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The EXACT Trading Strategy That Made Me $1,200,000 in the Last 12 Months — Transcript

by JJ Simon · 7,435 words · 1,174 segments · language en · Watch on YouTube

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0:01Okay, this is going to be a full
0:02overview of the exact trading strategy
0:04that I've been using for the past year
0:06and this is the strategy that has helped
0:08me to generate over 1.2 million dollars
0:10in payouts in the last 12 months.
0:12So, the way this video is going to go,
0:13first I'll show you proof that I
0:15actually did do that many payouts. Then
0:17I'll go for what I look for, key things
0:18to know, fair pricing theory, which is
0:19basically what is why the strategy
0:20works.
0:22And then I have just this past week of
0:24trades, so I'll just go through the
0:25trades I took this week and then
0:27hopefully you can see a little bit about
0:29it in action and then be able to
0:31replicate it yourself. So,
0:33this is the step-by-step trading
0:34strategy that made me 1.2 million
0:36dollars in payouts in the last 12 months
0:37trading on prop firms. So, first a
0:39little bit of proof. This is taken from
0:41my Mac.
0:42I have it in my Discord server actually.
0:45Pretty much just Topstep payouts, so you
0:48can you can pause, look through them if
0:49you want, but
0:51yeah, this is Wise. That's where Topstep
0:53pays out. Eight Futures, really good
0:54firm to use, 172k in payouts there.
0:58Alpha Futures, I'm on the live account
0:59now. I haven't sent live in like 2
1:00months, but was at like 75k or
1:02something.
1:04Um there's a bit more. Lucid, I'm on
1:07live as well.
1:08Uh 75k payouts on Lucid in like a month
1:11or 2 months.
1:12Trade F7, 100k payouts or so.
1:15I'm on live there as well. Apex, about
1:1760k in payouts. They did ban me. Um I
1:20wasn't given a reason. Funded Next, 67k
1:22payouts.
1:24Um another Topstep picture, I guess.
1:28Uh but most importantly,
1:29uh 1099 tax form. You can't fake this
1:32stuff. Topstep paid me 250k last year
1:34and then RiseWorks paid me 450k.
1:37Uh and then the other firms send their
1:38own 1099s cuz they just paid my bank
1:39accounts.
1:40Uh how much did I spend on evals? About
1:43200 to 250k. I don't know the exact
1:45amount, but it's under education
1:47business services.
1:49Um this was January, so
1:52yeah, so I didn't really sell anything
1:54at this point. It was just all prop
1:55firms. So, Apex, Lucid, Topstep,
1:57RiseWorks,
1:58E8,
2:00stuff like that. So,
2:01unfortunately, I was 14k off a million
2:03in my first year. Uh I started in March.
2:06Um March, I think February or March
2:09actually. So,
2:10I didn't really get 12 full months to do
2:12it, so that's why I didn't hit a
2:13million. Very unfortunate.
2:15But yeah, hopefully I'm going to hit
2:17that this year.
2:19So, hopefully you believe that I am who
2:21I say I am. I'm who I say I am. I've
2:22documented two full months of 100k
2:24payouts on my Instagram, so if you want
2:26to see like what firms I'm getting my
2:28payouts from, then you could take a look
2:29that as well.
2:31Now, for the strategy, the most
2:32important part.
2:33I trade high time frame mean reversion,
2:35low time frame continuation. So,
2:38what I'm looking for is the New York
2:40session open. It's like the main session
2:42obviously to to trade for
2:44me. Um continuation. I only trade it in
2:48the first 5 to 10 minutes or I guess
2:51like 0 to 10 minutes. Like I'm looking
2:52for my first trade pretty much
2:54instantly. After 10 minutes, I'm I'm
2:57going to look for mean reversion
2:58assuming there's been a move away from
3:00the opening price. Mean reversion then
3:03obviously is from 10 minutes to 90
3:04minutes because continuation is the
3:05first 10, mean reversion is just after
3:07that.
3:08Three to four trades max. You don't want
3:10to over risk into a situation that's not
3:12playing out in your favor. If you're
3:13winning, then you can keep trading
3:15obviously. If you're losing, it's not
3:16the best to continue because that
3:18usually means your bias isn't playing
3:19out and then you should stop.
3:21Um for the entry, I look for a
3:23displacement
3:24or a break of structure and a close just
3:26depending on the volume and what session
3:27I'm trading.
3:29And
3:30basically,
3:31the way to be profitable on prop firms
3:32is to have a bias that you're right a
3:34majority of the time plus very, very
3:37good risk management
3:38as well as a precise entry. So,
3:41the bias that I have is from high time
3:43frame reversion and low time frame
3:44continuation. I'll go into that in the
3:46trade recaps, but
3:48that's how I form my bias.
3:50And always, that's usually going to be
3:53the fair price at open. So,
3:55a few key things to know. This prop firm
3:57This strategy only works on prop firms.
3:59If you were to trade it on a live
4:00account, it would probably break even,
4:01maybe win a little bit, but the reason
4:04why I don't trade on live is that the
4:05risk is so large just to make
4:08basically like the most edge you can
4:10have probably is like 1 to 5%. So, you'd
4:12be risking tens of thousands of dollars
4:14just to get 5% of tens of thousands of
4:16dollars, which is definitely not worth
4:17it when you could be trading a prop firm
4:19with pretty much the same amount of
4:20capital and basically no risk, just the
4:22eval fee.
