How To Trade The 1 Hour Chart (as a beginner)
Published: 2020-10-18
Status:
Available
|
Analyzed
Published: 2020-10-18
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
A specific trade on EUR/USD was executed yesterday using the presented strategy.
"I had a trade yesterday on the euro dollar using the exact strategy I'm going to be teaching you in this video."
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The speaker is referring to a specific EUR/USD trade that occurred at a lower price point and is asking the viewer to analyze it.
"our trade actually happened a little bit lower and what I want you to do right now is tell me what you would be looking for."
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The EUR/USD trade from yesterday occurred within the identified trading zone, which the speaker had previously described.
"So here it is we've gotten into my zone remember this is the area I just said and you saw the trade from yesterday that I was looking for possible trades in."
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The speaker will explain their trading strategy in the next 15 minutes.
"I'm going to be teaching it to you over the next 15 minutes."
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The speaker believes their trading strategy is the optimal choice for individuals with full-time employment.
"This is literally what I consider the best strategy to trade if you have a full-time job."
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The speaker has developed a trading strategy over years that has yielded significant results in the last four months.
"I developed a strategy that's actually been in development over years of my trading career that's been giving me some incredible results over the past four months."
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The trading strategy involves two setups, utilizing multiple timeframes and the 50-period exponential moving average.
"This strategy we're going to be looking for two very simple setups on these setups we're gonna be utilizing multiple time frames and the 50 period exponential moving average."
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When the market is below the 50 EMA, the strategy involves identifying the next major structural level that the market is likely to reach if it continues downwards.
"I'm looking for my next level of major structure that the market will inevitably hit if we continue lower."
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For identifying support levels in the strategy, they must have been tested multiple times, and the box drawn should touch the lowest bodies of the support.
"This level of support must have been tested multiple times and if it has been tested multiple times I want the lowest bodies of the support level to be touched with my level my box that I draw."
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When a support level is identified, the strategy anticipates a bounce from that level before the trend continues downwards.
"I'm looking at this level to provide a bounce before trend continuation to the downside."
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After identifying key levels and expecting a bounce, the strategy involves looking for entry signals on lower timeframes such as double bottoms, hammer candles, or strong bullish candles.
"I'm gonna go down to lower time frames and look for possible entries what are my possible entries they consist of double bottoms hammer candles buying pressure of some kind a big green candle would be fine."
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Setup 1 confirmation includes trading below the 50 EMA, being at a major structure level, waiting for a bounce, and observing buying pressure via a large green candle.
"The market's trading below the 50 ema, we have a major structure level while we're here, we're waiting on just a little bounce before the market continues in this downtrend since we're waiting on this little bounce our confirmation is show me buying pressure big green candle in this case with this big green candle I would have a stop loss below this swing low."
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When looking for support levels for a downtrend continuation strategy, it's important to identify the next support level, not the one that caused the immediate pullback.
"I'm looking for my next level of support down here is a very important note I'm looking for my next level of support that was not the level that provided the pullback."
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Identifying significant structure levels involves looking for areas that have been tested multiple times, as demonstrated by four touches in the example.
"So for me this level would look something like this because that's the place I can get the most touches I have one two three four touches if I put my box my area right there."
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The speaker indicates that trades will be sought in the identified zone, and the execution of yesterday's trade will be shown.
"In this area is where I'm gonna be looking for possible trades and you're about to see exactly what happened on the trade we took yesterday."
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The analysis for the EUR/USD trade involved identifying a double bottom pattern on a lower timeframe within the trading zone, which served as the entry signal.
"Analysis behind it is that I went down here and I found a double bottom that was right here I noticed that my entry was going to be right here on that double bottom exactly as I explained earlier I'm looking for price action patterns in these levels."
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The speaker reiterates that their trading strategy has yielded excellent results over the past four months, but clarifies this is not a guarantee for others.
