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The ONLY 2 TIME FRAMES That Work in Any Market — Transcript

by The Rumers · 3,594 words · 491 segments · language en · Watch on YouTube

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0:00Last week was brutal. It was one of
0:02these choppy, soul-draining weeks that
0:05chews traders up and spits them out. And
0:08I'll be honest with you, it wasn't easy
0:10for me either. But the good part, I
0:12still managed to pull out almost $30,000
0:16out of the market. All thanks to
0:18ignoring the noise and dialing in two
0:21time frames. I combined the 1-hour chart
0:24for structure, zones, and bias, and the
0:275-minute chart for precise sniper
0:29entries. And when they lined up, I
0:32attacked. And that's what paid. But
0:34here's the thing, weeks like that used
0:36to be a nightmare for me 10 years ago.
0:39It was like the choppier and harder the
0:41market direction was to read, the more
0:43trades I took. Stupid, I know. I was
0:46forcing trades on the most
0:48unopportunistic markets imaginable. And
0:51the worst, I didn't even know I was
0:53doing it. I was just subconsciously
0:55shredding my account and wasting my
0:57life. And you know, I had the nerve to
1:00blame the market instead of myself. It
1:03wasn't until I had to learn to slow down
1:05and focus on high probability setups
1:08only. And yeah, I had to learn that the
1:10hard way. And in this video, I will show
1:12you how I filter out the noise, how I
1:14use the 1-hour and the 5-minute chart
1:17together, and how I step in where smart
1:20money steps in. And the best part, you
1:22don't need years of experience to start
1:24using this strategy. In fact, it's so
1:26simple that you can start using it
1:28tomorrow. And as always, I will back it
1:30up with live trades that I took live in
1:33our trading community. Before we jump
1:35into step one, let me explain why
1:37combining two time frames is such a
1:39game-changer. Most traders make one of
1:42these two mistakes. They zoom in way too
1:45close on the smaller time frame, trying
1:47to trade every small move on the
1:501-minute or even on the tick chart, and
1:52get chopped to pieces. Or they zoom out
1:56too far, staring at the big picture, but
1:58missing the actual zones and entries
2:01that matter. So, the real edge comes
2:03when you combine both. The higher time
2:06frame, in our case, the 1-hour chart,
2:08gives you the idea where smart money is
2:11positioned. And the lower time frame, in
2:14this case, the 5-minute chart, gives you
2:16sniper entries. Together, they filter
2:19out the noise and give you more clarity.
2:22So, step number one is drawing our magic
2:25lines on the 1-hour chart. This step is
2:28crucial because it is going to show us
2:31where smart money is positioned. So, we
2:33want to open up the 1-hour chart, and we
2:35want to draw a horizontal line around
2:38the previous high, the previous low, and
2:41the breakout areas. So, that right here
2:44is the YM futures, the Dow Jones, and
2:47the hourly chart. And as we can see,
2:50this right here was the previous high.
2:52Therefore, I'm going to draw a
2:53horizontal line just like that. And that
2:57right here was the previous low, and as
2:59well the breakout area, which is why I
3:02am drawing one more line around this
3:04zone. Now, let me show you a trick and
3:06explain why I call these zones the magic
3:09lines. Let's switch to the daily chart
3:12now. As you can see, the zone that we
3:15marked at the top is matching with the
3:18zone a few days ago. 3 days ago, this
3:20was an important high as well, which is
3:23making it a very important liquidity
3:25zone. If you look back lower, the low
3:28that we marked right here is matching
3:30exactly with the high right here, which
3:33is making this area as well an important
3:36pivotal point. And if you look further
3:38back, you see that this was even a
3:40pivotal point all the way a few weeks
3:42ago back here, where this zone was
3:45tested three times. So, again, the zones
3:48that we're marking on the hourly chart,
3:51they're matching with the highs and lows
3:54on the daily chart, which is why these
3:56zones are so important. These are not
3:59some random drawings on the chart.
4:01They're matching with the pivotal highs
4:03and lows from the daily, where most
4:05likely smart money is going to place
4:08their buy and sell orders. And we want
4:10to be positioned with them in their
4:12direction. But of course, the
4:14million-dollar question, how do we know
4:16where to buy and where to sell? This
4:19leads me to step number two, our rules.
4:22And by the way, the rules are extremely
4:24simple. We want to be buying at the
4:27lower line, which represents the
4:29previous swing low around this zone, and
4:32we want to be selling at the upper line,
4:35which represents the previous swing high
4:38around this area. If you're short
4:40selling, you want to be short selling
4:42around the upper line, which is again
4:44our previous swing high, and you want to
4:47cover your position around the previous
4:49low. We do not want to open any
4:52positions in the middle of the range
4:54around this area. This is noise and chop
4:58area. In other words, we want to avoid
5:00this area. Do not diddle in the middle.
