Okala on scalping the Nasdaq with his 80/20 price levels

0:00What made you believe or what got you into the field of scalping? Did you ever try with anything different or was scalping always your thing from the beginning? Scalping has always been my thing and I'll tell you why. It's because I didn't have the uh the luxury of letting those trades run because I again I had to get in and out because I was I was working. I was working. I had to be productive and um and so the faster I get in and the faster I get out the better.

0:32Do you ever find that there's any downsides to scalping? Yeah, absolutely. There there there is. You know, you don't get to you don't get to capture those humongous moves. You don't get to do those two week swings and and you know, in prop firms you can't do that regardless, at least futures firms. But uh the downside to scalping is that you know you really kind of cap your upside. And the way I get around that now is I would put on more size to capture a larger pointbased move instead of a um drastic pricebased move.

1:12Interesting. And I I think it's a it's a different way of looking at things because I think that at least from my perception the general narrative online is that successful traders they always run their winners. They always maximize the upside whereas you're doing something quite differently right you're kind of capping your upside but taking them with larger size. That's correct. And and let me let me preface this by saying that having runners is a great I mean that's that's really how you take your trading from from static to exponential is you have those huge winners.

1:46But I mean a lot of the times those huge winners you would have to take a much larger uh percentage based risk on your account. So for me, I keep my stop static. My take-profit at least for the first one or two contracts will also be static. And then runners, yes, I I will have runners, but most of the time, you know, they're not going for two or three or 400 points that, you know, maybe I'll get 30, 40, 50 out of them, but and a normal size move for you that you're looking to capture is how many points?

2:18About 15 to 20 on the NASDAQ. Okay. Interesting. And so tell me a little bit more about this 80/20 strategy. It's it's obviously got a little bit of a catchy name. How much can you tell us about how it works and and how you kind of trade it on a day-to-day basis? Sure. So, so you know, how I developed it was um you know there's price levels in the NASDAQ that end the very last two numbers end in 80 and 20 and I'm not counting the decimals.

2:44And most of the time you can see a reaction based on that. And and what I've noticed is these levels, they kind of align in align with the NASDAQ um and the QQQ option price ladder. It's about a dollar between. So there's there's more nuances than just oh for some reason these levels work. Um the I mean the reason the reason behind it is is a little more uh complicated than they're just magic numbers. But that's as I mean there and there's numbers in between them, but the main ones are 80 and 20.

3:20That's why I named it, you know, 8020. And then you combine that with structurebased setups on the NASDAQ because no matter what, you can kind of have what no edge um is forever. But when it's structurebased and that's how just the market moves, then you can't really eliminate that edge. And listen, I've been trading for seven years now and uh and those seven years, 8020 and and structure has always remained the same. Interesting. Did you ever take this sort of strategy and back test it prior to to actually starting to trade with it?

3:59You know, when you came up with the the concept? Uh I I've never I'll be honest, I've never back tested. I I don't do that. I think it's it's a waste of time. If it doesn't work tomorrow, what's the point of back testing it? So, I I always forward test my strategies. Um, I always put them up to the test on that day. Um, and and look, I mean, it's it's worked fine with with no back testing. I'm perfectly confident in that tomorrow it will work the same as today or yesterday or last week.

4:31Interesting. Do you do you find any issues in applying the same strategy to other markets or other asset classes at all? So that was one of the things that I really tried to break last year was was my need to trade the NASDAQ and only the NASDAQ. So last year I really started venturing into different markets. So copper, gold, silver, you know, the metals and I kind of developed my own playbook uh when it comes to uh the metals market. you can't really trade them the exact same way as the NASDAQ just because of just because, you know, it it really doesn't trade the exact same way.

5:07They both have their own um characteristics. But as far as structure goes, I mean, a market's a market. If there's volatility in there and and and it's moving and and you know, you don't have these huge price gaps and there's there's it's liquid enough, then structure is structure and most of the time it'll be the exact same. I've been speaking with a fair few guests about the importance of having that adaptability to to go into different markets, right? Because as you said and as other guests have have also mentioned, volatility is the name of the game, right?

