Profitable Trading Strategy: Step-by-Step Guide to Consistent Earnings

[00:02] profitable trading strategy to consistently earn money, step by step. In total there will be four steps, starting from the most basic, which is a trading strategy and going all the way to the most advanced, how to

[00:16] scale the profitability of the strategy. Furthermore, in the final part of the video I will bring together the best concepts that, when combined, allow you to more quickly and consistently earn money through trading and be profitable. Starting with

[00:32] the basics, what is a trading strategy? A trading strategy is simply based on a pattern that constantly repeats itself over time, and by applying a specific set of rules, it obtains a

[00:47] winning mathematical advantage in the long term. And here I want to highlight two key concepts. First, when we talk about a long-term winning mathematical advantage , it means that however profitable and winning our strategy may be

[01:01] , that doesn't mean that today, tomorrow, the day after, or next month we're going to make money. It simply means that the moment we constantly, consistently, and consistently replicate the same

[01:15] strategy, the same concepts, the same rules, the same pattern, we will end up making money in the long run. Secondly, the market is fractal, which means that everything is constantly repeated across all

[01:29] timeframes. And the fact of choosing which timeframe you want to use to execute your trading strategy determines the trading style you will follow. On screen you are seeing three different trading styles: swing trading,

[01:43] day trading, and scalping. Based on the timeframes you choose to implement your strategy, we will now discuss that. You will operate swing trading if the timeframes are larger with a specific flexibility and difficulty

[01:58] and a fairly low dedication. You will be day trading with intermediate timeframes. In this case we add a little more difficulty, correct flexibility and also intermediate dedication. Or you're going to

[02:14] scalp [music] with really low timeframes to make decisions in a matter of seconds. A high level of difficulty, schedules depending on each person's context, and a

[02:28] significant amount of dedication, but these are just trading styles; they don't depend on your strategy, they only depend on the time frame in which you apply the strategy. But of course, in order to operate a trading strategy, as I

[02:41] have mentioned, you first need to have a pattern, which is nothing more than a form of behavior that is constantly repeated over time and generates different entry opportunities in the market. To elaborate a little

[02:54] more on what a pattern is and to help you understand its importance, ultimately there are many types of patterns. There are continuation patterns , there are reversal patterns,

[03:06] there are uptrend patterns, downtrend patterns, and range-forming patterns. In short, there are countless types of patterns. The

[03:18] important thing about the pattern is that it has two characteristics. First, make it simple, then make it repetitive. Repetitive. Why is it important that it be simple and repetitive? Because in the end, the pattern is somewhat the essence

[03:33] of your strategy. Without a pattern, there is no trading strategy. So, if you're already looking for a pattern that's very complex, when we move on to the next point in creating your strategy, you're going to have enormous difficulties. Now you'll see

[03:47] why. And if you also look for a pattern that is not repetitive and that occurs infrequently, what [music] is going to happen? It will happen that you won't be able to execute it consistently, and no matter how good a pattern it is, if it only happens once

[04:02] every 3 months, you won't be constantly interacting with that trading strategy. Therefore, it is important that the pattern meets these two characteristics. In the end, a very basic pattern, a very typical pattern, a

[04:17] pattern, the quintessential pattern, we could say, is the impulse, pullback and continuation pattern. This is the pattern that most traders operate on, and it's the pattern that allows most people who

[04:30] trade to be profitable. As I said, there are many different types of patterns, but the quintessential pattern would be this one. The point is that this pattern, this is simply a pattern, it 's not a trading strategy. For it to

[04:46] be a trading strategy, you need to apply a specific trading philosophy to this pattern . And what do I mean by this? I mean that starting from the same pattern you can apply a price action philosophy, you can

[05:03] apply an indicators philosophy, you can apply a technical analysis philosophy, which would be a kind of mix between price action and of mix between price action and indicators. You can apply an

[05:16] algorithmic trading philosophy to it, you can apply a quantitative trading philosophy to it. You can apply a Smart Money philosophy to it. Ultimately, there are a lot of

[05:29] trading philosophies that can be applied to the same pattern. And what do I mean by this? Why is it important to keep this in mind? Because the same pattern, the same structure, which as I have said is not a strategy. Now the next

[05:42] step we will talk about how to create a strategy and you will understand why the pattern has to be simple and repetitive. But with the same pattern, if you add some concepts or a philosophy of indicators, how are you going to operate it?

