# The momentum method Scalpel is built around

> The small-cap momentum style Ross Cameron teaches, from stock selection to gap and go and micro pullbacks, mapped to Scalpel's scanner, intel and stops.

Source: https://scalpeltrade.com/guides/momentum-method
Guide 14.6, Tips and tricks. Intermediate, 11 min read.
Checked with Scalpel 1.12.8 on 2026-10-15. By Scalpel Team.

**In short:**

Scalpel is built around the small-cap momentum style Ross Cameron teaches at Warrior Trading: find stocks priced about $2 to $20, up 10% or more, trading 5 times their normal volume, with fresh news and a low float; trade them in the pre-market and at the open on patterns like gap and go and the micro pullback; and keep a small fixed risk, about 2:1 reward to risk and a hard daily loss limit. Each step maps to a Scalpel feature. This style is hard and risky, and many people who try it lose money.

**Note: Independent.**

Scalpel is independent and is not affiliated with or endorsed by Ross Cameron or Warrior Trading. This page describes the publicly known approach in our own words and shows where Scalpel supports it. It is not trading advice, and Scalpel never tells you what to buy.

Small-cap momentum trading looks for the handful of stocks each morning that are moving hard on news, and tries to take a small, quick piece of the move with a tight stop. Ross Cameron is one of the best-known teachers of the style, and his public material describes it in a consistent way: strict stock selection, a pre-market routine, a few repeatable patterns, hotkeys, Level 2 and the tape, and risk rules that keep losing days small. Scalpel was designed so each of those steps happens in one place, on your Interactive Brokers data.

**This can cost you money: Read this first.**

Fast small-cap momentum trading carries a significant risk of loss and is very difficult. Many people who try it lose money, and some lose it quickly. These stocks can fall 20% in seconds, halt, or gap through any stop. A method and good software do not change that. Practise in SIM for weeks, not days ([guide 14.5](https://scalpeltrade.com/guides/first-week-in-sim)), start LIVE with the smallest size you can, and expect a long learning curve.

## Stock selection: the five criteria

The method's best-known part is its stock filter: five things a stock should have before it is worth watching. Here is each one, in plain words, and where it lives in Scalpel.

| Criterion | Why it matters | In Scalpel |
|---|---|---|
| **Price about $2 to $20** | Cheap enough to move a lot in percent, liquid enough to get in and out | The **PRICE** column. **Running up** filters to **Price min ($)** 2 and **Price max ($)** 20 by default. The IBKR scanner's own range is wider (0.1 to 100) so sub-$2 runners still show |
| **Up 10% or more on the day** | Something is happening today, pre-market included | **CHG%**. The IBKR scanner's **Min change %** and Running up's **Min gap (%)** are both 10 by default |
| **Relative volume 5x or more** | Far more traders than usual are involved, so moves are real | **RVOL**, today's volume against normal. Running up's **Min rel volume (x)** is 5 by default ([glossary: relative volume](https://scalpeltrade.com/guides/glossary#relative-volume)) |
| **A fresh news catalyst** | A reason for the move: news brings buyers | The catalyst chips in **INTEL**, such as **FDA 4m** or **Trial data 52m**: the kind of news and how long ago it broke, graded from None to Explosive ([guide 9.4](https://scalpeltrade.com/guides/catalyst-grading)). **Require news catalyst** gates Running up |
| **Low float, often under 10 to 20 million shares** | Few shares available to trade, so demand moves price fast | **SHS OUT**: shares outstanding from SEC filings, the stand-in for float. The float is never larger, so a small SHS OUT means a small float. Running up's **Max shares out** is 10M by default ([guide 8.4](https://scalpeltrade.com/guides/shares-out-short-interest-squeeze)) |

*Screenshot: The IBKR scanner before the open: price (1), change (2), relative volume (3), catalyst chips (4), shares out (5) and the squeeze score (6). Only WXYZ and TUVW pass all five. Demo data.*

Read the list the way the criteria do. **WXYZ** is $4.20, up 38%, at 12x volume, on a deal announced 25 minutes ago, with 3.0M shares out: all five. **TUVW** passes too. **XYZA** is under $1 with 152M shares out and a dilution warning. **CDEF** is up on an offering, which is new stock for sale, not a reason to buy it ([guide 9.2](https://scalpeltrade.com/guides/check-dilution)). **BCDE** and **QRST** are moving on modest volume with 20M+ shares out.

