The SIMPLE 3-Step Trading Strategy That Makes Me $3,496/Day

Finding the right daily trading strategy didn't click for me for years. Not because it's too hard, but because no one would explain it fully with clear context that would allow me to be consistent and repeatable. I'm Craig PCokco. I've been a full-time trader and investor for over 5 years. And luckily, this year so far with one strategy, I'm about to cross the six figure mark, which I document on the YouTube channel and with the private side of my team. Additionally, I'm proud to say I've been able to help hundreds of traders on their journey with the mentorship program called Inevitrade, which I've been constantly developing over this journey with other verified six-figure funded traders from all over the world to build what I believe to be a world-class team. Okay, that's great, but that's not the point of this video. In this video, I'm going to be showing to you in raw terms the exact framework that has allowed me to be able to do this. And it literally consists of a simple three-step process that allows this to be repeatable, executable, and most importantly, profitable. When I started trading, I was probably something like you where it was a bunch of mixed things or oversimplified things. They were not repeatable, not actually executable. No matter what strategy you're trying to do that with, if you don't have the full context and it doesn't resonate with you and allow you to use what makes sense to you to apply into a strategy, you're never going to be able to execute on that. And that's exactly the framework that I'm using here. This is largely applicable across markets and across time frames. Figuring out how the market moves and then being able to capitalize off of that. If you think about it, the only thing that we're really looking at when we look at a chart is a representation of mass human psychology in decision-m by the means of people, institutions, algorithms, and this is mixed with market makers that are literally trying to make both sides of each trade, making it so the price is always trying to seek equilibrium to the path of least resistance. We can look at these two things and figure out what is likely to happen based off of those and put ourselves in a generally great position to be able to capitalize on the market moves. Once I started looking at the market as mass human psychology and market makers making it so the market's just trying to seek equilibrium, it changed everything about how I viewed the markets and everything becomes so much more intuitive. And this is kind of what led me to this three-step process. If you follow these three steps, I promise you by the end of this video, you're going to have so much clarity on how the market actually moves. It's going to help you set up opportunities. Whether it's this model or others, it's going to make it way easier to reach that profitability stage. Now, let's get into breaking down this three-step process. What we're going to be focusing on is basically like a big filtration process where we're going to be looking at range, change, then execution. Obviously, there's more details in the execution part, which I'm going to get to a little bit later in this video. If I just pull up a chart, basically what we're going to notice is that price naturally goes back and forth in these ranges. What I'm trying to do is figure out in general with the current price that I'm looking at, who's in control? Is it the buyers or the sellers? And what we want to do is figure out very early on where we can position ourselves to find the beginnings of these moves before we have massive moves to the upside because then obviously we can position ourselves there to be able to ride these waves up. Now obviously we can't predict this every time. So we need to strategically position ourselves with filtration processes and also by you know aligning the execution to be able to make it so that when we are right about those big moves we can fully capitalize on it. And if we're wrong which is inevitable in trading right you're not going to be able to predict the markets. All we're doing is reacting and then playing into probabilistic outcomes over time. We need to be able to figure out how to minimize our downside when we are incorrect about our thesis. That's something that people misconstrue a lot in trading thinking that you have to try to be right every single time. You're not going to be right every single time. Don't chase that. Chasing that is going to set yourself up for failure. All we're trying to do is build mechanisms that we can easily repeat over time and capitalize when we are correct about our trade thesis. So, what I'm going to do is start on a 15minute time frame here. And that's going to show me kind of a more zoomed out picture of where we're at. In order to figure out whether the buyers or sellers are in charge in figuring out where that range is, which is important for the first step, I'm going to do a few things. If we look generally speaking during this period of time price was moving down. There is a way we can actually look at it in terms of technical analysis so that we're not guessing. And what we're really looking for is something called a break of structure. I can sort of just visually identify this but simply put so that we can actually get the reps in and look at how it truly works. How we're going to truly be able to identify trends is by looking at the lows, the highs, the lows, then the higher highs that surpass that level, which is going to give me what's called a break of structure. a higher low, a higher high, and then as soon as we have price changing underneath that low, that's giving us something called a changing character. Once we have candles closing below those previous points, obviously, we can kind of just look at generally where the bottoms of these low levels