Summary of "Simple Scalping Strategy That Makes Me $100k/mo (How To Guide)"
Summary of "Simple Scalping Strategy That Makes Me $100k/mo (How To Guide)"
This video presents a refined, simple Scalping trading strategy based on nearly a decade of experience. The presenter emphasizes that profitability in Scalping comes not from complicated indicators or guesswork but from a disciplined, repeatable system focusing on high-probability setups, precise entries, and time-based trade management.
Main Financial Strategies & Business Trends
- Scalping as a Viable and Profitable Strategy: Contrary to common misconceptions that Scalping is gambling or noise trading, the presenter highlights that some of the world’s most successful hedge funds (e.g., Medallion Fund by Jim Simons) use lower time frame trading strategies akin to Scalping. Scalping leverages probability and statistical edges over many trades, similar to how a casino maintains an edge in games.
- Focus on Probability and Short Time Frames: Scalping benefits from the higher probability of price staying within a narrow range over short time horizons (minutes), reducing variance and increasing predictability compared to longer-term trades.
- Don’t Chase the Whole Move: Profitable scalpers aim for small, high-probability portions of price moves rather than trying to catch entire swings. This approach leads to better risk-reward ratios and more consistent returns.
- Trend and Market Structure: Trading with the trend improves win rates and momentum. Scalpers should identify relevant trends on multiple time frames but focus on intra-session trends (e.g., 15-minute or 1-hour charts) rather than daily or higher time frames.
- Sharp, Precise Entries as a "Superpower": Mastering entry timing and confirmation allows for smaller stop losses, faster break-even stops, and better risk-reward ratios. This precision reduces emotional stress and improves profitability.
- Time, Inducement, and Lower Time Frame Confirmations (The "Trinity"):
- Time: Focus on key trading windows (London and New York sessions) to leverage volatility and liquidity.
- Inducement: Identifying liquidity runs, manipulations, and market structure shifts that create high-probability reaction zones.
- Lower Time Frame Confirmation: Using smaller time frame price action patterns to confirm entries and improve win rates.
- Liquidity Pools and Points of Interest (POI): The strategy involves identifying key liquidity zones such as previous highs/lows, session ranges (Asia, London, New York), and inducements (market manipulations) that mark potential reversal or reaction areas.
- Risk Management and Trade Management: Using tight stop losses based on confirmed entry zones and aiming for a minimum 1:3 risk-reward ratio. Scalpers take partial profits quickly and move stops to break even to protect capital.
Step-by-Step Scalping Methodology
- Identify the Trend: Use multi-time frame analysis (preferably 15-minute or 1-hour charts) to confirm the market trend (higher highs/lows for bullish, vice versa for bearish).
- Locate Points of Interest (POI): Find liquidity zones and inducements (e.g., previous highs/lows, session lows/highs, market structure breaks) that align with the trend and show signs of manipulation or liquidity grabs.
- Focus on Key Trading Sessions: Limit trading to high-volatility windows, primarily the London and New York sessions, typically trading about 2 hours per day.
- Wait for Inducement and Confirmation: Look for price action that shows inducement (liquidity runs or traps) followed by confirmation on lower time frames (e.g., M1 breaker structure or market structure shift).
- Enter with Precision: Use a limit order or entry triggered by a confirmed lower time frame price action pattern to ensure a tight stop loss and better risk-reward.
- Manage Risk: Place stop loss just beyond the inducement or confirmation zone, keep it small, and move stop to break even as soon as possible.
- Take Partial Profits: Target a 1:3 risk-reward ratio, taking partial profits quickly to lock in gains and reduce exposure.
- Repeat Selectively: Only take 2-4 high-quality trades per week, focusing on quality over quantity.
Additional Notes
- The presenter references a larger resource (a 65-page document) shared in their VIP community covering multiple entry types, with a favorite being the M1 breaker structure after inducement.
- The strategy is designed to free traders from screen time fatigue by focusing on quality setups rather than quantity.
- The approach avoids reliance on fundamental factors or higher time frame biases since Scalping is about short-term reactions.
- The presenter plans to release a multi-part series to cover the full methodology in more detail.
Presenter / Source
- The video is presented by an experienced trader with nearly
Category
Business and Finance
