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The Only Trading Setup You Need (Just 3 Steps) — Transcript

by AM · 3,796 words · 544 segments · language en · Watch on YouTube

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0:00It took me years in the market to
0:02develop the system I trade, something
0:04that is consistent and structured
0:06through the steps, and it took even
0:08longer to find inside of my system which
0:11specific setups and criteria actually
0:13perform the best over time. So, here I'm
0:16going to be sharing one of my top setups
0:18that I look for in trade inside of every
0:20single week. This is something that is
0:22simple to follow because the steps are
0:24defined and you are simply looking for
0:26alignment in the market. You're not
0:28doing predictions, you're not guessing,
0:30you're not including random concepts.
0:32The market is either aligned with a
0:34setup and you're taking a trade or it's
0:36not and you're letting the day go.
0:37There's no in between. I'll be breaking
0:39this down top to bottom with trades that
0:41I've actually placed in a live market as
0:43always alongside some live execution
0:45clips. So, let's get right into this.
0:47Before we even think about placing a
0:49trade in the market, we first have to
0:51set the framework off the higher time
0:53frames to understand what the direction
0:56is that we're looking to trade so we can
0:58filter out the rest and put our focus to
1:00one side of that market. I use the daily
1:02chart to set the framework. I don't go
1:04above it to the weekly or the monthly
1:06where the scope is too wide. I don't
1:08drop down to the hourly for my initial
1:10perspective on the market. The daily
1:12chart is exactly what I'm looking for
1:14because there's only one thing I care
1:16about, where is the current daily candle
1:18going and how is it going to get there?
1:21That is the one question I have to have
1:22answered before I move on to any further
1:24step. I use something called relevant
1:26swings off the daily time frame which is
1:29drawing out and identifying the extreme
1:31highs and lows on the daily chart. Don't
1:34worry if you don't already have a
1:36baseline understanding of what relevant
1:37swings are because once we get into the
1:39real trade examples very soon, I'll
1:42share exactly how to identify them and
1:44what specific reactions we're looking
1:46for on reversal and continuation days
1:49under the setup that are going to give
1:50us the best follow through. And even
1:52beyond that, I have a video on my
1:54channel that completely breaks down
1:56relevant swings and a lesson on my
1:58website that you can check out after
2:00this video if you feel like you need it.
2:02Once we have a valid engagement of a
2:04relevant swing and we're sitting inside
2:06this expectation for the current daily
2:08candle to expand to one side, this is
2:11where we're going to look inside of that
2:13day and profile the sessions using the
2:167-hour time frame that we're going to
2:18allow the Asia and London session of
2:20print and we're completely focused on
2:23where that New York session is going.
2:25That is our window that we're looking to
2:26capitalize on. Finally, once we have
2:29that daily profile aligned with our
2:31expectation of the daily candle and we
2:33are looking to trade in that New York
2:35session, we have everything we need to
2:37then seek an entry. We're looking to
2:39position inside of the continuation of
2:42that daily candle. We don't need the
2:44high or low of day, that's completely
2:46unnecessary. We want a high confidence
2:48entry in the continuation once we know
2:51the reversal for the day is completely
2:53in place and that New York session is
2:55set to expand. As you can see with these
2:57steps, this setup itself is focused on
3:00giving you the highest quality and
3:02probability chance of capturing that
3:04trend move inside of the daily candle.
3:06We start with relevant swings, that sets
3:08the framework, the profile confirms it
3:11and tells us exactly how that New York
3:13session should trade, and then once we
3:15have that understanding, we are entering
3:17in the continuation where our stop loss
3:19is protected, and then the higher time
3:21frame idea does the rest of the work.
