This is what I did to Start my Day Trading and the exact process I used to scale it using proper risk management & processes. Hopefully this can help you guys with your own system.
Disclaimer: The content covered on this channel is NOT to be considered as any financial or investment advice, it is for entertainment purposes only. Links and products in this video generate affiliate commissions for Craig Percoco. Compensation is received from Public for sponsored materials. Craig Percoco is part of an affiliate network. Futures and crypto trading are highly risky, not for everyone. Loss exceeds initial investment. Use risk capital, considering financial security. Past performance does not equal future performance. Always assess risks before trading. Trading may incur additional fees. If you disagree with these terms please leave the channel immediately.
They say 90% of people don't make it in trading, that it's not realistic.
Online share trading.
Is it as easy as it looks?
Day trading is a lie, it's a myth, it's a scam.
I think there's some dangers.
97% of you lose money.
Well, thank God I didn't listen to that.
Because fast forward four years, I went from 35k to my name,
to 650,000 when I was 23 years old, and my entire life changed.
It took me four years, locked in my room, to build a trading strategy from effectively zero,
and scale it to $35,000 a month on average.
My goal with this video is by the end, you'll know exactly how I did this,
so you can basically model off of it, understand the exact strategy that I used,
and if you're serious about trading, lock in, learn this information,
and you'll have the whole blueprint to effectively replicate this and do it for yourself.
Okay, so the first thing that is so important to understand about this process is,
the first time I hopped into trading, when I first started off,
I was so focused on being right, finding all of these strategies and patterns
that I thought were the answer to trading,
when in reality, trading simply boils down to two things, and that is it.
Starting with trying to predict the markets, and attaching emotion to being right,
and trying to use all different patterns and all different ideas,
strays away from the core concept of trading,
and not building the foundation like this,
is going to basically make it impossible to learn trading the right way,
and it's going to delay the process a lot longer,
and that is that trading simply boils down to two key metrics, okay?
The first is going to be your average risk reward,
and the second is going to be your winning percentage,
or the percentage of the time that that happened, so let me explain.
Say we're entering the market here, all we're trying to do is find situations
where based off of our strategy and our pattern recognition,
we're convinced that the market is more likely to move to this direction,
before moving to this direction, okay?
And you can see if it moves to this direction, before moving to this direction,
we can make 4x what we're risking, so if we're risking $25 if it goes against us,
we're making $100 if it goes in our direction, okay?
And that's going to lead to something called a risk reward ratio,
which you can see right here, okay?
So if you have one-to-one, meaning you're risking $25 to make $25,
risking $25 to make $50, risking $25 to make $75,
risking $25 to make $100, $125, etc.
Okay, you'll see this is the table that's going to break down
your profitability based off of these two key metrics, okay?
And that is all we're trying to do with trading.
There's a good saying in trading, you don't get paid for being right,
you get paid by being profitable.
A lot of times, getting into trading, you take an emotional hit
if you're wrong about something, where really,
this table is the only thing that matters, okay?
If you're able to nail areas like this, where you're able to get 4x
the amount of profit on average, you can be wrong 7 out of 10 trades.
70% of the time you're wrong, and you'll still end up in a profitable state.
So when I realized this building my system,
it very much flipped the switch of trying to be right all the time,
and just trying to find as simple of a system
that can get me the combination of these two things,
and I framed my ideology around that.
Which brings me into point number two,
which goes hand in hand with point number one,
which is keep it stupid simple at first.
Keep the system easy at first.
The way people are wired is whenever you get into trading,
you think you need to obtain all this information,
and that the more information that you add on it,
the more confidence, the more layers of confirmation on your trades,
the better you're going to be at trading,
The way I look at it is like when you're building a house, right?
Obviously the house is going to be nicer if you have the curtains,
and the interior decoration done, and the placemat perfectly,
and all of your paintings hung up nicely.
But you can't start with those elements.
If you don't have a good foundation, good framing, good installation,
you're not going to be able to even get to that phase,
and that takes time.
Starting simple but good,
and then adding on when it's confirmed to you is the way to go about it.
Most people go about it the absolute opposite way
when they're first starting off.
You'll realize about trading,
and what I realized throughout this process is
trading is actually more simple than people think in certain ways,
and more complex in other ways.
The complexity of the strategy has nothing to do with trading really.