are at this liquidity. And then as soon as we start passing underneath that, we can kind of anticipate that the sellers might be taking over and play to the downside. We do kind of need to be able to look at it on a technical basis and really start to draw some lines in the sand. two things that I'm really looking for to determine the beginning of a new downtrend and where there's buyers or sellers in charge after this change of character. What we're looking for is the next swing point where there's a low, a lower high, and then a lower low. As soon as we get that point, which is identified right here, this is our new bearish break of structure. This area right here is confirming that now the sellers are in charge. And we can basically look at how that plays out with the price action in where we have these liquidity inflection levels. Okay, it's basically like a trend level. This liquidity inflection level is going to give us opportunities when it comes to our execution and really being able to identify those points as well. First thing is figuring out that range. But generally speaking, once we know the area where price action is typically moving in, we can basically be able to look at where we are in this current range and we're able to figure out a general range. In this process, I also use something called the Inevitrade Pro Plus indicator. It's basically an advanced version of an RSI that's giving me a little bit more clarity with these highlight strips. And these are going to play a little bit more importance later, but generally you can see when we have periods where price is drastically overvalued, it's not going to nail it perfectly every time, but in conjunction with other things, you'll see this is where we're getting a cluster of highlights. Price is generally overbought here and ends up moving down. And like I said, this alone is not going to show us bottoms. As we can see right here, we have highlight cluster here and then price continues to move down. But when we do have the market structure itself showing us, for example, here where we are in the highlighted state, this was actually that low before a massive move up. And then you'll see this was a temporary high before a rolloff. And then we have a cluster of highlights up in this vicinity. Just to emphasize a lot, this can help us in terms of looking at the general picture of where we are in our ranges to set us up with opportunities. I want to factor this in. And if I'm trying to capture a move on either side, whether it's to the downside here or to the upside here, doing so in an area where we just had a highlight, can be extremely beneficial as far as timing those general areas that are going to anticipate the next big leg up in the opposite direction. What this is going to allow us to do is basically figure out if say here the sellers are in control. As soon as we have a close above this area and we had a change of character in these high impact areas and we're going to use other things to identify that price is basically likely to do two things. This is either the big focus area where price is now going to move completely in the other direction in which case we can extract 3 5 10 15 plus sometimes you're going to see examples of it where we can ride trends out for a long period of time or that's going to be incorrect and it's going to be a fake out area and then price is going to continue moving in the direction of the sellers. But that can be minimized so long as we're actually selecting key opportunity areas, which is going to be identified by the next part of this three-step process, which is going to be the change section. In order to add a little bit more context before we move into the step number two, is I'm going to add something called the IT Foundation indicator. By the way, the Inevitrade Pro Plus and the IT Foundation indicator are in the description in the tools section. Just click there and I'll send everything over to you so you can add it to your trading view so you can follow along or if it helps you with any of your other trading. What this is going to do is break out basically 24-hour increments and show me with this red dotted line where the New York stock market open is. Now, that's going to show us where a lot of the initial momentum on the trading session is going to be and that's going to be a lot of opportunity where a majority of the market is going to move. So, if I'm going here identifying my range, I can see that here we have our break of structure. Sellers are in control right here. This is where we have a change in that state. We fail to break a new low here and we push up, make this high, make a low, make a new high here. Now we have another break in structure. We have these low levels here which is showing us our liquidity inflection levels and that means that now the buyers are in control until once again we have these high low high low failure to break a new high. Okay, we have this swing point put in here and whereas this price action back here isn't necessarily pertaining to the current trading session that we're looking at trading. I'm sort of going through the reps of understanding the general range that we are in and who's in control. After we have this low-level close like this, creating this change of character now into this session, we know overall the sellers are still in control, at least for the time being. Any trade that we're looking to take should either be following the direction of this current move or we're waiting until we get the first notice of a potential new trend in the opposite direction. Like I said, all we're doing is understanding how the market mechanics are going to work and then find opportunities inside of that to be able to capitalize on it. Once we have the change of character here and then we have this secondary push under here that's giving us our break of structure