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The Only Day Trading Strategy That Actually Works (Powerful And Proven) — Transcript

by The Rumers · 4,574 words · 642 segments · language en · Watch on YouTube

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0:00Today, I'm going to show you the one
0:01indicator trading strategy that helped
0:03me make this trade right here and this
0:04trade right here both on the same day
0:07this week. But before I get involved in
0:09all that, I want you to know something.
0:10I'm not here to just rub gains in your
0:12face for the next 20 plus minutes
0:14because I don't think that's going to do
0:15you any good. The only reason I chose to
0:17show you those gains today is because I
0:19want you to know what's possible when
0:21you put your mind to something and you
0:23truly commit to the process because what
0:25I'm about to tell you is kind of
0:26embarrassing, especially since I'm
0:28recording this right now. But it ain't
0:30like I'm some special person here. I
0:32graduated 88 out of 104 students in my
0:36senior class. I dropped out of college
0:38after 3 months because I was failing my
0:40classes there, too, and my major was
0:42communications. I was failing
0:45communications. And if you've ever seen
0:48my videos, I'm always wearing the same
0:49black shirt, so I can't pick out
0:51clothes, either. I'm just a regular guy
0:53whose only attribute in life just so
0:55happened to be resilient. However, if my
0:58trading strategy wasn't simple, stupid,
1:00and effective, I never would have been
1:02able to have the resilience in the first
1:04place. I'd have burned out a long, long
1:05time ago. And trust me, it took a long
1:07time to get to that level, but I was
1:10resilient, my strategy was good, and I
1:12just stuck with it. So, what I want to
1:14do today is I want to share this trading
1:15strategy with you in the attempts that
1:17wherever you find yourself in your
1:18trading journey, and whatever brought
1:20you to this video today, that I can give
1:23you the answer that you're looking for.
1:25The answer that you need to take one
1:27more step closer to your goal, to keep
1:29you in the trading game just one more
1:31day, to give it another try, or just to
1:34open the door that's necessary for you
1:36to take that next step. So, having said
1:38that, how about we get started with
1:39today's video?
1:43So, the strategy we're going to be
1:44talking about today has three moving
1:46parts to it. And what we're going to do
1:47is we're going to go through each one of
1:48those three parts individually, then
1:51we're going to combine them all together
1:52towards the end, and we're going to make
1:53some live trades in the market. That
1:54should be really cool. However, what's
1:56even cooler than that is all three of
1:59those moving parts rely on just one
2:02indicator, and that keeps it super clean
2:03in the mind, so it makes it a lot easier
2:05for us to execute. Now, before we get
2:07into what that indicator is and moving
2:09part number one, let's make sure that we
2:12have our charts set up correctly. So,
2:14this time, go ahead and pull up whatever
2:15you're trading. And the first thing that
2:17we want to do is we want to make sure
2:18that chart is set to the 15-minute time
2:21frame. Now, just for reference, I'm
2:22going to be using the stock Meta for
2:24today's example, but we'll get into
2:26assets here later. But what's important
2:27first is the 15-minute chart. And that
2:30will bring me to the indicator we're
2:32using and the relevance of using this
2:3415-minute time frame. The indicator that
2:37we are going to be using throughout this
2:39whole entire process is range. Now, I've
2:42been very vocal about range and the role
2:44that it plays in my trading, but I'm
2:46going to go through a few tiers of range
2:48today because what's important is what
2:51we need to do first with this strategy
2:53is we need to match the opening range,
2:56the opening 15-minute range, with the
2:59daily range. That's where we're going to
3:01start, so let's just keep our mind on
3:02that. So, how we do that is simple. We
3:05allow the first 15-minute bar from each
3:09market open. So, for example, this white
3:12shaded area represents official US
3:15market open. So, whatever market you're
3:17trading, that's going to be your open,
3:19but you're going to allow the first
3:2115-minute bar to completely finish and
3:24close before you touch any buttons.
3:27Should be pretty simple, right? Now,
3:29once that bar has completely finished,
3:31the next step in this process is to
3:33figure out what that opening range is.