[05:55] Well, for example, with moving averages. If you add concepts like , for example, price action, how are you going to trade it? by marking how are you going to trade it? by marking some support and resistance zones.

[06:09] If you add some concepts like, I don't know, look, [music] smart money, example, for a file value gap in the middle part of the pattern. In other words, the pattern that is necessary for your strategy has

[06:23] specific characteristics, but once you find the pattern, before moving on to the next step, which as I say, I insist, we will talk about now, it is important that you define what trading philosophy you are going to apply to that pattern. Because?

[06:37] Well, because as you can see on the screen we have a very basic pullback and continuation impulse technical pattern , a very simple pattern, a pattern very similar to the one we even mentioned in the current example, but you

[06:51] can apply moving average trading concepts to the same pattern and you get this strategy. You can apply Fibonacci trading concepts to it and you get this. You can apply trading concepts with support and resistance levels and

[07:04] trading concepts with support and resistance levels and you get this. or Fire Value Gaps trading concepts and you're left with this. Concepts of trading with RSI, concepts of trading with MACD, and even concepts of trading with technical patterns.

[07:18] Ultimately, there are endless possibilities you can use to monetize the pattern. The pattern doesn't change, the pattern is the same, but depending on the tools you use to monetize that pattern, you will get one type

[07:33] of strategy or another. And what we're going to do next is explain how to add rules to this pattern to achieve a profitable trading strategy . And before we start adding rules, I want us to recap for a

[07:47] moment. We have seen what a profitable trading strategy is. We have seen that strategy does not determine style, but rather that temporality determines style. Large time frame , swing trading. Intermediate, day

[07:59] trading. Lower or lower, scalping. We have seen that once we choose the temporality, we have to look for a pattern in that temporality. There are many types of patterns, but the most common, simplest, most efficient, and most repetitive is the

[08:14] impulse, pullback, and continuation pattern. But before the rules, we need to choose a trading philosophy. There are many possibilities and each person has

[08:26] to decide which way to go, because the rules we are going to mention below depend on that philosophy. If you are looking for a philosophy based solely on indicators, you need a set of rules

[08:40] geared towards those indicators. If you're only looking for price action, choose another option. If you're looking for smart money, look elsewhere. and so on. So now we are going to define what kind of rules our

[08:53] strategy should have once we already have the style, the pattern and the philosophy. So going the pattern and the philosophy. So going directly to the chart, the first thing we directly to the chart, the first thing we need to define is what I want to see

[09:07] need to define is what I want to see in order to enter. In other words, what do I need to see [in the music] to understand that this pattern is forming? Since my pattern is impulse, pullback, and continuation, I need to see how the

[09:21] price takes off and starts to rise strongly and even breaks the previous highs. And that's precisely what we're seeing here. The price enters

[09:33] a downward trend in a horizontal, range-like arrangement at this lower point and from here it starts breaking not only the

[09:45] upper part of the range, but also reaching the area of ​​the previous highs. Here it is. Therefore, we may be talking about a structure of rising highs, pending what now? The formation of

[10:00] rising lows. How will rising minima form? Well, at the moment when the price falls and from a level, which we will now discuss , it rises. And what we will do is capitalize on this

[10:13] movement. And without realizing it, we have the pattern made: impulse, pullback, and continuation pattern. Okay, what else do I want to see before I go in? I want to see I want to see before I go in? I want to see the price start a downward movement and

