How to Be a Dirty Little Scalper

hey guys Jared Wesley here of live Traders and it's that time of the week it's lecture time guys this week we're going to talk about how to be dirty little scalpers okay markets are ever changing and sometimes markets are in a great wonderful giving mood and you can sit there and buy something that's basic and just ride it to the moon or short it to the bottom Etc and then there's other times where the market Isn't So giving right and we have that Mantra you can only take what the market is willing to give well lately the Market's been a little bit less giving and pivoting quickly here and there go up a little down a little Etc so I want to talk about scalping specifically and how you guys can take advantage of these smaller moves have a shorter lower expectation because everything in trading is about expectation so today I'm going to talk about five or six very detailed things to help you be a better scalper so that you'll add more tools to your toolbox so when the market is in a giving mood you can use those tools when the market is a little bit more choppy and sideways Etc you can use these tools and then what happens there's no Market that you won't be able to profit from there's no Market that you won't be able to handle and that's the goal get so good at this business that nothing stops you from making money just about every single day all right if you like these videos click that like button smash Hammer that subscribe button I'm Jared Wesley of live Traders let's get to it [Music] this week's lecture topic is how to be a dirty little scalper um you know we've been talking recently about ever-changing markets and markets are always changing but oftentimes that change in the market is a subtle change not a huge change and the markets have been fairly consistent for the last 10 or 15 years they've been straight up since 0-9 pretty much obviously we had the the pandemic pullback and things of that nature but for the most part the markets have gone pretty much up um so there are rare but it happens where there's a material change in the market and I think recently we've seen some of that and some of the longer term holds two three four five are they still work Stefan crushes it I mean crushes it with 4r targets uh Jeff Yates still does a lot of the 2R targets so you can it can still be done um but sometimes there's different approaches and different ways to handle these market conditions so one of these um is being a scalper and there's lots of different definitions of scalper micro scalper day scalpert and whatever um I'm talking about one two and five minute charts predominantly today now we'll look at higher time frame charts because we always do but I'm talking about taking advantage of one to five minute charts um and taking 30 50 cents maybe a dollar from some of these but I'll get into that in more detail in a minute so how to be a dirty little scalper and what are some of the really important things that you need to consider when scalping and I'm going to tell you straight up some of these things are things that we don't talk about much and some of these things will go against what I teach brand new Traders because brand new Traders are supposed to be systematic and robotic because you have to prove you can do something first before you get the leeway or the flexibility to deviate from those very very strict rules okay so while some of you initially might think this doesn't sound like a pts when you're talking about stop losses it actually is because when you've taken pts you'll know in the money management chapter there is the tightest available stop loss 10 cents right that you know the page I'm talking about then there's the 20 cent stop loss then there's the 40 Cent stop loss we're going to talk a little bit about that I probably should have thrown that slide in today but I didn't so but before we do any of the file sanity stop segment right let's talk a little bit about when will the insanity stop the world is going crazier and crazier so why wouldn't Traders get a little crazy right get a little Jiggy once in a while um this one doesn't have a specific number attached to it but I don't know that it needs to right I have lost a lot of money what do I do forget all this jargon in here just read the I became overconfident I didn't put stop losses and this is what killed me at least the person recognizes the deficiency I didn't use stop losses I didn't remember what I told you guys that most Traders are gamblers well this is what you're doing when you're not using a stop loss you're gambling right so this person actually had a liquidation event right and then it comes down to this second pair or third paragraph whatever it is and goes then the second liquidation arrived today think about that it wasn't bad enough that you blew up your account once you had to do it twice right fool me once shame on you fool me twice shame on me right I've lost everything I'm extremely angry at myself at my stupidity I want to disappear guys I'm only showing this because this is the general modus operandi for people they mess up a little bit and it hurts so what but they really need to mess up badly right Jordan said it earlier you won't change until the pain to stay the same becomes greater than the pain to change and for most people the pain to change is something nasty like blowing up an account losing lots and lots of money and then you're like yeah I'm dumb you knew you were dumb in the middle of it you just couldn't help yourself I can't imagine telling anyone from my family about this this was a considerable amount of money what do I do the answer for that is simple