"S&R" Scalps

[walterw]

Hello dear fellow traders ¡¡ its has been some time since I dont post some charts arround here, so feeling the need to do some of this...

As a futures scalper I have various methods to scalp, in other older threads you can see how my traditional scalping is done... some links here :

http://www.traderslaboratory.com/for...ance-1714.html
http://www.traderslaboratory.com/for...rade-1940.html
http://www.traderslaboratory.com/for...rade-1994.html
http://www.traderslaboratory.com/for...rade-1942.html

Lately I had done some experiments with a vma based thing also using some divergences with some oscilators here :

http://www.traderslaboratory.com/for...alps-2788.html

Now as we started sharing some trading on the chat room, I noticed that my trading has some other type of aproaches I do almost by instinct and never really posted before... for my joy I see some traders like Adam share very similar concepts on their trading, so sharing on the chat room has been a very good growing experience to make some reflexions about this almost instinct trades and really try to understand the methodology I am using so I can share and also have a more technical understanding of what I am doing in a very almost intuitive way..

I know that when you better understand what you are doing, also the better you can avoid some mistakes... so this is a part from Walter that I want to discover, get it down to a method and keep sharing on post here as on chat live...

So I put myself on the mirror and try to see all this other trades I do that are not on any other thread from the chimp, try to understand this nut guy and see whats the logic behind...

What I notice is the use of "S&R" levels as they get formed during the session and how they create opportunities for great scalps...

So for the sake of simplicity I will call this "S&R" Scalps...

I continue on next post...

[walterw]

So inside the "S&R" Scalps let me introduce first the "Flip Scalp"

So let me start with the basics here...

One great concept is the fact that previous resistance after being breaked becomes support and viceversa... I call that a "flip"... the market its doing that on a permanent basis... if you train your eye to see it and use some basic tool to track it, you can do a lot of good scalps on an average day just with the "Flip Scalp"... I discovered that I actually do trade some other patterns related to "S&R" that I will gradually be posting here all inside the cathegory of "S&R" Scalps...


So how does a "Flip Scalp" look like ?



so the graph above shows the basic concept of how S&R change rolls...

and some real world examples on my 22T Ym chart :





(please dont get confused with my previous flip trades, as this ones actually happen much more often...)

The market is permanently creating pivots , if the pivot looks like a V pointing up it will create a resistance level, if it creates a V looking down, it will create a support level... you see plain observation of this pivot and you are creating inmediat "key" levels... some levels become more important than others...

The factors that make some levels more important is :

_The amount of test this level had already during the session

_A great break happened from this level

so this super important levels can be traded and also the less important levels can be traded as well...

So observing V`s and drawing Horizontal lines from this pivots can be a good way to track how this flip`s get formed :



So thats a simple way to see how this trade starts to get setuped...

some coffee, cont on next post.. cheers Walter.

[walterw]

So a good skill here to develop that will be usefull for all the coming diferent "S&R" Scalps, will be to spot this pivots and its Horizontal lines...

The most important levels as they have more cronical tests or had been breaked in a very important break, they will stay there, without any update..

now the smaller levels, that are not that important may be updated gradually as new levels get created... this skill is a base skill for this trading and screen time is key, its not dificult, very simple actually but requires to be open minded in updating those levels that alraedy become obsolete...

So the levels that are not important levels I will call them small levels, so we will have Important levels and Small Levels...
Lets see some important levels vs small levels in action , the cyan lines are important levels on the session, now the Yellow lines are small levels in action :




there are some interesting nuances in the construction of this levels as the session evolves...

the most used to scalp is the small levels, so let me focus on this levels how we can plot them and update them as the session evolves...

Let me give a simple example of how a small level got updated ...



for example in this case we may want to consider the lowest pivot of that group the most reliable small level support... after that we can see how we got a nice flip scalp...

So drawing this levels has some art and logic as well... no brainer at the end... cheers Walter.

[walterw]

So lets get finished with the "flip scalp" so we can explore some other patterns...

The flip scalps consist of three stages :

_Setuping
_Timing
_Exiting

(all chimp terminologies )

the Setuping process, needs a given S&R level that was created from a certain pivot ( V )... this level gets broken and now we expect a pullback to the level... once the pullback takes us back to the level,there comes the truth moment for Timing to happen, the level may hold or may break, we expect it to hold, so when we see a small swing going on our favor "click" we time our entry inside, we are on the trade... if he doesnt take off soon, you are out, if he breaks against you, you are out, he went up some ticks you are out, thats the Exiting criteria basicly... I aim ticks, this is scalping...

So some real life examples :















we will be able to share much more on the chat room about this trade... training the eye its a matter of watching this happen over and over again... cheers Walter.

[walterw]

This are a pair of videos on flip scalps... cheers Walter.

[mcichocki_]

Subscribed, awesome stuff Walter.

[nycdweller]

WalterW, thanks for sharing this information. I just have a few questions.

How many bars do you generally look for in the V pattern? I imagine the more bars the better. What about when you have a small V pattern that consists of three or four bars would you draw a horizontal line on something like this?

What criteria do you use to determine the important levels?

Thank you.

[walterw]

	Quote:	nycdweller
	WalterW, thanks for sharing this information. I just have a few questions. How many bars do you generally look for in the V pattern? I imagine the more bars the better. What about when you have a small V pattern that consists of three or four bars would you draw a horizontal line on something like this? What criteria do you use to determine the important levels? Thank you.

Nyc, the size of a pivot may vary... specially depending on the market volatility... spoting V`s its something I have been doing almost by instinct, so I am on the process of discovering how do I spot them... any way, a V should pop on your eyes... I will try to post as much possible here...

Important levels is a diferent story, you can see a lonely pivot from 2 hours ago now being tested for the third time (example)... and if there was a great break from one of this level some hours ago and we are coming back to it, thats an important decision area... cheers Walter.

[BlowFish]

Great stuff Walt price action at its simplest - much clearer than all that squiggly line stuff!! Those interested might also look for posts by oattrader at the old Yahho financial groups he was a venerable trader who put this forward as a really simple way to trade. From memory the method he described was pretty much identical. I think you can also find indicators and money management ideas at NQOO's trading naked site.

For a similar but almost contrary technique (its essentially a failure of this). Check out trader vic's 2B's summarised here http://www.dacharts.com/2b.htm.

I may be mistaken but I believe Dunnigan used something similar too. Certainly worth reading for those interested in stuff based on pure price action.

Cheers.

[walterw]

	Quote:	BlowFish
	Great stuff Walt price action at its simplest - much clearer than all that squiggly line stuff!! Those interested might also look for posts by oattrader at the old Yahho financial groups he was a venerable trader who put this forward as a really simple way to trade. From memory the method he described was pretty much identical. I think you can also find indicators and money management ideas at NQOO's trading naked site. For a similar but almost contrary technique (its essentially a failure of this). Check out trader vic's 2B's summarised here http://www.dacharts.com/2b.htm. I may be mistaken but I believe Dunnigan used something similar too. Certainly worth reading for those interested in stuff based on pure price action. Cheers.

Correct Blow, the 2b would be the false break concept trade, where the break actually didnt have much strength and coming back inside would suggest a hold of the "non- breaken" level...

This aproach certainly could replace squigly lines for horizontal lines, making the interpretation process maybe more easier for certain traders...

could you post a link to oattrader stuff ? I would be interested to take a look... thanks Walter.