[10:27] reach specific Fibonacci levels. Here it is. So the moment we see the price start to fall, start to

[10:39] fall, start to fall and it hits certain areas, there it is. What are those Fibonacci levels? Well, Fibonacci levels are between 1/3 and 2, here we

[10:51] have it. 0.382, 0.5 and 0.618. Now we've decided what I want to see before I go in. We now need to explain how and when I enter. How and when do I enter? Well, first when the price

[11:08] reaches one of these three Fibonacci levels. Second, when the price starts from this area, here we have the first green candles and here we see that the price is starting up. And

[11:22] third, by executing a purchase order. If the pattern were reversed and we were in a downtrend, then it would be a sell order. Thirdly, we have already defined what I want to see in order to enter. Then we defined how and

[11:36] when I enter. Now, thirdly, we explain how I get out, whether I lose or win. Okay, so how do I get out? If I lose, I'll place a stop loss

[11:48] at the 0.75 level, and if I win, I'll place a take profit at the previous highs. This gives me a

[12:00] previous highs. This gives me a risk-return of 2.87%. when we explain how to scale profitability. But now that we're already involved in the operation, what's the most important point? It's about

[12:16] determining what to do while the trade is open. This means that as long as the price hasn't touched my stop loss or take profit, I have to define what I'm going to do point by point.

[12:31] Well, at the moment when the price reaches the 1% risk-return level, which is specifically this level here, what I do is set the break even. This means I'm going to place my stop loss at the

[12:46] entry point. Because? Well, because if the price goes like this [music] and goes down, I won't lose money anymore because I've removed my stop loss from here and placed it here. And each time we go

[13:00] up and start a larger upward movement, what I'm going larger upward movement, what I'm going to do is follow that stop loss. So let's keep moving forward. There it is. And little by little, I

[13:15] go up, I go up, I go up, always giving space to the price and so on until the price is cornered enough the price is cornered enough so that either it hits the take profit

[13:28] or it hits the stop until you see, we reach this point and the price already hits the take profit. This would be the step-by- step process for executing a pattern with step process for executing a pattern with

[13:44] defined rules and a trading strategy. First, what do I want to see before I go in? Second, how long do I get in? Third, how do I get out if I lose, or how do I get out if I win? And fourth, what do I do while the trade is open? As I mentioned earlier, this same

[13:58] trade can be executed in many different ways, and these different ways result in different trading philosophies and strategies [music]. We've reached we'll explain how to scale the profitability of our strategy

[14:12] before, precisely, discussing and recommending the best recommending the best combinations to learn quickly and make money as soon as possible. And in this case, at the beginning, we will have a

[14:25] basic trading strategy, like the one I have mentioned, and we will be constantly executing it. [music] But when we have a [music] But when we have a specific number of operations, we can

[14:37] depending on whether it is scalping day trading or swing trading, we will start to obtain some numbers, some data. And here's the key to trading: using those same numbers and that same data to optimize and

[14:52] scale that strategy. Because? Because we'll know how many transactions we do per day or per week. We will have a specific success rate, we will have a specific risk-return . We will know on average how much we earn

[15:05] and how much we lose when we lose. We will know and understand what our maximum drawdown is. We'll see [music] what the price does, as soon as we execute the trade, how much it deviates against us, and then go for

[15:19] our take profit. We'll see how many times we hit the take profit, how many times we exit due to managing the position. We will look at different ways to manage the position. Ultimately, once we have consistently and

[15:33] long-term implemented our strategy, the key is to improve it through the numbers. And this gives us a huge advantage because at the beginning we will execute all the trades. Once the pattern is met and we can add the rules,

[15:46] we will execute. But then when we have 50, 100 or 200 trades, we will realize 50, 100 or 200 trades, we will realize that we might have a 40% success rate, that is, out of 10 trades we get 40 right, sorry, and lose

