So, in this video, I'm going to break down the exact price action breakout strategy that I use every single day.
This is the exact strategy that made me over $100,000.
Last month alone. And it actually got me moved to Topstep Live, which is something that only 98.
Out of 100,000.
Traders ever get moved to live.
So, I've got a whiteboard here.
We're going to spend a good amount of time.
I'm going to break every single part of this strategy down for you.
So, when it comes to price action trading, the biggest component of doing it successfully is your ability to read market structure.
And candlestick anatomy. So, the first thing I'm going to break down here is market structure.
What does that mean? How can you learn it?
And how can you get a real good pulse and intuition in the markets?
So, check this out.
The very first thing we need to do is understand.
Support and resistance.
So support is always the bottom end and resistance.
Is always the top.
Now when you come into the market and you see these levels,.
You might ask yourself, well, how do I know it's actually support and resistance?
In short, simple terms, what you're going to notice is price come up to a certain level.
And react off and then price will start pushing back down and then react off the bottom end.
Again, the bottom support,.
The top is resistance.
So what starts to happen is you can start to identify these zones and build a strategy and an edge in the.
Market based on that knowledge.
Next time price gets up to this point.
Buyers and sellers and participants in the market know that last time we got here price bounced off.
So that knowledge is is kind of stored there.
When buyers and sellers come into the market, they know that the price had a reaction there.
And.
It's kind of a tug of war.
Is price going to have a reaction?
Again,.
This is where my breakout strategy and the strategy I'm going to teach you today comes into play because.
Even if price does have a reaction off there, that's fine.
Our job isn't to get every move, but at some point,.
It's going to break out of here.
It can't stay there forever. And when it does, we're just like a sniper in the in the distance just waiting for.
That one moment.
To capture that.
Now, what a lot of amateurs or newer traders do when price does break out, they see this,.
A fair bit of FOMO kicks in.
Damn, I want to be a part of this move.
Look, price is leaving. I've got to take a buy position now.
What happens is price pushes up, comes back, and breaks back into the zone.
Now, there's ways to avoid this, and we're going to get into that very soon,.
But this is one of the most common things that I see and reasons why traders get cooked when taking breakout trades.
So, let's have a look at this.
What can we do to be a part of this breakout trade?
Um, and how to not.
Get cooked by it.
So, let's say price is coming down to this resistance level.
It's a high volume time. You must have high volume in the market when you're taking these trades,.
Right? So, it's a London open, New York open, Asia open, doesn't matter.
You know, price starts to break through.
Again, FOMO traders enter here. Professionals wait.
What are we waiting for?
We're waiting for a retest. It's very important.
We must see price come back.
And tap into what was once a support level because right now it's breaking out.
Great. That's what we wanted.
But we need to see it retested.
I need to see buyers take back over and try to push the market back up into the range and fail and.
Allow sellers to come back into play and then we enter.
Okay?
It's one very simple thing.
Now, it's very well and easy for me to talk through it here and show you like this with lines, but I'm.
Going to show you what this could look like within actual candlestick.
Structure as well. But in short terms, we want to wait for price to break out of the range, come back and.
Retest that level. And then once it retests,.
Fails to push in and comes back and breaks back out, that's when we enter.
Okay.
Now, I'm going to do this again, but I'm going to show you what it looks like in terms of candlestick structure.
And where to place stop-loss, uh, take profit and all that kind of stuff as well.
So, let's look at that.
Okay. Now, before I show you how to actually take these trades and what it looks like structurally on candlesticks and where.
To put your stop your stop loss and your takeprofit and all that kind of jazz, you got to understand candlestick anatomy.
Like, I have to show you how to read candles because if you can't, you're just going to get cooked constantly.
So, you've got multiple different candles obviously in the market.
And I'm going to keep this short and simple because I'm going to assume that you're not a very very beginner, but.
You've got a bunch of different types of candles in the market.
And believe it or not,.
Some mean something different than others.
Um, the candles have a lot of clues in them, and it's our job to read those as price action traders to.
Identify.
If it's a good trade or not.
Okay, so here's me just freestyling some.
This would be your most traditional.
Basic candlestick.
It's got a nice level of amount of strength.
This was the lowest point it got to in that time frame.
And let's say it's a 15-minute time frame each candle.
So each candle represents 15 minutes.
So at the the open was here.
It pushed down initially to here.
Pushed all the way back up.
Sorry, all the way back up to here and then closed here.
Open,.
Low,.
High.
Now that's a nice healthy candle,.
Right? It's got a good size body.
The wicks aren't bigger than the body.
