How I trade US30!

WealthFRX
19 Jan 202312:09

TLDRThe speaker shares a trading strategy focused on the US30, emphasizing the importance of the U.S. session and identifying key bank zones. The strategy involves entering trades from 2:30 PM and utilizing support and resistance levels to predict market movements, with examples provided to demonstrate the precision of this approach. The video also addresses adjustments for high-impact news events and the transition from bullish to bearish market structure.

Takeaways

  • 📈 The US30 trading strategy is based on identifying key support and resistance zones during the US trading session, which runs from 1 PM to 10 PM British time, or 8 AM to 5 PM Eastern Standard Time.
  • 🕒 The New York Stock Exchange (NYSE) open at 2:30 PM is crucial for US30 trading, marking the starting point for considering entries.
  • 📊 Traders should focus on zones made during the US session, particularly from 1 PM to 10 PM, to determine potential entry points for trades.
  • 🔍 Before entering a trade, it's important to identify previous bank zones around the current price level to anticipate market behavior.
  • 📉 The strategy involves looking for a 'buy off' of the bank zone after 2:30 PM, setting targets based on previous bank zones.
  • 🚀 Entry and exit points are determined by watching for rejections of the bank zones on lower time frames, such as the five-minute chart.
  • 📌 Stop-losses should be placed below the bank zone to manage risk, with targets set at the next bank zone for potential profit.
  • 📈📉 The strategy can be applied to both uptrends and downtrends, adjusting the bias based on market structure changes.
  • 📊 High impact news events, such as CPI data releases, can significantly affect market movement and require a different approach within the trading strategy.
  • 📉 In a downtrend, traders should look for selling opportunities, focusing on bank zone rejections for potential short entries.
  • 📈📊 Understanding and utilizing bank zones can lead to capturing significant market moves, whether it's catching multiple bottoms in an uptrend or identifying a reversal in a downtrend.

Q & A

  • What is the significance of the U.S. session timing in trading the US30?

    -The U.S. session is significant because it operates from 1 PM to 10 PM British time, which is 8 AM to 5 PM Eastern Standard Time. This session is important for the US30 as the NYS (New York Session) opens at 2:30 PM, an hour and a half after the U.S. market opens. This timing is crucial for identifying key zones for potential trades in the US30.

  • How does the speaker determine the bank zones for trading?

    -The speaker determines bank zones by examining price levels where significant buying or selling interest is observed. These zones are identified by looking at previous price action around these levels during the U.S. session. The zones are used to predict future price movements and to identify entry and exit points for trades.

  • What is the strategy for entering a trade during the U.S. session?

    -The strategy involves waiting for the price to drop into a bank zone during the U.S. session. Once the price reaches the zone, the trader looks for a rejection of the zone, which is indicated by a candlestick pattern with a long wick and a weak body. This rejection signals a potential entry point for a trade.

  • How does the speaker set a stop loss for a trade?

    -The speaker sets a stop loss just below the bank zone, immediately after observing a bullish candlestick and rejection of the zone. This helps to minimize potential losses while allowing the trade to remain in a favorable position to reach the target profit level.

  • What are the target levels for a trade based on the bank zones?

    -The target levels for a trade are determined by looking at previous bank zones. The speaker identifies zones from the left side of the chart and uses them as potential targets. The first target is usually a zone from the previous U.S. session, and if the trade is successful, the next target could be a higher zone from an earlier session.

  • How does the speaker handle news events like the CPI data release?

    -The speaker adjusts the strategy for high-impact news events like the CPI data release. Instead of focusing on the trend, the speaker emphasizes the importance of understanding how banks move the markets during these events. The strategy involves looking for rejections and breaks in the bank zones, which can lead to significant price movements.

  • What happens when the market structure changes?

    -When the market structure changes, the speaker switches from looking for buying opportunities to selling opportunities. This change is indicated by a break in the low point of a previous four-hour session, which signals a shift from a bullish to a bearish market structure.

  • Why is it important to consider bank holidays when trading the US30?

    -Bank holidays are important to consider because they can affect market liquidity and volatility. During bank holidays, there is often little to no movement in the markets, making them less tradable. However, the zones from these sessions are still used for future trading analysis, as they represent potential areas of interest for the market.

  • How does the speaker use the five-minute chart to identify trade entries?

    -The speaker uses the five-minute chart to identify trade entries by looking for price action within the bank zones. By observing how the price reacts to these zones, the speaker can determine whether to enter a trade. For example, a rejection of the zone with a candlestick pattern indicating a long wick and weak body can signal an entry point.

  • What is the significance of the U.S. high and low points in the speaker's strategy?

    -The U.S. high and low points are significant in the speaker's strategy because they represent key levels of resistance and support. These levels are used as targets for trades and can also serve as potential entry points when the price approaches or tests these levels.

  • How does the speaker manage risk in their trading strategy?

    -The speaker manages risk by using stop losses placed just below the bank zones and by carefully selecting entry and exit points based on the rejection of these zones. Additionally, the speaker considers market structure and adjusts the strategy for high-impact news events to further manage risk.

Outlines

00:00

📈 Trading Strategy and Bank Zones

The paragraph discusses a trading strategy focused on the US30 index, emphasizing the importance of the U.S. session, which runs from 1 pm to 10 pm British time. The New York session opening at 2:30 pm is crucial for the index. The speaker explains how to identify and use bank zones to predict market movements, focusing on lower time frames to understand how banks use levels to influence the markets. The strategy involves identifying previous bank zones and looking for buy entries after 2:30 pm. The speaker provides a detailed example of how the market reacted to a specific bank zone, demonstrating the effectiveness of the strategy with a high reward-to-risk ratio.

