The 3 Step A+ Strategy I Use Everyday

You've been trading for a year, maybe two. Every 3 weeks you're back on Twitter looking for a new strategy because the last one hit a losing streak and you couldn't sit through it. Sunday night you print fresh rules, Monday morning you break them by 10:00 a.m. You've probably spent five, maybe 10 grand on courses trying to fix this, but that's not the fix because the problem was never the strategy. The problem is you can't sit through the losing streaks that come with every real one. And every 3 weeks you switch to a new strategy that hasn't hit its losing streak yet. That's the whole loop you're stuck in. And that's what's actually been costing you the account. So, in this video I'm going to do two things for you. I'm going to give you the three-part framework I've been running for the past 5 years that made me millions of dollars. And more importantly, I'm going to tell you why you're going to struggle to stick to this one, too, and exactly what fixes that. But first, let's talk about what you need to understand before you take another trade this week. Starting off with daily bias, which is the direction institutional flow has already decided the market wants to deliver price today. Bullish, bearish, or neutral. And here's the thing that most retail traders never accept. The direction was decided before you sat down. Now, your job is not to guess it. Your job is to read it. And you form this bias before the open using two questions I'll walk you through in just a second. Now, if you come to a conclusion of which direction you're trying to trade before you start trading for that session, that's going to be your side and you should stick to it. If you have conflicting information or the market is more neutral, then you should sit out. There is no option where you should be trading because you wanted to force it. Now, our daily bias is a lean. It's not a prediction. Developing a bias is only answering one question. Which side am I willing to be on today? And you form this based on a higher time frame or what you're analyzing before the session starts. It's going to help you filter your trades, but it doesn't generate them. And one thing that's helped me a lot is not switching my bias in the middle of a session. Now, if you're an intraday trader and you like trading the AM session and the PM session, let's say if you get the bias wrong in the morning, then maybe in the afternoon you can decide to flip your bias, but I typically would not recommend doing it in the middle of a session because you can get into a lot of bad situations. It causes revenge trading, it causes tilt, and sometimes it makes you oversize the position trying to make back the initial loss. And because markets are probabilistic in nature, being wrong about your bias is totally normal. But if you're not comfortable admitting you were wrong, then it ends up being an expensive mistake. Now, how do I determine my actual bias? Well, first, it's going to start top-down, meaning I have a higher time frame that I'm trying to read, whether that's the daily, the 4-hour, or the 1-hour. And I'm trying to analyze if the market is making higher highs and higher lows or lower highs and lower lows. And also, do we have a target in mind that the market should trade to? So, I ask myself three questions. Which way is the daily or the higher time frame delivering? That could be the 4-hour or 1-hour, whatever your highest time frame is going to be for that specific trading session. Is it creating higher highs and higher lows or lower highs and lower lows? Are we getting inside candles showing us the market is neutral, or are we getting outside candles showing us strong participation in the market? Question number two, what has not been taken yet? So, I'm looking for untouched highs and lows above or below, depending on which direction my bias is. So, if I have a bullish bias coming into the day, I prefer the previous daily highs are not taken yet because that gives me a target to reach for. And if I'm bullish, but the previous daily high's already been taken, then I either size down or I don't take a trade because my target's already been met. And finally, number three, I always have a point of invalidation, meaning my stop loss. I always pick this level in advance, and it's my invalidation level. So, if price trades through it and holds, my bias is dead because my stop goes into a place where the trade idea is no longer right. And the best protocol that I found is once my invalidation level's hit for the day, then I'm done. I do not flip on an impulse. So, everybody talks about bias, but a lot of traders have a hard time actually implementing it and what to look for. So, let's walk through a couple cheat sheets that I put together. In both of these examples, they're showing strong bullish moves. So, in this top example, we have a higher low and higher high, and the close of this candle closes above the previous high. So, we have two candles in sequence that create a higher low and higher high and it's closing above the previous candles high. This is showing us that bulls are in control. Now, we also have outside bars where the second candle takes out the previous candles low and also closes above the previous candles high. And we can see that the second candle fully engulfs the previous candle. This is another strong indication that bulls are fully in control of this market. So, we have two examples of strongly bullish scenarios where we only need two candles to try and predict what that third candle's going to try and do. This gives me a strong conviction that the market is bullish. So, what I'm trying to do is only look for buying opportunities. [music] And you've probably noticed this in your own trading. You see bearish setups when the higher time frames were telling you it's bullish and all of those bearish setups fail and you end up taking losses. So, when I have that conviction coming from the higher time frame, whether it's a daily, the 4-hour or the 1-hour, I