They're pretty even on each side, meaning it's just a nice overall candle.
Over here, we've got something different.
Let's say this was a bearish candle, meaning it's moving down.
Had a massive push up. Buyers took over massively,.
And then it fell down very aggressively, but it fell down with no bottom wick.
So, it hasn't created any range down here at all.
Okay. Interesting.
Here's another candle.
Big body, little to no wick.
Here's another candle, massive rejection.
And here's another candle, a dogee,.
Meaning indecision, tugof-war in the market, buyers and sellers, no one's in control.
Each candle tells a different story, and they're always going to show up on the market, especially.
Around your key breakout zones. And this is where your job as a trader comes in to be able to read these.
And understand, hey, if I see a dogey candle here,.
This could be a red flag.
Maybe I shouldn't take a sell position here.
Okay,.
So when I break down how to take these breakout trades, I'm actually going to draw the type of candles that you're.
Going to want to see and the ones that you're not going to want to see.
Okay, so how to find your support and resistance levels?
This is one of the most common questions I get.
Great, you're looking to take breakout trades within these ranges, but how to actually identify these ranges?
I'll show you that right here.
So, we talked about it. We know that this is support,.
Right? And this is resistance.
Cool.
On the 15minute time frame,.
It has to be right. I'm a price action trader.
I'm teaching you how I trade price action.
All I'm going to be looking for.
Is this.
I want to see a bullish.
And a bearish.
Candle side by side printed like this.
Right? I don't care what the next ones do.
Can work its way up,.
But I want to see a bullish and a bearish printed side by side like this.
And then below that,.
There's enough.
Clean traffic.
For me to sell below.
Clean traffic meaning.
It's just one colored candle.
Like this.
Because here's the thing.
If.
Price moves down.
And breaks below this level like we're waiting for,.
I know that if I get that retest and that push down,.
There's no real obstacles on the way.
If there was a red candle right here, a bearish candle right here in the way, then that would be an obstacle.
That would trip me up on the way down.
I know price is going to have a reaction off this level.
And that reaction could be enough to hit my stop loss and take me out of the trade.
So, I want to ensure that there's actually clean traffic.
To the lefthand side as I'm selling down.
All I'm looking for is 15-minute candle closing side by side as my support.
And in this case, I'd be doing the same here as long as there was clean traffic above this level.
Okay? I'll be waiting for price to come up, break above that level,.
Retest,.
And continue up. And we're going to talk about the exact thing we're looking for when taking these breakout trades structurally.
But in terms of identifying your support and resistance level, it is really that simple.
Don't overthink it. I promise you.
Okay. So, like I alluded to before,.
Very important that we have high volume.
Asia open, New York open, London open.
These are high volume times where there's a lot of volume in the market and you will need volume to break past.
These respected levels.
Um, if you're a gold trader, a lot of people think Asia doesn't have much volume.
It's a great time to trade Asia open for gold.
So,.
Let's draw up some candles here.
And this type of structure that we'll want to see when we're taking breakout trades.
Okay. So, as you can see here, we've got our support and resistance levels.
We just spoke about how to identify your support and resistance levels.
Now, we've got a diagram structurally.
Of what we're going to be looking for in order to take a breakout trade.
Now, again,.
This is going to seem simple to a lot of newer traders.
The newer traders think it has to be extremely complex in order to take higher probability trades, but like I said, last.
Month alone, I made a stupid amount of money.
I got 15 payouts with Topstep to the point where they said, "Let's move this guy to live because he keeps taking.
Money off us using this simple strategy."
In short terms, all we're looking for is a break below our support level.
Bang. We've got that right. We've got a big bearish candle here,.
Breaking below this key level of support,.
And that's what we were looking for.
Now, before I give you some more diagrams and examples,.
This is what would be considered more of a perfect scenario for what we're looking for.
Why?
Candle bodies. This is a big candle body representing strength in the market.
It didn't break all the way from up here and drop all the way down and overextend.
It didn't break from the already at the support level.
It's in a nice spot.
Big candle body. Nice wick here.
And this is great.
Now, like I said before, this new candle is going to open up and it can even start pushing down and breaking.
The low of the previous candle and and sellers and impatient traders are going to.
Their pants and jump in this and try and sell the market.
But what happens, we spoke about this, which is a lot of the times.
Price will come back.
And ret and retest that level, that breakout level.
And then everyone who had their stop losses there, they all got tagged out.
And the professionals are just waiting.
They didn't take the trade and they're waiting for their chance.
To actually enter the market.
So, what we're going to do is we're going to let price push down a little bit.
