On a moonless night, with everything to lose, a fisherman somewhere in the world is easing his small boat into a harbor.

It’s a matter of survival. Nothing else.

Much like his father and grandfather before him – this is all he knows. Welcome to the life of a small scale fisherman.

In a fishing village in China you can find an entire community fighting to make it from one catch to the next. Founder, herring, fat greenling or yellow croaker. They’ll take what they can get.

Sound familiar? If you’re like millions of traders across the globe – you head into your market hoping for even the smallest of swings so that you can come away with more money in your account. Hopefully more than when you started.

The lure of trading is long forgotten. The monotony of trying to make a living one trade after another has now set in. The hours are horrible. The profits are microscopic. Setbacks can wipe out weeks, if not months, of hard work.

Yet scalpers persevere. Is there really a way to make consistent income scalping? Absolutely. It requires patience, the right strategy and the ability to manage risk.

Basic scalping strategies used in every market’s harbor

His name is Mr. Wang. He’s got medical bills to pay and he’s heading out to try and get his night’s catch – despite the prospect of being caught by local authorities.

For centuries the 562 people in his village enjoyed a quiet life – taking enough fish out of the ocean to make a decent living. Now all of that has changed as tourism and changing fishing rights have now set in.

If you’ve been scalping for a living, you’ve seen amazing change – both to your advantage and disadvantage – over the last decade. Machine traders driven by mammoth institutional funds now seem to drive the market.

This has essentially focused scalping on three approaches:

• Market Making: Buying the bid and selling the offer – basically trying to make the spread with each trade.
• Momentum: Taking large positions and trying to trade with the momentum with small market moves.
• Breakouts & Channels: The most common method for small accounts, looking for short-term (1-minute) charts looking for defined fluctuations – especially when price grinds along in a channel. Of course when price breaks out, you ride a wave for a very brief moment.

If you’re looking to make your daily catch with one of these strategies – there are some basics that you’ll want to have in place first.

Basics to have in place before dropping a line

You may be shocked to learn that 100 million tonnes of fish are eaten worldwide. That puts food on the table for around two and a half billion people here on planet earth. For many, this makes up at least 20% of their animal protein intake.

If ALL of your account intake comes from scalping, there are some basics that you’ll want to have in place before executing anything. These are the life preserver practices that will keep your account alive – even in the face of setbacks.

• Commissions: Additional round-trip fees are not your friend. A trading plan that details the number of trades you plan to take, your average time in trade – and what your profit target is – will be critical. If you make an entry without knowing this – you’ve taken the first step that many traders take to clearing out your account.
• Risk Management: No, that losing trade won’t turn around. More importantly, you can’t afford to wait and find out. Even if you have the depth in your account to ‘see how it goes’ – or even average into a losing trade, this mentality will cost you far more in the long run.
• Targets: Profit targets exist for a reason. If you’re concerned about leaving money on the table, then take a moment to reflect on the number of trades you’ve been in that were initially profitable but then turned against you. Set your target, and like your stop – honor it.

With that out of the way, let’s look at three strategies you can use to reel in a consistent daily catch.

Strategies to reel in consistent results

You’ve seen the pictures. Nets, spears, traps. Any and all methods to bring home a daily catch. Small scale fishermen around the world have spent generations honing their craft. There are even shrimping fishermen that go out on horseback. Whatever it takes.

When looking for scalping profits using the three main approaches, there’s one constant rule to apply: Keep it simple. And by ‘simple’, mind-numbingly simple.

You’re not looking for the latest five-factor concoction that some traders will brag about (you don’t usually hear them bragging for long). You’re looking for basic setup conditions that you can apply over and over.

For each of the primary approaches, the setup basics include:

Take the momentum that price gives you for short term Bid/Ask scalping.

• Bid/Ask: When working with high volatility markets like the CL, look for momentum shifts. When price starts to make its move in a particular direction, enter with a 2-3 tick target. Set your stop with nothing more than a 2-tick buffer. Keep in mind that you’re simply looking to cover the spread.

• Channel: Once price has established a direction, with a top and bottom that has been tested at least twice, you can create a channel to plot your entry. Using the CL example below – simply take the highs, duplicate your line and assign it to the lows.

Bollinger bands are also excellent channel guides for taking a channel trade. When the channel is tested again, make your entry – with the exit being the opposite side of the channel.

Showing pictures, talking about entries and exits – all after the fact – is easy to do.

Actually demonstrating a scalping system that you can lean on to make a full-time income is another story altogether.

If you don’t have a proven process, or even feel like you can consistently plot reliable market entries – take a moment and get some help. Not a three-week retreat to a village in the mountains, but a crash course that actually shows live trades from entry all the way to exit.

This way you’ll have a reference point that allows you to start managing your scalping trades with confidence and consistency.

Don’t face the same fate of the small scale fisherman. Enter your scalp trades and reel in your income like a seasoned angler.