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

by The Rumers · 3,849 words · 537 segments · language en · Watch on YouTube

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0:01Today I'm going to show you this amazing
0:03scalping strategy that's designed to
0:05take advantage of the first one hour of
0:07each trading session. It's called the
0:09pattern scalp. It's repeatable. It's
0:12newbie friendly. And best of all, it is
0:14simple. Now, my name is Doug and I've
0:15been day trading now for over 25 years.
0:18One of the biggest things I've learned
0:19throughout that time is that 90% of all
0:22the money a trader will make during
0:24their lifetime will take place within
0:26the first hour of each trading session.
0:29And every professional knows that
0:30everything we ever work for, train for,
0:32and prepare for all comes down to that
0:35moment in our ability to execute. It's
0:37like our Super Bowl. And if you want to
0:39increase your chances on becoming a
0:40successful trader, you've got to master
0:43the open. And if you want to master the
0:45open, you've got to have the right
0:46trading strategy. Otherwise, it is game
0:48over. So, in today's video, I'm going to
0:50show you how to use the pattern scalp
0:52strategy in just three simple steps. I'm
0:54going to show it to you the exact same
0:56way that it was shown to me in 2003. And
0:59the exact same way that I've shown this
1:01strategy to hundreds upon hundreds of
1:04other traders who are in our live
1:06trading community who are using the
1:08pattern scalp strategy day in and day
1:10out to make solid trades. Then after I
1:13show you this three-step strategy, I'm
1:15going to take that process and trade the
1:17pattern scalp in a live market. That way
1:20you know exactly how to use it. Let's
1:22get started. So, let's talk about this
1:24pattern scalp strategy. And I tell you
1:25what, I love this thing. I mean, I've
1:27built a 20 plus year trading career off
1:30of this strategy. And most people I show
1:32it to, they like it as well because it
1:34really is simple. It doesn't require any
1:36structure. It's just straightforward.
1:38And what we're going to do is focus on
1:39three steps to getting the patter
1:41strategy right. Starting with step
1:43number one, which is the opening range
1:45candle. So, the first thing that we need
1:47to do is take whatever we are trading
1:49and we're going to open up a 15-minute
1:51chart. So, for reference, you'll see up
1:53here in the corner, I'm using Palunteer,
1:55the stock for today, which is PLTR, the
1:57ticker symbol. But the most important
1:59part of that equation is the 15-minute
2:01chart. It will work with any asset, but
2:03just make sure you have the 15minute
2:06chart selected. Now, from there, what we
2:08want to do is allow that candle to
2:11completely close for that time period.
2:13Let that first 15 minutes of each market
2:15open to pass. Once that candle has
2:18closed, we're going to grab any kind of
2:20drawing tool like a line or a box. I
2:22prefer to use boxes. And we're going to
2:24connect the very highest price point we
2:26see. So, if you see at the very top of
2:28that wick says $13,410.
2:31We're going to connect that with a very
2:33low price point we see, which is $13049.
2:38And we are going to box that price in.
2:40And that's step number one. I told you
2:43it was going to be pretty simple. That's
2:45all you need to do is just box that high
2:47and low range. So, let's move on to step
2:49number two, which is far more important,
2:51and that is we need to make sure that
2:52this 15minute candle that we have boxed
2:54in is a manipulation candle. Now, most
2:57likely it's going to be, and I'll tell
2:59you here in a minute why, but we need to
3:01make sure because if it is, we're on to
3:03something super special. Now, a lot of
3:05you might be asking just what exactly is
3:07a manipulation candle or what am I
3:09talking about? A manipulation candle is
3:11any fast, aggressive moving candle going
3:13up or down. The direction is irrelevant.
3:16It's fast. It's aggressive. And it's
3:18moving in one direction. But it's more
3:20than just a candle. It's an emotional
3:23event. And that's where the edge is.
