0:01 Here's the deal. Today, I'm going to
0:03 show you a trading strategy that I would
0:05 use right now in this market. If I
0:08 wanted to start making $1,000 every
0:10 single day, even if I was starting out
0:12 with zero experience or I had nothing
0:15 but frustration to show for my efforts,
0:17 this right here would be the strategy I
0:19 would go to right now. Now, for a lot of
0:21 you, you're probably thinking, "Man, a
0:23 strategy like that with that type of
0:26 performance, it's got to be complicated.
0:28 I'm going to have to spend years trying
0:30 to master this thing." Guess what? You
0:32 don't have to do any of this because not
0:34 only has this strategy helped me become
0:37 a 7figure trader, I've had the benefit
0:39 of teaching this to so many people from
0:41 around the world. Many people who
0:42 started with zero experience, many
0:44 people who had blown through accounts
0:46 and had nothing but frustration to show
0:48 for their efforts. I've seen these
0:50 people flip the script and become
0:52 [music] successful traders using this
0:54 strategy. Now, the strategy I want to
0:55 talk to you guys about today is called
0:58 the box theory. And I truly believe this
1:00 is the most simplistic yet effective
1:02 trading strategy you're ever going to
1:04 see. In fact, since I started posting on
1:07 this channel about the box theory over a
1:09 year and a half ago, it has become
1:11 [music] one of the most widely viewed
1:14 trading strategies on the internet. And
1:16 don't take my word for it. Just read the
1:19 comments. Nothing but simple, stupid,
1:21 and effective. So today, what I'm going
1:23 to do is show you everything that I've
1:25 learned about this box theory over a two
1:26 decade trading career. And I'm going to
1:28 share with you today many things that I
1:31 have not shared in the past videos. And
1:33 as always, towards the end of the video,
1:35 I'm going to show you a series of live
1:37 trades using nothing but this box,
1:39 putting those final pieces of the puzzle
1:40 together for you. That way, when this
1:42 video is over, you can honestly look at
1:45 yourself and say, "Man, this thing is
1:48 stupid simple and effective." So, let's
1:51 go ahead and get started today.
1:52 So, here's where we need to start out
1:54 with the box today. First and foremost,
1:56 we need to make sure that the box is
1:58 drawn correctly. Otherwise, all the
2:00 data, all the analysis that you get is
2:02 going to be slightly off. And nobody
2:04 wants to be slightly off. Now, the basic
2:06 premise that goes behind the box is a
2:08 very simple one. Where we want to start
2:11 is by connecting the previous day's high
2:14 price point with the previous day's low
2:16 price point. And let me show you a
2:17 couple of ways to do that. Starting with
2:20 the most simplistic, take whatever chart
2:21 you are trading. So, for today's
2:23 example, I'll be using the stock Apple,
2:26 APL. But I don't care what's up here.
2:28 Could be anything. But what does matter
2:30 is take that asset you're trading, move
2:33 it over to a daily chart. Once you've
2:35 done that, all you need to do from there
2:36 is grab yourself some sort of drawing
2:39 tool like Trading View has a box tool
2:41 already. Go to the very highest price
2:43 point. Highest price point meaning the
2:44 highest point you can see with your
2:47 eyes, wick included, and connect that
2:49 with the lowest price point. Just like
2:51 that. And that creates the essence of
2:54 your box. Now once you have done that,
2:56 you can grab some sort of line or other
2:59 drawing tool and put a line right in the
3:01 center of that box. Now it doesn't have
3:02 to be perfect. Just you know eyeball it.
3:04 Whatever is close just like that.
3:05 Doesn't even have to be a clean looking
3:07 box. Just so you get that box drawn.
3:09 Previous days high, previous days low
3:12 line in the middle. Now after this you
3:14 can switch to a smaller time frame that
3:16 you like. So, for example, today I'll be
3:19 using my favorite time frame, which is a
3:21 five minute, but it doesn't matter what
3:22 you're on. That's the beauty of the box.
3:24 It'll work on a 1 minute, 5 minute, 1
3:26 hour, 30 minutes. It doesn't matter
3:28 because the analysis is always going to
3:30 be the same. Now, once this box has been
3:31 drawn, we can now talk about the
3:34 relevance and what this box means. And
3:36 the box has three main components to it.