5:03But why do we want to buy around the
5:05lows and sell around the highs? It's
5:08actually very simple. The lows represent
5:11the biggest and most committed buyers.
5:13This is where smart money puts their buy
5:16orders. And this is also an area where
5:19most amateurs and beginner traders
5:22either chase breakdowns or put their
5:25stop losses. And smart money knows that.
5:28They use that information and that zone
5:31to grab liquidity and enter their long
5:34positions. And it works the exact same
5:37way in reverse. Around the highs, most
5:40smart money place their sell orders.
5:43This is where they sell their long
5:45positions or open short sell positions.
5:48And unfortunately, this is where most
5:50amateurs and new traders are chasing
5:53breakouts or placing their stop losses.
5:56So, by knowing that information, we want
5:59to be positioned on the right side. We
6:01want to be positioned where smart money
6:03is placing their big orders and flow
6:05with them. So, before we get into the
6:08entry details on the 5-minute chart, I
6:10want to make sure that you fully
6:12understand the 1-hour chart zones, which
6:15is why we're going to take a look at one
6:17more example. This time on a different
6:19asset. This right here is the gold
6:22chart, and we're going to follow the
6:24same process. We want to mark the
6:27previous swing highs with a horizontal
6:29line, and the previous swing high was
6:32right here, which is why I'm going to
6:34draw a line just like that. And we also
6:37want to mark the previous low, which is
6:39right here around this area. You can
6:42also mark this small breakout area right
6:44here, which represents also another
6:47important liquidity zone. Based on the
6:49information that I gave you, what would
6:51you do here? Buy or sell? If you said
6:55buy, you're exactly right. As you can
6:57see, the price slightly broke below this
7:01area and immediately reversed to the
7:04upside, and it is going straight towards
7:07our upper zone. Now, based on the
7:10information that I gave you, what would
7:12you do here? Buy or sell? If you said
7:15sell, you're exactly right. Sellers
7:18stepped in and pushed the price lower,
7:21and the price is heading towards this
7:23area. Now that we know how to draw our
7:25magic lines on the hourly chart and how
7:28to mark these important liquidity zones,
7:31it's time to figure out how to enter on
7:34the lower time frame, how to combine the
7:37hourly with the 5-minute chart, which
7:39leads me to step number three, waiting
7:42for a very specific candlestick
7:44confirmation on the 5-minute chart. The
7:47candlestick confirmation that I'm
7:48talking about is called the pitchfork.
7:51And some of you who are following my
7:53videos, you know that I use the
7:54pitchfork mainly on the hourly chart.
7:57And I like entering also based on the
8:01hourly candlesticks. But sometimes,
8:03there will be cases where it makes sense
8:06to switch to the lower time frame,
8:08especially when you have choppy markets,
8:11wide ranges, and you want to have a
8:13precise entry with a minimal risk and
8:17huge reward potential. So, what exactly
8:19does that mean? When we switch to the
8:215-minute chart, in a perfect world, we
8:24want to see three to five candlesticks
8:26to the downside if we're about to long,
8:29and we want to see one green candlestick
8:32first. The entry happens as soon as the
8:36second green candlestick goes above the
8:39high of our first green candlestick.
8:42This is our confirmation, and this is
8:44showing us that there are more buyers
8:46stepping in around the zone that we
8:49marked from the hourly chart. This is
8:51what we're going to be looking for
8:53longs. And also, it does not matter how
8:56this first green candlestick would look
8:58like. In some cases, it would be with
9:01the wick on the bottom, a John Wick
9:03candlestick, and in other cases, it
9:05would be a simple green candlestick. So,
9:07that does not matter. And it works the
9:10exact same way in reverse. If you're
9:13short selling, you want to be looking
9:15for three to five green candlesticks in
9:18a perfect world, going straight into our
9:21zone that we marked from the hourly
9:22chart. And then, we want to be looking
9:25for one first red candlestick. As soon
9:28as the price starts breaking below the
9:30low of that first red candlestick, this
9:33is our entry, and the stop loss can be
9:35placed slightly above. And this is going
9:38to just give us the confirmation that
9:40there are more sellers stepping in
9:42around the highs that we marked from the
9:44hourly chart. Now, I want to show you
9:47the exact three trades that I took live
9:49in our trading community. I want to show
9:51you how I entered, how I managed these
9:54trades, and how I also got stopped out.
9:56So, the first trade I want to share with
9:58you is on the YM futures and this right
10:00here is the one-hour chart. The first
10:03thing we want to start with is drawing
10:05our magic lines. We want to mark the
10:07previous highs and lows. And as we can
10:10see right here, this was the previous
10:12high, which is why I'm going to draw a
10:14horizontal line just like that. And we
10:17have in this area the previous low. I'm
10:20going to draw another line right here.
