Scalping TipsThis is for intraday/week option scalping primarily. Can be weekly or monthly calls. Can work for shares as well. These are probably my bedrock top items I am working to make natural vs conscious thought, and just my opinion. It is also proving out to be much more consistently profitable if you are a trader.
A few basic tips I have learned the over time through personal experiences, execution, trial and error, studying the likes of Dan, Ripster, Redler, VS, Elite, etc. Nothing earth shattering but these can make the difference between a red or green trade. Adopting a little here and a little there.
- Mentally probably #1. Probably hardest to accept if you like winning. Cut your trade as soon as the trade goes against you technically. Its a cheap price for an option contract ($0.65) vs. being 10%, 15% or more % down and hope it comes back. No need to hope the price action and chart will tell you anyway. Ripster I think said he averages 1/3, 1/3, 1/3 between lose, scratch and win. The key is the losers must be smaller than the winners. Cutting is key.
- Scale out. Take you money. Dan refers to it as take on way up or down. Others as scale out. Don't wait for max profits. As an example if I buy 6 contracts I scale them 1 or 2 at a time on way up or down between resistance levels usually when approaching. The math works out in your favor.
- Leave a runner....or two. Its ok to leave a runner but make sure to cut it at break even or above.
- Don't watch the profit $ or % constantly. Focus on the levels as they will determine profit and loss.
- Technically probably #1. Know your SR (support/resistance) levels. Begin with daily, then add hourly the if you want add 10 or 15 minute levels. I use colors for each time. One for daily, one for hourly and one for 10 minute. Helps me not to think intraday and just execute which level I am approaching.
- Big one that has helped me gain more winners due to entry and exit. Intraday add trend lines diagonally. Keep updating the as things change. If the price action breaks the up or down trend the vast majority of the time its heading to an SR level.
- Volume. Volume is key. High volume and you have movement one way or another. Pay attention to what volume steps in and when (SR levels). Stagnation/sideways for too long and IMO risk. When sideways may be best to just exit and reenter when direction takes shape.
- Trust your levels not your emotions. Like a pilot let the instruments tell you what's happening.
- Enter after confirmation or 2nd candle calls or puts. No need to time the best entry or exit. Often find myself exiting trades because I was impatient.
- Focus on knowing something intimately. SPY, Qs, SPX or whatever and know it well. Don't try and trade all things early on. Know it like your children.
- VIX. Pay attention to it. Rising and chances are your trade will be impacted. Falling the same.
- Macros. Pay attention to them. Just because one is ripping doesn't mean the other will.
- Make 10 trades and grade yourself. If you can't have a winning hand with 10 trades you likely won't with 20 or 100. Begin with 1 share or 1 contract until 10 total equals a winning trend with no losers. Scratches can be included. This sure helps be patient on entry. Think Ripster uses 10 winning trades in a row before you can size up.
There are of course many others things technically you can use and should pay attention to. EMAs (or SMAs), Bollinger, MACD, RSI, SAR, etc., etc.
Hope that helps some of y'all that are giving it a whirl in a tactical market at the moment. I am learning daily and just wanted to share some tips.
51 trades today which includes buys and scaling out since scaling one or two at a time adds up. 5 losers and one was an ill thought out carry over in 'hope'.