learn from it that's it don't ever do it again but people do this all the time and I hate admitting it's just stupid but at least this person admits it I'm so angry haven't we seen this before I'm so upset at myself why guys why tell me why why is this person so upset at themselves is it really the money sure the money matters of course they lost to consider what is it really the money tell me why this person's so upset at themselves and then we'll move on from this they knew and they still did it that's part of it that that's a piece of it it's because they thought better of themselves it's true they thought not me that happens to other people I'm too smart for that not me look at that idiot over there they're dumb but not me I'm Different that's why they're so pissed off so sure you could say it goes back to the ego and you sure you could say they knew better but they did it anyway no they had such a chip on their shoulder that they're like oh that crazy stuff is what other people do I'm better than that and again it goes back to your ego of course and we talk about this in professional trading strategy and psychology chapter you are not as good as you think you're not as smart as you think and it doesn't matter if you're the smartest person on the planet you're not immune to stupidity because you're a human being and humans do stupid [ __ ] we do the question is at what point in the process do you catch the stupidity and nip it in a button stop and be like this is this is really bad do you catch it after your account's down five or ten percent or do you catch it after your account's completely blown up and you have to do it twice this person had to do it twice you see where I'm going with it so there are levels of stupidity we're all stupid at times every human on the planet does something dumb once in a while and we look at it and go that was dumb but how far do you let it go that's right Forest stupid is stupid does how far do you let it go this person let it go so far they blew up two accounts I do these when will the insanity stop segments to to hopefully catch you guys in the middle of doing it so you can tell yourself stop enough but you keep going on just a little more just a little more I need to get my money back just a little more stop just cut your losses and move on all right let's get into this thing all right how to be a dirty little scalper these are things you need to think about we're going to go over this slide again later on as a review and after this it's just all charts some of this is very familiar to you guys and you're like well geez Jared we we know those first three but after that it changes a little bit so what is happening is it a double bottom that's happening is it a V bottom let's have is it a rounding bottom that happened is it a breakout that's happening like first you need to Define what is happening okay you've already looked at the higher time frames because that's just a given all right and now I want to know what is going on here is this a stock that's pulling back but it's pulling back with 50 overlapping bars or 90 overlapping bars is it sloppy is it clean is it controlled okay so what that's the first thing then the next thing is the where where is this what happening think about what I just said where is the what happening okay this double bottom where is it happening is it just a random double bottom on a two minute chart or is that double bottom happening on top of a 60 Minute consolidation so there's big time support right there okay and then once you know the where and the what what is happening where you want to know how how did the what happen and where so how did it get there and we just alluded to that a little bit did it get there with nasty overlapping sloppy bars or was it a clean sequential move okay then you want to know are there is there anything else that's happening that I could add to this so the what is oh it's a double bottom but is it a double bottom with bottoming tails is it a double bottom with a big volume spike is it a double bottom with support okay those are those pattern boosters we talk about in professionals so far you're like well Dodge aired we know all this can we just like stop all right now there's a few things that maybe you haven't considered and note I want to be clear about these are all about pullbacks not every one of these is going to be a pullback you know just because it says double bottom V bottom rounding bottom or double top you know sometimes there are breakouts that maybe pull back to sport we buy on the breakout add on the pullback right but then you want to know what is the stocks ATR the average trading range this is a big deal okay this is a big deal and while I didn't put coin in today's lecture I traded we traded coin today right well coin does an average trading range of about three dollars sometimes four dollars a day so what am I saying and I'll don't get me wrong I'll show you with charts in just a moment what I'm saying here is if I choose to buy a coin at 59 knowing it does three or four dollars in range the possibility now remember there are days there are exceptions and that's when we say oh we got my hand in the cookie jar one of those there are exceptions but there are times when they exceed their trading range okay but if you look at coin and you're like well if I buy it 59 what likely likely the worst position I'll be in 55. correct right I mean if if you just literally buy the high of the day and it just the [ __ ] hits the fan and it tanks 59 is or 55 is probably going to be somewhere near the low of the day because that's right at the high end of the ATR okay you need to follow me on this