3:24Because when traders from around the
3:26world see these candlesticks appearing
3:28on their chart, their very first
3:29instinct is to chase into that strength
3:31or weakness in fear they're going to
3:33miss out on the next great trading
3:35opportunity. And that's exactly what
3:38those candlesticks are designed to do,
3:41is to pull the inexperienced retail
3:43traders in to create the liquidity
3:46necessary for the larger institutions to
3:49get in and out of their positions. That
3:52move needs to happen in order for those
3:55institutions to get in and out. That's
3:57why you're going to see them day in and
3:59day out. Now, the very best explanation
4:01of this comes from an old school trader
4:03called Dr. David Paul. Watch this video
4:06for a quick second. The best trades
4:08occur after the masses have been stopped
4:11out and markets tend to move. And that's
4:13because the big fellas up there, they
4:15can't press the we button and get in
4:17because there's just not enough
4:19liquidity there for them to get in in
4:21size. So they have to in fact engineer a
4:25100,000 guys like you, sir, pull you one
4:28way, your stop loss gets hit. That in
4:31fact sets off a sea of liquidity for
4:33them to get in. So again, these have to
4:35happen in order for the bigger
4:36institutions to get in and out of their
4:38trades. So the most important thing to
4:40understand how the pattern scalp takes
4:42advantage of this very phenomenon is
4:45that when you see those candles, most of
4:48the time they will be reversed. And
4:51right there, that's our strategy. That's
4:54our edge. Now, just in case there's any
4:56doubt in your mind as to whether or not
4:57what you're looking at is or is not a
4:59manipulation candle, let me show you a
5:01quick and easy way to figure that out.
5:03So, what we want to do is go back to the
5:04asset we're trading and we want to pull
5:06up a daily chart. And you'll see now I
5:08have the daily chart selected of
5:10Palunteer. And from there, what we want
5:12to do is add the indicator called
5:14average true range. You'll see it's
5:16right here, average true range. Now,
5:18some brokerage firms will have this
5:20listed as just ATR. All you have to do
5:22is click on it. You don't have to make
5:23any sort of inputs or adjustment to it.
5:25Just go with the default settings and it
5:27will give us a numerical value. In this
5:29case, it's $6.90.
5:32So, let's go back up to our 15minute
5:34chart and let's just go ahead and make
5:36the math easier and write $7. What does
5:40this $7 represent? Well, that is the
5:43average daily range of Palunteer,
5:47meaning it can either go up $7 a day or
5:50down $7 a day in any given typical day.
5:53Now, non-typical days such as Fed
5:55meetings, earnings, hit pieces, news
5:57pieces, that's different. But in most
5:59cases, you can expect a $7 up move or a
6:03$7 down move. Now, range is one of the
6:05biggest important factors for us being
6:08successful as traders, whether you trade
6:10the pattern scalp or not. But here's
6:12what we want to determine. If the size
6:15of this candle that we boxed in is 20%
6:19or more of that daily range, we have a
6:23manipulation candle. So, here's the
6:25basic math to figure that out. You take
6:27your $7, right? You multiply that by 20%
6:31and you'll have $1.40,
6:34right? So, if the very top of that
6:37candle to the bottom of that candle
6:39exceeds $140 in price, it is in fact a
6:44manipulation candle. So, you'll see the
6:45very base of that candle is $13046.
6:49The upper region is $134.7.
6:53that is well outside of the $1.40
6:57range. It is definitely a manipulation
6:59candle. Now, one thing just to note on
7:01that, if it's at a $140, $138, it's 18%
7:0717%. Don't sweat the details. But 20 20%
7:11or more is a dead giveaway that this is
7:14being manipulated. So, that will
7:15conclude step number two, which was
7:17pretty simple. Right now, we can move on
7:19to the third and final step, which is
7:21dialing down the perfect entry for this
7:24trade. And that's going to be pretty
7:25simple, too. Here's what we're going to
7:26do. We're going to go back to that
7:2815minute chart, and we're going to move
7:30it to a smaller time frame. And that can
7:32be anything sub 15 minutes. Could be the
7:3510-minute, 5 minute, 3 minute, 2 minute,
7:361 minute. You pick. Don't over
7:38complicate it. It's all the same thing.
