The ONLY Break And Retest Trading Strategy You’ll EVER Need (Step By Step)

Welcome everyone back to Char Fanatics, the.

Go to channel for all the very best trading strategies and concept breakdowns with the very best traders in the world. Talking which today we have a very, very special guest. He's currently on an incredible run this year. Over $400,000 so far and just in the last 24 months, closing in on a million dollars. And we're going to break down the exact strategy he uses. He is the founder of Options Insider. It's the one and only Vincent Desiano, AKA Desi Traits.

Thank you, Riz. I appreciate it. Thanks for having me.

Thank you for being here. I'm super excited to go into this strategy. Where do you think the best place to start is?

Well, first of all, I want to say this is like the best podcast for me. Just I love levels, I love charts. That's like everything. So I'm super excited.

We talked about that on our podcast. I wish we had charts.

Yeah, exactly. I think we start with just the core strategy, which is the break and retest. It's a widely known thing to look for, but how you execute it, how confident you are in it, the psychology behind it is also a huge factor of can you execute it correctly, which is just massive. The concepts of what you're looking for are quite simple, but repetition, experience in looking for it, doing the same thing over and over again really is the differentiator of are you successful using it?

Yeah, I've got you. So, yeah, let's begin. Let's crack straight on.

All right, so we can just go ahead and do some very basic examples of what I look for. Obviously we'll jump into the charts later and get a better idea of exactly real examples, live, live trades as well that I have for you today to really show you exactly what it is. But the best setup, the best break and retest, the A plus one that I'm always looking for, the one that I think works the most and I find most success of is when we have a previous day high. That's when I am locked in knowing that this is absolutely something that I'm going to look for. Right. So let's go ahead and just put a little dot here and say that that's pdh, Right. Pdh, previous day high. And we're going to go ahead and just put a little chart that goes up to that level. Right. So that's our previous day high. Right. Let's say we sort of topped out there. We went back down in the pre market. Let's go ahead and put a line here that Indicates the end of day. Let's say this is on Monday, right? So that's Monday's trade. That's Monday's chart. We have a previous day high of let's say, $200, right? We're not going to use stock X, just so we know Apple's around $200. We could use Apple as an example. So we have 200 previous day high in Apple. We didn't trade anything that day, right? No trade set up. It is what it is. So we then we have our after hours, right? After hours. We have. Let's just say we sort of open up within that range and we open the day pretty much flat. No overnight gaps, no overnight downside. We're just staying and opening at that same level we closed at. So the next day when I see this, right, the first thing that I'm going to do is I'm going to look and make sure I mark out that previous day high, right? So that's going to absolutely be on my chart as a level, right? Just sort of putting that on my chart the next day and going to be something I very closely watch to see if Apple or this stock in this example is able to break above that high. All right, so that's a huge thing that I'll look for. Now, of course, we'll get into some examples of using the S and P as well as the Nasdaq, right? Because those come into play of what's Apple going to do, right? So we're going to also going to be watching the S and P and the NASDAQ after we go over this, I'll break that down as well. So at the core of it, really all I'm waiting for is Apple to move higher, right? Move up, break above that high, right? And start to. That's when I start to get interested. Now, that's not anything to do with an entry. There's no entry there. You don't just enter on a breakout of a previous day high. That's probably the most amateur way to trade. And I think where a lot of people sort of get stuck in fake outs, right, because they're just breaking a high, taking a trade and hoping that it continues. What I want to see happen is Apple to pull back to that level, right? And then this area where we start to come back down to that previous day high is something that I like to call that is called the battle zone. So the battle zone is really when you start to see that price action start to get really tight, right? You start to get that wick action, you start to get some really clear examples of some manipulation going on in the market. And that's where the money is made. The battle zone is where the money is made. Being able to read the price action at that retest, because that is the retest. Right. Is how you get paid.

Gotcha.

Right.

So rather than just break retest, your break retest and actually looking at then the context of the price, exactly what time zone would you. Time zone? What time frame, sorry, Would you be looking at?

So I always will watch the two minute time frame.

Gotcha.

I think the one minute time frame is a little bit too messy. Right. It adds a little bit too noise, too much noise to the chart for me. So I'll always use that two minute time frame. And I would say on average, this retest should take anywhere between, at least from the averages that come into my mind and knowing my trades, I would say anywhere between six to around 10 minutes. So about three to five candles is what I'll wait for to look at what's going to happen in that area. So about six to 10 minutes. Right. Of price action. And there's really no, you can't really use time as how many. How long are we going to look for that? Yeah, it's really just what are the candles looking like above that retest level? Am I seeing. Right. Am I seeing bullish wicks like this? Am I seeing buyers pushing up. Right. And holding price above this 200 level? Or am I seeing, you know, candles that look bearish? Right. And holding. Let's say this is our 200 level. Am I seeing a start to fail that level? Right. So I need to start understanding the price action through the candles, reading price action through the candles of what's going on at that level. Now, something I want to talk about here is you had a previous guest on your show, Carmine. Right. And so Carmine really gets into the depths of what's going on and that price action, using things like order flow and things along that line, I believe that I am able to read that order flow and understand what's going on behind the scenes by really focusing on what the price action is showing me. So I know from past experiences that when I watch the battle zone, when I start to read price action at that important retest, which is previous day high in this case, I know that I start to see price action starting to form a really a battle. Right. You're starting to really see the wicks go around. You're not getting very fluid action because the fluid action is that Breakout the food action is you're pulling back. Right. Which is what some people will call a fair value gap. Right. FF fvg. Right. That's really that fair value gap. So when you're pulling back into a fair value gap, really all that is is a break and retest. The retest, yeah. As Carmine would call it, a low volume node. So really, all those concepts really mean the same thing. It's. At the end of the day, what gives you that confirmation to take that trade? Well, what is something that you're always looking for, something that makes you comfortable, something that gives you an actual game plan and a structure behind the trade you're entering. Because you have to be confident with what you're looking for. Right. I've built this out. I know, like, I dream about this. I mean, I know exactly how this plays out. Right. When I'm looking at the charts, which we'll look at later. Right. I know exactly what I'm looking for to fire and to take that shot. And at the end of the day, it's not 100%. Right. No trading strategy is 100%. There's no such thing as a 100% trading strategy.

That's right.

Sometimes we'll go ahead and get. So I'll go ahead and zoom in on this and make this larger for the audience. I'll make an oversized candle here because obviously we're a little bit small on the. On the whiteboard, but let's just say we get a wick underneath our previous day high. Right. And let's say that candle closes. Something like that. Right. And so you do at times see Price temporarily break below that retest level.

Right.

So there is somewhat of a margin of error that you have to allow at that retest level. Yeah. Right. You can't just say, oh, it went down. Right. It went under for a second. No longer a trade. Right. That's. That's just being too, I would say, too precise and too, too tight with what you're looking for.

Exactly.

Right. So that's why we want to see price develop. We want to see, okay, a few wicks that come under. We want to see a few wicks that pop back over.

So you said that battle, you want to see those buyers and sellers interacting.

Exactly.

That specific level.

Exactly. And so what I want to do is I want to sort of zoom in on just this area here. Right. So we'll delete everything here. And then let's just zoom in on the battle zone. Right. And so we'll go ahead and go over that. So let's just title this the battle zone, right? And this is where the money is made, is in the battle zone. So right here.

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So let's say we have that same 200 level on Apple, right? Right there, that's Apple and that's the $200 level on app. Now, let's say we can sort of put some candles here, moving higher, moving higher, breaking out over that level, right? Continuing to push higher, continuing to push higher. So we have those candles. Just let's say five green candles in a row. No pullbacks, no nothing. Just ripping through that level, right? A lot of people will start to chase, right? Chasing at the highs because they're like, oh, my God, Apple's going straight up. I need to start getting into this trade. I can't believe it, right? I'm going to miss this. That's all the FOMO and all the fear and all the not following a single strategy starts to get, you know, starts to come into play of why losses start to stack up. Now that trader will enter here at the high, right? And you'll get a wick like this. That starts to show you, hey, you know, you're starting to get selling up there. You're starting to get some rejections coming in. And that's when you start to move lower, right? You start to see that pullback. You start to get those candles moving back to the retest. And at this point, a lot of these traders will start to stop out of their trade before the retest even happens, right? Before that retest even occurs. So they're pretty much just randomly buying, randomly selling. And we're taking advantage of those sellers at the end.

And then you got people trying to sell there as well.