"I've been trading this for the past four months and it has shown some excellent results insane results for me that's no guarantee it will for you."
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Setup number two of the strategy focuses on identifying and trading trend continuation.
"This time for setup number two we're actually looking for trend continuation."
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The first rule for setup two is that the market must be trending below the 50 EMA, with structure levels also broken below the EMA.
"Market must be trending below the 50 ema so right now we're breaking through structure levels below the 50 ema that's our first setup."
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The second rule for setup two is that the market must pull back to the next major structure level to the left, which is expected to act as resistance.
"We have to pull back to the next major level of structure looking left that could provide resistance for this market."
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Major structural levels are defined as recent levels that have been tested multiple times.
"Major levels of structure as a recent level that's been tested multiple times."
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The strategy anticipates that if the market returns to a previously tested support level (now acting as resistance), it will likely fall to continue the downtrend.
"If the market gets back up into that level do you think we have a good chance of the market using that level as resistance and falling from that level to continue this overall downtrend."
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Utilizing lower timeframes allows for entry within a zone that can achieve the desired risk-reward ratio (e.g., 1.5:1) for trend continuation trades.
"If we do that for us to hit our targets we probably have to get all the way down to this level and maybe even break that level but if we go down to lower time frames we can get a little push out of this zone and this will hit our targets if we have an entry right here and we can still get our one risk for our 1.5 to one risk reward or whatever risk reward you decide to use."
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On lower timeframes for setup two, selling pressure is identified by a bearish momentum candle that closes below the previous candle, has a predominantly red body, and a small lower wick.
"At this point on those time frames I would look for selling pressure does this look like selling pressure well yes it does this is a momentum candle that closes below the previous candle and most of the body of the candle is red another hint that it's a momentum candle is that the bottom wick is tiny."
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For setup two, entry occurs on the close or open of the identified momentum candle, with a stop loss placed a few pips above the zone and a target set for a 1.4:1 risk-reward ratio.
"The trade itself here would be on the close of that candle or the open of the next candle we would have an entry we'd have a stop above our zone by a few pips and we would have a target like I said I normally do about a 1.4 to 1 risk reward."
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The speaker acknowledges that no trading strategy, including their own, has a 100% win rate.
"Now I know I've shown you winning examples of course this strategy and no other strategy in the world will always win."
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The speaker strongly advises against trading the strategy blindly without proper risk management or understanding its performance and potential drawdowns.
"Do me a huge favor do not go out there and start trading this blindly with no risk management and no idea how the strategy actually performs what kind of drawdown you can expect."
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The speaker has extensively tested the strategy and encourages viewers to at least backtest it themselves.
"I've tested this strategy for years and I've shown it to you so you don't have to go through the process of developing the strategy but the process you will need to go to at least is back testing the strategy."
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If backtesting is not feasible, the speaker recommends demo trading the strategy for several weeks.
"If you're not going to back test it do me a huge favor demo trade this strategy for a few weeks."
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The speaker has been monitoring charts between 6 PM and midnight EST for the past few months.
"For the past few months I've been looking at my charts between the hours of 6 pm and midnight and between those hours I'm eastern standard time by the way."
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Between 6 PM and 10 PM EST, there is less market movement but acceptable spreads for placing trades.
"Between the hours of 6 p.m and 10 p.m there's not a lot of movement in the market but the spreads aren't terrible you can still get away with placing trades with decent spreads."
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The speaker aims to be out of trades by 10 AM EST, after the London session (starting at 3 AM EST) and the overlap with the 8 AM session, which brings significant market volatility.
"By the morning for me at least whenever I go to sleep I have 3 a.m eastern standard time that's the london session a lot of traffic's coming into the market at that time I have the overlap at 8am so with those two times coming in and bringing a ton of traffic into the market a ton of volatility 90 of the time I'm out of the trade by 10 am."
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The described trading approach is classified as day trading because trades are closed within 24 hours, making it suitable for individuals with full-time jobs.