3:39 The top part, the bottom part, and the
3:40 center part. And let's go over what each
3:42 one means. Starting with the very top
3:45 part of this box. The very top part of
3:48 the box represents the strongest
3:51 sellside force. Hence the reason why the
3:54 asset had rejected from that price and
3:56 sold off aggressively. So easy in
3:59 layman's terms. The largest, strongest,
4:02 most powerful well-funded seller is
4:05 located up here towards the top of the
4:07 box. The very bottom of the box
4:10 represents the strongest buyside force
4:13 or liquidity. Right? Hence the reason
4:15 why the stock bounced from there. So the
4:18 very top parts of the box represent the
4:20 strongest seller. The bottom part of the
4:23 box represents the strongest buyer. And
4:25 the center of the chart right here
4:28 represents nothing at all. It's just
4:32 noise, confusion, and indecision. Okay,
4:34 that's the essence of the box. So real
4:36 quickly, at the top of the box,
4:39 strongest seller, bottom of the box,
4:42 strongest buyer. center of the box.
4:44 Nothing. Okay. Now, with this
4:47 information, we can move on to how do
4:50 you actually generate a trade from this.
4:51 And this is what I love so much about
4:53 the box. This is what so many other
4:55 people love about the box, and that's
4:57 its simplicity. Because there's only
4:59 three basic rules to getting this thing
5:00 right. And here they are, beginning with
5:03 rule number one. If the asset that you
5:06 are trading is close to, at, or above
5:08 the top of the box, don't buy it. That's
5:11 it. just don't buy it at that moment in
5:14 time. And the reason for that is what
5:16 the top of that box represents the
5:20 strongest most wellfunded sellside
5:23 dominance. So ask yourself a very simple
5:26 question. Why would you want to buy into
5:29 a known area that the majority of the
5:31 market can clearly see? A seller that
5:33 has announced their intentions. Why
5:35 would you want to walk into the lion's
5:38 den and go head-to-head against a known
5:40 large seller? You're going to get
5:43 cheesed every time. Rule number two, if
5:45 the asset you're trading is close to at
5:49 or below the bottom of the box, don't
5:52 sell it. Simple, right? Just don't sell
5:54 it for the same reasons you wouldn't buy
5:58 at the top. The known largest collective
6:01 of buyside wellfunded power is located
6:02 down there. Again, ask yourself the
6:04 question, why do you want to go into the
6:07 lion's den? Why do you want to position
6:10 yourself to the sell side, right next to
6:12 the largest, most wellfunded and
6:15 transparent buyer? You're going to get
6:17 cheese down there, too. Rule number
6:19 three is the center line. This is what
6:22 we call do not didd in the middle. And
6:25 it's self-explanatory. Just simply don't
6:27 trade there. Just don't do it. And
6:30 here's why. Because at the top of this
6:33 chart, you know, odds are it's going to
6:36 be sold. There's probably an 80%
6:39 probability that that strong seller will
6:42 return. At the bottom of the chart,
6:44 there's probably an 80% probability that
6:47 the buyer will in fact return. These are
6:49 known data points for the market. In the
6:52 center, you don't have that information.
6:54 So, if you think of it this way, it's
6:56 possible if done right, you could have a
6:58 70 to 80% win rate at the top of the
7:01 box, a 70 to 80% weight at the bottom of
7:04 the box, but 50/50 in the middle. You're
7:06 going to get confusing, whipsolled, poor
7:08 action, and the risk and reward is not
7:10 in your favor. Now, I know a lot of you
7:11 that are watching this that have a tiny
7:13 bit of trading experience is going, you
7:15 know what? I've seen some of these
7:16 stocks just shoot right up through the
7:18 box. I've seen a bunch of these just go
7:20 right down, just blow through the box.
7:21 What do I do then? I've seen these
7:23 things hang around the middle and just
7:24 move all over and it just take off up or
7:27 down. You know what? I've seen a monkey
7:29 ride a bicycle before. But you know what
7:31 I haven't seen? I haven't seen a lot of
7:34 monkeys riding a bicycle. The key to
7:36 being a successful professional trader
7:38 is trading probabilities, not
7:41 perfection. And over the course of time,
7:43 you've got to go with what is most
7:45 likely outcome in every scenario. >> [snorts]
7:45 >> [snorts]
7:47 >> And if you're always selling with the
7:50 big seller and always buying with the
7:53 big buyer and blocking yourself out from
7:56 the garbage little breadcrumb scalping,
7:58 you're going to go a long way in this
8:00 trading business. Nothing will ever be
8:02 perfect, but you're going to be a winner
8:04 more than you are a loser. Now, this is
8:06 all great the way I'm talking it up, but
8:09 how about we put this theory to the test
8:10 by showing you some real life trades so
8:12 you'll learn to trust the power of the
8:15 box. So, let's go back to our Apple
8:16 chart. You'll see our box is still
8:19 drawn. And I want to move to the
8:21 previous days open right here and focus
8:24 on the very first candle. I'm going to
8:25 give you a quiz. This should be a layup
8:28 for everyone. But tell me, your hands
8:30 are tied behind your back. You're forced
8:32 to make a trade. Based off the
8:34 information you've collected in this
8:36 video, what would you do here? Buy or
8:40 sell? Now, hopefully you said sell
8:43 because the price of Apple is close to
8:46 the top of that box. Now, you might have
8:48 been hesitant about saying that because
8:50 you see this big green candle and it
8:52 looks like that's going to be a
8:54 breakout, right? That's the trap. It
8:56 looks like it's going to be a breakout.
