Stock, Option and Futures Trading
August 8, 2011
In our members nightly video we have been saying it is best to scalp right now over taking bigger long term positions. There are too many patterns on the daily and 60 minute that have not completed yet to give us the true trigger to enter swing trades. This is why we have not played as many options the last two weeks.
Today the NQ was great on the Turbo Scalper and in the first three hours there was 55 points of opportunity from our entry signal to our exit signal. Once we enter a trade we look to scale out at +3 to +4 and hold the balance until the fast MA goes back to green. Once the fast MA goes back to green let that bar print and then place a stop above that bar. The 55 points noted on the chart is from entry to exit.
You can see that the exit will never catch the exact low bar it is not meant to try to achieve that result. The reason we scale out a portion of the trade early with only 3 to 4 points is so if we do get stopped on the balance it is a even or small loss.
It is important to trade the right symbol especially if you are only trading one contract on the TF,ES or CL meaning; if you are only trading one lot you cannot scale out and that results in a full stop out. We like to trade the symbol that has the biggest range so our first target is easily hit to reduce the risk on the trade quickly.
We know that traders love to day trade the ES for some reason and some traders only trade the ES because back in the day that is all everyone talked about. If you feel like you are right on the overall direction but are getting stopped before you really gave the trade time to work try trading the NQ. The NQ is only $20 per point instead of $50 so there is less money emotion and you can trade two NQ and still be under the $50 per point.
You can see from the chart above that the range of the NQ is great so once you master your entries and exits then you can add more contracts from 2 to 4 to 6 and so on.
Using two lots and taking 1/2 off at +4 and trail the rest would be:
The even trade made +4 before getting stopped even.
That is like making 28.4 points trading 1 ES contract.