When scalping the market you must be aware of any breaking news that may move the markets against you at any time. Having live financial news on while you are trading can help you be prepared for any sudden movement that may affect you.

Scalping the market can be successful for some but there are also a lot of people who try it and have to stop because they are really gamblers and wind up losing all their money. If you have the discipline to get out of your losing positions, you can do well.

One of the most important things to learn, whether it be scalping the market or trading anything for that matter, is to take losses at a predetermined level so that they can be minimized, and they are smaller than your average winners. Sounds simple, but many people don’t do this.

Just don’t become overconfident when scalping. I have seen people who have had 75-85% winning trades all throughout the month and be up thousands of dollars only to have one or two losing trades at the end of the month become large losing trades and wipe them out.

Overconfidence and confidence are emotions. This is what ruins many traders.

Note. For more further reading on scalping and more of an introduction, read my other page on Scalping Stocks here :

Many scalpers trade by their gut, that’s okay right for a while, but you have to realize that your gut involves your emotions as well. Sooner or later, your gut will have a losing streak.

The good thing is that you are reading this now and trying to learn more so you realize that there may be other ways to help you out, that’s great.

Here are a couple of things I have found useful when stock scalping:

Don’t over trade. Set a maximum number of trades per day to give yourself a break and also to spend time learning and looking for new ideas. Set a maximum amount you are willing to lose per day that you will stop trading. This way you don’t have several large losers in one day. It’s much better to take a break after a big loser and think about what happened. Don’t place large margin trades to try and make up for losses. Have multiple charts open to look for previous support and resistance levels. Have related charts open to watch for movement inconsistencies.

Below is a chart of BAC showing a 2 day chart. The gray areas are pre and after market trading. You can see that two days ago it bounced off $10.00 at the open and basically went sideways all day, although on the intraday chart for that day there were several scalping the market opportunities.

The point about the $10.00 price level is that In pre-market that day, I pulled up a 1 year chart and $10.01 was the previous 52 week low.

If you knew this at the time by looking at a one year chart, you could have went long BAC in premarket trading at around this level because there was strong support there.

In after-market trading that day, you can see that once it broke through $10.00 there was a big drop, again because it now broke through the $10.00 52 week low level, an opportunity to go short.

Then in the rest of after-market trading and in pre-market the next day it bounced off about $9.60 four or five times, forming another support level to watch as well as bouncing off $10.00 at the top several times, which previously was support and now resistance since it broke through.

So yesterday in pre-market around 9 a.m. would have been good to go short if you trade pre-market (trading pre and after-market are tricky) at just under the $10.00 level.

If you waited until the market opened, you still would have noticed a good shorting opportunity as it broke through the support level you noticed in the previous after-market trading and in pre-market trading.

Then, you will notice during the day it broke through the $8.00 level briefly, only to move back up towards $8.00 and formed an intraday support level there.

I actually bought BAC at $8.07 at around 12:30 p.m. when I noticed this but got out at $8.15 because I had to leave (which was at 1:10 p.m. right before it made it’s thrust up towards $8.80 and eventually around $9.25, of course).

You can see that after the spike up through $9.00 (which was also on the hour) it then went right back down to the previous support level of $8.00.

The next chart below show the next morning in pre-market trading.

You can see that the stock went up to a previous resistance level from the day before and bounced off and went lower.

Then as we approached the opening of regular trading hours at 9:30 a.m. it again went up to the same resistance level, only to fail breaking down once again providing another excellent opportunity for scalping the market using BAC.

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