3:24Now that you know the logic behind this
3:25setup and how these steps actually make
3:27it work, let's get into these real trade
3:29examples so you can nail down the
3:31understanding to be able to apply this
3:33for yourself. Like I mentioned, we're
3:35always starting off the daily chart
3:37trying to set the framework using
3:38relevant swings. We are here on the
3:40daily time frame, NQ is the pair, and we
3:43have a new week that's opening. This is
3:45Monday's daily candle in development and
3:48we want to look left to identify by
3:50relevant swings. We can see off the lows
3:52of the previous week we had a
3:53manipulation confirmed of this relevant
3:55low, expansion away to the upside, and
3:58then in this new week we gapped lower
4:01from the previous week close, and we've
4:03opened up right on a relevant low. Why
4:06is this low a relevant swing? It's
4:08because we have a daily low that has a
4:10lot of separation to this next daily
4:13low. Meaning that once we engage this
4:15here, there's nothing else for price to
4:17reach for. We know this reaction is
4:19meaningful. Now then when we look on the
4:21other side of the market, we see an open
4:23relevant high and room to expand up into
4:26it for the rest of this trading day.
4:29What makes this day even more appealing
4:31is that because we've gapped down and
4:33opened near this relevant low, this
4:35manipulation that we're seeing take
4:37place here on an intraday basis, it's
4:40forming this small wick of that daily
4:42candle. This means it's a high
4:44likelihood for this daily candle to be
4:46an expansion day. What we don't like to
4:49see and which reversal days we're going
4:51to completely avoid is a day like this
4:53here where the reversal has to reach
4:56very far to reach into that relevant
4:59swing and then it trades back away. This
5:01is not an expansion day. It is going to
5:03cap the range on that daily candle, can
5:06often lead to neutral ranges inside of
5:08this day. We want to see that small wick
5:10reversal form and then we can trade the
5:13continuation because that is aligning
5:15with the expectation of an expansion
5:17daily candle. This here is just to give
5:19you that visual. This daily candle is
5:21still developing, the New York session
5:23has not opened yet, and we're already
5:25seeing this reaction take place with
5:27room to reach for this opposing target.
5:30This bit of range here is exactly what
5:32we're looking to capture as long as we
5:34have a profile that's aligned once we
5:36look down on the 7-hour time frame. Now
5:38breaking this down, we have that
5:39expectation in place for price to expand
5:42higher. Do we have alignment of one of
5:44the three profiles? We have that daily
5:47relevant low, price engaged here in the
5:4918 candle, that Asia session, reached
5:52down and expanded away, and that 1:00
5:54candle held away from that intraday low.
5:57So, we are sitting in an 18 reversal
6:00bullish daily profile. If we take a look
6:02at the three different profiles that
6:03we're looking to identify, it falls
6:05under that 18 reversal where the Asia
6:08session establishes an intraday
6:10reversal, 1:00 candle either expands
6:13away or holds away from that point of
6:15reversal, and then we assume the New
6:17York session is already in the
6:18continuation. One thing that may throw
6:20some people off is that this candle did
6:22not make a significant expansion away,
6:24but it's still holding away from the
6:27intraday reversal. We've already
6:29manipulated the daily relevant low.
6:31There is no reason for price to return
6:34back here. We assume the New York
6:35session is already in the continuation.
6:38So, this next step is thinking, how do
6:40we confirm the low of that New York
6:43session because we understand that it
6:45should expand up into this high. Well,
6:47when we look at a wick like this that is
6:49opposing the direction we're looking to
6:51trade, what I want to think is that this
6:53wick on the 7-hour, if we were to view
6:56it on a 15-minute or a 30-minute, for
6:58example, this is just going to be down
7:01closed candles that we need to close
7:03back through in the New York session to
7:06confirm the low. And if we do look down
7:09to the 30-minute on NQ, that same
7:11highlighted range, which is the wick of
7:13the London session, are just down closed
7:16candles. So, if we close back through
7:18them in the continuation, we should be
7:21holding valid opposing candles because
7:24that New York session has to expand
7:26higher. So, all we want to do is wait
7:28for that closure, and that is not only
7:29going to validate the profile, but we
7:32know we are in the continuation of that
7:34New York session, and then we can go and
7:36seek a potential entry. Just a few more
7:38candles forward, and you can see that
7:39Asia session expanded, 1:00 candle held
7:43away from that intraday reversal,
7:44meaning we're already in the
7:45continuation of this current day. So,
7:48the New York session should trade
7:49higher, not reach back for that intraday
7:51low. We see that the 8:00 candle opens,
7:55runs out a short-term low, and then gets
7:57a closure above this series of down
8:00close candles on the 30-minute. That
8:02means we've just confirmed the low of
8:05that 8:00 candle, and we are assuming
8:07the continuation. This is that
8:09development of the 8:00 candle. We have
8:12that low that is already established.
