Transcription
There is one trading strategy that I use every single day. It's stupid simple, incredibly reliable, and the reason why I'm able to have days like this, this, and this. And in today's video, I'm going to show you exactly how to execute this strategy step by step. And then I'm going to show you real examples in real time. And by the end of the video, you'll have a complete system on how to identify this setup for finding winning trades in less than 90 minutes a day.
So, as you can see right here, this is my P&L for the last 3 months trading, and I've made close to $240,000. As you can see, this is my P&L graph. As you can see right here, this is the last 90 days P&L, as I mentioned. And one thing I do want to mention is that these results are not typical. I lost for years in the markets until I was able to finally find a consistent system and strategy in order to make consistent profits in the markets. And with that being said, the goal of today's video is to show you a complete system on how to identify a setup for finding winning trades in less than 90 minutes a day. And the strategy that you'll learn today is one trading strategy that is repeatable and mechanical. And the best part is it doesn't require any daily bias fancy indicators and sets up every single day.
And as you can see right here, I have a chart plastered full of different types of indicators. All right, I have the VWAP, right? Ballinger bands, right? We have so many different indicators on the chart. And if your chart looks like this, where there's too many complicated indicators and signals, it may make it very hard for you to trade and for you to be consistent because there's so many conflicting signals in the markets. And what I want to show you today is a simple strategy that has three simple steps. Step number one is understanding the foundation of the strategy. Number two is the actual setup. Number three is the executions. So I'm going to lay out the full foundation step by step on exactly how to execute this strategy so you guys can go out and execute this by yourself. And the first step is understanding the foundation of how this strategy works. And it's all based off of the first candle of a new market session. Once we're able to identify that first candle, then we're going to go on to finding the direction of the market. Are we going to head higher for the day or are we going to head lower for the day based off of step number one? And then we're going to go on to step number three, which is identifying entries, stops, targets, essentially managing our positions. Once we enter in the trade, we have to identify our key stops or point of invalidations. And as for our targets, we're going to be looking for key pivot points above. And of course, to end it all off, we're going to go over live examples in real time to show you guys exactly how to execute the strategy step by step.
So, the number one reason why most traders fail when it comes to trading in the markets is because they have over complicated trading strategies. They hop from strategy to strategy. As soon as something doesn't work, they're quick to jump off the ship and hop onto that next strategy. What you have to understand is that every single strategy works in the markets, but it's not going to work every single time. Another common problem is that you have way too many indicators plastered all over your charts. What you have to understand is that indicators are lagging, right? They're lagging price. Indicators are good to use as confluences, but when you have too many indicators plaster all over your chart, now you're at the point where you're so confused since you have way too many indicators, that's going to make it so it's very hard to understand what you're looking for. And what that creates is it's called analysis paralysis. And that's what happens when you overanalyze, you over complicate everything. So, in order to become profitable, it all stems from simplicity. I always like to say simplicity equals profitability. And when you keep things simple, that's when you're actually going to make money in the markets cuz you're going to focus on what actually matters instead of all the smaller things that don't have a significant impact.
So, the first thing that we're going to do here is focus on the first candle of a new market session. And right here, you can see we're on the 5-minute time frame, and the market opens in this case at 9:30 a.m. Eastern Standard Time. And this is called your New York session. So there's many different sessions in the markets. We have the Asia, we have the London, and we have the New York session. What we're going to focus on here is the first candle of the New York session, which has the most volume and volatility. So that is the most important candle out of all the major sessions, and that is the candle that we're going to be focusing on today.
Step number two, what we want to do now is mark out the high and low of that first 5-minute candle. So, as you can see here, what I have marked out is the high, and we're going to mark out the low. So, we can mark out the wick high and wick low on both candles. As I mentioned, this is at 9:30 a.m. Eastern Standard Time, and this is on the 5-minute time frame. Make sure if you're in a different time zone, adjust for Eastern Standard Time. This is when the New York Stock Exchange opens. Now, what we're going to do is head on to the 1-minute time frame. So, as you can see right here, what I have marked out is the 5-minute high, and we also have marked out the 5-minute low. And now, as you can see, we're on the one-minute time frame. So, it's nice and easy. So, this is essentially just understanding step number one.
