Trading Strategies and Concepts for US-30

Jun 22, 2024

Lecture on Trading Strategies and Concepts for US-30

Introduction

  • US-30 Trading: Discussion on trading the US-30 index and its profit potential.
  • Personal Experience: The speaker shares their personal journey, including making five-figure profits in a day and passing prop firm challenges.
  • Goals: The lecture aims to discuss four major points:
    1. What is US-30
    2. What moves it
    3. Daily trading strategy
    4. Increasing win rate

Understanding US-30

What is US-30?

  • Definition: A stock market index representing the performance of 30 large publicly-owned companies from various sectors in the US.
  • Comparison: Like an All-Star team, with leaders from each sector.
  • Purpose: Measures the overall health of the U.S. stock market and economy.
  • Calculation: Index value is calculated using a price-weighted method.
  • Committee Role: A committee may replace underperforming companies in the index.

What Moves US-30?

  • Dynamic Nature: Fluctuates in value due to component companies' stock price changes.
  • Volatility: Sensitive to macro events (e.g., interest rates, inflation, unemployment).
  • Component Impact: Key stocks like Apple, United Health group can significantly affect the index.
  • Institutional Behavior: Institutional investors may sell multiple stocks, impacting the index.
  • Movement Issues: Sometimes inconsistency among top stocks can cause index to stall.

Trading Strategy

Importance of Catalysts

  • Need for Movement: The traded instrument must move; requires a catalyst.
  • Types of Catalysts: Fundamental and Technical catalysts.
  • Focus: The lecture focuses on technical catalysts.

Types of Trades

  • Four Main Types:
    1. Trend Continuation
    2. Trend Termination
    3. Support and Resistance Holding (Range)
    4. Support and Resistance Breaking (Range)
  • Strategy Preference: Works best with Trend Continuation, Termination, and Range Breaking/Retest.

Supply and Demand Strategy

  • Trend Identification: Determine the market trend first.
  • Zones: Identify supply and demand zones.
  • Supply Zones: Areas where a large amount of contracts will be sold.
    • Indicators: Consolidation followed by aggressive selling.
  • Demand Zones: Areas where aggressive buying occurs.
    • Indicators: Consolidation followed by aggressive buying.
  • Institutional Behavior: Institutions may not offload all positions at once and might retrace to zones.
  • Execution: Wait for the price to return to identified zones and confirmation for entry.

Strategy Examples

  • Downtrend Example: Supply zone is identified after a reversal.
  • Uptrend Example: Demand zone identified as market consolidates and then pushes up.
  • Confirmation: Identify zones and wait for price action confirmation to enter a trade.

Increasing Win Rate

  • Identify Strong Zones: Align zones with the trend for high probability trades.
  • Future Content: Another video will cover the incorporation of fundamental catalysts.

Conclusion

  • Resources: Free weekly market analysis, Discord community, and a free prop firm course available.
  • Additional Learning: More in-depth video on supply and demand zones.