8:14And inside of this expectation,
8:16this is our opposing target. So, we have
8:18this range that is left as our window of
8:21opportunity that we want to seek an
8:23entry to position alongside that. We can
8:27see on this lower time frame this same
8:28series of 30-minute opposing candles.
8:31So, that is that opening price. We
8:33closed through it on that 30-minute time
8:35frame, and then we refine down on the
8:375-minute to seek our entry alongside
8:40this because we understand what the
8:42daily candle should do, we understand
8:44what this session should do, we've
8:45already confirmed this low on that
8:47intermediate time frame. Now, we just
8:49want to seek our entry. We have price
8:51here retesting the 30-minute down close
8:54candles, which should be respected
8:56inside of this move, and we find this
8:58signature still using opposing candles
9:01in the continuation. Once we retest,
9:04close back through, we have a divergence
9:06off this low with ES. So, that's an
9:08added confluence. Once we get that and
9:11start to break away, this becomes my
9:13entry with my stop loss at this opposing
9:16swing. Here, you can see I took my
9:18entry, placed my stop loss, and I'm
9:20wanting to see 9:30 expand price in my
9:24favor. That is the main volatility
9:25driver of the day. The bias and
9:27confirmation is already set. So, this
9:29volatility driver should just push price
9:32faster in my direction. It's not in any
9:34point that I would be scaling this
9:36position. So, I'm going to allow this to
9:38trade through, eventually make a slight
9:40opposing run. 9:30 expands price to the
9:43upside. We get that full follow through
9:46on this trade. When it comes to your
9:47trade management, the biggest mistake
9:49that traders make is micro-managing that
9:52position. We have this idea of the
9:54higher time frame. We know where this
9:56session should trade and how it should
9:58get there. We don't want to be drawn out
10:00by these brief moves back on our
10:02position or scaling too quickly or
10:05trailing to break even to try and
10:06protect risk without any reason in the
10:08charts. We want to set that entry, that
10:11stop loss, place our expectation of
10:13where price should go, and not
10:15micro-manage within that. Allow it to
10:18play out, reach your targets, and when
10:20it reaches that meaningful RR threshold,
10:23risk to reward, we can start to scale
10:25that position out or close it fully. The
10:27mistake in trade management is always in
10:29emotionally making decisions on that
10:31trade versus just allowing the logic to
10:34play out which the setup implies. We can
10:36zoom back out here to the 7-hour time
10:38frame to view this full follow through.
10:41We have the engagement of the daily
10:43relevant low. We align the bullish
10:4518-candle reversal. We don't need to run
10:48back to this intraday low. So, that New
10:50York session is already in the
10:52continuation. We confirmed the low of
10:55this 8:00 candle that we're looking to
10:57enter within on the 30-minute opposing
10:59candles that we closed through inside of
11:02this wick here. And then we refined our
11:05entry and set that move for the
11:07continuation where we fulfilled that
11:09objective on the other side of the
11:11market. We set these defined steps here,
11:13and we follow it very clearly to capture
11:16this type of move. Now, let's move right
11:18onto the next day for the following
11:20trade example. We have this daily chart
11:23which manipulated the relevant low, a
11:25small wick reversal, and then expanded
11:27to the upside. Again, small wicks lead
11:30to large expansions. These are the days
11:32that we want to trade. This is where
11:34you're going to find your daily profile
11:35alignment, but we see this daily candle
11:38closure and we start to think what
11:40should the next daily candle do?