because it's important So when you buy and you're looking for a potential breakout at 59 you might want to consider the worst case scenario which is a four dollar pullback it's not the worst case it's just one of the worst case scenarios so for example today on coin I started with like three or four hundred chairs I thought well if it pulls back four dollars that'll put me down 12 to 1600 bucks I can handle that pullback not a huge deal and I'm not expecting it to do that because there's two or three support areas way before 55 but I have to respect the ATR I have to respect the ATR okay and again there are times it does more than the ATR but that's a different discussion we'll get to okay so now that I know what's happening where it's happening how it's happening if there's any pattern boosters what's the ATR as it's happening so what's the ATR when it's pulling back to the double bottom at possible support with the volume Spike and bottoming tails is it at 50 is that a hundred percent okay next what's the market doing this is uh I guess an easy way or a different way of saying relative strength or relative weakness is this pullback happening because the Market's tanking or is this kind of a random pullback and showing a little bit of weakness in the stock because you don't really want to be buying those pullbacks that are weaker than the market generally speaking unless you have a strong inclination the Market's also going to bounce in your favor but I want to know what's happening why because I'd really like to see the stock pulling back near support with bottoming Tails near its ATR but stronger than the market so those days where the market gets hammered and this stocks fighting the move lower it's just yearning for that 10 minute bounce that the Market's going to give it because the markets do what they go down they bounce they go down they bounce they go down and those bounces are shallow but those are the types of balances that are going to get these 50 Cent moves or 40 Cent pops or one dollar pops okay and then of course this goes for all trades but what's the expectation if I see a stock go from 59 to 55 . my expectation is not for that stock to see 59 again today I'd be happy if it can't solve 56 or 57. so some 30 to 50 percent retracement is what I'd be looking to see so the expectation can't be if this stock continues to pull back the deeper it pulls back the shallower the bounce you're not going to get in it other than the exception you're not likely going to get the 100 retracement so don't expect it so when you get in what am I saying hear me out and don't get me wrong we're going to see charts all day after this okay all day if you get in and you nibble and I should have put this chart if you nibble some at 59 and that's the high of the day and you start adding a little of 58 and 57 and 56. and it finally pulls back to 55 and you're like all right my cost average is now 57.40 . man the move from 55 back to 57 40s big time right that's a more than a 50 retracement that's a problem because you're probably not going to get it you guys I and again I haven't got to the punch line yet but I hope you see where I'm going with this where I'm going with this is to say look in this environment specifically if you're going to buy the high of the day Breakout be careful be very very careful because there is a high likelihood there's going to be a form of a pullback so save some bullets for the pullback so that if the pullback happens to go a little more than you expect your cost average is still within a range that you can make money on this trade that's a very important point I make you want that to be in a position where you could still make money on this trade without needing a hundred percent retracement still make money with a 30 to 50 retracement and then decisions start have to be made well how much would I have to add at 56 or 55 to get that cost average down but still but still be within a reasonable money management approach so let's take a look at some charts and it'll start to make more sense was a stock that we traded yesterday okay and I'm looking at this as like a little three bar play off the open right good entry whatever and for us okay this thing peekaboo and then dropped now traditionally you would have that stop loss let me move this right there under that that Arrow right you'd have your stop loss under the low excuse me of bar number two and you would have been shaken out and this stop would have gone higher right that right here just FY I see this is the two minute this is the one minute this red bar you see the entry right there 678 peekaboo is up by like 15 cents and then takes out the 6740 stop area well if this was two months ago I would have taken that on the chin and I probably would have got back in and maybe made money on the second trade but I had to overcome the loss of the first trade okay but when we took PayPal we gave it like a low of the day stop loss right why because that's where the support from yesterday was and that's also the low of today so if you're getting in this and it does this now you're okay because you didn't get shaken out but I know I know some of you were thinking but you don't have a lot of shares I mean if you're if you're able to give a stock a dollar's worth of room you don't have a lot of shares right you're right you don't but that's where this comes into play right here let me move this back because it's on that little ShakeOut right but that's where this comes in if you missed the first entry for whatever reason you're gonna go full on the 6780 with a stop down below the green bar and that's okay because now you have what confirmation