Yeah, you're taking advantage of these sellers at the end of the day, these people that are buying on, chasing and pulling back. Everyone that did that, everyone that was in, everyone that was a part of this trade right here that bought at the high, sold at this retest is where that's our money. Yeah, that's the money we're about to take. Right. So we get back to the retest level and something that I love to see start to happen, which I know is a rudimentary thing to look for. Right. But it is very true in the markets is what I like. What I is what you would call a bull flag. Yep. Right. So this is our bull flag. That's our pullback. The retest after the breakout. Breakout retest. Bull flag. Right. And we want to start seeing the action here. All in the battle zone. Right. All right. There is where we get paid. Right. So we want to start seeing stuff like this Wick, maybe below Wick. Back above, maybe we have a candle that sticks right above it. Right. And starts to break out of that bull flag. Then eventually what you're going to see is you're going to see a candle that engulfs that previous price action. Right. And then we're taking our long position right here.

Gotcha.

Now the next thing I'm going to talk about and we'll go ahead and erase this again and then even get more minute and more detailed about right there. Just before we do. Yeah, go ahead.

If price was to, in this area, happen to close here.

Right, Right.

Just close there.

Yep.

But then trade back above and trade around this line, is that fine.

It's still a valid thing to look for. Right. It's not like we're ever just. Oh, it's. You know, the only time I would ever say trade's not gonna.

If you get the opposite.

Right.

What you're looking for.

Exactly. If you get a candle like that, that clearly rejects it. Right. And then let's say, for example, the S P is also rejecting a major supply or the NASDAQ's rejecting a major level. Okay. We waited. We never got our confirmation retest. Didn't work. No trade in this example.

So no trade.

No trade.

You're not going to look to short.

Well, yeah, if you want to go. Yes. So exactly. So what I would start to look for in this case, if I am interested in now looking for a whole market rejection. Right. At this point, if I'm going to flip this, I need to now be finding a thesis as to why I would look to short the market.

Got you.

Right. So we can get into this. But like, let's use this area on the chart. So let's say you're getting the S and P starting to reject the major supply, which then correlates with a breakdown of this level on Apple. Right.

Yeah.

So then, okay, right. We're saying, all right, S&P 500 starting to very clearly reject one of our major supplies. Now the question is, can I really set up a short here? Right. Or do I have some levels below that I really don't have interest shorting into? Right.

Okay.

Is there. Let's say this is the opening print. Let's say there's a major demand here on the es. Right. So sometimes. And this is what we're going to talk about, the no trade zone. Right. The next. Their next concept is no trade zone.

Sped ahead a little.

No, it's okay. So let's say this is my no trade zone. Let's say this is the overnight high. Right. Let's say that's like a previous day high. Let's say this is the previous day low or like the opening print. So what you'll often see is, right, you'll get that rejection, you'll come back down to the opening print, and then you're going to bounce again. Yeah. And in this case, if this doesn't align perfectly, you might maybe look for that quick rejection, the retest rejection. Yeah. But then if that is holds, you're going to get sort of wicked back out of that trade. So for me to short to me to. For me to flip my thesis, I need the S and P and the NASDAQ to align as well. So in this example, if I wanted to short this 200 retest level after a rejection or a fail, I'm also going to want to see the ES failing under that morning low, morning open. So there's more confluences to just that actual chart I'm starting here just so we sort of understand the. The actual price action of what we're looking for.

So now. Yeah, I'm glad we asked. Just. Yeah, just to clear that up.

We'll get over that.

Deeper for sure. But now we're going to go deeper into.

Yeah, right, let's go deeper into that. So what we're going to talk about next is we're going to talk about how to set up our risk using the break and retest. Right. Because with options, it can be difficult to know our exact dollar amount risk. It's a very difficult thing to do. It can be quantified through delta reading how much. What the delta of your contract is and how much risk on the underlying stock you're risking. So you can quantify it. It's hard to do very quickly. Right. Because you have very, very quick mental math. But it is possible to quantify. And really, you're really wanting to understand how many points on the underlying in my risking, Right? And if you're trading, what you want to be looking for is how much of underlying risk on the stock am I going to risk. Right. How much underlying basically from the 200 point to where I enter. What is that gap? Right. So let's say we put that 200 level back. Right? And let's say we just got our bull flag breakout. Let's say that was our bull flag. We just got our candle that engulfed the previous action and we got our bull flag breakout. Right? So this is now. And we'll use the green marker to indicate our entry point. So right here, let's say we go ahead and enter the position right there. That's our entry, right? So let's go ahead and say that's $202 on Apple. Right? So right now if we enter there and our retest level is 200, this is now called an invalidation line. Right. So I can use it, Right. So I can use the red marker and say, okay, 200 is now my invalidation validation.

I'm the same invalid invalidation line. So now our strategy and our structure here is I'm long apple off a 200 retest.

Right.

So we can sort of map this out. I'm long apple right off the 200 level of 200. Now, my stop loss or my invalidation is a close or price action that starts to clearly show me that it's rejecting 200. Right. If we start to see candles rejecting back under 200, then I am out of that trade. My stop loss is now under 200. That's my invalidation long. Why my first target, my PT1 is always going to be where that previous breakout high was. Right. So let's say our breakout high was up here at $204. Right. That was our breakout high before we got the retest. Yeah. So that is now my first target for a scale off. Right. And it's a scale off. It's only a scale off because we want to look to see if we can hold runners here. So our first price target is that 204. That's our first target. And what we're actually going to do after we hit that price target is we're now going to look to see if that previous high of day now becomes another break and retest continuation scale in. Right. And so we can either add or we maintain.

Maintain. Yeah.

Right. So what we can now put here, right? And we'll Use the green marker.

Is we can sort of quantify our risk reward. Right. So our risk reward here, here's our reward. Our PT1 reward is up to that 204 high.

Yeah.

Our risk for that first part of the trade is a close below or a clear rejection back below that 200. Right. So that's our first risk reward on our first price target. Yeah. Now we go deeper here. We keep this. It gets deeper and deeper as we go on. The reason why I will look to take some off at that high. Right. Is to reduce risk.

Yeah.

Because there's a very high chance that we could push back higher, reject the high, double top right, see another rejection and come back down and we take a full loss.

Gotcha.

Is it necessary to take a full loss if that hit that high a day? Is it necessary to allow that to. Or is it necessary for us not to take something off the table to at least whether it's going to be a win or not? At least we're taking something off. Right. And so what I'll typically look for is I'll take a quarter, right. Or almost, sometimes a half of my position off two fourths. Let's say I have increments of a fourth. Let's say I have, let's call it 20 contracts. Right. Let's say 20 options contracts.

Yeah.

So I'll take five or 10 contracts off at that high. Right. And that's typically, you know, it's different. It's gonna be different every situation. I would say that's typically anywhere between a 15 to 20% win. Right. On an options contract, that's like a very comfortable estimate. Right. So we're up around 15, 20%. We caught the beautiful break and retest long. We had a nice risk. We got our 15, 20%. We're taking half off. We can lock up some profits here and now. Let's see if this thing can run.

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A very big thing here to realize and to recognize about this example is when we do this, this is a form of risk management, right? So of course we're going to want more than 15 to 20% to have like spectacular risk reward in the long term, of course.

Right.

But we don't always get that. And why not grab it? Right? And let's make it so. If we do pull back and reject that, that is not a now 20 to 25 loss, that's now a break even trade. Or that could even be a profitable trade. Right. If we scale out at that high, you could still become profitable even if we do end up getting stopped on runners. Yeah, you're playing the long game, right? You're understanding the variables that are going on here. You're understanding that there's a lot of risk in play and you want to at least take something off there, take some off and understand that. Okay, maybe this one doesn't really go for me, the 40, the 50 to 60% runners, but at least I'm now being able to sit back Relax and let this play out.

Would you say? Two things. One, these are sort of trades that will pay for losses and also pay for sort of dynamic sizing if you want to down the line in terms of having like you know, a buffer account. But then secondly, are these quite fast trades in terms of the execution because it's two minute time frame?

Yeah. I would say these are relatively quick trades. I would say from the time that a really good retest trade sets up here and goes to that high is probably ten minutes. Right. Maybe like five two minute green candles.

But it feels longer when you're in the moment. And that's why to your point for this particular setup to sort of scale out even just a partial is to pay yourself. And as you say, take, take that ease back.

Exactly.

This whole period could take about 20 to 30 minutes. But during that time your mind is oh absolutely. Firing off.

