Scalp Plays with Examples

Scalps

Time

Scalping Period Ends within 11 am – preferably 1030

Wicks

1. If there is strong wicking ending around the same price point do not get in anticipating a break. There is a higher probability of sellers sitting above the wicks to push back down. Wait for a close above the level and get in as the next candle pushes above the level. 
2. Without wicking on a clean level look to enter as the tape speeds up and L2 looks good if there is direction. Without direction wait for the first candle to close above the level and enter as it holds. 

Higher Timeframe

When scalping the probability of being right increases if you don’t trade when a stock is tightly range bound or squeezing on a higher time frame. 

Building Watchlist

Try to keep the list to 3 stocks or less. 

1. Major Catalyst: news, Upcoming earnings, upgrades/downgrades etc
2. 2% gap or more
3. Squeeze or major level on higher time frames (1h and 4h) breaking 

Plays

Opening Drives

These are gap ups with news or any catalysts. The key here is to get in early and salp the PM high low break for a profit and hold a part for the bigger move. 

1. Premarket High
   1. Get long any time after the first minute as the high breaks. 
   2. Trade example:

2. Premarket Low
   1. Get long any time after the first minute as the low breaks. 
   2. Trade Example:

Without big moves

The plays are before you are directionally biased on a stock and the first big move has happened. 

1. HOD Break
   1. Long as HOD breaks with volume. Better not to anticipate  the break without knowing direction. Here it may be better as an A+ setup to wait for a cleaner level break instead of just getting long. 
   2. Trade Example:

2. LOD Break
   1. Short as LOD breaks. Better not to anticipate  the break without knowing direction. Here it may be better as an A+ setup to wait for a cleaner level break instead of just getting short. 
   2. Trade Example:
3. Symmetrical triangle
   1. Near the open often stocks will squeeze. Look to enter as the first bar closes with volume and the second candle opens in continuation. 
   2. Trade example:

Continuation

1. Flag Break
   1. Enter as a strong green or red bar closes. If there is no volume wait for the break of the high of the breakout candle.
   2. Trade example:    
2. HOD Break
   1. Enter anticipating high of day break if there is clear direction and hold. Don’t get shaken out by profit takers exiting at highs. 
   2. Trade Example:
3. LOD Break
   1. Enter in anticipation of a low day break. Hold and don’t get shaken out buy profit takers as long as direction is clear.
   2. Trade Example:

Pattern/ Candle based Anticipation

1. Very good setups often come from channels,flags, triangles forming near a key level. Often the move is very strong and entering as or after the close of the break candle is difficult. Entering before the break when the pattern in itself breaks gives some of the best entries. 
   1. Trade Example:
2. The other form of anticipating the break that works is looking for a wick candle showing pressure in the direction of the break right below the level. Enter as the high or low for this candle breaks. 
   1. Trade Example:

Stop Placement

1. The easy way to set the stop is a close below the breakout candle. 
2. A smarter way that allows you to dynamically get the best risk reward is entering as higher levels of support forms and using a close below the nearest minor level of support as your stop. The nearest minor level of support is not always the same as the breakout level but if the breakout level is tested and supported this is the level.  
3. If there are 2 straight candles going against your position as in closing near high or low get out of your position. After 2 candles a pull back is not a pullback it is consolidation or reversal. 

Profit taking

1. Take a portion of profit at 10 % or the first sign of resistance as the stock pushes up. The first sign of resistance is NOT a pullback to your entry. Look for size on the tape or multiple tests of an area on the tape. 

Extended Entries 

1. If a stock is up more than 2 big candles or 3 smaller candles without renewed buying pressure in the form of a wick or if you are confident in your tape reading bids stacking do not enter. 
2. Sticking to A+ plays its better not to enter extended stocks in general and is better to wait for a non extended setup or a retest play discussed later. 

Time of day

1. From 930 to 945 be quicker on your entries and exits. Trade with caution and get in quickly out when you see any signs of danger
2. From 945 on as long as direction is decided you should hold through smaller pullbacks on scalps and catch a nice pop.