The E.L.E.E. Trading Strategy Explained
60sThis segment introduces a simple, memorable acronym for a trading strategy, making it highly educational and shareable for beginners.
▶ Play ClipAI Summary
This video presents a simple five-minute trading strategy called 'ELEE', which stands for Environment, Levels, Entries, and Exits. The creator demonstrates how to apply this framework on a 5-minute chart using multiple real trade examples, emphasizing the importance of understanding market states and having a clear plan.
Chapters
[00:02]
Introduction to the ELEE Strategy
The strategy is called ELEE, which stands for Environment, Levels, Entries, and Exits. The creator uses only the 5-minute chart for direction, entries, and exits.
[00:15]
Environment Analysis
The first step is to identify the market environment: trending, reversal, ranging, or breakout. The creator warns that 'the trend is your friend' can be misleading if you don't consider different market states.
[00:30]
Level Identification
The second step is to mark key levels of support and resistance. In the first example, a steep decline and rejections indicated potential resistance at a level.
[01:41]
Entry Signals
Entries are based on a reaction at the level, such as a strong bearish bar, a rejection bar, or a double/triple top. In the first example, a red bearish bar was a clear signal to go short.
[02:11]
Exit Strategies
Exits can be a fixed target (e.g., 1:1, 1:2, 1:3) or a support/resistance target. The creator prefers 1:2 or 1:1 for quick scalps. In the first trade, the exit at a support level gave a 2:1 reward, earning $8,821.
[03:05]
Second Example: Trend Line Break
In a downtrend, a trend line break and a pullback to a supply level provided a short entry. The exit was at the lows or a fixed target.
[04:25]
Third Example: Reversal Environment
In a downtrend, a green bar was wiped out by a red bar, signaling a short entry. The exit was a quick scalp to the downside, earning $4,260.
[05:47]
Fourth Example: Trending Market
In a trending market, a breakdown and retest of a resistance level provided a short entry. The exit was a quick 1:1 scalp, earning $2,300.
[07:09]
Fifth Example: Ranging Market
In a ranging market, the creator shorted resistance after a failure to close above it, earning $3,300. Another ranging day yielded $4,300 from a similar setup.
[09:01]
Final Advice
The creator emphasizes understanding the environment, marking levels, and having entries and exits planned before entering a trade. Entries and exits are personal and should be backtested.
The ELEE strategy is a simple, structured approach to trading on the 5-minute chart, focusing on environment, levels, entries, and exits. The creator stresses the importance of a clear plan and personalizing the strategy through backtesting.
Tutorial Checklist
Study Flashcards (5)
What does the acronym ELEE stand for in the trading strategy?
easy
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What does the acronym ELEE stand for in the trading strategy?
easy
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Environment, Levels, Entries, Exits
00:02
What are the four market environments mentioned?
medium
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What are the four market environments mentioned?
medium
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Trending, reversal, ranging, and breakout
00:15
What is a common entry signal at a level?
medium
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What is a common entry signal at a level?
medium
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A strong bearish bar, a rejection bar, or a double/triple top
01:41
What are two ways to exit a trade according to the strategy?
easy
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What are two ways to exit a trade according to the strategy?
easy
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Fixed target (e.g., 1:1, 1:2) or a support/resistance level
02:11
In the first example, what was the reward-to-risk ratio and profit?
hard
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In the first example, what was the reward-to-risk ratio and profit?
hard
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2:1 ratio, profit of $8,821
02:53
💡 Key Takeaways
💡
Market States Matter
Challenges the common 'trend is your friend' mantra by emphasizing the need to identify different market states.
00:15
⚖️
Exit Planning Before Entry
Stresses the importance of knowing your exit before entering a trade, a key risk management principle.
02:11
🔧
Personalization and Backtesting
Encourages traders to adapt the strategy to their own style and backtest it, promoting a data-driven approach.
