Live Trade: Scalping Previous Highs and Lows

Video Transcription:

Hello, traders welcome to The Scalping Course and the fourth module, Live Examples. Today we’re going to use the previous highs and lows technique on the E-Mini S&P 500 chart. Hello traders, as we’re back on the five range ES chart and as you can see we are testing back these previous highs. So what we’re going to do here is we’re going to try to get filled on previous highs, on the test of previous highs and we’re going to order stop-loss, right here, okay?

Scalping highs and lows

 

Now, right here, this is the previous high-low method, and remember that you can use the previous high-low method to trade. Well to add to your trades or to quickly scalp the markets. So what we’re going to do here, let me just break this down for you, and what we’re going to do here, well, what we could do here is we could aim for the next level of, well, resistance which is this level we tested right here and that will be a very nice one to one scalp, okay, as you can see right here. Let me just get rid of these two rulers that we used in the past, and this should give us a nice one to one scalp right up these levels. So you can see here that’s a two-point stop-loss and we have a 2.5 profit target.

Now what we’re going to do is we are going to get rid of three contracts at this level of resistance for a one to one trade and we are going to try to ride the rest up till these highs, okay? Which will be the next level, I think, of heavy counselance [SP] in the terms of resistance and well that should be the scalp that we aim to do right now. So that’s two contracts up there and well if the first target is at 2.5 points, the second target should be around, let me see that’s the entry, the second target should be here around a 5.75 points. And that’s how we’re going to be scalping this day in and day out, okay? You can see we tested just this level, we broke with the level then we retested it back and that’s how you scalp, okay? And remember when we get filled on these three contracts, we are going to more stops to break even and if we, well if we break even on the last two contracts, that’s fine but what we are aiming here to do is we are aiming to teach you the previous high-low method.

Scalping highs and lows2

Okay, so our first targets got hit with the previous high-low technique so what we’re going to do is we’re going to move our stops to break even and we want to lock in a few ticks when we do that. We don’t want to put our stops right at break even because we want to cover the cost of the trade. Well, we started with five contracts and, of course, we need to modify our stop-loss for the two contracts that are remaining but as you can see with the technique of taking loans at previous highs and taking shorts at previous lows, we can scalp the market day in and day out and we can add to our winning positions. For instance, here we had a flag breakout and our cut rate targets of the flag were right here are 2094. We could have them, we could had well, just close three contracts out of the five contracts that we traded on this flag and just waited for a test of these highs to add to this position. But we didn’t, and what we did was just opened a new position when we tested the previous highs, okay?

Right now, we already made money on this trade because our first targets were obviously right here, but our second target is all the way up here and our stops are at break even. If we get stopped out of break even on the last two contracts, that doesn’t matter because we already made money with the previous high-low technique. And, as you can see our second target got hit. We have the stop-loss at break even still active so we’re going to cancel it, but you can see that we made money from, well by using these previous high-low technique and we hit our first target right here and the second target was hit a few minutes later. Well, like 30 minutes later but it was hit. And this is basically how you need to be, well how you are going to trade a previous high-low or how you are going to scalp with the previous high-low and add to your position if you are already in a winning position.

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