Super Simple Scalping Technique (Easiest You Can Make)

trading is not easy as you know if you've tried to trade for any length of time but are there easy trades that you can make the reality is that even if trading as a whole is difficult that doesn't mean there aren't easy setups that occur regularly as a prop firm with 50 plus professional Traders some of whom make seven and even eight figures a year we've seen it all and we've discovered some trades that are much easier than the rest and in this video we're going to share with you one such setup in exact detail it's a super simple scalping technique that can offer you high probabilities to take quick profits but only if you know the hidden mistakes to avoid and the exact rules to follow and that's exactly what you'll be learning in this video so stick around [Music] today we're talking about a momentum scalp off a technical pattern since this is such a straightforward trade we're going to Define it a little more clearly we're actually going to call this a morning momentum breakout trade since there's so many different definitions of scalping it's important to Define what a scalp is to me in my trading a scalp is a moment in time when the price action is suggesting a higher probability of a move in my favor than a move against me that's it for scalps I'm thinking entirely about the probability of this trade working based on the information that's presented in the price action when I Define a scalp I'm solely focused on the risk when I'm initiating the trade and very open to different reasons to sell that could be offered by the stock or the market even if my whole time increases in a scalp because the stock is not giving me a reason to sell I am very rarely turning a scalp into a move to move trade or a trade to hold those are different trades with different risk parameters and different reasons to sell for the trade we're talking about today I wanted to cover it in three ways start with the catalyst the stock is in play with elevated volume and a fresh news Catalyst from the prior session let's cover the setup specifically for this trade it was a break of a three-day range to the upside above a seven plus key technical level on increasing volume showing the stock is in play on a Breakout we challenge every Trader on our desk when they're talking about a level to score that level 0 being the least significant and 10 being the most significant for a trade like this it needs to be holding above a seven plus key technical level everyone's scaling will be a little different and it is a little bit subjective but once you start thinking about things in terms of 10 being most important level zero being least important level and if you get in the habit of just scoring things it actually makes things a lot easier the trade that we're talking about is a momentum scalp long off a key technical pattern you could make this trade very similarly to the short side we just happen to have the example of a log here if you want to learn three more real world setups that our Traders use including the simple setup that we teach all of our new Traders and the setup that turned one of our Traders into a seven figure big money earner check out the free webinar that we're currently running just go ahead and click the link that should be appearing now at the top right hand corner of your screen that will open up the free registration page in a new window so don't worry you won't lose this video you can also visit tradingworkshop.com to register for this free intensive Workshop you're going to learn more in a couple of hours from this trading Workshop than from years of online education covering some key principles of this trade why does this trade work well stocks need volume to move when we combine a strong stock with a key technical pattern and a high volume break of that pattern we're offered a high probability momentum sculpt rate the rules of entry for this trade we identify a key level the stock cannot get above that corresponds to the technical pattern once the price gets above that level and the tape speeds up or if you see the volume bar increase quickly as price breaks the level higher you enter that with a limit order on the offer reason why you need to do that is you need to be aggressive here you don't want to spray and Market because you could get filled randomly but you do want to get in as aggressively as possible because what you're seeing is the high probability moment you're looking for the rules of your stop your stop goes two cents below the low of the high volume bar I know you could argue that two cents is arbitrary because there are some stocks that trade huge ranges and others that don't but two cents is plenty what we're looking for in this move is the momentum to move away from our price that's it for a momentum trade this trade should work so just put your stop in place and Define your risk the rules of exit you exit when the momentum slows this can be seen on the tape which is what we use but it also can be seen as a second bar on a one minute chart that's not able to extend higher in this case it's pretty obvious when it can't really clear 41.90 this is a momentum scalp trade so you exit as soon as the momentum's gone we always want to cover rules of improvement as well Traders on our desk improve in this trade by reading the tape seeing the tape which is the term we use for the time and sales speed up we're seeing distinct changes in the level two will allow you to enter and exit this trade more efficiently the more efficient you are at entering and exiting this trade the better you can increase your probability and the more p l you'll capture from every one of these opportunities so here we can get into the specifics of this trade we have price that moves up above 40. which was an important resistance level on volume with a catalyst and then a clear consolidation occurs the consolidation winds up being a very clear technical pattern right now we're not going to get into what technical patterns are or which technical patterns are better than others I don't really care about that in this trade I know that there are a lot of technical patterns out there and you know you can look around you can do a Google Search and and find some of it we're going to be covering more of them this is certainly a wedge pattern in my eyes um there's a clear clear Cellar at 40 80 and as the price action touches there one two three four five six seven eight times um you know it gives you gives you this pattern the the price action is tightening up um it's showing you that that there's probably going to be a break in One Direction or another we cover a lot of the patterns in in our training in our development um but you know this is one that that I really like because it gives me a very clear point of entry and a very clear stop all I have to do is sit there and wait for the pattern to break with volume so I'll just sit in my seat and watch you can see about five minutes before the pattern actually broke with volume it broke without volume that's oftentimes a really really important thing to recognize because if you try and trade this break without volume uh it's very likely you're going to get stopped and it'll be frustrating the key