The " ONE CANDLE " Scalping Strategy I Will Use For Life

Summary

Doug shares a simple, effective scalping strategy designed for the first hour of each trading session called the 'Pattern Scalp.' The strategy focuses on three key steps: marking the opening range on a 15-minute chart, identifying manipulation candles using ATR, and finding the perfect entry using reversal candlestick patterns like the John Wick or Power of Tower. Doug emphasizes that this method is repeatable, newbie-friendly, and has been successfully used by many traders. He also offers a free weekly watchlist, 'The Gains Guide,' to help traders stay on track with potential stock picks.

Takeaways

• 😀 The Pattern Scalp strategy focuses on trading the first hour of the trading session for maximum profits.
• 😀 Mastering the market open is crucial for success in trading, as 90% of a trader's profits come within the first hour of the session.
• 😀 The Pattern Scalp strategy is simple, repeatable, and newbie-friendly, making it accessible for traders at all experience levels.
• 😀 Step 1: The first 15-minute candle is crucial—box the high and low points to define the opening range.
• 😀 Step 2: Identify whether the 15-minute candle is a 'manipulation candle'—an aggressive price move designed to trap retail traders and create liquidity for larger institutions.
• 😀 A manipulation candle is defined as a candle that is 20% or more of the daily range, signaling potential market reversal opportunities.
• 😀 Step 3: Move to a smaller time frame (like 5-minute) and look for either a 'John Wick' or 'Power Tower' candle for confirmation of entry.
• 😀 The John Wick candle represents a reversal to the long side after a strong down move, signaling the largest buyers entering the market.
• 😀 The Power Tower candle is similar but works in the opposite direction, often following an upward move, signaling larger sellers stepping in.
• 😀 The strategy relies heavily on manipulation candles as they provide the necessary liquidity for institutions to enter or exit their positions, making them key for identifying profitable trades.
• 😀 The Pattern Scalp strategy is repeatable daily, offering consistent opportunities as manipulation candles appear frequently in high-volume assets.
• 😀 For traders seeking quality trade ideas, the Gains Guide, a free weekly watchlist curated by the speaker and their wife, provides actionable insights into the best stocks and indexes to trade.

Q & A

What is the primary focus of the pattern scalp strategy?

The pattern scalp strategy focuses on taking advantage of the first hour of each trading session. It aims to identify and execute trades based on price manipulations during the opening range, using a simple three-step process.

How long has the presenter, Doug, been day trading?

Doug has been day trading for over 25 years.

Why is the first hour of trading crucial for success?

According to Doug, 90% of the money a trader will make during their lifetime happens within the first hour of the trading session. It's when the largest movements occur, and mastering this time frame is key to becoming a successful trader.

What is a manipulation candle in trading?

A manipulation candle is an aggressive, fast-moving price action candle that usually causes inexperienced traders to chase the market. These candles are typically used by larger institutions to create liquidity necessary for their own positions.

What is the significance of the 15-minute chart in the pattern scalp strategy?

The 15-minute chart is essential for identifying the opening range. It allows traders to draw the high and low of the first 15-minute candle, which sets up the potential manipulation zone for further analysis.

How do you confirm if a 15-minute candle is a manipulation candle?

To confirm a manipulation candle, you calculate 20% of the asset's average daily range (using the Average True Range or ATR). If the candle's range exceeds this percentage, it qualifies as a manipulation candle.

What is the Average True Range (ATR), and why is it important?

The Average True Range (ATR) measures an asset's typical daily price movement. It helps determine the expected daily price range. By comparing a candle's range to the ATR, you can assess whether the candle is a manipulation candle.

What are the two types of candles to look for after a manipulation candle in the pattern scalp strategy?

The two key candles to look for after a manipulation candle are the John Wick candle (a hammer or inverted hammer) and the Power Tower candle, which indicate potential reversals in price action.

What is the ideal entry point when trading with the pattern scalp strategy?

The ideal entry point comes when the price action confirms a reversal based on the appearance of a John Wick or Power Tower candle. For example, after a bullish John Wick candle, you enter when the next candle breaks the high of the previous one.

How does Doug suggest handling trades when no manipulation candle appears?

Doug suggests that even if no manipulation candle appears, you can still trade the pattern scalp strategy. However, for the best results, you want to have the manipulation candle to ensure higher probability trades.