4:23Risk management is definitely the most
4:24important part
4:26for trading in general.
4:27Um it's just
4:29you're not going to be you're not going
4:30to be profitable unless you have very
4:32specific, strict risk management.
4:36Uh and the way that works for me is I'm
4:38trading a different prop firm account
4:40based on what I'm seeing in the market.
4:42And uh I think it's a very unique
4:44approach. Not Not not that many people
4:46that I know actually take this approach.
4:49So, what I'm doing is what I see in the
4:51market is a specific amount of points
4:53that I can target. Uh usually in the
4:55direction of the session open. So, some
4:57days I'll see 50 points on a reversion,
4:58some days I'll see 20.
5:00Based on that, you should trade a
5:01different prop firm because each prop
5:03firm you should be using a different
5:04risk on.
5:05And again, that's because risk
5:07management is the most important thing.
5:08Second, that's just because prop firms
5:09have different rules. So,
5:11if you want to optimize your profit on
5:12prop firms, then you need to optimize
5:15your risk management and trade a
5:16different account based on what you see
5:17in the market.
5:19Um also going to go over A A+ A and B
5:21setups, just pretty much like your bias.
5:25You need both biases to line up, high
5:27time frame reversion and low time frame
5:28continuation to make an A+.
5:30And then displacement plus break of
5:32structure. Break of structure and a
5:33close is an A+ setup. It's a lot more
5:36likely to win when that happens.
5:38Um I am trading pretty much every
5:40displacement I see just because there's
5:42a slight bit of edge that I want to
5:43capture every single day in the market.
5:45So, displacement is usually an A and
5:47then B is when your biases are
5:50like
5:52going the opposite way. So, you
5:53definitely don't want to trade you don't
5:55want to trade the B+ setups, the B
5:56setups.
5:58Uh how to trade news days.
6:01Um I will
6:03Okay, I'll add a little thing here about
6:05how I trade on news when I'm done with
6:07these trade recaps. Uh it's pretty much
6:09the exact same thing though, thankfully.
6:10How to scale. Now, scaling is very
6:14different on prop firm versus live. Like
6:15on live, you're tracking your metrics,
6:17you're slowly increasing your risk. Prop
6:19firms, you need to take a different
6:20approach. The reason for that is risk of
6:22ruin.
6:23If you have an edge in the market like I
6:24do with the strategy, you don't want to
6:27bust, which basically just means lose
6:29all of your money and then not be able
6:30to continue trading to capture your
6:32edge. So,
6:34in in terms of scaling, copy trading is
6:36very complicated.
6:38Y- you want to have
6:40the exact pass rate. Like you want to
6:42know your exact pass rate, your exact
6:43payout chance, your average payout. All
6:45of that, you need to know these exact
6:47statistics before you start copy trading
6:49just so you can confirm that your chance
6:51of losing everything is less than 5%. If
6:53it's more than 5%, then you don't want
6:54to do it. If you don't know, then you
6:56definitely don't want to copy trade.
6:57Obviously, if you have Okay, well, I'll
6:58just tell you like if you have more than
6:59$10,000, it's fine to start copy
7:01trading, but most people do not. So, I
7:03would recommend stay away from copy
7:04trading.
7:05Uh it is just going to ruin your your
7:07bankroll. Your risk of losing everything
7:09is way higher, so
7:11start with one account,
7:13get payouts from there on, and then you
7:15can invest those and then start copy
7:16trading.
7:17>> [snorts]
7:17>> But the way I scale is
7:20I couldn't copy trade at first.
7:22Um just cuz I guess I didn't have enough
7:23money or I didn't feel comfortable doing
7:24it. What you should do is find a
7:26strategy like mine or you could use your
7:28own, but find a strategy that works
7:30multiple times per day. So, you're able
7:32to trade multiple times per day.
7:34And the reason for that is you want to
7:35trade each account once per day
7:38instead of copy trading all of them
7:39once. So, if you have five accounts, you
7:40want to trade five different setups per
7:42day ideally. Now, I know most most day
7:44trading strategies only work like once a
7:46day.
7:47That's true, I I guess, but the way that
7:49I created the strategy was so that it
7:51worked five times a day.
7:53Uh it works on every single session
7:54open. So,
7:56>> [snorts]
7:56>> that would be any EST, the 6:00 p.m.
7:58when the market reopens, 8:00 p.m. Asian
8:00session, 3:00 a.m. London session,
8:02uh 8:30 a.m. when there's news, 9:30
8:05a.m.
8:06Eastern, and then 2:00 p.m. Eastern for
8:09the New York PM session.
8:11I'll go into that in the fair pricing
8:12theory like in literally like 1 minute,
8:14but that is how I just trade every
8:16single session because I have 40
8:17accounts, I'm copy trading five at once,
8:19and I want to get maximum exposure to
8:21the edge before it dies.
8:23Now, why does it work? This is obviously
8:26fair pricing theory.
8:28It is what I studied in college. I
8:30graduated with a degree in quantitative
8:32finance, and so that is what I've been
8:33applying to trading on prop firms, risk
8:35management, strategy generation, that
8:37sort of stuff.
