Full transcript (2185 words)
In this video, I'm going to teach you a trading strategy that works every single day. This is the exact same strategy that's generated me consistent and profitable results after day trading for over 7 years. The best part about this strategy is that it's built around a simple three-step framework that anyone can follow before entering a trade now. I'm not here to make bold claims without showing you proof. To show you that this strategy actually works, I'm going to walk you through live trading examples step by step. You'll see exactly where I enter, where I place my stop-loss, and how I manage the trade from start to finish. And by the end of this video, you'll be able to open your charts and immediately trade this strategy yourself. So, without further ado, let's dive in. So, the strategy is called SLC, which stands for structure, level, confirmation. Now, this isn't just some random buzzwords. It's a decision-making framework, a trading system that's designed to stop traders from taking low probability trades. And if you follow this exact trading system with discipline, I promise you, you'll eliminate a huge percentage of your losing trades, and it'll turn you into a more consistent trader. So, here's what the SLC system looks like. First, I start with the S part in the SLC system, which is determining the structure of the market for that day. This makes sure that I'm only trading with the direction of the market. Think of it like swimming in a river. If the current is moving downstream and yet you decide to swim against the current, not only will you move slower, but you'll also use more effort trying to fight the flow of the river. But if you decide to swim with the current, not only will you move faster, you'll also use less effort to do so. Because you're letting the momentum of the river carry you. The same thing happens in trading. If you determine that the high time frame structure is moving upwards, aligning your trades with that structure will give you a higher chance of the trade playing out. So once the structure is identified, I move to the L part of the SLC system, which is marking my levels. Now, when marking my levels, I don't just draw random lines to clutter up my charts. I'll only mark high probability levels where price has the highest chance of reacting. Think of this step as marking my battlefield. I only consider going to battle if price reaches the levels I've identified. So, the price can move anywhere it wants, but if it doesn't hit my levels, I won't look for a trade. Doing this allows me to focus on only high probability setups. The final step of the SLC system is the C part, which is confirmation. Confirmation simply means waiting for additional signs that suggest my trade setup has a higher probability of playing out. Because at the end of the day, trading is a game of probability, and no amount of analysis will ever guarantee a 100% success. So instead of trying to be right all the time, I focus on stacking as many factors as possible in my favor. This way, I'm viewing every trade as probabilities and only when the odds are leaning in my direction. That's when I execute the trade. Now, what's great about the SLC trading system is I don't have to sit there for hours every day trying to analyze every price movement. Because I have a clear framework, I only need around 10 minutes to analyze a setup. I simply identify the structure, mark the high probability levels, and wait for confirmation. If a trade setup shows up, I just take the trade and move on with my day. No guesswork or stress, just a pure systematic way of trading. That's the power of the SLC trading system. And now I'm going to show you exactly how you can apply the SLC system in your own trades. First, the key is to identify the market structure on the higher time frame for that day. So, for example, if you're trading on the 5-minut time frame, then you want to go to a higher time frame like the 4hour chart and identify its market structure. Here's how you do it. First, you need to understand that market structure only has three phases: uptrend, consolidation, and downtrend. For this strategy, you only want to trade if a high time frame structure is either in an uptrend or downtrend. If it's consolidating, we don't take any trades. In an uptrend structure, you'll see price forming higher highs and higher lows. And if you see this structure, you only look for long trades. In a downtrend structure, you'll see price forming lower highs and lower lows. And if you see this structure, you only look for short trades. Now, let's get back to our chart here. I'm on the NASDAQ futures 4hour time frame. And as you can see, price is forming lower highs and lower lows. That tells us that the high time frame structure is bearish, which means when I'm trading on low time frames later on, I only trade short setups. Now, once we've determined the high time frame structure, we move to the next step of the SLC system, which is marking the levels. To mark the levels, I'm going to drop back to the 5-minut time frame because that's where I'll actually enter my trades. Now, the key to marking levels is you want to mark strong levels where price has the highest chance of reacting to. And a simply yet and effective way to do this is to find supply and demand levels. To put it simply, supply levels form at the top and demand levels form at the bottom. These levels represent areas where aggressive buying or aggressive selling previously took place. For example, to find a demand level, we look for an area where price made a sharp and aggressive move upwards. And the area right before that aggressive upwards move is what we call a demand level. The logic for this is simple. For the price to move up that aggressively, there must have been very strong buying pressure on that area in the past. Which means if price comes back to that level in the future, there's a high probability we'll see another reaction from buyers. The same concept applies to a supply level. To identify a supply level, we look for an area where price made a