if you took the first trade with me with a very wide stop you're going to add exactly Sacha you're going to add here and then you're going to raise it up so the first trade we're giving it all the room because so many things have been shaking recently I want to be able to withstand the shake okay and then as soon as it comes back up I'm getting in same spot I'm adding at the same entry point 67.80 I'm just this time tightening my stop so the ad can be a pretty good ad all right now before I get to the Target some people will say well what if it doesn't do that and just hits and runs well then I'm going to ride it out with a smaller position or look to add on a subsequent pullback later on or like I said I'll just take a smaller gain but the goal here is to not lose I'm not worried as much about the gain I'm just trading it not to lose so I need to give it the room I need to give it all the room and if it gives me this which is a confirmation of strength then I'll add back and all of a sudden everything is well in the world okay so now you do that and the stock you're in a 6780 your stop loss is now like 67.20 so it's about what 60 cents just looking for 50 cents 60 cents that's it and what happens it goes up to 68.40 and gives you exactly 60 cents and this is what I said earlier I'm not and this is what this is where people start getting a little mushy on me they Stark on chair and what's going on this is not you talking who's the person who has taken over your body and is speaking for you now I'm not my eyes are wide open what I'm about to tell you this I'm not even looking for 1R on it what half the people just fell out of their chairs like wait this is a person who was just a month or two months ago was going for 2R and now you're telling me you're not even going for one nope I'm not not I'm not just like unmoll he's not going for one hour on his options Scouts he's looking for a 30 Cent gain and he's willing to let it go a dollar dollar fifty against him to get the 30 cents but do it 95 percent of the time correctly 95 of the time correctly okay that's what I'm talking about here willing to give something three or four to one against you and I know the world is crumbling you're looking outside and go are there pigs flying and falling from the sky Jared what are you doing you're racing 20 years of good habits I'm not there's still a stop loss but it's much wider and you're not looking for two to one you're looking for like one to two or one to three but to do it at a 90 to 95 clip and we are and we are all right so this thing moves up 60 cents me personally I was looking for 50 cents out of this and it went 60. great okay now now okay this is the same exact stock I just looked at if you didn't get the 50 or 60 cents you could wait for another pullback and add more and raise on the pullback if you wanted and this stock did that so this stock pulls back now to be fair this red bar was kind of nasty right it was green for a little bit right here and then but what happened the last time it tested this area the last time it tested this area buyers came in we know this because hold on let's go back to it we can see it right here right there that's the engulfing bar right there the last time it tested this area it did this buyer stepped up handsomely okay so now retest buy setup on a stock that already had a mini retest right so think about just think about what I'm saying for a second the stock already on a one minute had a tug of war and it won the tug of war and now it pulls back to that area and it's re-testing it and the thing here is it's not even 100 retracement it's like an 80 retracement so buyers are stepping up a little quicker that's another entry where probably 67.70 right get in use probably that wider stop you could use the tire shop and then look for move back to the high of the day what we're bouncing off of is support here but it's not just any old support it's tested support it was tested once here and now it's tested again the only question is how aggressive do you want to be with your stop loss you want to give it a super wide stop and you want to give it a tighter stop okay we know the daily has room we can see that we're over the 50ma the 50mas at 67.86 okay we've already broken that above 68. so we're also pulling back now above the M.A we're no longer below the Ma we're above it so pulling back towards the ma should also be a little bit some form of support so now what this is the same stock this thing did what went all the way back and put in a higher high or hot so if you took that second trade or third you got profit there too okay so the first trade profit right here second trade profit now here's the question what about this is this a good entry I need audience participation for me Yes No Maybe So not sure give me a wiring it yes or no what about this good entry a little bit of a mixed bag the majority are nose but there are a few yeses muddled in here depends on the time of the day no 100 retracement needs an igniting bar mostly nose mostly knows Okay so let's talk it through let's talk it through this stock I think we can all agree up until this point at 10 A.M has been a bit choppy right a little bit I mean bottoming tail topping tail move tired made some money pulls back made some money so let's let's walk through a little bit choppy okay this high that it put in at 68.50 okay is what it's what we call a weak new high this is not a significant new high okay it's a weak new high all right then it pulls all the way back a hundred plus percent more than a hundred percent on this and about a hundred percent on this this is this is challenging look at the high it's a weak