8:39Basically, a brief overview of fair
8:41pricing theory is the New York session
8:43open acts as the first major intraday
8:45reference point for fair auction.
8:47Early moves away from that price are
8:48often driven by opening flow, liquidity
8:50imbalances, stops, hedging, momentum,
8:52participation, not necessarily by a
8:54true, long-lasting repricing of the
8:56index.
8:58So, what I mean by this is we need to
9:00actually be aware of what we're trading.
9:01We're trading Nasdaq futures. And on
9:04Nasdaq, Nasdaq's made up of 100
9:06companies, right? So, we're trading
9:07actual, valuable companies. We're not
9:09trading
9:10something like Bitcoin where the value
9:12is unknown. The value is determined by
9:14an auction place of people agreeing
9:16what's a what's a fair price for
9:17Bitcoin. We're trading actual companies
9:19that have an actual fair price. That's
9:21in the long term. Now, in the short term
9:23and why I think we can have an edge
9:24trading this sort of market is
9:27um on the very short term, there is a
9:29little bit of not liquidity. I don't
9:32really believe liquidity is a very
9:33important part of Nasdaq just because
9:35it's so liquid.
9:38But but basically, there's some sort of
9:40auction marketplace
9:42theory at play in the short term just
9:44because a bunch of people
9:47gain access to market at the same time.
9:49Like 9:30 open, all the overnight orders
9:51come in, all the banks start doing their
9:53trading then, stuff like that. So, I
9:55believe that the fair price would stay
9:57the same
9:58even when the the price on the chart is
10:00like moving up or moving down from that
10:02just because of the introduction of new
10:04market participants, opening flow,
10:06liquidity imbalances, stopped hedging,
10:07momentum participation, that sort of
10:08stuff. So,
10:10basically, I believe the 9:30 a.m. is
10:13the fair price. Any move away from that
10:15is unfair. So, I would trade a reversion
10:17back to the opening price.
10:20And that is the high time frame
10:21reversion. Usually, it's it's more of a
10:23medium time frame reversion, I guess.
10:25And then I just use a continuation for
10:26my entry. And the fair price is at open.
10:28So,
10:29let's just take a look at this week. I'm
10:31recording this on the 28th, Saturday.
10:34So, yeah, this would be Friday.
10:36Let me just zoom in here.
10:389:30 a.m. EST, we are getting the
10:41opening candle right here. It's this red
10:43one.
10:44So,
10:45what I believe is the price before is
10:47the fair price.
10:49And just because the market has opened
10:51and all these new participants have
10:52gained access and they're treating it
10:53now like a peer-to-peer auction,
10:55does not mean the inherent value of
10:57Nasdaq should have changed. So, what I
11:00do is first I trade a continuation away
11:03from this price just because the group
11:05of overnight orders that come in are
11:06usually set in one direction like this
11:08case is obviously red because the
11:09majority of the orders are crossing the
11:11spread in the down direction. So, I like
11:13to trade a continuation of that move
11:15just because usually displacement
11:17continues more often than it does not.
11:19So, in that sense, you can gain a little
11:20bit of edge just by trading a
11:21continuation of that move. And then
11:23after that, I definitely love to trade
11:25mean reversion back towards the opening
11:27price.
11:29So, I'm not going to cherry-pick any
11:30examples. I'm just going to go through
11:31this exact week and tell you exactly
11:32what trades I took and why. So, the
11:35first trade, continuation. The only way
11:38you want to look for a continuation is
11:39short because the first candle was red,
11:40which means the overnight orders were
11:41mostly short. So, you're going to look
11:43for shorts. And in terms of an entry,
11:45like I said over here,
11:47break of structure and close or
11:48displacement. Displacement candle
11:50usually, at least in my opinion the way
11:52I trade it, is a candle that's larger
11:53than the previous one and it doesn't
11:55really have any wicks. So, this would be
11:56a displacement candle since it's larger
11:58than the previous one and it has no
11:59wicks, basically. This one would not cuz
12:01it has lots of wicks. This one, no.
12:03This one, kind of, like 50/50. Yes, no,
12:08yes, that sort of thing. But yeah, break
12:10of structure. So, it broke this
12:11structure right here.
12:13The opening sort of wicked this
12:14structure, so I didn't like it. If the
12:16opening candle closed here, I would have
12:17shorted. But the reason I took this
12:19candle is because it broke this
12:20structure and it closed below. So, I was
12:22predicting on a displacement away from
12:24the opening price. And just for all
12:26these trades, I'm just going to be using
12:26a 1 to 1.5 risk to reward. It's a very
12:29common one. I think most people should
12:30be using that. I'm not sure if you are,
12:32but at least on your evaluation, you
12:34should be using it. The reason for that
12:35is most evaluations are plus 3,000
12:37before they're minus 2,000. And
12:39essentially, that's three to two, which
12:41is 1.5 risk to reward. So, like your
12:43entire challenge when you have three up
12:44here and two down here, that's the exact
12:46same as a 1 to 1.5 risk to reward. So,
12:49you can sort of just like
12:50compact the entire challenge into a 1 to
12:521.5 and just keep on trading that. It's
12:54just I don't know what I've done to
12:55simplify it.
