In early April, my trading account was around $350. Over the last few weeks, I have been practicing The Strat, and I found my way to Jim Bradley. I had a solid start, and I have decided to share my trading here.
Today I made one trade in QQQ, resulting in a $23 loss (4.25%). Thankfully, the loss was tiny. But it was also a bit unlucky, as I got stopped out immediately before QQQ reversed on me, within the same candle. Such is the nature of exhaustion risk. But the setup still played out beautifully, and, therefore, is a pretty good example for anyone interested in using The Strat on lower time frames.
First and most importantly, we start with the higher timeframes to determine our bias. I was attracted to the weekly 2d Momo candle. The month and day were green, but you can see all the chop on the daily chart. This is what exhaustion risk looks like 😐. So overall, I was able to establish a long bias.
|QQQ after the open|
When we went down to the 1-minute charts, I found a massive Pivot Machine Gun. This Strat formation is probably one of the strongest setups out there. As Rob has mentioned multiple times, it's based on the idea that candle highs/lows, resistance, and support do not halt price action, but rather propel it. It's not where buyers are necessarily looking to buy more; it's most likely their stops. Many people struggle with the lower timeframes. The lower you get, the more head fakes you have. This is because momentum is less established the lower you go. The volume is smaller. The amount of time to hold a setup is smaller. Therefore, you have to find setups that you are confident will provide you an instant push, or you will also be chopped up 🙂.
Now let's look at the QQQ open.
|QQQ 1-minute chart|
The Q's opened higher, before the shorts tried to take over. They tried really hard. Between 9:31 and 9:39, there was a total of EIGHT consecutive lower high candles ranging between 339.59-339.98. That is 8 minutes worth of shorts concentrated in that small price range that are going to be like dominoes once the first high hits. Talk about an explosion 😅. Unfortunately for me, there was a quick poke down to 339.39, 1 cent below the previous candle low that stopped me out. But as you can see in the image below, magnitude (plus a little more) would be hit within the next 2 minutes.
This is exactly what you are looking for when you scalp a 1-minute chart.
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Shoutout to @RobInTheBlack. I will never see another chart again without seeing #TheStrat. See More.
And, shoutout to @_JamesBradley__ whose approach to trading has made a tremendous impact on how I trade. See More.