"It's a way of day trading because you're in and out of the market within 24 hours and it's a way of day trading that you can do while still having a full-time job."
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The speaker has spent years testing the presented trading strategy.
"I've tested this strategy for years."
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A strong caution against trading the strategy without risk management is given.
"Do me a huge favor do not go out there and start trading this blindly with no risk management."
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The speaker emphasizes the importance of either backtesting the strategy or demo trading it for a few weeks before live trading.
"Back testing the strategy if you're not going to back test it do me a huge favor demo trade this strategy for a few weeks."
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The speaker has developed a trading strategy that has yielded significant positive results over the last four months.
"I developed a strategy that's actually been in development over years of my trading career that's been giving me some incredible results over the past four months."
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The speaker believes their developed trading strategy is the optimal choice for individuals with full-time employment.
"this is literally what i consider the best strategy to trade if you have a full-time job"
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The speaker will explain their trading strategy in a 15-minute duration.
"i'm going to be teaching it to you over the next 15 minutes"
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A specific trade on the Euro Dollar was executed yesterday using the strategy that will be taught in the video.
"i had a trade yesterday on the euro dollar using the exact strategy i'm going to be teaching you in this video"
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The trading strategy involves two distinct setups.
"with this strategy we're gonna be looking for two very simple setups"
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The strategy incorporates the use of multiple time frames and the 50-period exponential moving average (EMA).
"we're gonna be utilizing multiple time frames and the 50 period exponential moving average"
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Setup number one of the strategy was used in the live Euro Dollar trade previously shown.
"setup number one which is what we utilize to get in that live trade you just saw on the euro dollar"
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For Setup 1, if the market is trading below the 50 EMA, the speaker looks for buy trades.
"if the market is trading below the 50 ema then i'm looking for buy trades"
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When below the 50 EMA, the speaker identifies the next major structural level that the market is expected to reach if it continues downward.
"if we are below the 50 ema is my next level of major structure that the market will inevitably hit if we continue lower"
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The speaker defines a specific area on the chart as a key level for potential trades.
"my level for this particular trade looks just like this and i'm going to go ahead and put a box here to make it easier to see"
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The green box on the chart represents a level of interest for long trades on the Euro Dollar.
"this green box is the level i'm paying attention to for long trades on the euro dollar"
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In Setup 1, the speaker identifies the next support level and requires it to have been touched multiple times.
"i look below and i find the next level of support and i find a way for it to touch multiple times"
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A key criterion for Setup 1 is that the support level must have been tested multiple times.
"this level of support must have been tested multiple times"
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The speaker specifies that the lowest points of the support level's bodies should be touched by their drawn box for Setup 1.
"i want the lowest bodies of the support level to be touched with my level my box that i draw"
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When a support level has been touched twice, the speaker looks for potential buy trades in that area.
"this k in this case we have one touch we have two touches that means in this area is where i'm looking for possible buy trades"
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For Setup 1, the identified level is expected to offer a bounce before the trend continues downwards.
"i'm looking at this level to provide a bounce before trend continuation to the downside"
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After identifying the setup conditions, the speaker moves to lower time frames to find entry points.
"i'm gonna go down to lower time frames and look for possible entries"
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Possible entry signals for Setup 1 include double bottoms, hammer candles, or any indication of buying pressure, including a large green candle.
"my possible entries they consist of double bottoms hammer candles buying pressure of some kind a big green candle would be fine"
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Following a bearish move, the emergence of a large green candle signifies bulls taking control.
"after this bearish move down bulls took over directly afterwards creating a big green candle"
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A large green candle that shows momentum is identified as a suitable entry point for a buy trade using this strategy.
"this candle is a place i would put a buy trade using this strategy"
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The confluence of trading below the 50 EMA, being at a major structure level, and anticipating a slight bounce before a downtrend continuation are key elements of Setup 1.