12:57But yeah, so that I'm just going to have
12:59all of them be 38 points TP, 25 points
13:02stop loss, and then you can choose your
13:03contract sizing based on your risk
13:04aversion.
13:05Now, obviously, break of structure and
13:07it closes below there. So, first short,
13:10continuation of this move. Next, mean
13:12reversion. There is not any structure to
13:15close above. There's kind of this one
13:17right here, but there's not any
13:19structure to close above like there is
13:21here. Obviously, this is a really
13:23important piece of structure, which
13:24basically just means like it's lower
13:26than these two points.
13:27So, you can easily get a close below.
13:29There's no structure here to close
13:30below, so you can enter on a
13:31displacement. This is like very
13:32obviously displacement candle. There's
13:33no wick down here. This wick is very
13:35small compared to the candle. And this
13:37candle is bigger than this entire
13:38previous candle. So, right when this one
13:39closes up here,
13:40I'm trading a mean reversion back in the
13:42direction of the opening price.
13:43What I was saying earlier about fair
13:46price at open and trading a different
13:48account based on what you see,
13:51technically, you would have edge all the
13:52way from here, this close, up to the
13:55opening candle here. So, yeah, it does
13:57come up here, it taps the opening
13:58candle, then it continues its shorts.
13:59So,
14:01in that sense,
14:02you would
14:04For your take profit, either you could
14:06just stick with consistent 1 to 1.5 like
14:08I do, or you can move this take profit
14:11up to all the way up here. That would be
14:12fine as well if you want to capture more
14:14points on a funded account or something
14:15like that.
14:17I have very different specific risk
14:18management approach, so honestly, it's
14:19whatever works best for you.
14:21And then changing your account based on
14:23what you're seeing in the market is sort
14:24of what I do sometimes.
14:26Um
14:27Like if I was to enter if this dropped
14:29all the way down here and I was able to
14:30take longs here, I'd have a lot more
14:32points in favor of the opening price.
14:34So, I would trade an account that I need
14:35more points on if that makes sense, just
14:37based on my risk management.
14:39So, yeah, that was the first entry,
14:40displacement, closed above this one,
14:42pretty standard. Next, I usually don't
14:44look for shorts this late, but this is
14:46like the most perfect short setup just
14:48because you can see previous structures
14:50right here.
14:51Incredible displacement down, closed
14:53right below the structure. Like at this
14:54point, I was so confident it was going
14:56to come down here to this low. And 38
14:58points is pretty much exactly to this
15:00low, so there's like literally no reason
15:01not to take it.
15:03I know it does deviate away from the
15:04time, so I guess it could go from an A+
15:05down to an A setup, but I mean, it was
15:08just perfect setup. You get
15:09displacement, you get close below,
15:10everything. Everything needed for
15:12continuation shorts.
15:14Next, I was going to look for more mean
15:15reversion. In this case,
15:17pretty much the same thing.
15:19There were lots of wicks here, so none
15:21of these are displacement candles except
15:23for this one, but it's not really that
15:24large compared to this one previous and
15:26it didn't close consistently above it.
15:28Like see this one closed way above this
15:29one, so it's like a real displacement in
15:31that sense. This one, not really.
15:34So, I was waiting for a close above this
15:37this this box of absolutely choppiness.
15:40So, finally, we get the volume spike, we
15:42get a close above this box right here,
15:44and then I just longed. Um
15:47I guess it just speaks for itself, I
15:49hope. Just long because it closed above,
15:51mean reversion in this
15:53middle medium time frame, I guess,
15:55reversion. Also, I usually stop looking
15:57for trades at 11:00 or just whenever the
15:59volume dies out.
16:00Next,
16:01well, this is actually a very good day.
16:03I think I posted this one on Instagram,
16:05but this was four wins, so
16:07um
16:08and nothing cherry-picked. So, this was
16:10literally just my past week of trading.
16:12I should mostly be on Instagram, but
16:14okay.
16:163:26, this was Thursday. Now,
16:18basically, first thing you can do is you
16:20can mark out the candle pre-open, which
16:21we believe is the fair price. Any move
16:23away from that is unfair. So, this
16:25initial displacement is a really good
16:26candle to short on. It is an unfair
16:28move, so you are predicting a
16:29continuation of the unfair move, which
16:31is fine.
16:32That's that's just why you don't want to
16:33look for continuations too far after the
16:35open.
16:37So,
16:38yeah, first trade, it closed below just
16:40like it did in just like it did on this
16:42day. It closed below this structure,
16:44this structure, all of that. Just closed
16:46below, short 25, 38 take profit. You can
16:50also backtest just double-check.
16:51Hmm, almost stopped me out, but it was a
16:54it was a win. You can go back and check
16:55if you want.
16:56So, yeah, this is a win.
16:59And then after that, so I'm going to
17:00look for a mean reversion. So,
17:01basically, longs coming back to this
17:03price here. Um
17:05So, the first candle, there is no real
17:07displacement here because the wick is
17:09humongous. Same here. This is a decent
17:11displacement candle.
17:13So, I guess I could have entered here if
17:14I wanted to. The reason I didn't is just
17:16because I thought this structure here
17:17was going to be really key.
