My Incredible Easy Scalping Strategy To Make $500/Day (Back Tested Results)

Summary

This video introduces a simple, beginner-friendly scalping strategy for consistent profits in the market. The strategy revolves around the opening range break and retest, where traders mark out the high and low of the first few minutes of market opening, wait for a strong break, and then trade the retest with clear stop and profit targets. The video demonstrates how this mechanical approach works using real market examples, backtesting the strategy across multiple days. With a focus on risk management and a 2:1 risk-to-reward ratio, it shows how this strategy can be profitable if executed properly.

Takeaways

• 😀 The strategy is a simple scalping method that works every day, especially in the first few hours after the market opens.
• 😀 No bias is required, making it beginner-friendly and easier to execute without guessing the market's direction.
• 😀 The strategy operates in the 9:30 AM to 11:00 AM window, with setups forming early in the market session.
• 😀 It is a mechanical, rule-based strategy where clear levels (opening range high/low) and strong displacement trigger trade entries.
• 😀 The setup involves marking the opening range (high/low) of the first 1-minute or 5-minute candle and waiting for a break with strong displacement.
• 😀 The trade only enters after a retest of the broken opening range level, either high or low, with a stop set just above or below the level.
• 😀 The target for every trade is a 2:1 risk-to-reward ratio, which is consistently used to manage profits.
• 😀 The strategy was backtested over a week, producing three wins, one no trade day, and no losses, with all wins meeting the 2:1 risk-to-reward goal.
• 😀 If the price does not hit a 2:1 risk-to-reward target, key levels such as pre-market lows can be used for scaling profits.
• 😀 Patience is crucial; the strategy only triggers trades when a clear setup presents itself, ensuring high-probability entries.
• 😀 The strategy's simplicity and mechanical nature make it easy for beginners to adopt, without the need for complex analysis or predictions.

Q & A

What is the main focus of the strategy presented in the video?

The main focus of the strategy is a simple scalping method called the 'Opening Range Break and Retest,' which allows traders to make consistent profits by identifying and trading key price levels within the first few hours after the market opens.

What makes this strategy beginner-friendly?

This strategy is beginner-friendly because it requires no market bias, is highly mechanical, and offers clear entry points, stop levels, and profit targets. It can be executed without having to guess the market's overall direction for the day.

What is the 'Opening Range' in this strategy?

The 'Opening Range' is the price range defined by the high and low of the first 1-minute or 5-minute candle after the market opens. This range is used to set the reference levels for subsequent trades.

How does the 'Opening Range Break and Retest' work?

The strategy involves marking the high and low of the opening range, waiting for a strong price displacement (break) above or below this range, and then looking for a retest of the break level to confirm a valid trade setup.

What role do 'strong displacement' and 'retest' play in this strategy?

Strong displacement indicates that the price has moved decisively away from the opening range, signaling a potential breakout. A retest confirms the level's validity, providing an opportunity to enter the trade with a higher probability of success.

What is the recommended stop and profit target for trades?

For this strategy, the stop is placed just above or below the opening range high or low, depending on the direction of the trade. The target is typically set at a 2:1 risk-reward ratio, meaning the target profit is twice the distance from the stop.

Is the strategy dependent on a specific market bias?

No, the strategy does not require any bias towards the market's direction. It focuses on price action based on the opening range, making it suitable even when there’s no clear trend or bias.

How does the strategy perform during a backtest over a week?

In the backtest conducted in the video, the strategy produced zero losses, with three wins and one no-trade day. The wins were consistently profitable, each achieving a 2:1 risk-reward ratio.

What is the purpose of marking out the opening range high and low?

Marking out the opening range high and low helps identify the key levels where price could potentially break out. These levels act as reference points for subsequent price action, helping traders make more informed decisions on when to enter or exit a trade.

What should traders do if a trade doesn’t reach the 2:1 risk-reward target?

If a trade doesn't reach the 2:1 target, traders can consider scaling out at key levels, such as pre-market lows or other significant price levels. This approach allows for securing profits before the target is hit, and can increase the likelihood of a successful outcome.