sharp and aggressive move downwards. The area right before that aggressive downward move is what we call a supply level. Again, the logic is simple. for price to move down that aggressively, there must have been strong selling pressure in that area. So, if price returns to that level in the future, there's a high chance we'll see another reaction from sellers. Now, let's identify the supply and demand levels in this chart. So, since our high time frame market structure is bearish, I'm only interested in finding supply levels. So, I'm looking for recent areas where strong selling pressure occurred, which means we want to look for a sharp and aggressive downwards move. On this chart, immediately we can spot two of them. one strong move here and another one over here. Both of these areas showed aggressive selling. To mark supply levels, I take the last candle before the aggressive downwards move formed and draw a rectangle around it. So, these are our supply levels. And from this point forward, I'll only consider taking trades when price is at one of these levels. Now, let's analyze this first supply level. As you can see, price actually broke right above it. Now, some of you might think, "Wait, I thought this was supposed to be a strong selling area. So, why did price just blast through?" And this is a crucial point to understand. Supply levels aren't magic. They don't guarantee a reversal. A supply level simply tells us that strong selling pressure has occurred in the past. This is exactly why we never blindly take trades just because price touches a supply level. We still need to apply the C part of the SLC system, which is confirmation. We'll dive deeper into that in just a second. Now, let's analyze this second supply level. Unlike the first level, this one hasn't been broken or retested at all. So, based on this, there are two possible trade scenarios I'm watching. Scenario number one, for this level, since price never touched it, the plan is simple. If price retraces back to that level, I'll look for confirmation that price is starting to reject before entering a short trade. Scenario number two, for this level, since it was broken to the upside once, we'll need a different plan. We want to see the price break to the downside and retest it from below. Then I'll look for confirmation to enter a short trade off of that retest. But keep in mind, this type of break and retest setup is only valid if a supply level has been broken once. If it's been chopped through multiple times, it's no longer a valid level. Also, notice something similar between these two scenarios. Both are bearish setups, which aligns with the high time frame structure we identified earlier. So, let's see what price actually does. Here we can see that price has started to move down into this supply level, but didn't manage to break cleanly below it. And remember, for this setup to be valid, we needed a strong break below the level and then a proper retest. In this case, that didn't happen. So, because the setup requirement wasn't met, we don't even bother moving on to the confirmation stage. Next, price begins to approach the other supply level above. This one is different. It has never been retested before, which makes this a potential trade setup. But again, we don't just jump into a trade the moment price touches this level. We have to move to the final step of the SLC system, which is confirmation. During the confirmation step, our goal is to simply stack as many supporting factors as possible that favors our trade idea. Now, there are many types of confirmations that you can use within the SLC system, but to keep things simple, I'll show you one example using an indicator called the stochastic. I usually use it with these custom settings applied. Pause the video here and copy the settings so you can follow along. So the specific confirmation I'm looking for is as price taps into the supply level, the blue stochcastic line needs to break above the upper level and then crosses back down, which shows that price was overextended and is now shifting back down. Now if we actually go back to the previous time price hits the supply level, notice something important. As the price tapped into that supply level, the blue stochastic line did break above the upper level, but it didn't cross back down. So there was no valid confirmation during that point. and that would have saved you from entering into a losing trade. Now looking at the current price as price taps into the supply level, we can see the blue stochastic line crossed above the upper line and then crossed back down. This time there is valid confirmation. This completes the full SLC system for this setup. First we identified the structure, then we marked the high probability levels and finally we have confirmation which means we can now take a short trade here. the stop loss goes slightly above the supply level and a to take profit target set at 2R. And in this example, price moved down and hits our take-profit level perfectly. So, you can see just how powerful the SLC system is. Not only did it stop us from taking a losing trade, but it also gave us a high probability winning trade. And we did this without the guesswork, without the stress, and just by following a simple trading system. Now, if you want to start applying the SLC system in your own trades, I actually created the SLC execution blueprint that you can download for free. This blueprint includes a checklist which you can use side by side whenever you're trading. This checklist ensures that you're always following the structure level and confirmation framework. You can keep it on the side of your screen or even set it as your wallpaper if you have to. I promise if you implement the SLC system on your trades moving forward, you'll immediately begin to see improvements as you'll start trading the markets in a systematic way rather than using emotions. So, if you're serious about improving your trading performance, click the link below, grab the free SLC execution blueprint, and start using it on your very next trade. I'll see you in the next