My Simple 5 Minute Trading Strategy To Make Your First $10,000/Month (Results Shown)

Summary

This video provides a comprehensive trading strategy focused on key techniques for effective entry and exit points. It emphasizes the importance of using mental stop losses, understanding market liquidity, and confirming entry points with multiple tests of support or resistance. The strategy is about buying into traders' stop losses, setting targets based on chart patterns, and managing risk rather than aiming for huge, unrealistic profits. The video stresses patience and discipline, showing that consistent profits are achieved by sticking to a systematic process, even when starting with small positions in a trading account.

Takeaways

• 😀 Use mental stops instead of hard stops based on the low of the day to avoid false triggers and improve trade execution.
• 😀 Test key levels multiple times for greater confidence in support and resistance zones before entering a trade.
• 😀 Look for chart patterns like flags and pivots to confirm price movements and optimize entry points.
• 😀 When managing trades, focus on selling into other traders' entries, typically at established support or resistance levels.
• 😀 Removing risk by adjusting stop-loss orders once momentum is confirmed can improve trade management.
• 😀 Patience is key – allow trades to breathe and avoid premature exits when the setup is strong.
• 😀 Start with small position sizes in the beginning, especially for small accounts, and grow over time by following the process.
• 😀 Ensure that patterns, such as flags and pennants, are backed by strong momentum before entering a trade.
• 😀 When testing key levels, expect the market to revisit them several times before breaking through or reversing.
• 😀 Focus on building a consistent process rather than obsessing over short-term profits or large gains.
• 😀 Trading success is a gradual process that requires discipline, risk management, and an understanding of the market's behavior.

Q & A

What is the main caution the speaker provides about using hard stops near the low of the day?

The speaker cautions against using hard stops at the low of the day because it can trigger unnecessarily, especially if the price only briefly tests the low without aggressively breaking it. Instead, they recommend using mental stops and paying attention to the speed of the price movement.

What role does speed play when the price approaches the low of the day?

The speed at which the price clears the low of the day is important. A slow or non-aggressive break indicates it may be a trick designed to fool traders, suggesting the price is not truly breaking down but rather testing the support.

How does the speaker explain the significance of testing support levels multiple times?

The speaker explains that the more a support level is tested without breaking, the more confidence traders should have in its validity. Multiple tests imply that large buyers are holding the price up, making it more likely that the support will hold.

What is the concept of entering trades alongside large institutional buyers?

The speaker describes entering trades near the low of the day, where large institutional buyers are likely to be positioned, providing strong support. This helps the trader to 'wiggle in' with the support of significant buying power behind them.

How does the speaker suggest setting targets in a trade?

Instead of focusing on a specific target price, the speaker advises looking for chart patterns, like flags or pennants, that signal where to exit the trade. Targets should be based on the price action, with the idea of selling into other traders' entries.

What is the key to managing risk in the trading strategy?

Risk management involves setting stops near key levels like the low of the day, but also being flexible and adjusting the stop as the price moves. The goal is to protect profits and reduce the risk of large losses.

How does the speaker suggest handling trades with smaller accounts?

For traders with smaller accounts, the speaker recommends starting with small position sizes, such as 5 or 10 shares. Over time, as the account grows, traders can increase their position sizes while maintaining proper risk management.

What is the significance of using both Apple and Palantir (Palente) as trade examples?

The speaker uses Apple and Palantir as examples to show how the strategy applies in real-time. These stocks demonstrate how to identify entries, manage risk, and set targets. Palantir is specifically suggested as an alternative to Apple for those with smaller accounts due to its lower price.

What should a trader do when a trade shows momentum but hasn’t yet broken key levels?

If a trade shows momentum but hasn't broken key levels, the speaker suggests waiting for further confirmation before entering. This includes observing for the price to retrace back to key levels and then managing the position based on emerging patterns.

Why does the speaker emphasize following the process rather than focusing solely on profits?

The speaker stresses that consistent profits come from following a structured trading process, not from chasing quick gains. By sticking to the process, traders can manage risk effectively and grow their accounts over time, regardless of the size of individual trades.