[16:01] six. [music] Okay, so what good is this to us ? This helps us understand that if, at the moment we execute the trade from the entry point to our take profit, we have a risk-reward ratio of 111, we

[16:14] should not execute the trade, no matter how well the rules are met. Because? Well, because if the trade gives an 11 risk-reward ratio, we're most likely going to lose, because we'll only be right four out of ten

[16:29] [music] Six times we will lose money. As you can see in this table you are viewing on the screen, we have a relationship between profitability, risk and success rate. Perfect. If you are right 40%

[16:44] of the time, it means you need a two to one risk-reward ratio to be profitable. Actually it's a little less, it's 1 and a half, but to avoid at two to one. [music] And from here you can do the math. If you

[17:00] only win 20% of your trades, you need at least a 51% risk-reward ratio at least a 51% risk-reward ratio to be profitable, and so on. This is simply an example of how to use numbers to your advantage, but you

[17:14] can use and extrapolate it to all concepts or statistics that you want to corroborate. Having said that, I will now mention the three best concepts of all those I have mentioned so far, which together

[17:27] allow you to [music] more quickly obtain consistent results and profits with trading and thus become profitable quickly. First of all, use a trading style based on swing trading or day

[17:42] trading. This is very simple. It allows you to learn without the pressure of having to decide in a matter of seconds whether to buy or sell. You can also perfectly combine it with your work, since you don't have to be

[17:56] constantly glued to the screen, set alerts, or make decisions on a daily basis. your job, your studies, your family, whatever. And thirdly, it is important because these are styles that focus on learning. Many

[18:10] of you have one or two hours a day to learn. It's normal, you combine trading with other things. Now, imagine that you have to Now, imagine that you have to dedicate those 2 hours to trading. You are

[18:22] using the teacher market and the market is not [music] teacher, it is an exam. The market isn't going to teach you, it's going to evaluate you. Therefore, swing trading and day trading are ideal. So that? So that you can focus on

[18:35] your learning. If you have an hour, an hour. And if you have three, then three. And that the day-to-day operations don't take up most of your time. Secondly, as a trading philosophy, we will use price action analysis.

[18:48] Because? Because it's the foundation of everything, it's the main thing. The first thing you need to the main thing. The first thing you need to do is learn how to analyze how the market moves. This allows you to, if you later want to rotate to a more

[19:01] indicator-oriented style, already have a base on which to scale. If you want to rotate to a more smart money style, you already have a foundation [music] on which you can scale. But of course, if you start with indicators or smart money or

[19:13] quantitative trading, for example, then you do n't have a foundation to go for price action analysis. Furthermore, entry. It's not the most profitable style, not by a long shot. I don't know which

[19:28] I like the most and the one with which I get the best results. Now we'll see what those results are; I'm not so much talking about it, but it's profitable it is, which depends on each person, it's the most solid foundation to then go

[19:43] for other styles. Finally, in terms of pattern, we will trade the impulse, the pullback, and the continuation. Reasons. Well , that's how the market works. The market moves through supply and demand, as push,

[19:56] pullback, and continuation are the essence of supply and demand. Therefore, in a very similar way to what I have discussed in price action analysis , we are building a very solid foundation to then, for example, go

[20:08] looking for more complicated patterns, such as reversal patterns or range patterns, not trending patterns. So the impulse, pullback, and continuation pattern is going to be the essence of our trading strategy. And so

[20:22] you can see for yourselves, here is my audited track record, in which you can see that the concepts and tools I mention are real, valid, and perfectly suited to achieving

[20:36] high returns. To give an example, last year ended with a 36% return, here it shows 30.48, but the reality is that the months of February and January were not included. This year, just in

[20:52] January were not included. This year, just in January alone, we have already achieved a 4.91% return. We've just entered February, so most of the days are still ahead. And this is what I constantly do with a very

[21:05] low drawdown, with minimal losses. Notice how I only lost one month in the entire last year . This year, I haven't lost January. I'm not going to waste February either . It's very unlikely. This allows you to be very conservative, whether you're

