You’ve probably heard about scalping before, but what exactly is it?
Scalping allows you to take advantage of quick, explosive, high-percent return moves that happen every single day in the market, regardless of overall conditions. It can help a trader survive and even thrive during choppy, volatile times. Scalping can be used to hedge and manage your overall account, or can be a stand-alone strategy.
One of my favorite aspects of scalping is it allows you to trade the market without having overnight risk or being at the screens all day. Show up, attack, enjoy life.
Today, I want to share my go-to rules and tips when it comes to trading one of my specialties, scalping.
When is it best to scalp?
The best times to scalp are generally in the first two hours and the last two hours of each trading session, as more volume occurs during that time. However, a great setup can unfold at any time, just be picky if there is a lack of overall volume.
How do I choose my strike selection?
When scalping options, I focus on using the same week contract expirations, as they provide the most volatility and movement in value. For strike selection, I focus on playing slightly out-the-money (OTM) and at-the-money (ATM) contracts.
What mindset do we need as scalpers?
We want to focus on percentage gains and hitting price targets rather than on dollar gains and emotions. One of the most overlooked aspects of trading is emotions, but this can also be the most threatening to your account.
Some key tips I like to remember when scalping:
- Always respect your rules and trading plan.
- Do not scalp in chop.
- Wait for key inflection points and zones to raise your probability and edge.
If you’re interested in learning more about scalping, check out my Options Scalping Secrets class where I deep dive into my go-to scalping setups including how to prep for each trading session, how to find key levels and zones on charts, and how to use all my favorite scalping indicators together.
Stay Focused!