What has to do with advanced trading is understanding
that it all comes down to your mind,
and your ability to act the way you need to act when you do statistically
to give yourself that edge, okay?
The trader who is highly profitable,
and the trader that is not profitable,
probably know the same,
if not the unprofitable trader knows more about trading,
more about analysis, more about strategies,
and the better trader is able to execute when they need,
and it's all up here,
and I'm going to get more into that in a second,
but the first step of that is keeping the system simple, okay?
So say we have a strategy, right?
Where, once again, going back to this example,
say we have a strategy to try to find these areas
where we can get four times what we're risking
if it goes in our direction, okay?
So we have a checklist, rule one, rule two, rule three.
If we have, say, a bunch of rules,
where after rule one, we're looking for one thing in the market,
or sometimes we look for another thing,
and then we go to step number two,
and sometimes we're looking for this,
and sometimes we're looking for this.
In order to actually track what you're doing
and how it's working,
having all of these different combinations
makes it exponentially more difficult
to quantify the result of it
and figure out whether it's working or not for you
with each step that you add.
If you're an advanced trader,
you can add elements to this
because you understand that your framework works,
and you're trying to add things to boost your win rate,
improve your process over time,
but when you're first starting out,
this is going to be impossible to track nearly
and impossible to replicate consistently.
Whereas this strategy,
where we look for one, two, three rules,
if those rules confirm, we take the trade.
This is going to allow us to be easily repeatable,
and when we can be easily repeatable,
we can identify
if we're starting to see an edge in the market,
and it's gonna give us a beautiful foundation
to then later add all of these different steps,
but already off of a solid framework
that we know actually works or is close to working.
A lot of people think
that they're just gonna jump into this
and it's gonna work immediately.
It's a process for you as an individual,
but the more simple you keep it at first
is going to allow you to just add onto that good framework
and advance it over time.
And just remember, more complex does not mean better.
The complexity in trading
comes with your ability to execute when you need to
and not get emotionally involved with the trading.
That's the biggest part.
The third part of this process that I followed
was something called backtesting.
Now, backtesting is basically going through
the process that you build,
this system that you design,
and testing it out theoretically over previous data
to figure out what return you would have got
had you have just followed those simple rules
without modifying anything.
In statistics, there's something called
the central limit theorem,
which requires a certain sample size
to be able to get something called statistical significance.
Now, without going into too much technical detail,
in simple terms, what this is showing us
is basically we need enough data
to be able to prove an edge over time.
So let's take a coin flip, for example.
If I flip a coin two times,
maybe we land on heads twice, right?
But is the probability statistically 50-50
between heads and tails?
Yes.
Does that mean that we can't get five heads in a row
or four heads and one tails in a row
over, say, five flips?
Of course.
But if we were to flip that coin 2,000 times,
what you're gonna see is the data narrowing in
on that 50-50%, okay?
So this is a good example of that.
Say we take an example of four coin flips.
You can see if this is our 50-50 average,
we can have this data be lopsided towards one side.
Like I said, maybe we're getting more heads
in that situation.
Whereas if we do this over 100, 200, 300
different coin flips,
yes, we're gonna have outlier data.
But overall, what's going to happen
is we're going to get an even bell curve distribution
right here.
And this is going to increasingly narrow to that 50%.
And the goal of this 50% is to give us the data
on this table.
How often are we right?
And how much are we making on the trades
when we're right versus when we're wrong?
And all this is going to do is show us
where we need to be in order to be on the profitable side
versus the non-profitable.
Okay, so when I first got into trading,
I was not tracking anything.
I was just going from strategy to strategy,
being like, why isn't this working?
I was losing money and I would continue to run
with something if I was making money
and then it would blow up.
And it was very discouraging and confusing
because I didn't understand how to approach it from this.
It took me years and years and years
to be able to figure out
that I need to approach trading like this.
Everybody collectively watched this video
and just approached trading
the way I'm showing you right now.
We would have so many more successful traders
and there would be so much less BS and loss,
but it's just hard to get there.
It's hard to get that information.
That's why I'm trying to share it with you today.
If you appreciate that, make sure you hit the like button.
But anyway, so we can execute this backtesting
with something called a trading view.
Now trading view is where I'm doing all of my charting.
This is where you can basically do
all of your trade analysis.
It's basically the hub for trading.
