$14,937 Using This Price Action Day Trading Strategy

what's up everyone this is going to be a detailed trade review session on the S&P 500 today and how I made a little under $15,000 profit using this strategy that I'm very confident if you implement it into your own trading you're going to see a major difference in your wins and your losses I want to break this video down into two parts and the first thing that we're going to go over is about finding opportunity in the market and this is a very key concept because when you find opportunity you have to take it and for this to make sense and for the strategy to kind of tie together let's go over the pre-market plan I post these every single day in the Discord of setups I'm watching and levels that I'm looking out for so yesterday the day prior May 1st which was Wednesday we had fomc my main levels was 5044 and then 5114 to the upside if 5114 can break then I'm expecting a move into 5127 so these levels you see on my screens were there before the market opened up at 5127 5114 and the demand Zone at 5044 The Market opens up and we see a pull back down into this demand zone now the market comes into this demand Zone and my plan was if this can hold I'm interested in taking this thing long targeting a high a day offered great risk of reward offered great confirmation and I took it long at 5050 with a two-point stop loss going for a 12-point reward it was a 6 to1 risk the reward ratio eventually the market pulls back on me and I stop out of this trade for a $250 loss not the end of the world right well directly after I stop out the market rallies and I missed out on the opportunity now later in the session the market pulls back holds the demand Zone holds 5042 right on multiple different tests and then we eventually get the rally that I want and the small losing trade what I consider to be Break Even could have been a solid winning trade then we get fomc Jerome Pal's press conference the market rallies up into our resistance level and then gets a very strong dump to the downside and we form a new key level at 5090 from large sellers on the tap if anybody has a time in sales or a level two or a footprint chart or a heat map go back to 5090 to 5100 and you will see large aggressive selling there so that is a level that I've marked for the following day which is today on May 2nd Thursday the the point I'm trying to get here is I posted something on my Instagram about finding opportunity in the market in fact if you're not following my Instagram I recommend doing so I'll post a link in the description below click it you'll be able to follow me I post daily trading Recaps on here along with really good trading tips and tricks that I guarantee you're not going to find anywhere else but on here I essentially posted that there's nothing worse than finding opportunity in the market and not acting upon it I had a plan for this trade down here at the level and I took one losing trade and it made me a little fearful of not entering it again at some point in the future which is something that I never do the greatest risk is not having any risk in the market and this is something that kind of bled into today the day after this 590 to 5100 level uh formed now today May 2nd the pre-market plan I was watching 5090 to 5100 which is this pink level that I just explained that I will be looking for sellers here that if sellers reappear it's going to offer opportunities to play short targeting 5070 now with 5070 breaks that's going to lead into more downside targeting that 5044 demand Zone that bounced the market the day prior it bounced so many times that usually levels that hold on multiple tests usually get tested again to test those buyers or sellers to see if they're willing to be active in the market again so in the overnight session guess what happens the market rallies right into 5090 perfectly it was the high of the session as I'm recording this and we dump down about 30 minutes before the Market opens up now the Market opens up and directly from the Bell we can see very large selling pressure and this is going to come now into my strategy of how I implement this risk management system that helps me have small losing trades and even larger winning ones so going over my intraday commentary again this is just where I update my thoughts in real time of everything that I'm watching and any trade that I am taking win or loss is posted in here the main thing one minute at the Bell was I was not very bullish at the open in fact I was a seller at the open I was watching for vwap to break I was watching for the rejection to bring more sellers in the market and fuel a move down now here is my issue and this is where things get a little sticky and this is a very good lesson for a lot of Traders for me personally I am not a fan of playing breakdowns because breakdowns do not offer the best risk of reward compared to playing reversals so my main thing was I was watching for a rally up to short a rally up into the green line that if sellers could appear I would be interested in playing short targeting that demand zone lower the issue is is that the selling was very strong and the market never got that bounce without me now today is an exception we playing a breakdown would have worked very well and chasing the market would have made you money but you can't can't look at one trading session maybe you make a mistake one day and you try to tweak your whole trading system because of one trade or one day one setup or or one trading session is not good enough to tweak your trading right you have to have more data than that so the market sells off and by the time I was like okay sellers are really strong here it was all the way down here at the 75s the 78s right for me to for me to get short at one of these ovals my stop loss would have to be near this high or a break above the 90 level so I'm getting short at the 78s 74s I'd be risking like 16 17 points which means I need to make at least a 32 34 Point reward to the downside now is that possible yes because we did get it today however the chances of it happening are not as likely on a daily consistent basis so when I see the market like this move without me I rather wait for a rally up because the rally up would offer the best risk of reward if we got a rally up let's just say back up here into these 84s then now I could base my risk off of the 90s where my risk is smaller and my reward is much larger so we kept dumping down and it never really gave me an opportunity to short the market down now I'm just going to go over my commentary so you all could see exactly what was in my head as it was developing my main setup now 15 minutes in was if we can get above the 507s but not above the 50 77s I'm going to be looking to short the pop this kind of validates exactly what I just said of shorting the pops because they offer the best risk of reward so here's the 5070 ones and keep this level in mind because this is going to be a very uh significant role at a future setup we keep dipping down and again you know I I I can't