Transcription
We've been training Elite prop traders for 20 years, and there's one strategy that's hands down the best for traders to start with, to progress fast, and succeed. This video will reveal all of the details.
I'm Mike B. Fury, and we're one of the top proprietary trading firms located in New York City since 2005, and now Miami as well, and proud to develop number seven and even eight-figure per year traders. Watch, take notes, and learn from our prop firm so you can grow your trading account.
If you have zero experience, this is the easiest way to make your first winning trade. In fact, this is the very first trade we teach the traders on our desk when they start. It's the very first trade they learn. This is taught to you in the way that we teach them.
This trade works in every market. It occurs multiple times every single day. It makes it ideal for us not just to sit around and wait too much for it because it's so obvious. It actually just hits you right between the eyes. It has a clear stop, a clear initial target.
Most traders kind of fail, especially beginning traders, fail because they're overcomplicating situations. They use indicator overload, or they use price action overload, and there's this real lack of structure to what they're doing. They're looking for so many different things to happen, so many things to line up. But sometimes, when you're struggling or when you're just starting out, you need to be able to sit down and be able to just trade. You need to have something fall into your lap and understand exactly what to do and execute it.
Beginning traders are just like anybody else walking into a casino. Walking into a trading space, if you're in a poker tournament, you walk into a casino, you sit down, you have to win a bunch of hands in order to stay in the tournament. But trading's a little different because you can sit down, and you do not need to actually win a bunch of hands to have a successful day. You just need to win one hand.
This trade's actually something so simple, and because of the edge with the trade, it should work really, really quickly. So by the end of this video, you're going to know a simple, powerful strategy that you've already seen that real traders actually use every single day.
The first step is the one indicator you're going to need. So the only tool beginners need for this is VWAP, the Volume Weighted Average Price. We're going to put that right on our chart. You can notice all the different bands, but let's go and let's set some settings for VWAP. We're going to leave the main VWAP line on there. We're going to take off the upper band and the lower band, and we're going to take off the backfill. We're going to simplify our chart. So all we're going to need is the Volume Weighted Average Price.
The Volume Weighted Average Price shows where price is trading in relation to the Volume Weighted Average Price on the day. It's a very simple, very visual metric to show you who's in control. Now, a lot of times traders will take this indicator and they'll look at far too many details about it. Don't think about it. We're not changing the settings. We're just sitting there and taking our Volume Weighted Average Price. It becomes a reference point for us.
The second thing we're going to need to do is we're going to need to find the right stocks. We're going to look for liquid stocks with tight spreads, relatively tight spreads. So avoid things that are trading all over the place, and really avoid things that aren't trading at all. We're just going to use a simple scanner just to find any stock in play. It's very straightforward. When we have something trading range and liquidity, we're going to be okay, and it's likely we'll actually find this trading pattern.
And then we're going to wait for this exact pattern, this offside scalp, that develops at a key level after a break. We're taking this chart and we're going to actually look and find how many examples, how many times this trade showed up for us in a single day.
So starting on the left of the screen, you can see where it looks like it's going to sell and then roll over right into that 5-minute. And then we see that distinct break higher. We don't have to predict any of it. We can just be sitting in our seat and we can watch that. And as soon as we get that break above the key level, back above VWAP in this case, we can go long with our stop at the low of that move and we could target a one-to-one for a continued move to the upside.
Then we can come in later into the day, and you notice how we get that same pattern just flipped completely upside down where we drive up, we fail, and then we go back one more time, and it looks like we might break out. But then you can see the distinctness of the selling as we break down and towards VWAP. Once we break that low, we can enter short with our stop right above those highs, looking for a one-to-one move. We even get some continuation in this one.
And then you see on the downside, right into that 1-minute low, you see us flush down, pop up, look like we're going to roll back over, and then as soon as we start to trend back to the upside, we can enter long against that low, trying to catch that one-to-one move. You'll see this pattern over and over and over again when you're looking at a stock in play. You'll see this happen again and again and again.
