you’re at breakeven you can start trailing the stop just below (for a long) the previous 2-bars.
The 6 Deadly Sins of Trading to Avoid
Alert Software and NinjaTrader Indicator Configuration
Here are the Parameter settings for your NinjaTrader indicator for the Power Scalper Strategy that correspond to the ES-S tab
The ES-S tab in the Alert Software corresponds to the ES Scalper choice in the “system parameter” setting in the NinjaTrader indicator. The Scalper system entry triggers off a 20-second chart.
Configuring a 20-second chart
NOTE: A 20 second chart timeframe isn’t a default in NT8 so you will need to click the time interval on your chart, then click “configure”. Select “Second” then select “15” over on the right – hit “edit” and change the “value” to 20. Click Apply and OK and now you have a 20-second chart available in your drop-down box for selecting the timeframe.
If your trading platform doesn’t support 20-second charts – such as Think or Swim – you can use a 500-tick chart instead.
Setting Up An ATM Strategy
Here is the recommended Default ATM to start off with. This ATM uses 2 contracts and employs our Delta Neutral Breakeven Stop strategy. The advantage to having an ATM set up is that as soon as you place an entry order – it automatically places a stop and targets for the trade. The stop protects you in case your internet goes out. In a fast market the 1st Target can get hit in the blink of an eye – before you have time to react manually. You can use this ATM as an example and set up a couple different ones to use in different market conditions.
The ATM strategy shown above starts with 2 Contracts and sets an initial 2-point stop. The first “Delta Neutral Target” is 1-point, where it sells 1 contract and then automatically moves the stop up 1-point (at that point the trade is at Breakeven). Then it goes for a 3.5-point Target on the second contract.
NOTE: When setting up that ATM you must set the same Custom Stop Strategy Parameters for both Target 1 and Target 2. See on the top image how the “Stop strategy” has “custom” for both – that’s where you set it.
Keep in mind that there are times where the “price action” is dull and may be trading in a narrow range – and a 3.5 Point Target isn’t going to be feasible. Under those circumstances you will want to drag the 2nd Target down, say to 2 points. The ES is not always going to make a big move when it breaks out of the range. You should be aware of current market conditions and adapt your expectation to the behavior and ranges you see at the time.
Also, once you have reached “Delta Neutral” and the first contract has been sold for a 1-point profit, you will want to actively manage the Stop on the remaining contract. You will want to move the stop along with price to protect profits. When you see 3 higher lows (in the case of a Long) you can slide your stop up to your entry, thus insuring at least a 1-point gain on the trade. (A 1-point gain on the first contract that automatically sold – and the second contract gets sold at your entry point).
Tips for Trading the Power Scalper System:
1) You are NOT going to be able to trade every Alert – so your goal is to be very selective. The Dynamic Trigger Range is going to shift every 20-minutes which is about 20 ranges per day during the cash session. Not every range breakout attempt will follow-through and go on to make a significant move out of the range.
2) In choppy markets you will see the price attempt to escape the Trigger Range – poking through it in both directions – but then price reverts right back into the range over and over. These are the type of choppy conditions you want to avoid. When the market is dull, low volume and range-bound (like around the lunchtime lull or during the summer doldrums), you want to trade when there is “action” – not during dull periods.
3) Most days it’s better to trade early in the day and then wrap it up for the day – don’t over-trade. The best price action and volume typically comes early in the day and things can get dull for a few hours around lunchtime on the East Coast. However there can also be some good price action in the late afternoon or if there’s some type of new that breaks. Wait for the price to escape the opening range.
4) Be extremely careful if you are trading outside normal market hours. Our back-end algos run around the clock but you want to trade YOUR preferred instruments during active market hours. Also be aware of extra margin requirements to trade the Globex session. Best to stick to normal hours, though occasionally the system will catch a significant pre-market move – usually if there is news or something driving big volume before the regular market open.
5) Trade on Sim for the first couple weeks at minimum. It’s going to take at least that much time to become familiar with the behavior of our system – and the nature of the Dynamic Trigger Range over multiple types of market sessions. You will need time to get familiar with trading using the Entry strategies and experience how price reacts around the ranges over different types of market sessions.
6) There are basically 4 ways to take entries – and each will have varying degrees of success in different market environments. The analogy we like to use is that if you are playing baseball and you are up to bat, you are going to swing differently at a curve ball than you would a fastball. You would swing the bat differently if you were trying to get a base hit than if you were trying for a home run.
– wait for a 2-bar range break past the Trade Barrier (conservative)
– wait for a 1-tick move past the high or low of the penetration bar
– place a limit order a couple ticks past the barrier (super aggressive)
– wait for a technical formation at or around the barrier to develop
(the Trade Barrier is the Range High or Range Low)
7) Since you are Scalping – be certain to take profits quickly when they are there. Also be sure to move the stop quickly when there’s a chance. If ES moves say a point in your favor it’s imperative to take a profit or sell a partial position – or move up the stop. This is why it’s called Scalping. Don’t be afraid to get stopped-out at breakeven.
Avoid Trading in Dull Markets
Here’s What Makes This System So Unique:
1) It’s super-easy to Trade Along With This System.
Just open the Alert Software and check the Countdown Timer. You will know exactly when the next trade setup will occur. There’s a Trade Alert at 9:20 AM (Eastern Time) in pre-market and then then the first Alert of the Cash Session is at 9:40 every day (10 minutes after market open). After a trade is completed just check the Countdown Timer and you’ll know exactly when the next trade setup will hit. (A “new trade setup” means that the software automatically calculates a new Dynamic Trigger Range that we will play off of). That frees you up to do other things, maybe grab some coffee or make breakfast and you’ll never miss an alert. You don’t have to sit in front of the screen watching every wiggle on the chart all day because you will have a timed regimen for trading. Every 20-minutes throughout the day you get a new trade setup.
(The Power Scalper algo runs around the clock 24/6 when ES is trading – but we recommend trading only when there is sufficient volume and price movement)
2) You can trade either the MES Micro Contract or the ES Contract with this system.
We recommend that you start off with the MES Micro Contract to get the hang of trading along with this system and work your way up to the full-size ES contract. Starting off with MES will help you build your confidence and prove that it’s working for you, scoring points and profitable. Trading MES involves very little risk since it’s only $5 per point. Anyone can start trading Futures with a small account (a couple grand) and very little risk. MES is the perfect instrument for beginners learning the ropes. Build your confidence trading live with the Micro contract.
3) The Strategy Can Hook You Into Some Huge Runners.
While we are playing off the charts and ranges on the micro level, many times you will hook into a big runner – early on in the move. Frequently when the price breaks out of the range it will go on to make a substantial impulse move. Using the strategies in the video above, you can hook into some huge moves, and capture big points when the market is trending. Taking entries based on the micro level can get us into a trade right at the beginning of a substantial move. The actively managed Trailing Stop keeps us in as long as the trend persists.
4 Advantages To The ES Scalper System
– Focus in on periods of higher probability price action
– Trade at the micro precision level with tighter stops
– Gets you in a trade at the early stage of a BIG move
– Set your trading activity to the clock
Check out this video for more tips on trading successfully with the Power Scalper
A new entry technique designed to help you fine tune your entries in fast markets and help you hook into runners. This strategy uses the Scalper algo and can be used on any of the symbols.