Scalping Strategy – Sweeping the Book

Before I begin, this is a Footprint strategy intended for scalpers. It is aggressive, but if used when the market is approaching a predetermined level, it can be a very powerful confirmation tool and provide unbelievable timing to trades.

THE SETUP –The market has been in a short term trend (up or down). After trending for a period of time there is a sweeping of the order book. The moment this occurs or there is a counter reaction in the opposite direction, go with it. The market has probably reversed in the short term and the sweeping of the order book pattern is evidence of the “last person to get in” for that move.

If you are not familiar with what “sweeping of the order book” is, it occurs when a large buyer or seller places a large market order and takes out a bunch of resting orders at multiple prices. This can also occur if a stop order get triggered. A Footprint chart captures this information by showing all the volume on one side, either bid side or ask side.

REQUIRED TOOLS – To spot this pattern a Footprint chart is required. The reason for this is the history of the trading is immediately captured and displayed. A DOM (depth of market) just doesn’t cut it. Everything fills in so quickly and there is no way to tell really how much traded. The screenshots below are of MarketDelta Trader, the new trading interface by MarketDelta. MarketDelta’s native Footprint chart will work as well, but having this information coupled with the trading DOM and the fact you need to react quickly to these opportunities makes MarketDelta Trader a little better suited for this particular strategy.

Here is another example that occurred while typing this post. I was able to get long at 1222.50 and the market immediately moved in my favor and took out my profit target in the move higher. One of the benefits of this pattern is the risk/reward. Stops should be pretty tight.

Please comment if you have any questions. I would be happy to provide additional insight based on your questions.

7 thoughts on “Scalping Strategy – Sweeping the Book

  • ramon

    what is the risk/reward for this strategy? How do you determine your entry and exit?

    Reply
  • admin

    The risk/reward will vary depending on the style of trading. Some scalpers may stay in this for just a few ticks, getting out for the same if the market continues to flush. Others may time this with other signals and seek a longer swing.

    Determining the Entry is described under The Setup, above.

    We don’t offer specific trading plans here, but rather illustrate general setups and tools that can improve trading overall, when studying Footprint charts.

    Reply
  • estrader

    This site is excellent in bringing us Footprint users new insights and ways of using these charts. May I ask you that you always publish the chart type (periodicity, etc.) along with the chart header in the pictures (sometimes they are cut off), so I can replicate the charts in Market Delta? Thanks!

    Reply
  • giacomo

    Is it possible to do this strategy without DOM ??

    Reply
    • admin

      You would need either the DOM provided by MarketDelta (it’s free) or their more robust product, MarketDelta Charts. Both of these two programs offer Footprint charts.

      Reply
      • giacomo

        If i look at only the Footprint chart and no the DOM, how can i understand this reversal pattern?
        For example on the first screenshot: the market go Long; it is approaching a resistence; i see many buyers on ask side; and then the market reverses.
        When i see a lot of buyers in that circumstance must i know that it’s possible a reversal??
        But i dont see an increase of sellers; this is because there is a large Short market order (or a large short stop order) that i can’t see ??
        Thanks.

        Reply
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