What's up Everyone in this episode? I'm going to walk you through my scalping strategy. A scalping strategy is a technique of day trading the markets where you're taking really small base hits. Lots of small bases. So you see a setup and I'll talk about those in this episode.

How to find those setups where I get and where I get out, but you'll see a setup. You get in when you're up 5, 10, 15, maybe 20 cents per share in profit. You take the profit off the table. What ends up happening is you have lots of small base hits.

You're not gonna have the glory of big home runs, but you're gonna have lots of base hits. Lots of small winners. The downside of a scalping strategy is that generally your average winners will be small. That means if you're not good at cutting losses, your average losers could very easily become bigger than your average winners, and then that would require you to have a very high level of accuracy in order to be profitable.

One of the things that I've often said is that I find scalp trading a little bit easier, especially during bear Irish or indecisive markets because it's a little easier to predict what a stock will do over the next five minutes perhaps than over the next 50 minutes an hour, two hours, three hours, or certainly days of time. So by focusing on very small periods of time, you can use a scalping technique to capitalize on relatively small movements in price. Scalp trading is not going to work super well over the long term with like 100 200 share positions because 5 and 10 and 15 cents of profit isn't really enough to cover and to generate a substantial amount of gain. However, most traders who are focusing on scalp trading will make their way up to trading with one thousand, two thousand, four thousand, and even ten thousand share blocks scaling up to fifty thousand, seventy five thousand share blocks.

That's gonna be pretty hard to move in and out of the market and actually capture just like five cents of profit. So this is. there's definitely a sweet spot for the scalping strategy. I Would say it's greater than a thousand shares and probably less than thirty thousand shares for most trades, but of course there will be times where the volume is very high, the relative volume is really powerful, and there is an opportunity to take forty fifty thousand shares on some scalp trades so it can be done.

And I've certainly done it before in today's episode. I'm going to walk you through uh, a replay of my live trades actually from today today I Locked up uh, in the morning session about an hour and a half of trading over six thousand dollars of profit. and that was primarily scalp trading because we've been in this bearish market. I've just been focusing on taking these nice small gains.

Like I said, the problem and the downside is that one big loss can wipe out, you know, five or six base hits. so you know a word to the wise. be cautious, keep your stops really tight. All right, let's go ahead and jump in to this episode on my scalp trading strategy.

All right so you could see my uh, my trading screen right in front of you and I'm going to go over the first trade that I took today which was on Kit K-i-t-t This is a stock and you can see the chart. It's a smaller chart right here in the upper right hand corner. This is a stock that hit the Haya day Momentum scanners at about 8 30 this morning. Now one of the things that I was sort of interesting about this stock is that as it hit the scan right here so it's lighting up the scan, this is the stock.

this is a time and these are my custom scans that I've built out. so these are available with Warrior trading or day trade Dash So the stock starts squeezing up and the couple things I noticed right away is that it's hitting multiple strategies of my scanner to the same time it's moving up more than 10 percent. It's also a low float stock and a former Momentum stock. It's a stock that's had a history of making some moves in the past, so it squeezes up from 320 up to about 460.

or sorry, 420, 420, 416 something like that. So why was this a stock that I thought was a good candidate for scalp trading? Well, there's a couple reasons generally speaking: I'm going to focus each day on the leading gapper. So what I want to be doing is I want to focus on scalp trading the most obvious stock in the market each day. So each morning and I'll get my whiteboard out here.

Um, you know the market is as you know. Uh, pre-market starts at 4 a.m and after hours goes to 8 P.M All right, Regular trading hours: 9 30. Until you know approximately? well, it's exactly 4 P.M All right, so those are our regular trading hours. This is after hours.

This is pre-market here. so if, uh, if you kind of created a a chart here of number of um, you know, participants in the market and it's part for participants. you would find that at 4 AM there'll be very few participants in the market. There won't be a lot of people trading at 7.

