Simon Says Scalp

[Simonyadig]

I'm going to keep a little journal to document my descent into madnes... I mean document my path to becoming a scalper. I may end up changing styles eventually but to start out I am going to attempt to become a successful scalper, trading the Dow mini exclusively. I'm going to use this journal to document some of my trades, good and bad, and to ask questions and take input from people who offer it. I am in the process of paper trading and plan to go live as early as next month and October at the latest. I will be starting with a small account of $3k-$5k. It's money that I technically can afford to lose, but obviously I'd rather not. I'm choosing to scalp as any other method seems to require more capital as you need to handle price swings. With scalping I can keep close stops and at least not blow out my account on one trade.

Today was the second day of my second week of paper trading. My plan so far is to use candles, price action, support/resistance, and volume to find quick reversal trades. I have a 1, 3, 5, 15, and 60 minute chart open. First I wait for the price to trend in one direction for a while and start to become overextended. Then I start to look for reversal candles on the charts. Ideally I am looking for the longer term charts to show a possible reversal and then focus in on the shorter term ones. If the 15 minute chart is telling me a reversal is coming, I'll be more confident and aggressive on any 1 or 3 minute chart signals. My strategy is not very refined but ideally I'd like to have a lot or 2 that I lock in for very quick gains and then possibly another lot that I let run. With experience I tweak it and find what works for me.

I encourage any advice, questions, or words of wisdom. I appreciate all the help that MC and Cire have given me and I'm thankful that MC is providing this forum to make my learning process that much easier.

[Simonyadig]

Here is the only trade I took today. When I start playing with real money, I want to be extremely selective when trading, so I'm trying to virtual trade the same way. This was an ideal setup because the price had moved a good amount up recently and therefore had something to reverse. Reversal candles are meaningless if you don't have price action to reverse. You can see that the 1, 3, 5, and 15 minute charts all had reversal signals right about the same time. I scalped this for a decent gain on the break below the red line I drew on the 1 minute chart. In the future I want to recognize the potential in the longer term setups and let a portion run because I left decent profit on the table. I don't want to get away from scalping, but if I can reap the benefits of letting a portion run and still have my quick gains, why not? Like I said, I'm still very unrefined but I feel I have a solid base to start from.

[MC]

You were my first true mentor on stocks which set my mind in the right direction for the broad market.
I'm glad to give any info at my disposal back and I would wish you luck but you don't need it.,,you got the skillz to pay the billz.

I'll be watching you here and should be live soon myself to trade stories.

Added---
The charts look nice n' clean. And I like the eyes on confluent action in different timeframes.

[MC]

Daily and Weekly Videos

Be sure to check my levels out as well as the levels SNP500Trader shows...he does very good analysis IMO.

[Simonyadig]

I'll be sure to check those vids out everyday and I'll definitely note your levels as well. MC, what time frames are the charts you use and what moving averages do you use as well? I just have a 8 period ema on my 1 minute chart, which at the moment seems to work for me.

[case]

I like the style you are going with.

Waiting for a "perfect storm" of signals on multiple time frames. Very smart, and I think your odds of calling moves correctly are going to be very nice.

I'm looking forward to seeing this thread flush out.

edit: wanted to ask, is it easy with the multiple time frames to keep up with making sure all your times are lining up?

[Simonyadig]

Originally Posted by case

wanted to ask, is it easy with the multiple time frames to keep up with making sure all your times are lining up?

It seems relatively easy, though this style of trading (scalping) is still new to me. I don't plan on waiting for all of them to line up for all my trades, but that is the ideal trade I'll be looking for. If I see a good enough setup on just the 1 and 3 minute charts, I'll take the quick scalp, maybe just 1 contract though. If I see all of them lining up nicely, I plan on being more aggressive and then letting a portion run after the quick profits are locked in.

[MC]

Originally Posted by Simonyadig

I'll be sure to check those vids out everyday and I'll definitely note your levels as well. MC, what time frames are the charts you use and what moving averages do you use as well? I just have a 8 period ema on my 1 minute chart, which at the moment seems to work for me.

I mainly work off a 5 minute chart for the YM. I use 60 min, daily and weekly to try and spot key levels. I almost wish I stayed with Tradestation for the platform. They have the best continuous futures contracts charts I've used personally. I'm sick of shotty charts and only getting good charts for the quarterly contract.

I run 21, 50 and 200 sma's and honestly I rarely use them except to scale out if they show big opposition. 8ema I have run but it's too quick for me since I don't aim for scalps myself.

The sooner you incorporate scale outs the better IMO. Lock in guaranteed small profits and move the stop to breakeven. 1 big trend that you nail and trail will make your day, week or maybe more.

[case]

Originally Posted by MC

I mainly work off a 5 minute chart for the YM. I use 60 min, daily and weekly to try and spot key levels. I almost wish I stayed with Tradestation for the platform. They have the best continuous futures contracts charts I've used personally. I'm sick of shotty charts and only getting good charts for the quarterly contract.

I run 21, 50 and 200 sma's and honestly I rarely use them except to scale out if they show big opposition. 8ema I have run but it's too quick for me since I don't aim for scalps myself.

The sooner you incorporate scale outs the better IMO. Lock in guaranteed small profits and move the stop to breakeven. 1 big trend that you nail and trail will make your day, week or maybe more.

Yeah I took out every sma under 21 since I never even look at them and they just muddy up my charts. I tend to hold things for 2-3 days though so they aren't useful to me like they would be for you simonyadig

[Simonyadig]

Yep, scaling out is my plan and for the most part what I've been doing with the paper trades. Sometimes I've only traded 1 lot and that's when I get out with a quick scalp. Anything more and my goal is to scale out and leave maybe one on the table. With my small account I can't trade too many contracts at once though, so I'm planing on 1-3 normally, maybe 4 tops. Still working out the kinks and figuring these things out.