10:23And as we can see, this is also breakout
10:26area, which makes that a very solid
10:28liquidity zone. This area is holding for
10:32several hours now. We have a very nice
10:35consolidation on the hourly chart, which
10:38makes it a perfect opportunity for long
10:41entries. And so now for our entry, we
10:44want to switch to the 5-minute chart and
10:47we want to be looking for our pitchfork
10:50candlestick formation. We want to see a
10:52few red candlesticks in a row and one
10:56green candlestick and the price going
10:58above the high of this green
11:01candlestick. So, that right here is the
11:035-minute chart and as we can see right
11:06at the open, the price went straight up.
11:09And what we want to do is we want to see
11:11a little bit of a pullback straight
11:13towards our zone that we marked. So,
11:15this is our zone that we marked and you
11:17see here there's a little bit of a low
11:19here and a little bit of a double
11:21bottom. So, we want to see if the price
11:23touches this zone and then if it gives
11:25us our confirmation, the pitchfork. Now,
11:28remember we're not working with a ruler
11:30here. Sometimes the price is going to
11:33break through the lows and then reverse
11:35and sometimes it is going to stop just
11:38before that area is being tested and
11:40then reverse, which is why we're looking
11:43at the price action and our confirmation
11:46and rules. Now, I'm going to hit the
11:48replay button and see what happens next.
11:51As we can see, we have seven straight
11:53red candles in a row and we finally had
11:57one green candlestick right here. So,
12:00the entry can be placed slightly above
12:03this green candlestick's high and the
12:06stop loss can be placed slightly
12:08underneath just like that. So, for that
12:11I'm going to place a buy order as soon
12:13as the price breaks through this high
12:16and I'm going to walk you through the
12:18exact trade management. As I mentioned,
12:20I'm going to put the stop loss slightly
12:22underneath. If you're using TradingView,
12:25you can just drag and drop your stop
12:27loss, which is pretty cool. And now I'm
12:29going to replay and show you how I
12:30managed that trade life in our trading
12:32community. Now, as we can see, initially
12:34the trade went slightly against me. It
12:37was starting to get a little choppy,
12:39went back and forth, red, green, red
12:42candles and I was starting to question
12:44if this is going to work at all. But,
12:46you know, when you enter the trade, as
12:48long as the trade is valid and your stop
12:52loss is not hit, you do not have a
12:54reason to exit, which is why I held to
12:56this trade. But, what I like doing in
12:59cases like that, when the price action
13:01starts to get choppy, I like to go back
13:04on the hourly chart because the hourly
13:06chart just removes the noise and you
13:08have a clear picture of what is
13:11happening at the moment without staring
13:13at each tick. So, we're back here on the
13:16hourly chart. I'm going to sell half of
13:19my position, pay myself and move the
13:22remainder of the stop loss around break
13:25even. This way I'm out of the risk and I
13:27don't have to worry about this trade.
13:30And if you look at our big picture on
13:32the one-hour chart, we see that this
13:34right here was the previous high, which
13:37can be used as our target area. So, if
13:39you want to leave some of your position
13:41open, you can always turn that day trade
13:44into a swing trade and try to capture
13:47even bigger move. So, another option to
13:50manage your trade is using trailing
13:52stops. How does that work? This is
13:54something I like doing on the hourly
13:56chart. After each candlestick closes,
13:59I'm moving manually the stop loss below
14:02the low of each candlestick. So, for
14:05example, this candlestick right here
14:07closed green. Now, I can go ahead and
14:10move the stop loss underneath just like
14:13that. And as soon as the price started
14:15going a little against me, I was stopped
14:18out for this nice profit. Now, the
14:19disadvantage of using this trailing stop
14:22technique is that sometimes the price
14:24might continue further higher and
14:27sometimes you're going to just miss a
14:29big chunk of the move like in this
14:31example. Now, let's go ahead and check
14:33two more trades that I took on the NQ
14:35futures. So, that right here is the NQ
14:38futures and the one-hour chart. And by
14:40the way, I trade this instrument a lot,
14:43maybe 80 to 90% out of the time. So,
14:46we're going to start with our first
14:49step, which is drawing our horizontal
14:51magic lines. We want to draw a line
14:54around the previous highs, lows and
14:57breakout areas. And as we can see right
14:59here, this is a previous resistance zone
15:02and a high, which is why I'm going to
15:05draw a horizontal line just like that.
15:07And we have one more low underneath just
15:11right here, which is why I'm going to
15:13draw one more line. So, these are the
15:16start areas that I'm going to work with.
15:18And if you zoom out a tiny bit, you see
15:20that this area is also a breakdown area.