3:35And the easiest way to do that is grab a
3:37measuring tool. You want to connect the
3:39very highest price point that you see
3:42with the very lowest price points you
3:44see, just like that. And you'll see here
3:47it's telling us that Meta has minus $15
3:51per share. So, the entire range from the
3:53top open to the bottom open of that
3:5515-minute candle, the price declined by
3:59$15 per share. So, for right now, I'm
4:02going to put $15 per share. That
4:05represents our opening range, $15. Now,
4:09from there, we want to match that
4:11against the daily range. This is also
4:13very simple to do. All we need to do is
4:16pull up a daily chart of the exact same
4:18instrument. So, you'll see up here I
4:20have the daily chart now selected of
4:23Meta. And what I want to do is come
4:25right over here to the indicator tab. I
4:28want to hit the drop-down menu, and I
4:30want to look for the average true range.
4:33Again, I've done videos about this in
4:35the past. This plays a vital role in
4:37what I'm doing, but this is going to
4:38establish what our daily range is. So,
4:41if we just come down here, you'll see
4:42that the average true range gives us a
4:45number of 17.12.
4:48So, for math, let's just make that 17.
4:51So, if this happens to be one of the
4:52first videos you're watching, you're un-
4:54you're unaware of the concept of range,
4:56let me explain. The easiest way to look
4:59at it is on an average day, you could
5:01expect either a $17 move up or down each
5:06day if you're trading Meta. Now, you're
5:08not guaranteed to get 17 up or 17 down,
5:12but the way to look at it is this, or
5:13how I want you to look at it for today's
5:15video. As prices approach the top part
5:18of range, and this is why it's so
5:19valuable, as it approaches the top part
5:21of range, the collective body of traders
5:23from around the world see that as
5:25short-term overbought, as a short-term
5:28extension of price where value has been
5:31separated, and we'll talk about that
5:33here in a second. So, think of it as a
5:34short-term overbought, much like an RSI
5:36reading. Inverse relationship to the
5:39bottom. The more it gets closer to a $17
5:42drop in a singular day, the more the
5:44collective body of traders view that as
5:47short-term oversold. So, when you have
5:49short-term overbought, you have
5:51short-term oversold, you normally get
5:53what? Short-term reversals and
5:55corrections off of that. Little glimpse
5:57about how this strategy's going to work.
5:59But we have $17 in daily range. But
6:02here's what we want to do with that 17.
6:03We want to come back here and just put
6:0517
6:07as our daily range. And now what we want
6:10to do is compare the two. So, at this
6:12point, let me just ask you a direct
6:13question to see where you stand with
6:15this whole thing. Is there anything that
6:17you see that's interesting about these
6:19two numbers? Notice that the first 15
6:23minutes of range consumed $15
6:26out of the potential 17. Now, look at it
6:29this way. The market's going to be open
6:31for another 5 hours and 45 minutes, and
6:35already you've chewed up 90%
6:38of range. You see that? So, that's
6:41excessive. Now, here's what you need to
6:43know as a trader, no matter what you
6:45trade, and what's really important. What
6:48this signifies, this little math
6:50equation, the most important thing, it
6:52signifies the discrepancy
6:55between technical buyers and sellers and
6:58emotional buyers and sellers. When you
7:01get such rapid extension of ranges, you
7:04move from calculated technical events
7:08into emotional events. You draw
7:11emotions, and we've all who've traded
7:13have gotten to a point where we've
7:14allowed our emotions to abandon the
7:17intellect that we have in our heads,
7:19right? And we make very poor decisions,
7:22and that's the point. It's become an an
7:24emotional event, and the longer that and
7:27more aggressive that extension is, the
7:30more hardcore and fast that reversal is
7:34going to be. So, you can see we already
7:36have a discrepancy. Now, here's what I
7:38want to touch before we move on to the
7:39second point. A question you may have
7:41that you should have is what constitutes
7:45aggression or emotional event. Now, in
7:49this case, for this strategy, if you're
7:51trading a stock like I'm trading here,
7:53which is Meta, what we are looking for
7:56in this case on a stock is at least 70%
8:00of that daily range. So, if we go back
8:02to that $17 on the daily range here,
8:06we're looking for 70%
8:09of that to be taken out, right? So, that
8:11would be about $11.19.
