Best Day Trading Strategy (Stacking Confluence) — Transcript

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1. 0:00There's a difference between a break
2. 0:02even trader and a profitable trader. And
3. 0:05it's not just discipline, it's
4. 0:07confluence. The ability to stack
5. 0:10confirmations and multiple indicators
6. 0:12and multiple levels of price action for
7. 0:15the cleanest setup. In this video, I'm
8. 0:17going to show you exactly how to do it.
9. 0:19Sigma, this video is for you. And for
10. 0:21those of you that don't know, every
11. 0:23single week I make a personalized video
12. 0:25response to one of your questions in the
13. 0:27comments of the previous video. Sigma
14. 0:29asks, "Can you please make a video on
15. 0:31confluences?" Putting it all together.
16. 0:34Absolutely, bro. Let's get into it.
17. 0:36Confluence just means multiple things
18. 0:38pointing in the same direction. When
19. 0:41price, trend, indicators, and structure
20. 0:45are all aligned, you have a high
21. 0:47probability setup. When they're mixed or
22. 0:50conflicting, that's where most traders
23. 0:52get chopped up. The key things you want
24. 0:55to look for here when looking for
25. 0:56multiple confluences is structure,
26. 1:00support and resistance, candlestick
27. 1:03confirmation, indicators like the RSI,
28. 1:07moving averages, or any custom
29. 1:09indicators you're using, volume and
30. 1:11liquidity, as well as session timing.
31. 1:15The more confluences you have, the more
32. 1:17confidence you should feel. But there's
33. 1:19a balance. Too many signals equals
34. 1:23analysis paralysis. Here's how I
35. 1:26personally stack confluences before
36. 1:28entering a trade. Step one, structure
37. 1:30and trend. Top-down analysis. Start with
38. 1:34the higher time frames like the 1 hour
39. 1:36or the 4hour and ask yourself, is the
40. 1:40market trending or is the market
41. 1:42ranging? Step two, key levels, support
42. 1:45and resistance. You want to mark up
43. 1:48these levels of support and resistance
44. 1:51because over time if you mark the
45. 1:53previous highs and lows, the breaks and
46. 1:55the retest zones, the fair value gaps or
47. 1:58the liquidity pools, you will start
48. 2:01seeing the patterns over time and what
49. 2:03levels price likes to reject at or
50. 2:06reverse from. Step three, candlestick
51. 2:09confirmation. This is going to be your
52. 2:11entry trigger. rejection wicks,
53. 2:13engulfing candles, or breaks of
54. 2:15structure, or if you guys have been
55. 2:17watching me for a long time, you know I
56. 2:20love the candlestick pattern, the
57. 2:22threeline strike. Step four, indicators
58. 2:25for confirmation. This is optional for
59. 2:27those of you that prefer naked trading.
60. 2:30I, however, like to use the RSI. I like
61. 2:33to have a 200 smoothed moving average on
62. 2:36my chart to keep my trend analysis in
63. 2:40the right direction. I also really like
64. 2:43happy trail, but that's another video.
65. 2:45And my go-to trading strategy is using
66. 2:49divergences. I want to catch the full
67. 2:52swing of the trend whenever I can so
68. 2:54that I'm comfortable in my trade for an
69. 2:56extended period of time. Divergences
70. 2:59give me that outlet. All of these things
71. 3:02that you're looking at, you need to look
72. 3:04for agreement, not contradictions. Let
73. 3:07me walk you through a real chart and
74. 3:09show you how I would use all of these
75. 3:11confluences in action. This is gold on
76. 3:14the 1 hour time frame. You can see the
77. 3:16time frame up here at the top. First, I
78. 3:18want to mark up my support and
79. 3:20resistance using horizontal lines on the
80. 3:22higher time frame. These are the key
81. 3:24levels of support and resistance that I
82. 3:25want to focus on. The highs, the lows,
83. 3:28and the mid structure where price has
84. 3:30rejected off of multiple times and or
85. 3:33bounced off of. Then I draw up my trend
86. 3:36line so that I can see historical data
87. 3:38of where the price has been trending
88. 3:40over the last few months. Now I can zoom
89. 3:43in to where it is right now. But let me
90. 3:46show you really quick on the 1 hour time
91. 3:48frame. We are on a downtrend pulling
92. 3:50back to this level of support. Yet we
93. 3:52have broken this downtrend with a double
94. 3:55bottom and a divergence. I'm keeping
95. 3:57that in mind as I'm jumping down to the
96. 3:59lower time frame on the 15-minute chart.
