One Setup I'd Trade For The Rest Of My Life

in this video we're going to break down what I call my one setup that I would take for the rest of my life it's a setup that has made me a lot of money it's a setup that has also protected me from losing money in the market and making sure I am on the right side of the market so in this video I want to break down this setup I'm going to show you trades that I have personally taken I'm going to show you a win I'm going to show you a loss and I want to break down the charts so you can visually see this one setup that I would take for the rest of my life but before we get into it if you're new to my channel I would appreciate it if you could hit that subscribe button and also if you don't follow me on my Instagram at invest the trade this is my only account I'll post a link in the description below to follow me on there it's a really really good resource where I post daily trading tips tricks trading Recaps and just stuff you're not gonna find anywhere else on the internet again the link is in the description below you're doing yourself a disservice if you're not following me on on there but now let's get right into this video so the first concept to the setup or strategy is I want to locate an area where there is a ton of effort but no reward in the market now what this means is imagine a seller coming into the market or imagine a buyer coming into the market a very very large one and he's showing tons of effort he's buying he's buying he's buying but he's not getting rewarded and the market is failing to move higher or flip it let's just say there's a really large seller hitting the market aggressively hitting the bid and the market cannot move much lower despite all this selling he's showing a ton of effort but that seller or that buyer is not getting rewarded where is the absorption where are we seeing all this activity where are a lot of buyers and sellers factored in at this location and locating all this information is the first concept to the strategy for this setup to make sense we have to understand the context backing this that up let's go over the pre-market plan I post these every single day in my Discord of setups I'm watching levels I'm looking out for and potential trading scenarios so on this day on the S P 500 forward slash es the e-mini Futures we were watching 43.54 to 43.48 this was determined the key level from previous price action scenario number one was as long as we can hold or bounce off of this green box at 4354 to 4348 I want to play the market long targeting the next level of resistance or targeting the next level of Supply or anywhere the market can reject is where I'll place my targets and in this example it was four two six seven and then a little above that so now the Market opens up and I'm going to show you the chart of what happens when we come into this four three five four level from the pre-market plan number one it's an important level of interest and number two the market is validating inside of this range having a very hard time moving up but also having a hard time moving down now every single time the market dips down this is a five minute chart keep in mind we fail to move lower here we fail to move lower here and we also failed to move lower about four or five other times now what this tells me is the markets trying to move lower but number one we're inside an area of demand or support and number two we see a ton of selling come into the market and there's tons of effort from sellers but they are not getting rewarded and how I know this is watch this replay of the tape the order flow and the tape is vital in this setup in fact I cannot enter or come up with the context of this without watching the order flow so I'm gonna replay this for you and keep in mind that area of support was at 4354 where the market is currently trading now I want you all to keep an eye on the aggressive selling as we come into four three five four I'm gonna replay this and watch all this red and all this aggressive selling as we come into five four three five four we see a ton of selling we also see a very negative Delta below these lows so what this is telling me is there's tons of selling coming into the market on the first test and then the market then eventually bounces directly after that the next test comes around 10 10 1005. here we're going to see the market sell off and look at all that aggressive selling right directly at four three five four so we know there's tons of selling coming into the market is it multiple sellers is it one seller that really is not important to us what's important to us is how much size is hitting the bid but there's no follow-through we see a negative Delta of negative 750 negative 300 negative 250. it's really not that large of a negative Delta however it's multiple tests after multiple bounces off of this where the selling is very very aggressive you see where my head's at right now where I'm hovering over my cursor there's tons of aggressive selling down there and the next one happens at around 10 35 10 45. now what's important about this one is a lower day is getting broken a lot of Traders like shorting a low a day they like putting their stop losses below a day and eventually you're going to see a lower day break right here and I'm gonna speed up this even faster and you're just gonna see look at all the negative Delta building up again reading the order flow and we break the low a day and it's safe to say at this point there are tons of sellers showing effort into the market not getting rewarded and this is spotting the location from my favorite setup because there's absorption to the sell side there's tons of sellers not getting rewarded now the only thing we're missing is waiting for buyers to step in and that's going to lead to a valid reversal higher and as you can see despite all that selling near the low we eventually broke out on nice strong buying volume and as we break out on this strong buying volume over here we come into that 4 267 slash Friday High which was the target for the upside so there's two ways you can execute this is you can get in when you spot the absorption or you can get in once you see the buying step in and those late shorts have to cover further fueling a rally higher it depends on your risk tolerance I prefer getting in when I spot the absorption because my risk will be much smaller and this is what it looks like from a Candlestick chart you can see the consolidation you can see the nice move up and then a very very strong uptrending move simply off this level of Interest seeing a ton of effort but no reward and the market eventually is going to have to reverse once we put those opposing participants Under Pressure now very similar to this setup is essentially locating where there is Max pain or trapped participants where are many getting long or short where are many Traders stop losses at this could be at a high a day this could be