Speaker A
These are 5-second charts. And this is what I mean by a smash and grab trade.
Learn the secret setup for a 1-minute scalp trade using smash and grab techniques on 5-second charts with defined stops and targets.
Key Takeaways
- Scalping is about quick, short-duration trades with clearly defined risk and reward.
- Market overreactions to news create prime scalp trading opportunities.
- Stops and targets are defined by initial market moves, simplifying risk management.
- Successful scalping involves trading in specific market phases, not constant activity.
- Taking what the market offers and exiting quickly is crucial to scalping success.
Summary
- Scalping involves short-duration trades typically under one minute, focusing on taking small, defined profits.
- A smash and grab trade capitalizes on markets that have overreacted or mispriced information, allowing quick entry and exit.
- The initial market jump defines the stop-loss level, providing clear risk management.
- Scalping is about taking what's on the table without expecting large moves, emphasizing quick in-and-out trades.
- High volume of trades occurs in pockets when market conditions fit the scalper’s strategy, not constant clicking.
- Examples include trades around news events like tariff announcements or non-farm payroll data releases.
- Mispricing during news leads to rapid market moves that create scalp opportunities.
- Stops are placed just above the initial highs created by the market jump.
- Targets are usually set at least back to the origin of the move, ensuring a defined risk-reward.
- Scalping requires quick assimilation of information and swift execution to capitalize on short-term inefficiencies.
Chapters
- 00:00Introduction to Smash and Grab Trade
- 00:34Defining Stops and Targets in Scalping
- 01:22Clarifying Scalping Misconceptions
- 02:15High Volume Trades and Scalping Strategy
- 03:04Different Scalping Methods Overview
- 03:53Example of Smash and Grab Trade Setup
- 04:50Market Reaction to News and Scalping Opportunity
- 07:25Executing the Smash and Grab Trade
- 09:05Managing Stops and Exits
- 11:16Final Tips on Scalping Execution
Full Transcript — Download SRT & Markdown
Speaker A
The idea of a trade here is you see the markets jump. Now, you can't react fast enough to get onto that initial jump.
Speaker A
And you'll see that when I share the ladders. So, you can't get onto the initial jump. But if you assimilate the information quickly, you can sell because you can see that this is a huge opportunity. You can see that the
Speaker A
markets have jumped. The good thing about that jump as well is it defines your stop for you. So if everyone often I get a question, "Oh, where do you put your stop?" Well, once it jumps the initial moves create these highs. So
Speaker A
once you've got a high created you can sell five or six seconds after the data. You know where your stop is. Your target is a minimum of going back through the origin of the move defining scalping then that's where we are going to start.
Speaker A
Because what you often get when people talk about scalping is you get a lot of generalizations and this was my first point again. Well, what do people really mean? What are people really looking for when they're looking to try and
Speaker A
understand scalping? Because a lot of times you get things like, "Oh, they're just short duration trades." Well, that's a bit vague. What's short duration?
Speaker A
Because short duration to me is under a minute. Short duration to a lot of people maybe half an hour. So, that doesn't really explain it. Small winners. Again, small winners relative to what? Relative to a big winner. And
Speaker A
what's a big winner? So yeah, when you were saying a small winner, are you looking at trades that go for one, two ticks? Is that the typical what people assume scalping to be? Minimal risk trades. This is what this is the one
Speaker A
that I despise the most. When anybody comes into trading and says, "I want to take trades with very low risk."
Speaker A
Well, the easiest way to take low-risk trades is to just not trade. There is always risk inherent in trading. That is part of trading. You don't get paid something without taking a risk. So, the minimal risk trades don't really stack
Speaker A
up. Yeah, I get the idea that you're not taking on a large dollar risk on a lot of these scalp trades generally because of the way that scalp trade structures in that there is quite a well and clearly defined risk over the short
Speaker A
term. A high volume of trades is one of the things I often hear as a generalization of scalping. This I completely agree with. But what is key to a high volume of trades is pockets of trade. Good scalpers are not sitting
Speaker A
there all day long click click click click click click constantly. That doesn't work anymore as a business. You will just rack up costs and ultimately you won't find enough edge in doing that. The high volume of trade comes
Speaker A
when you recognize a phase of the market where you say, "Yes, that's the time.
