Full In Depth SMC Trading Strategy (Beginner to Advanced)

Summary

This video explains a strategic approach to trading, focusing on risk management, trade execution, and psychological discipline. The trader discusses the importance of managing trade entries within a defined range, taking initial profits at 5R, and letting the remaining position run with break-even stops. Emphasis is placed on controlling emotions and following a structured plan despite the ups and downs of the market. The video also promotes a free SMC (Smart Money Concepts) course for those interested in learning the trader's methods.

Takeaways

• 😀 Understand the concept of range initiation, where price movements begin and set the stage for the next moves in the market.
• 😀 Use the entire range of price action, especially when the range is small, to position entries and set stop levels strategically.
• 😀 Place stop-loss positions above the highs of the range to reduce risk, ensuring that positions are well-protected during price fluctuations.
• 😀 Lock in profits early at 5R to secure consistent returns, as this is considered the 'bread and butter' of a trader’s success.
• 😀 Leave a small portion of the position (20-30%) to run, allowing it to capture larger moves and additional profits over time.
• 😀 Always manage risk by taking partial profits, especially when the market shows signs of price reversal or retracement.
• 😀 Recognize the psychological impact of sitting in a trade, particularly when price moves against you; having a plan in place can mitigate emotional stress.
• 😀 Range mitigation may not always occur immediately, but it can happen later in the trade, impacting the strategy and how positions are managed.
• 😀 Traders should be cautious about getting into trades in the middle of a price leg, as this reduces the probability of a full trade-out success.
• 😀 Consistent profitability comes from locking in regular gains and letting the remainder of the position run for the chance of bigger, occasional wins.
• 😀 The strategy hinges on understanding the dynamics of price movement through fractals, range initiations, and mitigations to optimize trade execution.

Q & A

What is the core concept behind the range trading strategy described in the video?

The core concept involves identifying a price range and waiting for the price to tap into that range. The trader then enters a position, aiming to capitalize on price movements within that range.

How does the trader determine the range to trade?

The range is typically based on the PIP size, which can vary from trade to trade. The trader looks for a narrow price range to trade, such as one that is only 2.5 PIPs wide in some examples.

Why does the trader suggest placing an entry above the range, at 3.5 PIPs?

The entry is placed slightly above the range to cover the highs, ensuring the trader’s position is protected and cautious. This approach helps mitigate risk by avoiding being prematurely taken out of the trade.

What is the significance of taking profit at 5R, and why does the trader emphasize this?

Taking profit at 5R, or five times the risk amount, is considered the trader's 'bread and butter' strategy. It ensures that a consistent portion of profit is locked in, securing gains before potential price reversals.

Why does the trader only sell a portion of the position at 5R, and leave the remainder to run?

The trader locks in the profit by selling a portion of the position at 5R, ensuring consistency in profits. The remainder is left to run because occasional larger profits are expected when the trade continues to move in the desired direction.

What are the risks associated with entering a trade in the middle of a price leg?

Entering in the middle of a price leg can reduce the probability of the trade reaching its full potential. The price might reverse before hitting the target, which makes it harder to ride the entire trade out.

How does the trader manage risk during volatile periods in a trade?

The trader recommends taking profits early to mitigate the risk of price retracing. By taking an initial profit at 5R, they lock in a portion of the gains while letting the remainder run with a break-even stop to protect from sudden reversals.

How does psychological pressure impact trading, according to the video?

The trader highlights the psychological challenges of holding onto a trade when it moves against you, especially when the full position hasn’t been taken off. Stress and doubt can arise when the trade nears break-even or faces significant drawdowns.

What does the trader mean by 'range initiation' and 'range mitigation'?

'Range initiation' refers to the beginning of the price movement within a range, while 'range mitigation' occurs when the price returns to the range to balance or correct itself. Both processes are essential for understanding trade dynamics in the strategy.

Why does the trader offer a free SMC course at the end of the video?

The trader offers a free SMC (Smart Money Concepts) course to provide more in-depth knowledge of the trading strategies discussed in the video. The goal is to give viewers valuable resources without expecting anything in return.