The Higher Time Frame Technical Trading Strategy (revealed)

In this video, the Higher Time Frame Technical Trading Strategy is revealed.

A firm prop trader breaks down his real-time Higher Time Frame Technical Trading Strategy with his live exits and entries.

Let’s get to work on sharing these important trading lessons so you can grow your trading account.

View Video Transcript
in this video the higher time frame
technical trading strategy
is revealed hi i’m mike bellafiore
co-founder of smb capital and we’re a
proprietary trading firm located in
midtown manhattan
and i’m also the author of the trading
classic one good trade and the playbook
in this video
a firm prop trader breaks down his
higher time frame technical trading
with his live exits and entries let’s
get to work on sharing these important
trading lessons
so you can grow your trading account
this is a higher time frame breakout in
nvidia this was done back to the 8th of
um and the intraday pattern i use is
what i call a pull-up pattern which i’ll
go in depth about
but just kind of looking at where you
can spot inflection points
um to capture some of these larger term
traits and big picture ideas
so the trade criteria starting off um
i’m solely looking at higher time frame
and stocks near important higher time
frame technical levels
i need to see elevated arvol with all my
trades i want the price action be clean
tim if i could just jump in so of course
why are you only looking at higher time
frame trades and that is not an
that that is that is uh not to say that
that is uh
the wrong thing to do i’m curious as to
why you do that and the significance of
that for your trading
yeah so starting off um kind of like
tested a lot of different setups
to see what i was good at and look at my
stats and then
boiled it down when i looked at my
trader view stats
and the type of trades that were the
most successful for me
uh it all stemmed back to these higher
time frame ideas
where i’ll go in depth also about it in
the next slide
and i want to jump in here and just make
the point so
i actually did an interview with
somebody who i really liked
and i was really hoping would
uh jump to the top of the the queue
uh or the leaderboard or the
the prospect board for those that we
uh looking to hire and this was a person
who was coming in
uh as as a sort of in-between not not
somebody new
not somebody fully experienced with a
three-year track record
somebody with about a year of a track
and i was really pulling for this person
very likable person
had known him actually in the past
contacts with him from following sme
we have two companies their main company
is sme capital our prop firm
but we have our education company sme
training and had known him through there
and he had
taken some of our training and that was
taking that next step
to apply to the firm after having
trading markets i actually think he made
six hundred thousand last year in net p
l and trading piano and and was
interviewing to to the firm and
one of the things that
and i hope he reapplies after my
feedback to him but one of the things
that caused us to pass
for now on him was that he was not
tagging and measuring his trades
and to me the
the what i see is going to happen with
his trading
uh is that when the market changes
like it’s done the last couple of weeks
he’s really going to struggle
he’s going to really draw down and he’s
not going to necessarily know
why and he’s going to draw down too much
and you know we’re in the we’re in the
business of
building really big traders we’re not
here to build
people who make a hundred thousand
dollars and there’s nothing wrong with
that that’s still a terrific
living it’s just that’s just not the
business model we’re in we’re into
building seven figure and eight figure
that’s the work that excites us um
and look if you try as hard as you can
you know you only become a six hundred
thousand dollar a year trader or eight
hundred thousand dollar year trader
that’s you know that’s great you’re
always going to have
a home for us but if you’re not doing
all the things that you should be doing
like tagging your trades understanding
what your strengths are
then you can’t get as big as you want to
be you’re going to draw down too much
you’re going to take trades you
shouldn’t be taking you’re going to
frustrate yourself needlessly
by not doing well in
in those trades that don’t measure well
for you
and you’re not gonna reach your
potential if you’re gonna do something
you might as well do it
well and so you know our culture here is
you know you don’t need to become a
seven figure trader you don’t need to
become an eight-figure trader but
you need to become your best trader we
need to see that from you