11:42Remember, that is the only question we
11:43need to concern in this first step. When
11:45we add this opposing relevant high and
11:47taking this complete context, we have a
11:50manipulation off the low and a deep
11:52closure through the opposing relevant
11:54high. This is a condition where we want
11:57to seek continuation in the following
11:59day. Inside of both of these trade
12:02examples, you're getting each type of
12:03reaction that we're looking at for
12:05relevant swings that become actionable
12:07under the setup. Either a small wick
12:10reversal day running into that relevant
12:12swing with a small wick and then
12:14expanding off of it or we already have a
12:16reversal established and we're looking
12:18to trade the continuation day. For
12:20example, that could be avoiding this
12:22large wick reversal and then trading the
12:24continuation day to follow. In a day
12:27like this, we could trade the reversal
12:28day because there is a small wick, but
12:30then the following day is an equal
12:32opportunity because we expect the
12:34continuation higher. Now, with that
12:36expectation, the second step is to
12:38profile the daily candle. We see on the
12:417-hour with NQ, we have the 18 candle
12:44establishing a low and then the 1:00
12:46candle expands to the upside. At an
12:49immediate glance, this is a bullish 18
12:51reversal daily profile where we are
12:53going to expect that 8:00 candle to be a
12:56continuation without needing to trade
12:58back to the intraday reversal and that
13:00is correct, but there's a little bit of
13:02extra context that we want to bring into
13:04this. On the left here, we have the
13:067-hour for NQ which we just saw that 18
13:09candle putting in a low, 1:00 candle
13:11expanding higher, but then when we look
13:13at ES, this is its correlated pair, in
13:17that same point we have a higher low, we
13:19see a lower low on ES. This is a
13:22divergence across the session candles.
13:25This here is adding additional
13:26confluence for why we should see that
13:28New York session 8:00 candle to expand
13:32higher. If you look back to these three
13:34daily profiles, both of these suggest an
13:378:00 candle continuation, not needing to
13:40run back to that intraday reversal.
13:42Unlike the 8:00 reversal where neither
13:45the 18 or 1:00 candles establish that
13:48intraday higher low, and then it needs
13:50to run that out. So again, we understand
13:53in the New York session exactly what we
13:55are expecting from it, and also what we
13:58are demanding from it as well, so we can
14:00then begin to seek our entries inside of
14:03this here. Now that we've completed the
14:05proper steps to what actually makes this
14:07setup work using the reactions at the
14:09relevant swings where we expect the
14:11daily candle to expand higher, the daily
14:14profile has confirmed that idea by
14:16aligning with the 18 reversal and the
14:181:00 reversal on ES and NQ, this here is
14:22our next thought being where is the low
14:25of that 8:00 candle going to be formed
14:27so we can then position an entry
14:29alongside that. Here you can see the
14:31hourly time frame on NQ with these
14:34sessions broken up, and that 8:00
14:36candle, where should that low of that
14:39candle be formed? Where should it not
14:41trade back to because we already have
14:42that expectation and the understanding
14:44that it should expand to the upside.
14:47Well, when we look on these intermediate
14:48time frames like the hourly, 30-minute,
14:5050-minute, we are opening that 8:00
14:53candle above hourly opposing candles
14:56that we've closed through. So we are
14:58opening this 8:00 candle understanding
15:01that it should not return back to this
15:02low, and we should respect these down
15:05close candles. This is slightly
15:06different from the previous trade
15:08example where the 8:00 candle opened and
15:10it has to trade to create its low. This
15:14one is opening with that low already
15:16established because we have that
15:18structure in place. Now we can use this
15:21to either take an entry or we can refine
15:24an entry off of this level here. This is
15:26one that I'm going to share a live trade
15:28execution for both of my entries on this
15:31trade at the upside, how I managed it,
15:33and how I closed it out under this
15:35complete idea that we've just walked
15:37through. Got this long position on here.
15:39Want to see the open push up higher.
15:41Looking for this New York continuation.
15:43We have that divergence off the session
15:45lows.
15:46New York session looking to trade
15:47higher. If we're offered another
15:49signature on this, I'm going to take a
15:50pyramid entry. If not, then I'm just
15:52going to manage this current position.
15:54Definitely in on the strongest pair
15:56here, which is always a good sign. We
15:58want to see that fall through. And since
15:59we broke higher at the open, I don't
16:01need price to return back to this low.
