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43-ICT Mentorship Core Content - Month 5 - Defining Institutional Swing Points

Last modified by Drunk Monkey on 2022-09-14 11:56
1 00:00:11,519 --> 00:00:24,869 ICT: Welcome back, folks, this is lesson 1.5 Defining institutional swing points. Okay, we're gonna be talking about institutional swing points now that
2 00:00:24,869 --> 00:00:35,159 you've heard me teach, in many instances where the swing high swing low forms in the price action, swing high being a high with a lower high to the left of it
3 00:00:35,159 --> 00:00:45,509 and a lower high to the right of it, just a three consecutive three candle or three bar pattern, one with a high with two lower highs to the either side of
4 00:00:45,509 --> 00:00:53,339 it. And then obviously, the same thing would be said just in opposite terms for Swing low, one candle with a higher candle to the left of it and a higher candle
5 00:00:53,339 --> 00:01:01,589 to the right of it. That's a swing low. That's what I learned from my mentor, Larry Williams, pretty simple, easy pattern. There's been a lot of patterns I've
6 00:01:01,589 --> 00:01:09,659 come across through my development as a trader, some of them rather elaborate that really didn't mean too much in terms of future prognostication. But
7 00:01:09,659 --> 00:01:19,709 nonetheless, they were fun to read about initially got my hopes up, but didn't really deliver anything. I'm not talking about swing points in that degree here,
8 00:01:20,249 --> 00:01:31,079 I want you to think about institutional swing points, in terms of concept, and what's what's going on behind the scenes. I don't want to draw any charts up, I
9 00:01:31,079 --> 00:01:38,369 don't want to pull any examples up, I want you to think about it conceptually. Because we're gonna be building on these ideas, I want you to understand that
10 00:01:38,369 --> 00:01:50,039 there's really only two forms of swing points in the marketplace as it relates to institutional trading. It's in the form of a stop run, or ACI your swing.
11 00:01:50,489 --> 00:02:01,529 That's it, there's nothing else. So we're going to talk about the two forms of swing points. And we're gonna talk about the contrasting differences between the
12 00:02:01,529 --> 00:02:13,109 two and what makes them opportunities for us as traders and how we can see the characteristics of both. The first one we're looking at here is essentially the
13 00:02:13,109 --> 00:02:25,949 breaker. Okay, this is a breaker where the market will generally make a higher high fail, then break down and have a rejection at the highs. Many times this is
14 00:02:25,979 --> 00:02:34,529 a very surprising and deflating pattern for some traders. And everyone's experienced at some time in their development where they thought a specific
15 00:02:34,529 --> 00:02:43,859 price point with the expectation is going to go higher initially does. And then once it makes that new, higher high, it breaks lower aggressively. And you've
16 00:02:43,859 --> 00:02:52,139 probably experienced it as well, where you market, you sell a low, and it starts to break lower, you feel good about the trade. Now sudden, just by moving below
17 00:02:52,139 --> 00:03:03,359 a previous low a little bit, explodes on the upside, and now you're trapped or stopped down. This pattern, in my opinion, is the most powerful, the most
18 00:03:03,719 --> 00:03:12,929 dynamic, the most significant price pattern that you need to learn conceptually, you need to understand some of the characteristics about where it forms. But
19 00:03:13,499 --> 00:03:23,459 what generally happens is, when you have a selling scenario, the market will generally make a rally up to an area of old resistance and that resistance can
20 00:03:23,459 --> 00:03:33,929 come in the form of how we interpret resistance as a bearish order block. It could be a breaker or mitigation block. It could be an old low it's returning to
21 00:03:33,959 --> 00:03:44,849 or it could be in Ojai it's returning to, and it may fall short, just buy a few pips or points initially and start to trade lower, and retail traders. And like
22 00:03:44,849 --> 00:03:51,659 myself, when I first started, I thought that this was most likely going to be limited, market would break down aggressively and start trading lower and I
23 00:03:51,659 --> 00:04:02,549 could be expecting lower prices well. The market makes one more pass higher, driving out that short term high it creates and it spooks the marketplace and
24 00:04:02,579 --> 00:04:10,829 upsets those traders that are already short and ultimately it goes to the level at which you would have expected it to trade to the first time which is that a
25 00:04:10,829 --> 00:04:21,089 resistance level or in this case, it could be a bearish order block for us or closing a gap. But when we see price hovering just below a key institutional
26 00:04:21,089 --> 00:04:28,769 reference point like we learned in September, which are the bearish order blocks, bullish order blocks, liquidity voids fair value gaps when we see these
27 00:04:28,769 --> 00:04:39,419 things in our charts, we anticipate price trading to them to the pith or into them a little bit like as it were for a order block. The
28 00:04:40,709 --> 00:04:51,389 The idea is once you see the level and these levels are going to be delineated with the blue lines. The diagram on the left represents a selling opportunity or
29 00:04:51,389 --> 00:05:02,729 where we expect some measure of resistance. That could be a bearish order block the short term high that forms prior to that higher high. That's what gets many
