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Blueprint Remastered L22: Scalp Trading 1

Jul 4, 2024

Lecture on Scalping

Introduction

  • Overview: Focus on scalping, integrating concepts from previous lessons: position trade, swing trade, scalp trade
  • Grinder vs. Scalper:
    • Grinder: Takes position, swing, and scalp trades all the time
    • Scalper: Only takes scalp trades

Position Trades

  • Characteristics: Low Risk, High Reward

    • Based on the strongest technicals
    • Example: Hitting an important level for a swing trade with high risk-to-reward ratio
  • Examples of Position Trades:

    • Preferable areas: Between downtrend and specific levels
    • Position trade might turn into a swing trade or scalp trade

Swing Trades

  • Characteristics: Flexible in nature

    • Can turn into scalp trades or continue as swing trades
  • Examples of Swing Trades:

    • Levels that are hit but too high for position trades
    • Monitoring inverse levels and valleys
  • Difference from Position Trades:

    • Position trades occur at stronger, more optimal technical levels than swing trades

Scalping

  • Definitions and Approaches:

    • Initial Trades: Often intended to be scalps but can mature into swing trades
    • Entry and Exit Points: Watching for levels to take profits quickly
    • Active Account Management:
      • Dividing bankroll based on experience and comfort
      • Example: $500 active account, using portions for trades
  • Strategy Explanation:

    • Start with smaller amounts, slowly scaling up with experience
    • Knife-catching: Scalp on risky levels and convert to swing trade depending on market behavior
  • Practical Examples:

    • Taking trades based on trend analysis and laddering
    • Analyzing trends and levels for optimal entry and exit
  • Key Tactics:

    • Entering trades at important support/resistance levels
    • Laddering and trend-following to maximize gains
    • Risk management by adjusting position sizes

Conclusion

  • Summary: Understanding the fluid dynamics between scalping, swing trading, and position trading is pivotal
  • Final Thought: Effective bankroll and risk management are crucial for successful trading