This Scalping Strategy Is Boring, But It Makes Me $1000/Day

Summary

This trading tutorial focuses on using key levels and price action to identify high-probability setups. The speaker emphasizes leveraging the 5-minute and 1-minute charts for entries, targeting previous day highs/lows, and monitoring order blocks for support/resistance. The video demonstrates live trade examples, including trades on Tesla and Apple, with clear guidance on identifying breakouts, pullbacks, and managing risk. The strategy revolves around understanding market structure, timing entries, and scaling positions for optimal risk/reward ratios. The result is a solid day of successful trades, with a focus on continuous upward momentum and precise execution.

Takeaways

• 😀 Key levels such as previous day's high and low are essential in identifying potential entry and exit points for stocks like Tesla, Apple, and Nvidia.
• 😀 The 5-minute opening range is a crucial time frame for determining market reactions and making trade decisions based on the stock's movement.
• 😀 A combination of order blocks and higher time frame analysis helps identify strong trade setups for continuation or reversal.
• 😀 For Tesla, after a solid reaction from key levels, there’s potential for continuation towards previous highs if the stock holds higher time frame support.
• 😀 Apple's stock can provide excellent trading opportunities when it holds above key levels like the previous day high or specific price zones like 228, 234, or 237.
• 😀 The 1:2 risk-to-reward ratio is often targeted, where traders look for a push towards the upside while managing stop-loss orders appropriately.
• 😀 The Q's (NASDAQ index) serve as a critical benchmark for identifying relative strength or weakness when trading individual stocks like Apple or Tesla.
• 😀 Nvidia's stock can experience downside pressure if it fails to hold key levels, such as previous day lows, which suggests further downside movement.
• 😀 During consolidation phases, like with Tesla, it’s important to wait for a breakout or continuation above key resistance to capture significant price movement.
• 😀 Properly identifying and maintaining trade positions is key to maximizing profitability, as shown by the final push in Apple, scaling the position to the target price of 238.

Q & A

What is the significance of the previous day's high and low in the trading strategy?

The previous day's high and low are key reference points for identifying potential support and resistance levels. Traders often look for price action to react around these levels to determine potential entry or exit points.

How does the trader use the opening range in their strategy?

The trader uses the opening range (typically the first few minutes of trading) to assess market sentiment and identify breakouts. The opening range's high and low are marked, and a breakout above or below these levels can signal a trade entry.

What role do 'order blocks' play in the trading strategy?

Order blocks are considered areas where significant buying or selling has occurred previously. The trader looks for price to retrace to these areas and react, expecting the market to reverse or continue in the direction of the initial move.

How does the trader handle risk management during a trade?

The trader uses stop-loss orders to manage risk. For example, in the Apple trade, the stop-loss is placed just below the swing low. The trader also scales out by taking partial profits as the price moves in their favor.

What is the importance of using multiple timeframes in the analysis?

Using multiple timeframes, such as the 5-minute and 15-minute charts, helps the trader get a broader view of the market. The higher timeframe provides context for the overall trend, while the lower timeframe is used for precise entry points and managing the trade.

Why does the trader monitor the QQQ (Nasdaq ETF) in conjunction with individual stocks like Apple and Tesla?

The QQQ ETF represents the broader Nasdaq market, and its movements often influence the price action of individual stocks like Apple and Tesla. By monitoring the QQQ, the trader can gauge market sentiment and identify potential correlations between the ETF and the individual stocks.

What is the significance of the 'hammer stick' candle mentioned in the Apple trade?

A 'hammer stick' is a candlestick pattern that signals a potential reversal, especially when it forms after a downtrend. In the Apple trade, the hammer candle was used to signal a potential entry point for the continued move higher.

What does the trader mean by 'scaling out' of a position?

Scaling out refers to selling portions of a position as the price moves in the trader's favor. In the case of the Apple trade, the trader took partial profits at a key level (such as 237) and then allowed the remaining position to continue in the direction of the trend.

What does the trader expect after a price breaks above a key level, like the 237 level for Apple?

After the price breaks above a key level like 237, the trader expects further upward movement, potentially reaching the next resistance level or the previous day's high. The trader looks for confirmation of continued strength to stay in the trade.

How does the trader assess when to exit a trade or take profits?

The trader typically exits a trade when price reaches a predefined target, such as the previous day's high or a key resistance level. Partial profits are taken at intermediate levels, and the remainder of the position is held if the price continues in the expected direction.