So say you have a chart.
What I can do is go up to this top menu here
once you have your chart all set up
and I can click on this replay feature.
Okay, so I can have a few options.
I can click into this menu
and you can see I can either randomize
or I can select a date or I can select a bar.
So I can literally scrub back here,
click at this level and say,
I just wanna trade the last day's worth of information
to see what the outcome would be following my strategy.
Instead of sitting there and spending weeks and weeks
to test a strategy in real time
that doesn't actually work over time.
What you can do is you can play this forward
one candle at a time and say,
my strategy, super simple.
Okay, this isn't gonna maybe make much sense to you,
but I'll just show you.
For example, say I'm just looking for the first,
what's called fair value gap
that price is going to pull into.
So say we have one, two, three of these candles.
We're waiting for a gap in between
and then we're waiting for price to pull into those
and continue moving out.
Say we're waiting for the first one
to be able to get in in the middle of
and then play that one to four risk reward
that I was sharing with you.
So we're waiting for our fair value gap,
which you can see we get here.
We're entering in at the middle,
placing that risk outside of that fair value gap candle.
We're going up to a one to four.
So I'm clicking on this long button here
and clicking where I would have entered,
setting my stop loss below this candle to set my risk.
I have a one to four risk reward
and then the market comes up and closes me out.
And now I have plus four.
Okay, and you'll notice all I'm doing
is calculating plus four.
I'm not even focusing on a dollar amount
because chasing after money
and focusing on a dollar amount
is the last thing that you want to do
while you're learning trading.
And honestly, in the beginning,
when I was going through this process,
I was focused so much on money.
Whereas once I started focusing
on just treating it like a game
and looking at this as negative one
and this as plus four,
now it simplifies the whole entire game
where you can focus on the mechanics of it after,
but all you're focusing on is your average R.
This is what professional traders are focusing on.
They're not focusing on dollar amount.
The dollar amount doesn't matter.
If I grow a hundred dollars into a thousand dollars,
it's extremely compressive statistically,
but the thousand dollars,
I can make a thousand dollars in a couple minutes
just on a bad trade, for example, right?
It has nothing to do with money
and all to do with performance.
And this is what allowed me
to start focusing on performance.
Let's say we had plus four on that session,
but let's say we wanted to replay the previous session.
We can go all the way back.
Okay, and I click on the beginning of yesterday's session
and we can trade the same thing.
Okay, so we have our first gap filled here.
Stop loss would be placed here,
comes into our entry,
almost comes up and takes us for full profit
and then comes out and actually gets us out for a loss.
So this would be negative one.
So now in a few minutes,
I've been able to go over two days worth of my trading
and figure out that I would have ended up
positive three units of risk.
And in order to help you guys,
I actually built out a notion page
where you can actually go through,
create all of these cells,
add the date that you tested,
the day that you traded on,
what instrument you were trading,
whether it's crypto, future stocks, doesn't matter.
The strategy that you were using
and you can customize all of this,
whether it was a long or short,
as well as the amount of risk on the account,
whether it was a win or a loss.
And that's going to show you your total profit,
your total R factor units,
as well as you can click on this button,
open it up and put screenshots of your trades in here.
And what that's going to do is allow you to collect
a bunch of information for yourself
and see if this is a positive value over time.
Okay, and you'll be able to look at it
and see if your strategy actually works.
And this is the whole principle behind backtesting.
Once I started bringing this into my trading,
I stopped wasting time on strategies that didn't work.
And I was only focusing on scaling strategies
once I figured out that I had an edge
based on the way I was trading it on my instruments.
And then I moved on to the next steps of scaling
that we're going to get into in a second.
If you want access to this,
you can click the link in the description,
as well as get access
to all of the other trade tools that I use.
So you can check out those resources if you're interested.
Okay, so once I had this figured out,
what I was using was something called percentage scaling.
The way I trade right now
is basically I'll risk $2,000
and I'll hope to make 8, 10, 12, $15,000 when I'm right.
On average, I'm able to make 3.96
what I'm risking on my trades.
Sometimes it's a lot more, sometimes it's less.
My win rate hovering around 50,
it's a little high right now.
Typically it's around 40 to 50%.
So it's well profitable over time.
But when you're first growing an account,
percentage scaling is going to allow you
to increase your per trade risk.