here for me is I am looking and waiting for the volume to come in on the brake as soon as the volume comes in on the brake I'm actually watching the tape and it'll speed up um for those that don't watch tape you can probably trade it just on the volume off your chart but you know once you see the tape the level two and the time and sales start to speed up that really becomes your entry point and you're really trying to buy as close to that 40 80 um seller lifting as you possibly can because you'll see volume just clear it um as soon as you're in you immediate you can enter with a limit aggressive limit order so you're basically limit on offer you're clearing the offers as it lifts I don't enter these with Market orders because you would just get blown out you probably get horrible prints and and things like that so I am trying to get it as close as I possibly can once I am in this trade I'm immediately setting a stop two cents below the low of the candle mainly because I think when it breaks it shouldn't really go back down there particularly when it breaks with volume you're seeing the volume come in you're getting everything you want to see in the price action it's giving you a really good opportunity take it uh my reasons to sell on this are pretty simple I'm actually just writing it up until the momentum stalls um I'm watching the tape to do that but you can also do it on the one minute chart here you can see clearly that that it went up but it couldn't lift higher and really if this is going to be a really good momentum continuation trade to the upside it's going to continue to lift and it just didn't so after the second time up maybe even the third time up you're just cutting it the momentum's not there and I'm not worried about what's going to continue to happen I just know that the trade that I wanted was there I took it and it wound up being a great trade because it worked really fast and I got a very nice reward for a very small amount of risk I wanted to kind of get close to wrapping this up and really wanted to cover five mistakes that are absolutely critical to avoid when making this trade again this trade is a momentum scalp out of a technical pattern you have to set appropriate expectations for this trade it's very easy to get into this trade and think oh maybe it'll just go really really far or maybe it'll continue on or you know I don't know I don't care I'm taking the trade for what it is it's a move to it's not a move to move trade it's not a trade to hold this is a momentum scalp off a technical pattern I'm going to enter when the momentum starts and I'm going to exit when the momentum's done I'll use the tape to do it you can also use the the chart to do it if you need to but make sure that you're setting appropriate expectations for what this trade is and is not it's just too easy to get trapped in that you have to pick the right stock stock selection is absolutely critical to this we Define good stock selection of stocks that are in play you know you really do want something that is trading above average our Vol has fresh news is trading out of recent ranges in this case this one had all three the more checks in your favor for this trade the the more likely it is going to be to follow through you have to let the technical pattern develop before you enter the trade if you don't you're going to be guessing not trading don't guess you need to make good trades so let the technical pattern develop and don't predict the break when the momentum break occurs take it you have to trade this with the right stop it's very very easy to say I'm going to enter just below my I'm gonna I'm gonna put a stop just below my entry that is not the right stop for this trade the right stop for this trade is the low of the candle particularly on the high volume candle it should not come back to that price if it does you're likely to get it could set up as another trade or it could just fail entirely and you don't want to put yourself in that position so you want to put your stop in the right place here if you trade with the wrong stop you're likely to get stopped out and then it'll go and it'll just be so frustrating so make sure you're putting your stop two cents below the low of the candle and you can do that as soon as the momentum takes it to the upside finally one best practice in general do not move on without setting alerts or even better just don't move on from this stock take the trade that was offered to you but then stay with this stock if a stock is trading that cleanly if it's giving you that sort of price action um it is very likely that it will give you more opportunity later in the day as well so if a stock is show it's showing its trading really well uh it's giving good solid moves just sit there and wait for the next trade in that same stock this is an example of why you do that because the trade that we made today this momentum scalp out of a technical pattern was to the left it's highlighted in the red that was a very simple trade and it was a great risk reward trade and had an amazing outcome that was fast and Powerful look at all the other trades that you could have made in that stock on that day by just staying with it set alerts at the key breakouts you had a really nice break in retest which was a higher time frame trade it's not a scalp in this case but it's a really really good trade um you had a really good momentum you could even do a break above the the prior resistance level that was a really good trade on increasing volume you had an over extension trade or a couple over extension trades if you like those trades there were just so many opportunities presented by this stock and if you move on too quick you're going to miss them finally we've gotten in the habit of putting this as one of the last slides of our presentations this is actually a mural that hangs in the wall of our kitchen in our in our Midtown office every time you go get a glass of water uh go eat your lunch you you see the staring you write in the face it's a really powerful reminder that all of us are meant to do something great none of us are here to do anything but something great you have to believe in yourself everything we do centers around having that belief in yourself and and that understanding and that respect for the fact that you are meant to do something great so now that you've learned this super simple high probability scalping technique it's time to go out and put it into action but before you can have great success doing that you need to understand the fundamentals and basics of scalping if you don't know the overall principles of good scalping you can still end up making unforeseen mistakes even with a simple technique like this one but the great news is that we've already have a video that teaches you all about scalping so you can be much better equipped to trade in a range of Market environments so just click the video appearing on your screen and watch that now before you do anything else

Channel: SMB Capital

Views: 35,250

Keywords: stock market, day trading, smb capital, trading, investing, markets, wall street, stock trading, options trading, options income, economics, finance

Id: CzMrZl999PU

Length: 15min 5sec (905 seconds)

Published: Wed Sep 28 2022