Yeah. I mean this area is the most difficult for traders. Right. Because they. It's very hard to trust yourself. And that's why it's the bow. Right. And it really is. And so when you come back to here, it's. It's very unnatural for some people to be longing something after and being interested in longing something as you pull back. Right. This section right here when we're retesting is when I am coming up off my seat. Right. And I'm like, oh, here we go. Right. This is exactly what I need to see. Right. Before that I'm like oh man, another breakout. Is it going to come back for us? I'm not going to just chase this thing. Let's wait to see if we get that retest. And so that's when you start to really got to lock in. Right.

And these are the differences that make profitable traders versus the unprofitable traders.

Like I would say. Yeah.

Rather than panicking or rushing or chasing and equally not trying to sell. Some people because they think it might be a fake out start to sell it. When in reality you just got to sit and wait for your confirmation. Exactly. To play out.

Yeah. I mean when. And we can quickly. I want to touch on one last thing and before we can start to talk about flipping this, these trades, like you said, you made a good point. These trades pay for the losses. Right. This scale out that ends up being break even or this scale out that ends up being slightly profitable is. Is paying for the losses. Right. It's making it so those losses are smaller. It's making it, making. It's giving you that buffer. Yeah. Right. And when you can Sit back and relax and not be panicked about the position size you're in is when you can start to very vividly and very clearly watch price action. And then you'll start to see something like this start to happen. Right. Another breakout of this high, then another break in retest. Right. You're still in the trade. It goes higher again. Right. And now you're up 50%. Right. And you're continuing to scale off at your discretion. Yeah. We talked about this yesterday with Carmine. Right. Because I've been hanging out with Carmine this whole weekend and we've been talking about discretion versus strategy.

Gotcha.

Right. And so the strategy, this area is where pure strategy comes into play. Right. When you start to break through the highs and start to really seeing price action move is when a lot of my discretion comes in. Right. Because I can then read this price action. Right. Is it still strong? Yeah. Am I. Am I reading rejections or am I seeing just. Just continuous and continuous movement?

So it's like the bonus money.

That's the bonus money. This is the money that makes the difference. Right. If you can get this Trade to go 50, 60%, that's the account changing trade. Right. This is like the entry criteria that you have to follow. To catch it. Yeah, to catch it.

Love that.

Yeah.

That's incredible. No, that's a great way of framing it. Yes. You know, I've not really heard that, that sort of detail. When it comes to the discretion side, I have to be fair, always sort of reflected that the trade management, a lot of the time can be discretion while the execution and the process is actually the bit that needs to be more mechanical. But I love it because you can see the risk management side, we pay the losses with the small wins, but then if the small win turns into a bigger win, as you see in this occasion, because again, the other option is obviously if we did manage to scale in as well. If you were to scale in, as a good question, if you were to scale in, you're following the same process again.

Exactly. Just right here.

Just right there. Following the same process again.

Right there. Just continuing to drive it higher. Right.

How often does that happen for you? Is that something that's sort of infrequent?

So this happens when you have a trend day. Yeah, that's the only time it happens. Right. And so there's like, sure, this is a great example, but there's so much more to really dive down into. And we, we really talk about that in our group, like the S and P and what the Nasdaq is doing during this time is, is just, I mean, even as important as this. Right. Because if, if you're not watching the NASDAQ and S& P during this time.

You'Re, you're, as you show.

I mean, you're basically watching it. Yeah. You're watching with one eye closed.

Yeah.

Right. You have to know I'm, I got my charts set up top left is always the futures. And I mean, I'm always like this. Right. It's like, like looking up at that esnq. Yeah. To make sure that it's still following along with what's going on here. Yeah, exactly. So what we can do is flipping this to the bearish side, if you want to get into that.

Of course. Yeah.

Okay.

Yeah.

So we can wipe it all off. Yeah, go ahead.

So we went a little bit about risk. We talked about the, the entry criteria.

Should we get rid of this as well?

Yeah, we'll keep that. We'll keep the battle zone. So now let's talk about flipping this. Or we can even. Let's just go ahead and talk about a break and retest rejection. Yeah. Right. And so how do we look for this not only to the long side, but how can we play this to the downside? Because we're going to have really good examples of this later on in the, in the, in the podcast about retest rejections. And actually, me personally, these are better. I like retest rejections. Downside is like an elevator. Upside is like an escalator. Right.

Yeah.

So when that downside starts to come in, I mean, it just starts to flush. And these are, these can be some monster trades when we get this. So same concepts, Right. Let's say we have a.

Let'S say we have a pre market low. Right. A pre market low or even a previous day low. Yeah, right. Previous day low. Let's just go ahead and use previous day low as our example because the breaks of previous day lows are, are the nastiest. So when we have a previous day low here, let's say that is, let's call it. Let's just use, let's use the same 200, 200 previous day low. And let's say the previous day we traded down into that. We bounced after hours. Right. Right here.

Next day. Now, so let's say there's two examples here. Let's actually go ahead and put it. Let's do a little split screen here and let's put both of them on the screen side by side, same examples. But the pre market did something Different.

Yeah.

So here's example one and here's example two. Right. In example one, we open the day above that previous day low. Right. In that example, we have to be super, and I mean super cautious of shorting back into that previous day low. I mean, that is some of the worst trades that you could take because you get that morning trap, you get the little morning bear trap, wicks off the low, just rockets higher again. Right. This is where a lot of traders gets messed up. Right, right there. So for us to even get interested in a trade, if we're opening this low and this close to a previous day low. Yeah. We need the break below that low. We need the retest of that. Now before we get too deep into that, I want to talk about section two and sort of keep them up to date. Section two, or example two is we go ahead and open the market below.

Interesting.

The previous day low. Right. And if we break, this is the best trade ever right here. And I'm like, I get smiling. I mean, I remember plenty of six figure trades, five figure trades. Just thinking about this. Right. So if we open below that previous day low and if what. What you're looking for in the morning, I want to make this even cleaner. What you're looking for in the morning is a morning rally straight into that level. And I mean like aggressive. I want to go vertically, higher. I want people in discord chats around the world saying, long, long this thing. Like I want to be long. It's going straight up. Like look at, look at Tesla straight up. Right. That's exactly the, that's the exact, like just behavior I want to be going on there.

So I want to see a lot of volatility, momentum, exact period, straight up.

Straight up into the previous day low. And then you get this right here, you get a huge wick candle. Right. Leaving behind a huge tail at that previous day low. Candle closing red Right underneath that level. Yeah. And then, you know we're about to make some money. Right. So what we do here is we set up that same risk reward. Right. And same thing, the battle zone. Same exact thing. Right. Stop loss above that previous day low.

Yeah.

Right. You're looking for the bear flag. Right? This is now a bear flag.

Got you. Yeah.

Right. Because that's a bear flag up into that high. You're looking for a candle to engulf that price action down below. And then you got your breakdown. Yeah. Right.

So is the entry here.

The entry is so the same. I mean, I can get, if we want to go full screen And I might have to get a little bit bigger on this. But entry is when you see. Remember those two can. Let's say you get some candles here. Yeah. Right. That sort of just stay sideways. Go ahead and make this a little bit cleaner for you. Let me go ahead and make it perfect. So same thing. Right. Push up candle, rejects that high.

Got you.

Right. Next few candles, let's say we have just sort of an inside candle. Let's say we have another. Maybe we have another attempt higher.

Yeah.

And something that's hard to explain here on a whiteboard is like the live action, of course. Right. Because like this candle could come and trade up here within two minutes, but then it could close still below it.

Exactly, yeah. So in the real time, you're right. It's that thought of like, are we going to invalidate.

Right. There's some intuition. There's some. There's some, you know, discretionary reading what's going on. No doubt. Right. But you know that you're going to be focused on what's happening at this level. Right. I think it's easier for people to read price action when they're just focused on this. Right. They're not thinking about a thousand different things. Let's focus in on this. Right. And read those candles. So let's say another candle trades up, wicks back, lower, closes again. Right. Leaving a huge tail like that.

Got you.

Right. If I'm looking at 5, 10 minutes of this kind of action here, we're taking that trade all day. I don't care if this thing reverses back up. I don't care what may happen. We have to accept that uncertainty. Right. We have to accept that there's possibility of us being wrong still. But we have absolutely seen what we need to see to take. Take an attempt. Yeah. So we're going to trade that bear flag. Right. Let's say it's bear flagging. And once we get that break of the bear flag, once we have that clear, you know, consolidation range here, we're going to go ahead and take that entry.

Got you.