16:04Look at this higher time frame
16:05alignment. We have that relevant swing
16:07that was manipulated in the previous
16:09day, continuation on the following day,
16:11and we just aligned the daily profile
16:13here. Bullish daily profile, trade that
16:15New York session as the continuation
16:17inside of the daily candle. If we get a
16:19new closure above this down close
16:21candle, I'm going to take a pyramid
16:22entry and then trail my stop higher.
16:25That's a good push higher here, but we
16:26just want that closure to actually
16:27validate the entry. There's our closure,
16:30so I'm going to add to the position.
16:32That bumps my average, and I'm going to
16:34move my stop up to the new invalidation
16:36point. So there we go. I add to my
16:38position on that new signature, and then
16:40I close up my stop. So I have a larger
16:42position on while reducing my overall
16:44risk. Made a little bit of a
16:46retracement, but this is why we don't
16:47move stops from the invalidation point.
16:50Got ES showing more strength here, so I
16:52am going to be scaling slightly out of
16:54this position very soon. All right, at
16:56this point here, I'm going to close out
16:58my initial entry on this trade. Scaled
16:59those contracts from this initial entry,
17:01and I'm going to trail my stop again.
17:03Also just scaled one more for my pyramid
17:05entry as we keep pushing higher. Going
17:07to reduce that stop and then trail it
17:08higher here. Trailed my stop up one more
17:10time as we keep getting these closures
17:12above down close candles in the
17:13continuation. And right here, I'm going
17:15to close up fully. With that trade
17:17closed out, you can see we had the
17:18manipulation of the relevant swing in
17:20the previous day, trading the
17:21continuation, and simply aligning that
17:247-hour daily profile divergence off the
17:26session lows, trading the New York
17:28session as a continuation, and then just
17:31entering on opposing candles in that
17:33move. Now that you've watched a live
17:35execution, we want to really take a step
17:37back to understand what you're seeing
17:39here. The daily candle is under that
17:41framework to expand to the upside. We
17:43align the daily profile, which is
17:46already suggesting that the 8:00 candle
17:48is in the continuation and does not need
17:50to run out any new lows before trading
17:53higher. And then we refine down to our
17:55intermediate time frames, where we look
17:57at this structure here. The 8:00 candle
18:01is opening above valid opposing candles
18:04that were already closed through in this
18:06continuation of the day. So, we open up
18:09the 8:00 candle, we open, respect the
18:12opposing candles, and seek our entries
18:15alongside this and capture that
18:18expansion that is already set to take
18:20place. So, your option for entries are
18:22directly integrated into the daily
18:25profile, which is already confirming
18:27your daily bias. The moment we know what
18:29this 8:00 candle should do, whether it
18:32is in the continuation and we find that
18:34framework of where it should respect, or
18:36we're under an 8:00 reversal profile,
18:39where it needs to reverse off the
18:41current intraday higher low, we know
18:43exactly what it should do and where we
18:46should position after it. We are either
18:48taking that trade once we have
18:49alignment, or we are ignoring the day
18:52altogether. There is nothing in between
18:54one of those two things. This is a
18:56high-quality and structured setup that
18:58you will find every single week in the
19:00market if you are patient enough to look
19:02for it and understand that alignment is
19:05the only thing that matters. You don't
19:06need to make predictions or guess in
19:08market conditions that you don't
19:10understand. You want to seek the setup,
19:13and once you have that clear alignment
19:14in the market, you are trading it
19:16accordingly and not bringing your
19:18emotions into it. And now that you have
19:20a quality setup that is repeatable, that
19:22you can bring to the markets, your best
19:24next step is to first look at my past
19:27trades because I share them week over
19:29week on my Instagram. You can find them
19:31on YouTube, my website, my community.
19:34These are all places to go to look for
19:35yourself. And then alongside that, look
19:38and identify the setup in your own
19:40charts. The more you build your eye for
19:42this, the more simple it becomes. So,
19:44with that said, that is everything I
19:46have for you in this video. I hope you
19:48found it valuable, and I will see you in
19:50the next one.

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