and we need to see that every step along
the way so i love
what you said which is you have found
your niche looking for certain types of
and you have found your niche based on
based on tagging and measuring your
trades based on your statistics
you didn’t just sort of sit around
talking with a bunch of buddies
after the close and say oh you know what
i should
trade longer term technical setups now
had proof to show why you should uh
super important and so and that is
something that’s gonna
differentiate the people who get invited
to join our firm
and that’s gonna be something that is
gonna help you
become your best trader sorry to jump in
there but i thought that anecdote
was spot on to what you actually just
said with your own trading
no yeah that was perfect and i will add
to with the tag in your trades it really
was an ongoing process where
having those stats help you see like
maybe some problem areas
and then you have those stats to align
with your personality where i didn’t
like first come to higher time frame
the first time i looked at my stats but
it was like an ongoing
process of just improving certain areas
and then basically aligning that with
what would work best for me and then
i would say it was about november
which is multiple months of just
improving until i
went to the higher time for breakouts um
but yeah
going forward with it as well i wanted
to see
the stock showing relative strength
within the sector so not enough that
just the sector’s showing relative
strength but the stock that i’m choosing
i want it to be one of the strongest
um for that day and then a
way i would get more risk on is if any
one of those areas
is showing exceptional strength if you
want to learn
three more real world setups that our
traders use including the simple setup
that we teach
all of our new traders and the setup
that turned one of our traders into a
figure big money earner check out the
free webinar that we’re currently
running just go ahead and click the link
that should be appearing now
at the top right hand corner of your
screen that will open up the free
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don’t worry
you won’t lose this video you can also
visit to register for this
free intensive workshop
you’re going to learn more in a couple
of hours from this trading workshop
than from years of online education
and then the entry criteria for this
intraday pattern
the stock has to make a strong move off
the open which i’m measuring based on
three-fourths of etr and then it has to
pull back to re-test
view up and then also re-test the area
that it broke out from
and then with this i’m not looking to
time the pullback to the bottom tick
but i’m really waiting to see how it
reacts at view up
and if it gets below i want to see it
and i need to see that volume come in
when it does do that
and then i would be risking that
pullback low
and if it just doesn’t go below and it
just holds you up
what i’m waiting for is evidence that
it’s holding volume coming in
and it’s supporting that level and i’m
giving this three tries so
important to risk accordingly and then
the only place i’ll look to add is the
first higher low
after the bounce and then not looking to
add anywhere else because the risk
reward then becomes much less and the
reasons to sell
so with this strategy i’m using a
measured move off of that opening drive
i talked about
and the way i’m going to be taking
profits is small lot sizes
incrementally going into targets and
then above my targets
and then the reasons to get flat is if
the stop hits
um so once this trade starts to work
i’ll be moving my stop up
to important pullback lows in places
where it’s holding higher
um and if the trade is going to work um
and i did my job i should be in it for
most of the day if not the whole day
so a reason to get flat would be a week
which would tell me that i do not want
to hold any of the position overnight
so question one best practice
that people follow or or one trade
that is worth consideration is
whether or not you should be as big
overnight as you were
intraday so if you are thinking of
holding this
trade overnight
are you going to hold as much as you did
intraday because overnight you can’t
control your risk as much
so that’s number one that’s that’s a and
then b
is if the stock
isn’t paying you well intraday should
you hold a lot
overnight those are two
trade decisions that very successful
traders at a minimum make
and for you to think about for your
system yeah i completely agree
um and for me personally with this setup
uh what i would look for at the most
would be holding just a fourth overnight
um because the idea behind this intraday
pattern is i’m looking for an outsized
