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The 1H Pattern I Will Use For Life (Simple 1H, 1M Strategy) — Transcript

by Scarface Trades · 3,138 words · 432 segments · language en · Watch on YouTube

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0:00This 1-hour trading pattern has made my
0:02trading extremely simple. It helps me
0:05understand the timing of when to take a
0:07trade, the exact location of a high
0:09probability trade, most importantly the
0:12direction of the overall markets and
0:14where the trade wants to go. And after
0:16the last 7 years of trading and back
0:18testing the strategy, I can confidently
0:20say this one concept has helped change
0:23the way I trade and [music] it gets rid
0:25of the guesswork and confusion when it
0:27comes to trading. In this video, I'm
0:29going to explain the 1 hour trading
0:31pattern not many people talk about, and
0:33then I'll show you live examples so you
0:35can see exactly how I implement this
0:36pattern in the markets. So, the goal of
0:39this video is to learn the simple 1-hour
0:42pattern that I would trade for the rest
0:44of my life. This pattern personally
0:46helps me stop over complicating my
0:48trading. It helped me stop looking for
0:50the holy grail indicators that many
0:52traders look for and most importantly,
0:54it helped me from stop guessing random
0:56trades. So rather than making my trading
0:59extremely random and just hoping that a
1:00trade would go in my direction, I can
1:02actually get into trades, make it very
1:05mechanical and repeatable. And because I
1:07have a repeatable and simple strategy,
1:10this helped transform my trading. So
1:11whether you're a beginner or advanced
1:13trader, understanding this pattern, no
1:14matter what strategy you trade will help
1:17simplify trading. And of course, these
1:19are the back tested results using this
1:21one pattern. So, if I apply this one
1:23pattern into my own trading, these are
1:24the results we got back testing this
1:26setup all the way from 0 to 120,000. But
1:30with this being said, in this video with
1:32the pattern that I'm going to show you,
1:33I'm going to show you the three-step
1:34strategy that I can trade on a daily
1:36basis. We'll talk about the entry,
1:38stop-loss, and profit targets for this
1:39pattern. And then I'll show you some
1:41real example trades using this pattern
1:43in the markets so you can see it much
1:45more clearly. Why do traders fail? Well,
1:48most traders fail because they focus on
1:49the wrong thing. If you were looking at
1:51this chart here, what is the thing that
1:53you are focusing on? Where is your
1:55attention going when you look at this
1:57chart? The problem is for most traders,
2:00they focus on the full range. So if you
2:02were looking at this chart, you may have
2:03been focusing around this area, right?
2:05Where you may have seen a potential
2:07support, but there may be another trader
2:09watching this video where they were
2:10looking at this resistance or there
2:12could be another trader looking at this
2:14support level here for buyers to step
2:16up. So there's a lot of different areas
2:17we can look at, especially when the
2:18chart is continuously moving. So what I
2:21decided to do is completely get out of
2:24this range and full price action and
2:26focus on the only thing that matters and
2:29that is the first 1hour candle of the
2:32day. This 1hour candle will help
2:35simplify everything and help us not get
2:37caught up in the range but rather take
2:40high probability good setups. Now how
2:43does this work? Well, for step one, all
2:45we need to understand is I trade the New
2:47York Stock Exchange open. This means
2:49that I trade the 9:30 a.m. Eastern
2:52Market open. Now, the pattern that I'm
2:53going to talk about works for all
2:55instruments, stocks, options, forex,
2:56futures, and crypto. But for myself
2:58personally, I trade on stocks, options,
3:00and futures. But just understand that
3:01the market opens at 9:30 a.m. Eastern
3:03for when I trade. And when this market
3:05opens, all I'm going to do is mark out
3:07the 1 hour candle before the 9:30 a.m.
3:11open. So, before the market opens at
3:129:30, I'm going to look at the 900 a.m.
3:15candle. And this 9:00 a.m. candle is
3:18going to help me determine which way I
3:21want to trade for the day. Now, you may
3:23be wondering how this is possible. Well,
3:25I have simplified this so even a
3:27beginner trader can understand. If we
3:30come into the day with the 900 a.m.
