The Stupid Simple Scalping Strategy I Use Every Day (Backtested Results)

Summary

This video teaches a simple yet highly effective three-step scalping strategy for trading any market, focusing on the first hour of the day. Step one is marking the high and low of the first 5-minute candle. Step two involves entering trades on a 1-minute chart using three setups: Break, Trap, and Reversal, each with specific confirmations. Step three covers trade management, including placing stop-losses and fixed 2:1 risk-to-reward take-profits. The strategy is designed to be mechanical, easy to follow, and consistent, with real examples showing impressive profits in minutes and a backtested 66% win rate, making it ideal for disciplined traders and prop firm accounts.

Takeaways

• 📈 The strategy is a simple three-step scalping method designed for consistent daily profits.
• ⏰ Step 1: Mark key levels using the high and low of the first 5-minute candle at 9:30 a.m. EST.
• 📊 Step 2: Execute trades on a 1-minute chart using three entry setups: Break, Trap, and Reversal.
• ⚡ Break entries require three candles closing outside the range and the formation of a fair value gap (FVG).
• 🪤 Trap entries involve waiting for a breakout retest before confirming the entry.
• 🔄 Reversal entries occur when a breakout fails and a fair value gap forms back into the range, signaling a strong opposite move.
• 🛡️ Step 3: Trade management includes placing stop-losses strategically and using a fixed 2:1 risk-to-reward for take-profit.
• 💰 Backtesting over 18 trades in a month showed $7,800 profit with a $1,200 maximum drawdown, and a 66% win rate.
• 🎯 The strategy is designed to be simple, mechanical, and repeatable, eliminating overthinking and guesswork.
• 🧠 Discipline and confidence are crucial; traders must stick to the strategy and avoid chasing new setups after losses.
• 🌎 The method works across multiple markets, including futures, stocks, crypto, and forex.
• ⏳ Trades typically take only a few minutes to hit the target, emphasizing efficiency and quick execution.

Q & A

What is the primary goal of the three-step scalping strategy discussed in the video?

The primary goal is to provide a simple, high-probability trading strategy that consistently generates profits in short-term trades, while removing guesswork and overcomplication.

Which markets can this scalping strategy be applied to?

This strategy works in multiple markets including futures, stocks, crypto, and forex.

What is the first step of the strategy, and why is it important?

The first step is marking key levels by identifying the high and low of the first 5-minute candle at 9:30 a.m. EST. This is crucial because accurate levels are the foundation for all trade entries.

How do traders identify valid trade entries using this strategy?

Traders switch to a 1-minute chart and look for one of three entry types: Break Entry (three-candle closure outside the range), Trap Entry (price breaks and retests a level), or Reversal Entry (failed breakout followed by a reversal confirmed with a fair value gap).

What is a Fair Value Gap (FVG), and how is it used in this strategy?

A Fair Value Gap is a price gap between candle wicks that indicates strong market control by buyers or sellers. In this strategy, it helps confirm Break and Reversal entries by showing aggressive moves and potential areas for trade execution.

Where should the stop-loss be placed for each type of trade?

For Break and Trap entries, the stop-loss is placed at the first candle that closes outside the 5-minute range. For Reversal entries, the stop-loss is placed at the low of the first candle in the Fair Value Gap.

How is the take-profit determined in this strategy?

The take-profit is based on a fixed 2:1 risk-to-reward ratio for all trades. For example, risking $100 would target a $200 profit.

What is the significance of waiting for candle closures rather than wicks?

Candle closures provide a more reliable confirmation of market direction. Wicks alone can be misleading and often cause false signals, so waiting for full candle closures ensures disciplined entries.

What were the results of the backtest conducted for this strategy?

Over 18 trades in a month, the strategy produced $7,800 in profit with a maximum drawdown of $1,200 and a 66% win rate (12 out of 18 trades).

Why does the video emphasize simplicity and consistency over complex strategies?

Simplicity and consistency prevent overthinking, reduce emotional decision-making, and make execution mechanical, which improves long-term profitability and reduces the risk of errors.

How long did it take for the sample trades to reach their targets in the examples?

The sample trades reached their targets in 4 to 11 minutes, showing that the strategy is fast and efficient for short-term scalping.

Why is it recommended to trade only during the first hour of the market?

The first hour typically shows the highest volatility and volume, making price levels and patterns more reliable for high-probability trades.

How does the Trap entry provide higher conviction compared to the Break entry?

The Trap entry waits for price to retest the broken level, confirming that the initial breakout is valid and reducing the chance of being caught in a false move.

What psychological challenge does the video address for traders, and how is it mitigated?

The video addresses fear, overthinking, and inconsistency in executing trades. This is mitigated by using a mechanical, repeatable strategy and trusting the rules to remove emotional decision-making.