Next, what we're now going to be looking for is an impulsive move. As you can see right here, we have that 5-minute range high along with that 5-minute range low. What we want to see in the markets is a move higher above your 5-minute range high or now in this case, we want to see a move lower below your 5-minute range high. And as I mentioned this on the five-minute chart, and this step is going to be key to determine where price is most likely going to gravitate towards to start off the market open. If you get an impulsive move higher, we're most likely going to head higher. If we get an impulsive move lower, then we're most likely going to continue lower at the start of market open. So what does an impulsive move look like? And it's signifying that strong buyers are present in the markets. So as you can see, we have that 5-minute range high marked out and we have that 5-minute range low. In this case, we're breaking towards the upside. And as you can see, we have a strong candle close above our 5-minute range high. And now we're having strong buyers that are pushing towards the upside. As you can see, buyers are respecting this key level signified by these lower wicks. And now we're having nice strong candle closures above your 5-minute range high. So this is a clear signal that price does indeed want to head higher. So this is the first way to identify if there's strong buyers in the market. There's also another way to identify if strong buyers in the market are present as well and it's based off of the last video that I talked about which is understanding the bullish gap/fair value gap. So as you can see in this case we get that another close above your 5-minute range high. In this case what we create here is a gap in the markets. So basically your first candle high and your third candle low. If there is a gap in between what we have here is what's called your bullish gap/fair value gap. And what this signifies is that there's an imbalance in price towards the upside. So this is a clear signal as well that price is bullish and we can expect continuation higher. And just because now we can expect continuation higher in the market, does that mean we're just going to buy? No. So now what we're going to do is wait for the retest.
So step number one was marking out that 5-minute range high along with that 5-minute range low. Step number two was waiting for the buyers to step in and have an impulsive move towards the upside. Step number three is now waiting for that retest. So we had that nice push higher. Now we're going to wait for that retest off of our 5-minute range high. Now, what can we do is look for a potential entry here with a stop break below and we look for a target towards the upside. And this is the exact way to execute the strategy. But there's a very crucial step here. We don't just want to buy blindly. Just because price has our first two steps checked off and now it's coming back for the retest. That doesn't mean that every single break and retest that now we're going to be looking for, we can expect to continue towards the upside. What can very much happen right off that 5-minute range high is that we actually might get stopped out instantly. If you go look to buy every single time without waiting for the price action on the key level, what can happen is that a lot of times we might get stopped out instantly just because we're not waiting for one simple step that I'm about to share with you. A lot of people end up missing this crucial step which can help significantly increase your win rate and your risk-reward as well. And that is essentially waiting for strong price action. So as you can see here, we have that 5-minute range high. We have that nice push towards upside. Now we're coming back down in towards our key level. And now I can actually see that the buyers are stepping in. And what does buyer stepping in mean? Buyer stepping in is signified by strong price action which can be forms of hammerstick candles. It doesn't matter if it's green or if it's a red candle. But if you have a lower wick that indicates that buyers are stepping in and just by using this one step right here, it will significantly increase your win rate just because you're waiting for the strong price action around the key levels. And as you can see right here now once we have that buyer step in this is where we can look to enter with our stop being fairly tight. We can just have a stop just to break below essentially your 5-minute range high. And now what we can be looking for is a fixed 1:2 risk-to-reward ratio back towards the upside. Right? I have it as a fixed 1:2 just to make it nice and easy. Of course you can scale at key levels and you can scale at higher time frame key objectives as well. Just to make it nice and easy. A good rule of thumb is to look for a 1 to 2 risk-reward. That means for every single $100 that you're risking, you're aiming for at least a $200 minimum reward per trade.
With that being said, we now understand the full step-by-step process on how to execute this system from that foundation to the setup and of course how to manage your position. Now, let's go on to some examples that I have for us today.