new high buyers were supposed to after this retest over here after the second trade right here buyers supposed to rip this thing higher and remember this is a stock that can move so this new high is concerning it's not a strong new high like a significant higher high so now you have a weak new high and your pullback's 100 percent and you do have some volume spikes on these pullbacks right there on that little so sellers are a lot of sellers in this this big red bar so when I look at this there should be some bounce just not a very good one okay let me repeat it there should be some bounce just not a very good one if you're lucky 68. okay and that's maybe enough for some people but that's again that's a stretch weak High 400 retracement this is tough what happens it does that it does the retracement goes to like 67.75 puts in a lower low and then gets back to the high now if I'm correct and I don't remember someone can help me out I believe the market started going higher it's in it but again please help me out tell me if I'm wrong on that I don't remember if the market the queues specifically started moving higher at 10 30. but this is the challenge right this was a pretty significant pullback and it did bounce and if you're willing to give it room right lots of room you could have sat through that and ultimately got your 50 cents right you could have ultimately got 68 bucks okay but I don't know that I want to feel quote that lucky I want to have a lot more confidence in what I'm trading the other concern all right is now you're starting to get a little bit into the ATR games all right now here's the positive here's the positive let's talk about both sides okay yeah the The Q's W bottomed at 10 30 and that's likely why PayPal ripped right I mean it went higher right as a marketer but here's the here's the the positive side okay if you take a look at PayPal and I don't know the exact number I'm just eyeballing this up okay PayPal on a normal day normal that's key does about two bucks okay there are wide range bars here here here here here here here here I mean there's a quite a few wide range bars here and on those days it will do as much as four dollars and that's a monster day monster day four dollars okay so we'll throw out the quote Monster Day stuff and we'll keep two to three dollar average trading range let's just say because of this big move up here which was three and a half dollars and then this was like two dollars that after those two days up or on the third day there's a really good chance that a monster day is not likely in the cards you just stay with me for a second okay okay so you could also take a slightly different approach and say yeah I agree Jared this is a weak new high it's not significant this is 100 retracement and I honestly this balance it's not the best I'm not expecting it to be great but and this is where you need to pay attention you also might say to yourself from low to high the stock is put in not quite two dollars in range but like a dollar eighty in range okay like a dollar eighty in range and this stock averages about two dollar days and if it's something really big four dollar days but we're not expecting something really big after two pretty good days so there's a higher likelihood it stays within that two dollar a day average trading range maybe it goes as much as three well [ __ ] if I get into 67.50 and I don't I don't back the truck up I take a small position here we're never going full in the first the first entry never and it goes all the way to the low of the day 67.70. right I'm down 80 cents but I'm also what near some prior support from yesterday and the bottoming tale from this morning if it pulls that low I might just add so your 67.50 you add Summit 66.80 whatever 70 cents now your cost average depending on what you added your cost average is somewhere just above 67 bucks like I don't know 67.15. right and you're saying to yourself the odds this thing pukes out and just goes to 65 a really really Slim really Slim that would be a 3.50 drop but if it does save that last one third of a position for that nasty pullback okay if that thing does come all the way down to 65 which would be highly unusual highly unusual but if it didn't you added now your cost average can drop to like 66.50 or something like that and then you get your bounce and take your money and I know to some of you this is confusing but this is the thought process going through your head you're looking at support levels you're looking at how it got there what it's doing what the Market's doing the average trading range of the stock and the likelihood it's going to bounce it's very rare it happens of course it's very rare a stock just goes red all day and doesn't bounce at all it's very rare a stock goes red all day and doesn't bounce especially a stock that showed relative strength to the market which is why you took it in the first place so what are we doing we're mitigated in circumstance what am I mean by that I'm saying look the Market's going to bounce at some point today and this Stock's already stronger than the market so the stock will likely bounce more than the market okay next I'm mitigating the fact that it's not likely going to put in nastiness bars it's probably not going to put in a four dollar bar today it's probably going to put in a two to three dollar bar today well if it's already showing relative strength this is very important guys so please please listen it's already showing relative strength that two dollar ATR three dollar ATR is likely going to be on the long side not the short side I hope this is starting to come together a little bit because it's already put