How To Day Trade As A Complete Beginner

[0:00]This exact strategy is what I use on a day-to-day basis and has been backtested thousands of times. And every month that I tested it, it has been profitable in the long term. The core of this strategy uses supply and demand. Demand is the start of a strong move upwards. Supply is the start of a strong move downwards. The idea is pretty simple, you want to buy from zones where institutional buying and selling is occurring. You know, where the big bank boys are entering. Now, finding these levels is extremely easy. You simply find the candle before the strong move and mark the low to the high of that specific candle. You then wait for price to come back to that zone, enter your position, then proceed to make millions of dollars. But there's a huge problem. For example, if we look at this chart, there's an area of demand here, here, and here. So, which one do we use? Well, if you don't know the answer to that question, it could be the difference of you losing a trade and you winning one. So, going back to our example, we had three different demand zones. Zones one and two are fake demand zones. Persuading traders to enter there, when in reality, they just become the liquidity and help move price to the real zone, zone three, and that's where price actually reverses. Now, you might be sitting there thinking, okay, cool. So, you basically just want to pick the lowest zone, and that's the one that has the highest probability of going up. Well, yes, lower prices is usually a good thing when trading, the lowest zone isn't always necessarily the best one. For example, here on this chart, we have two zones. If we waited for price to come to this lower zone, we would have never gotten into the trade. Because price came down to the strong zone, zone one, and it went upwards from here. So, how do we decipher which zones to choose? The answer, inducement. If you go on Google and search the word inducement, you will find the definition, a thing that persuades or influences someone to do something. If we find inducement on our chart, it'll raise the probability of finding the strongest zone. The easiest way to do that is by finding liquidity. The simplest form of liquidity is just equal highs or equal lows. Whenever there's equal lows like this, there'll naturally be loads of stop losses below this level. The market is programmed to take out these stop losses and then proceed to do the actual move and go up afterwards. So, if we go to this example, we have two demand zones. At zone one, we see right before the strong upwards move, price consolidated and made equal highs and equal lows. Meaning, there's tons of resting liquidity below this demand zone. So, as price comes down to the zone, lots of traders will enter as they think this is a strong zone. Then proceed to set their stop losses below these lows. So, often times, price will do a little upwards move from here, but then we'll want to proceed to take out liquidity. And where better to do that other than these equal lows? So, price will end up breaking this inducement zone and move to the real zone, zone number two. But you may not always be lucky enough to get a clear example like this. Sometimes it will be a little bit more tricky to identify the true zone. Another way to find the strongest zone is by identifying breaks of structure. So, in this example, zone two had so much strength that it broke the previous high. Meaning, there's tons of buying power from this demand zone to give it strength to break the previous high. So, we can identify this as a strong zone. But that would completely change if we had a scenario like this. In this scenario, zone two actually didn't have enough strength to break the structure of the previous high and actually failed while doing so. While zone one was the zone that actually had the institutional backing, giving it the power to break the previous high. So, in this example, despite zone one being the higher demand zone, zone one is actually the stronger zone and is the one we would choose to enter a trade. The third trick in finding the true zone is fair value gaps. A fair value gap is simply just a three-candle formation, where price spikes up or down extremely fast and is untested by any wicks. The fair value gap is just the zone where price is untested. So, right here, price will eventually want to test this zone again, then move back up afterwards. So, knowing this, we can use it to our advantage. For example, here we have two different demand zones. So, again, we're forced to answer the age-old question. Which zone do we choose? If we look closely, there was a fair value gap formed right above zone two. And like I said before, price is naturally attracted to fair value gaps and will want to go to them. In order to do that, it would have to break through zone one. So, we can instantly remove the idea of zone one being a strong zone, as price will naturally want to come to this fair value gap. And in order to do that, it has to break through zone one. So, now we have crafted a formula for finding powerful zones, finding inducement zones made with equal highs and equal lows to generate liquidity. Zones that have strength from breaking structure and finding inducement zones based off fair value gaps. If we combine all of these tricks, we will raise the probability of finding the best possible setups. So, let's put all we've learned to the test and do a real life chart example. But before we get into that, let