Transcription
After seven years of trading, let me tell you something that took me years of time and money to learn to become a good trader. You don't need 100 indicators, strategies, or complicated concepts. Instead, you need one simple strategy that blocks out 90% of the garbage you see online today. I can make anywhere from $10 to $20,000 on a good day trading the first 60 minutes using an extremely simple strategy. The best part is when I first learned this strategy, I didn't start with thousands of dollars of risk. Instead, I started with $50 to $100 of risk and slowly scaled my trading account from there.
In this video, I'll share my personal best system to start trading. And I'll show you exactly how I implement this strategy in the real charts. All right. In this video, I'm going to share my full scalping strategy on exactly how I trade in this current market. And on top of that, here you can see a live login for two days, which is up to $17,000 on one day and $18,000 on the other day using an extremely simple scalping strategy, which is actually the strategy that I'm going to talk about in this video.
With this being said, why do most traders lose money in trading? Because trading is not a get-rich-quick system. Well, the reason this happens is because they believe something may be a good setup when in reality it isn't. And it is our job to distinguish good setups from bad setups. And by the end of the video, the goal is that you will be able to distinguish these setups.
So, as we can see here, this is a clear break and retest setup. This is the setup I trade. All this simply means is we have previous resistance here. This simply means that there was more sellers than buyers on the stock. And once we broke above, that means more buyers stepped in. And therefore, if we pull back, we're going to pull back into this previous resistance, now turn support. In this example, we have a break and retest with strong price action. Buyers are indeed stepping up, looking for continuation back to the upside. So, if I was to ask you before you watch this video, would you take this setup here? Yes or no? Leave it in the comments down below. And make sure to leave this video a like. If this video gets 5,000 likes, I'll talk about exactly how I would trade any of these strategies with prop firms as well.
But with that being said, if you took this setup, you would have actually unfortunately lost the trade. So everything in this setup was there. We had the clear resistance. We then had that turn into support. Buyers stepped up and this setup looked really, really good to a new trader. However, this setup still ended up failing and not working out. So how can we fix this? And why did this setup fail? Well, the reason this setup failed was because the daily time frame was downtrending. As we can see here on the left side, this is the daily time frame and we can see the daily time frame is only going down. This is a clear downtrending time frame as we have a high right here. We then create a low down here. We then create the next high which is a lower high, right? So this is a lower high, lower low. And once again, this continues all the way down. Lower high and lower low. So this is a very clear downtrend. And we were trying to actually take a trade to the upside on a daily time frame that is downtrending. And that's exactly why even though on the 1-minute time frame this setup looks really good, it was not a good setup based off of the daily time frame, but we didn't know that because we never looked at it.
So a question I've personally been getting on my channel a lot is how do I find the high probability stocks for the day? If you follow me on Instagram or Twitter or even my second YouTube channel, I break down some of the trades that I take. And on those days, traders often ask, how do you know that that stock was going to trend for the day? How are you able to from the thousands of stocks in the stock market, how are you able to find the one that has the highest probability to trend in the day? And that's what I'm going to explain in this video.
In this video, I'm going to explain the three steps I use on a daily basis to take my trades. First, we'll talk about the daily flag. This will help you understand which stock to trade. Then, we'll go over my simple setup and exactly what I've been personally trading for the last 7 years. And finally, we'll talk about exactly how I personally execute my setups for the best results for myself and my own trading. So, with that being said, let's get right into the charts so I can explain these three simple steps. And after that, I will show you real examples using all of these steps.
All right. So, how do I trade this strategy on a daily basis? On the charts here, first we have to be on the daily time frame. This is how I find the stock that I'm trading for the day. On the daily time frame, you can see on this specific stock, what is happening? Well, we have a low down here, a higher low, and this continues in a clear direction to the upside. So, we know for a fact that this stock is in a clear uptrend. And therefore, this is a stock we would want to focus on for a long position back to the upside. On the daily time frame, the first thing we need to understand is the trend of the market. And this trend is of course to the upside. But how do I understand there's going to be momentum on the specific day we're trading? Because there could be a day where we just get a very small candle, right? Right? These very small candles where there's not that much momentum. So, how am I supposed to understand which day is the best? Well, that is where I use a very simple pattern and that is going to be the flag pattern. If you don't know what the flag pattern is, it's simple. If a stock is in an uptrend, there's only two things that can potentially happen. One, it will of course pull back or the second one is if it's in an uptrend, it will then pull back. However, it will consolidate and it will make a very tight range. It is our job to understand what this range means. This simply means that buyers are trying to hold the stock up. As sellers are coming in because they believe the stock is now overextended after this big uptrend, buyers are still trying to hold the stock up. This shows that they don't want the stock to pull back. This means that if we do break out, then this can have a lot of momentum back to the upside as buyers are holding it up. Sellers believe this is resistance and we simply want to break this back above for continuation on the clear uptrend that we're already in.