which is confirming that these sellers are now in charge. Now going into this session, if we didn't have anything on our chart, we would be completely lost as to what we should do. Now we know sellers have recently most likely taken over and we can start looking for indications to play this to the downside. Going back to the equilibrium level, the last part of this process, what I want to do is be able to identify something called fair value gaps. What I'm looking for at first when I'm doing this sort of higher time frame look to get our zone and get our basis is I want to look at where we've had in this previous trend now that we're moving in the down direction. Where has there been a series of 1, two, three candles where the wick of the first candle doesn't overlap with the wick of the third? And that's going to be called a fair value gap. All I want to do is be able to mark out those and drag those into our current session because, as I was speaking about before, price is going to want to pull automatically into those areas and have responses off of them. You can even see already if we draw this one over, that's exactly where price pushed down into before coming back up, running into this liquidity inflection level, and now we're dropping potentially down lower into the sessions. We know price is going to want to draw into these gaps. We have two prevalent ones here that are sort of teed up for us if the sellers do continue to take over. If they don't and they continue moving up, that's also fine. You can see off of this one here, price also pushed up into the midpoint of those once again came up in the beginning of the session, touched that level and then rejected off of it. So, we can look on the opposite direction too and look for the next one that has not been touched, which would be this one. Okay, so we have some ideas now generally of where price can end up moving. That's going to check off our range tab. Keep these fair value gaps in mind as well. We're going to be using them for the execution stage as well. This is where I want to move down into a 1 minute time frame. This is where I'm actually going to be placing my trades. And what I like to do is use this double window here. And what I'll do is sort of scroll out and I'll click off of this and hit the settings. And then I'm just going to go into minutes and just move this up to 15. That's going to allow me to see it on my 15minute window, which you can see I click here have on my 15. If I click here, I have on my 1 minute time frame. I don't want my chart here to be too distracting. If I'm starting my trading session, most people are going to see right out of the gate the markets are pushing up and think, "Oh, I got to start buying into here, right?" But we know because we saw this price action here that price hasn't made its decision on where it's going to go for that session. So, we're not entering into anything until we see a change. I know that price has responded off of this level, that these sellers are now in control, and where price is likely going to want to gravitate if we get a move in the down direction. I want to re-emphasize, I don't know if this is going to happen. It's not like I'm saying price is now going to definitely move down, but now we have an idea generally and an indication that we have a fresh potential for price to want to move in this down direction or it's going to invalidate to the upside. And we can constantly be asking ourselves these questions on the higher time frame that's going to allow us to get a bias for the day to say if we get a move down and we get that change, which is step number two, how do we start to capitalize on that move so that if it does play out, we can make the move play out. What I'm going to do is go over to my one minute. Like I said, we've seen the response off of that higher time frame. What I want to do is once again figure out that range level where we're at. So currently, if we do the same process that we did on a higher time frame, but on the 1 minute time frame, this is showing us our overall picture, which is still important. You don't want to just be drilled into a 1 minute time frame. Here we have our break of structure, which confirms that these sellers are in control. We have a failed low here. This level breaks above, creates a change of character. Buyers are in control. We get that rejection level. Now we have these lows being produced. And right out of the gate after our rejection of this high, we have our lowest part on our range where in order to confirm that we're now on a 1 minute time frame, on a lower time frame, going to take the buyers out of control and have the sellers temporarily in control, we once again need to wait for a change of character underneath this level. This is going to prevent us from getting into a lot of BS chops. So, say price plays forward, notice how there's one big high impact candle that is forcing the buyers out of control and allowing the sell side to take control. Right? So, as I play this forward, we have our confirmed change of character. Sellers are freshly in control. Now, we have a situation where on a macro, we've had buyers, sellers are in control. In our 1 minute time frame, we've had a rejection for the buyers. We had sellers, buyers, now we have sellers back in control. This is going to bring us to the execution phase. In this change process, what we want to see is that change of character level. And we want to see one of these fair value gaps being produced at or around where we get that lower time frame change in direction, which you can see we have right here. And this is going to take us into stage three, which is the execution. Now, we're seeing a few things. We have some momentum to the downside. The sellers are taking control. This area was respected, moved up, and then failed. So, the probability of this area being