In this video, we share how a junior prop trader made a series of scalps in Tesla to achieve a new daily high in profits. We discuss long AND short scalp trades in Tesla that you can learn to trade to grow your trading account.
View Video Transcriptin this video we share how a junior prop
trader made a series of scalps and Tesla
to achieve a new daily high in profits
hi I’m Mike bellafiore co-founder of SMB
capital and we’re proprietary trading
firm located in midtown Manhattan and
I’m also the author of the trading
classic one good trade and the playbook
in this video we discussed long and
short scalps and Tesla that you can
learn to trade to grow your trading
account
[Music]
today I’m doing a playbook on my
momentum scalps on the opening drive and
into the close of day on Tesla on
February 4th which is really big day for
Tesla so for big picture context
Tesla open at all time higher to the
second day in a row at the same time it
was also day 4 after a very strong q4
earnings at beat on revenue be done EPS
they met expectations for their card
deliveries and there’s a lot of good
outlook for the future production on it
especially because they were building
more factories in other countries and
also the Chinese crown of virus news
that had caused a dip in the market was
deemed kind of negligible for Tesla’s
Chinese growth trajectory since its
third quarter earnings in October Tesla
has actually come from 250 dollars to
$90 and four months on this day analysts
have been trying to keep up with the
stock in the price targets their market
cap actually quadrupled from 40 billion
just 160 billion in this very short time
period and as far as the market it goes
in the last week the market had fallen
due to coronavirus fears but leading to
this day it was getting kind of clear
that perhaps the dip was being bought
spiars approaching the top of the range
that it dipped into the Q’s r
approaching its all-time highs again and
there are a lot of indicators of a very
strong market and in summary for the big
picture context Tesla has been a really
prominent market leader in a very strong
market alright so a big day for Tesla
and and really good day for you too
right so last night we celebrated you
hitting an important milestone and so
and that’s great and he did it in in
this opportunity right here which were
going to talk about right so we went to
mighty Quinn’s I forget how we got on
that subject but I think that Max and I
were sort of saying during training at
some point that if somebody hit this
particular milestone which you had that
I think I was on the hook for taking
everybody out for dinner and I don’t
know why we selected mighty Quinn’s but
anyway we did and so so you hit that
mile since we’re out and
some chicken sandwiches you guys had
checked I had the ribs but uh I don’t
know why guys got all the chicken
sandwiches seems like the ribs looked a
little bit better I mean there’s a
barbecue place but it was fried chicken
you got the fried chicken sandwich it
wasn’t the barbecue chicken so that’s
pretty good and now we have we were
talking so we all went out and then we
were talking about the next milestone
for one of you in your class to hit and
talked about maybe getting pizza that’s
actually looking up where we could go to
get really good pizza and I typed in
like the top pizza places in New York
City
and I think I gained five pounds just
actually looking at the site there’s
some like pretty good places in Brooklyn
and so whoever does it will get to pick
one of the top places in New York and
we’ll take everybody out there but look
the milestone is the milestone and it
doesn’t even really matter what it is
the reason why we actually have
milestones and Carlton passed them out
to you guys recently some are process
orientated and some are PL generated
there’s a long way for you to go from
where you all you are all at to being a
seven-figure trader but along the way
you do have to challenge yourself and
you do need to set goals which are
achievable so that you can see the
progress that you’re making so that you
can sustain your energy to keep working
at this if you were to come in at the
beginning of your career you know let’s
say the only goal that we had David was
for you to be a seven-figure trader now
this really good experience for you
would be perhaps not that not as
encouraging
because it’s a long way from being a
seven-figure trader but if you can get
to the you can get to one milestone and
I think the milestones are the first
trade is 250 and then 500 and a thousand
I think it’s twenty five twenty five
hundred and I think it’s five thousand
and then ten thousand are some of the
milestones that we sort of set up and so
people who are watching at home or
retail traders think that’s a good thing
to copy can I make a $250 trade if I do
so give myself a checkmark acknowledge
that I’ve hit a milestone that’s that’s
good stuff when I have a $500 trade okay
check that off I’ve made progress when
I’ve made $1000 trade okay it’s a
milestone check that off you are making
progress you are setting achievable
