I have gotten a few emails and comments lately that the strategy we teach is no longer valid due to the high volatility. That is simply not true, so I wanted to address that issue and also show you a live trade, trading exactly like we teach.
Price action is universal, and it never changes. The volatility may change and increase and decrease at times, but price movements and structure never change. It remains constant over time, and it works the same today and it did 25 years ago when I first started using it. Anyone that tells you otherwise does not understand price action, or else they have some ulterior motive for pushing this agenda.
I will show you a live trade I took yesterday (08-19-2024) trading exactly like I always trade. I do not worry with risk/reward. Where you put the safety stop is the more important than how large the safety stop is in my opinion. Within reason of course, but if a signal bar is 4 or more points, then yes, maybe you should look at some alternative entry options or skip the trade. Your safety stop should always go one tick above/below the signal bar, depending on entry direction.
This trade was not even an ideal setup, and it took very little heat, and this is typical of most entries we teach if you are reading the chart properly, and that is the key to everything. If you are taking a lot of stops, then you should not be trading live. You should be sim trading taking every single trade you think meets our criteria, then studying that trade diligently until you figure out everything you did right, and everything you did wrong, and then correct those issues going forward.
Some issues will be easy to correct, while others will take you a few times until you start to get a handle on them. Just understand that screen time and experience are critical to success. It is where you learn to gain confidence in your abilities as well. I can’t stress this enough, and most ignore me telling them the importance of sim trading live data. Playback is helpful, but nothing works like trading live data, so sim trade live as much as you can. It’s a great tool that people do not take advantage of enough.
Enjoy the trade and read through the FAQs where I offer some alternative suggestions for those that can only trade singles or small lots.
Comments
RobertB August 20, 2024 at
Pick your trades judiciously and you should be able to scalp 1 or 2 contracts. The risk:reward win rate to make money is:
4:1 = 80%
3:1 = 75%
2:1 = 66.67%
Look for the high probability trades. Stay away from large bars if it scares you. Or drop a limit order and hope it comes back to reduce your risk. I started my 18yo son on sim trading with $5K and he’s not lost more than $500 before coming back into profit. It’s doable.