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I wanted to use today’s P.O.D. to highlight a simple but very effective scalp play that I look for in the Index Futures markets.

All that is needed really is a 2minute Chart with volume (which is the chart on the right). But having the 55-tick chart on the left really helps you time the play much better.

This is a 2-tick scalp only. Oftentimes it can be a good setup for a little more depending on other technical factors, but it has a very high probability of success when going for 2-ticks.

Here’s the Setup:

1.) After an initial move in one direction or another price then consolidates sideways or down
2.) This consolidation must last at least 4 bars
3.) The volume on all of these bars must be lower than the 50-period moving average
4.) A volume spike in the oposite direction must occur that is
    A.) Greater than the 50-period moving average and
    B.) At least 1.5 times greater than the previous volume-bar
5.) You can then enter the trade as a micro-fade on the next pullback to the rising 55-tick trendline using a 7-tick stop & 2-tick target

The play I entered today occured at the second arrow on the 2-minute chart… I entered at the bottome of the green hammer that is circled right before the red candle at 691.70 & within 3 seconds had gotten my 2-ticks.

The first arrow on the 2-minute chart show another situation where you could have probably gotten 2-ticks. It only has 3 bars under the 50-period moving average but the volume was very explosive on that bar being 3x greater than the prior bar. While I would recommend sticking to the 4-bar setups until you get the hang of it, with experience comes the ability to deviate slightly from the plan when other mitigating factors are present.
 
 

Ok, so I finally bit the bullet and opened up a myspace account. In perusing the profiles of some other traders on there, I came accross the following link with a number of very good articles for traders of all levels.

Enjoy!

http://www.ultimate-trading-systems.com/articles.html