15:25This was a previous support and we broke
15:26down, which makes our resistance zone a
15:29pretty solid zone. So, because of that,
15:32I want to be looking for a short setup
15:35and for that I'm going to switch to the
15:375-minute chart and I want to see our
15:40pitchfork candlestick formation for the
15:42short entry. So, that right here is the
15:455-minute chart and as we can see, the
15:47price is trying to reject this area. So,
15:50before I enter the trade, I want to see
15:52one red candlestick closing red on the
15:555-minute chart and the price going below
15:58the low of that red candlestick. This is
16:01my entry confirmation and this is going
16:03to show me that there are more sellers
16:06stepping in. So, let's replay and see
16:08what happened. So, we see that this was
16:10a failed breakout. We had a wick on the
16:13top indicating that there are more
16:15sellers stepping in and I want to enter
16:18below this area here because this is
16:20going to give me the confirmation that
16:21there are more sellers stepping in
16:24trying to push the price lower. As soon
16:27as we break the low from this red
16:28candlestick, I'm going to push the sell
16:31button. Now, the stop loss in this case
16:33can be placed slightly above just like
16:36that. Now, initially the price started
16:38going in my direction, but then all of
16:41the sudden I got stopped out. And this
16:44happens sometimes. This is why we have
16:47our rules, our stops and we have to just
16:49come back later and see if we have
16:51another trade. And this is exactly what
16:54I did. As soon as I got stopped out, I
16:56was looking if more sellers step in
16:59again so that I can re-enter my short
17:03trade. And if you zoom out, you see that
17:06we're still around this area. So, most
17:08likely this is a liquidity sweep and
17:11most likely institutional traders are
17:13just grabbing liquidity and will try to
17:16reverse the price lower again. And so in
17:19this case, we have another opportunity
17:21to re-enter. Actually, even better
17:24because we now have a few green
17:26candlesticks in a row. We broke straight
17:28through that resistance area and now I
17:31want to see if we get a confirmation. If
17:33the price starts going below the low of
17:36this red candlestick, I will get back in
17:39the short and re-enter and I will put
17:41the stop loss again above this
17:43candlestick just like that. Now that I'm
17:45in the trade, I'm just going to drag the
17:47stop loss here slightly above and let
17:50this trade play out. Now, initially the
17:52price went slightly against me, but
17:54eventually dropped lower. And guess
17:57what? It headed towards this 5-minute
17:59low right here. And because I already
18:02had one minus trade, I'm going to go
18:06ahead and just move the stop loss to
18:08break even right here and close some of
18:10my position just to pay myself. So, now
18:13I closed half of my position and now
18:17what I like doing is going back to the
18:19hourly chart because I want to see how
18:22the overall big picture looks like. And
18:24we see here a very nice failed breakout.
18:27You see how the market ran this straight
18:30through the highs, had a huge wick on
18:32the top on the hourly chart indicating
18:35sellers step in and this big red candle
18:38right here shows us that there are more
18:42sellers and therefore I decided to hold
18:45half of my position and see if I can get
18:47out around this zone, which is a little
18:50bit of a consolidation area on the
18:52one-hour chart or even get out
18:55here. Now, we finally got this momentum
18:58to the downside and we went straight
19:00into the zone that we marked. Remember
19:03we marked previously this lows right
19:05here and look how the price is trying to
19:07reject this area. Obviously, buyers are
19:10trying to step in here and the price is
19:13having a bunch of weeks on the bottom,
19:15which is why I decided to go ahead and
19:17close my position, realize my profits
19:20and be done for the day. Now, hindsight,
19:23as we can see, the price went further
19:25lower and if you had a little more size
19:28or a little more options to split your
19:30position into more partial profits, you
19:33could have waited and targeted this
19:35previous low right here, which is
19:37another support area and you could have
19:40just realized your profits and closed
19:43all of your position around this area. I
19:45just decided to close earlier because
19:47this really looked at that point that
19:50buyers are stepping in and I was not
19:52willing to give back of my realized
19:54profits and also one of the reasons
19:56because my first trade initially was a
19:58negative trade. So, I hope that helped
20:01you understand how to combine the one
20:02hour chart for the zones and use the
20:04five minute chart to dial in your
20:07entries. And by the way, we trade live
20:10every day on Zoom together. If you want
20:12to check out our community, check out
20:15the link in the description below. And
20:17we also sent each week every Sunday our
20:20gains guide where we map out the most
20:22important liquidity zones on the
20:24futures. And also, I personally bring up
20:27one growth stock each week which has a
20:30huge potential for continuation higher.
20:32So, check that out. It's totally free.
20:34It's also in the description below.
20:36Thank you so much for watching and I
20:37cannot wait to see you back here in our
20:40channel again. Bye for now.

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