Scalp Trading Stocks for $741 in Profits!

Table of Contents

1. Introduction
2. Trade 1: BFRG
   1. Pre-Market Analysis
   2. Entry and Exit Points
   3. Thought Process
   4. Pros and Cons
3. Trade 2: ELBM
   1. Pre-Market Analysis
   2. Entry and Exit Points
   3. Thought Process
   4. Pros and Cons
4. Trade 3: VRM
   1. Pre-Market Analysis
   2. Entry and Exit Points
   3. Thought Process
   4. Pros and Cons
5. Dealing with the PDT Rule
   1. Cash Account
   2. Multiple Brokerage Accounts
6. Conclusion
7. FAQ

Trading Recap: $741 in Profits on July 25th

Welcome back traders! In this article, we will be discussing my trading activity on July 25th. I had a profitable day, locking in $741 in profits. I made three trades, two of which were profitable and one that resulted in a loss. In this article, we will be discussing each trade in Detail, including my entry and exit points, thought process, and analysis of the pre-market activity.

Trade 1: BFRG

Pre-Market Analysis

BFRG was a stock that was gapping up in pre-market. The pre-market session showed a strong trend going into the open, with higher highs and higher lows holding above the VWAP. However, I knew that most of the volume would come in at the market open, making it a riskier trade. I had two ways of trading this stock: an opening range breakout or buying into a support area using the morning low to risk off of.

Entry and Exit Points

There was Never an opening range breakout to buy into, so I took a starter position on the dip. My average price was right under the VWAP at the time, and my plan was to lock in a portion of my profits if we got another pop up to the $6 area. However, the stock started to reject the VWAP and broke down under $5, which was my risk level. I had to cut losses on the trade, resulting in a loss of $258.

Thought Process

When trading a stock that is running up all the way up until its open, it is usually a riskier trade. I had two ways of trading this stock, and since there was no opening range breakout, I took a starter position on the dip. I used the morning low to find my risk level, and once it started to break down underneath that low, I had to cut losses on the trade.

Pros and Cons

Pros:

• Strong trend going into the open
• Possibility of an opening range breakout

Cons:

• Riskier trade due to most of the volume coming in at the market open
• No opening range breakout to buy into

Trade 2: ELBM

Pre-Market Analysis

ELBM was another stock that was gapping up in pre-market. It had a big move up to $3.04 in the early pre-market session, pulled back down to under $2 per share, and traded sideways and consolidated right around that $2 level into the open.

Entry and Exit Points

We got an opening range breakout, and I took a starter position in this trade. It ramped up to a high of $2.65 before being rejected straight back down. I missed out on the first move and had to hold through the pullback, but then I sold a portion of my shares as it bounced back up and added back some shares as it pulled back into the VWAP. I locked in my profits once again into the pop that happened up in the $2.50 area, resulting in a profit of $169.

Thought Process

Even though ELBM was a weaker setup in general due to the pre-market action being overall kind of to the downside, it was still a better candidate for a gap and go than BFRG. I took a starter position in this trade and added more shares as it pulled back closer to the VWAP.

Pros and Cons

Pros:

• Opening range breakout
• Better candidate for a gap and go than BFRG

Cons:

• Weaker setup in general due to pre-market action

Trade 3: VRM

Pre-Market Analysis

VRM had been a slow and steady mover that morning. It had been a very strong Momentum stock lately, and we could see that yesterday on Monday, it had a pullback into an area of trendline support and into the 20 period simple moving average, which had been acting as support as well.

Entry and Exit Points

I took a starter position in this trade pretty much right away at the market open. I added some shares into the pullback as it got closer to that level of trendline support. I knew that my risk level in this case was going to be underneath the low of the previous day, which was $1.97. Once it started to curl back up, break above the VWAP, and we got a nice high volume spike through the $2.20 level, I added some more shares. I ended up with a total of 4,500 shares, and my average price was right at about $2.15. I locked in my profits up in the $2.30s and ended up with a total profit of $830.

Thought Process

VRM had been a slow and steady mover that morning, and I was a fan of this setup in general from the trade plans. I took a starter position in this trade and added more shares as it pulled back closer to the trendline support.

Pros and Cons

Pros:

• Strong momentum stock lately
• Pullback into an area of trendline support and into the 20 period simple moving average

Cons:

• None

Dealing with the PDT Rule

The PDT rule is something that pretty much all of us have had to deal with at one point or another in our trading Journey. There are some ways to work around it a little bit and to make things a little bit better without having to deal with offshore brokers and without having to deal with sketchy wire transfers.

Cash Account

One solution is to have a cash account with an American brokerage. With a cash account, there is no PDT rule, but You have to wait three days for your cash to settle after each trade.

Multiple Brokerage Accounts

Another solution is to look into splitting up your funds into several accounts. For example, you could have one account with TD Ameritrade and one account with Interactive Brokers. The reason for this is because you are going to get three day trades per five business days in each of those accounts. If you have two accounts, you can have six day trades. If you have three accounts, you can have nine day trades. On top of that, it's a good way to manage your risk because now you don't have all of your money in one single account, which is going to prevent you from being able to put all of your funds into one single trade.

Conclusion

In conclusion, I had a profitable day on July 25th, locking in $741 in profits. I made three trades, two of which were profitable and one that resulted in a loss. Each trade had its own unique pre-market analysis, entry and exit points, and thought process. I also discussed ways to work around the PDT rule, including having a cash account and multiple brokerage accounts.

FAQ

Q: What is the PDT rule? A: The PDT rule is a regulation that requires traders to have a minimum of $25,000 in their account and limits them to three day trades per five business days.

Q: What is a cash account? A: A cash account is a type of brokerage account where you pay for securities in full at the time of purchase.

Q: How can I work around the PDT rule? A: You can work around the PDT rule by having a cash account or multiple brokerage accounts.