Scalping Trading Strategy - Fast & Profitable Secrets Revealed - WIRED is where tomorrow is realized.

Scalping is not easy.

You could make fast money quick, but it could also be extremely risky if you don't do it the right way.

(bright upbeat music) Welcome back to another Humbled Trader video where I've made hundreds of day-trading videos, including step-by-step trading strategy tutorials and pro tips.

A lot of you guys are still asking me to teach a very specific trading strategy, which is scalping.

I get it.

Who wouldn't wanna make some quick profits in a couple of minutes and sometimes even a few seconds? In this video, you are going to learn the three key criteria for scalping, the best indicators and chart setups, and how to find the right stocks to scalp.

Once again, make sure you smash the like button and subscribe to the channel, especially if you want to learn more trading strategies that actually work.

If you're relatively new to trading, I really hope you pay 100% attention to this video, because it's really going to help you out.

Let's go.

Let's start with my scalping criteria number one.

I would only scalp if a stock is having a daily breakout or breakdown.

So looking at our chart here, ETNB, this one is, you can see, gapping up to pre-market around $6 from prior day scales of $5.

Now if you look at a dating chart around the $6 mark, this is why I call the intraday key level.

This is a huge breakout on the daily chart.

Looking at a chart, you don't have the prior resistance around sixes until the beginning of the year.

So this is a huge level.

This is essentially a breakout about 52 week highs.

The reason we wanna look for stocks are breaking out of a daily key level.

Like this one is so we can have a lot of range to the upside.

So we can see this thing once broken above a $6 resistance pre-market.

This thing ran all the way to $7 pre-market around here and at the open the spike to 770s.

In order to get the range we want, we need a daily breakout.

Now this will be crucial whether you want to loan the stock or short the stock because once you have that range that's broken out, you can see you have a dollar gap to a downside.

Once I decided to short the stock, and if you're looking to scalp, you need range to make your money, right, When you're scalping, you wanna see stocks that making 50 cents move a dollar move or more.

You're not gonna be in here trying to scalp like 5 cents.

For me, I looked at how the stock is opening into the 770s area from the key level.

So that gives me around a dollar downside if I were to short the stock.

So that's why I got in the stock short around 750-760s, right at the open and look for the downsides towards do you want breakdown towards $7 and 680s area.

So this big of a range is what we're looking for and you can see after about 10, 15 minutes after the open, my trade is closed, I got what I looked for on the scalp side and the trade is done.

The second must-have criteria when scalping stocks is above average trading volume on the particular stock.

We talked about range earlier for the stock, and while that is important, you most of all you need the volume.

Without volume, you will not be able to get in and out of a stock really quickly, which is really essential if you are looking to scalp and using the scalping strategy.

So back to the example we have here on ETMB, you can see the stock on the daily today trade around 35.

9 million shares volume and that's, that's above average.

You can see on the daily.

This on trades on average about like 1 million at most on the high end and usually trades about 500,000 shares.

So on any normal day you will not look to trade the stock at all, not even just to scalp it.

So looking at the scanner for the stock pre-market, you can see ETMB was the second gapper on the day gapping up to around 35% since prior days close.

And the volume on the day was 14 million pre-market.

And on the average daily is only trading about 300,000 as we can see right here.

So this is how you can really quickly find out if a stock is trading above average volume and when it is, it's usually going give you above average range on the stock and that'll be perfect for scalping.

Another very crucial thing to mention about the volume is that usually when you have above average volume, you're gonna get normal spread, meaning that the spreads at most, you'll get on this example here, you get a 1 cent or 2 cent spread.

The spread is the difference between a bid and the ask.

So if the spread is really thin, that means you have less chances of getting slippage and losing money when executing.

So looking at this other example here, NRBO, you can see the spread is about 50 cents and that's already really high, but earlier it was actually around 70 cents to a dollar.

So if you are looking to scalp a stock, this is the kind of stock you want to avoid.

Higher spreads, lower volume, and lower range.

So you definitely want to avoid it.

Now the third crucial criteria for scalping is that you wanna make sure you're picking stocks that can give you minimum of 1-2 or even greater risk/award.

So here's my true opinion about scalping strategy and this is one of the reasons I almost never talk about it on my channel is because scalping strategies, usually their risk/award is only 1:1 or sometimes even less.

So meaning you can be risking $1 to make $1 or $1 to make 70 cents.

So that's the reason I think in my opinion, don't hate me.

I think scalping is not a reliable strategy long-term.

I think it's one that's enough to get you around for you know, a couple of small trades here, but as a long-term you want to develop your scalping strategies into a bigger picture kind of trade.

So here's an example of a scalp short side I did on Oracle and I didn't do that well on it because as you can see, the risk/award is not that great.

I risked it about 70 cents to make a dollar, which it's okay, but it's not exactly one to two.

Essentially you wanna look for entries around key daily levels.

So if I was looking for the short on the stock, which I did short around the pre-market areas around 78-80s and above it, you have a small resistant around $79 here as you can see on the daily.

So that would be your short entry.

And ideally once you enter the stock short, you wanna use the higher day as your risk.

So if I entered around the 78-90s area, my risk is about 50, 60 cents off the higher day.

So I'm risking 60 cents.

Now we're looking at a downside for the stock.

Can the stock have a lot more downside than 60 cents? Ideally I want to see a dollar, a $1.

20 or more.

So if the entry's here, let's see the downside, you have the after-hour small-level here around $78.

So that's 80 cents to a downside.

And then after that you have prior days' closed area around $77.

So that means I could potentially make about something do the math pretty quick.

You I could potentially make 80 cents or 1.

80 cents.

So downside.

So that means I could potentially make 1:2 risk/reward.

So this is a trade for a scalp that makes sense.