intraday move um that could have
momentum following through to the
following days
uh but the idea is if it’s an a plus
trade for me
and it’s a trade that does work um it
have a very strong intraday move where i
would be wanting to take profits
intraday as well so usually about a
um and then i just wanted to touch on my
overall like thought process
kind of going off of what we were
talking about with the stats and just
what led to the entire timeframe
breakouts um and i do want to mention
with smb
that we get paired with a mentor and
mine has been significantly helpful
with my overall trading and selectivity
and i’ve adopted some of his principles
that he looks for
in the way he thinks through trades um
and that’s led to a lot of success
and really helped with my selectivity
and patience
yeah going forward with it what i’m
looking for is the first like
step in my process would be it has to be
a higher time frame breakout
like we talked about um so this one’s a
technical breakout
it also could be earnings any other
hourly breakouts but then once i have
i am looking at those a plus variables
those tri trade criteria that i
uh and the most important ones for me
are the clean price action
uh just how it’s trading on the tape as
well as
arvol and then once i have the eight
plus variables
i have about six to seven intraday
patterns i look for
so those are ways where i time the trade
to get those good
risk to reward opportunities i’m able to
control my risk
and that’s the way i identify these
inflection points
and he’s helped the tone with this and
kind of this was
his way he looked at it where if there
wasn’t a higher time frame breakout then
there’s no reason to look for an
intraday pattern if you do have that
breakout but you don’t get a plus
then don’t look for the intraday pattern
and then if you have the higher time
frame breakout with your a plus
what you’re doing is just sitting
patiently and waiting to see if nature
day pattern aligns
and since you know these intro intraday
patterns well when it does align you’re
able to capitalize
uh and put risk on but that’s kind of
basically what i’ve
adopted from him which has been super
helpful and the way i think through all
my trades now
and then big picture uh we’re coming out
of the post
gme like kind of madness i said
but we are still in a very speculative
uh which we’ve seen now has changed uh
the end of march in april
but this is back in february um in the
overall start of the year pretty quiet
uh kind of was grinding higher we just
low volume
and we have not had really any major
catalysts to drive the market itself
since early january so looking at spy
we’re under the previous all-time high
we just had a pullback in the previous
that held and put in a swing low and now
we’re just kind of grinding higher like
you can see
on a little lower volume
then just looking at that on the hourly
so this was that pullback i’m talking
about where
we failed multiple times at 386
pulled back some buyers stepped in 370
and we really did not spend a lot of
time below this 374
level which was important and then
following the pullback we had a couple
of strong days
and then following that we want to
digest the move
and what’s important there is that we
did hold higher and we held above this
then i’m also wanting to look at the
cues uh considering this is a trade in
nvidia so uh tech semiconductor
so this is also sitting right below to
all-time high
uh the previous pullback um held as well
and then it’s a little clear to see on
the hourly
so we failed at 3 30 a couple of times
pulled back
previous support level of 314 we had
some buyers step
in and this held as the pullback low
and we had a little trouble at 3 30
again at that same resistance level but
going into this trade we’re now above
and holding above so that previous
resistance now becomes a support level
which is a good sign for maturity
looking at smh the semiconductor etf as
well because it’s nvidia
a very similar story and it’s
looking ready to make a move for a new
all-time high uh
holding higher um after the pullback as
and then this is just again 234 is an
important level for this stock as well
and we’re holding above
and on the day of the trade um in nvidia
we see that smh also had a strong
opening drive
so as i’m trading nvidia i’m watching
to make sure on this pollen it’s holding
view up
at the same time that nvidia is pulling
so i’m watching it basically every tick
alongside in video
so for the intraday fundamentals this is
no specific
uh company specific catalyst but it’s a
technical breakout catalyst
uh so with looking at that it’s
important to rank the breakout
uh for how important it is and
significant uh and with nvidia i would
say it was a nine out of 10.