7:40Now, I preferably like to use the
7:42five-minute chart because that's what I
7:44started. That's what I'm used to and
7:45that's what I'm going to continue to use
7:46in these demonstrations. You use
7:48whatever you feel comfortable with. Now,
7:50from here, what we need, which is the
7:52most important part of this video, we
7:54need one of two types of candles to
7:57appear. And I I say it's the most
8:00important thing because if these two
8:02candles do not appear, it's not ready to
8:05be reversed. Because that 15 minutes is
8:07just a guy. It could keep going 20
8:08minutes, 30 minutes, 40 minutes, 1 hour
8:11for the rest of the the freaking day,
8:13right? it can just keep on going. Now,
8:15if you've watched this channel for any
8:16length of time, you already know what
8:18they are. And the two candles that I'm
8:20going to be looking for, one of these
8:21two candles to appear is going to be
8:24either the John Wick or the power of
8:26Tower candles. Now, for most of you,
8:28you're going to know the John Wick
8:29candle, which is on the left side of
8:31your chart as the hammer or inverted
8:33hammer candles. And on the right, you
8:36have the power tower. Now, and here's
8:38why these two candles are important and
8:40must be used in this equation. Let's
8:43start with the John Wick reversal to the
8:45long side. This would come after a bold
8:47red 15minute candle. The confirmation
8:50comes within the wick itself right here.
8:53The wick represents that the largest
8:55buyer took advantage of that liquidity
8:58and the algos and the institutions
9:00bought into that weakness. And I said in
9:02past videos, you have to think of it
9:04this way. If somebody with that large of
9:07a bankroll is going to step in there and
9:09buy that dip, it's not going to go lower
9:12in most cases. That's where the edge is.
9:14They're too big, they're too strong, and
9:16they've announced their intentions, and
9:17most likely that asset will go higher.
9:19Now, not all the time, but most time it
9:21will. Now, for me, the entry is very
9:23simple. You can wait right for the break
9:25of the next five minute candle here that
9:27I'm using, and the entry would be right
9:29there. The stop would be at the low.
9:31Right now, the inverted John wick would
9:34be something after a bold green candle.
9:37So, for example, this is what it would
9:39look like right here.
9:41You would have the wick coming from the
9:43top that would come after a series of
9:46greens or the bold green 15minute. The
9:48entry would be on the following
9:50fiveminut break and the stop would be at
9:53the high. Now, the power of towers have
9:55the exact same significance.
9:58They just look a little bit different.
9:59No, by the way, what I'll do here for
10:01everyone is I've done a ton of videos
10:03about this. So, I'll post a couple of
10:04them right up here on the screen. You
10:06can watch them after this video. It'll
10:07give you a much deeper dive and
10:09understanding of how powerful these two
10:10candles. I have done singular videos
10:12about them, but the same significance
10:14here. Now, when it comes to the power of
10:16tower, I actually do not let the candle
10:18completely finish red like this. I will
10:21give it about 50% right here, and that's
10:24where I will make my entry. And then the
10:26stop would be above the high of those
10:28candles. And then of course on the other
10:30one moving in the other direction here
10:34coming after a red I would enter about
10:3750% right here. This would be my long
10:39entry stop between the low. Now if you
10:42didn't comprehend all of that right now
10:43that's okay because we're going to go
10:44through this step by step and you'll see
10:46them. So let's go and open up this
10:49palunteer here again. So most of you
10:52should see exactly what you need to see
10:54here. What is this candle happening at
10:58the 15minute point? Right? It is a John
11:03Wick candle. So the entry would be very
11:06very straightforward and simple or I
11:08should say the trade would be very
11:09simple. What we would do is look for a
11:13sell order but the entry would be right
11:15here. The stop loss would be at the high
11:17of the day if the very next candle would
11:20be red. So, I'm just going to move this
11:22forward real quick and you will see that
11:24the very next candle is in fact red.
11:27This would be a qualifiable entry for
11:30me. So, here I would sell. The stop loss
11:33would be placed above the high, right?