17:19And
17:20if we were to close by the structure, I
17:21was pretty confident we'd come back to
17:22at least the top of this opening candle
17:24here. And then from there, I just had a
17:26little bit more of take profit. So, uh
17:28you can just let it run. Essentially,
17:29it's pretty much random, at least in my
17:31opinion, once it gets back to the
17:32opening price. It's pretty much random
17:34from there. So, I was pretty confident
17:36at a 1 to 1 when it got back to here and
17:38then just letting it run for the rest.
17:40And the reason for this entry was break
17:42of structure, close above.
17:44Um
17:46And it's sort of a continuation trade.
17:48That's what That's I think that's what I
17:49mean when I say high time frame
17:51reversion, low time frame continuation.
17:53High time frame reversion,
17:55even though it's like 5 minutes, I guess
17:56I mean
17:57medium time frame because we're coming
17:59back to the opening price. So, by
18:00reversion, I just mean coming back to
18:01the opening price. And by continuation,
18:03I just mean
18:04like this this series of green candles
18:06or the series of gray candles for this
18:07continuation.
18:09This one's not the best example. This
18:11one's a little bit better, but yeah,
18:12continuation, I guess, kind of.
18:14That's just the words I use to describe
18:16it. Then from there, I believe this move
18:18up was unfair, so I was going to trade
18:20another reversion back to the opening
18:21price, which you can see it perfectly
18:22came back into. There's no structure,
18:25really. There is a bit bit of structure
18:26here. The problem is if it was to close
18:29below here, which it did, this would be
18:30a
18:32not the best short. It'd be like a an A
18:34to B+ setup just because you're already
18:36at the fair price, which I believe was
18:38to be in this rectangle somewhere.
18:39You're already here. So, essentially,
18:41from here, it's random. There is a
18:42little bit of momentum continuation, but
18:44you don't want to rely on just that
18:46alone. My favorite thing ever is to mean
18:48revert back to the session open. So,
18:51you're already at the session open, so
18:52there's no point in reverting anywhere,
18:54basically. From here though,
18:56very good trade to revert to the session
18:58open. This is a displacement candle, so
18:59this is where I can enter off a
19:01displacement.
19:02It is the first displacement that occurs
19:03because this one, too big of wick. This
19:05one,
19:06a little bit too big of wick.
19:09Kind of the same size as and it's
19:10definitely smaller than this candle
19:11here. Kind of the same size as this one
19:12and it's like right on the opening
19:13price. This one, wick. This one's
19:15finally displacement, bigger than this
19:16one. Basically, no wicks, consistent
19:19close below here. So,
19:21very good entry there as well. So,
19:22that's how we enter off displacement.
19:24This is another three for three day.
19:26That's the wrong tool.
19:30Okay.
19:31Three for three.
19:34So, honestly, like I barely
19:36ever did not lose on these days.
19:39I did lose these days, so you're about
19:40to see you're about to see what a losing
19:42trade looks like.
19:43Okay, first example.
19:45Opening candle, this is on Wednesday.
19:47Opening candle right here, I just marked
19:49that out. And you can see it sort of
19:50plays around the candle.
19:53Like the opening candle here would be
19:55all the way over here. It just comes up,
19:56taps that. It sort of plays around the
19:57fair price, and that's why that's just
19:59what I've noticed over like just look at
20:00this candle like the wick there, boom.
20:02Wick there, boom. It sort of chops
20:04around it here for a bit before dumping.
20:07Just makes me think that the opening
20:08candle actually has something to do with
20:09the the fair price of NQ. And again,
20:12just what I said earlier about why it
20:13works is the influx of participants
20:14creates an unfair move away. So,
20:17yeah, lots of action around the opening
20:18price like
20:20throughout the the period. I got a
20:22little bit more into fair price in my
20:24one-on-one. So, if you're interested in
20:25that, link will be in the description. I
20:27also go over like the exact risk
20:29management approach you should take, how
20:31many accounts to buy, which firms to
20:32use, how much to risk per trade in terms
20:34of dollars, points, all that sort of
20:36stuff, how to risk on different firms,
20:38copy trading, scaling, all that stuff.
20:40But yeah, I mean it it sort of can If I
20:42could extend this rectangle here, this
20:44is just picture, but if I could, then it
20:45sort of chops around here, which may
20:47again makes me believe this is a very
20:48fair price.
20:50Uh and
20:51one thing I forgot to say,
20:54news does change fair price because news
20:56changes the inherent value of Nasdaq
20:58futures, at least in my opinion. I mean,
21:00I could be totally wrong or I could be
21:01right, but I mean, again, I've done like
21:03a good amount of payouts, and it's been
21:04very consistent, so I believe it I
21:05believe it's true.
21:07News changes fair price, but opening
21:09session does not. So, you do have to be
21:11careful if some sort of news comes out
21:13and changes fair price. Obviously, like
21:14you look at this past week, there's been
21:16a lot of news with the war, tweets,
21:18stuff like that.
21:19That's more related to fair pricing
21:21theory. I do a lot more of that
21:22one-on-one, so it's like too complicated
21:24to explain here, and there's not really
21:25any point. I'm just just explaining the
21:27the very basic strategy that I use. So,
21:29Wednesday, mark out the opening candle,
21:31displacement up, close above here, very
21:33good for a long.
21:36Just continuation. I think that's pretty
21:37standard.
21:39And then next, I wanted to take a short.
