Video summary

3 Step BEGINNER Scalping Strategy (500 Trade BACKTEST)

Main summary

Key takeaways

Educational

Main ideas / lessons

  • Goal: A beginner-friendly scalping strategy for making directional trades within a specific daily time window.
  • Core premise: Trades are built from three sequential steps:
    1. Bias (market direction) using an H1 pre-session candle pattern
    2. Range breakout confirmation at the NYSE open
    3. Entry from a “point of interest” (typically demand/supply zones) with risk management
  • Evidence presented: The creator claims to have back-tested the model 500 times and uses it daily, with a reminder that past performance doesn’t guarantee future results.
  • Time focus: The strategy is applied repeatedly in the 9:30–11:00 a.m. Eastern window, with the range specifically defined as the first 15 minutes from 9:30 to 9:45.
  • Trade logic:
    • Use bullish engulfing for longs and bearish engulfing for shorts (Step 1).
    • Only enter after price breaks and closes outside the opening range (Step 2).
    • Enter on a retracement into a demand/supply level (often with an additional engulfing confirmation) and target the next logical level (Step 3).

Step-by-step methodology (detailed)

Step 1: Bias (determine market direction)

  • Timeframe: H1
  • Pre-session candle check: Look at two hourly candles:
    • 7:00 a.m.
    • 8:00 a.m.
  • Bullish setup (for buying):
    • Wait for a bullish engulfing pattern to form before the trading session.
  • Bearish setup (for selling):
    • Wait for a bearish engulfing pattern to form before the trading session.
  • Trading window mentioned for execution: 9:30 to 11:00 a.m. Eastern
  • In practice (as described):
    • After the engulfing pattern forms, price typically continues in that direction during the session (shown with multiple examples across instruments such as Forex, Nasdaq, and gold).

Step 2: Range breakout confirmation

  • Trading timeframe: 5-minute chart
  • Session/range definition:
    • Use the first 15 minutes of the NYSE open:
      • 9:30–9:45 a.m. Eastern
    • The range is the high and low formed during that window.
  • Directional rule:
    • If Step 1 indicates buys → wait for price to break and close above the top of the range.
    • If Step 1 indicates sells → wait for price to break and close below the bottom of the range.
  • Indicators / settings mentioned:
    • Session timing uses “New York session” by James Davey (TradingView).
    • Timezone requirement: ensure the chart matches UTC minus 4 (explicitly called out in the chart settings).

    • For breakout marking/confirmation, use Lux Algo: “Opening Range with Breakouts and Targets”

      • Time period: 15 minute
      • Time range: 9:30 to 9:45 (UTC-4)
      • Outcome of Step 2:
        • Once a break + close outside the range occurs, the trade proceeds to Step 3.

Step 3: Find a “point of interest” (entry via demand/supply + risk plan)

  • Concept: Identify a key demand (for buys) or supply (for sells) area where price is likely to retrace before the next directional move.
  • What to look for:
    • Demand/supply areas formed by aggressive price pushes.
    • The creator also references fair value gaps as a related idea.
  • Entry mechanics (as shown in examples):
    • Wait for price to retrace into the chosen demand/supply zone.
    • In at least one example, an additional bullish engulfing appears near the entry area to confirm momentum.
    • Another example uses a limit order placed at the level rather than waiting for a touch-and-trade.
  • Stop loss (SL):
    • Commonly placed below the range for buy examples.
    • For sell examples, SL is placed above a recent wick (described as a safety placement).
  • Take profit (TP):
    • Determined by “looking left” for prior reaction levels.
    • Often aligned with the next expected opposing zone:
      • Buys: target a supply zone
      • Sells: target a logical downside level based on prior structure
  • Example outcomes mentioned:
    • A buy trade that “smashed” TP around 11:00 a.m.
    • A sell trade where price tapped the entry and dropped to TP; the creator mentions adjusting to break even and leaving some profit on the table.

Additional live-trade example themes

  • Forex buy example (H1 → 5m):
    • Step 1 bullish engulfing on H1.
    • Step 2: breakout and close above the opening range top.
    • Step 3: retracement into a level (support/demand described).
  • Forex sell example:
    • Step 1 bearish engulfing on H1.
    • Step 2: breakout and close below the opening range bottom.
    • Step 3: retrace occurs; the creator describes modifying the plan (removing the supply zone and using the bottom of the range / break-and-retest approach).
    • Mentions break-even after price moves in favor.

Sources / speakers featured

  • Speaker / author: Unspecified individual (described as a 17-year trading veteran)
  • TradingView / indicators referenced:
    • James Davey — “New York session”
    • Lux Algo — “Opening Range with Breakouts and Targets”

Original video