Trading Strategy Lecture Notes

Introduction

• Teaching a scalping strategy used daily in Discord server.
• Focus on trading NQ (Nasdaq 100) or ES (S&P 500), not other assets.
• Strategy uses a 1-minute time frame with high time frame analysis.

Key Concepts

• Fair Value Gap: A price range where the market failed to close, indicating potential entry points.
• SMT Divergence (Smart Money Technique): Divergence between NQ and ES indicating potential trade opportunities.
• Order Flow: Direction of the market, important for determining long or short positions.

Strategy Overview

Pre-Market Setup

• Before 9:30 a.m. NY time, identify fair value gaps on 15-minute time frame.
• Determine order flow direction: bullish for long positions, bearish for short.

Market Open

• Wait for market to open at 9:30 a.m. NY time.
• Wait for price to enter identified fair value gap.
• Drop down to 1-minute time frame when price is in the fair value gap.

Trading Execution

• Look for SMT divergence between NQ and ES.
  • Example: NQ makes lower lows while ES does not.
• Identify a fair value gap within the current market leg.
• Enter trade when a candle closes above the identified fair value gap.
• Place stop loss below the gap.

Risk Management

• Go break even when closest high/low is taken after entry.
• Take partial profits at 0.7 RR or 1:1 risk-to-reward ratio.
• Second TP can be the next equal highs/lows; final TP can be marked equal highs.

Key Points

• Repeat the process for short positions in reverse conditions.
• Back-testing and live trading in the Discord server are encouraged.
• Claim of 95% win rate in the trading community.

Example Trades

• Example 1: Fair value gap on NQ 15-minute, SMT divergence observed, successful trade execution.
• Example 2: Fair value gap re-tested, SMT observed on second attempt, entry after fair value gap inversion.

Conclusion

• Encouragement to back-test the strategy.
• Invitation to join the Discord server for live trading sessions.

Important Note

• The strategy is said to work best with a disciplined approach and consistent application.