Right. Stop. Loss above that high on a. I would say we need something along the lines of this. Right. Really showing us that we're going to close above it. Okay.

So would you put it above this high?

Yeah. I mean, you definitely. I definitely would want to monitor those wicks. Right. But if I start to see some very clear action holding above this, then I'm absolutely needing to now accept that. Hey, it looks like we've reclaimed that level. Right. That's a reclaim Reclaim of the previous day.

Yeah.

Right. So that's a, that's an awesome setup. 100%.

For this one. Same thing. We just need to wait for it to break. We cannot short into the low. We need to wait for the actual break. Right. And then that same action we saw here off the open.

Yeah.

Is the same thing we want to see here. Intraday aggressive back up, heavy failure at the previous low. Bear flag.

Retest. Yep.

Got you.

Yeah, Perfect. So that's the, that's the core of the. The break and retest both to the upside as well as to the downside. Perfect. Let's talk about the no trade zone and how this comes into play, really, to find those retests. So we'll go ahead and take the battle zone off.

Yes.

And let's talk about something I like to call an ntz. Ntz, which is the no trade zone. Right. So on the no trade zone, go ahead and say we have a previous day high. Right here. This is previous day high. Previous day high. Right there. Right. So we go ahead and trade back lower, maybe. Here is our after hours and our, you know, pre market after hours in that day. So we're going to put a little dotted line across here for the previous day high. We're also going to take a pre market low. Right. So let's say, you know, we're trading like this and then we trade within. Let's say that's our pre market low. Right.

So now. So really the concept behind an NTZ is I want to be able to understand where is the price action going to be the most difficult to read? Where is it going to be very tight? Where is the channel going to form, where the fake out is going to come in? Right. Where is the area that I don't want to trade within, which is really at the core of it. The no trade zone should also give us our break and retest levels.

Yeah.

Right. So if we have a no trade under previous day high and a no trade above previous day low, or I'm sorry, pre market low, then that's really our break and retest rejection or our break and retest long ideas.

In between that.

Right. And between there is where so many traders just absolutely blow up their trading accounts. Yeah. Right. Because they just. The market opens. We're here, we're there, we're here. Right, we're here. We're chopping, we're chopping, we're chopping. Nothing's happening here.

Even worse. Well, maybe not worse than blowing up, but what can also happen is they. They're getting long.

Yep.

Or they're getting short.

Exactly.

Holding and holding and holding it. And even by the time it does break out, let's say in their favor. They probably got out. Yeah.

Out. Because they're either tired of staring at it or that contract they're taking zero.

They'll chase after.

Exactly.

It has broken, retested. They'll chase after.

Exactly. Yeah. And I mean, I'm here as someone that's done this and successful, but I have done that same thing. I mean, I have. I know exactly how that feels. I've done it. Right. I'm not going to ever say to someone that I have not done that because that is absolutely things that I've done. And that's the only way I've been able to build these, this playbook and these ideas to, you know, diving deeper.

And learning from your data and your patterns that you recognized.

Exactly. So we have that previous day high. We have that pre market low. Right. Whatever it may be, maybe it's a. Maybe it's a previous day low. Right. It's not always going to be exactly. Previous day high, pre market low. Right. And I think that's where a lot of discretion comes in again. Right. We have to know what's the chart look like today? Where's a very clear low from the previous day or the pre market. Where's a very clear eye. What's up? Maybe, maybe it's not even previous day. Right. Maybe it's a level from a few weeks back. That's a very major supply. Right. And that's actually a really good example I have today. So we want to get an idea of where our no trade zone is. A joke that we make in the group all the time is, you know, I'm long, I'm short, I'm long, I'm short, I'm long, I'm short. Right. And then you just, just keep taking a thousand trades within this area.

Yeah.

And it's just, it's just a disaster. So what we need here is we need a trade outside of the ntz. We need to break, we need to retest. We need to turn previous day high into a support and start to trend higher.

Get back our original. Right, Original model.

Exactly. Yep. So you can see how that's a perfect market structure. Yeah. Right. Look at the market structure there. You have this zone. Then your market structure is now higher. Right. And these are the points where you're looking to take that trade.

Right.

And you're just structuring this thing higher and you Continue to follow it on a beautiful trend day. And we don't always get this trend day right. But the best thing about giving yourself an NTZ is that if it's not a trend day, you're not trading. Right? And who cares if you don't trade in that, right? If I look at this, this day right here and I'm, you know, it's today, you know, today's not a bad day looking at the action, but let's say like today was just a total sideways day. And I'm here on a podcast and you know, I look back at 4:00 and I say, oh man, thank God I didn't even look at the charts today, right? So if we're looking at this for me, if it's 12 o', clock, if it's 1pm and this is still what the market's doing right here, I'm out. I'm not going to sit here all day.

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I was about to say about timing wise.

Oh yeah, absolutely. I mean, you can't sit there all day, you can't wait for it all day. I would say the quality of these plays start to deteriorate as the day.

Goes on because then your volatility and your volume's going.

Exactly. So that's the no trade zone. This is a new concept that I've been really focused on. Right.

Even helps you just reduce unnecessary.

Exactly.

Reduce energy and.

Exactly. Yeah, exactly. Even 12 years later, you know, I'm still thinking of ways to make this more precise.

I think that's the difference. Right. That's what makes the profitable traders. That they doesn't matter 12, 15, 20 years, they'll still go and look to optimize and find ways to be better.

Absolutely.

And in that case, it's not even a case of like trying to find more trades. The stuff.

Oh, it's let's find less trades. Yeah, let's, let's avoid this. Right. Because the more you can avoid that.

The probably more profitable, powerful one. I've always said that's the ultimate hack is how do you avoid the low quality trades? Because now you make more money without taking more trade.

Without, without more. Yeah, without more effort. Yeah, right, exactly. So the last thing I think we'll talk about on the whiteboard before we jump into the charts is the bit, I like to call it the big four correlation. I don't use the fancy terms that you hear a lot. I think it's pretty much the same thing as smt. Yeah, right. So big for me, I call it big four correlation because there's, you know, big four sort of comes from an accounting firm. I just think I'm, I wanted to be investment banker accounting. So big four is like all the big accounting firms. So big four, which for me the big four is NASDAQ. Right. NQ futures, S&P 500 futures. Right. The SPY ETF and the QQQ ETF. Right. So I am watching all four of these every single day. Without a, without a doubt. They're in the same chart. They're in the same chart every day. I press one thing on to us. I got a four square on to. They're in the same spot every day. Right. And I'm just becoming a master of reading these four together because you absolutely spot discrepancies between these four every day. If you know what you're looking for, you find those smt, you find that, that they're not Correlated at times. So a quick example, which we'll get into later on the chart, is what happened actually last Friday. So Last Friday, the 25th, I took a losing trade. This was a loss that, you know, could have been avoided. But I did like the setup. I felt like it lined up with what I wanted to look for. But there was a very clear reason as to why it failed. And it was to do with the big four correlation.

Gotcha.

And so I want to quickly show you exactly what happened here. So let's split this in half by the Nasdaq.

And that was the 25th of April for anyone.

Oh, what did I say?

No, you said 25th. Oh, 25th of April. Just for anyone who's wondering.

Yeah, 25th of April. So we have the NASDAQ and the S&P 500 futures. So we had a pre market high on the NASDAQ futures right here, Right. We moved lower. And then later in the day, we broke above that high and started to look like we were holding above it. Right. This was exactly what the NASDAQ was doing at that same exact time. We had an S P that had that high. Move back lower. Right, Move back higher and rejected an equal high here like that. Right. And so when you spot this, right, this can be very dangerous and very difficult to trade. Right, because the question mark here is does the NASDAQ hold, right, and bring the S and P with it.

Yes.

Or does the NASDAQ fail back under. Right, because of the S and P failing. Yeah, exactly. And so, so typically when you see in a situation like this where the NASDAQ's above a high and the S and P is below it, some would call that a bearish smt. Right? So this is a really good sign of. Okay, now ES is rejecting that high. NASDAQ's above it. We do not have a reason to long the market yet here because of this discrepancy. And I did make the mistake, full transparency of longing, the Q. Q. Q. Because of this retest, I slipped up. I didn't spot that right. And that was my own mistake. But this is where going back into my trades, right, putting them in trades, Ella, and seeing that was like, okay, this was a bad mistake. I understand why it happened, which is extremely important. But it was something that I did wrong. And so what ended up happening, I took that long, it fell back under. I got stopped out. S and P, very clear double top. And that's a bearish SMT that happened just on Friday. Right. So in this situation, we need The S P to also be doing the same thing as that nasdaq. Right. Breaking and retesting above to go ahead and, you know, take that trade along. Without that, we avoid the divergence.

