My Incredibly EASY Trading Strategy Made Me $31k This Month

Summary

In this video, the trader shares a simplified, systematic approach to trading that has resulted in some of their best career performances. By observing market patterns, calculating risk-reward ratios, and using tools like Fibonacci retracements and moving averages, they identify high-probability trade opportunities. The strategy focuses on simplicity, discipline, and repeatability, avoiding complex models. Real-time examples and mock trades are provided to demonstrate the process, and advanced techniques, like the L1 bomb and Elliott Wave analysis, are used to refine decision-making, ensuring consistent profitability while managing risk effectively.

Takeaways

• 😀 High win rate with systematic risk management: The strategy achieves over 90% win rate, targeting 1.25R or higher for each trade.
• 😀 Confluences in trading: Using multiple factors like support/resistance levels, moving averages, and trendline tests to increase confidence in trades.
• 😀 Underside/overside retests: The strategy involves testing key levels after a trend break to identify entry points with higher probability.
• 😀 Real-time trade example: A trade started with a standard entry but adjusted as the market moved, leading to significant profit (e.g., $10,000).
• 😀 L1 bomb strategy: A method that allows adjusting positions during retracements, giving flexibility for bigger price movements while managing risk.
• 😀 Risk-to-reward ratio management: Aimed for a 5x profit compared to the original risk, with careful adjustment of stop losses and targets.
• 😀 Avoiding Elliott Wave pitfalls: The strategy avoids entering trades during the fifth wave of an Elliott sequence, which often signals a corrective move.
• 😀 RSI and Elliott Wave avoidance: A key part of the strategy is staying clear of trading against momentum, ensuring smoother entries.
• 😀 Testing and refining through backtesting: Using TradingView's bar replay feature to backtest trades, refine strategies, and solidify understanding of key confluences.
• 😀 Community and educational resources: A focus on building a systematic approach with community support, providing tools and education for traders to improve their skills.

Q & A

What does the trader mean by a 1.25R profit in a single trade?

A 1.25R profit means that the trader made 1.25 times the amount they risked on the trade. For example, if they risked $1,000, a 1.25R profit would result in a gain of $1,250.

How does the trader identify strong support and resistance levels?

The trader uses a combination of price action and moving averages to identify key support and resistance levels. They look for areas where price has reversed or consolidated before and focus on levels where a significant price reaction is likely.

What is the 'underside overside retest' concept mentioned by the trader?

The 'underside overside retest' refers to a strategy where price breaks below a support or resistance level and then retests it from the opposite side before continuing in the expected direction. The trader uses this as a signal to enter a trade with high probability.

What is the purpose of using the L1 bomb strategy?

The L1 bomb strategy allows the trader to enter a position with a second fill (referred to as a dip-buy two) if the price moves against the initial entry. This lets them adjust to a deeper retracement and capture larger profits if the market moves in their favor.

How does the trader adjust their risk-to-reward ratio during a trade?

The trader adjusts their risk-to-reward ratio by actively managing positions. If a trade shows strong momentum, they may increase their target profit (as in the example where they ended up making five times their expected profit) while moving their stop-loss to lock in profits.

What role do moving averages play in the trader's strategy?

Moving averages help the trader identify the overall trend and potential reversal points. The trader waits for moving averages to align before entering a trade, which serves as confirmation of the direction they expect the price to move.

What is the importance of avoiding Elliot Wave's fifth wave in trading?

Avoiding the fifth wave in Elliot Wave analysis is crucial because it indicates that the trend may be near its end and a corrective pattern (ABC) could follow. The trader looks to avoid entering trades when a five-wave pattern is complete, as it could lead to counter-trend movements.

How does the trader use backtesting to improve their strategy?

The trader uses backtesting by reviewing historical price data in TradingView and practicing their analysis. This allows them to refine their strategies, identify patterns, and build confidence in their approach before applying it to live markets.

What is the trader’s approach to managing trades with high volatility?

The trader adapts to high volatility by adjusting their stop-loss and profit-taking strategies. If a trade is moving in their favor, they may allow it to run, but they remain flexible and close the position once they see signs of consolidation or reversal.

How does the trader ensure consistency in their trading results?

The trader ensures consistency by following a systematic approach, focusing on the risk-to-reward ratio (R), and repeating the process across multiple trades. They aim for consistent profits while refining their strategy based on ongoing analysis and feedback from previous trades.