The **SQZ** column folds most of this into one number from 0 to 100: a tight float (or few shares out), heavy relative volume (10x or more scores fully), shorts trapped, short interest, days to cover, a price in the $2 to $10 sweet spot and a small market cap, cut back if the company is selling or can sell stock. It is a quick way to rank the list, not a reason to buy.

## The pre-market routine

The method does most of its work before 09:30, and so does Scalpel.

1. **From 04:00, let the scanner build the list.** At 04:00 ET Scalpel says "Pre-market is open." The IBKR scanner panel lists the top gainers, volume spikes and gappers, pre-market included, and refreshes about every 30 seconds ([guide 8.3](https://scalpeltrade.com/guides/premarket-scanning)).
2. **Check the news and the supply.** For each name that passes the five criteria, read the catalyst chip and its headline, and check the dilution chips: a company with a shelf or an offering on file can sell stock into the move ([guide 9.2](https://scalpeltrade.com/guides/check-dilution)). Keep the **dilution entry guard** on, so a buy within 30 minutes of a financing filing or offering headline needs a second press ([guide 9.7](https://scalpeltrade.com/guides/dilution-entry-guard)).
3. **Load the best two or three on desks.** Each desk gives you Level 2, the tape and a chart with VWAP from 04:00 ([guide 2.1](https://scalpeltrade.com/guides/load-symbols-and-desks)).
4. **Mark the levels.** The pre-market high, the high of day and VWAP are where these stocks decide. Plan where you would buy and where your stop goes before price gets there.
5. **Trade small, or watch.** Pre-market books are thin. Many traders using this style trade the pre-market with reduced size, or only watch until the open.

[Guide 14.2](https://scalpeltrade.com/guides/premarket-routine) turns this into a full routine with times.

## The patterns, and Scalpel's setup chips

The method trades a few repeatable patterns. Scalpel's **Setups** scan watches every name on the IBKR scanner's list for them on the 1-minute candles, marks each with a lettered chip, and calls it out by voice and toast ([guide 8.2](https://scalpeltrade.com/guides/scan-types)).

| Pattern | What it looks like | Scalpel chip and callout |
|---|---|---|
| **Gap and go** | A stock that gapped up pre-market breaks above its pre-market high after the open | **G**, "Gap and go." The first cross above the pre-market high in regular hours, once per stock |
| **Micro pullback** | In a fast move, one small red or indecision candle that holds the run's low, then a candle that takes out its high | **M**, "Micro pullback." |
| **Bull flag** | A strong push up (the pole), one to three tight candles drifting sideways or down by no more than half the pole, then a break above them | **F**, "Bull flag." |
| **Flat top breakout** | Three to five candles stalling at the same high, within 0.3%, then a break above that shelf | **T**, "Flat top." |
| **New high of day** | Price breaks to a new high for the day in regular hours | **H**, "Breaking highs." |
| **Consecutive run** | Five of the last six candles green, then a new high | **R**, "On a run." |

*Screenshot: The Setups panel with four detected patterns, each letter chip in its own colour, and the toasts their callouts raise. A setup stays on the panel for about 25 seconds unless it keeps confirming. Demo data.*

A chip says a pattern is there; it does not say it will work. The detectors are deliberately simple, many patterns fail, and the same chip on a stock with no news and 50M shares out means much less. Use the chips to know where to look, then read the book and the tape yourself ([guide 3.7](https://scalpeltrade.com/guides/read-the-players)).

## Entries and exits on the keys

The method relies on hotkeys, because momentum moves faster than a mouse. In Scalpel every action has a key ([guide 4.3](https://scalpeltrade.com/guides/hotkeys)):

- `Shift`+`1` to `Shift`+`4` buy with your four presets, as a marketable limit at the ask plus your offset ([guide 4.4](https://scalpeltrade.com/guides/entries-and-fills)).
- `Ctrl`+`X` sells half into strength, `Ctrl`+`Z` the rest.
- `B` moves the stop to breakeven once the trade works.
- `Esc` flattens everything.

Every fill and exit is spoken, so you can keep your eyes on Level 2 and the tape, which is where the method reads the entry: buyers lifting the ask, a seller at a round number being cleared, the bid stepping up.