tested again and responding off of it again and holding is a lot lower because we've already pulled a lot of the liquidity out of this area and moved away from it. If it's getting tested again, it's probably going to invalidate. But now there's the next major area here that has not been invalidated that is going to want to pull the price down if the sellers have taken over. So, step three is complete. In step three, what I'm looking for is I need to be able to identify a change of character on the one minute time frame, a fair value gap produced by that change of character or at least around it, and a liquidity inflection level created which is going to open up opportunities where price is likely to come back up off of this area before making a continuation back in the other direction. And having price be able to retest that is more of an extra confirmation. But we still need that area to be broken in a potential inflection level to be produced based off of that. And that's going to set us up for execution. So now we've gone through the three-step evaluation and now we have a way boiled down view to not get mixed around to not be taking random parts of the market and we can go into executing on the model. There's one further step of filtration that I'm going to show to you as we make it a little bit further through the video which is drastically helped by trading. But to keep it as simple as possible, I'm just going to stick with the basics for now and get into the entry model. Here's how I'm going to actually set up and maneuver an opportunity like this. So the first thing that I'm doing is waiting for, like I said, the change of character. Once we have the fair value gap in the liquidity inflection level here, I'm positioning myself to target the midpoint of these fair value gaps. All I'm going to do is set an immediate 1 to four. You'll start to see as I go through more examples of these why that's important to target the midpoint. But just as a simple example here, notice how price action bounced off the middle of that before continuing to make a move up. Notice how we have this gap here that was respected and moved off of the midpoint. You're just going to see a lot of these examples as we go through. Ideally, I'm going to place my stop loss slightly outside of this liquidity inflection level. This is kind of my last line of defense that price can come up into, have some sort of resistance off of, and then continue back into my direction. So, that's going to be the first component of this process. I like to also place my position a little bit before this midpoint. That way, I can ensure that I'm actually going to get filled. I'll do a slight example here. Say I want to risk 100 on this. That's going to show me I need to use 344 units. I could set up my position there. You can see price comes up and tags this area. Depending on where we draw our liquidity inflection level, you'll see off of this wick, which is technically the swing low on this, that's where the opposite side came up to retest. Originally, we had drawn it here, which is also a key area. It's hard to nail it perfectly every time. We can look at this also as a liquidity inflection level, but point is we have the change of character and the fair value gap produced. We're entering at the midpoint. We got the response. Next thing that I'm doing if we get a confirmation off of that level and price doesn't immediately just move through the stop-loss and close us out for a contained loss is I'm going to mark off the next low swing point. And this is going to be where I move my stop loss down to break even, taking any of the risk off the trade. As I played the trade forward, we did have a candle close slightly below this level. So that's where I can now reduce my stop loss to break even. I'll just do that with this red line so you can see where the original stop loss was. Some people like to take partials off depending on the pair that you're trading. If you want to go a little bit more risk on and you're looking for faster growth, maybe you're trading with a slightly smaller amount of money and you care less about a smooth line, you want more upside, it can simply be held. And all I want to do now once I see this invalidation of this fair value gap is look to target the next draw in liquidity, which is going to be the midpoint of this higher time frame fair value gap. Once we get the confirmation of the trend direction, say price were to move in the up direction, we would be targeting the liquidity up here, in this gap, in this gap, and in this gap. You can see we responded off of that, and now we're targeting these ones. If I move my target all the way down to here, you can see our upside is 8.81 what we're risking on the trade. So, we're making 8.8 8 times the initial risk on this trade, which allows us to be able to potentially be incorrect about this timing a pretty significant amount of the time as long as we're able to let these play out when we can catch these opportunities, which are pretty often. That's exactly where price comes down, tags that area, and then has a massive response off of position can be closed out there. We're able to make 8 or 9x what we were risking once again on that trade. Now that we have that trade, let's take a look at where the price action is and try to do this again on the same session. So, we'll clean things up a bit. Let's take a look. We've had a response off of this area. Now, we know that sellers are in control. Once again, what would I do? I want to find out where my liquidity inflection levels are, which are going to be right around here. I'll do this a little bit faster so that we can get more realistic reps in. We do currently have a break of structure level underneath here. So, the sellers are still in control. Price pushes around a little bit, starts getting a little bit of momentum. And what you'll