how do you scalp the open?scalpers and gap players

Discussion in 'Strategy Building' started by bill739, Jun 23, 2006.

  1. bill739

    bill739

    I like to do scalping and momentum trading especially at the open the first 30 minutes seem to be very profitable .

    do you scalp in the first one to five minutes of the open(9:30 to 9:35a.m.)? Gapster has a tread in ET (playing the gaps) and he will sometimes scalp the first minute of the open if there is one dominant direction (via a supervolatile stock which he gets from the esignal scanner/filter which I also have - it shows the most volatile stocks in the premarket).

    if one of the stocks (of the eight trade boxes he has set up before the market opens,) if one drops like a rock or shoots up like crazy, violent $1-3 move in 30 seconds to 1 minute , gapster buys/shorts it with 1-2000 shares say and makes $500 -1000 etc.

    Then when it stops and reverses, he goes the other way and makes$ 500-1000 etc.

    of course he can lose too and has. His strategy is if you don't get that violent move, you don't trade that day. tomorrow is a new day for you. Basically , what he is doing ,is waiting for the super high percentage violent move, of which there may be only one all week or none or 3 say.

    I don't think this is a bad strategy because if a premarket stock up/down $2-$3 is not showing a definite move or is a slow mover
    at the open plus 5-10 minutes say ,his chances of winning or losing is 50-50 not good odds. And sometimes it's better not to trade than have a loss.

    So he prevents taking losses this way and just waits for the violent move stock, super high percentage winning setup.

    I've tried to emulate him and I set up 9-10 vertical charts on the screen (esignal) and I have my trade boxes ready to go. If out of 9-10 premarket volatile stocks , if one takes off, I buy/short it and often it works out pretty good. I try to wait after the first minute because I've been burned trading the first minute but sometimes I'll trade the first minute if the move is really violent( I also quickly check the spread of the stock I'm going to trade. sometimes spread is 20 - 40 cents and I don't trade it because I can get screwed if it reverses quick).

    and of course I've had plenty of losers but cutting my losses and scaling out on the profits(like" trading in the zone" book I just read says) I can honestly say I'm ahead,(although I nearly blew out my account twice over the last year or two) not way ahead but ahead and of course when stock like NBIX(down $10 in the premarket) which maybe you traded may 15-18 I am not sure, everyone who traded made at least1- 2-3000 ,even the novices probably, and I made more.

    My question to you (,the traders who scalp and play the gaps,)is how do you trade the open and / or the first hour re scalping and momentum trading?

    I'd appreciate your help.

    thanks. bill739
     
  2. goodday

    goodday

    I do the open scalp on E mini futures, pretty much the same principle.