me show you something. I found a new broker, triple AA FX.com, and this is no ordinary broker. They offer forex, stocks, and crypto. Yes, a three for one. So, no matter what silly little thing you trade, they have it. Best part is, they have 0% commissions. Yes, you heard me right, 0% commissions for all of your trades. So, unlike most brokers, where you have to pay fees for every single trade you take. I mean, really sit down and think about it. If you're taking hundreds of trades, those fees can really add up to where you're paying hundreds, if not thousands of dollars. On here, it's absolutely free. Plus, they're available in 176 different countries and fully regulated. If you want to try them out, use the link in my description and you will get unlimited 0% commissions if you use my link. You're welcome. Now, this strategy will work for all time frames. But I personally like to use it for the one-hour or daily time frame, as those supply and demand zones tend to hold the strongest. Here in this example, we have a clear uptrend, with price making higher highs and higher lows. So, since we're in an uptrend, we only look for areas of demand. To find our areas of demand, we need to find the start of moves with strong impulses. So, there's an area of demand here, here, and here. So, we now have all of our potential demand zones, but not all of them are valid. If you were trading this chart, which one would you choose? Would it be zone one, two, or three? Now, right away, we can remove zone one. The reason being is there's a fair value gap right above zone two. And like I said before, price will naturally want to come to this fair value gap. And in order to do that, it'll have to break through zone one. So, we can instantly remove this as an option. That leaves us with two zones to choose from. Now, which one do you think we should trade from? You may be thinking it's zone three. Considering what I just said, there's also a fair value gap down here, meaning price would have to break through zone two in order to get to that. But if we look closely at our chart, something interesting's happening. As you can see, our previous high is marked out right here. And if we look closely, zone three didn't have the strength to break this high. The zone that did end up breaking this high was zone two, meaning zone two is actually our stronger zone. We then proceed to wait for price to come to the zone, enter as soon as it does, put your stop loss below the demand zone, and set your take profit at the recent high. Let the trade play out, and zone two was indeed our strongest zone. Here's another example. Here we have the start of a reversal to the downside, so this time we'll look for short trades and areas of supply. Now, while looking at this chart, I immediately see two areas of supply. One right here and one right here. Which one should we use? Well, both of these zones broke the previous structure, so we're good in that regard. Zone two, before creating its strong downwards move, made these equal highs. And like I said before, whenever there's consolidation or equal highs, that will create liquidity above these equal highs. As traders will set their stop losses above them, and price will naturally want to take out these equal highs. Also, there's a fair value gap above by zone one, so that's a whole another reason on why not to use zone two. So, we choose zone one. We see what price does. It hesitates at zone two, because all these traders think this is the correct zone. But for the reasons I mentioned before, we know it's an inducement zone. Price then proceeds to break all these equal highs, grab all of this liquidity. We enter a short trade, set our stop loss above the area of supply, set our take profit at the lows, and get a beautiful winning trade. Let's do one last final example. Here, we have a downtrend. Since we're in a downtrend, we'll look for areas of supply. Right when I look at this, I see an area of supply right here, here, here, and here. So, we have a total of four areas of supply, but which one do we choose? All of them created a break of structure, so we're good in that regard. When first looking at this, I see something very interesting. We see equal highs at this area of supply, so we can instantly remove zone one. As price will want to naturally take out this easy liquidity at these equal highs. And in order to do that, it has to break through zone one. Zone two is an inducement zone. Lots of traders will enter here, thinking this is the correct zone. But like I said before, there's equal highs here, and since this is an inducement zone, it'll add even more liquidity. So, we'll take out zone two. That leaves us with two zones. Which one do you think it is? If you guess zone three, you would be absolutely wrong. As again, there are equal highs here, creating natural liquidity, making zone three an inducement zone. So, now we know zone four is the real zone. Let's see what price does. It breaks through zone one instantly, coming to zone two, the inducement zone, hesitates, then proceeds to grab all the liquidity, giving it fuel to head higher. It then goes to zone three, grabs even more liquidity, then moves to the real zone, zone four. We enter a short trade, set our stop loss above the supply zone, set our take profit at the low, watch the trade play out, and we get another winning trade. Liquidity, breaks of structure, and fair value gap. Implement this in your trading and watch your trading balance grow. Inducement