97. 4:01Now let's analyze this price. We had a
98. 4:04large wick right here, then an engulfing
99. 4:07candle to capture liquidity as price
100. 4:09shot up. This level right here is now an
101. 4:12A+ level. Price used this level to break
102. 4:16the downtrend and come back into it,
103. 4:18retesting the downtrend as well as that
104. 4:20same level. Zooming in a little bit
105. 4:22closer, you can see right here we had a
106. 4:25double bottom, wick down, retest, and a
107. 4:28strong rejection. And looking at the
108. 4:30RSI, we had a divergence. If I was
109. 4:33watching this move, I probably would
110. 4:34have got it on this candle with my stop
111. 4:37loss below. But since I can't go back in
112. 4:39time, let's mark this up. The next level
113. 4:41of support and resistance is a 0.62
114. 4:44risk-to-reward. Not worth my risk. You
115. 4:47always want a 1 one or higher. And
116. 4:50seeing the RSI that we're at the top of
117. 4:52the range, we don't want to get into
118. 4:53that trade. You have to know when it's
119. 4:55not worth your risk-to-reward to get
120. 4:57into a trade after a move has already
121. 4:59gone. So going back in time, this would
122. 5:02have been right at market open, giving
123. 5:04you nearly a 1:2 risk-to-reward ratio.
124. 5:07That's a good trade. At that time,
125. 5:09everything lined up. All of your
126. 5:11confluences were telling you one thing,
127. 5:14go long. And again, this is not needed,
128. 5:16but if you use the happy trail indicator
129. 5:18on the 5-minute time frame looking for
130. 5:20scalping, knowing that it rejected off
131. 5:22of that double bottom, this would have
132. 5:24been your entry candle. And because
133. 5:26scalping is tighter stop- losses and
134. 5:28shorter position times, your trade setup
135. 5:30would have looked like this. Happy trail
136. 5:32signal after the double bottom
137. 5:34rejection, breaking the previous
138. 5:36downtrend, looking left for your target,
139. 5:38the previous swing high, stop-loss below
140. 5:41the previous swing low, 1 to 1.8
141. 5:44risk-to-reward. A quick warning, don't
142. 5:46get addicted to needing seven different
143. 5:48confluences. You'll hesitate, you'll
144. 5:51miss entries, and you'll overthink and
145. 5:53underexecute. Pick three to four key
146. 5:56confluences that you trust and get good
147. 5:59at spotting them quickly. Here are some
148. 6:02quick tips. Don't wait for perfection.
149. 6:04It's never going to happen. Trust your
150. 6:06system. And most importantly, track your
151. 6:09setups and learn what worked over time.
152. 6:11We're focusing on consistency here.
153. 6:13Trading with confluences gives you
154. 6:16something more than just trades with
155. 6:18good entries. It gives you confidence.
156. 6:21the confidence that keeps you from FOMO,
157. 6:24that keeps you from panicking, and that
158. 6:26keeps you in the trade. The goal isn't
159. 6:28to be right all the time. It's to stack
160. 6:31the odds in your favor every single day
161. 6:35over and over. Master confluences and
162. 6:38you'll stop guessing and start
163. 6:40executing. And if you're still
164. 6:41struggling getting into a trade because
165. 6:43you keep secondguessing yourself, go
166. 6:45check out our new earn as you learn
167. 6:48program where we provide you the trade
168. 6:50setups so that you can see what good
169. 6:53trades look like and feel like to make
170. 6:56those profits. And while you're
171. 6:58executing those trades, you can learn
172. 7:00about day trading. So now you don't have
173. 7:02to wait 6 months until you can start
174. 7:03trading. You can do it from day one as
175. 7:06you're learning. Check out the earn as
176. 7:07you learn program at trdfloor.com. I
177. 7:10hope this video helped you guys out. And
178. 7:12if you have questions that you want
179. 7:13answered in a video response, put them
180. 7:15in the comment section down below.
181. 7:17Thanks so much for watching and we'll
182. 7:18see you in the next one.