Speaker A
Now's the moment where I can scalp because this fits into my skill set. This is happening right where I need it to be happening." So, let's go and have a little look at some of the things I'll go and cover today. This is just to
Speaker A
list a few, and there are tons and tons of different ways that you can scalp.
Speaker A
One-point scalps in the S&P. Yes, that is a viable strategy. That for me would fall very much into what I would call trick trades and potentially small flow trades. Even small flow trades, I would suggest will generally look for more
Speaker A
than one point in the S&P. So, I would lean those towards suggesting that they're what I call trick trades. We probably won't cover too many tricks today, but I will show you a couple of little examples of this type of thing.
Speaker A
There are also, and again scalping is not just purely a ladder thing, specific pattern trades. These can be scalps, very, very sort of well-defined patterns that happen at very specific times of the day or very specific, you know, phases of a
Speaker A
move. You can trade those. We'll first go and have a look at what I would call a smash and grab trade. This is recognizing that a market has gone too far in one direction, has mispriced some information, has reacted too much to a
Speaker A
comment. Any of those things are what I would call a smash and grab trade. A perfect example of this one was earlier on basically was the announcement that Trump will be introducing or holding a news conference on reciprocal
Speaker A
tariffs at 1:00. Now, as soon as the markets heard tariff, they started to drop and you got this really quick whip down in S&P, in the euro, in lots of different markets. They all whip down.
Speaker A
This is your smash and grab trade because this is an example of where a market has moved on well non-information. Holding a press conference doesn't tell you anything more about the tariffs that we already know Trump is likely to at some point
Speaker A
introduce. So, you're not gaining any more information. That's where you get market whips down, smash, buy, and grab your winner on the way back. So for me, what scalping is, if I'm going to generalize and try and describe it in
Speaker A
that way, for me, scalping is specific things, specific trades that apply in certain circumstances, in certain situations. That's what I'm looking for.
Speaker A
We'll go and have a little look at a couple of examples of this now. And what we're going to go and start off with is that smash and grab trade. So, how do you do it? What are you looking for?
Speaker A
This is a short duration in and out scalp. You're not looking for more than what the market offers you. And that's another key thing with scalping. It's not getting into a trade and then thinking, "Ah, but this might turn into
Speaker A
a bigger and bigger move." The key to scalping is taking what's on the table.
Speaker A
Take what's in front of you, take it, be gone, and get out of there. That's the key to some good scalping. So, short duration in and out. And this is one based on a market mispricing. Now, if any of you saw the non-farm payrolls
Speaker A
data, you will have seen that almost all markets jumped up and then down. And if you look at a one-minute chart, you'll see a candle with a huge wick on it to the upside and then most of them all
Speaker A
red. What happened there is this is effectively a market mispricing or a mispricing of the sequence of information. So what we ended up with and what happens with non-farm payrolls data is to start off with you get the
Speaker A
headline number. This is the main number that everyone's looking at and this came lower. Now a lower number is bullish for in this instance here bunds, euro, treasuries, even the S&P. Reason it's bullish more rate cuts. Now we're not
Speaker A
going to have to go into too much of the theory. This is something that we could cover on another session and do a whole session about macros. But the idea lower number, it's bullish because it suggests the Fed's going to cut rates. But, and
Speaker A
this was the big but, the quicker you recognize the rest of the information, average hourly earnings were higher noticeably, unemployment was lower. So, your inflation component is going up, unemployment is falling. All of this suggests you don't need a rates cut
Speaker A
because inflation isn't coming down and unemployment's doing all right. You don't need a rate cut. Therefore, market turns back and we get these very quick drops. Now, you're looking at those charts and thinking, okay, you got some time on that. These are 5-second charts.