[21:19] scaling a trading account, obtaining funding accounts, or avoiding losing money while learning to trade. And these are the results I obtain based on the concepts I just mentioned. And you

[21:35] normal that you get these results. You've been trading for 11 or 12 years . You have all day to trade, to learn, to improve, and my situation is completely different." Well, look, so you can see that it's

[21:48] possible to get the same results as me or even better, I'm going to quickly present the testimonials of three students to whom I've taught these same concepts and who are getting similar or

[22:02] and I could only aspire to X. I couldn't aspire to more in my job. Well, I haven't told you, I'm a nurse, in case that's relevant. I am the father of a girl who is about to turn one and a half . Anyone who is a parent knows this: during

[22:17] nap times, when you put her to bed in the late afternoon or evening, and on weekends. I had a lot of information, but I needed to be more specific. No, I wasn't following any strategy. In fact, I had never traded in real money, nor had I

[22:32] ever faced the market. And now I feel, I don't know, like I can't believe it. Tradild has changed everything for me, that is, he has managed to take all that amalgam of knowledge that he has in his head and focus it, uh, take it towards

[22:45] strategies that I know are profitable and that work, because those strategies work. I've spent hours watching the trappers, observing the mentors' corrections, and learning from them. I had doubts

[23:00] , a mentor answered them and until I understood it perfectly, that person was there for me. And then another thing I really liked is that Alex's training, we know they're videos, but it starts from

[23:14] the beginning. In other words, you don't need to have prior knowledge from having read he starts from the beginning. You can start, as he often says , from zero to 100 with his training, and it really is like that. He started in this world

[23:27] of trading after about 5 years, something like that, always combining it with a job like everyone else can have. Trading has adapted to me, to my way of being, to my personality. Since I work shifts, you just

[23:40] combine them. In the end you go in knowing nothing and you fit all the concepts together and Tai has made me like, I mean, arrive crazy, saying, "Okay, this is how it is because of this, this and this." Well, I'm Ivan, I've been at the academy for about a year and a

[23:54] half, a year and eight months or so, and I also work in fire protection and climate control installation. I quit the first one and from the second one onwards I started pushing hard, pushing hard and nothing, I managed to

[24:08] little because I have one of 160, which is the one I operate on the most and the one I try the most to get out of, and another exam of 160,000 that I'm at 1%-2% of the let you know that if you want to achieve the same results as Antonio, Rubén, and

[24:25] Iván, if you're interested in joining a profitable trading community— some more experienced than others—to interact with them, to interact directly with me, to participate live in discussions

[24:40] about trading psychology, trading strategies, and money management, and to structured training program with exams and self-assessments that allows you to take a final exam, which, if passed, gives you access to a

[24:57] $10,000 funding account trial to participate in in-person and online events—in short, to become part of Trading Lab—you'll find a link below in the first pinned comment and in the description of this video

[25:10] that will take you to a 4-minute mini-video where I explain exactly how it works and what we do behind the scenes. This is obviously only for those who are willing to take a

[25:23] experience, knowledge, and results; who want to accelerate their learning and training; and who want to be part of a community of traders. For those who do n't want to learn much faster or who do

[25:38] n't want to be part of something that goes beyond trading—that is, a family—that's fine, no problem at all. You will always have access to my free content for you to consume daily. Clearly it is

[25:51] different content, it is much less personal content, it is scattered content that is not ordered point by point and in which I do not provide daily support. That's how I do it at Trading Lab, but you'll always

[26:05] trading for free. So, below in description of this video, you will also find other links of interest such as courses, tutorials, training, all 100% free content so that you can continue

[26:18] learning without having to invest your money. I'm going liked it, and that it was useful to you, which is the important thing. If so, like, subscribe, share with friends and family, and we'll see you in the

[26:31] family, and we'll see you in the next video. God.