So that risk factor when you're winning
and it drops the risk when you're losing.
Okay, so let's go back to this example here.
Let's say we start with $100 account
and we're placing this trade.
Say we want this area here to account for $5 of risk,
which would be 5%.
If I lose that $5, now for the next trade,
we're taking 5% of that account,
which is going to now mean that we want to risk 4.75.
So we're actually systematically reducing
the amount of risk that we're taking
if our account starts to shrink
so that we don't snowball out of control
when we're focusing on growing an account.
Say this trade actually won
and we're able to make four times what we're risking.
So 20, so this would be plus 20.
Now same situation, we're taking 5% of that
and now we're actually risking $6 per trade.
So say we were to make four again,
that would be 24 plus the 120.
So say we have two back-to-back wins.
Now we have 144 of our balance.
We're taking 5% of that.
Now we're risking 7.2.
And when I did that over time,
I found that it took a lot of the emotions out of it
where I go on a losing streak
and I'm worried because I'm continuing
to chip into the account.
Okay, what this would allow me to do
is take the direction of the account.
If we're trending up as a balance,
we're risking a percent of a larger balance,
which is a higher dollar risk.
And that's going to accelerate the growth
when we're moving up, when the account has momentum.
That's gonna get cycled back into the account balance.
Okay, if we're trending down,
we're systematically risking a lower amount on the account,
lower dollar amount.
That's capital preservation going back into the account.
And this system is going to allow you
to be able to scale smaller amounts of capital.
At the end of this video,
I'll put another video that I made
about scaling $100 into 10,000.
If you're interested in that,
like I said, I'll put that at the end for you as well.
Okay, and just as an example of this,
basically I put my own trading performance year to date
into a calculator,
calculating starting with $1,000
and risking 2.5% of the account per trade.
So you'll see if we started theoretically
with the $1,000, we're risking $25, which is 2.5%.
And I just used a randomizer
to randomly insert wins and losses
based off of my real trading statistics.
And you'll see this first trade was a win.
So you'll see the total R made was my exact average.
I even calculated this with fees so that it's realistic.
And you'll see the profit on the account gets rolled in.
And then the next risk on the trade
is increased to 2.5% of that new balance.
And you'll see over time,
the risk per trade scales up, down, down, up, down, up.
And it keeps going back and forth,
but gradually goes from 25 to 35,
back down to 30 to 20.
And then eventually ends up at $50.
Then eventually ends up at $100 per trade risk.
And then after a hundred trades at 2.5%,
the per trade risk is $233
off of a $9,300 account balance.
Okay, so once I started scaling my trading like this,
I started applying this into crypto.
I started putting my trading strategies to work,
and that's where I was able to take that $25,000
and turn it into almost $650,000.
That was before losing 160,000 of it in the Luna accident,
but we're not gonna talk about that.
Still nonetheless, as far as applying this scaling mechanism,
that is the best way to do it.
Which brings me to the fifth step in my process
that I followed,
which was focusing only on the process on the system,
then worrying about adding capital to it later.
Okay, you can only simulate so much.
What I would recommend is use the simulation
to build the strategies,
to understand that your model is working,
and then immediately switch
to a very small amount of live capital,
$100, $200, a prop firm,
and just be able to play around
with the actual feeling of executing the trades,
interacting with the market and feeling the fees,
but also feeling how the emotions trigger you.
So starting with that small trading account,
execute the small trades.
Once again, continue to track the performance
in the live markets,
make sure that you have positive expectancy,
so a positive average amount of risk.
So you're actually making money over time.
Okay, and if you're not in the live markets,
but you are in the simulated markets,
now you have it narrowed down
to exactly where the problem is.
And it's usually a psychological problem.
It's either that your strategy wasn't profitable enough
to be able to still be profitable
while you're paying fees in the market,
or it's that you're executing differently
now that there's real risk on the table.
Okay, it's important to remember going into this
is that when you're starting to trade live,
don't expect yourself to actually be profitable.
What you need to do is focus on receiving the information
and then being able to use that information
compared to your data and your strategy
that you know works
and figure out where the disconnect is.
Only treat it as information.
And then once you have that dialed in
with a small account,
once you have the positive expectancy
and you've nailed that,
and you start to see growth,
this is where you can simultaneously
be adding capital to the process.