in two dollars of that ATR and it's still green so now you're looking at like the odds this thing pulls back to the low of the day and then goes another like three dollars it's unlikely it's already showed strength today most of today's ATR has been green ATR right it has been look at this this orange line and look at the high of the day it's mostly been green ATR the trading range of this stock has been mostly green the odds it like puts in three dollars of red it's unlikely possible slim ten percent chance maybe less see the mitigation I'm looking at a garden wall if it does pull back here there's a high likelihood it's going to bounce it's damn strong now could you have the Black Swan event news comes out sure could you have the market just have one of those 10 down days sure but that's the five percent we're talking about where you're gonna take it on the chin that day and you're going to take that 3x loss but that's the five percent because you're mitigating circumstance that's all you're trying to do here okay that's all you're trying to do here now let's try with another stock we didn't trade yesterday I think Mara all right we're on a 10 minute chart here this orange line is support and this orange line is the kind of the bottom area of support So this stock opens immediately goes higher leaves the bottom you said oh my gosh goodness gracious what is that a failed three bar play we've been seeing a lot of these lately and what I tell you guys if you put your stock under the bar number two is low you got hammered at peekaboo you in immediately dropped peekaboo doing immediately dropped so now what are we gonna do I'm not saying don't take the three bar play I'm simply saying nibble it quarter lot third lot nibble it okay nibble it now if it pulls back against me I have plenty of bullets left in the chamber to lower that cost average I'm going to take a look at Mara's average trading range I can't see the daily but um if I look the last three days on the 15 minute chart it's averaging like 50 cents a day yeah here's a day where it's at 75 cents so if I look at mayor and go hmm 75 cents is a big day A dollar is a really big day there's a good chance a really good chance that if this thing's at 10 60 and it pulls back to 10. it's going to bounce why well one it's stronger than the market two it's close to its average trading range on the downside and three that downside strong Market close to average rain also happens to be at support oh my gosh what am I doing I'm lining the Stars up my risk mitigation here is looking really good because I know around the 10 Mark it's already pulled back 60 cents and if I look at the last three days 50 cents to a dollar is about what this thing trades for the entire day so while I know it could pull back a little more than 10 why because it average trading range wise it could probably pull back to 9.50 but that's okay so it comes back to 10 I'm going to add a few more shares but I'm gonna still save some just in case it pulls back a little more than I expected and it does and then you can add Summit 970. and this is going to surprise most of you I may even save a third or a quarter for the oh [ __ ] moment the oh [ __ ] moment and don't get me wrong I'm not talking about black swans I'm not talking about like oh my gosh Mara comes out and they're going to go out of business it's not what I'm talking about I'm talking about the wow I didn't foresee that that wasn't in my plan I'm going to save a quarter a lot maybe a third lot for that I mean if this thing moved a dollar fifty that would be big time really big time most likely it's going to bounce at one of these first two Orange Lines because if everything I just said one it already has relative strength two the average trading ranges right around that area and three there's support down there there should be a bounce oh and one more thing it's a little bit of a double bottom here isn't it see this little retest pulled back four bars in a row retested that area and there's a little bottoming tail there okay right there okay there it is what happens rip now to be fair was I expecting a rip of this magnitude no no and no but the Line in the Sand for the stock was 1060 and that's a reason it probably dropped but that's also a reason some people may have taken it do you see where I'm going with this what I'm saying is this red line on the daily chart down here is right around 10 60 10 70. okay it's right around that area so some people might take the three bar play at 10 16 go okay I only need a nickel to break this consolidation I'll get in a nickel early and if we break the red line if we break the consolidation this thing's going to rip that's the three bar play right it's gonna rip I'm buying it just a couple pennies under under resistance but if it breaks it it should go it didn't though it didn't though but you're prepared for all this support in here see it look at all this support at 10 bucks average trading range has been met the relative strength overall you buy some at 10 save a little bit for maybe a lower lot and here's the thing you're not expecting you're not looking to make two or three r on this thing so you're not necessarily going to have a full full position here you may have a half to two-thirds of a lot but that half to two-thirds of a lot should be good enough to get you what your your target is 500 bucks a thousand bucks but remember this is important if you're looking to get 500 bucks then it could go 1500 against you maybe two grand if you're looking to make a thousand it could go three grand against you now it shouldn't happen very often it shouldn't happen very often but that's what I mean