The Easiest 1 Minute Breakout Scalping Strategy — Transcript

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1. 0:00Breakout trading is one of the most
2. 0:02powerful methods in day trading. The
3. 0:04reason is because as price is
4. 0:07consolidating and going sideways, it is
5. 0:10collecting orders from both sides. Both
6. 0:12buyers and sellers are getting stuck.
7. 0:15And then as it breaks out, whatever
8. 0:18losing team is stuck gets stuck there
9. 0:21forever or loses their money, which adds
10. 0:24more strength to the direction of the
11. 0:26breakout. So, in this video, we're going
12. 0:28to go over breakout trading, how to
13. 0:31identify areas of consolidation, and how
14. 0:34to actually trade these and where to put
15. 0:36your stop-loss when you are trading
16. 0:38these breakouts. So, let's get into it.
17. 0:40Now, if you watched my previous video,
18. 0:42the intro to this series, we discussed
19. 0:45areas of consolidation. To identify
20. 0:48areas of consolidation, you must find an
21. 0:51area where price failed to make a higher
22. 0:54high in an uptrend or failed to make a
23. 0:57lower low in a downtrend. So, as you can
24. 1:00see on this chart, price was making
25. 1:03higher highs and higher lows and then it
26. 1:07failed to make a higher high and then it
27. 1:10failed with this wick to make a lower
28. 1:12low. So, what I want you to do is take
29. 1:15your rectangle tool, mark where it
30. 1:17failed to make a higher high, and mark
31. 1:20where it failed to make a lower low, and
32. 1:23drag this box out until price breaks
33. 1:27that structure that you had previously
34. 1:28drawn. Now, the first thing that I want
35. 1:30you to understand about ranges and
36. 1:34consolidation is that there is buyers
37. 1:37and sellers both active during this
38. 1:39range. Now, if we take our GAN box tool
39. 1:42and draw it on the consolidation range
40. 1:44that we just drew, we can clearly
41. 1:47identify where the sellers are
42. 1:49interested in the red zone and where the
43. 1:52buyers are interested in the green zone.
44. 1:54Because the simplest way to explain the
45. 1:57interest of buyers and sellers is that
46. 1:59buyers buy low and sell high. Sellers
47. 2:04sell high and buy back low. So in this
48. 2:07range, sellers are selling at the top
49. 2:10and buyers are buying at the bottom.
50. 2:12These wicks are lots of active sellers
51. 2:16on the top and these wicks on the bottom
52. 2:18are a lot of active buyers pushing the
53. 2:21price up buying at the bottom. Now once
54. 2:24we get a candle closure outside of this
55. 2:27range that means that the strength and
56. 2:29determination of one side either buyers
57. 2:32or sellers have won this war of
58. 2:36consolidation. Once that candle breaks
59. 2:38out we enter in a trade with the
60. 2:41stronger side. We are not fighting the
61. 2:43current here. We are scalping the market
62. 2:45in the direction of the winning team.
63. 2:47And your stop loss is going to be that
64. 2:51midpoint because if it comes back to the
65. 2:53midpoint that means we're back in that
66. 2:56range of consolidation and you don't
67. 2:58know who's going to win the war. Then
68. 3:00temporarily one side will take over the
69. 3:03other side. That's why if you run a
70. 3:051:1.5 risk-to-reward ratio, you can
71. 3:09still capture these tiny movements
72. 3:12outside of these consolidation ranges
73. 3:14with having good risk-to-reward without
74. 3:17over-risisking or waiting for a
75. 3:19monumental trend trade that goes on for
76. 3:22hundreds of pips in one direction. No,
77. 3:25that's not the point of scalping.
78. 3:27scalping is taking advantage of where
79. 3:30market is moving and the momentum that
80. 3:32is taking it there quickly. This trade
81. 3:35ended in seven five-minute candles,
82. 3:37basically a half an hour. And one of the
83. 3:39cool things about periods of
84. 3:40consolidation is that once price fails
85. 3:42to make a higher high or a lower low and
86. 3:45you mark up that zone, until price
87. 3:48breaks out, you should not be interested
88. 3:50in any trades inside of that zone. So,
89. 3:53what you can do is go on your Trading
90. 3:55View chart and add an alert at the top
91. 3:58of the range and add an alert at the
92. 4:00bottom of the range. That way, when
93. 4:02price breaks out high [snorts] or low,
94. 4:05you'll know, cool, now I can look at the
95. 4:07markets. In the meantime, I can mow my
96. 4:10lawn or fold my laundry. You know, you
97. 4:12have a pile of socks laying around that
98. 4:14need to be folded. Consolidation ranges
99. 4:16can happen at any time of day. One of
100. 4:18the most important things that you need
101. 4:20to realize is if you see a double top or
102. 4:22a double bottom assume a period of
103. 4:25consolidation. Failures to continue
104. 4:27market structure, higher highs and
105. 4:29higher lows in an uptrend or lower lows
106. 4:32and lower highs in a downtrend makes the
107. 4:34buyers and sellers skittish. These are
108. 4:37also areas where a lot of liquidity is
109. 4:39collected in the markets because in
110. 4:41order for a trend to continue, let's say
111. 4:44bullish, there needs to be a lot of
112. 4:46sellers that the buyers are going to
113. 4:48pick up their orders from. So, in
114. 4:50tomorrow's video, I'm going to be
115. 4:52covering bullish and bearish market
116. 4:54structure, how to identify those, and
117. 4:57how to trade the tops and bottoms of
118. 4:59these market moves using RSI
119. 5:01divergences. I hope this video gave you
120. 5:04some clarity on periods of consolidation
121. 5:06and how to trade the breakouts of these
122. 5:08consolidation zones. Come back tomorrow
123. 5:10and we'll continue this deep dive into
124. 5:13my trading strategies. Thanks so much
125. 5:15for watching and we'll see you in the
126. 5:16next