The Only Trading Strategy You'll Ever Need

0:00I have a 3 step formula that I ve backtested 1000 s of times

0:03And every single month that I tested it, it was profitable in the long term.

0:07No indicators, no patterns, just pure price action baby.

0:18And by the end of this video, you too will know this strategy.

0:21And will be able to take calculated trades just like this one and make insane amounts of money.

0:28To jump right into it, the first step involves market structure.

0:31Now, this is arguably one of the most important steps.

0:34Because if you even slightly just slightly fk this part up. It will ruin the whole strategy.

0:38*meme* One of the very first things you

0:43learn as a trader is uptrends and downtrends. Its almost the sippy cup of trading.

0:48A chart that makes higher highs and higher lows is an uptrend.

0:51A chart that makes lower lows and lower highs is a downtrend.

0:54Simple enough. Everybody know this. Now you may be thinking.

0:57Why are we even going over this? I already know all of this.

0:59Well, what if I told you, you re probably doing all of this completely wrong?

1:03Let me explain. So going back to our example.

1:05The chart does this, making higher highs and higher lows.

1:08And as we already stated, its an uptrend. Okay.. But then something interesting happens.

1:13The chart starts heading downwards. Which in the process, price makes

1:16this low, and breaks right through it. And this exact point, is where I see the

1:20majority of traders make the mistake. Since price broke this low,

1:23a lot of traders think we are now in a reversal and price is in a downtrend.

1:27So they start looking for short trades because they now think price is going to head lower.

1:32But what if I told you this chart is actually still fundamentally bullish.

1:38*crowd gasp* You see, sure price made this low.

1:40But this low is actually not a low at all, or at least a valid one.

1:44Why? Because price never broke

1:46the valid low which is right here. *switch up*

1:47You see, the only way you can get a valid low is by breaking the previous high.

1:48If price did something like this, where price didn t break the previous high.

1:48This would not be a valid low. I want to make this clear

1:49In order for a low to be validated. It needs to break the previous high.

1:53If you do not understand this part of the strategy. The strategy will not work.,

2:02So say if price does breaks this high, we now know this is the valid low. Okay good.

2:08So now price is in an uptrend. Which means, we should only look for bullish trades.

2:12The only time we should start looking for short trades is if price breaks this low.

2:16It can do anything right here. It can go up, down, sideways.

2:19Literally anything as long as it doesn t break this low. We are in an uptrend.

2:23So if price did this. What are we in?

2:23Well a lot of people would say downtrend, because we broke this low right here.

2:23But like I said before, a low is only validated if it breaks the previous high.

2:23Which this low did not break the previous high. So its not validated.

2:23So we are still looking at our previous low. Which price hasn t broke,

2:23so we are still in an uptrend. Now say if instead of doing this,

2:25price did end up breaking upwards. Since price did break our previous high.

2:28Our new low will be transferred from this point, to this one.

2:32I know it can be slightly confusing But the main thing you have to remember

2:32is the only way a low is validated is if it breaks the previous high.

2:32If you remember that one simple rule, you will easily be able to identify

2:32if we are bullish trend or a bearish one. So that s the first step. Identifying if we

2:34are in an uptrend or a downtrend. So whats next?

2:37That would be step 2 in the formula. Step 2 is identifying supply

2:41and demand in the markets. Demand zones take place in uptrends.

2:44Supply zones take place in downtrends. A good style of thinking is you want to buy from

2:49demand zones and sell from supply zones. The reason why you want to

2:51buy from demand zones is this. Here if we look closely. The market is going up.

2:54Since we saw a large push from the beginning of this move.

2:56It simply shows us that a lot people wanted to buy from this point onwards.

3:01So we can assume, if price comes back down to this area.

3:04Traders will have the same style of thinking and want to buy in this same area again.

3:11A supply zone is the exact opposite.

3:14Since we saw a large downwards move from this point on.

3:17It shows us that a lot people want to sell at this area.

3:20So if price ever retests this zone we can assume price will again move downwards from this point.