09:01Full Transcript
[00:02] you guys a very simple fiveminute trading strategy that will help you navigate the markets and put you on the right track. Okay, so what I follow is something that's called Ely. Okay, E stands for environment, L stands for
[00:15] levels, E stands for entries, the other E stands for exits. Okay, so let's go to examples. All right, so right here I want to know the environment. Okay. So, right here, the market is going up. And this is the five minute chart. So, I'm
[00:30] for my entries. So, I'm only looking at the five-minute chart for my direction, entries, exits, everything. So, right here, okay, this day, if we're looking it opens, right? It opens right here. But when you're looking at the the
[00:44] market is shooting up to the upside. Now, you probably say, okay, maybe I need to look for longs. And that would be, you know, a good way to look at it. be, you know, a good way to look at it. But at the same time, if I'm around here
[00:58] with which the market opened around here, I'm looking at this as a reversal trending environment, reversal environment, ranging and breakout different states because if you really think that the trend is your friend, a
[01:13] lot of times the trend will literally take your money because you're not You're not looking at the different states. So right here instead of saying to the left. What the left tells us? Well it shows us that we had a steep
[01:28] decline right here and also we had you know some rejections right here. So this is telling me guys that it's possible resistance around here. All right. So what I did this day was when it came up to this level right here I'm looking at
[01:41] first the environment which is E. So the environment is I'm looking at a a reversal market right. Second one is L level. So this is the level I'm looking And then the third I'm looking at is entries. Okay. How do I want to enter
[01:56] the market? Well, I want to see a reaction. Okay. So I'm looking for either a strong bearish bar, okay, or a nice rejection bar or maybe a double top, triple top at that level. So right here we have a nice red bearish bar. So
[02:11] this is a clear signal to go short. And this was a nice short right here to the downside. And I'm talking these lows right here. So let's go to the last one, exit? Well, there's a couple ways you can exit the market. You can have a
[02:25] fixed target, meaning that it could be at one to one, one times your money, or it could be two times your money or so on. Okay, entries and exits is honestly is a personal thing. And it's whatever fits you. Okay, some people will scout
[02:39] for a quick one to one. Some people want one to three minimum. Okay, me personally, I like, you know, one to twos or if I feel like it doesn't have to one. But right here, guys, quick scalp right here to the downside to this
[02:53] support level. And this gave me a 2:1 right here. And in this trade right here, I was up $8,821. Okay, on that trade right there. So that was that trade. So again, we're looking at, you know, those four
[03:05] So let me show you guys another example. So right here, guys, here's another good example. Okay, the market is trending down and basically we have a trend line break and it's going down. Okay, so you could have probably, you know, took a
[03:19] short right here or when it pulled back to here anywhere around here, guys. You know, would have been a good entry. So, we have a nice rejection bar right here. know some of you guys looking at this like, hey, you know, you can make money
[03:32] could. Sometimes I forget that I have beginners on my channel. So yes, you can actually go um and make money if the market's going down. So right here, this is another good example. So we have the environment. What type of environment
[03:45] environment. Okay. The second one is the level. What level are we looking at? here. Soon as it broke this trend line, I would look at this level right here. Okay. And I will look at when it pulled back. Okay? I will look at this level
[03:59] right here. Nice little supply right here. Now, to me, I'm looking at I'm also looking at this level right here because this is definitely a potential this supply, right? And it went to this swing high right here. Anywhere around
[04:12] those are the levels right here. Now, the entry, again, the entry was a nice rejection bar. And the exit on this one was um again, you can go for the lows, which is, you know, a support or
[04:25] resistance target, or you go for a fix, maybe one, one to two. Okay. So, let me go to the next example. All right. So, here uh was a trade I took today and pretty much, you know, going down, right? So, if you look at the overall
[04:39] market, it's uh it's in a downtrend right here. Okay. So, we're down trending downtrending. I'm looking at this and I'm looking at the market and we try to go up right here, but guess what? We we pull back. Okay. So, we keep
[04:52] on going down making lower lows. So, I'm looking at this market and I'm saying, "Okay, what should I do?" And it's obvious that we broke this trend line right here. Okay? And then as soon as the market opened, which is right here,