It might even break the low.
Don't stress out.
But what it's going to do is come back and start pushing into the range like this.
And you're going to go, "Oh man, lucky I didn't take a sell there.
Looks like it's pushing back into the range."
But be patient.
Because what happens next.
Is it starts to flip,.
Leave a wick,.
And now.
It's starting to push back down.
So now buyers have failed to push price back up into the range.
Sellers have taken over.
It's breaking the low of the previous candle or even its own low.
If it's already created a low, then my entry will be sitting right there.
I'll have a sell stop sitting right there.
And as it's starting to push back down, it's coming down.
It's coming down. Ding.
Order filled. I'm in this trade now.
Entry.
My stop loss will go back above the current candle wick.
Because the reality is if it starts to push down and then come back up and break its own high then I'm.
Just wrong. You're going to be wrong sometimes.
You can't win every trade. So that's where my stop loss is going to be in this case.
And take profit is going to be down to a one to one risk-to-reward.
Risk to reward.
Take profit.
So, there's my order. There's the entry.
There's a stop loss. There's a takerit.
Now,.
What I like to do, and this is something I've been teaching guys.
For a while now, is let price push down.
And let's say it gets to like there and stops.
If this at about 80% of the way down, I'm going to cut 85%.
Of the position.
I'm going to take profits off the table.
I'm going to move my stop loss to break even.
So now I'm in a be break even risk-f free trade.
I've already secured 85 80% of the position.
And instead of my takeprofit being there,.
I'm going to forget that.
And I'm going to bring it down to the next range.
Because I've already secured most of the trade here.
I've made a good amount of money just with this move alone.
Now I have an opportunity to make more money with no risk on the table.
So, I'm going to move my take profit down further and let this 20%.
Run and give me more money out of the market.
Does it mean that always happens?
No. A lot of the times price will come back up, retest that level, and hit your break even a lot of.
The times.
But when it doesn't,.
You can get a 200 pip runner.
And really make some good money out of this trade.
This system alone.
Changed my life. I live in Dubai now.
Like I live a pretty crazy life from doing this exact thing.
Now, like I said, I'm drawing here a perfect example of this scenario.
It doesn't always and it doesn't always present itself like this.
There's a lot of nuances of the market which make it difficult to catch these breakout trades.
And I'm going to show you what those look like because if you aren't aware of if you're unaware of it, you're.
Just going to get cooked cooked by taking these breakout trades.
So let's look at some scenarios where it could be a bit more tricky than this perfect scenario.
So if you look at this scenario, it's the same thing.
We're looking for a break below this key level and we technically got that right.
This candle has technically broken below.
But if this was a live market and I seen this,.
I'd be pretty concerned. And I'll tell you why.
If you remember the last example, it was one big strong bodied candle that broke below this key level.
In this case, we've got one, two,.
And on the second candle on the way down, it broke below.
If I can highlight a few issues here, let me just do that.
One is it's already given it a pretty decent stab here.
Look, it pushed all the way down.
And yes, it rejected back up, but you know, it gave it a stab.
Like, it really tried to fill some of this range here.
The second thing is this bodied candle is actually smaller than the previous one on the way down.
And to me, that would indicate.
That we're actually losing volume moving down here.
We want to see the opposite.
We want to see strength coming into the market as we push down and break below this key level.
So, already I'm like, uh, you know, there's some red flags here.
And the third thing is like what are you going to do?
Let's say the new candle opens up and retests and starts to flip down.
You got to make a decision.
Do I want to take a.
Do I want to take a sell as it flips red here?
I know it's a high probability if I take it at the break of that low there, but now that's already like.
Pretty extended away from the breakout range.
So, you're going to have a really big stop loss at this point.
These are the things that happen all the time in the market and you're going to have to make a educated decision.
Uh based on your personal experience.
Like you, this is where individuality comes into the market.
You can never.
Um.
Know exactly what to do. There's no rule book of you must do this when this scenario happens because the markets are.
Random. No scenario has ever happened the exact same.
Than a previous one. It's always random.
So.
I'll tell you right now in this case based on the fact that the candle body is smaller than the previous one,.
It's already kind of wicked off this level mean it's rejected off and.
Uh the signs of weakening because of that.
I actually wouldn't take this trade.
Even if I got the retest and the flip,.
This one I would have to stand down.
And your ability to stand down in the market and not take every trade opportunity.
Is what's going to keep you alive.
Capital preservation is really important with trading.
Now, now another scenario you might see is something like this.
Can you look at this and identify what could be the issue here?
Because I can tell you right now,.
