For Scalpers Only! How to Scalp The Charts Profitably in 2024
Summary
TLDRThis video script teaches viewers how to become proficient at scalping in the stock market. It emphasizes the importance of quality over quantity, targeting only 1-3 trades per day, and looking for specific market conditions before entering a trade. The presenter advises understanding the type of trade, such as breakout or pullback, to manage expectations and strategy. Additionally, they highlight the significance of higher time frames for market direction and the necessity of tight stops for quick rewards. The script also stresses the importance of trading during market hours with higher volume and not being afraid to re-enter after a stop-out, aiming for quick gains rather than long-term plays.
Takeaways
- 🕐 Scalping focuses on short-term trades, typically within minutes, as predicting immediate market movements is easier than long-term ones.
- 🏠 The goal of scalping is to quickly enter and exit the market, seeking quick rewards rather than holding positions for extended periods.
- 🔍 Quality over quantity is key in scalping; traders should aim for one to three high-quality trades per day instead of numerous low-quality ones.
- 📈 Traders should look for specific market conditions before entering a trade, such as a strong breakout or pullback, rather than randomly choosing trades.
- 📊 Understanding the type of trade (breakout, pullback, etc.) is crucial for preparing and managing the trade effectively.
- 🌐 It's important to check higher time frames for the overall market direction to align scalping strategies with the broader market trend.
- 📉 In a strong uptrend, traders can look for key support levels to enter trades, aiming for quick profits as the market continues to rise.
- 📅 The time of day matters for scalping; it's best to trade during market hours with higher liquidity and volatility, avoiding slow periods like lunchtime.
- 🚫 Scalpers should not be afraid to re-enter the market if stopped out, as the same trade idea might work out on the second attempt.
- 🏈 Scalping is about quick, small profits (1:1 or 1:2), not chasing large, unrealistic gains.
Q & A
What is the main concept of scalping in trading?
-Scalping in trading is about getting in and out of the market as quickly as possible, typically within minutes, with the goal of making quick, small profits.
Why is it easier to predict market movements in the short term rather than the long term?
-It's easier to predict market movements in the short term because the factors influencing short-term movements are often more immediate and visible, as opposed to long-term movements which can be influenced by a multitude of less predictable factors.
How many trades does the speaker recommend taking per day for a scalper?
-The speaker recommends taking at least one to three trades a day, emphasizing quality over quantity.
What is the importance of looking for specific conditions before entering a trade?
-Looking for specific conditions is important in scalping because it helps to filter out noise and identify high-probability trade setups, increasing the chances of success.
Can you explain the difference between a breakout trade and a pullback trade as mentioned in the script?
-A breakout trade occurs when the market price moves past a key support or resistance level, often with volume, indicating a potential continuation in that direction. A pullback trade happens when the market retraces to a previously broken support or resistance level, providing an entry point for a trade in the direction of the breakout.
Why is it beneficial to look at higher time frames when scalping?
-Looking at higher time frames provides a broader perspective on the market's direction, which can help in making more informed decisions about entry and exit points for scalping trades.
What does the speaker mean by 'know what type of trade you are taking'?
-The speaker means that understanding whether the trade is a breakout, pullback, or another type allows a trader to manage the trade effectively, knowing when to take profits or when to let the trade run.
How does the time of day affect scalping opportunities?
-The time of day affects scalping opportunities because market volatility and volume tend to be higher during certain times, such as market open and close, providing more opportunities for quick trades.
Why is it important not to have too wide of a stop when scalping?
-Having tight stops is important in scalping to minimize risk and ensure quick rewards, as the goal is to be in and out of positions rapidly.
What is the speaker's advice on re-entering a trade after being stopped out?
-The speaker advises not to be scared of re-entering a trade after being stopped out, as sometimes the second entry can be more successful, provided the trade setup still makes sense.
What is the strategy for managing profits when scalping?
-The strategy for managing profits when scalping is to take the majority of profits at the first target and then let the rest of the position ride to potentially achieve higher returns, depending on the trade type and market conditions.
