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MACD Base Hit Cheat Sheet

This document outlines the strategy for a base hit scalp trade. It involves identifying when a stock is trading within a range and the MACD lines are flat. The trade enters long when the fast MACD crosses above the slow MACD after the range is broken out of. The stop is placed 0.02 below the lowest retracement point. The trade exits when the fast MACD crosses back below the slow MACD. Good set ups for this trade include gaps out of the range, volatility within the range, an uptrending day, a failed breakdown, a gap down into key support, or the second day following an intraday reversal.

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Pratyush
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673 views1 page

MACD Base Hit Cheat Sheet

This document outlines the strategy for a base hit scalp trade. It involves identifying when a stock is trading within a range and the MACD lines are flat. The trade enters long when the fast MACD crosses above the slow MACD after the range is broken out of. The stop is placed 0.02 below the lowest retracement point. The trade exits when the fast MACD crosses back below the slow MACD. Good set ups for this trade include gaps out of the range, volatility within the range, an uptrending day, a failed breakdown, a gap down into key support, or the second day following an intraday reversal.

Uploaded by

Pratyush
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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The Dynamics of the Base Hit Scalp Trade:

● In Play stock putting in a range. It can be tricky to trade the ranges at times, especially when we are anxious,
are excited, are in an anticipatory mindset.
○ The anticipatory mindset often manifests itself through one, or a series of invetned trades.
■ Trades that on the surface seem to have decent ideas behind them, but are not grounded in
real edge from the perspective of
● A clearly defined, appropriate stop
● A specific entry trigger with a reason for that entry
● A distinct exit strategy (reason2sell) that tells us when the “meat” of the move is done
● For this Base Hit Scalp, we first dentify the range turning into a consolidation
○ The price action compresses and the MACD goes relatively FLAT for a period of 3-15 minutes
● Second, we observe a break of the range, and an expansion of the Fast and Slow MacD lines.
● Third, we observe the price retracement that occurs and look for the FAST MACD to dip below the SLOW
MACD.
The exact rules of ENTRY (all rules the exact same, just inverted for a short scalp:
● When the FAST MACD moves back above the SLOW MACD, and BOTH are above the 0 line, we enter long
○ We dont have to be super aggressive here, we can often use a mid-point entry (between bid and ask)
The exact rules of STOP placement:
● Hard stop Trade - One and Done Trade
○ Stop is placed .02 below the retracement lows.
The exact rules of EXIT:
● This is a Scalp Trade. We use MACD as a guide.
○ We stay in our position until the FAST MACD crosses back BELOW the Slow MACD
○ When this happens, we exit our position entirely and move on.
Set Ups where we look for this Scalp Trade:
● Gap out of Range
● Volatility in Range
● Trending Day to the Upside
● Failed Break Down
● Gap Down into key support
● Day 2 following intraday reversal
** All of this can be reversed for short trades, just flip the charts!

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