Now, if we use that exact same example here, we can see we're in a clear uptrend. This is our first pullback area right here. And in this pullback area, you can see we got a clear flag. We got a strong breakout. We got our consolidation and then big buyers stepped in right here for continuation on the stock. However, this same thing is happening again. And you can see this because we got the next leg up and now we're getting that flag formation again. Now this flag formation the second time you can see we're already breaking above. This means on the day that I'm about to trade for step one, we have a clear uptrend and a clear example with a very clear risk of a flag pattern being formed. So we know that we want to go long and we are not fighting the trend. We are simply following the trend and trading on the lower time frame. So step number one is to understand market structure. Understand if you're in an uptrend or a downtrend and then find a low-risk pullback such as this where it's higher probability that the next day will have momentum.
Now after the daily time frame, let's go over to the 1-minute time frame. And on the 1-minute time frame, now there's multiple setups that we can trade. I personally can trade the first candle strategy, the one candle rule, the previous day high and low strategy, or even the pre-market high and low strategy. I have full in-depth videos on each of these strategies on my channel. However, on this specific day, we can see this gray shaded areas, pre-market high and pre-market low. This is, of course, previous day. We are gapping up. This simply means that pre-market the price is higher than the previous day high. So, we know that the stock needs to hold above this pre-market high and pre-market low. So, we're simply going to box out our pre-market high and pre-market low. And so, what we'll be looking for is a break above our pre-market high area for any sort of entry. To keep this first example very simple, I'm not going to come into the day with any levels other than that. Now, I'm going to open up the day here and see exactly the price action we get. And as we can see here, within the first couple minutes here, we got very strong buyers stepping in. We actually got an immediate retest of our pre-market high area right here. However, another thing that we got was this down candle. Now, this down candle is actually the one candle rule. If you don't know what the one candle rule states, that simply means that if there is a down closed candle in a very strong uptrend. This down closed candle will be used as support as this is where sellers stepped in and therefore buyers need to hold the stock above this area for continuation. And the exact opposite in a downtrend. If there's an up closed candle in a downtrend, then sellers have to step in because that's the last area buyers stepped in. Because this is the last area sellers stepped in, this is what needs to be used as support for a move back to the upside. So, let's see if we can get a break and retest off this area. And as we can see here, this is where sellers are coming back into this area, holding the one candle rule. However, I would need a little bit more buyers to step in just to confirm this price action. And here on this candle at 9:36, you can see buyers are stepping in very aggressively. So, we can actually look to enter into the trade here. Our stop loss is simply going to be a break of the one candle rule, and we're going to be targeting out at least a 2R multiple. This means for every $100 we're risking, we're looking to make around $200 of potential profit in this specific trade, I would be risking $483 to make about $910 of potential profit. Let's see exactly what happens if I entered this trade. And as we can see here, this trade worked out very well right to the upside. And this day was done at 9:41. Meaning this was about an 11-minute trading day by simply understanding which stock to trade with the highest probability and then following a simple setup which in this case scenario was the one candle rule. And if you want a full in-depth video on the one candle rule, I have a full playlist in the link in the description where I go over the one candle rule in much more detail. And this MU trade was a real trade that I took in real time in front of hundreds of students to help them understand how I make these decision-making processes using my simple strategy but in real time.
So with that being said, this was the first setup. Let's go over to the second setup.