when I say I'm not looking for two to one I'm looking for one to two one to three and heck with options sometimes you'll go one to four one to five yeah and then you'll add a little unmoll start with 10 contracts then it goes to 20. and sometimes 30 then 40. I think it'll go up as much as 50. and this is what you're looking for you're playing the game then it bounces back up and you take your 30 to 50 cents this would be a stock I'd be looking more for 30 cents than 50 cents why because 50 cents quite frankly is hard to get on this stock it's hard to get in this case it gave a dollar Thirty okay but normally it wouldn't right normally you'd be looking if I can get halfway to the high of the day so again you nibbled some at 10 60. small lot you bought some more at 10. okay maybe you nibbled some more here your cost average should be somewhere in the neighborhood of 10 20 by the time you're done all your ads or most of your ads 10 20. so you need what 10.50 to get out of this thing another thing to consider and I've done this before I did it today on coin okay I did it today on coin sometimes not always not always but sometimes this stock isn't done yet and you know it and you've added on the way down and it gets back to break even you'll take some shares off at break even why because you're kind of expecting another pullback so then when you get the next pullback you add back again so now it was done you've lowered your cost average even more right I'll explain it one more quick time occasionally you get in a little bit early like I did on coin I got my hand in the cookie jar just a little bit right have a good one Annabelle it'll pull back and let's say you go from 500 shares to a thousand shares and then it bounces back to break even you might take those 500 off at break even because you're expecting another pullback and when you get the pullback you'll add the 500 back and what does it do it lowers your cost average even more and then it bounces and it's exactly what I did on coin today right I added on the way down it got just above break even at one point I sold half of the ad and then I added that half back on the next pullback and then it just it got my cost average from 59 down to 57 90 or 58. okay here's another example all right average trading range at support matters so we look at envx this is stock that on the 60 Minute I think we can agree there's a lot of support here on the 60 Minute so the previous day this stock gapped up to 15 30 whatever rolled over bounced by the end of the day precedent has been set you're like wait and let's take a look at on the 15. gaps up and just gets crushed what do you get bottoming tail topping tail rip what happened the last time tested this area bounced so the guess what happens Deja Vu Groundhog's Day the next day the very next day this thing gaps up goes a little higher right we made some money off this off the initial trade right we bought the initial pullback at 15. I don't have it on here because that's on like a one or two minute chart we bought the initial pullback and it bounced to 1550 we got out we got out okay we bought this tiny little pullback on a one and we got out well on the 15 it went one two three four five six seven eight stinking bars lower What's Happening Here by the way on this pullback talk to me guys take a look at the hint hint size of the bars what's happening on this pullback where my cursor is what's happening on that pullback what's happening talk to me Bueller sellers are coming in buying pressure is increasing really thank you Ricky thank you Ricky thank you Ricky and the rest of you shame on you for not even sticking your neck out there it's okay to be wrong but you gotta try look at the size of the bars at the top look at the size of the bars at the bottom look at the volume at the top look at the volume at the bottom look at the size of the bars at the top huge 50 Cent bars the size of the bars at the bottom are 15 20 cents look at the size of the volume huge look at this size volume quiet volume resting volume continuation volume right that kind of stuff oh oh what where is it happening again oh my gosh it's happening at 60 Minutes support okay also on a double bottom on the 15 minute where it previously bounced and it's eight bars down so selling pressure selling momentum is absolutely slowing down and it's slowing down exactly where you'd want it to slow down now I'm looking for what give me a pattern booster baby give me a bottoming tail change a color bar doji bar narrow body bar give me all those goodness things and have it happen right here where it bounced last time oh can we talk about average trading range one more time by the time it got to 14 the stock had dropped like a dollar sixty how often does this stock put in a dollar sixty not very it does like a dollar a day look at it on the 60 Minute chart one two three four five six seven eight nine ten eleven twelve days of those 12 days it's put in what about a dollar range on average put back a dollar sixty so it's way above its ATR and it's getting to an area that the stock previously bounced significantly it's getting to that area eight bars down with slowing momentum this is a no effing brainer for a 30 to 50 Cent pop I'm not expecting a new high hell no I'm not even really expecting a full 50 retracement per se I'm just looking to get in off the bottom because I know there's 30 to 50 cents in this bad boy and if there's not what's the worst that's gonna happen to me it's just gonna chop around it break even it's just gonna chop around it break even because it's already down like 50 past its ATR and guess what if it goes a little lower I still have some