Scalping BAC 02/27/2009

This is an example of Scalping BAC 02/27/2009 where several opportunities appeared to anyone who trades during pre-market hours.

The same pattern that occurred in pre-market, also produced an entry point during the first few minutes of regular hours trading.

Trading in Pre-Market hours and during the first 30 minutes of regular trading carries additional risks. Please make sure you are aware of these additional risks before attempting to trade during these times.

In the first chart below, you will see that it covers the time period from 6:29 a.m. thru 9:35 a.m. I have added labels showing identifiable, repeating patterns that occurred multiple times.

Scalping Trade

From 7:40-8:00 a.m. you will notice a higher low was made resulting in a short term move higher. From 8:20-8:33 a.m. the same pattern of a higher low was made resulting in a short term move higher. And finally, from 9:20-(9:30-9:34) a.m. had the same pattern resulting in a short term move higher for the third time in one morning.

You may notice that I listed the last occurrence as (9:30-9:34) a.m. I did this because there is so much volume and uncertainty at 9:30 a.m. that the risk of entering a trade at this time and having a sharp move against you is probably the highest of any time during the day. 9:34 a.m. is still very risky, but it is a lot better than at exactly 9:30 a.m.

You will also notice that when the stock opened up at 9:30 a.m. it moved higher to $4.60 and then reversed. If you look back to the left on the chart, you will see that this was a previous pre-market resistance level in which the stock reversed from.

When the stock reversed from the $4.60 level, it then went down to around $4.25 which was around the opening price at 9:30 a.m., which then provided some support. Once I saw the price reverse, start to move higher and cross above $4.30, I placed an order to buy shares with a limit of $4.35.

My Buy order was filled at $4.34. Less than a minute after my Buy order was filled, I placed an order to sell my shares and close my position at a limit of $4.45 for a quick scalping trade. You can see below that my Sell order was filled at $4.4701 for a profit of +2.99% before commissions in less than a minute.

BAC Trades

My target for this trade was +1% or more with the goal of getting out before a possible reversal at the previous resistance level between $4.50-$4.60. While this trade in particular could have produced larger gains by waiting a few minutes, my trading plan before I entered this trade was to be in and out quickly and move on, so that's exactly what I did.


Looking at the next chart, you can see that someone with a longer timeframe to trade using their specifc plan could have had profitable results as well.

The same position that I entered could have been used for a longer timeframe trade or an entry into a trade at the breakout point of the triangle that formed shortly after I exited my position (9:45 a.m.) would have worked out great. Notice the three pre-market resistance levels I added with green horizontal lines and how the stock reacted when it reached them.

Scalping Trade BAC

While this trade worked out well, BAC in this case could have very easily dropped lower after I entered into the trade. Having an exit plan in place before you enter a trade should be used on each and every trade to help minimize losses. By doing so, you will be around to trade the profitable trading opportunites that come about in the future.




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