want to make sure I'm aligned with that. So, when I drop down to my execution time frame, whether that's the 15-minute, the 5-minute or the 1-minute, that I'm trading in alignment with that higher time frame. Now, the next one is going to be a weak bullish setup. And in this case, we have a higher low and higher high, but in this case, candle number two fails to close above the previous candle's high. While this specific pattern is still bullish, I'm much more cautious because we could see some type of retracement. Even though this example is still bullish, I am much more cautious because I am weary of a deeper retracement prior to seeing those buy signals appear. So, again, you're trying to long but with caution. Next, we have strong bearish. And in this example, you could see that the market is creating lower highs and lower lows and we are also closing below the low of this previous candle. Now, again, this all depends on the higher time frame that you're using for your trade ideas. If you're using an hourly chart for your higher time frame and you're executing on the 5-minute, you really only care what happened in the last couple hours. So, let's say leading up to to open, we have this specific setup. Coming into the open, we're anticipating some smaller retracement. We're trying to position ourselves short for another expansion lower on that third candle. And in pattern number two, we also have a bearish outside bar, where it's taking out the high and closing below the low. And you could see again that this specific candle is engulfing or outside of the previous candle. So, both of these examples give me a strong conviction for bearishness. So, even when I drop down on those lower time frames, I'm only looking for reasons to short the market. If I drop down to a lower time frame and I'm seeing bullish setups, well, I'm just going to wait until a bearish setup appears. Next up, we have weak bearish. So, this market is creating lower highs and lower lows, but this second candle fails to close below the low of this first one. Now, I'm only shorting this with caution because there is the chance that this market is going to provide a deeper retracement prior to finding that short signal. Then, we have caution candles, and these signal either a reversal or retracement is underway. So, as you can see in this top example, the market did create a higher low and higher high, but you can see that the second candle closed bearish, meaning it failed to continue higher and it gave us a bearish rejection. And in our bullish example, we can see the market is creating lower lows and lower highs, but the market failed at the previous candle's low and gave us a bullish closure. So, for our conviction, it's low for a continuation, meaning if we get a higher low and higher high, my conviction is very low that the market's going to continue higher, and it's actually higher for a reversal or retracement. These two examples give us our early warning signs of a possible turn in the market. And lastly, we have our neutral candles or inside candles. So, in this top example, we see that this candle closed inside of the previous candle and did not create a higher high or a lower low. It's the same thing if you see a bullish inside candle, it failed to create a higher high and it failed to create a lower low. This two-candle pattern is telling us that the market is indecisive in that current moment. And what we're trying to do is wait for a break. Now, a break can come in the form of a fake out, meaning it takes out the candle's high and then reverses, or we might get a break to one side and a continuation. But usually when these candles appear, I'm sitting on my hands waiting to see what happens. Now, knowing the bias is just step one because the market doesn't just go where we want in a straight line. It has to run something first. And when you understand what that is, every losing trade you took the last month is going to make sense in about 30 seconds. And that's because your stops are what the market is chasing. So, every visible swing high on your chart, that's where buy stops are resting. And every swing low, there's sell stops sitting below that. Those are our pools of liquidity, and the professionals know exactly where every single one is. And they need to know this because they need counter flow to enter their positions. So, for every buyer, there's a seller. And for every seller, there's a buyer. What professionals are trying to do is position themselves where the most transactions are occurring. So, if the market is bearish, they're going to use buy stops to try and enter their positions because they know a bunch of old highs, there's going to be a lot of liquidity and trading activity occurring above that old high. So, professionals are using that flow to fill their orders and then reverse it and go the actual direction they want to take the market. So, yeah, that move that stopped you out this morning before ran to your target, that's because you were the counterparty to their trade. So, when we think about a market, we have all of these pending orders that are being placed in the market. Whether it's traders that are sidelined trying to get into the market or traders that have active positions using stops and limits to protect the position and take profit. So, above obvious highs sit buy stops and below obvious lows sit sell stops. Again, a large order needs someone to take the other side. Now, equal highs and equal lows are the clearest pools because as that market approached its previous high and didn't take it out, more and more liquidity is being built up above that high. And same for equal lows or double bottoms. As the market approached that level, it didn't take out this liquidity on its first visit. So, when it rallied away, more and more orders are being built up below those lows. Now, if you're having a hard time spotting where liquidity is, it can be very simple. All of these orders stack at very obvious levels, meaning previous weekly highs and