Winning Through Losing: When 30% Is Enough · Diego Cortes Lopez

Profile & Background:

• Diego Cortez Lopez is a 24-year-old American expat trader originally from Mexico City, raised in Dallas, Texas.
• Former professional tennis prospect who turned to teaching at age 16 until a back injury ended his playing career in 2019.
• Lives in Southeast Asia (previously Bali, Vietnam; currently on Phu Quoc, Vietnam) as a "100% trading for a living" digital nomad.
• Never missed a market open since starting full-time trading in early 2020.

Trading Evolution & Mentorship:

• Initial Strategy (2020–2022): scalped futures (MNQ, MES) by incorrectly buying resistance and shorting support; lost nearly $100,000.
• Pivot Point: Discovered mentor Oliver Velez's methodology via YouTube in late 2022 after 2.5 years of unsuccessful self-learning.
• Current Approach: Day trades large-cap stocks (e.g., Tesla, AMD, Microsoft) using a rule-based, support/resistance reversal system; focuses on the first 60 minutes of the session.
• Win Rate Philosophy: Rejects high win-rate expectations (70-90%), aiming for a realistic 30–40% win rate with a 3:1 to 4:1 reward-to-risk ratio.
• Performance Trend: Described account growth as an "exponential lineup" since 2022, with 2024 cited as his best year.

Strategy Mechanics & Rules:

• Timeframes: Primarily analyzes 5-minute charts for entries, with 2-minute or 1-minute charts for precise entry/stop placement; uses Daily charts for major support/resistance identification.
• Entry Triggers:
  • Seeks "violent" bars (large range) at obvious daily support or resistance levels.
  • Identifies "Gift Zones" (violent reversal bars) and waits for price to retrace (50/50 chance) to re-enter.
  • Uses "Tail bars" (reversal candles) as the primary signal, requiring the entry to be obvious to the eye ("if a child could circle it").
• Targeting: Aims for a 1/3 retracement of the prior move as the primary profit target; may trail stops if the move extends.
• Stop Losses: Placed just above/below the signal bar (e.g., the tail bar), not based on percentage; adheres to a hard monetary stop ($50 risk on specific setups).
• Position Sizing: Maintains consistent position sizes across trades to mitigate the randomness of low win rates; avoids pyramiding due to account size constraints.

Market Conditions & Preferences:

• Best Conditions: Ranging or overextended markets; avoids trading during trending markets or "trap zones" (tight consolidations between major highs/lows).
• Session Focus: Trades exclusively the first 60 minutes (after the initial 20-minute warm-up) to capture maximum volatility and institutional participation.
• Indicators: Uses only two Simple Moving Averages (20-day and 200-day) to gauge bullish/bearish states; avoids volume analysis.
• Pre-market: Ignores pre-market data entirely; relies on the previous day's high/low.

Psychology & Risk Management:

• Losing Streaks: Accepts losing streaks (up to 10 trades) as part of the mathematical expectancy; views "staying with the method" as the primary struggle.
• Education Advice: Warns beginners against scalping and high win-rate expectations; advocates mastering a single timeframe first.
• Journaling: Previously journaled but currently stops, viewing his process as "second nature" (automatic).
• Common Pitfalls: Identifies beginners' tendency to hold losers and cut winners as the primary cause of failure (inverse of profitable behavior).
• Setup Simplicity: Reduced trading hardware from four monitors to a single 13-inch laptop to align with a simplified, mobile-focused strategy.

Community & Lifestyle:

• Community Impact: Credits the "Chapter Traders" community with connecting him to mentors and maintaining long-term friendships in an isolating industry.
• Teaching: Teaches his methodology to a small group of close friends and his girlfriend.
• Future Outlook: Focuses on reinvesting all profits and enjoying life in Southeast Asia; does not hold positions overnight.