With respect to skc's question here:
I used to scalp full-time in the early 2000's and made a decent living from it. Then trend trading became a better option so I let scalping go and have just started to pick it up again in the last few months. I'm still rusty and making plenty of mistakes but getting back into the swing of it.
So this thread is for anyone scalping aussie stocks. It's not just about what I'm doing, but I'll kick off with my basic strategy. Others can feel free to add their strategies/ideas.
I look for lower priced stocks preferably sub-10c but anything up to about the 40c mark works for me. I look at the odd higher price stock too like AIO in the last few days. The reality is it depends completely on liquidity, volume and volatility.
What I want to see is above average volume and decent range. I like thick buy lines and thin sell lines, with plenty of individual orders on the buy side. One or two big orders making the line raises the risk of those big buys getting pulled and leaving one with no demand. Depending on the DOM, I might put in a bid, but generally I send a limit order at the ask. All I'm looking for is 1-3 ticks on the upside with a downside risk of 1 tick. Occasionally that gets swept to 2 (infrequently 3) if some dedicated sellers appear.
It's discretionary trading so it depends on a lot on the individual trader. It's difficult to quantify. It's more of a 'feel' for how the orders are flowing, what transactions are occurring etc. I guess it's internalised patterns.
SDL is an example of something on the watchlist. It's had great ranges, the buy lines are currently looking good, strong overhead resistance but only looking for 2-3 ticks so that wouldn't be an issue. I don't think this will trade today, maybe not tomorrow, and maybe not for weeks. Who knows? But I have my eye out here for an opportunity. In this example, if it were a real trade, I'd probably be looking to get in at 9.2 if possible or 9.3 if 9.2 builds up quickly and there are no sellers. I'd probably look at getting out at 9.4. Difficult to say exactly because it's not a real trade and the buyers aren't flowing and the sellers aren't pulling orders.
As SDL is not presenting a real opportunity I want to make it clear in this case that the thin sell lines could very well be from sellers at market driving the price down quickly (and cascading stops) rather than a lack of sellers. As I say, it's difficult to quantify and is more about a 'feel' for the DOM. I'm sure TH and the other SPI scalpers understand what I mean.
Will post a real trade when I get one.