The Strategy I Wish I Knew as a Beginner

Summary

This script discusses three top-performing trading entry models that the speaker has found to have an 83% win rate. It delves into candle behavior and market structure, explaining how to identify type one, two, and three entries for trading decisions. The speaker emphasizes the importance of aligning different timeframes and using candlestick patterns to time market entries effectively, also highlighting the use of the DXY as a complementary tool for confirming trades. The script encourages practice and community engagement for improved trading strategies.

Takeaways

• 📈 The speaker has tested hundreds of trading entry models and identified the top three with the highest win rate and best trade-reward ratio.
• 🔑 The three main entry models are categorized as type one, type two, and type three, each with distinct characteristics based on candle behavior and market structure.
• 🕯️ Type one and type two models focus on individual candle behavior, particularly how a candle moves throughout its life cycle and the impact of the previous candle's close on the next candle's open.
• 📊 Type one entries involve a simple candle close change in direction, such as from bullish to bearish, and are defined by levels at the open and close of price.
• 🔄 Type two entries are similar to type ones but involve closing beyond a certain level, indicating a stronger move in the direction of the trade.
• 🌐 Type three entries signify a shift in market structure or character, such as making new highs followed by a strong bearish move or vice versa.
• 📉 The speaker emphasizes the importance of trading with volume in favor of the direction of the trade, especially for type three entries.
• ⏳ The models can be applied across different time frames, from 5 minutes and up, and are fractal in nature, meaning they can be seen at various levels of time frames.
• 🔑 The speaker suggests using these models to find direction, areas of interest, and entry points, aligning and connecting different time frames to stack probabilities in one's favor.
• 🤝 The community aspect is highlighted as a way to learn quickly through group discussions, feedback, and teaching others.
• 🔗 The speaker invites viewers to join a community for daily trading sessions, indicating the importance of practice and real-time application of these models.

Q & A

What are the three main entry models mentioned in the script?

The three main entry models mentioned are Type One, Type Two, and Type Three, which are based on candle behavior and market structure.

What does 'candle behavior' refer to in the context of trading?

Candle behavior refers to how an individual candle moves throughout its life cycle and how the close of the previous candle affects the open of the next candle.

How does the speaker define a Type One entry model?

A Type One entry model is defined as a simple candle close that changes direction from bullish to bearish or vice versa.

What is the significance of a 'bottom wick' in candle behavior?

A bottom wick signifies a potential reversal in the market trend, where the price has tested lower levels but closed higher, indicating buying pressure.

What is the difference between a Type One and a Type Two entry model?

The difference between a Type One and a Type Two entry model is that a Type Two involves closing beyond a certain level or structure, whereas a Type One does not.

What does the speaker mean by 'trading the second hour of a session'?

The speaker refers to focusing on trading during the second hour of a market session, which they find to be an effective strategy based on their candle behavior analysis.

How does the speaker use market structure in conjunction with candle behavior?

The speaker uses market structure to identify trends and potential reversals, combining it with candle behavior to time entries and exits more effectively.

What is the importance of volume when identifying a Type Three entry model?

Volume is important in a Type Three entry model as it confirms the strength of a market shift, indicating a strong move in the direction of the trade.

How does the speaker refine and stack time frames for trading?

The speaker refines and stacks time frames by aligning and connecting different time frame signals in favor of the trade, increasing the probability of a successful outcome.

What role does the speaker suggest for the DXY (U.S. Dollar Index) in trading strategies?

The speaker suggests using the DXY as a form of confirmation or complement to the trading strategy, helping to stack probabilities in favor of a trade.

How does the speaker define 'areas of interest' in the context of trading?

Areas of interest are defined as levels at the open and close of price, which are used to identify potential entry and exit points for trades.

What is the speaker's approach to practicing and refining trading strategies?

The speaker emphasizes the importance of practice, group discussion, and teaching others as the quickest way to become profitable in trading.