11:35Because this is now the bearish Johnwick
11:38formation. And usually when it comes to
11:39target, this is not an exiting video,
11:42but let's just go with the standard 2:1
11:45or in a lot of cases, I like to just get
11:4750% of that range. So, let's just make
11:50it a standard 2:1 right here. And that's
11:52the trade. You just let it play out from
11:55there. And you'll see that it eventually
11:57finds its way much lower. Now, I know at
11:59this point a lot of people are going to
12:00say, "Look, that's cute." But you
12:02cherrypicked that chart. Let me show you
12:04something here real quick. I'm going to
12:06go back and select that 15minute time
12:08frame. I want to show you something
12:10here. Here's what we had drawn in the
12:13example we used for today. But let's go
12:15back to the previous day at Palunteer. I
12:17want you to tell me what you see. Is
12:19this a manipulation candle? Yes,
12:23absolutely. That exceeds the 20% of the
12:27daily range. Now, what direction did
12:30that candle start? Red, right? Red
12:34opening manipulation candle the day
12:36before. What was the end result?
12:39Palunteer finished higher. You see that?
12:42If we go back to the day before that,
12:45what do you have here? Right? opening
12:48move was red on the first 15 minutes.
12:52Now, it closed green, but it actually
12:54went all the way down to the base of the
12:56range and clawed its way back and closed
12:59green, but its opening move was red.
13:03What happened? It went back higher. What
13:06if we went back to the previous day
13:09before that? What was the opening
13:1215minute candle? That should be pretty
13:15easy, right? Is that a green candle or a
13:18red candle? Right, that is a green
13:22opening bull candle. What was the end
13:26result?
13:27Red. Almost every time that gets
13:31reversed now, in this case, it tried to
13:33come back again, but think about what
13:34you're seeing. Three, four, five days in
13:37a row, Palunteer gives you an opening
13:40candle and then reverses it. Now, what I
13:43want to do at this point before we move
13:45into the live trading session is try to
13:47answer a question I think you've had in
13:49the back of your mind this whole video.
13:51What do you do in the case that that
13:5315minute candle is not a manipulation
13:56candle? Well, for the pattern scalp to
13:58work the very best that it can and any
13:59trade for that matter, the more
14:01manipulation you get, the better. But on
14:04that note, I would say this. If you are
14:06trading any high volumed interest like
14:09foreign currency, cryptocurrency, oil,
14:11gold, stocks, futures every day, you
14:16will get a manipulation candle because
14:18remember you have to have the
14:21manipulation to allow the bigger
14:22institutions to get in. If there is no
14:25manipulation, they don't get in. The
14:28trades really aren't that good. But
14:29because they need to get in every day,
14:31you're always going to have it every
14:32day. And over 255 years of trading,
14:36every single day, there are tons and
14:38tons of manipulation candles. I see them
14:40every single day when I trade. And I'll
14:42show you more of them before the video
14:44is over. So, just kind of keep that in
14:45mind. You can still trade the pattern
14:46scalp if the manipulation isn't there.
14:48But if you really, really want it to
14:50work and you really want to make money,
14:51it should be. And 99% of the time, it in
14:54fact will be. Now, what we're going to
14:56do from here is move on to the live
14:57trading portion. And what I chose to do
15:00was just actually show you from our live
15:03community a real trade announced far
15:06ahead of time using the very same
15:08three-step procedure I showed you. That
15:10way you know in fact that not just me
15:12but hundreds upon hundreds of people
15:14like I said in the intro, they saw it,
15:15they witnessed it, and not just one day,
15:17every single day after day after day
15:19after day, as you saw here on Palunteer,
15:21it's repeatable. So let's give it a
15:22watch and then I'll explain it and show
15:23you a couple of more things when it's
15:25done. Obviously, you would have loved to
15:27have bought that and caught it, but
15:28there's no setup there. So, look at
15:30yesterday and carbon copy that, right?
15:34Your your range. So, when you go range
15:37always wins, right? So, if we go to the
15:39daily chart, you click the indicator
15:41tab, you put the average true range on
15:43there, right? You have
15:46$6.
15:48$6,
15:50right? So, think about it. This has
15:52always been the message. $6 is your
15:55average daily range and you're up three.
15:58You're 50% of the range in less than two
16:02minutes. That's too much, too fast. I've
16:05referred to these as, you know, like
16:06there sucker candles, manipulation
16:08candles, but the real truth is like an
16:11institution has to take advantage of the
16:14liquidity to sell because they won't get
16:16it. So when they see this big candle,
16:18there's so much liquidity there. whether
16:20they want to or not, they have to sell
16:22it because they won't get another shot
16:24the rest of the day to sell it. That's
16:25why all the activity happens in the
16:27morning. Let's let let's keep an eye on
16:30that level. I think this is just going
16:31to give it. They're going to chase this
16:33candle still strong.