It can be a really frustrating thing if you're starting to predict this trade. But here's a really important tip: all you have to do is let the trade put in the distinct pattern and then trade in the other direction. And here's what's actually happening. You'll see traders that start to force in both directions. So they're starting to press and press and press. Like, "Okay, that low's in. All right, it popped up a little bit. I need to chase it because what if the low's in?" And then it's going to start to roll on them, and then they'll hit out at the lows, only to find buyers stepping in right there. Or even worse, they're sitting at their low and they think this stock's going to completely implode or completely skyrocket, and it just doesn't. And so what they're doing is creating a situation where those traders are getting offsides.
That offsides situation creates an opportunity for us to just go with the trade. After all of that energy is spent, now we get to capitalize in the fact that people were overleveraged in either direction. Once they get overleveraged, we don't have to have a lot happen for our trade to turn into a very profitable trade. All we have to do is recognize when those traders get offsides, and then we get a clear break of that level. We can go long against those lows, looking for a one-to-one target, or vice versa.
When we're pressing up into the highs but just can't do it, and then we start to roll back over and we see the sellers already in control, we can short on the break of that low with a stop right above the highs, looking for a very clean, very fast move in the other direction. This is a very straightforward trade that if you just train yourself to understand, you'll be able to pick off left and right.
And why it's so important for traders to start with this is because we don't have to predict. You just sit there and let the trade happen over and over. And I understand it's a scalp trade, right? Well, guess what? We start our traders with scalps because they're going to get more reps, they're going to get better practice, and they're going to be able to capitalize on opportunities when they're just sitting in their seats.
So we just gave you an entry, a stop, and a target. That's risk management, and we just did it in like 30 seconds. Your entry is at, after that price pattern gets put in, your entry is on the break of the level. Your stop is at the highs of that move or the lows of that move, and you're targeting a one-to-one, basically most of the time. You're risking one to make one.
But the reality of this trade, and the secret sauce to this trade, is very rarely are you ever going to risk a full amount. We've actually found a little trick on this trade is you can pretty much risk one to make two. So you can risk about half that move in order to make a full move. That's it. So think about it in the simplified version of it. You have your entry, your stop, and your target, and it's a two-to-one scalp.
By understanding that you can risk one to make two, we're going to actually watch this trade develop. This is the way we train traders. We watch these trades develop and we talk about what's actually happening in the trade as it's developing. So right now, we don't have a lot. This stock moved up, it's putting in a range. We don't have a lot that we can do. There are a bunch of possibilities, but we don't have a ton that we could actually do yet.
You can see how it feels like the stock's going to break out. It really does, right? We had a really strong up move. But wait, now we're seeing a distinct change. We don't have a trade unless it breaks through that low. But we're having this really interesting pattern where it feels like all the buyers are getting pushed, and they're going to push it higher, and they're going to push it higher. But if it doesn't follow through, they're quickly offsides.
So many traders find themselves in this position over and over again, but they don't actually learn. This is where you learn. Now is the time to be able to take that short. You're basically risking half of that move, half from the highs to where our entry is, and you're targeting one full move. So it gives us a really good, clear target to look for.
When we get a little pop against us, that's okay. That's a part of this trade. Look, it's not actually threatening us. It's just like buyers giving their last little effort to try and get it. Remember, we risked half of that level, we targeted a full amount of that level, and we waited for the break. So we had a very clear stop, we had a very clear target, and we had a very clear entry point, which is how you can simplify the trade.
We take our profits for this trade. What's even better is we put ourselves in a position where we allowed all of this energy to create an opportunity for us. The offside scalp allows all of the traders to do the battling, and we can just step in after their offsides and take advantage of that opportunity.
So now we've got this trade setting up again, and we don't actually know that it's setting up again. I mean, we do, but we don't actually understand that it's going to set up again because we're not needing to predict anything. We're just watching the price action as it looks like it's going to drive higher and then doesn't. That's when the hairs in the back of our neck get to stand up, and we recognize if this breaks the lows, we have an offside scalp. It's just occurring on a little higher time frame.
So you see this is where our entry is. When we break the lows, we had that first push higher, came in, looked like buyers were going to chase it back up, and they weren't able to. Our stop can be half of that range, and we can target the full height of that range for a measured move. It gives us that two-to-one. We expect that the sellers are firmly in control of the price action, and we can ride this to a very quick and distinct profit target.
