Scalping Trending markets

E

EsKiller

How to make money scalping trending markets:

1) Define what a market needs to do to be considered trending for your plan.
2) Have a predetermined set types of support / resistance structures (note, not every
trend has good support and resistance structures so not every wave is tradable) and only place trades near these levels

3) Define healthy and unhealthy price structures at the top of a wave to avoid trends
like clustering at highs / lows

4) Monitor structure of pullback ie volume and size of the bars.
5) Have predetermined entry techniques for moves for shallow, medium, and deep pullbacks as well as ABC or ABCDE pullbacks. Don't forget about new support / resistance structures that arise from ABC, ABCDE pullbacks.
6) exit @ s/r or at new highs/lows depending on structure.

There you have it ! Felt a little generous today. Enjoy.
 
EsKiller said:
How to make money scalping trending markets:

1) Define what a market needs to do to be considered trending for your plan.
2) Have a predetermined set types of support / resistance structures (note, not every
trend has good support and resistance structures so not every wave is tradable) and only place trades near these levels

3) Define healthy and unhealthy price structures at the top of a wave to avoid trends
like clustering at highs / lows

4) Monitor structure of pullback ie volume and size of the bars.
5) Have predetermined entry techniques for moves for shallow, medium, and deep pullbacks as well as ABC or ABCDE pullbacks. Don't forget about new support / resistance structures that arise from ABC, ABCDE pullbacks.
6) exit @ s/r or at new highs/lows depending on structure.

There you have it ! Felt a little generous today. Enjoy.
More...

How to differentiate a pullback vs a trend change? Usually it is too late by the time it is visually apparent.
 
traider said:
How to differentiate a pullback vs a trend change? Usually it is too late by the time it is visually apparent.
More...

Deeper the pull back, likely the more confident you are to take the trade as its cheaper, but in reality the deeper the more likely its a trend changer.

Trade small fast pull backs bravely, slow moves generally continue ie change trend.

Other than that, you can't really tell till after the event so got to get in and take your loss when it turns against you.
 
traider said:
How to differentiate a pullback vs a trend change? Usually it is too late by the time it is visually apparent.
More...

Personally, I use moving averages to differentiate trend change. Slope is in wrong direction, I don’t trade.

Also if price reacts in a specific way into a backtested support structure, price shouldn’t blow through support and should give u time to get out with small win or small loss.

Therefore, I’m taking information risk as opposed to price risk. Price risk is basically waiting for confirmation that it’s a pullback, I do risk is not having the proper info and basically buying as it’s pulling back. Can it continue to turn into a trend change and stop me out ? Absolutely. But that’s why u master your craft so that’s few and far between
 
ElectricSavant said:
Does tick speed factor into your trades?
More...

Good question. While I trade off the 1 min when trend scalping, this does come in to play.

Take for example the NQ.

We can safely assume an increase in tick speed is going to produce more volatility on a time based chart. In addition, volume will mostly be higher than normal except during contract rollovers and certain holidays. Therefore, i have the rationale that the market is actually less liquid at each individual price level.

So in regards to my trading, while each wave might not have a tradable s/r area, if it does, i make allowances for price to blow through this level more than average while still being a viable trade. Therefore, both stops and targets normally are increased. Deep retraces are most dangerous in this environment if I’m attempting a 3rd retrace in a trend (after 5 points in the Elliot wave) or if the move from A down to B up is 6 or more up bars and far exceeds normal wavelength.

In normal p/a environment 3 ticks in Es and 2 points in nq are good allowances for a move through s/r. Higher volatility is more.

Sometimes I even have to drop down to smaller time frames like back in February, but that comes with a decrease in contract size
 
You must log in or register to reply here.
Back
Top