Okay, what I did in the beginning,
once I figured out
that I needed to build this simple system
and then calculate how it would work
over a large sample size,
then I started trading it in real markets
and scaling it.
As soon as I saw for a couple months
that I was able to scale a small amount
into a larger amount systematically,
I was literally working at the same time
as a bartender
and I was doing government security
for Space Force at the time.
I was taking all of that income
and shoveling this back into the process
once I had proof of concept.
I'll never forget people at work,
I was telling them what I was doing.
They thought I was crazy,
but I was like,
I'm taking $2,000 this month
and I'm adding this into this process
because if I'm able to go from risking
$100 to $200 per trade
and I'm able to make five R in a week,
that's another $1,000 a week for me.
And they were like,
what are you talking about R?
I was so obsessed with the process
that then it was exciting
to add capital into that system,
but the framework was built
around good process and execution
off of small amounts of money,
starting with that small amount of capital
so that I wasn't getting emotional about it
and I was gradually scaling
to be fully comfortable.
That allowed me to continue
to build up this process.
Build the process first,
add the capital later.
One thing that I ran into
and this is something
that I still have to mentally combat,
everybody's going to have their own thing.
Trading is a very mental game,
but throughout this process,
I would notice that I would have
really good trading performance
with small amounts of capital
or in simulation.
Then when I would get into the live markets,
I would end up trading
and then I would be making changes
because I was like,
oh, well, I want to be
a little bit more careful.
This is a lot of money,
so I don't want to take this trade
because it's not a perfect setup.
I started changing my behaviors.
It was getting me a result
in the models and in the data,
but not in the live trading.
Okay, so the common issues
that I've seen from,
I've coached hundreds
of different traders at this point
and I would say these are
the most common things
that I notice at this key point
where a lot of people
end up getting stuck
and that is changing how you act
to be more careful
when you're trading live capital,
especially when the capital grows.
In our minds,
it sounds logical,
say to be like,
okay, well, I want to take
only the best trade setups
now that I'm risking a bit more
or I'm over my profit target.
Now I can start taking a payout
or something,
so I'm only going to take a trade
if it's really, really perfect.
The whole time you're trading,
you should be taking
only the trade setups that are perfect.
Okay, so if you're now deciding
that you're only going
to take the perfect setups,
you're doing something differently
than what the result was
off of this data
in your live trading
and I call this
the glass equity ceiling fallacy.
I've coined this name.
I don't know.
We'll see if it catches on,
but basically it's
when you hit a barrier
in your account
because of purely
psychological reasons.
There's no reason why
the account balance
should not grow
the way it should
based off of the data.
It's purely how you're
executing it over time.
Okay, the second biggest issue
that I faced
while I was scaling this
in a live market
was risking less
because I was on a losing streak.
This is a question
that I get a lot.
Oh, well, I've lost a lot of money,
so should I back off
a little bit and trade
with smaller size
until I get back on track?
The problem is,
this is a really vicious cycle.
Say, for example,
you lose five trades in a row,
so you're just constantly
starting to lose
and this is where you're at
with your journey.
You're technically underperforming, right?
Then you finally decide
it's gotten so bad,
I'm going to reduce my risk
and just risk half
of what I'm risking
and say the next trade
is a winner.
This equity curve
that you've calculated
based off of data
didn't account for you
dropping risk
if you have a bunch of trades
in a row being losers.
This is why using that
percentage scale
is so important
when you're growing up capital.
You were literally relying
on the fact that
you need these big winners
in order to drag you back
to the average
that you knew
you could perform at,
but if you're risking half,
now your winners
are half as big
and all of your data
is completely different.
So you want to make sure
that it's calculated in
that you're not making
any random changes
based off of emotion
or discretion
in your live trading
that wasn't accounted for
in your models.
This is a business model.
Trading is a business.
The third thing is
being afraid of losing,
which is going to trigger
an emotional response
for you to act differently
and this is typically
because the amount
you're using is too high.
Even if you're scaling
on a percentage
and it starts to get too big,
you can then slice
the percentage risk
on the account
that you're using,
say in half,
and then go from there.
But don't do it
during a losing streak
to try to correct
the system from not working.
Do it if you've scaled
the capital
and you want to be
in a more of a preserved state.
So say you go from
100 to 500
and you care more
about losing the 500
than you did with the 100.