A.M When a lot of major Brokers allow traders to begin executing orders so many Brokers won't even allow you to start trading before 7 A.M So starting at 7 A.M All of a sudden, you're gonna see the total number of Traders you know, jump up substantially and that keeps increasing as we come into the open. and you'll find traders that don't even start till 9 30.. So it keeps increasing probably until about 10 a.m All right, so this is 10 A.m and then what seems to happen is We Begin This sort of decrease, we start coming back down and it it drops off probably pretty quickly and then after hours it really dwindles down. And so what I find is as a momentum Trader Uh specifically a momentum Trader That's focusing on trying to do scalp trades.

you're going to do best during the periods where there is the most volume in the market because that volume is what's going to allow you to jump in and jump out relatively quickly. So I would say The Sweet Spot is probably you know going to be right in this area and I can't say for certain exactly what time this would be, but you know, let's say 8 30 till you know, maybe 10 30 or something like that. So this is about a two hour window when we typically will see the highest volume in the market and this has been pretty consistent over my years of trading. So if we go back to the screen share, it's 8 30 right now.

So we're kind of coming into the sweet spot where we're probably going to have more eyes on the market. So stocks that are hitting High day momentum scanners are going to be closely watched by all the Traders out there. So if a stock is popping because it has breaking news, it's giving us an Algo. Spike For whatever reason it's it's moving higher.

That's something that you want to look at very carefully. and so on this particular day, uh well, this is this morning. our Gap scanner which is right down here in the bottom corner. This is a scan that's telling us uh, the uh, the highest percentage gappers in the entire stock market.

and so our leading gapper was Pgy at 52. our second leader was Vev at Uh 46. Now both of these are lower priced stocks I don't really I didn't really care for them I already looked at them and I said no I don't think I like them. they're not even really moving that much shpf uh sorry, sh uh uh FS This one was moving very slowly, had very light volume, wasn't really that interesting, and this one was not very interesting either.

And so when Kit popped up at that moment, it was the it was the biggest mover in that like 10 minute period. and so one of the ways that we can look at this is by scanning for stocks that are moving right now and so stocks moving right now naturally are going to capture a lot of attention from traders that are in the market. and so as I saw it starting to move I thought okay this is something that I want to watch. So first it pops up as you can see right here to about 420, then it pulls back to like 340 345 and I thought that's a sharp pullback I don't mind to pull back, maybe to 375, maybe 360.

But pulling back and even breaking below the half dollar of 350, that's not great. But this thing rallied back up and in these three candles here it surges back up to 420. And this is when I said okay I have to start taking this stock seriously I didn't buy the dip on it but I need to start watching it now because it's clearly moving fast and so I pull up the stock and I put my order to buy. so I'll show you I'll sort of walk you through how I take this uh, this first scalp trade.

So uh, and for Traders that are taking part in Trader Rehab? Uh, which is a program that um I've created for Traders who are, uh, chronically struggling. Trader Rehab is a program where you focus on taking one trade a day. You take one trade a day. you get in, you get out.

That's it. You don't over trade, you come back tomorrow. You do that for first for 10 days. The goal is to be green.

At least six out of those 10 days. that's 60 accuracy. You know that's kind of like you want to be at least at that and you want to be green. And then you start building on that track record by continuing to trade and trading a little bit more frequently.

So for a stock like this, I knew that it had just popped up to a high of Uh 428 and of course that's noted on the scanner right here. and so I was watching to buy this little dip right here for the break back through 428 and so I see it consolidating and I went ahead and punched the order right there. and I bought 6 000 shares with an average price of four dollars and 20 cents I am looking for the Breakthrough 428. in this case we get the break of 428.

It goes to 438 440 on the ask. So now we're up to 440 which is solid right? That's 20 cents. This right here is a scalp trade. You've got 435 on the bid I show right now an open profit of a thousand dollars on this trade.

This is a picture perfect scalp trait. If you took one trade like this per day, that would be enough. Now granted, if you took this was 600 shares, uh, you would only be up 100 bucks. All right, not that 100 bucks a day is is bad.

That would be fine if you took it. With only 60 trades UH 60 shares, you'd be up only ten dollars, right? So this is where some traders who are trading was 6 100 200 shares might feel like I can't really make enough scalping uh to really to make a considerable amount. And generally the reason that people would be trading with only 50 100 shares is because their accounts are so small they can't afford to buy more. Here's kind of the the tragedy of trading.

If you have such a small account that you can't take profit unless you're making 40 or 50 cents a share, you've set the bar really really high to be profitable because there are a lot of super successful Traders out there who are not consistently pulling 40 cents of profit out of the market each day. They might only be pulling 15 cents, but they're doing it with 10 000 shares, they're making 1500 a day average and they are crushing you. And it's not because they're trading getting more out of the market, it's because they're able to trade with larger size. So you know there, there is definitely a sweet spot in terms of account size.

