{"id":936,"date":"2009-06-06T12:18:35","date_gmt":"2009-06-06T17:18:35","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=936"},"modified":"2023-05-24T17:30:44","modified_gmt":"2023-05-24T21:30:44","slug":"where-is-the-next-50c-trade","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/where-is-the-next-50c-trade","title":{"rendered":"Where is the Next 50c Trade?"},"content":{"rendered":"

We are in the office watching tape on this Saturday. \u00a0 We just ended Part I one of our review session. \u00a0An interesting trading topic emerged: when to forgo a scalp. \u00a0Let’s discuss.<\/p>\n

There is this notion that day traders just scalp. \u00a0Wrong. \u00a0But there is also this elitist belief that scalping is somehow beneath some traders. \u00a0Not me. \u00a0 When I take my check to the bank at the end of the month they do not ask,”Hey did any of that money come from scalping?” \u00a0They cash my check.<\/p>\n

As a trader I ask- Can I find a trade that offers me an edge? \u00a0And sometimes a scalp offers me an edge. \u00a0So I scalp.<\/p>\n

However as day traders we cannot fall victim to over-scalping. \u00a0Scalping should just be one trade of many in our quiver. \u00a0And scalping should not be our focus, especially in this market. \u00a0If GMan catches you doing this on desk he will call you out. \u00a0I can hear him lecturing,”Stop trading like a piker day trader. \u00a0That is not what we do here.”<\/p>\n

Most importantly, we cannot let a scalp trade interfere with our main objective. \u00a0And that is to find the next 50c trade. \u00a0If a scalp will alter our focus such that we can make a quick 7c, but miss the next 50c trade then this is a poor trade.<\/p>\n

Also, scalping against the trend with really strong or weak stocks is not advisable. \u00a0Scalps are for stocks that are not clearly directional. \u00a0When a stock is really trending, we want to focus on where to load up with the direction of the trend. \u00a0We want to focus on a big trade. \u00a0Wasting mental energy on 7c is not a good use of our time with a clearly trending stock.<\/p>\n

But as we poke around with a stock sometimes, especially on the open, a scalp can be the proper trade. \u00a0Sometimes we must scalp a stock on the open on the short side and long side to get a feel for the stock. \u00a0Often this scalping helps us identify the stock’s important intraday levels. \u00a0Often by trading in and out we spot the next excellent 50c trade.<\/p>\n

Today during our review session <\/a>we were watching GES from this week. \u00a0Our trader made a scalp trade at 52c to 64c. \u00a0I barked, “Stop the tape.” \u00a0I was concerned that this trader was not focusing on the big picture, the next 50c trade. \u00a0He was. \u00a0My bad. \u00a0He recognized that the short at 64c was the trade that offered the most likely next 50c trade. \u00a0So he got short. \u00a0He scalped the 52c to 64c trade and then had the mental agility to start a short position.<\/p>\n

This is excellent trading. \u00a0But not everyone has this superior mental agility. \u00a0And if you don’t then you can’t make that 52c-64c scalp trade. \u00a0All you can do is make the short at 64c trade. \u00a0Because you should be focusing on that next 50c trade. \u00a0This is the trade that you can’t miss.<\/p>\n

Enjoy your weekend. Don’t forget to follow us on Twitter!<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

We are in the office watching tape on this Saturday. \u00a0 We just ended Part I one of our review session. \u00a0An interesting trading topic emerged: when to forgo a scalp. \u00a0Let’s discuss. There is this notion that day traders just scalp. \u00a0Wrong. \u00a0But there is also this elitist belief that scalping is somehow beneath some traders. \u00a0Not me. \u00a0 … Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,10],"tags":[4676,30,18,301],"class_list":["post-936","post","type-post","status-publish","format-standard","hentry","category-general-comments-2","category-mike-bellafiore-bellas-blogs","tag-day-trading","tag-prop-trading","tag-smb-capital","tag-trading-blog","no-post-thumbnail"],"yoast_head":"\nWhere is the Next 50c Trade? | 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\/where-is-the-next-50c-trade\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Where is the Next 50c Trade? | SMB Training\" \/>\n<meta property=\"og:description\" content=\"We are in the office watching tape on this Saturday. \u00a0 We just ended Part I one of our review session. \u00a0An interesting trading topic emerged: when to forgo a scalp. \u00a0Let’s discuss. 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