So maybe while you
were trading the 100,
you were risking 5%
all the way up to the 500
and now you get to 500.
Say you want to cut
that risk in half again.
Now you're still risking
basically what you were risking
before at the start,
but now you're preserving
that capital that you've grown
so that a losing streak
isn't going to eat
into your profits,
but you're still scaling
dynamically based
off of the growth
or drawdown on your account.
If you're ever risking
too much capital,
if you're ever feeling emotional
over losing an amount of money,
you're still not
detached from that fully
and you need to risk
less amount
because it's going to make
you act emotionally.
And the fourth,
this is one of the
most important ones
for me actually,
is the fallacy
of taking profits too soon
to quote unquote
lock in gains.
I was always told
in the beginning
of my trading career,
this is the worst piece
of advice that I was given
from people who don't know
what they're talking about,
which is no one's going
to blame you
for taking profit
or if you have profit
on the table, take it.
This seems like good advice
because obviously
you want to have winning trades
and you want to make money
as a human.
But what that's not accounting
for is the fact
that you need to let
your trades run
based off of the data
that you had before
to keep you on the equity curve
and the performance
of the data.
If you start taking profits
too soon
because you're scared
of having it go
all the way against you
and lose,
OK, you're not following
the system
that once again
gave you the data
to move forward
and now you're starting
to modify things.
And all of these things
are going to give you
that glass ceiling equity curve
that I talked about.
Be aware of those things
that you're doing differently
and then try to nip
that in the bud
based off of following
your system
and having that discipline.
That was one
of the biggest things
for me to be able
to break into
a higher range of trading.
OK, before we get
into the system
that I've been using
and how that works,
the last part of this process,
which is one of the
most important things
is to not chase
the dollar amount goal per day.
It's very tempting
and intuitive
for humans to be like,
I'm going to trade
five days out of the week
times for 20 days.
I want to be able
to make $300 a day.
So that means that
I need to make $6,000
in order for me
to make that $6,000 per month.
I need to be able
to make $300 per day.
And what they'll do
is they'll chase
after that daily profit amount.
But in trading,
you're going to have
back to back days
where maybe you lose money
or maybe you don't take trades
because your setups aren't there.
Right. So say, for example,
you have to make $300.
You lose $200 the first day.
That means that the next day
need to make $800
in order to be back on pace
because you make another $300
plus the previous day's $300
and then recoup the $200 loss
and you eventually
spiral out of control
trying to chase
after this daily goal.
Instead, this is how
you can figure out
in order to get
to your income goal,
how much you need
to risk per trade.
And this can either be done
through that scaling mechanism.
So you know exactly
what you need to start with
to be able to get
to a certain dollar amount risk
to get to your goal.
Or if you just want to risk
a certain dollar amount,
say you're using a prop firm,
this is going to show you
that exact amount.
So in order to hit our goal,
we need to focus off
of process based goals.
OK, so what we want to do
is figure out not per day
what our goal is,
but how many days we aim to trade,
say, for a set period of time.
So say a month
and then over that month,
how many are multiples
are we making?
Like we were talking about before
on this trade example,
say this were to go to full profit
that actually did hit our full profit.
Oh, that's an L.
Anyways, the funny part
about this is
this actually did hit our one to four.
So that would be eight risk factors,
but just the strategy.
Anyways, doesn't matter.
OK, so let's say, for example,
on this trade
that should have been a win
making four risk factors.
OK, we need to figure out
based off of tracking our data,
how many risk multiples
we're making
over that set period of time.
So say over 20 days,
I'm able to make seven R in total.
And my goal is to make
nine thousand dollars per month.
Now we're just dividing
the total amount
that we're aiming to make
over the total R
that we know our process yields
to be able to determine
what our risk per trade
needs to be to get to our goal.
And so now we're not focusing
about the outcome
of each individual day.
All we're doing is basically
reverse engineering that goal
to make it so that by default,
we're going to hit our goal
because now we know
we need to get to a point
where we're risking
twelve hundred and eighty five dollars
per trade in order to get
to nine thousand dollars total,
which is going to get us
to whatever that amount is per day.
OK, so now this makes it realistic.
It gives us a path
to actually follow
to get to that amount.
And it makes us focus
on the right things,
focusing on the process
only to default,
get us to that money goal.
