Shared by
KyleErvin_BOWS
So I've noticed there are times when a setup appears like a flat top breakdown where you know its going down and you can literally capture .10 or .20 cents during a single large candle. When the volume floods in after a support level breaks and you see the move happening you can literally snipe a scalp by hitching a ride on the way down.I literally got into this trade while it was going down and I was out before it even formed the bottom of the 5 minute candle. Now this only would work on a stock with a decent spread and you only want to enter on a break of an important level on confirmation of huge volume. I am refining my strategy a bit and lowering my expectations for myself because instead of going for .50 or 1.00 moves like kunal gets I am going for .10-.20 cents in a very fast scalp trade.
The ultimate goal is to extract money from the market, wether I capture a 2 dollar move with 200 shares or a .10 cent move with 5,000 shares the results are still essentially the same, I'm taking 500 bucks from the people on the other side of the trade.
So instead of getting into mediocre probability trades with very few shares and hoping to capture a large move I am going to lower the bar and make things a bit easier for myself by starting with much smaller moves but of a far higher probability. When I see an important level crack on a stock that I have been following for literally weeks I can enter with a much higher probability of success. With the wind at my back I can come in with a large position size, capture a small portion of the move, and still take hundreds of dollars from the guys on the other side.
So I am going to try this style out a bit more. Wait for an important level of support/resistance to break and capture a small but fast movement with a higher volume of shares. As I get better at the setups I can take larger, and larger portions of the move ultimately increasing my profits even more. Essentially I am buying on confirmation making this about as high probability as it gets, sort of like running alongside a moving train, and hoping on and off real quick.
I'd love to hear your thoughts on this guys!
Execution detail:
| Date/time | Symbol | Side | Price | Position |
|---|---|---|---|---|
| 2015-04-23 11:18:04 | VLTC | sell | $12.581 | short |
| 2015-04-23 11:18:05 | VLTC | sell | $12.600 | short |
| 2015-04-23 11:18:05 | VLTC | sell | $12.604 | short |
| 2015-04-23 11:18:05 | VLTC | sell | $12.609 | short |
| 2015-04-23 11:18:05 | VLTC | sell | $12.612 | short |
| 2015-04-23 11:18:05 | VLTC | sell | $12.615 | short |
| 2015-04-23 11:18:05 | VLTC | sell | $12.617 | short |
| 2015-04-23 11:18:05 | VLTC | sell | $12.615 | short |
| 2015-04-23 11:18:05 | VLTC | sell | $12.618 | short |
| 2015-04-23 11:18:05 | VLTC | sell | $12.627 | short |
| 2015-04-23 11:18:05 | VLTC | sell | $12.628 | short |
| 2015-04-23 11:18:05 | VLTC | sell | $12.629 | short |
| 2015-04-23 11:18:05 | VLTC | sell | $12.631 | short |
| 2015-04-23 11:18:05 | VLTC | sell | $12.630 | short |
| 2015-04-23 11:18:05 | VLTC | sell | $12.632 | short |
| 2015-04-23 11:18:05 | VLTC | sell | $12.634 | short |
| 2015-04-23 11:18:05 | VLTC | sell | $12.636 | short |
| 2015-04-23 11:18:05 | VLTC | sell | $12.635 | short |
| 2015-04-23 11:18:05 | VLTC | sell | $12.635 | short |
| 2015-04-23 11:18:06 | VLTC | sell | $12.646 | short |
| 2015-04-23 11:18:06 | VLTC | sell | $12.646 | short |
| 2015-04-23 11:18:44 | VLTC | buy | $12.590 | short |
| 2015-04-23 11:18:44 | VLTC | buy | $12.566 | short |
| 2015-04-23 11:18:44 | VLTC | buy | $12.563 | short |
| 2015-04-23 11:18:44 | VLTC | buy | $12.559 | short |
| 2015-04-23 11:18:44 | VLTC | buy | $12.551 | short |
| 2015-04-23 11:18:44 | VLTC | buy | $12.546 | short |
| 2015-04-23 11:18:44 | VLTC | buy | $12.544 | short |
| 2015-04-23 11:18:44 | VLTC | buy | $12.542 | short |
| 2015-04-23 11:18:44 | VLTC | buy | $12.538 | short |
| 2015-04-23 11:18:44 | VLTC | buy | $12.537 | short |
| 2015-04-23 11:18:44 | VLTC | buy | $12.534 | short |
| 2015-04-23 11:18:44 | VLTC | buy | $12.525 | short |
| 2015-04-23 11:18:44 | VLTC | buy | $12.520 | short |
| 2015-04-23 11:18:44 | VLTC | buy | $12.519 | short |
| 2015-04-23 11:18:44 | VLTC | buy | $12.519 | 0 |
Comments
KyleErvin_BOWS
With 5,000 shares you wouldn't want to let it go against you at all, lol I had my finger on the exit button from the moment it filled. Your points are well taken, this was just something I've been playing around with as I feel out what my individual trading style is. Maybe I will find a middle ground somewhere between the two styles. I plan to continue to learn the setups and play them with much, much smaller risk as I continue to learn them. On the other hand when an important level of support is broken and it's accompanied by a huge rush in volume I don't want to be afraid to get it with size since there is very little risk of this quick trade going against you. I'd rather have one very profitable trade a day, week, or even month than make tons of tiny shitty trades where I was trying to anticipate a setup to capture a large move. Your points are well taken and being day 4 of my simulator training I will still be hesitant not to call everything up to this point luck.
foldelinio_BOWS
Hey Kyle, you can trade this way, but you have to keep two important things in your mind.
1. You will have trouble getting fills when you jump on a moving train as you are going to compete with traders in panic gettig slaughtered by bots. Really hard to get in without slippage.
- Where is the level you are going to base your risk of? You cannot take it from the charts, but there is setup, some guys call the "mush trade" Check the LvL2 for a sizable bid (for a short) at a breakdown level on the chart and enter when you see that other people are hitting it and it doesn't refresh. Your stop would be a couple of cents based on a one minute and the outcome is very digital. Either they eat the entire bid and the stock flushes or the bid refreshes, then you hit out asap. You would stay in the trade as long as you see people trading on the bid. If they stop, GTFO.
This way you can take 10 - 50cts depending on the stock, but I doubt if it's worth it, given the fact that you are able to trade larger moves already.
Thanks for this awesome comment, I am really going to have to dig into this one and read it several times to make sure I understand everything.
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It's a style done by many. Watching the level 2 and time & sales for any clue on how to catch a hold or hunt order (a train to hop on to). I don't know. For me it seems stressful when a simple short of the bearflag that broke 4 candles before you got in, stop above the consolidation, and let it ride until a reason to exit is met would've been easier and MUCH less risky. 5,000 shares is a lot to carry. I guess you'd exit if the stock went 10 cents against you too? Then there's commissions and fee's. Don't know who your broker is/will be, but just using your example in CliqueFund, 400 shares (200 in, 200 out) would cost you about 1.60 for both commissions and fees. But your 10,000 shares roundtrip would cost in the neighborhood of 40 dollars. None of that is meant to belittle the style. There are people that makes bank doing this. But for me, I think it would be much more difficult long term.