lows, previous daily highs and lows, and previous session highs and lows. Now, you would have noticed this if you study this for any meaningful time. Often times when we take out weekly highs and lows, there is a very, very strong reaction at those levels. Either we get a reversal or we get a break through and a continuation. Then we have daily highs and lows, and these are our default target for the session. Meaning, if I'm bullish, I'm targeting a previous daily high. And if I'm bearish, I'm targeting a previous daily low. I'll mark them every morning, and again, if I'm bullish and we've already taken out a previous daily high, I'm much less likely to put on excessive risk because my target's already been met. And then finally, we have session highs and lows. So, we have Asian session, London session, and New York session. These are typically the intraday levels that we're trying to hunt for our setups. Now, once you see this, you can't unsee it. Well, that leaves one question. How do you know in real time the sweep is done and the reversal's on? Because if you enter too early, you get chopped up. And if you enter too late, the trade's already gone. Now, there's one specific candle pattern that tells you it's a good trade. And that is the swing failure pattern. And it's exactly what it sounds like. Meaning, price approached to swing point, it took the swing point out, but failed to displace any further. That characteristic is all you need to understand the previous two concepts we just talked about. It's showing you that the bias is in play, and it's showing you where liquidity was taken and the counterparty stepped in. So, what is a swing failure pattern? I'm going to give you guys a bearish example. So, we have a prior swing high that's being raided and closed back below. So, here we can see we have this prior swing high, we take it out, but then fail to close above that specific level. Now, it's telling us two things. That buyers were given the breakout, meaning as price traded above this high, there were a lot of people trying to buy long on a break of this previous swing high. But, also there were previous sellers that may have gone short on one of these candles that put their stop loss above this specific high. So, we have early shorts being stopped out of the market, and we have buyers being trapped in the market. And that's enough liquidity to send the market the opposite direction. So, what we're looking for in a bearish scenario where our bias is bearish, we're looking for a previous swing high to be taken out, a failure at that previous swing high, and a closure back below it. Now, what separates a good swing failure pattern from a coin flip? Well, first of all, it happens at a level that actually matter. So, a weekly swing high, a session swing high, equal swing highs, not just some random swing high that happened mid-day. Number two is the direction. Is it pointing in the direction of our bias? So, if you got a bearish swing failure pattern, but your bias is bullish, it's very likely that it's going to fail. And finally, the reaction. Did it reject quickly or did it kind of take out that level and just drift? What we're looking for is a strong, quick reaction after taking out these swing highs and lows. So, now how do we put all of this together and actually trade it? Well, let me show you right now. So, the first thing that I do when I sit down in front of my charts is I go over my higher time frame to find my bias. And in this specific example, I can see the daily time frame was an inside candle. So, if we just zoom in here, we can see that this specific candle closed inside of the range of the previous candle. So, this one candle right here is an inside candle. It didn't create a higher high or a lower low. So, right now the market is neutral. And as I mentioned, what we're looking for is either a run on either of these levels to give us an indication that the market wants to continue lower or we might break out of this high and continue higher. So, right now the market is neutral. Now, what I'm going to do is plot out my previous daily high and my previous daily low. So, our first two steps are out of the way. That took me literally 2 minutes to do. Now, what we're looking for is a swing failure pattern at one of these levels and targeting the opposing level. So, we're going to drop down here and see what we get as we we forward towards the next day. All right, we're still within the range of that previous day, and we are approaching New York session. Now, here we can see that we've taken out the prior day high and closed back below it. This here is our swing failure pattern. So, we have a swing failure pattern at the previous daily high, and not only that, the hourly candle is giving us a bearish outside bar. So, you can see that we took out the previous candle's high, and we took out the previous candle's low. Now, for it to be an outside bar, it doesn't need to close below the low. All it needs to do is take out the previous high and the previous low. That way, these upper and lower wicks are outside of the previous candle. Now, I do want to note that the body of the candle should be pretty big. It should not close near the open. So, what we're going to do here, because this is our confirmation, it's telling us that people that were short got stopped out, and anybody that tried to go long on a breakout is now trapped. All right, so, what I like to do is actually just draw a rectangle here and visualize all the participants that were transacting above of this old swing high. Right? There are a pool of traders that are up here that are either getting stopped out or trapped in long positions. Now, yes, you can be the person that's in here trying to act as the counterparty, but I'm not trying to do that. I'm trying to get on side with the bigger players. So, now that I know there's bigger players operating above that high, what I can do, because I'm leaning more bearish, because if I go to the daily time frame, we're trading also into a