21:41Good displacement candle here. We're
21:42getting 38 points or so back to the
21:44opening price here, so very standard
21:46short as well. This one did lose.
21:48That is totally okay. Losing is very
21:50very common. It's part of trading, as
21:52you should know. You need to take your
21:54losses better than you take your wins,
21:55just because the inherent value of
21:58losing or the the emotional value of
21:59losing is two times as much as the
22:01absolute value of winning. So, you need
22:03to learn to handle your losses better
22:04than you handle your wins.
22:06And then for your short, another short
22:09would be fine because we're coming back
22:10to the opening price. This one closed
22:12below here.
22:13And it's a displacement, everything A+
22:16setup, like 100% going to win this
22:18trade. Maybe not 100, maybe like 70 to
22:2180, but that's really good cuz it's 1 to
22:221.5, so
22:24Yeah, that was why I shorted here and
22:27here. Just displacement.
22:30This is an A setup. I love the break and
22:32close below. It's an A+.
22:34But yeah, I mean, I'm going to I'm just
22:35going to enter every A setup I see. Some
22:37B+ I'll enter.
22:38Just cuz, you know, I'm trying to trade
22:40all my accounts.
22:41Next,
22:43it displaced all the way down through
22:45the fair price.
22:47So, the reason I didn't take
22:48continuation shorts or anything here is
22:50because the opening candle right here
22:51was very green, so I wanted longs to
22:52start. And then after this initial
22:54displacement up, sort of just trade
22:56reversion because the initial unfair
22:58move is sort of over.
22:59But yeah, so
23:02that's why I didn't take shorts here.
23:03Next, I'm definitely trading a mean
23:05reversion back to here.
23:08In this example, this was off a
23:10displacement candle, so again, not the
23:11best entry, and but that's fine. I mean,
23:14you have some points in your favor
23:15coming back to a reversion.
23:17Displacement again, it closed above the
23:18previous one. Barely any wick. I would
23:20prefer the body to be a little bit
23:21larger, but I mean, I'm still just going
23:22to enter on this.
23:24And it's larger than the previous one,
23:25so just long here.
23:27And something like this. This one did
23:28get stopped out. Usually, if I get
23:30stopped out, it's due to a displacement
23:31down, which is unfair, and then I can
23:33just reenter instantly, which is what
23:34happened here and is what happened here.
23:36Displacement candle close.
23:39Definitely not the best entry, for sure.
23:40I mean, I would have probably preferred
23:43this candle right here, actually.
23:45But yeah, I didn't want to miss out on
23:46it. And this candle was like very large
23:48in volume, but I definitely should have
23:49entered here. It's pretty much the same.
23:51This one's a lot
23:53more
23:54sure to win just because it closed
23:56almost above this.
23:58I don't like the wick, though, so not
24:00not the best action here.
24:02Probably could have been better to
24:03actually just not trade not take this
24:05trade at all, but
24:07win, loss, win,
24:09loss, win. So, three and two, so
24:12that would be three out of five on this
24:14day.
24:16Two more days, and then and then we'll
24:17be done. So, I know it's been a long
24:19video, but hopefully you are
24:20understanding this, and hopefully you
24:21can implement it yourself.
24:23I will mention Let me just mention
24:26news, how to backtest.
24:30Okay, so I'll go over these things as
24:31soon as I get through these next two
24:32days.
24:34Okay, Tuesday.
24:36Not the best day, unfortunately, but
24:39that's fine. First candle, we mark out
24:41the pre-opening candle right here. We
24:42believe that's the fair price, so it it
24:44chops around here forever, so I mean,
24:46probably is the fair price.
24:49Okay, so on longs, I wanted it closed
24:50above this structure. I really wish this
24:53candle here, which is the opening
24:54candle, I really wish it didn't have
24:55these large wicks. I wish it just opened
24:58here and then closed here. That'd be a
24:59perfect long. The problem was it didn't,
25:01so I had to long all the way up here.
25:04Not my favorite to long at the all-time
25:05high of the last 30 minutes, but I mean,
25:09it's fine.
25:10I [clears throat] truly believed it was
25:11just going to go up from there based on
25:13the strategy, and I always follow the
25:14strategy. So, it's a fine entry.
25:16Unfortunately, it doesn't play out.
25:18You could take
25:20Honestly, I have no idea why I did not
25:22take this, but looking at it now, this
25:24is a displacement candle.
25:27And this closed below here, so you could
25:28take a mean reversion short here.
25:31I guess there might not have been enough
25:32points in my favor to take this trade.
25:35Or I might have taken it and just not
25:37marked it out, but
25:38that would have been a pretty standard
25:39trade as well, to be honest.
25:41Okay, and then it displaces So, yeah, it
25:43chops around here for a bit, confirming
25:45that this is probably the fair price,
25:46and then this displacement here, I
25:47believe is unfair. So, displacement
25:48candle up, close above here. It's
25:51displacements again, since the body is
25:52larger than this one, there's no wicks.
25:54Send another one long back to the
25:56opening price for the reversion.
25:58This one stopped out.
26:00Second attempt, another displacement,
26:02close above here.
26:04This one won, so two losses and one win.
26:07Not the best day, but
26:08it's all part of the broad process, so
26:11just getting in as as much reps as
26:13possible. Monday was a very weird day.