goals we have some milestones on reading
the tape viewing sessions and and and
and consistency there’s some milestones
in there how many days you’re positive
in a row but those are that was
important I think they’re fun because
the reality is again you’re not going to
make as much money as some of the better
guys in the desk
but you still can be having just as good
of a day production-wise as them and you
need to see that and you know thousand
becomes a three thousand dollar day
becomes a 10 thousand dollar day okay so
you’ve got the next milestone for
yourself to hit good job and hitting
that and let’s talk about how you do it
with this particular trade so Tesla’s
been really strong and today especially
it was really in play some of the
intraday fundamentals for Tesla by the
end of the this day was 2.7 arvo which
is pretty good for it I want to know a
couple things and it’s intraday
fundamentals it’s short float this isn’t
exactly accurate because the site I use
for information on short float it
doesn’t always update to the exact day
but Tesla has been generally fairly high
fairly high
shorted above 20% even though it’s been
going up people always trying to short
it some people try to make the careers
in shorting Tesla so that’s always
something important to keep in the back
of the mind on the state also capped up
15% and probably most notably the pre
market volume on this day was almost 20%
of its average volume which I think
shows how in play this name was and then
I’m gonna show you some chart to show
how extended this was from its quarterly
three earnings if you want to learn
three real-world setups that our traders
used including the simple setup that we
teach all of our new traders and the set
up that turned one of our traders into a
seven-figure big money earner check out
the free webinar that we’re currently
running just go ahead and click the link
that should be appearing right now at
the top right hand corner of your screen
that’s gonna open up this free
registration page in the new window so
don’t worry you’re not gonna lose this
video you’re gonna learn more in a
couple of hours from this trading
workshop then from years of online
education so I’m the daily you can see
here is its quota three earnings and
there’s a large gap then and since this
October date it’s come all the way to
900 from 250 which is almost quadruple
in its price on an all-time chart it’s a
little more clear you can see that it’s
come out of this this area where it’s
come down and then continually just come
up quite a bit very steeply and this is
the 30-minute chart for the last few
months you can see it’s very clearly an
uptrend and then particularly the last
couple days you can see that it’s
extremely extremely steep so for some
market context this is a 4-hour chart
for the last six months and this is just
to show that how strong the markets been
this line indicates the breakout point
from a long-term consolidation that the
spy has had and it’s gone an up it’s
been an uptrend this dip right here has
been due to the coronavirus news and
fears but on this day you can see that
the spy is kind of coming up to the top
of the range that it’s been in it looks
like the dips being bought and we’re
clearly in the queues which is very
similar the dips and bought but it’s
actually approaching its all-time highs
so the queues have been a little bit
stronger but all around very somewhere
yeah for my morning game plan Tesla’s
been extremely strong and shorten it in
the past days has been very risky and
the stock at this point you can see from
the weekly chart is like extremely
parabolic and there hasn’t been like any
polling which I think has me to keep my
mind open for both the short and a long
side here because you know like how high
can it go right that question people
keep asking in the last the weeks up to
this moment and it just keeps going up
so I don’t think I have the resources or
the expertise to kind of guess the top
so I’m just gonna try to be in a scout
mindset because the one certain thing is
that there’s an elevated our ball it’s
very employ there’s a lot of pre market
volume and so I want to be able to read
the tape clearly on the morning game
plan and play the momentum really play
any breakouts in solid ation your highs
and lows and really if there’s any sign
of directionality just try to scout that
for momentum it’s an important point
lots of times people think I have to be
long Tesla and catch a really big move
or I have to catch the backside and
Tesla and catch a really big short
pulling trade and you don’t need to do
that it’s good enough to just spot
something and look for opportunities
where it’s overbought short it for a
scalp oversold buy it for scalp wait for
it to break out of a important area
scalp it to the upside
maybe brakes now from errors scalp it to
the short side I mean something like
Tesla is is going up and down intraday
in shorter chunks cleanly that are easy
to discern if you are patient and so you
don’t have to feel that pressure and you
can see that a little bit today with
space right even over the last three