3:32Eastern candle on the 1 hour time frame,
3:34if the candle is bullish, then I will be
3:37looking to buy for the day, meaning I
3:39will be looking for a potential long
3:41position. If this candle is bearish at
3:449:00 a.m. Eastern, then I will be
3:46looking for a bearish move. So, I will
3:48be looking to short the stock for the
3:51day. It is that simple. I want to
3:54simplify my trading as much as possible.
3:57So in this example, if we look at it, we
3:59can see that this is a bearish candle.
4:01This means coming into the day, I would
4:03be looking to short for the day. Meaning
4:05I will be looking for any sort of
4:07opportunity where I see resistance, go
4:09short at that area for a move back to
4:11the downside. And this helps me simplify
4:14my trading because I don't focus on the
4:15full range. I can simply look at one
4:17candle and then create my thesis on the
4:19next. So now that we understand that for
4:21step one, all we have to do is identify
4:23that first 1 hour candle. For step two,
4:26it is very simple. It is trading your
4:30strategy. So, whatever strategy you
4:32trade, you can trade that strategy just
4:34using that 9:00 a.m. pattern. But for
4:36myself, and if you've watched this
4:37channel before, these strategies could
4:38be the first candle strategy, the
4:40previous day strategy, the one candle
4:42rule strategy, or whatever you trade. In
4:44this video, I'm going to show you
4:46different strategies using the 1 hour
4:48pattern because once again, this is just
4:50a 1 hour pattern. The strategy we trade
4:52is the same. This just helps simplify
4:53our trading even more than the
4:54strategies I've talked about on this
4:56channel. But for step two, all you need
4:58to understand is we're going to trade a
5:00simple strategy along with the 1 hour
5:02pattern. So if we use the example that
5:04we were already using for step one, now
5:06that we know that the actual stock is
5:08bearish because the 1 hour candle was
5:10bearish, we just have to go to the 1
5:11minute time frame. Because I trade the 1
5:13minute time frame, I'm going to mark out
5:15the 5minut high and the first 5minut
5:17low. So this is the first candle
5:19strategy. This simply means I'm marking
5:21out that first five minute high, five
5:23minute low, and I'm looking for either a
5:24break and retest to the downside or to
5:27the upside. However, because I know that
5:29the 1 hour candle closed bearish, I will
5:32actually be already looking for that
5:34retest to the downside because I know
5:36the 1 hour candle was already bearish.
5:38So, I'll be looking for the continuation
5:40down. And here we can see once we got
5:42that break, we got the retest with weak
5:45price action. This simply means that
5:47because this is a short position,
5:48sellers were stepping in near this area.
5:51This gives me the confluence to enter
5:52with my stop loss at a break of the
5:54previous candle and my profit target at
5:56at least a 2our multiple. This means for
5:58every $100 of risk, I want to make $200
6:01of potential profit. And as we can see
6:03with this trade, if I entered into the
6:05trade here, this one worked out very
6:07nicely all the way back down into low of
6:09day using not only the first candle
6:11strategy, but also understanding the
6:13first one candle pattern. And this gave
6:16me a lot of confluence and confirmation
6:18for this trade. So, at this point of the
6:20video, hopefully you understand exactly
6:22how to set up the 1 hour pattern. If you
6:25don't, don't worry. Now, I'm going to
6:26show you some real trading examples
6:28using this pattern in the markets. So,
6:30by the end of the video, you'll
6:31understand exactly how I implement this
6:33in the markets. All right. So, here we
6:35are on the first example, and all we're
6:37going to do is look for the first 1 hour
6:38candle. If we even zoom into the
6:40previous day here, we can see green
6:42candle, green candle, green candle,
6:44green candle, green candle. And this is
6:45all on the 1 hour time frame. Then when
6:47we get a red candle, we get multiple red
6:49candles in a row. So the whole premise
6:51of this pattern is the recognition that
6:53if you typically get one down candle,
6:56the following candle is going to be
6:57another downlosed candle. Vice versa, if
7:00you get one up close candle, the
7:01following candle, it is a higher
7:03probability chance that you're going to
7:05get an uplose candle as well. So that's
7:07the whole premise of the pattern. But
7:09how do I actually trade it using a
7:10simple system? On the 1 hour time frame
7:12here on Nvidia, we can see that this
7:14candle is opening up red. And we can
7:16also see the previous 8 a.m. candle and
7:189:00 a.m. candle were both down close
7:20candles. And this helps me identify
7:22coming into market open that I'll be
7:24looking for more of a bearish side move.