All right, so you can see I have the first example played out here. I'm currently on the QQQ or the NASDAQ. As you can see right here, I'm on the 5-minute time frame at the start of New York session. And the first thing that I'm going to do is mark out the 5-minute range high along with the 5-minute range low. So the first 5 minutes of New York session is going to be very key. And what you want to do, as I mentioned, is mark out the high and low of the first 5-minute candle. And this is going to be your foundation to execute this strategy. The second step is waiting for an impulsive move higher or lower. So as you can see, we have our 5-minute range high. And now we have our 5-minute range low. What we're waiting for is an impulsive move towards the upside for a potential continuation higher. Or we would be looking for an impulsive move lower for a continuation towards the downside. As we play out the tape, as you can see right here, we're now getting that impulsive move towards the upside. We have a strong candle close above your 5-minute range high. We now form what's called the bullish gap or a bullish FEG. And now we can expect price is to react off this level and continue back towards the upside. So, as you can see, we have that break of your 5-minute range high. Now, we're getting the retest of this key level. We're having strong buyers stepping in right off this level, indicating by these lower wicks. So, we can get in on this candle close. In this case, our stop loss can be a break underneath this key low. And now, we could be looking for a minimum of a 1 to two back towards the highs. All right. Now, let's play out the tape. So, as you can see, we end up having a very nice push towards the upside right off of our five-minute range high. And we executed the strategy perfectly. First drawing out the 5-minute range high, waiting for an impulsive move towards the upside, waiting for now the retest, and for strong buyers to step in off our key level, and then managing our trade and letting it play out towards our profit target or our stop-loss. In this case, we end up having a nice trade up and towards our key take-profit levels.
Now, with this being said, that was our first example. Now, let's go on to the second example that I have for us today.
All right, so we're on our second example and now we are on the SPY chart or the S&P 500. The first thing that we're going to do is mark out the 5-minute range high and low. Right now, you can see the market opens up at 9:30 a.m. Eastern Standard Time. What we're going to do is mark out the high and the low of the first 5-minute candle. As you can see right here, this is the first step. It's the foundation of this strategy. Now, once we have this marked out, we can move on to step number two. Step number two is now heading onto the one-minute time frame. And now what we want to see is an impulsive move to the upside or an impulsive move towards the downside and looking for continuation. Now let's play out the tape. So as you can see we have the first 30 minutes played out and we are still stuck with inside of its 5-minute range. And what are we going to be looking for is a strong push lower as I mentioned or a strong push higher above the 5-minute range high or low. Finally, as you can see, we're getting that impulsive move lower. We're breaking underneath our five-minute range low, as you can see, indicated by this weak candle closure underneath our five-minute range low. We also have a bearish FEG here once again because we have an imbalance. If we mark out the first candle low to the third candle high, we create what's called this gap or this bearish fair value gap. And now we can expect continuation towards the downside off of this level. So, as you can see right here, price gravitates back in towards that 5-minute range. Has a very weak candle reaction right off this level. This is where we can go looking short with a stop loss just to break above your 5-minute range. Now, you can be looking for a 1 to two towards the downside. And as you can see right there, once we're able to get that weak candle close underneath our 5-minute range with that weak rejection candle as well, that's when we end up having a really fast move towards the downside right down and towards our key take-profit levels. That right there was a great example of a downside 5-minute range low retest for continuation lower.
Now let's go on to the last example that I have for us today.
Okay, so we're on my last example here and we're on Tesla and as you can see we're on the 5-minute once again. What we're going to do is mark out the 5-minute range high along with the 5-minute range low. And this is the foundation of this setup is understanding the first candle and why the first candle is very important. Now with this being said, let's move on to step number two. All right. So now you can see that we are on step number two and what we have marked out here is the 5-minute range high along with the 5-minute range low. As I mentioned, what we'd like to see is an impulsive move towards the upside, breaking above our 5-minute range high for continuation, or we'd like to see the break underneath our 5-minute range low for continuation towards the downside. So, as you can see right here, we have a big impulsive move towards the upside indicated by this strong candle close. We also form a gap here as well, indicating an impulsive move towards the upside. So, now what we're going to be doing is waiting for this retest off our 5-minute range high for this continued push back towards the upside. All right, so we have that nice break above. Now we're coming back down for the retest. Buyers immediately stepping in. And then on this next candle, we have that lower wick right in towards that 5-minute range high and a very strong candle close indicating our confirmation candle that price wants to move back towards the upside. This is where we can go look long with a stop just to break below this confirmation candle. And now we can be looking for 5-day plus continuation back towards the upside. And just like that, you can see we end up having this nice continuation towards high of day plus our 1 to 2 risk reward right off of our key five-minute range high.
So as you can see right there, I just laid out the full system on how to use this strategy from the foundation of how the strategy works to the setup all the way down to the executions and how to manage your position. So with that being said, I hope you guys did enjoy that video. If you did, appreciate if you guys drop a like and sub and I'll see you guys next week for a brand new video. Peace.