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walterw

"S&R" Scalps

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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/forums/f34/the-flip-trade-support-and-resistance-1714.html

http://www.traderslaboratory.com/forums/f34/the-abc-trade-1940.html

http://www.traderslaboratory.com/forums/f34/the-false-break-trade-1994.html

http://www.traderslaboratory.com/forums/f34/the-lazy-trade-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/forums/f34/the-chimp-s-new-futures-scalps-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...

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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 ?

 

attachment.php?attachmentid=4363&stc=1&d=1197138140

 

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

 

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

 

attachment.php?attachmentid=4364&stc=1&d=1197138414

 

attachment.php?attachmentid=4365&stc=1&d=1197138414

 

(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 :

 

attachment.php?attachmentid=4366&stc=1&d=1197139047

 

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

 

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

5aa70e2889896_Flipconcept.thumb.png.f05d3593f726b62e740e465424766662.png

5aa70e2895952_flip1.thumb.png.f231b8369e8625a1bacad5168b9d09c5.png

5aa70e289fe3e_flip2.thumb.png.0853ca2ecee06720e05e17a3fffabfa5.png

5aa70e28a506e_VandHorizontalLine.png.08c5e7edef8f3fe7b23b9ae41c4109f4.png

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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 :

 

 

attachment.php?attachmentid=4368&stc=1&d=1197140803

 

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 ...

 

attachment.php?attachmentid=4369&stc=1&d=1197142139

 

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.

5aa70e28b2faf_importantandsmalllevels.thumb.png.70a6e1d70ba574652c478c379d8759b4.png

5aa70e28bd0db_updatedsmallline.thumb.png.03fd8e28643ddf73748d9beac34088a4.png

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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 :

 

attachment.php?attachmentid=4372&stc=1&d=1197144480

 

attachment.php?attachmentid=4373&stc=1&d=1197144480

 

attachment.php?attachmentid=4374&stc=1&d=1197144480

 

attachment.php?attachmentid=4375&stc=1&d=1197144480

 

attachment.php?attachmentid=4376&stc=1&d=1197144480

 

attachment.php?attachmentid=4377&stc=1&d=1197144480

 

attachment.php?attachmentid=4378&stc=1&d=1197144480

 

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.

5aa70e28d0d6c_ex1.thumb.png.47e158ac814280f2e1e7b42358dd97cd.png

5aa70e28db3c4_ex2.thumb.png.95f83db720f3a7d93eb80cea1cd389db.png

5aa70e28e4c4e_ex3.thumb.png.24e739f25f049e1de4a2ea28f375a73e.png

5aa70e28ee841_ex4.thumb.png.b28b5bed678df392685aea92365f9560.png

5aa70e29040b6_ex5.thumb.png.1993b0ed5d210cc0af0c3754b2c4ca3a.png

5aa70e290d74c_ex6.thumb.png.ded96c2951641b8f515877cac3e167ae.png

5aa70e29175e9_ex7.thumb.png.837bcd0835ae94199d184a8a55b6a505.png

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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.

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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.

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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.

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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.

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I think its possibly one of the simplest 'pure' ways to trade. These lines on longer term charts (a few weeks of hourly is pretty good) often mark major S/R. Especially if they have been tested a few times. Then you drop down to a lower time frame and either short if they hold or play the BO if they don't. I think most traders (me for sure) tend to try and over complicate things.

 

Cheers.

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Thanks Walter. I want to make sure I understand your comments. Are you saying that once a level is drawn it stays valid throughout the day? It doesn't matter if price passes straight through it the first time around, it could become provide support or resistance later on in the day? I guess my question comes down to knowing how long a level stay valid and when do you decide its time to erase that level off the chart? Sorry to bombard you with so many questions. I really like this topic. Thanks again.

 

 

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.

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Thanks Walter. I want to make sure I understand your comments. Are you saying that once a level is drawn it stays valid throughout the day? It doesn't matter if price passes straight through it the first time around, it could become provide support or resistance later on in the day? I guess my question comes down to knowing how long a level stay valid and when do you decide its time to erase that level off the chart? Sorry to bombard you with so many questions. I really like this topic. Thanks again.

 

Hi Nyc.. bombard as much you want ¡¡ the idea here is to grow together...

 

In this particular case on this trade I am actually exploring myself, what I do on a very instinct way, I want to see it in a very well formed method, it will take a couple of weeks really to get this with complete form...

 

let me answer with a video on next post... cheers Walter.