8:15So, that's $15 as well outside of that,
8:17so it meets that threshold. If you're
8:20trading an indexed instrument like the
8:22YM, the ES, the S&P, right? The Nasdaq,
8:25gold, Bitcoin futures, or whatever, use
8:2930% threshold. Now, on that note, I know
8:31a lot of you who are watching remember
8:33one of the most popular videos I've done
8:35on this channel, which was the Patter
8:36Scalp, and I'll put that video up here.
8:38In that video, I used a similar type of
8:42mathematical equation to make the trade,
8:44a similar type of setup there. Except
8:46for that one, we used a benchmark of
8:48just 30%. So, some of you might be
8:50asking, "Well, what about the Patter
8:51Scalp?" Well, remember, the Patter Scalp
8:54is a scalping strategy. It's a strategy
8:56that's intended to be only in for a few
8:59minutes. This is a full-day trading
9:01strategy, and the goal on this one is to
9:04be in the trade for several hours and
9:06capture the largest or lion's share of
9:09the gain. So, they're very similar in
9:11their entry and setup, but they do rely
9:14on more extreme. So, this strategy is
9:16relying on excessive extremes, excessive
9:19levels of emotion, so that would be the
9:21difference. Thought I would touch on
9:22that point. Now, once we've established
9:24the difference between the opening range
9:26and the daily range, and we determined
9:27that we're very close or more than the
9:29threshold that we just spoke about, we
9:31can start to do step number two, moving
9:34part number two, which is we need to
9:36level out this and find an area that
9:40this may reverse course. Now, this part
9:43is very important because the last thing
9:45we want to do is catch the falling knife
9:47and get steamrolled or short the
9:49greatest rally ever of all time. Here's
9:51how we do that. The best way I've found
9:53to do is take this 15-minute chart now
9:56and bounce it down to a 5-minute chart.
9:59This is going to give us a very clean
10:00entry signal. And now you'll see we're
10:02on the 5-minute chart, so instead of one
10:0515-minute bar, we now have three
10:075-minute bars. This is the one I prefer
10:10to use, but you can use anything smaller
10:11than sub-15 minutes. The most important
10:14part of this process is to take that
10:16very low print you see, which is right
10:18there. And I want to move a line over to
10:21the left, okay? You'll see this was the
10:24first area post 15 minutes
10:28that the market, the collective market
10:30decided maybe there's an opportunity to
10:33buy. There was some buying activity
10:35here. And for reference, that's going to
10:36be $690.51
10:38per share.
10:40But what we want to do from here is
10:42start to move our eyes to the left and
10:44see is there any place in the past where
10:48there was a support zone, where this
10:50price held up? Does this have any
10:53relevance? It's a very important for us
10:54to understand the relevance of these
10:56numbers. So when I kind of scroll this
10:58chart out, you see
11:00there really isn't any. I can go many,
11:02many days back. So this is a very deep
11:05and very aggressive pullback. This
11:07should be taken seriously. So in this
11:09case, what I will do is come back to
11:11that daily, and you'll see there's that
11:12blue line that we drawn. Now I'm going
11:14to move this out all the way to my left.
11:18And I want you to see
11:19if your eyes can catch anything. Notice
11:22that just a few months back there was a
11:25bounce right at that same number. And
11:28just previously before that, there was a
11:30bounce. Now that second bounce led to a
11:32very aggressive rally, but there was a
11:35double bottom that was about 2 and 1/2
11:37to 3 months prior. So let's think about
11:40what we have here, and let me place this
11:41into context, because this is how you
11:43make money trading. It's layers of
11:45context on top of other layers of
11:47context, not just one smoking gun
11:49signal.