Speaker A
And this is what I mean by a smash and grab trade. The idea of a trade here is you see the markets jump. Now, you can't react fast enough to get onto that initial jump. And you'll see that when I
Speaker A
share the ladders. So you can't get on to the initial jump, but if you assimilate the information quickly, you can sell because you can see that this is a huge opportunity. You can see that the markets have jumped. The good thing
Speaker A
about that jump as well is it defines your stop for you. So if everyone often I get a question, "Oh well, where would you put your stop?" Well, once it jumps, the initial moves create these highs. So once you've got a high created, you can
Speaker A
sell five or six seconds after the data. You know where your stop is. Your target is a m
Speaker A
Market goes up, it's gone too far, you sell it, you know where your target is, you're in, it goes through that opening point. Whichever market you take on, once it goes through that opening point, then your job is just to exit. And
Speaker A
you're looking to exit as the market slows down in these little areas here. This is a trade that can last you under a minute. So let's go and have a little look at right when I start off this is
Speaker A
just before the data. So data is just about to come out. So this is why the markets are very very thin. What you've got on the screen there as well. On the left hand side you've got the euro, then
Speaker A
the 10-year Treasury, then the 2-year Treasury, and then the S&P. These are the the four go-to markets for most traders on C on payrolls data at the moment. Right. So, let's go and look at what happens. Remember, the data is
Speaker A
going to hit almost immediately. So, you will see all of these markets jump up the screen. That's the first thing you're going to see. I will play it through. I've got a few annotations that will explain what's going on, but it
Speaker A
happens very, very quick. Right. So, here we go. Market's nice and stable. They jump on the data. So, you've now reading the data. you've had a chance to realize that actually this data is lower or should suggest that the markets
Speaker A
should go lower. Now the S&P has come off the fastest here. The euro is still pretty close on the on the highs. So what we've done, we've had this jump up.
Speaker A
Euro is still near the high. S&P has already come back. Now the S&P had jumped up. If I take this back just a little bit, the S&P has jumped up to around about 1213 area. the euro around about 27. So once you've seen these
Speaker A
initial highs, you know where your stops are. So your stops are just above the highs. So you may be looking at 10 ticks in the euro. If you can get in on the S&P around 12, you're looking at maybe
Speaker A
three points on the S&P. That's all you're looking for on a stop. And you're playing this all the way back through the origin of the move. So there you go.
Speaker A
S&P's now come off down towards O. The Euro then starts to come off as well.
Speaker A
So, this is all within a matter of 10 seconds, 15 seconds that you've been in on this trade. Markets are now starting to come off. The Euro is now approaching its low. The S&P whips down through the low. So, this is your first chance to
Speaker A
exit some of the position. When the S&P whips through the low, you're out of that trade. The Euro is now sitting at the low as well. This is now the time to start to exit the Euro. So, you managed
Speaker A
to take about 20 points out the S&P. The euro looking at the moment about 40 ticks on side at this point in time and what you're looking for now the the exit of the S&P came because of the
Speaker A
acceleration down. So that's a specific thing. Again, scalping is about specifics. The acceleration was the specific to get out of the S&P. With the euro, you're looking for the kind of energy to fall out of it. That's what
Speaker A
we're looking for here. So the euro, the energy starting to die down. It's slowing down. The S&P's bounced off the low. That's important information. The treasuries also just sitting around the lows. And as they start to bounce, the
Speaker A
euro starts to bounce. This is where you want to try and get out of the trade.
Speaker A
And that's your job done. That trade lasted about a minute and a bit to extract that out. And you got about 20 points out of the S&P and you got around about 40 to 45 points out of the Euro.
Speaker A
So that's the first trade. That's your smash and grab trade. Be specific. Be quick on your entry. But what's really important with that, because what a lot of people make a mistake with on a trade like that is they get in, they get on
Speaker A
side, and then they start thinking, "Ah, this might turn into a much, much, much bigger move." That's not what you're looking for. This is a specific trade.
Speaker A
Get in. Get
Topics:scalpingsmash and grab tradeshort duration trading5-second chartsAxia Futuresmarket mispricingstop losstrade targetsnews tradingnon-farm payroll scalping
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