Live Trade: Scalping Wedge Breakouts
Hello, traders. Welcome to the scalping course and fourth module live examples. Today, we’re going to trade live a consolidation breakout. Consolidation and wedges are normally continuation patterns, but sometimes we may have breakouts to the other side of the trend. We need to be careful because we can also trade reverse with them.
Okay, traders. This is the YM 9 Range Bar Chart, and what we have here is a consolidation period between this area of support, which is marked by the blue lines, and this area of resistance, which is marked by this red line. Well, you can see that we tested this area of support, once, twice, then we broke it. It has been heavily rejected as resistance. So, this is a very large period of consolidation. It has been going on for quite a while, actually. It started when we broke to the downside around 8:30 in the morning, and it’s now 11:30 and we’re still inside that range.
The cool thing about that is that not only are we inside of a range, but this is also a wedge kind of formation. If you look at the lows of this formation, we are making sharply lower highs, but every time we get to this range, we get rejected by buyers. And the reason we get rejected by buyers, just look at what has happened here. We tested this area as resistance, once, twice, three times. And, of course, this area was tested as support too. So, there are strong buyers that were just waiting for this dip to push price up.
But if you look closely at the oscillator, the stock oscillator that we have here, we are not in overbought territory just yet, but this small move to the outside almost at cost to overbought territory. So, what we’re going to do is we’re going to try to sell the breaker of this consolidation period and wedge. Now, let’s look for targets, shall we? Our targets should be around these levels. You can see that we were tested here as resistance, we broke out and we tested as support before going all the way up here.
Now, I think that this is a great level to take profit for a scalp. And I think that we’re going to put our buy limits right here. So, basically what we’re aiming to do is we’re aiming to scalp this breakout or this consolidation period breakout for 22 points, and our stops are going to be above, once we get filled, of course, above these blue lines, which will give us a nice 22 point stop-loss for an excellent one to one scalp on this breakout. Now, we’re going to come back once we get filled, and if we get filled, of course. Nothing is certain here.
Okay, traders, just a little update on our short trade. You can see that sellers move price down to the area that we mark as heavy support again, and we had a bullish reaction again in this area. But if you look closely, we have a good indication that the price might actually break with this area. We have a bearish crossover right here on this classic oscillator at this area of support. So, what we’re going to do is we’re going to just close three contracts when we have the breakout, because I think that once we have the breakout, we are going to have a lot of momentum to the downside. And if we break with this zone of support, we want to profit from it. So, for the time being, we are not filled yet, and we are waiting for it. We’ll be right back once we are in the trade.
Well hello, traders. We just got filled on our short position here, and I think we’re going to take out all of our trade when we hit our targets right now. So, we’re just going to wait to get filled on our position right here. And we’re going to come back once we get filled. As you can see, once we broke with this level, we got some momentum to the downside, and right now, as expected, we just got some reaction to the upside. But we’re going to ride it down until we get filled. I’m going to put my buy stops above these highs. And right now, we’re just going to ride it down.
Okay, just a little update on the trade. We have moved up to the daily support one, and right now, we are finding some buyers here at the daily support one. And everything points out for a flush after this. So, we’re just going to wait for the flush, and we’re going to wait to get filled in our position.
Okay, now we have moved down and we are about to get filled for around a $900 profit. We have broken with the previous low, and we are making lower lows, which is good for our short position, and everything aims that we are going to get out of this with a profit. Now, I’m going to move my stops above this high just to protect it, but I think we are about to get filled. We came to about one tick of getting filled, and right now, everything we can do is just wait for our position to get filled. And if we get taken out on a stop-loss, well, we will get taken out on a profit. So, everything’s going to be fine with this breakout out of the consolidation and wedge.
Okay, so a little update on the trade. You can see that we came very close to getting filled on our targets, and now price is reacting to the daily support one and previous highs. We got our stop-loss here above the previous high, and we have locked in these profits for the time being. Now, what we’re going to do is we’re going to wait to see if we get stopped out on a profit, or if our profit targets get hit. Right now, there’s not much volume going on. Well, we already locked profits in this trade, so it was a good idea to wait for the breakout to the downside of that consolidation period. And we’re going to come back once this trade is over.
Well, we got stopped out on our trading stops. Well, I’m happy with the result of this scalp. Even though we got very close to being filled on our targets, sadly we didn’t, but that doesn’t matter because the idea of the short trade was a good idea and we made about $450 out of the trade.