Can you trade with a minimum of 500 at some of Cats Some? Brokers Yes, you can. Is it probably better to scale up an account to four thousand? or five thousand? Probably. And in this case, with a four thousand five thousand dollar account, you would have been able to buy a thousand shares of this type of trade and you'd be up 150 bucks. You know you do that 10 days in a row and you know you're averaging 100 150 a day.

Maybe you have a couple red days. You know. Now your account's gonna go from four grand to five grand. You do it for another 10 15 days, your account's growing from five grand to six grand to Seven Grand It's starting to move up obviously.

I'm gonna disclaim that my results of course, are not typical. Take it slow, manage your risk, and don't trade money you can't afford to lose. All right. So having said that, uh, the first trade here is on kit and um, so in this uh trade I'm up uh with six thousand shares 20 cents and I end up uh, adding to the position to 7000 right there and then I try to take some profit.

uh, right through this area I book a little bit of profit. it didn't break through 40. it does this sort of like little pullback right here and I end up taking my profit, uh, mostly off the table. So the first trade on this stock is gonna yield around 800 or 900, which again, is pretty good.

15 cents or so on six seven thousand shares. All right. So now that I've got the first trade out of the way for a Trader in Trader Rehab, the first trade is the only trade. You just take one trade you're in.

you're out that you're done for someone like me who's ready to trade more actively as long as the stock is proving itself. I'm going to keep watching it for high a day breaks. Remember each time it hits high a day, it's going to be on high a day. Momentum scanners that Traders all around the world are using.

So a stock hitting new highs moving higher, it's going to be the most popular stock during that little time frame. Something to be cautious of is when you have four or five stocks all moving at the same time and none of them are really obvious. It's always better when there's just one that probably all the Traders out there are focusing on. That's where you're going to see cleaner, follow through, more predictable price action.

Okay, so on this stock. Now we've got a high of about four dollars and um, 43 cents approximately. So I'm going to draw my little arrow here marking out the the trades I've taken so far. trade one was right there and then I added for the break of 40.

didn't really get a big breakout, but sitting at 955 dollars in profit and these are on two scalp trades, both of these trades were relatively short. I've only been trading for like four minutes so far, five minutes. so now I'm watching to add back for the Breakthrough the half dollar stock hit the scanner again there at 449.. So I add right there at 50.

All right. So I added the half dollar and now I'm going to look to do a quick half dollar whole dollar breakout when I get in around a half dollar like 450. Sometimes I'll get in a little ahead of that to anticipate the break like 445 or 448 and then look to take profit at 454 455 as it breaks through. In this case, I got in right at 450 and I'm looking for a move up to 460.

it really has to hold that half dollar of 450. I'll do similar trades as it approaches five dollars, and you'll notice when it approaches five that it breaks five. it gets over it and then it comes back below it so it's not able to hold that critical level. That's a problem it ends up being I think a losing trade in that case, but we'll go over that in a second.

All right. So right now we're straddling, but it looks like holding over it was 49 by 50 for a second 55. Now it's 53 by 56. All right, so there's 60 on the ask and boom I'm going to take some profit off the table and now I'm up 1300.

That's again a 10 cent scalp. It's a quick little breakout trade on a stock moving higher. Now we're up 41 percent. you could say well, geez, why didn't you just you know, get in way down here on that pullback which I wouldn't have because it retraced a little bit too much or why didn't you just get in at 4 20 like you did before, but just hold it until oh I don't know.

Maybe the first red candle and one of the things that you'll find is that in these bearish markets, there is so much indecisiveness that a stock could easily squeeze up to 450 and then go right back down to 420. And if you don't take the profit when you have it, boom, it's gone. So this is a market where you have to pay yourself. you have to be really disciplined about taking profit off the table.

So I'm sitting here up about thirteen hundred dollars, the stock is moving a bit higher and now I'm watching for the next trade. All right. So our Hyatt day was about 60, 70, 470. so we're watching the 470 level.