days people feel like I have to get the
space long right or I have to get the
space short right which is fine and I
would say a majority of the traders will
focus on that but you can make a career
thinking differently you can make a
career saying that’s a lot of pressure
for me
you know maybe that’s not exactly the
way I want to think through things so
you don’t need to you don’t need to put
that kind of pressure on yourself it’s
so good and I’m glad you’re thinking I’m
glad you’re being open-minded that you
don’t need to do that that’s an
important observation and my focus is
really just trying to be in like a very
nimble mindset not to let myself get
caught or it stuck to one side unless
it’s very very clear which in other
words really just means being really
quick to take profits and being open
minded so this was the pre market setup
you can see like yesterday it was pretty
strong an uptrend and then today it’s
gapped up you can see that since you can
see that since the the morning there’s
been a good amount of pre market volume
and even broke 900 which was a target
that not many thought it would hit like
a couple months ago I’m so ready there
in the pre market and then this is what
I ended up doing on the opening drive so
number one I noticed that there’s
weakness on the tape and there’s a swipe
below the pre market support leaving
into the open and I noticed that there
is an inability for its approach to
pre-market high which is kind of that
wick you see on the candle and I end up
shooting one momentum lot and I take it
down and as it goes down I’m really just
watching the tape taking profits noting
that there’s heavy selling volume and
when the tape begins to turn I get out
my entire position see if it gets bought
back up and when it does I start to get
back in one is such making a push back
to achieve you op did you hold that
until you saw the tape turn you saw the
weakness you hit it for a scalp and then
you were saying to yourself because
you’re quite in the money here you’re
saying to yourself I want to see it turn
on the tape stay in it until I see the
turn or are you just sort of saying well
I’m so far in the money lock in profit I
mean definitely a little bit of both I
mean it came down a lot farther than I
thought it would but I feel like this
has happened before in Tesla where it’s
kind of like gone sold off in the open
and then just bid back up and gone for
four highs on the day
so I was just really prepared for it to
turn around on me I think just the short
silent Tesla there’s just really risky
to keeps eyes on and I definitely baron
multiple times trying to hold on his
eyes the way I set up my volume bar on
dickish whim I can see like how much
size has been done on the asker the bid
and you can see like the first candle is
real a lot of heavy selling and a lot of
heavy and you can actually see like when
it when the when the candle is turned
green you can see like all the volume
volumes I’ve also turned green and like
the bind really comes in and I think on
the tape it’s pretty clear I’m just very
I’m just trying to be as nimble as
possible so I end up getting long on
that turn get out on this small pullback
you can see at number four and I
actually try to flip it short but I
didn’t end up working out so I’m like
okay maybe this is just a really shallow
pull in and I got back long when that’s
completed though I mean you catch a nice
move down right away right one and then
two and then you’re able to rest and
think about hey where would be a good
long get you you get long and it takes
something out of that and that’s good
open-minded trading I mean it sold off a
little bit too much so with three that’s
set up a good long that’s that’s a very
good intraday active trading that’s good
but it’s very good intraday active
scalping and I just try to continue
having this mindset I as a purchase to
pre market highs there I end up getting
out a little bit and I’m just like
trying to see if it’s gonna break it
does break pretty cleanly so I got back
in there and then one at the top it
starts getting really heavy and
eventually I got of everything
especially when it was kind of clear
that it was really selling off and it
hadn’t sold off since like that since to
open and I ended up flipping short
alright good so it’s going up going up
going up to gone up a bunch and now
you’re noticing it’s harder for it to go
up higher there’s volume being done but
that volume is not pushing it up as much
as it had from where you watched it
towards the bottom up
where it is there we call that being
heavy there’s volume being done
there’s transactions being done there’s
decent volume but that is not pushing
the stock higher and the poland is a lot
deeper than the last several poland’s
which have an extremely shallow between
number seven number eight it actually
consolidates a little bit i thought it
was gonna break out long tried scalping
it long and it was a fake break out so i
got out of that and then flipped it
short when it was quit i was when it was
clear that was a fake breakdown or break
out and that was kind of like most the
