For Scalpers Only! How to Scalp The Charts Profitably in 2024

Summary

This 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

00:00

💹 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.

05:01

📈 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.

10:01

🕒 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.

Keywords

💡Scalping

Scalping in the context of the video refers to a trading strategy where traders aim to profit from small price movements and quickly exit their positions, often within minutes. It is a short-term trading approach focused on making quick, small gains rather than holding investments for longer periods. The video emphasizes that scalping is about quality over quantity, meaning traders should focus on a few well-executed trades rather than numerous trades throughout the day.

💡Quality over Quantity

This phrase is used to highlight the importance of making fewer, more thoughtful trades rather than a high volume of trades. In the video, it's applied to scalping, suggesting that traders should aim for one to three high-quality trades per day instead of dozens of quick, potentially less considered trades. This approach is meant to increase the likelihood of profitability by focusing on trades with a higher potential for success.

💡Breakout Trade

A breakout trade is a specific type of trade where a security's price moves beyond a certain level of resistance. In the video, the speaker uses the NASDAQ five-minute chart as an example, illustrating a breakout trade where the market breaks a key support level with significant force or volume, indicating a potential opportunity for a quick downward move that a scalper might capitalize on.

💡Pullback Trade

A pullback trade involves buying or selling after a security's price has moved sharply in one direction and then temporarily reverses. The video provides an example of a market going up, breaking a key level, and then pulling back to that level, presenting an opportunity for a quick upward move. Scalpers look for these pullbacks to enter trades with a high probability of a quick return.

💡Higher Time Frame

Refers to looking at longer time frame charts to understand the overall trend or direction of the market. The video stresses the importance of not just focusing on minute-by-minute movements but also considering the broader market trend, such as the hourly or daily trend, to make more informed trading decisions.

💡Key Level

A key level is a price point that has significance due to historical price action, such as previous support or resistance. In the video, the speaker discusses looking for key levels to identify potential entry points for trades, such as waiting for the market to hit a support level before considering a trade.

💡Stop Loss

A stop loss is an order placed with a broker to sell a security when it reaches a certain price. The video suggests that scalpers should aim to have tight stop losses to minimize risk, which is crucial for quick in-and-out trades where small movements can significantly impact profitability.

💡Time of Day

The video emphasizes the importance of trading during times when market volume is higher, as this can lead to more opportunities for quick scalps. It mentions that certain times, like lunchtime, are less suitable for scalping due to lower volume, while market open times and later in the trading day present better opportunities.

💡Re-Entry

Re-entering refers to the act of entering a trade again after a previous trade has been stopped out. The video encourages traders not to be discouraged by stop-outs but to view them as potential opportunities to re-enter the market with a fresh perspective, especially if the conditions still align with their trading strategy.

💡Home Run

In the context of the video, a home run refers to a large, one-time profit. The speaker advises against seeking home runs in scalping, as the strategy is about making small, consistent profits (one to one or one to two) rather than aiming for significant gains in a single trade.

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

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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