## The risk rules

The method's risk rules matter more than any pattern. Scalpel has a control for each.

### A small, fixed risk per trade

Decide what one trade may cost you and size every trade from it. **Risk (Cents)** does this: set the buy buttons to dollars of risk ($25, $50, $100 and $200 by default) and Scalpel works out the shares from your stop distance, 30c by default ([guide 4.2](https://scalpeltrade.com/guides/trade-fixed-dollar-risk)).

*Screenshot: The order bar on Risk (Cents): each button is a dollar risk, with the position size it would buy at the current ask above it. Demo data.*

### About 2:1 reward to risk

Aim to make about twice what you risk. Every entry gets a take-profit at **Take profit (R)** times your risk above the entry, **2R** by default ([guide 5.4](https://scalpeltrade.com/guides/r-multiples)): on a 30c stop the target is 60c up. Selling half at the target and trailing the rest is a common variation ([guide 5.3](https://scalpeltrade.com/guides/breakeven-and-trailing-stops)).

### A hard daily loss limit

Stop for the day after a set loss, before a bad morning becomes a bad month. **Settings > Risk > Daily loss ($)**, $1,000 by default, blocks new entries once your day's realised and open loss reaches it, with a **RISK LOCK** banner, and can flatten everything with **Auto-flatten on daily loss** ([guide 7.1](https://scalpeltrade.com/guides/daily-loss-limit)).

A worked example for a $25,000 account: risk $50 a trade (0.2%), a 2R target of $100, and a daily loss limit of $150. Three losing trades and the day is over; one winner pays for two losers.

### Measure it: the Analytics goals

The method judges a trader on accuracy and on the size of wins against losses. **Analytics > Goals** shows the same targets against your own trades, in SIM and LIVE separately ([guide 6.4](https://scalpeltrade.com/guides/analytics)): **ACCURACY** (win rate, target 75%), **PAYOFF (WIN/LOSS)** (average win over average loss, target 2.0), **PROFIT FACTOR** (gross wins over gross losses, target 2.0) and **EXPECTANCY** (average R per trade, target positive), with a trader grade from Novice to Pro.

*Screenshot: Analytics, Goals: four targets and the trader grade, from your own trades. Demo data.*

Do not go LIVE, or add size, until these numbers hold up over many SIM trades. Most people find their accuracy falls when real money is on the line.

## What Scalpel does not do for you

- **It does not pick stocks.** The scanner, chips and scores narrow the list; the decision is yours.
- **It does not predict.** The setup chips, the read line and the squeeze score describe what is happening. When Scalpel's book reads were replayed over recorded sessions, most did no better than a coin flip.
- **It does not short.** Scalpel is long only ([guide 7.3](https://scalpeltrade.com/guides/long-only)).
- **It does not trade for you.** There is no auto trader; every order is your key press.
- **It does not make this easy.** It makes the mechanics faster and the risk controls harder to skip. The skill, and the risk, stay with you.

## Questions

**What are Ross Cameron's five criteria for picking stocks?**

As commonly described: a price of roughly $2 to $20, already up 10% or more on the day, relative volume of 5 times normal or more, a fresh news catalyst, and a low float, often under 10 to 20 million shares. Scalpel shows each as a column or chip on its scan panels.

**Is Scalpel affiliated with Warrior Trading?**

No. Scalpel is independent and is not affiliated with or endorsed by Ross Cameron or Warrior Trading. It is built around the publicly known small-cap momentum style.

**Does Scalpel show the float?**

It shows SHS OUT, the total shares outstanding from SEC filings, as the stand-in. The float is always smaller, so a small SHS OUT means a small float; a large one can still hide a smaller float.

**Can Scalpel find gap and go and micro pullback setups?**

Yes. The Setups scan marks gap and go, micro pullback, bull flag, flat top, high of day breaks and consecutive runs with a letter chip, a toast and a voice callout. A chip says the pattern is there, not that it will work.

**How much should I risk per trade?**

Scalpel does not advise amounts. The method uses a small fixed risk per trade and a daily loss limit; many traders risk a fraction of a percent of their account per trade. Set it with Risk (Cents) and Settings > Risk > Daily loss.

**Can I make money with this method?**

Many people who try small-cap momentum trading lose money. It is very difficult and carries a significant risk of loss. Practise in SIM, keep risk small and expect a long learning curve.