26:16I have just I just have the 5-minute
26:17chart here. I'm always on the 1-minute.
26:19But Monday was a very weird day. The
26:22reason for that is the wicks were so
26:24bad. Like the open Let me find an
26:27example. The open literally looked like
26:29this. If you go back and look at Monday,
26:30you'll see what I mean. The open looked
26:31like this. So, there was literally
26:32nothing at all.
26:34Monday is like usually the least
26:36volatile day, I think, or it could be
26:38Friday, just cuz there's no news in the
26:40morning. But yeah, Monday was absolutely
26:42no volume, so I literally took one
26:43trade. It was the shortest trade ever.
26:46And what I did on this trade is usually
26:48when there's no volume or if I'm on a
26:49different session where there's no
26:50volume, like Asian session or New York
26:52p.m., I'll go to the 5-minute, and I'll
26:54trade the exact same strategy. So,
26:57yeah, as you can see the open, this was
27:00the opening candle right here.
27:02Like the wicks were were very very large
27:05and compared to the body, meaning it
27:07sort of chopped around in here, and then
27:09wick,
27:11wick, so pretty much nothing to trade.
27:14But yeah, so 5-minute, I take the exact
27:16same approach. I'll wait for a break and
27:19a close below previous structure.
27:21And I'll look for high timeframe
27:22reversion, low timeframe continuation.
27:24So, the open was here, so this is the
27:26fair price.
27:28We are getting a high timeframe
27:30reversion because it's gone up, and
27:32we're getting a low timeframe
27:33continuation because it's gone down
27:34recently.
27:36And in terms of the entry,
27:37I wanted a break of this structure. It's
27:40pretty much the only structure. This is
27:42kind of
27:43not the best. These are like equal.
27:46But I mean, this this candle would break
27:47this one just like it breaks this one,
27:48but there's no structure here.
27:50No structure here.
27:52So, you want a break and a close below
27:53structure. So, this is where you get the
27:55break,
27:57the close on 5-minute. You break, close,
28:00low timeframe continuation, high
28:02timeframe reversion. So, you're getting
28:03all four of those.
28:05And then yeah,
28:06you're also getting points in your favor
28:08back to the open. So, everything lined
28:10up, so I just took one trade today, and
28:11it was
28:12just this short, I believe, so
28:14Honestly, pretty easy if you don't see
28:15any volume, so that would work as well.
28:18We're 28 minutes in, so hopefully I'll
28:19wrap this up really quickly with news
28:21and how to backtest.
28:23News, let me check if there's any news
28:26this week I can go over.
28:28What exactly I traded.
28:30Okay, so news, I'm always talking about
28:328:30 news.
28:33There's some little niche things like
28:34you don't want to be in a trade when
28:359:45 or 10:00 a.m. news comes out, but
28:37that's like kind of niche. But
28:40red folder news 8:30 is what I'm mainly
28:42referring to.
28:43So, let me just look at
28:47Thursday 8:30 and how to trade news.
28:50Yeah, this is the open. News. Okay, so
28:52on on news days, what we believe is that
28:56the This is Wednesday.
28:58We believe I believe that the fair price
29:01is the candle before news. And just
29:02because news came out, news is already
29:04priced in on average. Everyone knows the
29:06desired Not desired. Everyone knows the
29:08average outcome of news,
29:10just because of insiders, there's quant
29:12funds,
29:13Polymarket as well, like telling you
29:15what the average news is going to be.
29:16Like the average price of news is
29:17already priced in. And usually like
29:21>> [clears throat]
29:21>> the overnight is usually trying to price
29:22in news, at least in my opinion. So,
29:24when news comes out, the volume spike
29:26off news is so unfair. That's literally
29:28just funds taking advantage of
29:29uninformed retail traders,
29:31kind not hunting their stop losses, but
29:34just taking advantage of uninformed
29:36participants in the market. I don't
29:37believe stop losses are truly hunted.
29:39That's not really a thing.
29:41But yeah, just taking advantage of
29:42uninformed participants. So,
29:45I I'll do is I always mark out the
29:46candle before news. So this will be the
29:4829 candle.
29:50Um
29:52and then from there any move away from
29:53that is unfair. So I'll go
29:56low time frame continuation, high time
29:58frame reversion, close above break of
30:00structure, and points in your favor. So
30:04let's see if we can get all five of
30:05those things in our favor.
30:06First, we are going to obviously we're
30:09going long because it dropped off. So
30:11that's the first one.
30:12Second,
30:14we are getting this continuation trend
30:15of green. Good. Now we just need a break
30:19a close above and like
30:21points in our favor.
30:23Which points in our favor means don't
30:24long here because you're in the fair
30:26price.
30:27Uh so we'll look for a structure which
30:29happens to be here
30:31and here. This one, all right, there we
30:33go. It closed above
30:34as expected. We're getting points in our
30:37favor, 32 or so.
30:39Uh I'll just set it to 38.25 is just the
30:42average what I do.
30:441:1.5, 1.5. There you go.
30:47So
30:49reversion back to the fair price
30:50pre-news. This this works on every news.
30:52You can go back and look. Um back test
30:54it.
30:56And yeah, it's a close above.
30:58Low time frame continuation, high time
31:00frame like zero medium time frame
31:03reversion I guess is what I mean by
31:04that. But yeah, pretty standard news
31:06entry there.