11:50First of all, we know, based off of the
11:52opening range, that we have this
11:54aggressive emotional move. We know that
11:56the participants are emotional. They're
11:58just smacking buttons, they're getting
12:00out. Fear is heightened, okay? So we
12:01know that. We also know that because
12:04it's so extended, it's most likely going
12:06to reverse. The next step is where does
12:08this reverse? If we take a quick look,
12:11we just want to kind of move over and
12:13realize, man, this was a double bottom 3
12:15months ago. There has to be a
12:17significant buyer. Now here's why I tell
12:19you it's emotional, because if you just
12:21think about it here real quick, guys,
12:22whoever was selling down in there on
12:25that deep, deep range, did not look at
12:29that support, because if they would have
12:31seen that support that's right there on
12:33that screen, they wouldn't have sold
12:34this. Am I right? You would not have
12:36sold this. So we want to go back now to
12:38our intraday 5-minute, and we want to
12:40move to step number three. All we really
12:43need here is just one candle
12:46to take out one of those reds. That's
12:49it. We just need a push of a green to
12:50come out somewhere. Now let me explain
12:52why this becomes a very important part
12:55of the process as well, why each one of
12:57these coincide with one another.
13:00It's not like it can't go a little bit
13:02lower, like the next bar can't drift
13:04down here, and the next bar can't drift
13:06down there, right? It's not like it
13:07can't sink below that support for a
13:09short period of time, sweep liquidity,
13:12and then come back up. So you really
13:14need that last candle, especially on
13:15something so aggressive like this is
13:17testing such a deep level. You need to
13:19make sure that you have that next
13:21candle. So I'm going to play this
13:22forward, and you'll see that the very
13:24next candle does, in fact, cross over
13:28that red. Now to me, that's all you
13:30need. You just need those three parts to
13:33make the trade. I have the opening flush
13:36that's in excess of 70% of the daily
13:39range.
13:40I have a pivot off of a long-term deep
13:44support level, a very valuable support
13:46level, and I now have a confirming
13:495-minute green candle.
13:51That's all I need to make a trade. You
13:53And you don't need any more than that.
13:56So in a situation like this, the trade
13:57becomes very straightforward and very
13:59simple. So what I would do is enter a
14:02buy order right on that cross. Now this
14:04is a replay, so it's going to fill you
14:06at the end of the bar. In a real-time
14:08environment, that would be right there
14:09at 694.71.
14:12So the stop loss in this case would go
14:14right underneath the low of the day. Now
14:17the beautiful part about this range that
14:19we've already determined, there's one
14:20little key here I want to show you.
14:22We're going to use that same range
14:25method for our exits. So what we want to
14:29do is take this entire range from the
14:31very top to the very bottom, and we want
14:35to target 50%
14:38to 100%
14:41of that range, and that's what we want
14:43to use for our target. So if I kind of
14:45play this back, you'll see that
14:47eventually it does go all the way back
14:49up to the top of that range. Now this
14:52would be something that you may have
14:53heard in the past. I'm not going to go
14:55into an in-depth explanation about it.
14:56It's called a mean reversion.
14:59Assets tend to go back into their median
15:02averages and trade back into their
15:04median averages. This is why that
15:06trading strategy works, because those
15:08opening flushes create the emotions, the
15:11panic to get liquidity, so larger
15:14institutions could buy into them, and
15:16they often return back to the median. So
15:18what I want to do now is before we move
15:20into the live portion of the trading,
15:22let's just quickly go over those three
15:23moving parts. I'm sure you got them, but
15:25let's just make sure, double-check that
15:26they're in our head. That way you know
15:28exactly what we're doing here in a
15:30real-time environment, cuz sometimes it
15:31get kind of fast. So step number one, or
15:33moving part number one here, is we want
15:35to make sure we have the opening range
15:38and measure the opening range against
15:40the daily range. And what we're looking
15:41for is if we're trading a stock, we're
15:43looking for 70%
15:45of the daily range to be consumed within
15:47the first 15 minutes, at least close to
15:49it, 70% or more. If we're trading an
15:51index instrument like the DAX, the ES,
15:54the Nikkei,
15:55commodity, whatever it might be, 30% is
15:58going to be good enough there, okay? So
16:00somewhere in those neighborhoods, we
16:01know we have at least an emotional event
16:03that we can take care of. The next step
16:05in that is we want to make sure we know
16:08some sort of level, whether it's a
16:09resistance level or a support level.
