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Showing content with the highest reputation on 08/20/2021 in Posts

  1. 1 point
    Hey Jeremy, This is a viable strategy and I know quite a few people who do this. I myself have started day trading by scalping large positions for very small movements. However; in order to be successful, you need to time your entry perfectly- every cent will make a difference in your P&L. You will need to watch price movement on a market for at least 5 minutes before entry keeping careful watch of the chart, volume, the tape, and level 2. Once you are certain the stock is in play, volume is strong, and the price is either oscillating in a range or moving in an upward trend, you should enter on the lower end of the range. If the 1 minute chart shows a bullish trend with candles making higher highs and higher lows, you want to enter at the around lower wick of the previous candle, and likely, sell within the same candle around the upper body of the previous candle as you do not want to wait around and risk your candle making a higher low and for the price to dip or flush. This is a very tough strategy to trade, however, if you master reading the tape and Level 2, you will be able to select entries on stocks that will produce a near instantaneous profit, but you also will have to cut your losses the very moment the trade goes against you. The most successful scalpers I know have insanely high win rates of 90%+, and they don’t let the losers stick around for long. The commission ratio (at least on IBKR) will also be quite high as you will be trading a larger number of shares for a lower %. The reason why I stopped scalping in favor of trading reversals off support/resistance is because it was taking much longer to meet my profit goals and on some days my commission would cut into 50%+ of my P&L.
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