this wasn’t a breakout to an all-time
but this is a breakout on a tightening
wedge consolidation
on the daily chart and given the length
of this consolidation
and the volume on the breakout i would
give it a nine
i do want to mention overall with
the backdrop has been very bullish for
starting with the pandemic there’s been
a global shortage in chips
which has led to strength in the
and then the etr for
nvidia is 20.95 uh
average volume 7.1 million at the time
of the trade
the arvol was two and this was not the
our fault right off the open but when i
uh institutional ownership 69
so this is the consolidation i was
talking about so
we started consolidating from last
and you can see it’s tightening which is
what i want to see
and then when i do see this higher time
frame chart
what i’m looking for is on these
pullbacks to the bottom of the wedge
is there increasing volume when it holds
and with nvidia’s case you can see every
time we tested
it had a lot of buyers step in we had
that volume supporting it
and then the last pullback held in the
stock push tire to
550. that’s a little bit unusual there
a textbook pattern usually is you want
the volume to be light
into the pull-in but i think you’re
making a nice distinction there which is
all right well if the volume is heavy
and it holds
well that’s okay too uh yeah kinda i’m
also agreeing with that
so what i was referring to is when we do
have this pullback like i’m just gonna
look at this first one
um to like this area i do look for like
pretty low volume in comparison but when
holds and we start to bounce that’s when
i want to see that increase in volume
so like where i circled this first blue
circle this is
this day and then the gap up the next
so just a little bit of both i would say
and then this is the hourly chart in
um so this is just showing the most
recent pullback to depth a little bit
um and we had 510 515 some buyers
stepped in
to defend these levels and we held and
now you can see
we’re just pushing higher and we’re just
the day prior to this
in another variable that i look for um
it doesn’t mean i wouldn’t take the
trade if it’s not there
uh but a slight gap up is a good sign
for me with this type of trade
and we get that going into the 8th of
and it’s also a good sign the day prior
after a pretty strong move from 5 15
we had a couple days inside days to
digest that move
and without that it makes it a lot
harder for me
to try to take a big picture idea like
this given where it’s come from but when
we consolidate
um it just says to me that there might
be energy
for another move i was just going to
my entry so we’re looking at
nvidia right here which is this smaller
chart unfortunately
but here’s the tape to the right side so
what we’re going to be looking at is
like this 560 area
so we break through 560 off the open
this was the breakout level
and now we’re coming back to view up and
i’m gonna
watch to see how we react and you’re
gonna see with this
uh it takes two tries for me to enter
you’ll just watch the volume that comes
in once it does
and you can tell right now as we are
pulling into view up here
a lot lower volume which is what you
want to see
compared to the open
and with my risk management something i
know i’ve talked about my daily reviews
that i sent to you mike
is the importance for me personally to
make sure i am giving myself enough
tries at the stock
and not risking too much initially where
i wouldn’t be able to put the size on if
it takes a couple tries
all right so right now we’re below 562.
i’m just going to be patient just
watching to see when we do react
at uh view up i could even skip ahead a
okay so we start to hold there
and at this point i’m gonna just wait to
if um we’re gonna start to bounce a
little bit and get above the previous
uh open of the minute candle that five
minute bar
you’re going to see i’m going to enter a
second risking that pullback low
and what i really want to see when we do
start to bounce is that it’s
a clear bounce we have the volume
confirming that for me
and then with this first trade which i’m
going to cut
very quickly we failed at 563
but the most important thing to me as
this volume bar is developing
we don’t have volume support in the
bounce yet so it might take a little
more time
and i take it off
and the idea behind this uh pattern is
that we broke through
560 and if we could hold v up here
we’re holding v up as well as holding
above the breakout level
and i’m in the rush to enter and the way
i trade is i like to have it show me
that it’s ready to go and for me to have
that confirmation rather than trying to
anywhere in here
so i just get in around yeah 562
we start to see more volume coming in i
don’t have it on this screen right here
but i have
uh volume alert basically that tells me
in real time how much volume is coming
in on the current bar compared to the
last 30.
which you can kind of see on this left
and what i’m seeing right now is we’re
just kind of a little
sticky in here where this 562 to 563
we’ve been just kind of trading between
so now we break above that
and you can see the momentum hit the
tape where we move like about
75 cents pretty fast and right now i’m
about to add to my position
so i doubled there still
risking that pullback low
we’re above 564.
yeah that’s a good ad there
thank you yeah definitely um one thing
continually worked on is just when i
have that confirmation and i have the
volume coming in
uh adding there and not even thinking
about taking profits yet
yeah you’re getting more price and
volume confirmation
from your original position which brings
up a trade decision to
add some more size i think that’s a good
decision there
yeah definitely agree thank you
and then with this trade too the idea is
you’re really trying to
find this inflection point and if it was
gonna consolidate here for 20 30 minutes
that’s not what i want
where it should if the trade is there
and it is
an eight plus opportunity like it looks
like it should move away from my entry
price pretty fast
and then i just wanted to show that this
ended up being a trade that i held the
day i could kind of go to where i have
but we see made a new high a day and
had a natural pull in back to 565.