momentum scalping i did on the opening
drive
alright doing that early open and I
ended up scalping this for the whole day
but I think that this kind of
demonstrated the best time to momentum
scalp because there’s so much volume and
volatility and I think it was actually a
little bit of a mistake to continue
trying to scalp this a little bit too
much once the the moves are a little bit
the opening moves a little bit finished
yeah and so what you’ll see when you’re
trying to make some of these these
scalps and Tesla is that when you can
see it when you can see where there’s
weakness and you get short when you can
see where their strength and you can get
long when you can notice there’s
something different when you can
describe what that is so you know assets
going up after a pretty explosive move
to the upside you’re saying I’m seeing
heaviness on the tape and now I’m
getting short those are gonna be those
are gonna tend to be your better
momentum trades slash scalp trades you
know on the open I can I forget what
your words are and I can’t see that far
can you read that to me again
on the open I noticed weakness on the
tape yeah so I noticed weakness on the
tape yeah and then the more you can in
your own head describe what that is what
that means that’s gonna get you to make
those see it better trades that’s
important and then so the over trading
becomes oh well it it didn’t go down so
I’ll get long as opposed to it didn’t go
down the
to push it lower there’s more volume
there’s a buyer it’s new
let me get along I’m seeing the strength
that’s a better trade okay what’s next
yeah this is just my trade executions on
the opening drive basically you can see
me flip short here flipping here trying
to short the pull in doesn’t work and
I’m picking long all the way top flip
and so on here this has actually zoomed
out for the entire day
what I was just showing you was this
kind of area right here on the left side
where it comes down up back down and
it’s really choppy kind of like I was
just saying like I definitely scalped a
little bit too much into the midday I
think like it’s pretty clear after a
whole deal up here it just kind of
trends up back to that high and ends up
breaking out a little bit more something
really important to keep in mind in the
future when I stocks ever even played
like this again and I’m trying to
momentum scalp it is to kind of look for
a bigger picture idea once that momentum
and the volume dies down because if it’s
gonna trend like I shouldn’t just be
scalping it yeah and if you are you seem
like you’re doing a pretty good job of
being open-minded cuz you’re trading it
long and short that seems to be an easy
transition for you to be able to make
which is alright after an hour settles
where the there’s this period of price
discovery let me just sort of see if
there’s a particular trend that I’m
noticing and because you’re in it and
trading it actively it should be
actually easier for you to detect the
likelihood that there was gonna be a
trend I suppose just looking at a chart
so I sense it you should do that and so
you know when you have something that
gaps up and then it’s above B WAP and
holding the gap and doing nicely you can
shift then to say now it’s time for a
swing trade I’m seeing yet I’m seeing
the strength let me give it a run I’m
now making an intraday swing trade I’ve
got different rules for that that’s a
different Trey let me give it a go
all right good but yeah good I mean
really good job hitting your milestone
looking forward to all of the next of
you getting to that particular milestone
you should all do in this market you
really should all do it almost by the
end of the week it’s Thursday max I know
you’re you’re upset about today but you
know and and that’s fine you should be
but these milestones these numbers
become much higher you know there was a
time where I personally challenged some
of the guys in the desk to have a thirty
thousand dollar month who have gone on
to make you know millions and millions
in a year these numbers are just what
we’re making them up we’re just making
them up they’re arbitrary there’s
there’s nothing that says that you can
only make $1,000 in a particular day you
know great milestone at the beginning to
hit that’s a that’s impressive nothing
to say for the next person in the room
and I hit three thousand it’s just an
art it’s an arbitrary number they shift
but the trade that went into it that you
like you can build from and trade bigger
and the improvement that you see perhaps
turning this into swaying can be made to
make a little bit more and you can find
more trades like this and other things
like you know could you have found the
same trade in space over the last five
days or so yes a hundred percent and so
that’s that’s the importance of that and
you know you just keep challenging
yourself there’s really no there’s no
destination now it’s your turn is
scalping a strategy that you use in your
trading what if so are your favorite
trade setups to scalp let us know by
leaving a comment below right now
* no relevant positions