"we have a market trading below the 50 ema we have a market at a major structure level while we're here we're waiting on just a little bounce before the market continues in this downtrend"
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Confirmation for Setup 1 comes in the form of buying pressure, exemplified by a large green candle, with the stop loss placed below the preceding swing low.
"our confirmation is show me buying pressure big green candle in this case with this big green candle i would have a stop loss below this swing low"
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The speaker personally aims for a risk-to-reward ratio of 1.4 to 1 for Setup 1 trades.
"for me personally i put my risk to reward at a 1.4 to 1"
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The speaker directs the audience to analyze the Euro Dollar trade that occurred at a slightly lower price level.
"our trade actually happened a little bit lower and what i want you to do right now is tell me what you would be looking for"
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When trading below the 50 EMA, the speaker looks for the next support level.
"we're below the 50 ema if we're below the 50 ema i'm looking for my next level of support down here"
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For Setup 1, the speaker emphasizes identifying a support level that is distinct from the one that caused the immediate pullback.
"i'm looking for my next level of support that was not the level that provided the pullback"
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If the immediate preceding support level is not a trading opportunity, the speaker looks further left and lower for the next significant level.
"if i'm not looking here then i have to look left and lower where's my next level"
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The speaker defines a trading level based on its history of being touched multiple times, specifically highlighting four touches in this instance.
"for me this level would look something like this because that's the place i can get the most touches i have one two three four touches"
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The identified area, with multiple historical touches, is where the speaker searches for potential trades.
"in this area is where i'm gonna be looking for possible trades"
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The conditions for Setup 1 are: trading under the 50 EMA, being at a major structure level, and anticipating a bounce from that level.
"we're under the 50 ema we have a major level of structure we get there i'm expecting a bounce out"
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For the Euro Dollar trade, analysis on a smaller time frame revealed a double bottom pattern.
"i went down to a smaller time frame on that trade the analysis behind it is that i went down here and i found a double bottom that was right here"
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The speaker looks for specific price action patterns within these key levels, and a double bottom was identified as such a pattern.
"i'm looking for price action patterns in these levels and that price action pattern while in this level was right here with this double bottom"
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The speaker admits to entering the trade late due to observing the double bottom pattern after it had already formed.
"i saw that double bottom way way after that it actually happened so i got a later entry way over here"
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The speaker reiterates that their trading strategy has delivered excellent and 'insane' results over the past four months.
"i've been trading this for the past four months and it has shown some excellent results insane results for me"
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The speaker expresses confidence that the trading strategy will be highly beneficial for individuals with full-time jobs or other commitments.
"if you have a full-time job or prior obligations i know it's going to be extremely beneficial for you as well"
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The speaker is transitioning to discuss the second setup of their trading strategy.
"let's move on now let's talk about setup number two"
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Setup number two is designed for trend continuation.
"setup number two which is a trend continuation setup"
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Setup 2 focuses on identifying and trading with existing trends.
"for setup number two we're actually looking for trend continuation"
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A prerequisite for Setup 2 is that the market must be trending below the 50 EMA.
"market must be trending below the 50 ema"
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For Setup 2, the market needs to pull back to a major structural level to the left that can act as resistance.
"we have to pull back to the next major level of structure looking left that could provide resistance for this market"
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Major structural levels are defined as recent levels that have been tested multiple times.
"major levels of structure as a recent level that's been tested multiple times"
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In Setup 2, a recent level of structural support has been broken.
"we have a recent level of structure support that was broken below"
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When a level previously acting as support is retested as resistance, it's a strong indicator for trend continuation downwards in Setup 2.
"this level has been tested multiple times as support and if the market gets back up into that level do you think we have a good chance of the market using that level as resistance and falling from that level to continue this overall downtrend"
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Setup 2, like Setup 1, uses the 50 EMA, structure levels, and multiple time frames.
