If you read my previous article, you'll have a good idea what scalp is negotiation. You'll also receive your device platform direct access as a trader scalp. Now it is time to begin to cover the strategy. Before you begin to look at stocks and to decide whether or not it is a good short-term or trade, you need to know the methods of entering a location. From the last article I have described the level 2 and the definition of adding or taking cash, you will need to understand to get this next part. To simplify the processes for registration only going to cover 2 at this stage. They are called dynamic registration and the average-in.
Scalp Trading dynamic registration method
When you use this method of registration will receive liquidity. You can use an internal limit order. This means, for example, if you are long (buy shares with intention to sell the higher) send buy limit order at inside "prompt".Why use a limit order instead of a purchase order?This is because I use this method of entry when you see momentum building at level 2 and Time & sales window. ship when it happens often fills achieved from the purchase order price is different from the end you see on your screen (this is referred to as slippage). an internal limit order stops creep at the expense of not filled quickly, or perhaps only a partial fill quickly.
Scalp Trading Average method
When you use this method of registration will add liquidity. This is where you are planning multiple entries to find a position that suites your risk tolerance for this stock and trade. So that for example you want to make some 1,000 shares. Using momentum, described above, you will get the entry with the full 1000 shares about the start of a dynamic movement.This is not the case with the average method. "will" bid "price 300 shares almost certainly will find visits. You then "quote another 300 shares at a lower price level that has a good chance to hit. Finally you quote the remaining 400 shares at a lower price level realistically think you could get hit. Each time you receive your position filled average price gets improved.
It is worth noting that on average below! Averaging, which will be "tenders" full 1000 shares on the first order and then when the price moves against you "quote another 1000 units to improve your prices average position but at the expense of your risk tolerance.You have exceeded your risk tolerance because planed on 1000 shares but now, of course you have 2,000 shares.Distribution become harder to manage when you trade off your risk tolerance planed (my risk tolerance will cover and design in future articles)
The output method
There will be only one output method for now.This is the mean value-This is like out. average; in but reverse procedure. continuing with the big example above, once you have your 1000 shares your quote 300 in value very likely to receive, then another 300 slightly higher. Finally the last 400 at a realistic level with technical analysis (which I will cover in future scalp trading articles).
For new scalp Traders
It is important to master the scalp trading average entry method before you use the method momentum. in the next article I will cover my a strategy where they can use these methods of entry and exit.
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