16:35Um I'm doing that one. Two two.
16:40My entry was 22521.
16:43I'm gonna post it here. They already
16:46popped that marvel. Yeah, that marvel.
16:48You've already got the signal.
16:53Yeah, you power a tower there real
16:55quick. You got two 7983
16:59would have been the entry. I wouldn't I
17:01wouldn't go on that candle there right
17:03here. The very highest tick,
17:06right? Yeah, it's a good uh good area.
17:10So far, they haven't had the selling in
17:12that candle yet. You see it? Still still
17:14tough, but let's see.
17:17There you go. You see that? See that
17:19guys? Little bit of hesitation pulling
17:22in there. Not quite enough, but let's
17:23see if we can make it to the next bar.
17:25I'm going to do that one. I'm looking at
17:27this too. Same same thing. I will I
17:29think I'm passing on AMD. It's too
17:31extended for me to long PLTR shorts.
17:34Sounds good. Looks good. I'm going in
17:37Palunteer by the way guys. Here
17:40I'm going to have to do it too. Have to
17:42go to Palunteer. Let me just hit this.
17:4514759
17:48Palunteer short. I can type your PLTR if
17:52you want. I think you guys already Yeah,
17:54go ahead and type the Palunteer cuz I'm
17:56in at 58. What was your entry? 140
18:0014759.
18:02Yours is 59, right? So, this one is
18:07three three pieces. Three pieces of
18:09material, right?
18:11The first being resistance,
18:15second being extended range,
18:19third power tower candle at 30. Now if
18:23you are newer,
18:26not quite sure,
18:29you can always wait for the candle
18:31closure. You can wait for the full
18:33candle to close because I don't think
18:35it'll just blow blow out. But
18:38in time, you'll pick the way you want to
18:40enter, whether it's aggressive or not so
18:42aggressive. Right? That's the deal.
18:46Target would be probably somewhere here
18:53about half of that range. Just like lay
18:54it right there
18:57and who knows,
19:00but there it is. You got your your wick
19:02right in the cell zone. Now, you just
19:04need to shake that tree a little bit.
19:06and my ENQ. I don't know if you guys
19:08took this ENQ short on the one hour
19:10chart, but that is going move the stop
19:13loss to break even or so. Hopefully, we
19:15get a little more push here on that.
19:17Just one last talk. There you go. Your
19:20your three combines, resistance,
19:24range, candle. Yeah, good point.
19:28Resistance, range, candle. The more
19:30context that you can put into that, the
19:34better the trade. Right.
19:38I agree. It's good.
19:41And these stocks are sometimes sometimes
19:43easier, guys, to day trade because, you
19:45know, they're giving you cleaner setups,
19:48a little slower than the the futures
19:53indices. I'm going to try for 14650%.
19:58Let me see if I can tag a 146 fill.
20:03You're also starting to see a pattern
20:04here,
20:06right? AMD, Palunteer, the same.
20:12They're not eating those dips up right
20:13now. Something to keep in the back of
20:16your your mind, right? All right, guys.
20:19That's going to conclude today's video.
20:21And I do hope you found some value there
20:22in the patter scalp strategy. Just
20:24remember, take it slow. Day by day,
20:26you'll start to see some new things in
20:28the market that can give you an edge
20:30into making some quality trades. Now,
20:32one thing I want to remind you before I
20:33officially sign off is that if you're
20:35looking for quality ideas, levels, and
20:37everything in between, every week my
20:38wife and I put together a comprehensive
20:41watch list of all the major indexes, as
20:43well as the best stocks to trade for the
20:44week, it's called the gains guide. Best
20:46part, it is free. It's a great starting
20:48point for those that may have trouble
20:50coming up with names to trade or to
20:52understand markets or just have a hard
20:53time with levels in general. Again, it's
20:55free. You can just follow the link down
20:57in the description. So, as always, take
20:59care, trade well. Thanks for watching
21:01the video and cheers.

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