Outlines
💹 Becoming a Better Scalper
This paragraph introduces the concept of scalping in trading, which is about making quick, small profits by getting in and out of the market as fast as possible, typically within minutes. The speaker emphasizes the importance of quality over quantity, suggesting that taking only a few well-considered trades a day is better than many random trades. They also stress the need to look for specific conditions before entering a trade, such as market breaks of key support levels with significant force or volume. The speaker promises to show chart examples and live trades to illustrate their points.
📈 Understanding Scalping Strategies
The second paragraph delves deeper into scalping strategies, explaining the importance of knowing the type of trade one is engaging in, such as a breakout or pullback trade. The speaker uses chart examples to demonstrate how to identify and act on these conditions. They also discuss the significance of looking at higher time frames to understand the market's direction, which can inform scalping decisions. The speaker shares tips on how to manage multiple trades within a single larger trend and the flexibility that scalping allows, such as taking profits at different levels.
🕒 Timing and Tactics for Scalpers
The final paragraph focuses on the practical aspects of scalping, such as the best times of day to trade for optimal market movement and the importance of not being afraid to re-enter the market after a stop loss. The speaker advises against aiming for large, 'home run' profits and instead encourages focusing on quick, small gains. They also remind viewers to subscribe and engage with the content for more information and to ask questions for further clarification.
Mindmap
Keywords
💡Scalping
💡Quality over Quantity
💡Breakout Trade
💡Pullback Trade
💡Higher Time Frame
💡Key Level
💡Stop Loss
💡Time of Day
💡Re-Entry
💡Home Run
Highlights
Scalping involves making quick trades, usually within minutes, to predict short-term market movements.
Scalpers aim for quick rewards, typically a 1:1 or 1:2 return on investment.
Quality over quantity is key in scalping; taking 1-3 trades a day is ideal.
Focusing on specific market conditions, such as key support or resistance levels, is crucial for successful scalping.
Understanding the type of trade, like breakout or pullback, is essential for effective scalping.
Higher time frame analysis provides direction and context for scalping entries.
Tight stops and quick rewards are preferred to minimize risk in scalping.
Market timing is important; avoid slow market periods like lunchtime for scalping.
Re-entering the market on the same idea after a stop-out can be profitable.
Scalpers should not aim for large returns; quick, small profits are the goal.
Examples of breakout and pullback trades are provided with chart illustrations.
Multiple scalps within a single trade are possible with an understanding of market direction.
Live trade examples demonstrate scalping strategies in real market conditions.
The importance of not being scared to re-enter trades after a stop-out is emphasized.
The presenter shares a personal trade example, detailing the thought process and outcome.
The presenter advises on the best times of day for scalping based on market activity.
The presenter discusses the flexibility of scalping strategies and adapting to market conditions.
Transcripts
let me ask you a question if I ask you
hey what are you going to do five years
from now you might not give me a very
specific detail answer right you might
say ah well I'm looking to buy a house
or I'm looking to do this or do that but
I almost guarantee you 98% of you guys
that's watching this right now probably
can't give me a very detailed answer but
if I ask you hey what are you doing 5
minutes from now you going to say well
I'm about to watch TV well I'm about to
eat I'm about to brush my teeth I can
guarantee you that you can give me a
very Det answer and that's what scalping
is about right trying to make that
educated guest a minute from now 5
minutes from now because it's much
easier to predict or understand what's
going to happen a minute from now versus
a year from now 5 years from now 10
years from now so today we're going to
talk about the things that's going to
help you become a better scalper okay so
first let's talk about what is scalping
scalping is basically getting in and out
the market as quick as possible
sometimes seconds but but in general you
hold it maybe for 5 minutes all the way
to like 30 minutes sometimes depending
on if the market is slower you know you
could have a trade that lasts for 50
minutes but in general we trying to get
in and get out as quick as possible and
we looking for maybe some quick reward
okay so it could be a 1: one or a 1 to2
we look for a quick reward and we out
and later on I'm going to show you guys
some chart examples in a live trade that
I took so let's talk about how to
actually become a better scalper okay
first thing you have to understand
understand is scalping is not about
taking a lot of Trades a lot of people