If it breaks 470, the stock is going to be back on the high day momentum scanners. Okay, so we're going to jump forward to the next trade here. So the next trade I Just bought back at Um 458 so it came back down and it's proving that it's holding over psychological psychological support of 450. So I take a new trade at 458 with a stop at about 450..

So each of these stops the risk in most cases is about 10 cents per share, risking about 10 cents 12 cents. There's a couple that end up going a little further against me, but and then there's a couple that go a little bit further to the green side as well than than my target of 10 or 15 cents. So it averages out what you'll notice. Um, for those that have been watching me trade, uh for a while, If you look at my metrics and um I can compare my winners or let me just compare my winners versus losers, you'll notice that, um, over the period of you know, this year.

But I'll just look at the last month for example. So start date Um, right here. So we're going to compare losers and Winners all right. And what I want you to look at is the average uh, profit per share.

And uh, so what you'll see right here is the average profit for winners is 14 cents. The average loss for losers is 10 cents per share. So if you're trading with 10 000 shares for every trade, that'd be 1400 winners and a thousand dollar losers. The actual dollar amount ends up being a little bit different just because of how I manage my risk.

about 600 winners and about 268 dollar losers. So that's that's really solid. That's a really solid profit to loss ratio, winners being double the losers. And then if we looked at the um, the total gain here for that period of time, you'll see that the profit was a little over a hundred thousand dollars.

About a hundred and thirty thousand, right? So an accuracy was 68. Which is you know that's good. And a lot of the trades from the last month have been these types of quick breakout trades as a stock is moving higher. I Haven't had a lot of home runs, but I'm working with base hits and you know, like you see, they're 100 in one month is a fantastic month.

Okay, so uh, all right. so I add back here notice uh on the level two, you'll see that there's a big buyer right there at 455. So when I saw that buyer I punched uh, my button to buy at 458. it ends up going up to 468 that provides about a 10 cent bounce right there.

It's not a picture perfect trade. it does end up coming back down. it kind of double tops at around 470. It can't break through it, but it adds a little bit more profit now.

I'm at 1464 on the day. and what you're going to see is that taking these kinds of Trades is how I just slowly add a little bit of profit, a little bit of profit. so I can move forward here. You know right there that was another trade this one.

Uh, I got in at 479 High a day break. now we're at 490 I added it for 90. now we're at 494, 495. and I'm going to take a little bit of profit here I was looking for the break of five.

we didn't quite get it. so I was trying to anticipate the squeeze through that level. There's some profit at 98 and I'm happy with that. That's 1800 a profit right there and it's still only 8.42.

I've only been trading the stock actively for like 10 minutes. All right. So as we come up to five dollars, I end up taking a bigger position up here at 594. I'm taking this position on this micro pullback to anticipate the Breakthrough five and then I'm looking for the break of 5 10, 5, 15 and squeeze up to 525.

I had the right idea, but I was a little early on the trade I scaled up a little bit too much I held through a pullback down a thousand. it comes back up and I end up unwinding the trade. Uh, about twenty three hundred dollars of profit and I unwind it for a small loss, but not a big loss. So I'm at 2100..

All right. So I pulled back a little bit there, the stock pulls back and then watch as it curls back up right through here as it comes back up. I'm going to take that next trade on the break through the highs. All right.

So we're watching for another high day break and let's see I moved my level 2 window up to here so just to orient yourself. All right. So watching. now for the break through the high which is 5 14.

All right. So I see we're holding back over critical support of Five. So I'm going to buy with a stop at 4.99 6, 000 shares in stop at 4.99 and there's a little profit at 516. So now I'm up to 20 uh, 2400 2400 on the day.

I'm going to look to add again about 517 to anticipate the Breakthrough the new high a day 520. of course I'm thinking about the psychology of where short sellers would be stopping out. When they stop out, you expect to see covering which are buy orders. so a high a day break can create more short covering.

So then anticipating that and now we get to move up to 525.. there's a 10 000 share bid at 521 so it's starting to move a little bit higher. One of the things that you're not able to see in this broadcast are is my routing strategy. This is something that's reserved for members over at Warrior trading.

Warrior Pro Students who can see the order routing and they know the hotkeys that I use I do trade using dark pools for better liquidity and better execution. I also use the lit markets and I have some Advanced order types that we covered as part of the Algo scalping class over at Warrior so they have access. They have us this, um, without my face right here so they can actually see all the orders that go through. All right.