bullets left to add so this is one I would feel more confident to take a little more shares instead of starting like a quarter lot I would probably start with a half lot on this why because it's already pulled back and done likely everything it's going to do and I'm not expecting a lot of ads here because of where it's at how it got there there's not much left to go lower and then it bounces 50 cents you're looking to take 30 cents from this thing that's it that ladies and gentlemen is how to be a great scalper and I know some of that was challenging to hear like wait you're gonna do one to two one to three not two to one not three to one you're gonna let it go to secondary levels of support you're going to factor in the average trading range on the pullback not for the Target but on the pullback yeah I'm gonna do all those things okay anything under this line after ATR is met is likely a good buy area let me repeat it so you can you can read it yourself but I'll repeat it anything under this line okay which is like 14 30. after the average trading range is met which it's been met at 14 30 is likely a good buy area okay because again you don't know where it's going to start bouncing but in this case it made it obvious for you bottoming tail bottoming tail green bar green bar doji bars this was an obvious play they're not all this obvious sometimes you just have to bid for them on the way down give them room okay and again to some to summarize it what is happening in this case the last slide double bottom where is it happening support on the 60. how did it get there eight bars down with slowing momentum and decreasing volume are there pattern boosters oh yes there are there's bottoming tails there's support there's narrow body bars there's change of color bars what's the Stock's ATR oh it's exceeded that by 50 Cents what's the market doing bouncing what's my expectation 30 cents I'm not I'm not expecting a high of the day or a dollar check check check check check check check check check this thing meets everything you want to do everything that's how you have to look at it now again I understand some of this will make some of you uncomfortable and if it does that's fine I'm not telling you it's the only way to trade I'm not even suggesting you should do it I'm simply saying it's another way another tool in your toolbox to be better and it works extremely well look at unwell I mean the guy has what two down days a month for the last 9 10 11 months I since I've started doing this like seriously two down days in a month 18 up two down I mean that's basically what it is there's a lot to look at so let me say this before I finish it's a paradigm shift for me it's not something I typically have done in the past so I I'm doing it with very small shares that's why you're seeing you know someone that's used to making a couple Grand days making 500 a day now but I'm gonna bring it back up right I'm gonna bring it back up and that's okay so if you're thinking about doing this do it but do it with small shares one five ten shares do it for a month or two get comfortable and then slowly bring the shares up because I'm telling you now this is an unequivocal fact you will occasionally add a little early and the stock will go further against you then sometimes you anticipate and you'll get your hand a little bit in the cookie jar again you'll have that second or third level of support and you will have it exit you will always have a money management for example if you say 500 is the max I'm willing to lose on this trade then you will get out when it hits minus 500 bucks that that does not change but you might only make 200 on the upside which is a paradigm shift right you have to be willing to see red for this to work no that's not the goal right you don't want to just oh my gosh let everything go against me but many will and then you have to step back and be calm relax take a deep breath and go I expected this to happen I drew the lines on the chart I knew what the potential pullback was right take a look at this one again go ahead I knew right here orange line at the top second orange line and then this is the [ __ ] hits the fan one save a quarter to a third of a lot for that but you have to know as it's going red you're not going oh no you're going oh yes let me repeat it one more time a little Harry When Harry Met Sally moment you're not going oh no when it pulls back you're going oh yes why because I'm going to get to add more shares and make more money okay so when it goes against you not if but when you're not panicking you're going okay I got this I got this all right and this is not exactly the same as what on mold does a lot of times his will hit the trend line and immediately go in his Direction he's out okay and he's out and sometimes these will too and sometimes they'll go against you you guys are an accused trade that went against you and he's adding back in certain areas right so it's amazing when I think these lectures are going to be a little shorter and they're not right um I hope you guys learned a little bit about how to be a dirty little scalper but remember your money management is still number one don't think I'm taking that off the table you still have to have a maximum loss and adhere to it otherwise garbage start out very small cut your teeth a little bit learn it a little bit get better then slowly raise your risk okay so hope that'll make you guys better Traders I'm Jared Wesley of live Traders we'll get back at it again next week [Music]

Channel: Live Traders

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Id: WnapX3b9qt8

Length: 55min 55sec (3355 seconds)

Published: Wed Aug 02 2023