05:02

📉 Market Entry and Zone Rejections

This paragraph continues the discussion on trading strategy, focusing on buying drop down entries and breaking free test buys. The speaker uses a five-minute chart to illustrate how the market drops into a bank zone, where traders wait for rejection signals to enter the market. The example shows a candlestick pattern confirming a rejection of the bank zone, leading to a profitable trade. The speaker also discusses how to adjust stop losses and target gains, emphasizing the simplicity and effectiveness of using bank zones for trading decisions.

10:02

🔄 Market Structure Change and Trading Adjustments

The speaker describes a shift in the market structure, transitioning from a bullish trend to a bearish one after a significant price break. The paragraph explains how traders must adjust their strategy when the market breaks a critical low point, switching from looking for buying opportunities to selling opportunities. The speaker provides an example of a strong rejection of a bank zone on a five-minute chart, indicating a potential selling entry. The example illustrates the importance of adapting to market changes and the potential for profit in both uptrends and downtrends.

Mindmap

Keywords

💡US30

US30, also known as Wall Street or Dow Jones, is a financial instrument used in trading that represents the performance of the top 30 blue-chip companies listed on the United States stock market. In the video, the speaker is focusing on applying their trading strategy specifically to the US30 index, demonstrating how to identify entry and exit points based on market behavior and specific zones or levels.

💡trading strategy

A trading strategy is a defined approach or set of rules that a trader uses to determine when to enter and exit positions in the market. In the context of the video, the speaker is applying their trading strategy to the US30 index, breaking down how to identify key support and resistance levels, known as 'bank zones', and using these to time market entries and exits effectively.

💡U.S. session

The U.S. session refers to the period of time when the financial markets in the United States are open for trading. This is significant for traders as market activity and liquidity tend to be higher during these hours. The speaker emphasizes the importance of the U.S. session, particularly the opening of the New York Stock Exchange (NYSE), as a critical time frame for identifying potential trading opportunities in the US30 index.

💡bank zones

Bank zones are specific price levels identified by the speaker's trading strategy that have historically shown significant buying or selling interest, presumably from large financial institutions or 'banks'. These zones act as key support and resistance levels and are used to identify potential entry and exit points for trades. The video demonstrates how the speaker uses these bank zones to anticipate market movements and manage risk in trading the US30 index.

💡rejection

In the context of the video, 'rejection' refers to a price action phenomenon where the market price approaches a certain level (a bank zone) but then reverses direction without breaking through it. This is seen as a signal of a potential trend continuation or reversal and can be used as a trading signal. The speaker uses the concept of rejection to identify high-probability trading opportunities in the US30 index.

💡risk-to-reward ratio

The risk-to-reward ratio is a fundamental concept in trading that refers to the potential loss compared to the potential gain of a trade. Traders aim for a favorable risk-to-reward ratio, such as 1:2, which means the potential gain is twice the potential loss. The speaker in the video emphasizes the importance of managing risk and setting stop losses to achieve a favorable risk-to-reward ratio when trading the US30 index.

💡break and retest

Break and retest is a technical analysis concept used in trading. It refers to a scenario where a price level (support or resistance) is broken, and then the price returns to 'retest' that level. If the price is rejected on the retest, it can signal a continuation of the breakout direction. The speaker uses this concept in the video to identify potential sell entries in the US30 index when a bank zone is broken and later tested.

💡CPI data

CPI, or Consumer Price Index, is a measure of inflation that tracks the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. In the video, the speaker mentions a CPI data release for the USD, indicating that such economic news events can have a significant impact on the market and may require adjustments to the trading strategy. High-impact news like CPI can cause increased volatility and price spikes, which traders must account for in their trading decisions.

💡uptrend

An uptrend is a term used in technical analysis to describe a period in which the price of a security is consistently rising, with higher highs and higher lows forming over time. In the video, the speaker mentions that they have been catching bottoms in an uptrend, meaning they have been identifying and entering trades in a market environment where the overall direction of the US30 index has been upward.

💡bearish

Bearish is a term used in financial markets to describe a sentiment or outlook that expects prices to decline. In the video, the speaker indicates a shift from a bullish (expecting price increases) to a bearish stance after the market breaks a critical support level. This change in market structure signals to the trader that it may be more favorable to look for selling opportunities rather than buying.

Highlights

The speaker applies their trading strategy to the US30 index.

The U.S. session for trading is crucial, running from 1 PM to 10 PM British time.

The New York Stock Exchange (NYSE) open is pivotal, occurring at 2:30 PM.

Bank zones, made during the U.S. session, are key areas for trading opportunities.

US30 differs from other pairs due to its unique trading zone dynamics.

The speaker uses lower time frames to identify how banks use levels to influence market movements.

Before 2:30 PM, the speaker's chart is clean, focusing on potential market movements.

The speaker identifies a previous bank zone around the 3340 mark based on the U.S. session.

The strategy involves looking for a buy off the bank zone once the market opens at 2:30 PM.

The speaker provides a detailed example of a trade, including entry and target points.

The importance of the U.S. high bank zone is emphasized for the next trading day.

The speaker demonstrates how to handle high impact news events, like the CPI data release.

A significant move in the market can be captured using the speaker's strategy during news events.

The speaker explains the concept of 'breaking free test buys' and how to identify them.

The market structure can change, transitioning from a bullish to a bearish outlook.

The speaker illustrates how to switch from looking for buying opportunities to selling based on market conditions.

Bank holiday sessions are not tradable due to lack of movement, but zones are still drawn for analysis.

The speaker emphasizes the ability to catch major market movements by understanding how banks influence the markets.

A detailed example is provided of catching the exact top of a market reversal and riding the trend downwards.