This is one of the most common things I see traders do when they take breakout trades is they see something like.
This happen and decide.
To wait for that wick,.
The push,.
The entry at the break of the low,.
And now they're in a sell position.
Right here.
The issue with this is.
If this was a break break below level,.
We're all the way down here.
This is massively overextended.
Because your stop loss in the most ideal scenario is actually meant to be back up in the range.
Remember, the concept of this is we're breaking out, we're failing to push back in, and then we're pushing out.
It didn't even fail to push back down because it hasn't it's too far away from that range.
Just sellers massively pushed in, took over, and now we're away from the range.
So, this is actually just an invalid trade.
This isn't a breakout trade now.
This is some sort of continuation trade.
And you know, whether or not this is a system in which you follow, it's different to price action breakout trading.
This is something entirely different and something that I see most traders get cooked on these overextended plays.
Remember,.
You want to see a breakout around here.
Break fail to break back up into the range and then entry goes here, stop loss can go back up there.
Overextended,.
Bad way to go. Okay, one more scenario here.
And this one's really got the source in it because a lot of people don't know what to do here.
And I've formulated some sort of strategy around this.
And it's pretty high win rate if you can do it the right way.
So check this out.
You get a breakout. Awesome.
But there's no bottom wick,.
Right? There's no bottom wick. What do you do in this situation?
Because we know a bottom wick on a lower time frame represents range.
We know price has there's like a bunch of candles, a bunch of structure, and the market has actually moved down here.
On lower time frames.
But on the 15minute where we're waiting for that break and hold below level,.
Um it hasn't given us that.
It's there's no range has been created yet.
It is.
Just.
No wick there. So, you got a breakout candle with no wick.
This is how.
I get over this. This is what I do in these scenarios.
The new candle opens up.
And we know what we're doing.
We know what we're waiting for.
We're waiting for a retest there.
The only way I can participate in a sell position here is if this new candle opens up,.
Actually starts to drop.
Red. Right. At some point, it looks like this.
Then it fails,.
Right? It fails to do that,.
Pushes back up into the range,.
Right? So now it looks like this.
With that bottom wick down there, right?
It's green at this point. Then it fails to push up.
I know this is very nuancy, but like this this stuff matters.
Now it fails to push up.
It starts to push back down.
We know it's already got a bottom wick.
It's starting to flip red again here now.
Now.
I'll have an entry sitting there,.
Right?
Because.
That range is being created. Remember when it opened up, it created that bottom wick here.
It created that bottom wick, then pushed back up into the range.
Now, if there's enough time on the clock, and for me, that would be about.
6 minutes before the candle closes and starts to push back down and break its own low.
Now, I'll have an entry there.
And I know it's very nuancy, but this is the only way I'll participate in taking breakout candle trades.
That broke out with no bottom wick.
I need the new candle to create that range,.
Fail, create the top wick for me to put my stop loss, and then I'll I'll break at the rebreak of its.
Own low.
As long as there's enough time on the clock.
And then you guys know the rules.
Same thing. Write it down 80%.
Full take profit and let the rest play out like that.
So just a few takeaways here as we wrap up.
Again, some of the main components you need to understand.
We wait for the breakout.
We wait for the retest.
Once it retests and pushes and breaks the low of the breakout candle,.
We enter. Stop loss can go back up in the range.
Take profit can move down to a one one.
Once you get 80%, you can move your takeprofit down lower.
And bring your stop loss to break even.
It must be a high volume time.
It doesn't need to be session opens, but in,.
You know,.
Inside the the first couple hours of a market open,.
Um,.
Understanding the candlesticks.
Anatomy,.
Right? We're looking for big bodied candles as the ones that break out.
We don't want weak candle breakouts.
We want big body closures.
And again, it's going to require patience because a lot of the times,.
What are you going to see?
You're going to see this the market breakthrough and you're going to be waiting for your retest and it doesn't happen.
It keeps moving and you're like, "God damn it, that Daniel guy, I should have just taken the sell."
But the thing is over a thousand trades, you're going to get cooked.
You need to wait for a retest extra confirmation.
Because at the end of the day, we're not playing a game.
We're actually trying to make money.
And to make money, you got to be patient.
Let it let things play out.
Over a thousand trades. Thinking long term, okay?
Thinking long term.
But yeah, man. This is the exact strategy that I use every single day and it's essentially changed my life.
So hopefully you got something out of this.
And if you did, leave a comment or if there's anything else you want to learn, uh, let me know and maybe.
We'll make a video about that as well.
Cool. Thanks, guys.