What we've done in this trade, and what most people forget about, is you have to let all of the momentum get on your side. You have to allow the price action to develop for you. Do you notice how we wait for confirmation before entering? We know exactly where we're placing our stops. We allow all of these things to develop for us. This is why this trade becomes our favorite trade to start new traders with because you're sitting there and you're letting everything develop for you.
There are a lot of scalps we teach, and in the Scalp Radar, we teach five distinct scalps with as much or more detail than what we've talked about today. But you need to start somewhere very distinct. So we wanted to start there today. We wanted to start with the idea of, here's exactly where I place my stop, here's exactly a trade with edge, why it has edge, here's where our target goes, and here's our very clear rules of entry. When we have that, we can sit back and we can let those trades just fall into our lap over and over and over again. It allows our trading to work for us. It allows us to identify these patterns over and over and over again. It allows us to trade with more edge, more frequently.
The number one mistake I see beginners make is FOMO and overtrading. So beginners will look at this and they'll go, "Oh, look, it just failed at the highs. It's got to be breaking to new lows. It's got to get this giant move lower. The momentum must have shifted, right?" Well, the reality is, a lot of times when a stock is trading with a decent amount of volatility, moving up and down, and a decent amount of volume, it's up to us to make sure we don't ruin a great setup.
So a quick tip to avoid revenge trading and just stay disciplined is when we get pushed in one direction, and then you see the sellers really try and take control, or you see it push higher in one direction and the buyers really take control, but they can't actually do it. That's when you're going to look for this offside scalp. This offside trade is going to happen at the edges of both ranges over and over and over again.
And to sidestep that FOMO and avoid that revenge trading, you're going to now be set with a very clear trade that you can look for, and you're going to really be able to sit back and allow the others to push on those edges. You're not going to get that FOMO of what happens because you're going to understand what trade a lot of us pro traders are actually looking to make when something gets pushed down into the edges. Sometimes, once in a long while, you'll get this really big break lower. But when a stock's in play and a stock's just kind of ranging, you can't sit there and have those FOMO expectations of, "I missed the short way up there, so now I really want to take it down here."
Because a lot of times what's happening is you'll hit it at the lows, and then immediately it will start to come back against you because, guess what? The stock's just ranging. But it puts in this very repeatable, very distinct pattern, and these patterns occur over and over and over again. It's like the market gets programmed to take advantage of those that lose their control, that start to become susceptible to FOMO, they start to become susceptible to their own emotions, instead of those traders that are just sitting there and going, "Oh, I recognize this pattern. I recognize it's trying to break lower, but it's not breaking lower. It can't do an effective job of doing that. But I can tell you what, if it starts to break this high, everybody down there is going to be trapped, and it's going to create this really good opportunity for me to just take a very long, very straightforward, simple scalp trade."
And if I take it, yeah, maybe it's not going to go to the highs, but I can risk half of this range and I can target one measured move of this range, and I can often times walk into a really high-quality trade. Now, right here, you can see how those buyers are not getting rewarded for the first time it went up. And so maybe people are thinking, "Oh, it must be a short right here, right?" But we can see we start to roll over. But then instinctually, as soon as we do, we see those buyers step right back in. And now, if we get a break of that very clear level, it's a trade that should work quickly and work aggressively, and we don't have to risk a whole lot. We can risk half of that range in order to look for one of those full ranges. So it gives us that two-to-one target. We always want to see that instinctual response as we start to roll over, and if we get it, we take it and we move on with our trading day.
So this is the simplest strategy to start. But what happens next? So if you want to learn more about some of the different types of scalps that we teach, you can check out our Scalp Radar course. It's going to give you a bunch of cheat sheets. It's going to give you step-by-step guidance of how to put together these trades with edge. At a minimum, take the webinar, get the cheat sheets, understand what trades with edge typically look like, and then drop a comment if you want us to break down more beginner-friendly strategies like this, the way that we start our traders. And hit subscribe so you don't miss the next deep dive into trading strategies for.