All right, here we are on the second example. And this is on SPY or SPY's. And therefore, the strategy I'm talking about today can be used on options, stocks, forex, futures, or crypto. It really doesn't matter as long as you understand the core principles behind the strategy. With that being said, on the daily time frame, we can clearly see we are in an uptrend. We have a low here, a higher high, and this is technically the next higher low that we're creating. In this higher low, you can see since we've had already such a big move up, this is a flag pattern. So, we understand that this is going to be a low-risk pullback area where we now want the stock to break above and we understand that that's where the momentum kicks in on the daily time frame. So, if we can capture that on the 1-minute time frame, it will be a very high probability, low-risk, high-reward trade. So, with this being said, the only thing we're going to do here is just simply mark out the top of this flag pattern here, and then we can go to the 1-minute time frame. Now, remember, you don't have to go on the 1-minute time frame. You can trade whatever time frame you're comfortable with. However, I personally trade and execute my trades on the 1-minute time frame. Now, for myself on this specific day, I'm going to show you the first candle strategy as well. So, we're going to mark out the first 5-minute opening candle. And as we can see here, this is going to be our 5-minute high, and this is going to be our 5-minute low. Now, for this strategy, all we're looking for is going to be a break and retest to either side. However, we know we are looking for that upside move, and that's exactly why we're going to be waiting for the break and retest of this previous 5-minute high for continuation back to the upside. So, let's play out this day and see exactly what happens. So far, you can see we did get that break back to the downside here, but we never hit low of day. So, even if you entered into this 5-minute low, we never hit low of day because the stock is in that flag pattern looking for a move to the upside and we would have been able to avoid this low probability entry. All right, now we're finally breaking out of the first candle strategy. Let's see if we can get a retest. And right here, we got the retest with strong price action right off that 5-minute high. This is where we can look to enter the trade. Our stop loss can simply be a break of the candlestick we're entering in on. And we need at least a two R multiple. In this example, we'll simply target out that $712.50 flat top break. And this means we're risking about $470 for about $1,360 of potential profit. Let's see exactly what happens. And just like that, we actually got a very big candle that actually made this one pop back above our flag pattern. Once again, showing that the flag pattern break was a very significant break for us. However, this was a very simple trade executed well using not only the first candle strategy, but also understanding the flag or flat top break as well.
So far, I've shown you two bullish examples. Now, let me show you one bearish example with a move to the downside. And this way, you'll understand exactly how I trade this, whether it's a move to the upside or to the downside.
All right, here we are on Palunteer and this is actually a flag to the downside. So, we can see we have a high up here. We then create a lower high, a lower high again, multiple lower highs. We created this low, lower low and of course lower low. So a clear channel formation back to the downside. And on top of that, we are also creating this clear flag. Right? So we have this clear move down and then we are now consolidating if we can break below this area. We have clear room down into lows here. Therefore, this is a good candidate for step one, which is simply understanding is the stock uptrending or downtrending. In this example, it is downtrending. And for step two, finding a low pullback consolidation area where we're simply looking for a break for continuation. So once we understand that, all we have to do is simply mark out this previous flag low. Now let's go over to the lower time frame. And on the lower time frame for this example, what we can simply do is actually look to enter in based off of once again the flag pattern itself. So, if this stock, because we're opening up very close to it, if they can come back for a retest opportunity, and it shows low risk with sellers stepping in, we can look for a move right back down into lows here using this simple strategy because once again, this is also your previous day low. So, not only is this your flag low, but it is your previous day low as well. So, multiple confluences around this area. Let's play out the first couple minutes here to see what happens. And right off of the bat, you can see we got the retest right into your previous day low or your flag bottom here. You can see we got very weak price action on the first candle. The second candle confirmed that price action as well. So this is exactly where we can look to enter into this trade. Our stop loss would simply be a break back above the previous day low. And we need at least a 2R multiple. In this example, we'll simply look for that $161 whole psychological number. We're risking about $1,120 for a potential profit of $2,720. So, let's play out this trade and see exactly what happens. And just like that, yes, we did have to sit through a little bit of consolidation for this specific trade. However, we did hit our profit target. And this was a very simple way to understand how to avoid low probability trades, understand which stock is going to have the most momentum for the day, and using a simple system to actually execute this trade.
So, if you want to learn more about any of the setups that I talked about in this video, make sure to click the playlist on screen. Now, if this video helped you, make sure to leave it a like. If you have any questions, put them in the comments down below. Make sure to subscribe to the channel and follow me on Instagram and Twitter for more education. And I will see you next week with a brand new.