8:59 What kind of fool would short a bar that
9:00 looks like that or sell it? Why would
9:02 you sell something like that? Well, I'll
9:03 tell you why you would sell something.
9:06 because we know the largest, most
9:09 well-funded known seller is located
9:12 there. And what happens? Couple of bars
9:15 forward and look smoked. You will get
9:17 cheesed every time walking into it. And
9:19 for some of you, you've had this very
9:22 feeling. And I have too. Now, let me
9:25 give you quiz number two here. Where is
9:29 it now? You see it here. Is it closer to
9:30 the bottom of the box or the top of the
9:34 box? The bottom. So, what should you be
9:36 thinking again? Hands tied behind your
9:37 back, forced to make a trade. What
9:40 button do you hit? Buy button, sell
9:43 button. It's the buy button. And just
9:45 like the previous candle, I know that
9:47 didn't look like a sell, but it was. And
9:50 I know this doesn't look like a buy, but
9:53 I bet that it is. Why? Because you're
9:55 now bordering the strongest, most
9:58 well-funded, and known transparent
10:00 buyer. So, if I just kind of fast
10:02 forward this a little bit right here,
10:04 you're going to see that's exactly what
10:06 happens. It tags the very bottom of that
10:08 box and finds a way to move back up into
10:10 the center of that range. So, again,
10:12 just look at it. You traded from the
10:15 very top part of the box. The known
10:17 seller came back into the market. You
10:20 tested the bottom of the box and it came
10:23 right back into the known buyer and then
10:25 bounces back up. The key to learning
10:27 this and starting with the very best and
10:30 most powerful part of the box is it's
10:33 also a way to keep you out of trouble to
10:35 keep you from walking into the market's
10:37 traps. Now, a lot of you might say,
10:39 "Well, look, you're cherry-picking some
10:41 charts. This doesn't work all the time
10:43 or it only works in a certain market."
10:45 But let me go ahead and show you what
10:47 the next day's action looks like. So, I
10:49 went ahead and jump forward to save time
10:50 into the next day's action. And what
10:52 we're going to do is just scoot our box
10:55 over here. Right? And for that day, we
10:58 had just a little bit lower price print
11:00 right there. So that is our new drawn
11:02 box. So again, I want to go back and I
11:04 want to just cover the basics. Remember,
11:07 keep it simple. So here it is. Apple is
11:11 opening up. You tell me where it is. Is
11:13 it at the top or is it the bottom? It's
11:17 at the bottom. Again, I know this looks
11:20 bearish. It looks like a sell. It looks
11:23 like it's going to collapse. But by now,
11:26 you should know the rules. You tell me
11:28 again. Hands behind your back. You got
11:30 to make a trade right now. Buy button,
11:33 sell button. Which is it? Hopefully by
11:35 now you said buy. If you didn't, you're
11:37 going to have to rewind the video. What
11:40 do you think happens here? Right. Goes
11:42 right back up through the top of the
11:44 box. Now notice though when you get to
11:47 the top of the box even though you
11:50 extended slightly what happened it was
11:53 never able to hold that momentum over
11:55 top of the box. So again you can see
11:58 span through several days of activity
12:01 it's always managed to test the very top
12:03 of the box and the bottom of the box so
12:06 quickly as prices get towards the top of
12:10 the box we are sell side focused bottom
12:13 of the box we are buy side focused. in
12:15 the middle. We should do our best to
12:17 stay out of that because our accuracy
12:20 isn't going to be as good. So, now we're
12:21 going to move on to the next part of
12:23 drawing boxes, which is alternative
12:25 boxes. You're going to need to know this
12:27 because I'm sure some of you have this
12:29 question right now. What do you do in
12:31 those cases when price breaks the box?