16:11We're looking for a very deep, vital
16:13level where a previous buyer and seller
16:16has been present to look for that shift
16:19in possible momentum. And the third part
16:21of that is just look for that one candle
16:24to to just show us there are interested
16:27buyers or interested sellers. We put in
16:30the order, we place the stop, and we use
16:32that range to get back. Very, very
16:33simple. So let's go ahead and do some
16:35live trades here, and then I'll walk you
16:37through each one while we're doing them.
16:39Okay, so we have this Palantir. Let me
16:41move this chart around where everybody
16:43can see it.
16:44You can see the entry right there by the
16:46blue arrow. Just want you to take a look
16:48at the pattern, take a look at the
16:50entry, and I want you to just figure
16:52out, look, by this time you should
16:53understand what what this trade is all
16:56about, and we're going to go through
16:57each part here real quick. Before I get
16:59into that, let's mark the actual trade
17:03anatomy here with the entry point, the
17:06stop losses, and then the target. So
17:09there's the entry, there's the stop.
17:11We'll do the 50% of this range. Now this
17:14is the 5-minute chart that I'm using. I
17:17I'm not using the 15-minute, but these
17:19three bars would be the culmination of
17:2115 minutes.
17:22The first thing I want to show you is
17:23this is one of the reasons why we wait
17:25for that candle confirmation, because
17:27you see you didn't even get that one
17:29candle crosses another until down here.
17:32Now if I grab a measuring tool, and we
17:35come back up, I'll put the 15-minute
17:37chart when I go back up over and I edit
17:39this, but
17:41if you measure the very top of that down
17:43to the pivot, you're looking at
17:45about 10, almost $11 worth of range. So
17:50that's pretty excessive. And then if I
17:52pull up the daily chart, and we're using
17:54the ATR, you'll see that's that's well
17:57over 100% of Palantir's range. So we're
18:01talking about the extreme of the
18:04extreme. And we've already gone through
18:06that trade.
18:08So this again is one of the reasons why
18:10you want to wait, because it doesn't
18:11necessarily have to happen at that
18:1415-minute mark. Now the other part of
18:16that equation, too, is if I pull up the
18:19daily, take a look at where this is
18:22bouncing at this 170
18:25uh this 177 area right here, right?
18:29You're going to notice this is pretty
18:31adequate support, right? Matching a past
18:35level.
18:36So this should be, for all intents and
18:39purposes,
18:41the low of the day. There's no
18:42guarantees, but you can see the risk
18:45versus reward is extremely favorable. So
18:49just real quickly going through this, we
18:51already have our
18:54range extension here, and we're well
18:56outside of the 15 minutes, and we're
18:57well outside of the daily range move.
19:00The opening range move is like 10 times
19:02more
19:04than the daily move.
19:06There's your first candle taking out
19:08another stop loss as at low of day.
19:11We're just looking to take back half of
19:14the range. Now maybe it can go all the
19:15way back up.
19:17I don't know,
19:18but that's the angle
19:20that we're looking for. So
19:22let's just let it kind of play out. As
19:24long as it's holding up, we're good to
19:27go. Okay, so moving forward, you can see
19:29we have really, really good structure.
19:31So I'm pretty sure that the low
19:34is going to be the low. And now we're
19:35coming up into that that 9 EMA. Again, I
19:38did a a video about this 9 EMA, but
19:41if you wanted to, you could choke that
19:44stop up underneath
19:46of those
19:48two recent candles there, but we're
19:50going to let it go. As long as it's
19:51working, we're now starting to make some
19:53higher highs. You can see how the
19:54structure is working on the chart. I'll
19:56try to highlight that when I go back and
19:58edit it. But this is exactly what you
19:59want to see. Notice the extension.