i took off a little bit of size um on
the new high day
but this is about where i end the tape
and what i’m looking for the rest of the
day which i’ll show my trade management
is i’m not looking to add any more but
every time we are getting these pull-ins
i’m just observing if we’re holding
higher levels
so here we’re holding we will be holding
565 so just putting in higher lows
and that’s a confirmation of strength
for me hey tim
if i can go back to something you said
which is super important
which is that you give this more than
one try
yeah how do you go about
deciding on your risk for trade one
trade two
for the amount of trades overall you’re
going to give this
um and how does how do you figure out
if you’re going to give it a couple of
tries then obviously you’re not going to
put on
the max risk on the first trade
so so how does that work for you
so the way i look at it coming into the
day this was my top idea
so i want to say in the pre-market
what i’m willing to risk percent was of
my daily stop
so if i’m willing to risk 25
um let’s say on my daily stop um
if i’m giving it three tries i would
probably want to
do it about five percent each try uh
which still allows me
a couple spots when i have confirmation
to add to get to full size
this is something that i’m continually
working on
where there are some trades that take
more tries
what i’m thinking toward or thinking
back to was the nft names
um some of those were very difficult
traders and even
took six seven eight tries uh but the
idea behind it
is i need to position myself where
in the tries before it works i can’t be
losing an amount that changes my
psychology and mindset
that would lead me to not put enough
size on the real
opportunity or not take it entirely so i
would say
just before the open a risk allocation
for the symbol itself and on this trade
and then to divide it up with how many
childs i think
and then so when you start to see more
of the confirmation
based on price and volume yeah
how do you change your risk allocation
yeah so um like you saw on the table we
did get this bounce
and we had that volume come in uh if
that’s like basically i would then
change it to
if it doesn’t work here it should work
if it is gonna work so if it doesn’t
work here then i’m done for the trade
so at that point um that would that was
my second try
and then i would be looking to get to
full size
on this position on this position
so once i do have that confirmation um
and part of that is like from
watching this trade and other symbols
at the spots where it should work if it
doesn’t work there
then there’s something wrong with the
idea maybe i’m too early
um maybe it’s not there entirely um but
yeah once it
goes um and gets about 563 564
i’m getting to full size in my position
so if i lost five percent on the first
i’m going to be getting into 20 of my
daily stop overall
then that leads into the trade
management so
the first thing i’ll mention with the
opening drive that i look for
the measured move was approximately 15
so i’m using that as my targets so from
the pullback low
i’m just using that measured move so my
target for this trade was 575
and then i’m looking to hold a quarter
of that original position
overnight if we have a strong close uh
and the way that i
look at a strong close is if we close in
the top 20 percent
of the intraday or of the day’s range if
we close in the top 10
it’s even better i want to see
increasing volume going into the close
um and i’ll be monitoring that
in after hours as well um just to see
up until 8 pm where we have the decision
if we want to
cut the trade i want to just make sure
we’re not gapping down
or anything crazy like that but yeah
going into it
like you saw on the tape um my entry was
on this pullback to
view up holding above 560 which is that
pull-up pattern
uh took two tries um and then i added
above 563 when that volume came in
and then one way i could improve that i
want to mention
is i think it’s okay to take off some
into the 566 area 567.