daily fair value gap, my target is then the previous daily low. So, what I'm going to do is put on a short position and put my stop above the high that created the swing failure pattern. What I'm going to do is target the previous daily low. So, I'm going to sell short here, put my stop at 30,144.50, and my target at 29,108.25. We can see that I'm taking $3,500 of risk to make $17,000. Now, I don't know if I'm going to hold this trade all the way down to the previous lows, but if it gets close enough, you could also partial and adjust your stops. So, now that we have the position on, let's play this forward and see what happens. So, we get a very large expansion lower. Now, because my target is again previous daily lows, I'm just going to hold this one and maybe move my stop closer to break even, and I'll use this previous hourly high as my stop loss. So, I have most of the risk off the table. And there we go. Now, this trade moved extremely quickly, and I don't want you guys to anticipate that this is going to happen on every specific trade. But, the framework we talked about is there. When you get an inside candle, you're waiting to see what happens at the extremes of that inside candle. Here, we get a swing failure pattern, and then we're targeting the previous daily low. We get a very strong expansion down towards our target in the next couple hours. Now, let's just walk through the next day. Here, we can see we have a bearish outside bar because we took out the previous day's high and the previous day's low. And we got a bearish closure. Although, it's not the best bearish closure cuz I typically like to see a closure through the open of the previous candle, this one is pretty sufficient because we traded into a daily fair value gap and rejected. So, what I'm looking for is more bearishness coming into the next day. And what am I looking for again? I'm looking for another swing failure pattern. And when markets are really bearish, I don't anticipate the previous day's high to be taken out. So, in this case, I'm going to look for session liquidity. So, at midnight, we have our Asian session high. So, I'll mark that out and see if we get a swing failure pattern here. Now, we're just going to skip forward to our New York session and see what the market gives us. All right, we don't have a raid on that session liquidity just yet, but we'll keep playing it forward. Now, here's our PM session window. This candle closes at 3:00 p.m. And this candle is also a swing failure pattern. So, we have another swing failure pattern here, and as I mentioned on those bias cheat sheets, what I'm looking for in a two-candle pattern, this is a caution and reversal because we take out the previous candle's high and close bearish. So, what I'm going to do during the PM session is go short. Maybe I'll put my stop loss right around here and aim for a 2R. So, I'm going to go short. I'm going to put my stop at 29457, and my take profit at 28656. Because it's so late in the day, I don't know if we're going to get that run to the previous daily low. Well, let's sell short and see what happens. So, here's about 4:00 p.m. where the market is typically closing. Now, if you wanted to tighten up the risk reward a little bit, you could drop down to the 5-minute and see if we get a swing failure pattern or something in here to position yourself short. Now, if you're trading with prop firms, they don't allow you to hold overnight, but what you can do is wait out the hour rollover and just put on another position exactly where you had your stop and your take profit initially, as long as the market doesn't gap too much. So, let's say I had to close this trade on my futures prop firm accounts, I could reopen it at 6:00 p.m. We get more continuation to the downside, and eventually we hit the target. Three things: bias, liquidity, swing failure patterns. That's the whole framework. You form the bias before the open, you wait for the market to run the opposing liquidity, when the sweep prints an SFP, you take the trade with your stop above or below the wick, and you target the next opposing pool. But, here's the actual reason I made this video. In 1983, two commodities traders ran an experiment to see if trading could be taught. They took 23 novices off the street, gave them all the exact same mechanical rule set, put them in the market with real money, same rules, same markets, same time period. Some of those traders made 100% a year for 3 years straight, while others washed out completely. Same rules, wildly different outcomes, which brings me right back to what I told you before. Knowing the framework and running the framework for the 100 trades it takes to prove the math are two completely different games. And that's the game you're going to lose if you do this alone. The traders who made money and the traders who washed out weren't split by intelligence or talent. They were split by whether they had someone holding them accountable to running one framework long enough for the math to show up. That was the difference. And that's the trap that most retail traders never get out of. It's not a knowledge gap, it's an accountability gap. And that's why I created the Trading Apprentice. You get to trade this exact framework with me live. You get access to me to ask me any question you want. And more than any of that, you get held accountable to actually stick to the plan long enough to prove the edge. Now, most traders quit at trade 30, but we don't let you. So, if you're interested, I'll leave a link in the description to apply. Some of our students have gotten results like this and this. And some of them have even made $100,000 in a single month. But, I want to be very clear. We don't just accept anyone. So, if there are spots available, just submit an application and we'll see if you're a good fit. But, if you decide that's not for you, I hope this framework that I've shared will get you on the right path to success. Don't forget to like and subscribe, and I'll see you guys in the next one.