think that scalping is about taking 50
trades or 30 trades for the day no guys
actually is quality over quantity okay
so in scalping the way we want to do it
we want to take at least one to three
trades a day max okay you know sometimes
you might take four or five trades but
for the most part we're not looking to
take 20 trades 30 trades no guys not
even 15 trades we're looking to take at
least one to three trades for the day
and we are done quality over quantity
the next thing that's going to help you
become a better scalper is looking for a
specific condition okay most people
think that if you go on a lower time
frame it's a whole bunch of noise and
you can't just understand what's going
on and they are correct yes if you just
randomly go on the chart and say hey uh
look at the one minute chart let me buy
no of course now what we are doing okay
we don't want to do that we want to look
for a specific condition okay a good
example is let's say at the open if the
market breaks a key support level okay
and it breaks it with a lot of force or
a lot of volume we want to participate
okay that's a very specific condition we
not just randomly open up a one minute
chart and say hey oh the market is
moving let's buy no so we are looking
for a very specific condition now the
next thing that's going to help you
become a good scalper is know what trade
you are taking okay is it a breakout
trade is a pullback trade know what type
of trade you're taking so you can
actually be flexible and prepared for
that trade beforehand let me show you a
quick example so right here guys we have
uh NASDAQ five minute chart right we
have a key level right here and it
breaks that key level so this is a nice
breakout trade now a lot of people will
trade to downside notice that it has a
lot of volume coming in just breaking
the level with Force so they probably
want to scalp it for a quick momentum
trade to the downside right boom I'm out
so that is a quick breakout trade you
know looking for a quick ride to the
downside let me show you guys a good
example of a pullback trade so here's a
good example of a pull back trade the
market is going up uh we broke this nice
key level right here and then pulled
back to this key level right here so
we're looking for uh a nice pullback
right to this key level so we have a
pull back and test the this level twice
I like that nice reaction right here and
we looking for a quick scalp to the high
the high would be right here right this
high right here now we can have that
quick scalp to the high and we'd be done
for the day now what you can also do is
you can break it up so you can say all
right that high right there I'm going to
just go for a quick scalp and then I'm
gonna let the rest rise so let's say
that you take majority of your profits
at that high right let's say 80% and
then you let 20% ride to the upside if
you believe that this Market has room to
go up okay this is why it goes back to
understanding what type of trade that
you are in once you understand the type
of trade that you are in you understand
that okay this trade I could probably
hold a little bit longer but the first
Target I'm probably going to scalp out
and and the rest I'm going to let it
ride okay so the next thing that's going
to help you become a good scalper is
looking at the higher time frame for
direction a lot of people they get stuck
with the one minute chart and just focus
too much on the one minute chart they
forget about the 1 hour Trend or the 5
minute Trend or the daily Trend right
and they don't understand that guys
we're not just focusing on a one minute
chart no we just using that 5 minute for
entries but for the most part we want to
check our higher time frame okay to see
what the market is doing so let me show
you guys good example so right here guys
we have the hour chart right the hourly
chart and you can tell that we are in a
crazy uptrend right crazy crazy uptrend
so we're looking for key levels right
here we have a nice key level right here
okay so we looking for the market to hit
this support level so let's go down to
the 5minute Chart all right so here's
the 5-minute chart the market hit this
level right here and we have a nice
reaction okay it's breaking this high
right here and it's pulling back into me
the way I will look at this is uh we are
flagging a little bit maybe I take this
little breakout uh notice how we have
this nice solid bar too so I'm looking
to get in as soon as I see nice buying
and the market is closing at its highs
when it comes to the Candlestick so
right here we have a nice Candlestick
strong closing at its highs right and I
look for a quick scalp now we could look
for a quick scalp for a quick onet to
one right boom we got that Target now
here's the thing I told you guys before
uh when it comes to scalping okay you
can be very flexible this is why you
have to know what type of trade you in
so let's say that this trade right here
we know that this is a a nice reversal
trade so we can do two things right we
can say all right we Scout most of it at
first Target and then let 20% ride or
what we could do is we can actually have