[05:06] we slammed down. Okay? We slammed down. And guess what? We basically made this basically hit this supply. We had this nice green bar and then a a red bar wiped out that green bar. And to me, that was a good enough signal because
[05:21] that nice green bar that was bullish just got wiped out. So to me, that was a good signal to get in. Okay. So we have the environment which is this environment is a reversal environment right and also we have the level which
[05:35] red bar wiping out that nice strong green bar and then we have a nice exit to the downside looking for a quick scalp. Okay and uh on this trade I made
[05:47] $4,26. So that was that trade. Okay. So let me show you guys some more examples. So overall what we looking at we looking at a trending market to the downside. So is environment. So environment is a trending environment. Okay. Now, the
[06:01] next thing we're looking at is the market breaking down right here. This is looking at, you know, pretty much this breakdown right here. And I'm looking at this, you know, level right here. This resistance level right here. Okay. Let
[06:14] me erase this and make this much uh clearer. So I'm looking at this level right here where we broke down at. Okay. And so when we came back to this level right here, I just took the short right here. As soon as I saw the market um
[06:28] short right here. We went below this candle right here for a quick scalp. And on this day, I made $2,300 uh for this day. Okay, so this is a quick scalp. Again, we have the environment, which is a trending
[06:42] right here, which is a resistance. We have the uh entry, and then we have the quick one to one. again. Uh, sometimes if I feel like, you know, the market's I I I mean, we've been trending for a long time. So, I mean, we can't really
[06:56] expect maybe that much out of this move. So, a quick scalp is, you know, good enough for this trade. And, you know, that was that trade. So, let's go to the have here, guys? All right. Uh, unfortunately, you know, there's a lot
[07:09] of short trades because the market has been bearish, you know. So, right here, we have um the market basically shooting down, right? So to me, I'm looking at this as a, you know, pretty much a bearish situation, but at the same time,
[07:22] it's ranging. So it's bearish and it's ranging, too. Okay? So I'm looking at this range right here and I'm saying to myself, okay, we have resistance right opened. So let me erase this. This is where the market opened right here,
[07:35] guys. All right, so basically the market opened right here. We went to this resistance right here. Okay. Now, I was looking for the top, but this is was my first resistance right here. And also, we have support right here. So, to me,
[07:51] the market was pretty much almost in a range in my opinion. So, I'm looking at this resistance right here. I saw that we had a hard time at this level right here. As soon as we went above it, couldn't close above it. It went down. I
[08:05] I went short right there, okay, for that quick scalp to the downside. And if you look at this trade, I made $3,300 for that day. Very simple, straight to the point. Again, I'm looking at the whole picture, not just one thing. I'm looking
[08:19] 5minute chart for everything, but I'm looking at the whole picture. Okay? So, example so you can really understand. All right. So, this day right here, much like a ranging day. You know, overall, you know, similar to the last
[08:34] really not doing anything. It was just ranging right here. So, I was looking to basically, you know, short the top. So, I took this first trade right here. This to take the other trade right here because look at this. We tried to go up.
[08:48] Really couldn't close above this high. So, to me, that was a good short right there. So, I took this right here. And that day, I was up $4,300 in uh dollars for the day. Okay. So, that was that trade. Again, guys, I'm doing this on
[09:01] the 5minute chart. You just have to just basically get used to this. Understand what type of environment you are in and also mark down your levels, have your entries and exits in place. Okay? Make sure you know where you want to exit
[09:13] before you get in the trade. Okay? That should be part of your plan um in general. Okay? So again, entries and exits are personal. Some people like to get in as soon as it hits the level. Some people like to see confirmation.
[09:26] Some people like to see uh you know, a drop first and then a pullback. It's up to you. you know, it's very personal, but you know, I showed you guys how I'm Now, it's just your turn to figure out, you know, what fits you or back test
[09:39] this or see if it fits you. So, that's what I have for you guys today. I hope you enjoyed this. If so, hit that like button and talk to you guys later. You know what to do. If you want to learn more, check the description. Told you
[09:51] more, check the description. Told you guys later and have a great