chase it now here at the 62s my risk is way too much breaks down even more I can't chase it here at the 56s and we kept selling off and kept selling off and guess where we hit at at 5044 right we sell off right into that demand Zone where the market had bounced out the day prior on that fomc where I missed that long opportunity then we get a rally up and this is where things get interesting and this is where the strategy gets involved throwing my computer in the dumpster I was pretty frustrated at this point missing all these opportunities that was a great opportunity do not fomo into other setups the market hasn't even been open for 30 minutes there will be other opportunities so now the market sells off and uh we came into the demand Zone and at one point I was not watching for Longs and this is a important lesson about flipping the switch when the market tells you to flip never be so bearish never be so bullish when the market tells you to be bearish or bullish then go with those flows so what I saw here about 10:15 was a very large buyer appear in the market now what I mean by that is as the market was trying to move up some large trades were hitting the bid and price was holding so now I had a thesis that as the market was selling off into the demand Zone I wanted buyers to hold and support the market around 5046 5047 5044 this is just general area right over here of consolidation around 5047 5045 keep keep that level in mind now we get a move up and around 10:22 when the market rallies up like this there is a ton of consolidation which is holding this previous low right here coupled with aggressive trades hitting the bid yet the market was not selling off so at this point I was comfortable taking the market long right here at 5049 with a two point stop loss call it a 1.5 stop loss for a 11 to 20 point reward imagine having such a great entry because I'm confirming my setups through the tape that it enables me to have a one and a half to two point stop loss that goes with having great entry points now when my stop loss and this is the strategy that I've I really want to be implementing a lot more into my trading it's not something that I normally have done so I'm long here 5050 5049 with a stop loss under these 50 call it 50 48s just just to be simple with this right 50 50 48s so I'm long with a 1.5 stoploss if I'm wrong on this trade and let's just say I trade my normal size I actually wrote this up twoo risk on my normal I trade about 15 fulls size EC contract es contracts would be about $1,500 loss with that two-point risk right but I'm way comfortable I'm way more comfortable losing more than $1,500 because my average loss when I hold to my stop loss is around $2,000 to $3,000 so having a two-point risk enables me to size up and I traded this with 25 contracts because it enabled me to size up but still even though I sized up my risk was around my average losing trades around $2,500 so yes I sized up not because the position was a high quality one but I sized up because my risk was smaller than normal and what enabled me to have my risk smaller than normal was a great entry point confirming this setup through the time in sales so I'm in this trade long when the market looks like this we're pulling back into the level then we get a strong move up I sell 75% of my trade into the 61s and then I sell the remainder five contracts as this thing is rejecting vwap and showing signs of weakness but I don't want you all looking at the profit because yes it's nice making solid profits but the concept here is adjusting your position size relative to my risk if my position size was 10 points away trading this thing with a above average size would not make sense it would make sense to size down on that setup to compensate for the risk if my risk was one point here or two ticks maybe I could have traded this with 35 40 contracts and what this does is it makes my risk if I lose on the setup about average to what I am normally losing but if I am correct on the setup it's going to make my wins above average and this is how you're going to be able to compound your growth significantly by adjusting your position size relative to your risk now going back to the opportunity aspect I know there's a lot of little lessons and gems that I'm that I'm going over here I rather take a setup with the risk of being wrong rather than missing a setup with no risk at all there's been a lot of setups and and it's been very frustrating if I have to be completely honest like I can't sit here and and act like I'm you know trading extremely well there's been a lot of setups that I've been missing recently that I've had a plan for that I just simply did not get an entry point whether I missed confirmation or whether I walked away um so it's been frustrating seeing the market do exactly what I had planned out for and follow my strategy perfectly but not having real skin in the game and not making money on it you know so losing on a trade for me right now is a better feeling than actually missing an opportunity I'd rather take a $2,000 loss than miss a setup and see I could have just made an extra $10,000 so after that setup guess where we pull back into we pull back right into these 46s right right back into these 46s that we were watching for the market to hold at right pulled back into it perfectly and I missed the setup you know it it rallied 30 points from it and I missed the setup later in the session a few minutes before I started recording this video remember what I said about the 71s we were looking for a rally up earlier above the 71s to short the market short a pop targeting the 60s well guess what the market broke above these 507s failed and pulled back over 25 points now we're testing this level again so there's just so many opportunities and I feel like this is kind of like a double-edged sword like I don't know if it's okay to miss these opportunities because of it's showing how well the strategy is working and how powerful the levels that we can all create are uh but there's really not a a worse feeling in the market than than seeing your levels trigger and you not taking a setup off it whether I miss it or just didn't find valid confirmation when it hit these 70s I didn't see valid confirmation for me to take it it wasn't that I was scared to lose money on it it was more so that I was just not finding valid confirmation when it hit this level so if you find the opportunity and you get confirmation take the setup and adjust your size relative to the risk those are the two gems that I want to leave you all off in this video if you learn something from it I would appreciate it if you're new subscribe to my channel drop a like on this video and comment any questions peace

Channel: Carmine Rosato

Views: 10,999

Keywords: carmine rosato, supply and demand, ricky gutierrez, learn plan profit, ross cameron, warrior trading, tim sykes, day trading, stocks, stock market, day trading recap, trading recap, thinkorswim, tdameritrade

Id: pQkfuWHkH1E

Length: 14min 29sec (869 seconds)

Published: Thu May 02 2024