Learn to Trade One Specific Setup for Big Profits Daily - John Kurisko

Finance-focused summary (markets/investing/trading)

• Presenter John Carrasco (“Day Trader Rockstar”) explains his day-trading approach built around Stochastic-based divergence and “high probability setups (HPS).”
• He emphasizes a rules-based system designed to reduce discretionary overthinking.
• The method is framed as trading momentum shifts detected by Stochastic oscillators (developed by George Lane).
• Setups are confirmed with a combination of:
  • Trendlines / moving averages
  • Chart patterns
  • Reversal candles
  • Support & resistance
• He repeatedly calls himself a “one setup trader”: consistency comes from strict entry/stop rules and disciplined patience, not chasing goals.

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Disclaimers / cautions

• Trading is difficult; without consistent rule-following, you’re likely to lose money.
• Outcomes can’t be guaranteed—setups offer probability, not certainty.
  • He uses language like “hopefully” and highlights that results depend on execution and conditions (e.g., “no news” in probability claims).

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Tickers / instruments / markets mentioned

• ES (E-mini S&P 500 futures): his primary instrument
• SPY: used as an example ETF for applying divergence ideas
• Historical / contextual references:
  • Nasdaq / “tech bubble”
  • “911 crash”
• JP Morgan (JPM): referenced as an example stock
• Chart framing:
  • S&P 1-minute chart / S&P minute context (for index futures)
  • He notes you can apply the concept to stocks

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Methodology / step-by-step framework (HPS + divergence)

Core setup definition (High Probability Setup / HPS)

• Primary signal: Stochastic divergence
  • Buy-side (long):
    • Price makes a lower low
    • Stochastic makes a higher low
  • Sell-side (short):
    • Price makes a higher high
    • Stochastic makes a lower high
• Confirmation requirement:
  • The Stochastic divergence condition must line up with 3 other indicators (his wording: “three of the indicators … lining up”).
• Common confirming elements he lists:
  • Trendlines (price reaction points)
  • Moving averages
  • Chart patterns: wedges, channels, flags, pennants
  • Support & resistance
  • Reversal candles (candlestick confirmation)
  • Also references behavior such as “wedge/channel break”

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Divergence structure rules (two-stage)

He describes divergence as requiring two key lows/highs:

• Stage 1
  • First extreme low/high where Stochastic must reach key thresholds
  • Common thresholds:
    • Buy-side: often under 20
• Stage 2
  • Second low/high
  • Buy-side:
    • Price fails to make a new low while Stochastic stays above 20
  • Sell-side:
    • Analogously uses above 80 and failure to confirm
• He stresses: steeper divergence (greater separation between stages/levels) generally indicates a better setup.

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Timeframes

• Most emphasized: 1-minute timeframe for day trading / scalping
• Extensions for broader context:
  • 5-minute / 60-minute (context/swing)
  • Daily for longer holding periods
• He still prioritizes divergence timing on the shorter chart.

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Stochastic settings / interpretation (execution spec)

• Main parameter: Stochastic 9,3 fast
• Notes George Lane’s evolution:
  • 9,3 fast → 14,3
  • He mentions using dual stochastic / keeping both variants
• Threshold emphasis: 20/80 lines
• Execution preference:
  • He uses only the configured %K/%D representation
  • He trades primarily off the %D line
  • He avoids crossover-based interpretation (“no crossover trades”)
• Key principle:
  • Divergence is about the relationship between price extremes and Stochastic extremes (momentum), not just simplistic “overbought/oversold.”

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Entry trigger confirmation (optional enhancement)

• After divergence forms, he often waits for a reversal candle in/near the divergence area to increase odds.
• Examples of confirmation candles he names:
  • Engulfing pattern
  • Hammer
  • Piercing pattern
  • Outside day / outside period
• He asserts this confirmation can improve probabilities (with specific percentage claims below).

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Stop-loss rule (explicit)

• Stops are pre-defined and described as tight.
• Common rule: place stop “one tick” beyond the divergence extreme
  • Example: for longs, one tick under the divergence low
• The tightness is justified because divergence provides a clear invalidation point.

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Profit-taking rules (framework + difficulty)

• He emphasizes profit-taking is the hardest part and depends on market context:
  • If divergence forms within a strong trend, he may let it run.
  • If the market rolls over after divergence, he may exit sooner.
• Practical 1-minute heuristic:
  • Take profits when Stochastic reaches overbought (or turns around near those levels), i.e., exit as momentum shifts back past the overbought/oversold zone (he references movement toward 80).
• Other management:
  • Trailing stops are sometimes used
  • He warns about “standing orders” because intraday order/market behavior can cause price to tag levels and then reverse.

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Key numbers / performance metrics / probabilities mentioned

Probability claims

• Stage-1/stage-2 structure:
  • “85–90% of the time” (if no news and market movement aligns)
• Divergence + reversal candle:
  • Claims odds can increase to about ~90%
• Divergence + confirmed channel breakout:
  • Says “90% of the time” the channel break occurs

Risk management

• Typical position risk:
  • 2% per trade
• He sometimes uses:
  • ~3% risk per trade
• He references a position-sizing tool on his website to calculate contracts to keep risk under a chosen percentage.

Trade-frequency / expected setups

• On a strong day:
  • Up to ~70 divergences
• His target:
  • About 3 “best” trades/day (he uses stricter criteria)

Profit/target talk

• E-mini scalping example:
  • Mentions two contracts as an example tied to aiming for roughly $100 per divergence in his “fifty-dollar trade” concept (described as picking up “$50 bills”).
• Caution on goal-chasing:
  • He warns that aiming for too much (e.g., “make $500 today”) can lead to overtrading.

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Explicit recommendations / best practices he emphasizes

• Be disciplined and rule-bound; don’t react to the crowd.
• Trade only when conditions align (divergence + confirmations); otherwise it’s gambling.
• Avoid goal-based pressure that pushes trades when setup conditions aren’t favorable.
• Use tight stops tied to divergence invalidation (one tick beyond the extreme).
• Prefer liquid instruments with tight execution:
  • He says ES is the “most bang for the buck” and links it conceptually to SPY.
  • He notes stocks/options are possible, but his emphasis is on ES.

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Presenters / sources

• Presenter: John Carrasco (“Day Trader Rockstar”)
• Source referenced: George Lane (credited with stochastic; “father of stochastic”)