notice as we draw our liquidity inflection level, price breaks up above, fails to produce a new low underneath this area. That is the gap that pushes us past this critical area and actually produces the change of character that we're looking for. This was a key area where price caught major support off of that low, broke underneath, rejected off of, rejected off of, rejected off of, and then came up rejected, and then broke with impact. So that's exactly what I want to see from a liquidity inflection level. And this is the fair value gap that was produced to break out of that range and actually produce this change of character here. You can see this was our swing point failed low. That is the high with the fair value gap produced. So once again we have our change of character, fair value gap and liquidity inflection level. So we go over to the entry model. Entry model is going to be set up just inside of that midpoint. Put underneath that liquidity inflection level. I start with a standard 1 to4. Input the buy order. Price comes back down. Tags that entry. Now I'm setting up this position for my break even level. We get a nice push to the upside. And if we look on our higher time frame, the next target area is going to potentially be the midpoint of this higher time frame fair value gap. But by the time we get to our 1 to4, we've already broken and invalidated the midpoint of this gap. Which means now the next area that we want to look for is either going to be at the next gap which would be all the way up here or at the midpoint of this gap which was respected flipped respected on the bearer side which should act as temporary resistance even if price does end up rejecting off of it. So you can sort of just target these high impact key levels here. But as far as support flipped resistance, price is going to want to run into that. At this point we have our stop loss reduced to break even and then we get a push up. Notice how we're responding off of that midpoint even temporarily. And that's a heavy area of resistance. So, this is a logical area to go ahead and close the position out of. And you can see lo and behold, that's where we start getting some resistance. We can continue playing this throughout the session. I promise you those examples I showed to you are not cherrypicked examples. Those are actually live trades that I took in real time. And I'm going to show you the execution of those so you can see it happening in real time. But before we get into some examples, I want to show you when to not take these trades. First of all, anytime there's high impact fundamental news at your entry, it's going to make it a lot more hard and a lot more volatile. With this type of strategy, it can still be done, but it's still not the most optimal conditions for that. The second situation is when we don't have a strong enough close through a change of character or a high impact candle, for example. So, say we want to play out of this range and then we see price make a little close and then breaks below it. And there's not really a big fair value gap here that is definitive andor on the opposite side of this liquidity inflection level. If we are to take a long into here, you'll see there's not a big enough push in momentum for this to actually be an actionable area. That's why I want to see a high impact fair value gap during that execution phase. If we're just getting in via sideways chop and we're not having a lot of increased volume or an actionable decisive move, these are not high conviction areas to be entering the markets into. One last thing that I will say, it is very normal for price to go almost all the way back up to your entry level and then move all the way down in your takerit. So, it's very important to remember to follow your system rules. Do not start decreasing your stop-loss into profit saying, "Well, I just want to make sure I'm keeping the system safe and I don't want to lose money." It's very normal for price to rebound to that area before going to full profit. So, you need to leave it alone. Only reduce to your break even level when you get that new break of structure. Otherwise, leave it alone and just target and let those areas fill and let that equilibrium reach. Now, let's go through some live examples of me actually executing through the system. And I want to start off with the first two examples that I used so that I can show you that those happened backtoback in sessions and that I'm not cherry-picking examples and that these happen on a routine basis as I show in my live trading series. Don't get me wrong, there's still a lot of losses. I'm not glamorizing this in making it unrealistic. But what I am showing you is that if you can actually master this and keep putting the reps in, these are really good ways to find really good areas. Here's the example that we just marked out. So you can see I have all of the same analysis here. I have my higher time frame pulled up on the side. I have the same fair value gap set up with the response level. I have my same liquidity inflection level set up, same levels marked out. That is the fair value gap that I'm targeting. I set up my order. I set up my break even level. And you can see where I'm targeting on my takerit. As this level reaches break even, I'm reducing my stop loss. As price moves up, I'm evaluating my stop-loss level, trying to target the higher time frame fair value gaps. Then I'm using that inverse fair value gap area outside of the 1 to4 to make a discretionary decision to lock in full amounts of profit. You can see I locked in partials at the 1 to4 and then I was able to capture the rest of the move and close it out like so. That's exactly how I was going through the process of entering that trade, executing that same ideology in real time. If we look at an example of another trade that we have here, once again, sellers are in