7:26But now I can go over to the 1 minute
7:28time frame. And on the 1 minute time
7:30frame here, specifically for me, what
7:32I'm going to be looking for on this very
7:34first example, now that we know that I'm
7:36going to be looking for a little bit
7:37more of a bearish move, because the 8
7:39a.m. and 9:00 a.m. candle were both
7:40bearish, I'm going to be looking for
7:42that move to the downside. So, I'm going
7:44to wait for the first 5 minutes to play
7:45out for the day. And once the first 5
7:48minutes has formed, I'm simply going to
7:49mark out 5minute high and the 5-minute
7:51low. And because I already know that the
7:53first candle was bearish or the 1 hour
7:55candle was bearish, I'm going to be
7:57looking for a break below this 5-minute
7:58low, a retest and continuation. This is
8:01going to be the highest probability
8:03trade using a very simple system, but
8:06having the combination and confluence of
8:08the first 1-hour candle as well. Let's
8:11play out this day and see exactly what
8:13happens and if we can get a retest entry
8:15on that 5-minute low. So, as we can see
8:19here, so far we broke below that
8:215-minute low. We have not came back for
8:23a retest. So, now I simply want the
8:25retest of that 5-minute low for
8:27continuation. On this retest, I'm going
8:30to be looking for weak price action.
8:32Let's see if we can get that retest
8:33entry here. And right here, we can see
8:36we finally came into that 5minute low.
8:38We are getting weak price action off
8:40that 5minute low. And the 1-hour candle
8:42that we were trading with is also
8:44bearish. So, how will I look to take
8:46this trade? Well, I'm simply going to
8:48look for a short side move here. I'm
8:50going to have my stop loss at a break of
8:52the candle that retested this area. And
8:55I'm going to simply be looking for that
8:56low of day move as this gives me a 2.15
8:59risk-to-reward trade. This means for
9:01this trade specifically, if I'm risking
9:03$480, I'm looking to make about $980 of
9:08profit. Let's play out this trade and
9:10see exactly what happens. And as I say
9:12that, within the first candle, that one
9:14already came down into our profit
9:16target. However, with the trade
9:18continuing, we can see we saw a little
9:19bit more continuation as well on this
9:21specific trade. So, this was the first
9:23example. This was a bearish example
9:25using that first candle strategy along
9:27with the first hour pattern as well.
9:30But, let's go over to the next example
9:31where I'll show you a different strategy
9:33in combination with this 1 hour pattern.
9:35All right, here we are on the next
9:36example. We're on the 1 hour time frame,
9:38and we can see that the candle opening
9:39up here at 9:00 a.m. This is a very
9:41bullish green up close candle. This
9:43means that we will simply be looking for
9:45that break and retest for a move back to
9:47the upside. Now, how would I look to
9:49trade on this specific day? Well, I know
9:51that this candle is going to open up
9:53very strong. And therefore, for this
9:55specific day, I'm going to mark out that
9:57previous day high. I would like a
9:59previous day high break and retest. This
10:01is the previous day high strategy. So,
10:039:30 a.m. to 400 p.m. Eastern. You can
10:06mark out the previous day high and
10:07previous day low. and you're simply
10:08looking for a retest on either side. On
10:11this day, because we know the 1 hour
10:12pattern is very bullish, I'm going to be
10:14looking for that previous day high break
10:16and retest setup. So, now we come over
10:18to the 1 minute time frame and we're
10:19simply waiting for the break and retest
10:21of this previous day high level. We can
10:24see we broke above this previous day
10:26high and now we're coming back for the
10:27retest. On this retest, I need strong
10:29price action. So, so far we're getting a
10:31little bit weaker price action. Let's
10:33see if we can get some strong price
10:34action off this area. And the very next
10:36candle, we got strong price action. So
10:39the way I would look to enter this
10:40trade, understanding the pattern and the
10:42strategy, is my stop loss is a break
10:44below this previous day high, and I need
10:47at least a 2our multiple. In this
10:49example, the 2-hour multiple comes near
10:50the 221 whole psychological area. This
10:53gives me about a 2.13 risk-to-reward
10:56trade. This means for this trade, I'm
10:57risking about $1,040 for a potential
11:00profit of $2,410.