So we've got. um, let's see three thousand dollars of profit right here. And now I've added back at 27 looking for the Breakthrough 30. we get a little bit of a false break here.

it doesn't quite go higher so I'm at 2500 and then look at this. we get another move. Uh, higher. but I on this one, take a loss.

So I have a 200 loss there. That's a small loss that's tolerable and now we're coming up to 540. So you can see as this is moving higher: 542 544 I keep taking these quick breakouts as it goes higher. This is a scalping strategy where I get in I get out I get in I get out I don't overstay my welcome I try to cut the losses quickly when it shows strength I add back so I take the high a day break out I book The Profit and then I go back.

And so you know over the course of all these trades, you can see I'm sitting at like thirty four hundred dollars of profit. I've had a couple of losses, but they've been relatively small. The only time the losses will get bigger is if I have large share size which is poor timing at the moment that it reverses and you know ultimately that does happen from time to time and that's your biggest risk as a scalp Trader is that you've you over leverage yourself on one trade with big position and that's the moment you catch a 50 Cent drop. Educated intuition is going to be really important here to help you learn the times to start to scale down and reduce share size and the times you want to scale up and be more aggressive.

I'm going to try to be more aggressive on the front side of the move when the stock is moving quickly and showing some real strength. I'm going to try to scale down as we have a Macd crossover and we're starting to come into a period of congestion. Right now, we're still moving higher. So this all looks, um, generally you know, really good and it does go higher.

it goes up over six dollars a share. So as I continue to trade this stock I Ended up trading a couple of others that popped up and between a starting time of about 8 30 and the end of this recording here which is around 9 48, 10 a.m I was able to put together about 6 800 of profit and that was predominantly on small base hits. I didn't have any huge winners, it was just base it after base it after base hit. Now unfortunately at the end of this recording I ended up taking a loss on tops I got in a little bit too high I did exactly.

You know kind of the thing that you've got to be really careful about when you're trading these types of stocks and it ended up moving higher. It continues to move higher here, which is great to see, but you know it just happens to be the case. I Took a trade on it. Uh, it was right in.

Let's see this area here. it rejected and dropped down and then I didn't get back in as it moved higher because at that point I was kind of you know I had checked out I was done and even on this stock as I was was mentioning before when we were talking about you know Peak volume the highest volume was still early in the day it was right here. so as it continues higher here and it continues higher right in this area, these are on lighter volume and these moves on lighter volume can start to become risky and more difficult to utilize the scalping strategy on because there's not as much liquidity to get in and get out quickly, especially with larger size. so you know that that just sometimes happens to be the case.

Um, but while there are some downsides to using a scalping technique or a scalp strategy, you know, namely, that losses can quickly become too big and then if that happens frequently, you have bigger losses on average than your winners. There's also some really great advantages: I Find that my accuracy is pretty high because of that willingness to take quick base hits and I find that by focusing on quick base hits, what ends up happening is my accuracy is higher with higher accuracy I have more confidence with more confidence I Feel comfortable trading with larger share size and then my profits are higher and then that you know kind of becomes this positive, reinforcing cycle of increased confidence, increasing accuracy, increasing profits, and it all kind of comes back to focusing on base hits, which is really the foundation of a scalping strategy that's not going to be for everyone Again, you know, like I said, if you've got a really small account, uh, it may not be a strategy that you're able to implement if you've got a larger account, but you're not disciplined at cutting losses. You could also find that you struggle to implement this type of strategy, but I have seen Traders Implement a scalping strategy across all different Brokers TD Ameritrade high-speed Brokers Like the one that I'm using equally so you know it's not like it's you have to use a specific set of tools I Think that using tools that enable you to trade quickly makes sense, but it's not a requirement, so it's something that you should definitely look at if you want to learn more about scalping. I've got a couple more episodes that you guys can check out.

I'll put links right here and right here I Hope you've enjoyed this brief episode on my scalping strategy I Hope you hit the thumbs up I Hope you're subscribed to the channel and I'll see you right back here for the next episode Live on YouTube Alright, I'll see you guys soon. Hope you really enjoyed that video and make sure you hit the Thumbs Up And subscribe to the channel if you haven't already. Our goal is to hit 1 million subscribers this year, but we won't get there without your help. So please, please please hit that subscribe button.