The 100K Trading Strategy I Wasn’t Going To Show You

The 100K Trading Strategy I Wasn’t Going To Show You
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Trading Formula

I always heard that the trend was your friend, but I realized there’s more to this trading formula. Today, we are going to talk about a trading formula that changed my trading. So let’s not waste any time and dive right in.

The trading formula is Elite, where E stands for Environment, L stands for Levels, E stands for Entries, and E stands for Exits.

Firstly, let’s discuss the environment. The environment refers to market structure, the context of the market. Understanding the market structure is crucial because the market goes through different states: trending, ranging, breakout, and reversal. By recognizing these states, traders can adapt their strategies accordingly.

To illustrate, the video mentions taking screenshots of different market conditions and categorizing them into folders based on trends, ranges, breakouts, and reversals. By doing this, traders can understand that not all trends are equal; some may have deep pullbacks, while others are stronger. Recognizing these subtleties helps in making more informed trading decisions.

Next is Levels, which refers to key support and resistance levels. Traders should identify significant levels on the chart to make more precise entries and exits. The video emphasizes the importance of levels in providing a framework for trades.

Moving on to Entries, the video discusses how entries should be based on the observed market state. For instance, in a ranging market, buying at the bottom and selling at the top makes sense. Entries can be triggered by various signals, such as rejection bars, strong bullish or bearish bars, or chart patterns like double tops or double bottoms.

Taking Profits

Finally, Exits are determined by choosing sensible levels for taking profits. These could be based on previous swing highs, supply and demand zones, or other technical factors. The video stresses the importance of having a plan for exiting trades and highlights the flexibility traders have in choosing exit points.

Throughout the video, the key message is that a trader’s job is to understand the current state of the market in real time. Instead of blindly following the notion that the trend is your friend, traders should analyze the market’s environment, levels, entries, and exits to make informed decisions. This approach allows for more adaptability and precision in trading strategies.

 


I don’t want to be the trader who always thinks that the trend is your friend because every single day is not going to be a trend. So let’s explore another example.

In this example, the market is initially going straight down, suggesting a trending market. The trader identifies a supply level and waits for the market to reach that level, expecting a reaction. However, the market blows past the supply level, indicating a potential reversal. The trader observes a trendline break and the formation of an inverse head and shoulders pattern, signaling a shift in the market state from trending to reversing. The trader then looks for long opportunities, identifying a level and waiting for entry signals, such as a bullish bar. The exit is determined based on strategic points, such as the previous high.

The current State

The video emphasizes the importance of understanding the current state of the market in real time. It provides more examples of different market conditions, including ranging and breakout states. The trader discusses how they approach each situation by assessing the environment, identifying levels, waiting for entry signals, and determining exits.

The key takeaway is that the trend is not always the trader’s friend. The market undergoes different states, and traders need to adapt to these changes. The video encourages traders to be flexible, patient, and selective in their trades, waiting for the right opportunities based on the current market conditions.

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