this is a spot where it could fail from
so kind of with my system i want to take
off a little there
just to cover a little risk but when i
do that
it shouldn’t be the amount i did on this
trade so
yeah there’s just a lot of ways i could
improve and this is one of them
where i was out of about a fourth of my
position into 570
when this was confirmation that it was
working really
and then we pull back into 565 that’s
where i ended that tape
um this is a sign of strength to me we
pull in after making that new high
and this is something to expect and
what’s important is that we hold 565 and
we hold higher and consolidate
and on that pulling you can see once we
and then we start getting back above
560 750 level the top of the
consolidation you can see extreme volume
comes in
and at that point i’m in the driver’s
seat so what i’m really doing is just
sure i’m patient enough with my profit
so i’m going to sell 10 um into
or above 570 on a new high a day just
taking some profits along the way
very small lot sizes just incrementally
and then we go into 575. uh this was my
based on the measured move and i’m going
to be taking off 40 percent there
20 going into the target layered out and
then 20
above 575 and once we get above the
size of my shares that i’m selling is
going to start increasing
and then another sign of strength is on
these pullbacks
once we get to 575 we pull back
and we hold above the previous high a
day at 570
and then on the next pullback we put in
another higher low
and we’re continuing to hold the
21 ema on the five minute as well
going into the close uh i sold five
percent to get down to a fourth
into 578 and 5.79 um
just kind of into momentum when we broke
to new highs a day
and then i’m holding the rest they’re
holding the rest of risking
everything to 569 so below that 570
so this was a good learning lesson for
me um we didn’t get a gap up on this day
and the trade i was looking for was a
one to two day um multi-day
swing trade where i was playing the
of this breakout on day one
so what i was looking for was clear
and if i can just jump in here were you
talking communicating with anyone else
who was
in the trade or interested in the trade
while you were in this trade yeah uh i
was talking to my mentor
uh garrett throughout this which was
very helpful as well
um just for me at the moment too don’t
have a long-term account
so i was just kind of going through my
thought process on the way i was
and game planning to manage the
position so just going over with him was
very helpful too
and just sticking to that game plan
so we didn’t get the gap up so what i’m
looking at
is i want to have continuation so right
off the opening drive um
i sailed 25 into 580
which was my first target on the rest of
this position
and then the other targets i had was 585
and then 589 um and now stopping below
that 570 level like i mentioned
so once we fail at 583 and we start to
come down
smh was weak as well i’m not trying to
force anything
um based on the time frame of my trade
so i lighten up 25 percent uh below 572.
um we just broke below the opening price
and then i got flat below 570 so just
stuck to my plan
and stopped out and it’s important for
me personally
to just be disciplined with this and
remember i just made a great trade
stopped out of it and then move on
like don’t dwell on anything that
happened so you can see
these are my executions for it it looks
like a lot of executions based on those
small lot sizes that i mentioned
so some aspects to think about for my
i’ll actually go back to this for the
first one is
the important aspect of making sure your
time frames
are consistent throughout the trade so
with this idea there’s
many ways you could have traded it where
you could have just traded the momentum
right after we held view up
some people could have got in on the
opening drive
you also could have played for a longer
term swing trade
where you were looking to hold until we
broke to a new all-time high
and in that scenario you would want to
be risking too low of day
you probably didn’t take any sales this
day at all and then on the day two you’d
be looking to buy any dips
so maybe you bought 572 570
but that wasn’t what i was looking for
um so it’s just important for me
that all the trade decisions that i make
are aligned with the time frame that i’m
where the part i mentioned where i was
taking off some size at 568
that’s a little too short-term um
minded for the trade that i was going
for and that’s an area to improve
and then some other areas um we
mentioned this but
risk management on the entry attempts so
just making sure that i’m able to stick
with the trade
because an a plus trade could take
multiple tries
and then the difference between trusting
a trade
and letting it work versus being
so when i’m trading one of the questions
i’m asking myself throughout the trade
is am i being flexible enough
am i watching the tape and being aware
of places to lighten up
but that also
is a fine line between making sure i’m
trusting the trade it’s an a plus trade
i have the intraday pattern
and really letting it work for me and
being patient and not taking sales
and then the last thing i’ll mention at
the time in february this was my biggest
trade to date
and one thing that just stands out to me
as a big takeaway is there was
many ways i could have traded it even
better so just always
keeping that mindset well that’s great i
mean you’re playing to your strengths
there right
yeah definitely and you’re applying to
your strengths that
you have proven are your strengths
yeah with those stats like we talked
that’s good and we’ll leave it here i do
think i’d love to talk a little bit more
the importance of not just joining a
team but joining the right team and
joining with team members who are
to what your strengths are and the type
of training you’re doing
we passed on that during the discussion
before but we’ll get back to that at
some point i appreciate it tim
congrats on uh congrats on the biggest
and many more to come hey go ahead and
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* no relevant positions