hey everyone thanks for checking out this video my name is travis from master to the market and
this video is going to be dedicated to scalping and scalp trading now as most of you that watch
my channel probably know i focus mostly just on trading stocks but the nice thing about this
strategy and the nice thing about scalping based solely on technical analysis is that you're going
to be able to apply this strategy to trading all kinds of different things so if you're somebody
that trades options or if you trade cryptocurrency forex futures whatever it may be you're going to
be able to use this same scalp trading strategy within any of those different markets okay so with
that being said what exactly is scalping and what is scalp trading really what this refers
to is just a day trading method that's going to take advantage of very quick and very small price
fluctuations in the market so scalping is a little bit different from regular day trading because
when you're a scalp trader you're specifically looking for very small and very quick price
fluctuations but as a day trader many times you're looking to take advantage of
price action over the entire day um and that leads to being in position sometimes for hours at a time
when scalping you're probably going to be in and out of your positions many times
within minutes and really the whole idea behind scalp trading is that these small profits
are going to add up over time and along with those small profits in those small moves in the markets
you're also going to be reducing your risk and looking for small losses when the trade happens
to move against you okay so with that being said one of the main ways that i actually scalp
trade stocks is simply by looking at some of the largest gainers for the day and looking for any
clear levels of support and resistance for those stocks and simply scalping them between those
levels of support and resistance now as you may know i actually share some of the biggest gainers
and the biggest market movers for the day almost every single morning on my twitter account
and that is in the form of a morning watch list uh to give you an idea of what this looks like
um something like this i post almost every single day it's going to be a list of the biggest movers
that are gapping up and the biggest movers that are gapping down along with the news that is
causing them to gap up or gap down i'm gonna actually include some levels of support and
resistance on these for the stocks as well and like i said this is one of the main ways that i
actually trade some of the stocks on this morning watch list i simply look for them to fall within
these levels of support and resistance i then look to buy support and sell out resistance and believe
it or not this simple method of trading can lead to some really great and very quick and easy
profits in the market okay so if you don't already make sure to follow my twitter at mtm underscore
trader so that way you can keep up to date with the morning watch list and you can look to take
advantage of those scalp trade opportunities as well now although that is one way to quickly scalp
trade stocks that already have that momentum in the market that's not exactly what this video is
going to be based on and the strategy itself that this video is based on is going to be
a little bit different so instead of looking for those horizontal levels of support and resistance
like the ones that i share on the morning watch list for example this strategy is going to rely
a little bit more on trend line support and trend line resistance which simply put are just slanted
lines of support and resistance together when you have those two lines together in a parallel line
that's going to form what is known in the market as a channel so the whole idea behind this scalp
trading strategy is to look for these channels in the market look for when the price is bouncing
clearly between a level of trend line support and trend line resistance and scalp the stock
between those two lines you would use the trend line support just like you would use any other
flat horizontal line of support meaning that you can look at it as an opportunity to buy
and if the price of the stock happens to then break below that trendline support
that's going to be a red flag and that's going to tell you that that trend is no longer intact
which can be a good signal for you to cut losses on that trade and then on the other side of the
spectrum the upper line above the channel is going to be the trend line resistance which
can be used of course just like you would use any other level of flat horizontal resistance
meaning that you look at that as an opportunity to sell at the highs before the price reverses back
to the downside and really as long as the price is falling within this channel you can repeat this
process over and over and over again those small profits between these trend lines is going to add
up over time and is a really great way to scalp trade stocks with a very small and limited risk
so as a quick example i wanted to share this chart for wnw this is the one minute chart of course a
very short term time frame which is most likely as a scalp trader what you're going to be focusing on
because you're going to be doing very short term trades and i wanted to specifically share
this example because it is a great example of a channel in the market but more specifically
it shows that everything is not going to be picture perfect and what i mean by that is
simply put you know if there's a level of support whether that be flat support or trendline support
most of the time the stock is not going to perfectly bounce off that level of support
and then bounce back up same thing is going to be true with resistance whether it's flat resistance