And again, coming back to the no trade zone of helping you reduce losses as well in this case.

Yeah, the ES was still in it. Yeah, ES was still in the no trade zone. Right. But below our no trade zone. So it should have. Right. It should have been an indicator for me not to take that trade.

And that trade was though on qqq, was it?

Basically, instead of longing the NASDAQ futures, I took some options on the qqq. Gotcha. Right. So the nasdaq, the QQQ was showing pretty much. Pretty much the same thing.

Gotcha.

Yeah. Perfect.

Yeah, that's great. So we go over the pros and cons.

Yeah, let's do it.

And again, for everyone at home, cons wise, it doesn't mean it's necessarily a bad thing. It's more so something to be aware of, something that could be a hurdle and something that you just need to know when looking to implement something like this. That's awesome.

Absolutely. So let's start with the pros.

Yeah.

You know, start positive. Start with the pros. So I would say some big pros of the break and retest is that it teaches patience, teaches the ability to. Or the importance of not having fomo. Yeah. Right. Because if you trade the break and retest, you cannot have patience. You are, you need patience and you definitely cannot have fomo. Yeah. Because you need to wait for that retest to come in.

Yeah.

So it really, really teaches that. And you'll, you know, if you're not, if you're not implementing this when trading the breaking retest, you're going to find that you're, you're losing every time. Right. So that's a really big pro for me. Right. And, and has really helped me stay patient in my trades. Another big one is, I think it's quite basic, right?

Yeah, that's right.

And that's something that I get a lot from people online. It's, it's quite basic. Right. But it works. It absolutely works. There's a lot of ways to complicate it. There's a lot of ways to make it sound more difficult than it is, but it's just simply how the market trades. You see it all the time. I mean, even today we had an absolutely perfect break and retest of nineteen four hundred on the NASDAQ futures again today. And I would not be Able to have action packed and high quality content every single day if this didn't happen every single day. Right. So every day I can wake up and be excited to go on the live streams and say and show them another example of the break and retest. Right. And so it's happening all the time. It's about spotting it and staying patient for it. And it's quite basic to understand.

Yeah.

Another major pro I would say is it, it is structured. Right. There's structure to what you're looking for.

Yeah.

Right. You're understanding exactly how to structure that entire thing out. Right. Sort of mechanical in its. In nature. Yeah, yeah. So. So I would say another pro would just be that you're really focused in on reading the price action. It does. It's a really, it's a really great way to start to read price action. Right. Because you know ex. Where to read the price action where it's important and that's the battle zone. Right. Something that I think a lot of traders do is that they're reading price action all over the place every day. There's only so many places that you really actually need to focus on price action. Right. So instead of, you know, from the 9:30 open to the 4:00 clock close eastern time and watching every candle that goes on all day, which is just going to make you numb in the brain, like just can't do it, you know, exactly your shots, like where is it that I am going to pay attention?

Right.

Where are those areas on my chart that I'm going to pay attention to? Reading the price action. Right. I think that's a really big pro. It avoids a lot of noise and takes away unnecessary things. Unnecessary things to focus on. Okay. So those I think are some of the major pros. Right. You have to be patient. It teaches patience. You can't have FOMO or you're going to take very bad losses, you're going to take poor entries and just going to get pulled back on.

And I guess the potential as well for the outlier trades, you know, the trades that can go and make higher.

Exactly. Yeah. I would say that would be another great pro is that you're in a trade, you know where that stop loss is, you know, where you know how important the hold that you entered on is. Yeah. And if that continues to hold, then the running potential of. Of your trade is very high.

Yeah.

Right. Because as long as it's above that 200 level, if we go back to the, you know, beginning of the video, as long as it's above that level, you have, you know, potential to reach new targets and maybe previous highs from previous days. And so there's absolutely like an exponential growth to it, if it's correct. Right.

So let's talk about some cons, I would say, of the break and retest. And the first one that really comes into mind. Yeah. Is you have to have confidence. Yeah. So the reason you have to have confidence is because to really squeak out the most percentage points out of the strategy is you have to be entering where that retest level is. And sometimes before it feels right to enter.

Yeah.

Right. So I would say you have to have confidence.

In what you're looking for. Right. Because when we were talking about that example, when we pull back to that retest level, price action is usually coming down in that situation, it's starting to look actually aggressive to the downside. Right. And so, you know, new traders may feel like, okay, that's bearish. Yeah. That's not bearish. Right. It's the retest you want, it's the pullback you want. And so if you're going to get a good entry because it's so Precise in that 2 minute, 10 minute timeframe, you have to be entering close to that invalidation line, close to that level. If you let that go too far higher. Right. Or too far up. Right. And maybe if you're watching a 10 minute candle or a 5 minute candle, by the time that 5 minute candle closes, you could now be. Right. Instead of being at 200 on the retest level, you could be trading at 208. Right. And you can't take eight points of risk here. Yeah. Right. It's too far away. So you have to be able to find that execution skews a risk reward. Yeah. To make sure that your risk reward is correct. If you're having problems having being confident and you're having problems executing, that could be a big con.

You say speed as well.

Speed, right? Yeah, absolutely. You do have to be fast. Right. I definitely see. And you know, to be honest, I see a lot of people that sometimes try to copy my trades. Right. Just being fully transparent. If you're not fast with it, I mean, it's a hard, it's. This is not a strategy to be, you know, just, oh, what's desi? And let me go ahead and let me go copy it. Right.

It will skew the rest.

Exactly. You need to learn exactly why I'm looking at this. Right. You need to be in it. Right. When I enter. Right. Or even before me. Or it's Got to be very quick.

Yes.

Right. And so this is why something in my group is I don't text any alerts because I know that if I, if I text alerts, by the time I text it out changed, it's changed. Right. And so I'm not going to pass that information along to someone if it's not even something that I'm interested in.

Right.

So you have to be fast, which a con, maybe to some is that you actually have to learn it.

I guess.

Is that a con? I don't know.

Maybe it is for everyone. Nobody like that.

Yeah.

But in terms of speed, is there anything you have to have done outside of just the norm to improve speed or like optimize speed?

I would say you're going to have to have your broker ready to go, right? You're going to have to have that options chain ready. You got to start to, you know, you, you have to understand what's the contract I'm looking at, right? What's the correct contract? And we get deeper into, you know, all this information, some mental math, but like, am I trading, you know, I'm probably going to want to be at an at the money contract, right? I'm not going to want to trade a too far out of the money contract here because if I'm only taking 5, 10 points on an underlying, which could be big depending on the stock, but if I'm taking a small move on the underlying, if I'm too far out of the money on my options, I'm not going to get that move, right. I'm not going to get. It might not move as much. Right. And if it goes against me and if that's too far to the money, then you're going to take a massive percent loss, right? So I won't say it's a con, but it's just another thing to understand. You have to understand, you know, the option contract that's correct for the strategy, which for me is the at the money contract. Right. So you got to be confident, right? Is it a con? Maybe, maybe not. But if someone's not, then it could be a big con.

Would you say, is this strategy only for options or can it be.

It's, it's absolutely for futures as well. Note 100, like we'll show you examples today. And I mean, I see break and retest on the NASDAQ futures, the S&P 500 futures all of the time. And actually I would, I would almost say that it's equally, if not better on futures. Yeah, it possibly is. Right. Because with futures you can absolutely quantify risk a little bit better. But you don't get that exponential growth.

Yeah.

With the futures contract. Right. When you get that really big growth, the QQQ starts to expand or let's say you're trading the options on the Q. Q. Q. When it really starts to run, those options are going to far outperform the futures contract, you know, and get that expansion in percentage P and L. So.

So the only thing I would add then really is just what we're talking about is the discretion element.

Yeah.

It's not really a con.

Yeah.

It was positive and negative. Some people it might be comfortable. But in reality, in terms of something to be aware of is that when it comes to after the initial part, as we discussed the entry model and the sort of first trade management.

Exactly.

When you, after that it's your discretion that's going to keep you in the game, which is something to be aware of.

Yeah.

Because you will still need to I would say create some form of rule process.

Exactly.

Of like if X happens and Y and so on. But it might not be as fixed as the original one.

Correct.

Well, is it chart time?

Yeah, let's jump into it. Ready? Yeah, absolutely.