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Hi Walter,

 

Thanks alot for the great videos. You have shared lots of ideas, I really appreciate it. What kind of moving average is the green line? Thank you.

 

Feel free to make more videos if you have the time. I really love this kind of information that is based on price action and support and resistance trading.

 

 

 

Here goes 2 videos on this.. hope this brings more light, its bringing it to me ¡¡ jejeje cheers Walter.

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Hi Walter,

 

Thanks alot for the great videos. You have shared lots of ideas, I really appreciate it. What kind of moving average is the green line? Thank you.

 

Feel free to make more videos if you have the time. I really love this kind of information that is based on price action and support and resistance trading.

 

 

That green line is a vma from the vma research thread, I will post tomorrow this indis and templates for NT... cheers Walter.

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Hi Walter,

 

Great thread! Please continue with these videos. This is the area of Price Action we work on in an Ensign Windows Echat room I occasionally visit. Tests of the the last highs/lows and high/low failures (usually on a HTF setup chart). Then look for turns at those levels on the smaller tick chart.

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Hi Walter,

 

I'm using Ensign software so the templates will not work. Do you know if anyone has designed a template of your moving average for Ensign? Thanks.

 

 

That green line is a vma from the vma research thread, I will post tomorrow this indis and templates for NT... cheers Walter.

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Hi Walter,

 

Great videos once again :thumbs up:, I like that kind of setups.

Although the concept is simple, I am sure it takes quite some skill to become a master scalper like you.

Combining tape reading with price action could improve the setup a bit.

 

Thanks for sharing.

 

nycdweller: I believe you are out of luck with ADXVMA for ensign, I haven't seen one so far.

 

Cheers

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Hi Walter,

 

Great videos once again :thumbs up:, I like that kind of setups.

Although the concept is simple, I am sure it takes quite some skill to become a master scalper like you.

Combining tape reading with price action could improve the setup a bit.

 

Thanks for sharing.

 

nycdweller: I believe you are out of luck with ADXVMA for ensign, I haven't seen one so far.

 

Cheers

 

Thanks Sparrow... this is a matter of screentime... what I notice is that only using this lines and horizontal lines, readings cant get any simplier... cheers Walter.

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Ok, now I will start talking about another trade that I am also doing on this S&R scalps aproach... it is the "Retest Scalp"

 

What he basicly does is that he bounces right off a level that just was built...

 

Example :

 

attachment.php?attachmentid=4411&stc=1&d=1197332152

 

you can see we created a V and went back to retest the extreme of that V...

 

Its not perfect, but the key its taking very tight stops when it doesnt work and try to take the most when it does...

 

The logic behind this trade is that if there is NO mometum in place, the market simply will not take off... and this levels marked by the Price action of the market are key levels to bounce once again...

 

It is important to be alert of probable break against us... thats why tight stops are a requirement... another thing, if the trade doesnt react as expected, get out...

 

On the next posts I will start a series of videos where we will make a tour on varios sessions using flip and retest scalps... cheers Walter.

retest.thumb.png.2e625fad128b91706f363498a790a887.png

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Before I post the videos I will introduce a third trade that is inside the "S&R" Scalps aproach... its the Old Level Test

 

As the session evolves we draw horizontal lines and then price action gets far from this lines... eventually market comes back to them and when retesting them we can expect a rejection... basicly its similar to a retest trade, only that the levels where created far before...

 

Some examples :

 

attachment.php?attachmentid=4415&stc=1&d=1197337599

 

attachment.php?attachmentid=4416&stc=1&d=1197337599

 

attachment.php?attachmentid=4417&stc=1&d=1197337599

 

so on the coming videos you will see better how this other setup works as well...

 

so far inside the "S&R" Scalps we got :

 

_Flip scalps

_Retest scalps

_Old level Test scalps

 

the fourth and last to come later on some other post will be the "Break Scalp"... cheers Walter.

5aa70e2a21c01_oldlevel1.png.1a214c9a86b0f3f1422f007ae899558c.png

5aa70e2a291b1_oldlevel2.png.5564a7942dad20c96188f8b86ed32070.png

5aa70e2a2eddf_oldlevel3.png.7c8fb282b9130eb723ef10f258252b61.png

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Here comes another series of videos... hope this starts to make sense... at least for me, I am getting a more organized way to follow this aproach...

 

Really first time I dont trade with any mayor help from indicators other than price action and S&R as it unfolds... cheers Walter.

11-30 scalps 1.swf

11-30 scalps 2.swf

11-30 scalps 3.swf

11-30 scalps 4.swf

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