5:39If a market's not moving, our ability to capitalize from that market become very very little. And it sounds like obviously your transition in moving into some of the metals has been very beneficial given the current volatility in them. Um, have you found that the the more recent volatility and specifically I'm thinking about, you know, the gold, the silver specifically, has that been beneficial for you? Is that something that you've struggled with in terms of changing the I guess the volatility that you're used to? No, absolutely not.

6:10You know, I I would I would put it like this. Gold and silver have have went from a more mild movement to more of a NASDAQ type movement. And uh and I'll be honest, you know, the last two to three months have been my most successful months in in trading period. It's and it's strictly because metals are moving with volatility. And if NASDAQ isn't, I can always have an instrument that is interesting. And again, I I've started to see this as a little bit of a common theme here, which is yes, of course, it's important to have a strategy which gives you an edge.

6:45But actually, I think where most people tend to do really well is they find the asset class or the market that is going to present them with the conditions to allow that edge to really thrive. Was that something that you were conscious of when you were starting to dabble out into different markets as well as wanting to, you know, not be so reliant on NASDAQ? So that's that's something that I really took from other traders. I I started looking at what other really successful really big players are doing.

7:14And what I've noticed is they are not stuck on one instrument. They always have a different playbook. They look at several different markets. And when you're starting out, I mean, it's it's great to know one market and only only trade that market. But once you have kind of mastered quote unquote mastered, I I don't say that lightly because no market is is you can fully master. There's always changes. But as far as being able to have multiple playbooks, multiple instruments, I think that's vital as as a trader to grow and to really leverage yourself and and your ability.

7:50Yeah. I I was just speaking with my last guest about the idea that money never really disappears from the market. it's always just transferring into something else, new asset class. And I agree, I think having that outlook as, you know, being able to see where the money is going, where the volatility and opportunities are, it's a really, really important skill set for for every trader to be able to have. Um, something I do want to pick your brain on a little bit is a little bit of the nuance behind developing the strategy.

8:16Now, I'm actually not super fussed about learning the the intricacies of how you get in and out of the market. I'm actually more fascinated by the idea that you actually came up with something completely by yourself. Maybe that sounds silly to you, but at least from I guess this side of the the interview, I tend to speak to a lot more traders that start with a a relatively um out ofthebox uh strategy is maybe the right way to put it.

8:44I'm talking and I'm thinking of, you know, the ICT traders, the SMC fanatics, supply and demand, support and resistance, however it is you want to frame it, but they all come up with a very generic way of doing things and then maybe apply it to fit it to themselves. Do you think that there is any benefit in starting generic or do you think everybody needs to find their own thing that works for them much like you've done with the 8020? I look so so there's no concept that that I have really invented quote unquote.

9:12it, you know, the market's been around for for hundreds of years. You know, it's it started in tulips. I mean, you can you can you can say anything about that, but as far as, you know, inventing stuff, I think it's very hard to to invent a a strategy that no one has done that no one I'm sure someone is trading exactly like me. Um, but as far as being a new trader and taking stuff that's already proven to work, um, I think there's a lot of benefit in that.

9:44However, you can never just copy someone step by step. Every trader, every everyone has a different mental, everyone has a different uh, approach to the market. So, you can take nuggets from here and nuggets from there and combine it into something that you understand personally. And I think that's what I really ended up doing was I took um pieces that I've just noticed in the market and I and what has worked and what hasn't worked and I kind of combined it into something that works for me personally.

10:16um I didn't have the opportunity to watch streamers or watch uh you know YouTube videos because I would I would just you know come home and I would be so so tired from the day and I really didn't um really care for what others were doing. I just wanted to make money in the market, you know, that's what I really wanted to do. And with time, I believe anybody can develop something that works for them. But it just takes that knowing your own personality and knowing uh what exactly you're looking for.

10:56So me, it would be very hard for me to be a swing trader. I'm not a swing trader. I I didn't develop my strategy around that. So watching a position for two or three months, I personally couldn't do that right now. Um, and that would be the same case for, you know, a person that's just starting out. Uh, if you're naturally just someone that wants things here and now, you're not going to want to to take, uh, someone who's who's a professional swing trader and try to apply that to your own, you know, your own self because ultimately it might work, but 80% of the time you will just be fighting yourself.