31:07So that's how you trade news and then
31:08how to back test. Back testing is
31:11very important. Um
31:13the way I would recommend you back test
31:15is
31:16most people back test and all they care
31:19about is their equity curve. So they
31:22will think
31:24okay, this is a profitable strategy
31:25because on average I've made money.
31:26That's true if you were in the live
31:28market. Now prop firms have a very
31:31specific set of rules though where a
31:33live strategy that makes money would not
31:35work on prop firms because of their
31:36specific rules. So everyone who's back
31:38testing and saying, yeah, I made money
31:40on this live. I'm going to trade on the
31:42prop firm. That's not going to work most
31:43of the time. Some of the times it will
31:45work
31:46if you're on a funded account and you're
31:47in a high amount of profit. At that
31:49point like if you're up 10k on a funded
31:50account then it would work because
31:52you're making money on a $10,000
31:53balance. Funded accounts have drawdown,
31:55consistency rules, payout rules, winning
31:58day rules, all that sort of stuff. And
32:00you see this drop off here where that
32:02wouldn't kill you in a live account, it
32:04would kill you in a prop firm account.
32:06So you're not able to realize this full
32:07expected value of this linear uptrend
32:09essentially in a prop firm account. So
32:11what you should do on a prop firm
32:12challenge
32:14is
32:15let me extend this down here. Let me
32:16mark this as 48.
32:19This is going to be for 50k, 53. What
32:22you should do when you're back testing
32:23is do this sort of thing. Start here.
32:26One trade per day. Just one trade per
32:28day. So instead of your equity curve
32:31looking something like this,
32:32your equity curve is going to look
32:33something like this.
32:36I guess it'll be something it'll be more
32:37like this.
32:38Assuming you won. It'll look like this
32:39because you finished the day with a win.
32:42If it I hope that makes sense.
32:44Uh you finish the day with a win or if
32:46you were to lose, you finish the day
32:47with a loss. So you don't have a curve.
32:49You just have a a teleport. It sort of
32:51just teleports like you win or you lose
32:52because of how the drawdown works.
32:54So
32:55I want you to back test like this. Take
32:57one trade per day. Say you go for a
32:59thousand. You win a thousand. Now you're
33:01right here.
33:02So it looked like this because you ended
33:04the day up a thousand. Now this is no
33:06longer your drawdown. Now your drawdown
33:08is 49,000 because the way end of day
33:10trailing drawdown works.
33:12From here, say you risk another
33:13thousand, you come back to here
33:15and then you lose again.
33:17That would [clears throat] mean
33:19you lose the eval, right? Obviously cuz
33:21you hit 49.
33:24So I want you to back test and find your
33:26pass rate. You need to pretend that
33:28you're trading a prop firm challenge.
33:29You don't want to pretend that you're
33:31trading a live account because you're
33:32not. You're trading a prop firm. So you
33:34need to take this exact approach to back
33:36testing. You do not want to do this ever
33:39unless you're in a live account. You
33:40want to trade like this. You want to
33:41back test like this because you're
33:42trading a prop firm account. So you need
33:45to find your exact pass rate. You need
33:47to make sure your drawdown trails. So if
33:49you win, you bring your drawdown up to
33:5049. If you win again, you hit 52, you
33:52bring your drawdown up to 50. Drawdown
33:54stops trailing at 50.
33:56So you need to find out how often you're
33:58going to pass the prop firm challenge.
34:00And then
34:01based on that, if it's $100 for the prop
34:03firm and you're passing 33% of them,
34:05meaning you're hitting 53 before the
34:08trailing drawdown,
34:09uh
34:1033% of the time you win,
34:12then this would be $300.
34:15You can find out your average cost to
34:17achieve the funded account based on
34:19this. So the cost, your pass rate, which
34:21you can back test,
34:23divide it and then you get the average
34:25cost of a funded account.
34:27From that, you can know if you're
34:28profitable based on more statistics like
34:30your average payout and your payout
34:31chance.
34:32Um but yeah, this is how you should back
34:34test. Please do not back test like it's
34:35a live account. A whole group of
34:37strategies that do not work on live will
34:39work on prop firms. Strategies that work
34:41on prop firms do not work on live. This
34:42is a prop firm specific strategy. If you
34:44back test it on live, I assume it's
34:45going to break even. I haven't even done
34:46it. Like there's literally no point for
34:48me to back test this thing on live
34:49because I only trade prop firms. I only
34:52need to optimize it for the pass rate. I
34:54only need to optimize it for the average
34:55payout times the expected payout. So I
34:58hope that makes sense. I hope you go
34:59back, back test, pretend you have 10
35:01prop firm accounts. See how many of them
35:03you can pass using your strategy, if you
35:05want, using this strategy, if you want.
35:07But yeah, please just use
35:10prop firm back testing, okay?
35:13You need to find your pass rate. You do
35:14not need your average profit, your sharp
35:16ratio, your
35:18expected profit per trade, your win
35:19rate. That does not matter. The only
35:21thing that matters is this.
35:23So hopefully that made sense.
35:25And I will as well have a one-on-one
35:27mentorship link in the description of
35:29this video if you're interested in
35:30learning more from me specifically about
35:32how I trade prop firms.

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