{"id":14685,"date":"2011-09-29T17:21:29","date_gmt":"2011-09-29T21:21:29","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=14685"},"modified":"2023-04-13T09:17:42","modified_gmt":"2023-04-13T13:17:42","slug":"a-scalp-trade-on-jbl","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/a-scalp-trade-on-jbl","title":{"rendered":"A Scalp Trade on JBL"},"content":{"rendered":"

This is a post from our traders TO about a scalp trade he made on JBL from yesterday:<\/strong><\/p>\n

My trading desk neighbor SW and I were both trading JBL today, with 19 as the key level of interest. Without knowing it, I took the opposite direction of his trade at the Open for a quick momentum scalp. SW got long at 19.01 against the important 19 level. I got short into it. When I was reviewing my tape, he asked me \u201cWhy did you short into that held bid?\u201d<\/p>\n

My answer: \u201cBecause the seller could crush that bid and I could capture an explosive move to the downside. Plus the volume was done at .02, 19 hasn’t really proven itself\u201d<\/p>\n

Let me explain the trade: On the first ticks, we traded up to 19 where there was a held offer. The prints sped up and the volume came in. 19 lifted. We traded almost immediately to 19.14. There was no chance for someone looking for size to grab a lot of shares between after this offer lifted. Within 30 seconds, we traded higher to 19.30, while skipping a lot of prices. This is a move that tells us the stock is not very liquid, at least not yet. It also foreshadows that the stock could have other explosive moves, in either direction.<\/p>\n

After this quick upmove, JBL returned to 19 within a minute. At first, I was looking at this as a potential buying opportunity. The short-term momentum was to the upside and we returned to a key breakout price. However, I am very weary of a stock returning to the same price too often, or failing to move away after a catalyst. I replaced my bid box with an offer box to hit the bids when the .03 seller lifted (this was supposed to be the catalyst to move away from 19) and came back. If this stock is truly strong, they should battle 19 and I’ll have time to see the buying and get out.<\/p>\n

This is a not a trade that will make anyone’s trading career. It’s just an insignificant piker scalp trade. But I bring it up because it demonstrates a couple of important concepts:<\/p>\n

    \n
  1. Developing an understanding of the present liquidity in a stock \u2013 Ask yourself \u201cwhat’s underneath 19 if that bid drops?\u201d You should have this thought implanted in your subconscious anytime you decide to get in front of held bids\/offers on the Open, in order to have a better approximation of your risk-reward.<\/li>\n
  2. Knowing your trading psychology \u2013 Which side is potentially trapped at that moment? Could this result in an explosive move as everyone rushes to the exit all at once at the same price?<\/li>\n<\/ol>\n

    You have to think about these things if you find yourself always getting in front of the order flow and frequently getting run over.<\/p>\n

    For more on reading the tape, check out the SMB Reading the Tape<\/a> program.<\/p>\n","protected":false},"excerpt":{"rendered":"

    This is a post from our traders TO about a scalp trade he made on JBL from yesterday: My trading desk neighbor SW and I were both trading JBL today, with 19 as the key level of interest. Without knowing it, I took the opposite direction of his trade at the Open for a quick momentum scalp. SW got long … Read More<\/a><\/p>\n","protected":false},"author":290,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[4676,1922,1111,336,29,338,83,1193],"class_list":["post-14685","post","type-post","status-publish","format-standard","hentry","category-general-comments-2","tag-day-trading","tag-market-strategy","tag-momentum","tag-order-flow","tag-prop-trader","tag-reading-the-tape","tag-scalping","tag-trader-education","no-post-thumbnail"],"yoast_head":"\nA Scalp Trade on JBL | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/a-scalp-trade-on-jbl\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A Scalp Trade on JBL | SMB Training\" \/>\n<meta property=\"og:description\" content=\"This is a post from our traders TO about a scalp trade he made on JBL from yesterday: My trading desk neighbor SW and I were both trading JBL today, with 19 as the key level of interest. 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