or trend line resistance it's not always going to have a perfect top at that resistance level
before falling back down many times there's going to be false breakouts and there's going
to be false breakdowns which are simply going to happen in order to try to fake you out
but as long as the overall price action is still remaining within these two trend lines the channel
is really still going to be intact and you can still use these lines to scalp trade between them
so in this specific example if we go ahead and look at these green dots on the chart as where we
would buy the stock and the red dots as where we would sell the stock you can see that there are a
few really great opportunities here to buy at this trendline support and scalp trade it all the way
back up to that trendline resistance over and over again until the trend is really no longer intact
and the price starts to kind of trade and close multiple candles below that trendline support
and then you can see it squeezes back up and breaks right above the trendline
resistance showing us that it's no longer really respecting these levels of support and resistance
and going forward they're not going to be as great of an opportunity to buy and sell at as they were
in the past but regardless before that happens there are multiple really great opportunities
to scalp trade this stock based on this channel trading strategy now you may also be noticing that
i really didn't put any opportunities to buy and sell earlier on in the morning and that's
simply because if you're watching this in real time and if you pretend like this entire section
over here of the chart didn't yet happen and you were just watching it over here you're not
going to necessarily know that this is going to be a channel that's forming later on in the day
you have to wait for some of these lows and some of these highs to actually start forming before
you can start to see this as a channel and before you can start to draw your levels of trendline
support and treadline resistance okay now with all of that being said this is probably going
to lead you to the question if you're falling under the pattern day trader or the pdt rule
because scalp trading is requiring you to trade multiple times a day in many cases
the pattern day trader rule is unfortunately going to limit your scalp trading abilities
for those of you who may not know this pdt rule is simply a rule that is put into place by the sec
that limits u.s based traders to only three day trades per five business days if their account
balance is less than twenty five thousand dollars but because this video is based on scalp trading
and scalp trading requires you to do many day trades in order for those small gains to really
start adding up i just wanted to in this video share a few quick tips to help you kind of beat
this pattern day trader rule and increase the amount of day trades that you actually have
in your account and one of the ways that you can do that is by simply having multiple different
brokerage accounts the pdt rule means that you have three day trades per five business days
in each of your brokerage accounts meaning that of course if you have two different brokerage
accounts with two different brokers for example one with e-trade and one with td ameritrade
you're going to have three day trades in each of those brokerage accounts per five business
days giving you six total trades per week now obviously this is still not ideal because if
you're under the pattern day trader rule in the first place that means that you have less than 25
000 in your account and it's not necessarily going to be the best idea for you to have to split that
money up even further into two separate accounts so another way that you can actually bypass the
pattern day trader rule is by actually just using a cash account the nice thing about cash accounts
is that the pattern day trader rule does not apply to cash accounts meaning that you can simply day
trade as much as you'd like with that cash account as long as you're not using any margin and with
a cash account you're going to have to wait up to two days for that money to actually settle in your
account after every single trade and the way that this differs from a margin account is with margin
after you sell out of a position the money that you get from selling your shares
is going to be immediately back into your account and ready to be used for your next trade but with
the cash account that money is going to show up in your account but you're going to have to wait
up to two days for that money to actually settle in order for you to use it again on another trade
that's of course the one major downside to using a cash account but still if you're using only a
small portion of your account on every single one of these scalp trades then it's not going
to be a big deal for that small portion of your account to take two days to settle
because you're still going to have the rest of your account over those two days to place any
other trades that you'd like so at the end of the day this is going to allow you to day trade much
more frequently than if you were somebody that was under the pattern day trader rule
okay so that's going to be a wrap for this video i hope you learned something about scalp trading
and found this helpful if you did please make sure to like the video and subscribe to the channel so
you don't miss out on future videos and future trading lessons and as always if you'd like to
learn a little bit more about day trading swing trading and even long-term investing make sure
to go down to the link below and check out our programs at master the market but anyway until
the next video thanks for watching i hope you enjoyed and good luck with your trading
you