3:26This supply and demand theory is the core of our strategy

3:28But We still have one more step in our 3 step formula

3:32But lets put all that we learned so far to the test on a real life chart example.

4:30So looking at a real chart. We see price moved upwards

4:33Came down, and then broke this previous high. Which means we have higher highs and higher lows.

4:38Meaning we are in a . uptrend. Since we are in an uptrend.

4:41We only look for long trades. WE DO NOT look for any sell positions

4:45As shorting in a uptrend is just silly. *meme*

4:48Since this low broke the previous high, this is our valid low and price will only

4:53be in a downtrend if it breaks this point. So now that we know we are in an uptrend,

4:57we want to look for demand zone opportunities. We can find our demand zones by finding an area

5:02of consolidation or a point where price moved sideways before having a sharp move upwards.

5:07As you can see from this chart we had some consolidation right

5:10here. The price shot straight upwards. How I like to mark my demand zones is marking

5:15the candle right before the impulse move. So grab your rectangle tool on the side.

5:19Find the area of consolidation before the big move.

5:22Then mark from the low to the high of the previous candle before the big move.

5:27This is our area of demand. Again, we are not even considering areas

5:31of supply because we are in an uptrend. So we don t need to worry about that.

5:37We wait for price to re-enter into this zone and this is where we would enter.

5:41Set your stop loss right below the demand zone and set your take profit at the recent highs.

5:46Boom we got an easy trade. So that s an example of one winning trade.

5:51But I want to show you just how accurate this strategy really is.

5:54So lets break it down with a real chart example. Here we get an uptrend, because price is making

5:59higher highs and higher lows. As we can this low is what

6:03broke the previous high. So, this is where price need to

6:05break in order to be in a downtrend. Which is exactly what happens.

6:10So now we are in a downtrend and we only look for areas of supply or short trades.

6:15So we mark our areas of supply. Price comes back up this area of supply. We

6:20enter. Set our stop loss above the area of supply. And set our take profit at the recent lows.

6:25Boom easy winning trade But wait! we re not done

6:29Price created another area of supply up here and we re still in a downtrend.

6:33So we wait for price to come up to this supply Enter

6:36Set our stop loss above the area of supply and target recent lows.

6:40Another winning trade. But again, we re still not done.

6:43Price created another area of supply. Wait for price to come up to it.

6:47Set stop loss above the area of supply. Set take profit at recent lows.

6:51And again we got another winning trade But wait theres more

6:54We got ANOTHER area of supply Wait for price to come up here again

6:58Set you stop loss and take profit. And we got another winning trade.

7:02That s the power of this strategy. Its extremely accurate for one.

7:05And two, you are only trading in the direction of the trend

7:08Which raises the probability of you winning a trade by a lot.

7:11So now that you know just how powerful this strategy really is.

7:15Lets go to the third and final step on how to improve this strategy even more.

7:19Our last step involves risk to reward. Sometimes while using this strategy,

7:23you ll get a trade that checks all of the boxes. But when you setup your stop loss and

7:27take profit. Its has a low

7:28risk to reward like in this example. We only want to take trades if the

7:32risk to reward is above 2.5:1 Mean for every $250 we re

7:37getting back we re only risking $100. So even if the chart follows both step 1 and 2.

7:43But the risk to reward is under 2.5. We do not take this trade.

7:47This one rule increases the profit rate of the strategy by a ton.

7:52So for our final example we have price making higher highs and higher lows.

7:56Meaning we are in an uptrend so we only mark our areas of demand.

7:59Price consolidated right here before shooting upwars. So we mark this area.

8:04We wait for to come to this area again. Enter.

8:08Set our stop loss below the demand zone. Set our take profit at the recent high.

8:13Last step is to check our risk to reward and make sure its over 2.5.

8:17Which in this example its 3. So we re good to go there.

8:20If its anything under 2.5, we do not take the trade.

8:23Wait for price to play out and we get a beautiful winning trade.

8:27Then we just repeat the process Forever ..