multiple trades to the upside so let me
show you guys what I'm talking about so
right here we know that we are at key
support we know that the hourly chart is
very bullish and so so we understand
that it's a possibility that the market
could what could actually go to this
high right here right break this high so
if we know that that means that we can
actually break this up with multiple
trades so this could be our first Scout
right here the second scalp could be
right here right here to upside for a
quick one to one the next scalp could be
right here the market is pulling back to
this level right here right we have a
nice bullish bar right here and this one
looks like a loss cuz it didn't
definitely didn't go to one to one so it
doesn't matter if it's a loss okay we
got one Scout two Scouts now the third
one would be right here nice bullish bar
right here because it's holding this
level guys you see this level right here
it's holding this level so we're not
going to give up on this trade so we got
this right here boom quick Scout and
then we can say all right we could
either hold it for this high right here
or break this high right here okay so we
can actually have multiple scalps in one
trade if we understand the direction of
the market and understand what type of
trade that we are in okay this is why
it's very important understanding what
type of trade that you are in okay so
let me show you guys my quick trade real
quick so let me explain this trade real
quick so right here I realized that we
have some type of resistance over here
so when I came in the market notice how
we have Boom the market sold off and it
sold off again notice how we have this
nice bearish candle right here here
clothing at is low that's when I got in
the market okay and I'm looking for a
quick 2 to one Okay the reason why I'm
looking for a 2 to one because I
understand that this is a reversal trade
so a reversal trade can give me more
give me a 2 to one or give me or give me
3 to one depending on the market right
now this is a bullish market so you
probably don't want to go for too much
but right here a quick two to one let me
show you guys the quick recording right
here you see that I'm in the market and
the market is going my way I'm just
waiting uh for my target it um and I'm
just you know waiting for the market so
let me fast forward just real quick so
right here boom you see me I got out and
and look to the left I'm up
$1,482 for the day that scalp took like
around um 40 minutes uh sometimes you
know the market will play around and you
know it's not a quick In-N-Out but it is
what it is quick scalp and I'm done for
the day so let's go over more things
that you need to know if you want to be
a good scalper um the next thing is try
not to have too wide of a stop I mean
you could but for the most part if you
want to be a good scalper try to have
tight stops quick rewards and that's it
right we want to be in and out we want
to at least have one bar in our flavor
or two bars in our flavor meaning that
we just going for one you know one to
one or one to two now the next thing is
the time of day guys it's very important
if you're scalping the market the time
of day okay you do not want to be
scalping the market when the market is
slow so lunchtime is a a noggo you know
because it's the volume dries up okay
now you want to scout when a market
Market is moving so that's when the
Market opens at 9:30 a.m. if you're
scalping the NASDAQ like me or if you're
scalping stocks if you're scalping uh
Forex that's probably 8:00 a.m. eastern
time or 3:00 a.m. eastern time right and
usually later during the day uh there
are opportunities around I would say
around 1:30 p.m. all the way to 4:00
p.m. there's some opportunities
sometimes the market moves okay so
understand the time of the day you're
trading because that's going to help you
get in those quick moves in and out
right now next thing guys is if you want
to a profitable scalper you can't be
scared of re-entering okay if you get
stopped out you can't say oh my gosh I
got stopped out no if it gives you
another opportunity take the next trate
okay so don't be scared to re-enter on
the same idea because sometimes it will
stop you out on the first try but the
second try will actually work out and
the next thing guys is don't look for
home runes remember guys we are scalping
we're not trying to look for you know a
10x or 20x we are scalping in and out
one to one one to two and we're done for
the day okay so look for these quick
moves yes you will have opportunities
where you can actually hold longer this
is why you have to know what type of
trade that you are trading and if you do
hold longer you can actually get out for
a quick Scout your first Target and let
the rest ride so that's all I have for
you guys today if you enjoyed this hit
that like button hit that subscribe
button if you want to learn more Link in
the description if you have any
questions type it below because I try to
answer all you guys questions thanks a
lot for your time and please have a
great day
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