And now we're not doing
the stupid thing of chasing
a dollar amount for the week
or for the month or for the day.
We're just focusing on the process
and adhering to that process
as closely as possible.
OK, so now I'm going to go
into the strategy
that I use on a daily basis.
And I'm going to show you
my year to date performance.
OK, so the first thing
that I'm doing
is waiting for nine thirty.
You can see where
this gray section ends.
That's where the New York
Stock Exchange down there opens.
And that's going to increase
the amount of movement
in the market
and open up opportunity.
What I'm waiting for
is something called a shot
or a change of character.
OK, so what I'm trying to identify
is price generally
moving up or down.
And then if we have a level here,
a lower level here,
we now have a new higher level here
that comes over this area.
And that to me is going
to be my change of character.
What I want to do is wait
to find the first high
impact fair value gap.
OK, and what a fair value gap
is a series of three candles,
one, two, three candles
where the high wick
of the first candle
and the low wick of the third candle
do not overlap,
leaving this green box
area right here,
whether it's in the up
or down direction.
In this case, we're breaking
to the upside.
So this is a bullish
fair value gap.
And what I want is to have
that fair value gap
significantly push through
this previously not broken area
after our change of character area.
OK, and that's where I'm
going to be waiting
for a retracement
into the middle
of that fair value gap.
I'm setting my stop loss
or that risk
outside of this candle area.
I'm waiting for price
to revert into the middle of this,
placing my stop loss
once again outside of that area.
And I'm starting with a target
at a one to four risk reward.
OK, but what I'm doing
is it once we get a pull
back into this area,
I'm marking off this level
and I'm waiting for candles
to close above this area
in order to reduce my risk
to my break even zone.
So that takes risk off the table.
So I'm moving my stop loss up
when I'm confirming
that this is a new trend,
because if price wants to come down
and break underneath this area,
that's now confirming to me
that this trend is no longer
moving in an up direction
and it's creating
the change of character.
So it closed underneath this low
in the opposite direction
and it's time for me
to leave out of the trade.
And what this allows me to do
is find the very beginning
of new trends
and allow this to move
significantly more in my direction
than what I'm risking.
Sometimes I'm able to make eight,
ten, twelve times
what I'm risking,
which makes it so that I can lose
ten trades in a row after that,
which is not likely.
And still be able to be break even.
OK, and what that's doing
is allowing me to really
keep my losers contained
and allowing my winners to run.
OK, so let's take this trade
as an example.
You can see I've waited
for price to push up
over this swing point,
creating that change of character.
I'm waiting for my first
available fair value gap.
You can see position comes down
immediately into that area,
responds beautifully off of it
and starts to flip over it.
It starts to flip
in the opposite direction.
OK, notice how we didn't
break over that high yet.
So I didn't reduce my stop
loss to break even.
We respond off of that
entry level again.
We finally close above
so you can see my stop loss move up.
And you can see if this hits
my full take profit,
I'm making six point eight times
what I'm risking
on the individual trade.
OK, you'll see takes time,
but I'm just being patient
and I allow the trade
to move up in my direction.
OK, I do end up taking it
off a little early,
but this is well outside
of that one to four
that I require myself to have.
OK, you can see another example
of my trade here.
I'm waiting for the confirmation
of the change of character.
I enter into my position.
Price responds off of that area,
continues to push down
and eventually moves down,
goes to my full take profit.
OK, but this took a long process
for me to be able to scale
to the point I'm at,
but it doesn't necessarily
need to take that long
so long as you have
the proper framework.
So if you follow along
with this video,
get the resource
with the trade journal,
figure out a strategy
that works for you
and then test this
and dedicate six months to this,
you can then actually set up
a profit goal for yourself
and an objective
and have a clear roadmap
of actually how to achieve it,
which is how I've been able
to scale up to my goal
and continue scaling
and help thousands of people
on my private trading team
work on this exact process as well.
OK, trading is a business
and needs to be treated that way.
If you want to get started on this,
you can check out the description
and get the resources.
OK, make sure you hit
the like button, subscribe
if you want to know
when I put other videos out.
As promised, this is the video
I made about scaling
100 into 10,000.
If you want to start
with this process,
I put the free resources
in the description for you as well.
If you're interested in our team,
you can check that out right here.
But until next time,
I will see you all
in the next video.