20:02Notice that it hits support. You got the
20:04one candle over the other. Now it's just
20:07a matter of can we just continue to
20:10build the structure, make some higher
20:11highs, and just continue to move?
20:14So we'll come back in a little bit and
20:16take a look at this. But so far this is
20:18turning out to be really good. I mean,
20:20you can see how this works, right? Now a
20:23lot of people who were looking at that
20:24chart,
20:25I mean they're thinking sell, right?
20:27This looks like a panic event. This
20:28looks like, you know, the world's coming
20:30to an end. Maybe you should get out of
20:32your your Palantir, but
20:35you know, these patterns just don't
20:36fail, man. It's just don't fail. But uh
20:39anything can happen. The trade's not
20:41over yet. So we'll come back and look.
20:43All right. So I wanted to come back
20:44here. This This red arrow, I sold 50% of
20:49this position. This is something I like
20:50to do. It's a completely different
20:52topic, but I do like to scale in and
20:54out. So I'm taking a partial here and
20:56trying to see if we can just be a little
20:58more patient. Maybe work our way back up
21:01to the full opening range. Just This
21:03This kind of tactic allows me to be a
21:05little bit more patient. But take a look
21:07at that entry. One thing I wanted to
21:08kind of note is like notice right after
21:10that break, you got a little bit of a
21:12sucker candle that could have shook out
21:13a trader. Remember, once that low has
21:16been sunk in at a good level, that
21:18should be good. So as long as we kind of
21:20hold that 9 EMA,
21:23see if we can work our way back up. But
21:25so far, booked some profits and the
21:27remaining looks good as well. So I'll
21:30come back in a few and update you.
21:33Okay. So it's been a while, but I went
21:36ahead and took the extra or the last Let
21:39me just say the last half.
21:41Um we're getting a little bit late in
21:42the day and it looks like maybe this is
21:45tapped out and I'm just kind of running
21:47out of a little bit of a patience with
21:49it. But look, I mean, this is what you
21:51want to see. I think you got the point.
21:53Would have liked a little bit more on
21:54it, but
21:55if truth be told, having a tough time
21:57with the patience here. I think I've
21:58given enough time. And there was this
21:59nice
22:01little uh shakedown here. But again, as
22:03long as it holds the structure
22:05and you're holding a good trend here.
22:07You can see it's still kind of trending.
22:09It still might go, but as of now I'm
22:12done with it. So anyway, guys, that's
22:14going to do it for today's video. I
22:15think the strategy is very
22:17straightforward and it's pretty simple.
22:19So you shouldn't have any problem
22:20starting to implement it. Now if you do
22:22have any questions, go ahead and put it
22:23down there in the comments section. Or
22:25you can always reach out to me. I'll put
22:27my email down there as well. If you have
22:28any questions about using any of the
22:30other strategies here that are on this
22:32channel. But I think you're going to
22:33find this one of the more
22:33straightforward and simplistic
22:35strategies. Now one last thing I want
22:37before I sign off here for the day. As I
22:39mentioned in all of these videos, if
22:41you're looking for solid trading ideas,
22:43my wife and I put together a watch list
22:46every week that's called the Gains
22:48Guide. And we list all the best stocks
22:50and assets to trade for the week. It's
22:52completely free. I also wanted to let
22:54everybody know that the trades that you
22:56saw here are trades that were recorded
22:59live in our trade room. We now have a
23:02live trade room called the Rumor's
23:04Squad. Now I haven't posted anything
23:06about that here on this channel. We've
23:08had it open for a little while. But I'm
23:10going to post it now. So for any of
23:11those that are really looking to see
23:13what this looks like on a day-to-day
23:14environment, to have complete narration
23:17from start to finish with the trades
23:19being made in real Just like this. These
23:21are taken live just like this each day.
23:24Maybe the squad can help you. Again,
23:26that link is going to be down there in
23:27the description box. As always, I want
23:29to thank you for your participation
23:30today. It's always my pleasure to share
23:31these strategies with you. On that note,
23:34take care, trade well, until next time.

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