at a lower day this could be at v-wop this could be at any location that you know majority of retail Traders are going to either stop out at or where they're getting long or short because that gives us an edge in itself for example if I know a lot of Traders are getting short as the Market's rallying higher and then we get that pull back down that's going to attract a lot of more shorts coming into the market if I know a lot of shorts are coming into the market and let's just say pullbacks hold I know we're probably going to reverse higher and put those early shorts into Max Payne where there is the most pain will be the most gain I love seeing where a lot of Traders will be in pain because that's when we're going to get nice continuation or reversal setups that will provide the most gain for us using that as an edge and an advantage for example this was the other day on the S P 500 this is in the ancient day commentary tab of the Discord I update my thoughts in real time as the market is developing we saw the market holding and trying to bounce off of this demand Zone we're also putting in a higher low and as the market was rallying higher a new level of Interest established at 4421 to 4415 that if we can dip into that I would look to Target pre-market highs and then 4441 Supply if I did get long on this dip down into this level of Interest so now I made a pink box at this 4421 level and on this strong rally I knew many were getting long I also know that on any sign of weakness many are trying to play a reversal and take the market short eventually the market pulls back down into four four two one and how do I know this if we look at a Delta footprint we're going to see the market rallying higher on aggressive Market buying and then we see selling step into the market Traders perceive this selling they take it short and on this Wick down this essentially is a little bit of a stop run where it attracts many two get short where all this selling is down here at these lows for majority to hop on the wrong side of the market and if we start coming up these guys are going to be trapped and they are going to be put in what I call Max Payne to fuel a further rally higher to validate this even more let's look at this replay of the order flow and I want you all to keep an eye on 4421 where you see this bottom little orange line here I want you to make a note of all the aggressive selling stepping in before this move here putting it in here and look as we just dipped into four four two one and held it automatically as soon as I spot this little action and the market spend some time here defending that level and especially holding it while increasing buying volume comes in this is one it sparks my interest and I take the market long at 4422 as soon as that level bounced targeting a simple seven point scalp above pre-market high and if we can get above that then I will hold Runners for a further Supply Zone Target above again this is in real time where we took the market long at 4422 the thesis for it where buyings supported the pullback lower and sellers entering prematurely we hold this level perfectly we come into our Target about 10 minutes later and then eventually the market continues to rally and these guys get put in Max Payne simply causing a further rally higher now what's very very important about these setups is you have to use context it can't be just used alone and Order flow slash tape reading is vital in this because you have to pinpoint an entry and for myself I could only speak for you know this setup on my my own behalf some people don't like using the tape but I need to use context and I need to use the tape it's best at a level of Interest versus a random point on the charts that you're just making up along the way speed and Pace along with the location of this trade is very very important also you want to go go with the flows of the market if the Market's telling you to be bullish then be bullish if the Market's telling you to be bearish then be bearish go with the flows don't have a bias and just react to the information the market presents you don't try to predict instead react by doing this it will get you in before the move occurs as you can see with those two examples also your risk is going to be much smaller and your reward is going to be much larger you're at shoot for at least a two to one or better three to one four to one whatever the case may be arrested reward because that will put you in the position that your losses are small paper cuts and your wins will take care of themselves by using this strategy I'm cool with taking two three losses that are really small paper cuts that don't even make me bleed but I know when I take that one winning trade I'm gonna get a lot of points and the winners are going to take care of the losers for example here was a losing trade with this same strategy remember you're not going to have a strategy that wins 100 of time that's why risk management is the most important factor of any profitable trading strategy in this example I took a losing trade going with the same thing that I've explained in this whole video we were spotting buyers here at 4415 the lower portion of this demand Zone I took the market long and we were holding it on this weakness but on the tape we were spotting buying and then I had my stop loss a little bit lower eventually the market rallies higher and we start pulling back lower my fill was at 4415 and I exited before my stop loss because I developed weakness in the market and I took a two point loss as I mentioned I will take paper cuts all day long a two-point loss is nothing when you're winning eight points ten points 20 points on your winners if you cannot accept the loss then you will be a losing Trader you've got to position yourself to make the wins take care of themselves and the losses you accept and our small paper cuts and this is the strategy that I like to use it's worked the best for me and if I had to use one setup for the rest of my life it would be this because this is the setups that I've made the most amount of money on in my trading career and I'm going to wrap it up on that note if you got anything out of this video If you learned something I would appreciate a thumbs up comment if you have any questions I'll go through the comments also check out the links in the description below if you're not following me on my Instagram I recommend doing so and also by the end of next week I currently have about 14 new videos over five hours of new lessons which I will be adding on order flow to the A to Z course tons of new value and added value getting added and prices will be increasing very very soon because of all this value add it will be there by the end of next week and on that note I'm ending it peace

Channel: Carmine Rosato

Views: 34,032

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, ict

Id: 7q2Pqd8-Jwo

Length: 13min 44sec (824 seconds)

Published: Wed Jun 21 2023