The Scalping Strategy to Make a Living Trading - John Kurisko | Trader Interview

Finance-Focused Summary (Scalping + Stochastic Momentum/Divergence)

John Kurisko describes a 1-minute (primary) scalping approach built around Stochastic Oscillator divergence (i.e., momentum shifts) combined with multi-timeframe stochastic confirmation. The goal is to capture small, high-probability “$20 trades” in futures, using pre-defined stops and exits, with an emphasis on discipline + patience.

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Instruments / Tickers Mentioned

• Futures (general): He trades intraday scalps throughout the day.
• ES / E-mini S&P 500: Repeatedly referenced (including “MEs… ES broken into fractions” and using multiple MEES contracts).
• SPY (ETF):
  • Used as a proxy (referenced as “the Spy”).
  • Also described as how he syncs the 5-minute context/indicator.
• S(w)k / SWK (stocks): Mentioned as an example of daily stochastic divergence.
• GameStop: Used as a “frenzy” / meme-stock context example.
• Bitcoin: Shown visually, but no detailed strategy was provided.
• Meme / Reddit stocks: Mentioned to frame risky crowd behavior.
• Options: Noted as potentially tradable (e.g., SPY options), but he prefers using the 5-minute chart “vehicle” for this style.

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Key Methodology / Step-by-Step Framework

1) Core Indicator: Stochastic Oscillator

• Uses the Stochastic Oscillator (originated by George Lane).
• Preference is for the signal line (uses %D / signal line, rather than divergence crossovers).
• He highlights a proactive property: divergence can appear before price fully moves.

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2) Stochastic Settings / “Bands” (Timeframes)

He references four stochastic “bands” with different lookbacks:

• 93
• 143
• 44
• 6010

How he frames them:

• 93 / 43: the “classic” divergence setup used on 1-minute.
• 6010: used as a 5-minute proxy (described as mimicking the 5-minute on SPY).

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3) Entry Framework: 1-Minute Divergence Scalps

Divergence Pattern (structure)

On the 1-minute chart, look for high-level divergence structures such as:

• Bullish: low + higher low (plus variants like “low / higher low” or similar low-structure variations).
• Bearish: high + lower high (including structural variants like higher/high rotation patterns).

Timing / structure rule

• A divergence rotation on 1-minute typically takes ~5–7 candles to complete.

Trigger (“Stage 1” → “Stage 2”)

• Stage 1: first low forms.
• Stage 2: second low forms and stochastics turn up.
• Entry trigger: enter on the trigger associated with that rotation stage.

Stop placement

• Stop = “one tick under” the prior stochastic low that caused the divergence.

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4) Exit / Risk Management

Defined stops (core edge)

• Stops are defined and intentionally tight so the method “keeps you out… most of the time.”

Take-profit plan

He uses stochastic-based exits plus moving-average targets:

• Target #1: 50-period moving average.
• Uses a rotation / scale-out concept:
  • Example with 5 contracts (MEEs):
    • Take 3 off on the first rotation
    • Leave 2 with a break-even stop

Runner management

• He describes managing remaining contracts by following a moving average (e.g., “right under the 20 period moving average”).

Profit framing: small and frequent

• Calls them “$20 trades”—capturing smaller moves rather than hunting for very large ones.
• Example expectation cited:
  • ~$200–$300/day on MEEs (from repeated small scalps).

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5) Confluence / Additional Confirmation

To improve probability, he encourages combining divergence with other factors:

• Channel / trendline location
• Optional management via VWAP (e.g., “take it off at the vwap”)
• Mentions optional confluences such as:
  • Fibonacci
  • Volume profile
• Still emphasizes the foundation: divergence + multi-timeframe alignment.

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Explicit Performance Claims / Key Numbers (As Stated)

Algorithmic context

• Claims ~70% of volume/market movement comes from algorithms / high-frequency trading, making manual trading harder due to hidden order flow.

Success rates (approximate)

• Stochastic divergence signals work ~85–90% of the time (and “amazing” if you add a couple indicators).
• Additional scenarios mentioned:
  • One setup: ~75% success
  • Add +10% if it occurs in a channel
• General claim:
  • “Market moving in the direction of the divergence” nine out of 10 times (with caveat: must be a “decent divergence”).

Duration / trade timing

• Divergence rotation completion on 1-minute: ~5–7 candles
• Implies intraday execution (not holding all day).

Reward framing

• “$20 trade” analogy: prefer smaller, repeatable capture.
• Example variability:
  • On a 5-minute move, he references a ~22–26 points range, with an estimate of capturing “four points” as realistic take-profit variability.

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Risk Management + Behavioral Cautions

• Discipline required: “You got to be disciplined… be patient… put the time in.”
• Avoid staying in the market: he stresses that more time in the market = more losses; the edge comes from tight entry/exit rules.
• Defined stop is the key edge: he calls it “the most important thing.”
• Not counter-trend:
  • If the market is trending hard, he advises caution and avoiding opposite divergence trades.
• Setup frequency expectations:
  • Looks for 3–5 setups daily.
  • Many described as ~90% working, and non-working setups are flagged by other weakness indicators (including use of his multi-timeframe 6010 context).
• News risk:
  • Divergence can fail if news hits at the same time you enter.

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Setup Types Mentioned (Beyond Basic Divergence)

• 1-minute classic divergence (primary).
• Quad rotation
  • Occurs when all four stochastics are oversold.
  • Described as a distinct setup type with high success.
• “2020 flag”
  • A bullish/bearish flag concept driven by stochastic zones around 80/20:
    • Fast stochastics reaching 80
    • 60 stochastics stuck under 20
    • Price staying under 20 = “2020 bear flag”
    • Analogous upside version mentioned

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Tools / Automation Mentioned

• Phone alert system
  • Push notifications when divergence setups occur, including:
    • divergence location
    • price example
    • stop placement
• NinjaTrader indicator/bot
  • Can identify divergences automatically.
  • Can take trades automatically depending on parameters.
  • Sends email/phone alerts and may “wake” him to check signals.

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Disclosures / Disclaimer

• No explicit “not financial advice” disclaimer appears in the provided subtitles excerpt.

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Presenters / Sources Mentioned

• John Kurisko (primary guest/presenter)
• George Lane (originator of the stochastic oscillator; “stochastic inventor” referenced)