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Well, we got the charts out now. We've actually got some active charts that we're going to be looking at live.

Yeah.

And then some incredible trades to go over as well. So where do we begin today?

So today I want to go ahead and show you guys some examples just that happened today. This is April 28th, Monday around 3pm of some break and retests on the NASDAQ futures, right? So you could trade this through the QQQ options, you could trade this through mnq, you could trade this through QQQ or I'm sorry through NASDAQ Futures. However you want to trade it, Right? The break and retest is not solo to futures or options. It's a trading criteria, it's an entry criteria. It's something that you will absolutely 100% see during the day on the market. It's just, I mean even us just sitting here, I just showed you two examples and they both worked. And so like if you can spot these things throughout the day, you can absolutely be correct. And if you follow the structure correctly, you can manage risk correctly and profit correctly. So the first thing I want to talk about here is this low right here that came in in the overnight session. Right. So Sunday Futures open. Yeah. Right. And you can very clearly see that we held that level. Right. So I'm going to go ahead and zoom into this to get this even more closer and just to understand what happened at this area. So we can see very clearly that we had a very clear low that came in here. I'm going to make that green. Right, Very clear low. This was actually also a very clear rejection from Friday's Price action. Right. So we can see that's a very clear level even right there, a clear hold. So 19 3, 95, 19, 400. Absolutely level of interest. Right. That is now our level of interest. We can very also clearly see where our no trade zone comes in. Right. Look at this. We have this overnight high. We have that 19 for low. So what do we have? We have our no trade zone. Right. So we don't want to be trading here. This is our ntz. Not interested in the ntz. Actually a beautiful rejection of that high. Right. Could have traded that supply rejection. Nice. Right. Very clean. I'll sometimes look for that as well. A little bit outside of the break and retest strategy. Maybe a little bit more discretionary or just looking for a previous level of rejection to happen again. But I'll actually in a second show you where that 196 level comes from. It's not just this high, it comes from a few weeks back. Got you. So, so what happens today is you trade within that no trade zone and eventually it looks like around 11:15 you have a clear break under that low. Right. So it looks like on the 15 minute chart it just sort of breaks back under, straight down. And where do I find an entry on that? Well, we need to go ahead and break this down to a shorter term time frame. And so what we can see here is we go down to the two minute chart. So on the two minute chart we can see that we still have those lows right there. That was the lows we just talked about on the two minute chart. Right. And let's now let's go ahead and zoom into this. Right, let's zoom in just to where this happened today. And let's talk about just.

And let's talk about just how beautiful this was on the intraday today. So we have our 19 four key level, our inflection point that we just talked about. We even see right here an attempt of a hold.

Right.

And that actually makes me even more interested because you had some buyers that tried to hold there.

Yeah.

Pushed higher, actually rejected these lows, which is actually quite nice. A little bit of a rejection of those lows. Yeah, that could be a break and retest in itself, but that's still in the no trade zone. Right. So it's not. It's not a significant. Absolutely. That's perfectly said. It's not as significant. Right. And so what happens? We come back down. Look at this candle. Big breaker candle right through that level. Now, do you chase this? Me? No, I don't. Could you. I'm not going to advise it. Right. Was there money to be made there? Sure.

Yeah.

Right. But that's not a trade that I'm going to advise to go ahead and chase.

Just a break.

That's just a break. So what do we need? We need the retest.

That's right.

Where's the retest? It's right here. Look at this right here. That's your retest. And that's the oh, shit moment. Right. It's like, okay, it's time. Right? It's time to start looking for the retest. Right. So we had our 194 level. We broke below it. Right. Right here. We broke below that level. We're looking for the retest. And it starts to come in now. What do you notice about those candles at that retest level? Right. You start to notice some of those upper wicks on that candle.

Yeah.

Right. And so actually this is a fantastic example of how it didn't work instantly, but guess what? It still stayed under your level. Right. So this is actually a really great example for the video today is okay, we had the bear flag, Right? We had the bear flag, break and retest, which is right here. Break, retest. And maybe someone went ahead and entered right there because that's what we just talked about. Now, where is the stop loss? The stop loss is above this candle. High. Right. And back above that reclaim level. And what did it do? Sure, you went into some drawdown here, right? On a big candle. Sure you went into some drawdown. But did it ever break above? No, it never broke above. And that means you stay in the trade.

That's right.

You have to stay in the trade. And that's when drawdown is just. It's irrelevant.

Yeah.

You have to accept this risk. You must accept this risk. If you don't accept this risk, this is when you say that the break and retest doesn't work. Right. Because they say, oh, Desi said the short here. Right. And to put a stop loss over this high. Right. And I got stopped out and took a loss on this trade.

Yeah.

Well, did you follow the strategy? No.

This is why it's by step.

You didn't follow the strategy, you didn't stay in the trade. It still was below that level. So what ended up happening? It rejected again on a double top rejection and it ran for almost give or take. Right. What is that? Almost 100 points to the downside. From 400 to 265. Right. More 100 and 130 points to the downside. And that's a huge trade on some NASDAQ futures.

Right now in terms of the process we went over is the first tp, the low of the day.

The first. Exactly. So the first place I would look to take some profits is right here at this low right here. Right. So I'd put that line there and I'd go ahead and take some profits off right there.

In this scenario, for example, the remaining that you're holding, where is there anywhere in this scenario where you would. So I'm taking more.

Yeah.

Not really hit a level for you, so.

Absolutely. So where I would start to exit more is the 50. I personally like to hit that every 20%. I'll take another little stab off. This is sort of discretionary. I wouldn't say this is some master scaling out strategy. It's just sort of discretionary and how I like to reduce risk. So let's say I hit 20% here taking some off. Let's say I hit another, let's say hit 40% here taking some off. Right. So I'm just sort of equaling out that curve and taking risk off as I go lower. Now another big thing that I'm watching is what is the next level we're coming down into? Right. Where do I have to exit this trade? So the next thing I'm going to focus on is where is the next level of demand and where does the risk reward actually start to inverse against me? Right. Where is it now become unlikely that we're going to continue lower? Right. So where is that? Just from looking at this chart it's pretty clear, right? It's right at the previous day low. Right. So are we going to now hold full size shorts into previous day low? Probably not. Right. You probably shouldn't be holding, you know, a full short entry as we start to come down into this low. Yeah. Right. So I have to do my job of knowing my levels and saying, okay, I've gotten a nice scalp. Yeah, I'm up 20, 25%, 30% and I'm starting to get pretty damn close to that low a day from. From the previous day. Yeah. And I need to start exiting this position. Right. And so you can either take it all off understanding that you can run it, you know, run it down to one contract, but no trades, always going to just last forever. And so now, you know, just looking at the last two days, we can even start to show ourselves even larger channel. Right. We can now see that the last two days we have traded within the last or the same exact channels. Right. But we did find a very nice break and retest scout underneath this low at the 19, 4 level, which is quite nice. The next thing just to even, you know, now we're using real life examples here. We can see actually later in the day, which probably not a trade I would typically take, but what happened here later in the day off the exact same level that we just talked about. Take a look at this long. That is actually going on as we speak.

Literally up once we were recording.

Yeah. As we record this, we have a beautiful break and retest long entry. Wish I was, you know, wish I had the broker open and we took the trade. But you can see right here, right, we were Talking about that 19 3, 95 level which tried to reject again ended up not going lower. Right. And what happened here? We saw a breakout above. We didn't chase the breakout at the high. Right. We're not interested in the breakout at the high. We're looking for the bull flag to form. Where's the bull flag? Right here. Right. We flagged back down into the retest level. You can see right here. And look at this candle right there. That's the money candle. That is the candle. That's the battle zone. Right. Our battle zone is right here. We need to understand what's going on at our key level. We move over and we move over, we move lower. That's fine. That's again the. Oh shit. We're coming back down it. We're coming back into our retest. Yeah. What's happening at our level? Look at the candle right here. You can see we talked about, you know, if we're watching live action. This candle at one point was red, right? Right down into this low. Wicked higher. Turn green. Taking our long right here, right? Long entry right here. That's our long entry. Our risk is back under this Low. You could even move it down into that Wicklow, right? I would. I would say you could definitely use that Wicklow as your risk, right? And then you're targeting, I would say, at least to that equal high, which is about a one to one there. So it's not fantastic. But that, again, is where we take some risk off, right? If it works for us. And now look at. Look at the runners, right? Look at these runners. These runners are probably up. Oh, look at this.

And then every 20%, right?