12:33 When you wake up and the price is way,
12:36 way above the previous day's high or way
12:37 below the previous day's low. So, I'm
12:38 going to show you a couple of ways to
12:40 draw some alternative boxes. That way,
12:42 you can still continue to use the box
12:44 theory. Starting with gap up and gap
12:46 downs and how we draw these alternative
12:48 boxes. Now to save time, I went ahead
12:50 and drew the box from the previous day
12:51 connecting the previous day's high with
12:54 the previous day's low. I moved that box
12:56 into the regular session. And as you can
12:59 see now, the ES is trading far above the
13:02 previous day's high. In this case, we
13:05 need to create new levels and new boxes.
13:07 And here's how you do that. When in
13:10 doubt, the cheat code for the box is at
13:12 any given time, you can always connect
13:15 the very highest price point you see
13:17 with the lowest price point you see.
13:19 That would be right here with the lowest
13:21 price point you see. And that creates
13:24 your alternative box. So whether it's at
13:25 the beginning of the day, the middle of
13:26 the day, the end of the day, you can
13:28 always create, let's call it, cheater
13:31 box and use those levels. And here's why
13:33 this is so beautiful. Continuing to
13:35 hammer home the power of the box theory.
13:38 Because regardless of where that box has
13:41 been drawn, the three rules still
13:44 remain. You are a seller at the top, a
13:45 buyer at the bottom, and you're not
13:48 trading in the middle. So, having known
13:50 this information, going as far as we
13:52 have with this video, while this has
13:55 gapped up and it's looks stupid,
13:57 what do you think is the odds play here?
13:59 You got to push a button. Is it a buy
14:01 button? Is it a sell button? You tell
14:04 me. I hope you said sell because what
14:07 happens is down it goes. Right. And
14:09 there it is. Right. Moves down towards
14:12 the very base of that box. So here's
14:13 what I want to show you though that you
14:15 probably don't see too many times on
14:17 YouTube videos, but this is very very
14:20 important. This goes in in in tandem
14:22 with understanding and believing your
14:23 technical analysis and understanding the
14:25 strategy. First and foremost, just like
14:27 the rest of them, it didn't look like a
14:29 sell when it was supposed to be a sell.
14:31 It doesn't look like a buy when it's
14:33 supposed to be a buy. But notice on this
14:35 one, it tapped the box and this sneaky
14:37 little thing tried to come back up
14:39 there. Just try to throw that last
14:42 little shade of doubt into the trader's
14:44 head. Then it eventually cracks. It
14:47 eventually cracks and rolls over because
14:51 the largest seller was always there. and
14:53 that largest seller would always win out
14:55 as the all as the buyer would always win
14:57 out. Now, what we're going to do at this
14:58 point is I'm going to show you a couple
15:01 of live trades using nothing but this
15:04 box theory in its simplistic form, which
15:06 is selling at the top of the box, buying
15:08 at the bottom of the box, and staying
15:10 out of the middle. These are recent
15:12 trades we took in our live community
15:14 that we're running every day. And as I
15:17 said, 26 years into this game, I'm still
15:19 using the box theory every day. So,
15:20 let's take a look at a couple of those
15:22 trades. Now, as we go through these live
15:23 trades that we made in the community,
15:25 I'm going to pick these things apart,
15:27 but I just want you to simplify your
15:30 focus and think about those three rules.
15:33 We are sellers at the top of the box. We
15:34 are buyers at the bottom of the box. And
15:36 we're just not going to doodle in the
15:37 middle, right? Let's just keep it
15:39 simple. No indicators, no fancy
15:41 candlesticks, no jargon. Let's just keep
15:43 it stupid simple. So, let's go through
15:45 this YM trade. First and foremost,
15:47 drawing the box. So what we do is we
15:49 connect the previous day's high with the
15:52 previous day's low and we extend that
15:55 out right towards the market open.
15:58 Right? Very simple. Now knowing what you
16:00 know up to this point in this video, it
16:03 should be a slam dunk easy peasy answer.
16:05 What do you do here? What do you do
16:07 here? I mean look where it's at. It's at
16:09 the bottom of the box. So while it may
16:13 look like a market crash, a super dump,
16:16 this is a buy. It's a buy because you
16:18 are against a known buyer. And let me
16:21 show you what I mean by known. If we go
16:23 back and we take a look at this chart,
16:27 this buyer was tested once, twice, three
16:31 times, four times, and now a fifth time.
16:34 So, are you going to tell me that on the
16:36 fifth time the buyer is just not going
16:38 to show back up? They've been tested.