control here. We failed to make a change of character over this level. So, sellers are still in control over this area. We had a confirmed change of character underneath this blue level. See, that's the lowest point that we went. We had a candle close underneath that area. That's exactly why I was setting up a fair value gap off of those small technicalities. I was literally looking at this candle close with the fair value gap creating the change of character underneath that low. Liquidity inflection level failed off of here. You can see that's where price makes a major push. And this was in that same session where we got that response. Once we have a change of character underneath that area, I'm now targeting where price is likely to want to go once it breaks through this gap right here into this 15minute fair value gap right here, which you can see I have my take profit on. Price is underneath the break even level. So I've reduced my risk to break even. Price does some back and forth and you can see tags that level perfectly. Gets me out of the trade. You can see I'm celebrating here and then it comes all the way back up in rebounds. Okay, so just to show you the importance of targeting those high impact areas. This was an example from literally 2 days ago. I have my trend structure here. Bearish move to break the structure. Didn't quite close under necessarily the next full swing move. But what it did do is break out of this low liquidity inflection level with impact and then failed off of these highs several times. And on my 1 minute time frame, I had these levels being broken right at the New York open. Maybe a slightly higher risk cuz I didn't have that perfect higher time frame change of character. But once again, if these trades go wrong, I'm just risking this breaking out for the beginning of the session, continuing to make a move higher, and then I just don't touch that trend until I have full confirmation that the sellers are there. But if I want to jump in front of that, as long as I have on my lower time frame my liquidity inflection level right here, I have the change of character underneath this level with a fair value gap produced here. That level being responded perfectly off of, that's where I entered. We got an immediate beautiful move down. The next area on this trend where I can literally target a high impact bullish for value gap is right at this midpoint here. So I set my takeprofit to that area, take off partials, and then right here I end up taking the trade off at this fair value gap. Even though I knew that there was a good chance it would probably break through this, I just wanted to realize the really good reward. I already had made five or six, which is way outside of the 1 to4. So I can kind of be a little bit more variable of where I want to take profit. This did end up moving perfectly down into this zone and then responding. But as long as I'm past that 1 to4, I'm okay to take profit during this process. You can also see an example here where I take a position. I have a proper change of character liquidity inflection set up. Then price just ends up pushing up against my position, coming up and literally just invalidating my position and closing me out for a full contained loss. Keep in mind, these losses are going to happen a lot of the time. So it plays deeply into the need of the psychology behind the strategy. This is one of the most important things to remember in general in trading, but really specifically for this strategy in general. Happiness literally equals expectation minus reality. If you go into the trade with any sort of expectation, if it's a winner, you're going to be excited that you expected it to work and that it worked out. If it goes against you, you're going to be sad because your expectation was that the trade is going to work out and it didn't. When you're entering a trade, you're not going in because you think that individual trade is going to work out, but because you know over time, this type of framework is going to put you into an advantageous position that if it works out in your favor, you can capitalize on it. And if it does not, you're keeping your risk contained and you're walking away. And you're going into each trade with literally zero expectation. Your only job as a trader is to literally execute the strategy at hand, collect the data, refine over time, and try to act towards that end goal. And that's really what has taken me my entire career to figure out is it not having those expectations and going in with that psychology is one of the most number one things to pay attention to, especially with a strategy like this because you are going to be losing a lot of trades. I'll lose four consecutive trades, five consecutive trades, and unless you have conviction and are able to let your winners run, you are going to drag yourself into a hole with any trading strategy. But your ability to be able to play say the next trade and capitalize on a 6R and then take another two losses and then capitalize on a 6R. Now you have plus 12 riskreward and maybe you've lost seven or eight trades. So you're still netting four R over that period even though you felt like the only thing you've been doing is taking losses. But you'll never be able to do that unless you come in knowing the data, knowing the strategy, and not having expectations on each individual trade, knowing that they can fully go against you and capitalizing on them when they do work out. If you want to learn more about market structure or any of the strategies, you can watch this playlist right here. Make sure you hit the like button and let me know in the comments how you like the strategy if you implement it for yourself. I appreciate you guys who are still here. Let me know in the comments if you like this video. Hopefully, it was helpful. But until next time, I will see you all in the next