And look, I mean, look at this candle that's coming in as we speak, right? This is a huge trade. I mean, if I pulled up the options chain. Do you want me to pull up the options chain? Let me get it. Let me get it situated first or.

So let's just talk about the.

470 calls.

And that was at right here.

So if we look at the options chain, this is the Q. Q. Q. Today, expiration contracts. And if we take a look at the QQQ long at that same situation that's right here, they' 65 cents per contract at that time, right? 65 cents per contract on that NASDAQ retest we just saw. And you can see right now, this Trade is up 130%. Right? Just right there. 130 on Q contracts. That's the great thing about options, right? 130 trade just on that, right? And we go back to the NASDAQ futures. I mean, that is literal perfection right there today. So, I mean, what an incredible example today, guys, of the break and retest live. And you can see it just continuing to run. And now I feel fomo.

And now I wish I was in this trade. But yeah, awesome example there.

No, it definitely is. It definitely is. And one thing I think is important to highlight is that no doubt there'll be people out there thinking, oh, but why didn't you get into that trade and hold it to like the end of day high, the weekly high, so on? But I think obviously there will be those trades that end up doing that. But I think it's understanding and similar to what we discussed with Carmine is understanding your trading. What is your style? We are lower time frame and scalping and really getting intricate into the price action. And therefore, the way that it's managed, the way that it's targeted, reflects that. While everyone always assumes that you can do a scalp entry with a swing target and be the perfect entry with the perfect exit, it's not reality.

There's an expression to it.

Exactly. Maybe two to three trades In a year, you get that they might be phenomenal and do really good things for your P and L. Right. But overall, to think that you're going to do that consistently day in, day out, it's not a reality. Right. And, yeah, you know, no doubt, probably early on, you might have tried to do that through the learning, as you say. You developed a system that wins, of course, and we're very grateful to be able to see it.

Yeah. And the last thing I'll say before we get into some trades is, like you said, there was only two trades today for me, in terms of the strategy. It was right here and right here. So out of the entire day so far, there has been two setups. Yeah. Right. And that's, you know, shrinking it down into, what's my criteria? What's my strategy, what am I looking for? And making sure I'm not just trading in a bunch of noise.

And that's more than enough.

Right. That's. It's funny. I mean, 150% there. I don't know how much that ran on queues, but it must have been pretty nice. Yeah.

All right, so.

We can go into some trades.

I guess we can talk about this Netflix trade. All right. So the first trade that I'm going to go ahead and review, and of course, this is a massive trade. This has been the biggest trade of my career. So I know they're not all going to be like this. Right. We're going to show some losers as well. Yeah, of course. Hopefully we beat this soon. But this was a massive trade. This was actually a swing trade. Right. So switching it up a little bit here. This works on swing trading as well. Right. So there are setups that I'll look to swing trade, the retest rejection. Right. Same way, but just on a larger time frame. So we'll go over this one and then we'll jump into some losers, some smaller trades, some normal trades. This one's an outlier, no doubt. Right. This is not normal for me. This was a trade that I also put a decent amount of size in and risk. Right. So you can see I risked about $35,000 on this trade. I put about $82,000 in the trade. So pretty large size trade. It was a break and retest rejection. That was the playbook. Yeah. The same thing we just talked about on the whiteboard, where you're going to see it's the same exact concept, what we just looked at. Right. So let me go ahead and show you why I looked for this trade on Netflix. So what we're looking at here is the four hour chart on Netflix. Right. And we're going to go ahead and spot where are those key inflection points on Netflix. Right. And so looking at this chart, we can see that right around here around February 25th to around February or around March 5th, we have a very clear area on the four hour chart that Netflix was attempting to hold above. Right. We can see multiple attempts holding above that level, multiple tries to push back higher. Right. Eventually, right. You can see a clearly a breakback lower. So we can definitely say, hey, if we break under this level, similar to what we just talked about on the whiteboard, if we see this turn into some type of a rejection on a break retest rejection, we can now look to target a short at that level with this low as our stop loss. Right. Same concepts, larger time frame, definitely. So what we see here is that starting to happen. So right here on around April 3rd, we see that Netflix once again had a breaker candle underneath that major previous low. Yeah, we come back into it over a few days, we channel come into it failure. Next day we come into it again and we fail it again. Right. And so I'm going to go ahead and now zoom in on this April 2nd and April 3rd time frame and what you're going to see here go, we'll cut that and go to the April 3rd, April 2nd. So taking this one step closer on the one hour chart, we can see that just reading that action at that major level and understanding our levels, take a look at the candles that we started to see once Again, within our 940 to 950 area, we see very clear inability to move higher. Multiple attempts higher over two days. Both Wednesday failures to move higher and rejections next day. Right. We hold that low, we push higher again, push higher and we can see a very nice one hour wick rejection candle right in that same 950 to 940 area. So after seeing that and knowing how major that rejection level is, that retest rejection level on top of that seeing us failing, for me, the Daily 20, which is that blue line on your charts, and the Daily 100 SMA, which is your green line on your charts, I was confident to set up a put option and a swing trade, risking back over that 950 high. Because I now have very high confidence that after seeing two days fail at that same level, which was also that previous low that we talked about, I can now just say, hey, if it gets back above 950, I'm going to have to accept My loss. That's a pretty incredible, you know, rip back over that very clear rejection point that is shown. Same thing with my strategy. Same thing with everything I'm looking for with the break and retest on a. On a larger time frame. We can see that very clearly. We're going to go ahead and target that low, which from that point was around a 30 point move on Netflix. So if we go back to Tradezilla, we can see if we can go to my executions. I'll go ahead and now zoom in on this. On my executions, I entered that around 228 and 255 on April 3rd. You can see I was entering near that after that rejection came in, which is what we just looked at. Right. Entering on that trade and then holding that overnight. Overnight we get a beautiful move to the downside on Netflix. And you can see I'm just scaling out of that trade as we get that morning to the downside. So pretty much the same thing. Obviously a big example and a swing trade which is a little different than what we talked about on those really short term action. But if we go back to that four hour chart, we can execution.

Everything was identical, right?

Execution identical. And we can also see the importance of understanding our levels because that's really it. It's garbage in, garbage out. When you have poor levels, you're trading off of pretty much nothing. You're trading off of noise. You need to make sure that what you're trading off of is a key inflection point on the market or on your stock. Right. So we can very clearly see. Look at this. 950 on Netflix. These are four. This is a four hour chart. Yeah. It's not just a two minute chart.

Exactly.

Major lows. 950 on Netflix. Failing under it. Retesting it.

Retesting it right here. Rejecting it. That is right there. A break, retest and rejection. And if I would have caught this whole move, obviously it would have been an even more massive trade. Right. This ended up going down to $800 per share. Right. So almost 150 point move on that break and retest. So that was a great example of a longer term trade. A longer term in a swing trade. Break and retest. Yeah. Quite, quite nice. The next one we can go into like a. I actually have a live trade that we can share. All right. So the next trade I want to go over is a little bit more realistic of a amount that I'm putting in it and a more short term trade. Right. This is my typical size and a More, you know, short term scalp, you can see, put about 30,000 in this trade and pull that about 20%. Now the reason that I would say the ROI percentage is sometimes skewed with the break and retest, at least how I trade it is because my first scale off is a pretty heavy amount. Right. And like we talked about, I'm taking at least half off on that first scale out to again reduce risk. Right. Take some cash flow out of the trade. And if the trade does reverse on me, I've done this long enough to realize that, you know, of course in the heat of the moment you want that thing to keep going, but there's plenty of times that it's going to reverse back on us. And why just accept a full loss at that point when you're at your first target, I'm always going to take a pretty decent chunk off the table and to make sure to reduce some risk. So these contracts went from $2 up to around 357, which is a pretty big move. But you know, I netted around 18%. And this was again just a break and retest long. And I want to go ahead and show you guys exactly how this played out on Palantir. So on the charts you guys can see that this is the Palantir two minute chart. And I'm going to go ahead and gray out the after hours similar to what we talked about. That after hours is important. Right. So we gray out that after hours there for us to see. Now so what do we have here that's identical to what we just talked about on the whiteboard? We have a very clear pre market high. Yeah, right. We just talked about how we're always looking at that pre market high or that previous day high to give us an inflection point for the, for the move intraday. And what we can see is that Palantir had a beautiful morning drive straight above the pre market high at $100. Now, like we talked about, are we looking to chase that move through the breakout of the pre market high? No. Right. We're not interested in chasing this move here. This is not where our money's made. Of course, you know, pretty nice. Straight up. Great. Not interested. What am I looking for? I'm waiting for us to come back down, stop out those traders that chase that breakout long. Right. And come back down into the retest. Right. And we can see that it came right back down. Right back down into that pre market high.