"we're not only utilizing the 50 ema and structure levels we're also utilizing multiple time frames"
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Utilizing lower time frames in Setup 2 allows for capturing a quick push from a zone, enabling targets to be hit.
"if we go down to lower time frames we can get a little push out of this zone and this will hit our targets"
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On lower time frames for Setup 2, the speaker looks for signs of selling pressure.
"at this point on those time frames i would look for selling pressure"
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A momentum candle for Setup 2 is characterized by closing below the previous candle with a predominantly red body.
"this is a momentum candle that closes below the previous candle and most of the body of the candle is red"
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A tiny bottom wick on a candle in Setup 2 indicates that bears were in control at the candle's close.
"the bottom wick is tiny if we have a small bottom wick that means at the close of this candles bears were taking over"
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For Setup 2, an entry can be taken on the close of the momentum candle or the open of the subsequent candle.
"the trade itself here would be on the close of that candle or the open of the next candle we would have an entry"
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In Setup 2, the stop loss is placed a few pips above the identified zone.
"we'd have a stop above our zone by a few pips"
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The speaker acknowledges that no trading strategy guarantees 100% wins.
"this strategy and no other strategy in the world will always win"
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The speaker strongly advises practicing the trading strategy on a demo account before trading with real money.
"do me a huge favor trade this on a demo account using what i'm going to tell you next"
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A recommendation is to use a demo account to practice the trading strategy for a period of several weeks.
"trade this on a demo account for a few weeks"
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The speaker has been monitoring charts for the past few months between 6 PM and midnight EST.
"for the past few months i've been looking at my charts between the hours of 6 pm and midnight and between those hours i'm eastern standard time"
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From 6 PM to 10 PM EST, the market experiences less movement but offers acceptable spreads for trading.
"between the hours of 6 p.m and 10 p.m there's not a lot of movement in the market but the spreads aren't terrible you can still get away with placing trades with decent spreads"
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Trading between 6 PM and midnight EST allows for a less volatile market, providing ample time to identify optimal trading setups.
"for one placing trades during these times between the hours of 6pm and midnight the market's normally not going crazy and if the market's not going crazy it gives you time to actually look through your charts and find the best setups"
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By 3 AM EST (London session) and the 8 AM overlap, significant market traffic and volatility increase.
"by the morning for me at least whenever i go to sleep i have 3 a.m eastern standard time that's the london session a lot of traffic's coming into the market at that time i have the overlap at 8am"
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The speaker typically exits trades by 10 AM EST.
"90 of the time i'm out of the trade by 10 a.m"
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The described trading approach qualifies as day trading (within 24 hours) and is compatible with having a full-time job.
"it's a way of day trading because you're in and out of the market within 24 hours and it's a way of day trading that you can do while still having a full-time job"
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Trades are typically concluded within 12 to 24 hours, classifying the approach as day trading.
"you're normally in and out of the market within a matter of 12 to 24 hours so technically classified as a day trade"
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A strong caution against trading the strategy without proper risk management or understanding its performance characteristics.
"do not go out there and start trading this blindly with no risk management and no idea how the strategy actually performs"
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The speaker has rigorously tested this trading strategy over a period of years.
"i've tested this strategy for years"
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It is highly recommended to backtest the strategy or, if not possible, to demo trade it for several weeks.
"back testing the strategy if you're not going to back test it do me a huge favor demo trade this strategy for a few weeks"
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Successful demo trading for a few weeks indicates the strategy is effective for the trader.
"if you demo trade it for a few weeks and your account goes up fantastic you found a strategy that works for you"
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Demo trading allows for assessment of the strategy's effectiveness without financial risk and provides time for learning and improvement.
"if you demo trade it for a few weeks and it doesn't work you didn't lose any money and you give yourself time without losing money to learn how to better perform in the markets with this strategy"
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A minimum of a few weeks of demo trading is advised before committing to live trading.
"make sure to at least demo trade this for a few weeks before you start trading it live"
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