Now that we cover the three key criteria for scalping.

Now I'm gonna show you guys how to set up my chart and the Highly, highly requested indicators for scalping.

So make sure to smash the like button and make sure to share this video with your friends who are also looking to get into scalping strategies.

So in order to do the scalping strategies well, you need to make sure you have a very fast execution on your broker platform.

No, unfortunately your think or swim is not gonna do it.

Your Robin Hood's not gonna cut it either.

They're not fast enough.

So what I use right here is CenterPoint Securities connected to DAS Trader Pro as my platform.

So let me show you how I set up my charts.

I like to have my daily chart on the left side here.

This is a daily chart.

I have my volume and the daily candle and intra date.

I usually actually use around two minute charts, sometimes five minutes to do the scalps for my stocks.

So this remember intra day chart side by side with the daily charts, just because of all the criteria we talked about earlier, we need to use the daily key levels.

So that's why we wanna have it side by side for you to spot it really quickly.

So besides the entry day chart windows, I have my order entry montage window here.

So this is a level two for CenterPoint level two, this is where you enter your tickers here, Oracle and level two.

And usually I have time in sales on the side, but it's hitting in the window.

And one thing that's very notable about this broker platform is that they have really extensive list of advanced routes.

So if you click the dropdown menu here, you see a huge list here.

I actually use only about four of them.

They have a lot of advanced one for OTC stocks.

If you trade those, I don't trade OTC stocks, but they have different ones for adding to liquidity and removing them, getting rebates from different exchanges.

So that's very, very useful.

You can check out the website with a really extensive list of all the routes, the descriptions, and how much rebates you can get.

So this is what I use in terms of execution.

I just really quickly load the price by clicking the level two bid and ask and click sell or short and buy or cover.

When I'm doing these really quick scalps, again, they load really quickly and that's essential if you're looking to scalp.

And this year in 2022 it's being a heaven for short sellers, especially if you are scalping and a lot of these low-float pump-and-dump stocks.

So you need a broker that can give you all these locates in order to scalp and do these short-selling strategies.

So a lot of times I have my locate window open and how you get there is go to trade short locate.

That's how you co-op the short locate window.

So earlier, if you look at ETMB, I believe that stock was actually easy to borrow, so free to borrow.

So what you do here is enter the ticker, enter the number of shares you're looking for.

Let's say I'm looking for a thousand shares and just quickly inquire all, and the stock is already short about, that means it's free to borrow.

So it doesn't cost me anything to locate the stock.

So that's a really, really great benefit.

So looking at another example here, this is a different stock that ran today, AEHR went from $14 to $16.

So if I was looking at a stock, I probably look for $17 short on a daily back to retest of the daily resistance.

So if I wanna short the stock and scalp it really quickly, I need to make sure that I can go into the short locate window, type in the ticker, how many shares I want, and click and inquire.

Oh, and you can see it's gonna cost me $17 to locate for a thousand shares on the stock.

So if you are scalping these quick volatility on the stocks, just make sure you have access to the easy-to borrow stocks as well as the hard-to-borrow stocks.

If you're interested in CenterPoint securities, they're actually running amazing offer right now, giving away a lot of trading softwares and huge discounts.

So make sure to check out the promo link down below if you're interested.

Thank you to CenterPoint insecurities for being a humbled trader partner.

Now moving on to the juicy part, how to set up your indicators for scalping.

Looking at my platform here on the chart, all I have is this purple line here and that's VWAP and that's all I use.

I also pair that with a volume indicator at the bottom, I use a volume average indicator.

I have the period of I think 13, 13 volume average indicator down here.

So what you do is I look at how the volume is breaking out above the average.

Down here in this black line here, a volume is breaking out and consistently holding above the average.

That means the stock is more downside.

If I'm looking to short the stock, which as the earlier example you recall, I was shorting the stock.

So that's how I use the VWAP indicator.

I use the breakdown as the price target and I use a retest.

You can see all these little retest around the VWAP area of 680s.

I use those as my additional entry points.

If you wanna learn more in-depth about how I use VWAP, the indicator for all of my trading strategies, not just scalping, then you can check out this video over there.

I explain how I use VWAP indicator in detail.

Next we're gonna talk about how to find the right kind of stocks to scalp.

We talked about earlier with our three criteria, we're looking for stocks that's breaking out of key level, trading above average daily volume and also can give you above average risk/reward greater than 1:1 or 1:2 So how exactly do you look for them? And this is where a technical scanner really comes into play.

So what I use, and I've been using them for many, many years now, is trade idea scanner.

So if I show you really quick here, this is what my trade idea scanner looks like.

I have my pre-market gainers.

So if you scan for stocks that's, you know, gapping up, usually they're gaping up above the key levels or you know the gap downs over here on this gap down scanner, it's showing stocks, it's gaping down below the key level.

So that's a really quick way for me to scan through all the stocks that could be potentially good to trade.

And it also shows you the volume on the day pre-market.

So volume today compared to the daily average volume over here in this column.

So I can really quickly compare side-by-side how the volume today compares to the average volume and see whether the stock is trading above the average.

And this tool trade idea scanner is one of the many tools included in the CenterPoint promotion for free.

So make sure to take advantage and check out the link down below.

I used to pay thousands of dollars per year for these tools.

Now I get them for free.

If you're interested in CenterPoint Securities, you can check out my link below for 50% off on commissions and short locates, including trade ideas and many other tools for free for 60 days Comment down below if you've been using scalping strategies and if any of the tips in this video helped you out.

If you want to see more, make sure to let me know down below.

If you wanna learn more of my trading strategies beyond just scalping, but looking for the bigger picture trades, then make sure to check out the Humble Trader community down below.

Thank you so much for watching us always.

I'm the humble trader and I will see you guys next time.

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