Yeah.

Which is that $100 level. And we created a beautiful bull flag on the break and retest of that pre market high. Right, right here we have that flagging action.

We're coming back down, trading back lower and we enter our right, our battle zone. This is where we need to start to really pay attention. We didn't trade the breakout, we didn't chase a breakout, we didn't get stopped out because of a pullback. Right. We're not getting involved in this FOMO type environment. We're waiting for the structured pullback to our clear inflection point which was our pre market high. We start to watch price action. Right here we get a nice confirmation candle to the upside. And right here we get a nice break of our flagging move. Right, right here we get a nice break of that flag and we now have structure. Right. We're putting our stop loss below that 100 level and we're looking to target the upside continuation first. Upside continuation, typically around that one to one. They're right. Taking some profits and letting things run. I actually have this trade recorded live and I can pull it up for you guys to watch. You can see our ultimate target was here at 104, which we did ultimately actually hold this entire trade up into 104. And so if I go into my tradezilla, we can see here that my last exit on this trade was around 1046, 1053 and ultimately taking some off later as it started to go against me. So scaling out into 1046, 1053, that being right around here, 1046, 1053 level, level to level. So beautiful trade.

On average, do you find that the first scale off is on a 1 to 1 on average?

Yeah, I would say so. And I think it does hold me back at times. It really does. But I do like to be on the side of caution. Right. Something that I very. Right. I mean, well, it's just. Yeah. I just. Something that very rarely happen or something I never want to encounter is a major loss.

Yeah.

Right. So I'm okay, I'm okay off, I'm okay giving away gains if that means I'm going to lose less. Of course, if you've done this long enough. I'm 30 years old. There's, you know, I'm balding, I got receding hairline. Right. I've been around and I. I've gone through some nasty losses. Right. And for me it's about minimizing that loss. Right. And if, if I got to scale out at a 1 to 1 to make sure that I'm taking some risk off and letting things Run to my ultimate target. I'm okay with that. Right. For me, that's my personality and I'm comfortable doing that. There is, there definitely does require. Right. Doing that type of, or having that type of mindset does require to be very accurate at times. Right. Because if you're taking that risk off at one to one and you're not getting the runner, it does require a higher win rate to be profitable. Right?

Yeah.

Right. So if you're not getting really strong risk reward to be profitable, the only other way is to be more accurate. Right. So I have been able to be accurate more than 51% of the time because we've, you know, as we've talked about, the strategy really is shows up and you just have to really follow it exactly. Yeah. So, you know, there's some, there's, there's pros and cons, just like we talked about. There's some pros, there's some cons. It's not perfect. You know, nothing is perfect in the market. But this is what works for me. And really the reason this works so well for me is because, I mean you could probably see from the passion and the excitement when I see these, I mean I just know, know exactly what it is, what you're looking for every single day. Like not bringing in a whole lot of noise into exactly the, the setup. You're looking for 100. So that's the second example. So the last example we have today is actually a trade that I have live for you guys. We can play the recording and watch how I actually executed this one live. A trade that I sort of wish I had back. Got a little bit too aggressive scaling out. Okay. But I remember actually taking this trade. I was a little bit low on buying power on the day. I did some trading before it started to run out of buying power. So I took this one light and I actually used this and I actually used this trade as somewhat of a good example for a smaller sized account, smaller size trade and what I would typically do to scale out if I had some, you know, beginning beginner size trading account. Right. And so this is the SPX and we went ahead and we long the SPX. We took five contracts, which is a pretty comfortable size, but about $12,000 in the trade and pulled about an ROI of 12%. Now the entry was around 24, with my last exit around 29. That was the, you know, from first entry to last exit. Right. So did some scaling at 27, did some scaling at 29. Now I want to show you why Did I take this trade on the S and P? Why did I trade spx which. So if I see a trade on the s and P500 futures that I really like, I'll go and trade the SPX to still trade the options contracts. Again, this working beautifully for futures as well. The strategy can work on both. So we can see here we have a very clear once again, pre market high. Right? Pre market high, very clear rejection, 5250. You can see I have this marked out on TOS a Wednesday low. So the Wednesday of that week we also had a clear low at that 5250. So we had two confluences at that level. Now you can see when we zoom into the two minute chart, we see a very clear morning rejection of that level right here. Morning rejection. We wake up, market opens, we reject that level. So no trade. Right. Rejecting our pre market high. Not interested.

Yeah.

What are we interested in? We need the break. Right? First criteria. Break. Okay, what did we get? We got a beautiful straight up move, straight through the break. Beautiful move over 52.50. Now if you're trading and now if you're chasing zero DTE SPX on a candle like this and you get this move against you, you are screwed. Right? You cannot allow this type of chase to come in. You cannot allow yourself to trade a zero DT SPX contract chasing a almost. What is that, a 15, 16 point move on the ES. Right? You are basically buying the total expansion of that options contract. And any move lower is just going to, I mean I would assume just to guess that's about a 40% loss just right there. Right? So again, who's going to hold through a 40% loss? If you're not comfortable with what you're doing, you're going to exit that trade. It's just fear, emotion, not knowing what's going on. Right. And so again, just a great example of how you cannot chase that breakout. What do we wait for? Oh shit moment again. Right, here we go. We're coming back down to our retest level. Yeah, right. Again, the pre market high, the Wednesday low. What do we get? Look at that candle right there. Right? The first sign of some buying. Stepping up off our retest level. What do we also get? We get our flagging action, right? Same exact thing we talked about on the whiteboard. Break. Retest. Yeah, right. Pulling back, nice candle, right? Risk. I actually entered this trade right here on the break of that. Right. So here's your risk, my reward again, likely, right. About a one to one. I took Some profits off into that. And then scaled as we got our push again. Break, retest. Here's our battle zone. We get paid to learn what happens here. We take our entry. We have our risk. Everything is quantified. Yeah, right. And we can see. We got. So we can see we got a nice move on this trade. And ultimately. Right. The thing that pains me is if I zoom out, we can see how far this ramp. Right. Just. I mean, think about taking that trade and letting the least a contract run here. And just again, right. If we. Remember we talked about how we can use the next high to look at the retest. Yeah, look at this. That high draw at our zone. Look at that. Right there's your high. Retest, hold, retest, hold there as well. Yep. And you have a. Exactly right. Look at that. What a beautiful day this is. Look at that. I mean, just, just basically just art. That's just art. All right, here's your high. Here's your high. Here's your low. Still holding. Break, retest long. Over and over again. Look how perfect that market structure was on that day. So just incredible. If you can just focus on this and avoid the noise. And hey, it has to be a break and retest of 5,000, 250 today. That's the only way I'm trading. If it's not doing that, I need to figure out a way to unplug my mouse and just step away, step away. Right. So we can quickly. Just. Just quickly. I'll show you guys a example of this actually live. Right. And you can see how I execute this trade. So let's go ahead and go back to this and we can watch this together. And you can see we're pulling back right to that retest level. Yeah, you take that off the screen. I just entered right there. So that was my entry. So just entered the trade. And now we're putting our stop loss below 5250. And we're going to maintain that trade. Right. Unfortunately, I think I have it cut off here. I have mstr Netflix on the. I don't have it recorded, but you can see right here there's another example of.

Yeah, you pulled it up.

Yeah, you can see it pulled up. So right there I take some off. So there's my first sell. Taking some off. Obviously I've had this a little cut up just for this example. And we can see we get that big push and then, you know, from there I'm scaling out.

Yeah.

But there's like a live little example of. Right.

Right there.

Yeah.

Is where I take that trade. I wish I could. There you go, right there. So bought five right there. And you can see where the. Where the chart is at this moment. Exact same as that break and retest of that 5250 love that I saw.

On the whiteboard there.

Yeah, the whiteboard in the background. Yeah. Right. Yeah. Find your NTZ right on the whiteboard.

Yep. Vincent, man, this is an incredible breakdown. If anything, I was just reflecting once we were just going through those trades there. How you know, some traders look down on breaking, retest. Yeah, I think it's too simple.

Yeah.

Can't work.

Yep.

Close to a million dollars so far.

Yeah.

Just using break and retest.

Phenomenal.

Phenomenal breakdown.

Thank you for that.

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