11:02Let's enter into the trade here and
11:04let's see exactly what happens. So far,
11:07we can see there is a little bit of
11:09consolidation on this retest. Let's see
11:11if we can hit our profit target. And as
11:14we can see here, this trade ended up
11:16working into our profit target and
11:18actually had some nice continuation
11:20above that as well. So far, I've shown
11:22you a bullish and bearish example using
11:24the 1 hour pattern along with two simple
11:26strategies. Let's go over to the final
11:28example to really make sure you
11:29understand this pattern. And I'll show
11:31you one final strategy. All right, here
11:34we are on our final example. And on this
11:36example, we can see we're on the 1 hour
11:38time frame again. And we can see
11:40multiple green up close candles. This
11:42means coming into the day, I'm going to
11:44be looking for a bullish move back to
11:46the upside. And remember, the reason the
11:471 hour candles are important is because
11:49it's a higher time frame. So, if the
11:51higher time frame candles are printing
11:53green bullish candles and we know
11:54there's a higher probability after one
11:56green candle that the next candle will
11:58be green, well, that means that the
11:59lower time frame will follow it. So,
12:01even if I mess up my entry just a little
12:03bit, as long as the higher time frame is
12:05still bullish or bearish, depending if
12:07it's green or red, I'll still have a
12:08higher probability chance of winning my
12:11trade. And that's what makes this
12:12pattern so powerful. But let's open up
12:15the day and let's see exactly what
12:17happens on this specific day. On this
12:19day, we can see we have two setups here.
12:22The first setup is something that we've
12:24already traded, and that's going to be
12:25the five minute high retest strategy.
12:27So, this could simply be a break above a
12:29retest and continuation on the 5-minute.
12:31This was the first setup that I showed
12:33you. But on top of that, we also have
12:34this down close candle. This means that
12:37price needs to support this downlo
12:39candle. So, I have a full video on this
12:41one candle rule on my channel that's a
12:43lot more in-depth. But all this means in
12:45an uptrend, a downlo candle should
12:47support price for a move to the upside
12:49as this is the last place sellers were.
12:52So buyers know when we come back into
12:54this area that they need to hold it up
12:56or the trade will fail back to the
12:58downside. In this example, we can mark
13:00out this down close candle. This is what
13:02buyers need to hold the price above and
13:04this 5-minute high. So the confluences
13:06for this trade is we have three
13:08confluences. The first one is the 1-hour
13:11candle. We know the 1 hour candle is
13:13bullish. The second one is the 5-minut
13:15strategy and the third one is the one
13:17candle rule. So this is going to be a
13:19very high probability setup trade if we
13:21can form above the 5minute high and of
13:24course the one candle rule as well. All
13:27right. So as we can see this one broke
13:29above retested. We had a little bit of
13:30consolidation but now buyers are finally
13:32stepping in. We waited for that strong
13:34price action. I have a full video
13:36explaining price action on my channel as
13:37well that you can watch after this one.
13:39However, we would enter into the trade
13:40here. The stop loss will be a break
13:42below this pivot structure. And the
13:44profit target here would be high of day.
13:46This gives us about a 2.43
13:48risk-to-reward trade. This means I'll be
13:50risking about $520 for a potential
13:53profit of about $1,90.
13:56So, let's play out this trade and see
13:57exactly what happens. But remember the
13:59confluences on this trade. We had the
14:02first candle strategy. We had the down
14:04close candle which is the one candle
14:06rule as well. And we had the 1hour
14:08candle as well. So three different
14:10confluences making this a very high
14:13probability trade for a move back up
14:15into high of day that was just achieved
14:17right here. So if you want any more
14:19information on this 1 hour pattern or
14:21how to start trading from absolutely
14:23scratch as a beginner, I have a full
14:24free playlist. You can click the link in
14:26the description or the video on screen.
14:27Now if this video helped you, make sure
14:29to leave it a like. If you have any
14:30questions, put them in the comments down
14:31below. Subscribe to the channel. Follow
14:33me on Instagram and Twitter for more
14:34education.

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