16:40 They've been proven. You're at the
16:42 bottom of the box. So, let's go ahead
16:44 and open this up and let's see what
16:46 happens. Now, as I play this forward,
16:48 I'm just going to go one more bar
16:50 forward and you'll see we start out with
16:52 this very, very nice green. Now, this is
16:54 not an entry class or every little
16:56 minute detail. But in this case, all I
16:58 look for is just one little line of
17:00 support and that's enough to go in
17:02 because as I said in so many of my other
17:04 videos, especially like the unsharp, the
17:06 earlier you can get in with the signal,
17:08 the less your risk is. So the beautiful
17:10 thing about the box is a stop loss goes
17:13 right underneath of the low. So the ones
17:16 that you do lose on the 15 the 20% that
17:19 you lose on the losses are going to be
17:22 so much smaller. But here's the beauty.
17:25 The risk versus reward is nuts because
17:28 the target price is either the center or
17:30 the middle of the box. So everything
17:33 that you are trading has maximum range.
17:35 So if we kind of move this forward,
17:37 you'll see what happens is it shoots
17:40 right up into that level, right? And
17:43 gets rejected. Now take a look at the
17:46 rejection. Where did it come from? It
17:50 came towards the top of the box. Now
17:51 this one was a little shy of the top,
17:53 but as you get towards the top of the
17:56 box, the philosophy here is you can't
17:58 start buying on this candle. You have to
18:01 buy on this candle bare minimum that one
18:04 at the latest. You cannot start chasing
18:05 into those momentum like mo most
18:08 strategies do. Now that we have gone
18:11 lower, what is most likely going to
18:12 happen? Now, I'm going to go ahead and
18:14 hit the sell button because that's what
18:15 you should be doing here. You should be
18:18 looking to sell a position like that off
18:21 of the top. Now, in this case, the fill
18:22 on this platform is going to be way
18:25 later. It should have been right there
18:27 at the break of that candle. Stop loss
18:29 should be over top of the high of that
18:31 candle. target price is moving back
18:34 towards the bottom of the box. Okay.
18:35 Now, this is a little bit late of a
18:37 fill, so it won't be 100% accurate, but
18:39 you'll get the message because what
18:41 happens is you come back down towards
18:44 the bottom of the box. Right now, if we
18:47 stop right here where we are, and I just
18:52 continue to move this box out, where are
18:55 we? We're now slightly below. Now, one
18:57 thing to understand about the tops and
18:58 the bottoms is we're just talking about
19:01 zones. As we get close to, our mind
19:03 should shift to selling. As we get close
19:06 to, our mind should shift to buying. So,
19:08 what we're looking for in this case is a
19:11 buy because we are underneath the box.
19:13 Now, we do need the candle signal just
19:15 to take out the top. So, let's go move
19:17 it forward and see what happens. And you
19:19 kind of move up. Right there is good
19:21 enough. We're going to go ahead and hit
19:24 the buy button again. It's almost the
19:26 same trade as it was before. targeting
19:28 back towards the middle of the range or
19:31 even higher, right? And you'll see what
19:33 happens is it comes back up again,
19:36 right? But notice the pattern over and
19:39 over again. Testing the biggest seller,
19:42 testing the biggest buyer, returning to
19:44 the center of the charts. It constantly
19:47 has this momentum over and over and over
19:49 again. And you can see using no other
19:51 candlesticks, no other theories, no
19:54 things that take you 19 million hours to
19:57 figure it out, you can actually put some
20:00 pretty damn good trades together. You
20:03 will be pretty consistent by using this
20:06 type of a formula and just those three
20:07 rules. So guys, I'm going to end the
20:09 video there. It's been my pleasure to
20:10 talk about my favorite trading strategy,
20:12 which is the box theory. I hope you can
20:15 agree with so many others that this is
20:17 the stupid simple strategy of a
20:19 lifetime. And if you just follow those
20:21 three basic principles of being a seller
20:23 towards the top, a buyer towards the
20:25 bottom, and staying out of the middle,
20:27 you should be able to put together some
20:30 very nice quality trades. Now, one last
20:32 thing I want to remind you of before I
20:34 sign off is if you want to see these
20:36 types of trades in real time, every day
20:39 we trade live in our new squad trading
20:41 room. My wife and I just put this thing
20:42 together. We've had a great time trading
20:44 live. We're going to continue to do this
20:45 in front of everybody. So, if you're
20:47 looking for a more tailored experience
20:49 where you get exactly what you see on
20:52 this screen, live navigation, live
20:55 trading on screen with narration every
20:57 day. No Discord hindsight stuff. Just
21:00 real life, real world stuff. Click the
21:02 link below or follow the link below in
21:03 the description box. That'll take you to
21:06 our squad. So, on that note, guys, it's
