Wednesday, September 13, 2006

Scapling Day - CTSH, NIHD

Today was a scalping day for me because with two very good trading days behind me, I didn't want to risk giving too much back. With the NASDAQ just 8 points away from the 200 MA going into the session, I surmised that we might have a NR day.

My trading rules for scalping are quite simple:

1. Don't trade the open.
2. Trade from 5 minute charts - stay in the trade until I get stopped out on a lower low ( trail a stop 2 pennies below the low of the previous 5 minute bar) or until the target is reached or a wide range bar (move stop up to 50% of the WRB)
3. If the scalp is very successful, book 50% of my profit after 1 pt.
4. Setups are either a break from a narrow consolidation range or a low risk entry on a shallow base.
Here are my scalps:

The first scalp came to me via the good folks at High Chart Patterns . I was a little hesitant about taking this trade because of yesterday's WRB on the daily CTSH view. I didn't risk too much money going into the trade. The shallow base was yesterday afternoon.

The next scalp was a big winner - NIHD on a break of a narrow consolidation range:

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