30 00:05:02,729 --> 00:05:13,379 traders caught. And if you understand order blocks, many times the bearish order block is just above that it didn't in trade to it, or it leaves a little bit of
31 00:05:13,379 --> 00:05:22,289 a fair value gap. And price comes up and just falls short of filling it in, and then finally drives up and closes that little bit of a range. And that's when
32 00:05:22,289 --> 00:05:34,019 you get this breaker swing point. Now, why is it a breaker? The fact that it creates that little short term low in between the higher high and the previous
33 00:05:34,019 --> 00:05:45,629 high for the sell side diagram on the left, when the market breaks down and takes up that short term low prior to the new high. That is indicating that the
34 00:05:45,629 --> 00:05:56,999 market has broke those individuals that were initially short, and now they're trapped. So when that move takes place, what you're seeing is the opportunity
35 00:05:56,999 --> 00:06:07,619 for the marketplace to move aggressively away from the level, it was an initial fakeout. And then the buy stops sometimes also are what's targeted. So it could
36 00:06:07,619 --> 00:06:16,379 be an order block, it could be a fair value gap. It could be liquidity void, getting closed ended, didn't get closed the initial time, and then search that
37 00:06:16,379 --> 00:06:28,529 the second leg up many instances, by looking at your chart, you'll have a plethora of examples and gaining experience by looking at hindsight examples how
38 00:06:28,529 --> 00:06:36,869 that occurs. The one of the benefits are looking at intraday charts not that we're going to be talking about intraday in this month. But when we practice
39 00:06:36,869 --> 00:06:46,709 with intraday charts, it gives us a lot of examples of where these types of events take place, because this very pattern here, this materializes every
40 00:06:46,709 --> 00:06:58,199 single day, it materializes every single day, in every single pair, it's there, you have to study every single timeframe and see how this pattern manifests
41 00:06:58,199 --> 00:07:10,859 itself. On the bias of being bullish the market diagram here that we have on the right hand side, where the sell stops are ran out below a short term low. Once
42 00:07:10,859 --> 00:07:20,219 it hits the level or at short fall short of support level, the market maintenance will drive lower and go right into that level. To me, I love this
43 00:07:20,219 --> 00:07:28,199 pattern because number one, I can see when it's forming. Okay, I can see when it's just fallen short of a level and where we're going to anticipate one more
44 00:07:28,199 --> 00:07:37,589 drive lower, or in his case, it could be a drag higher on the bullish side. But when we look at price, it's important to have the key levels or the
45 00:07:37,589 --> 00:07:48,359 institutional reference points that we taught in September, those ideas have to already be on your chart, if you don't see them already outlined, you're not
46 00:07:48,359 --> 00:07:59,399 going to be able to capitalize on the opportunities that these patterns present themselves with. So if we see sell stops being ran out. Or if we see a fair
47 00:07:59,399 --> 00:08:08,879 value gap below the marketplace, or a liquidity void that didn't initially fill in the first pass lower and then dries low and then closes it in all of those
48 00:08:09,719 --> 00:08:20,099 scenarios can lend well to this pattern by itself. Conceptually, it doesn't do you any good just hearing me talk about it. So you have to go into the charts,
49 00:08:20,279 --> 00:08:30,419 and literally pull out examples where a short term High was passed through just a little short period of time right after that. And then it creates that
50 00:08:30,689 --> 00:08:43,859 rejection or reversal high. Same thing is said for the buy side of the breaker pattern. These swing points, if you look at them, they many times offer
51 00:08:44,429 --> 00:08:55,109 outstanding entry points. What makes them scary is the fact that the number one question I get about them is how do you know if you're going to see it reversed
52 00:08:55,139 --> 00:09:03,569 if you sell above the previous high. And that comes by experience with trusting the institution reference points that we taught in September. And then
53 00:09:03,569 --> 00:09:15,419 throughout the all the free tutorials, order blocks, breakers, mitigation blocks, liquidity voids, and now you've learned fair value gaps. So having these
54 00:09:15,419 --> 00:09:22,559 ideas in your chart, you'll be able to anticipate these patterns unfolding before they actually do.
55 00:09:24,030 --> 00:09:32,400 If you don't have the levels on your chart, you're going to be surprised by these things. But that's okay. Already know that most of you aren't going to be
56 00:09:32,400 --> 00:09:41,880 able to see this pattern readily before they happens. So what can you do with it once you see the pattern break down? In the example on the left hand side for
57 00:09:42,450 --> 00:09:53,190 bearish swing point in front of a bearish breaker when that high is broken, and it takes out that short term load between that market structure shift breaking
58 00:09:53,190 --> 00:10:07,680 point that becomes your trigger. If price ever comes back up to that level You can be a seller. Now, the beautiful thing is, we already have a stop run on this
59 00:10:07,680 --> 00:10:20,430 pattern. Now think institutionally, there was a short term high. Right here, the market comes down creates a short term low, and it rallies up to taking out this
60 00:10:20,430 --> 00:10:29,640 short term high, blowing out to buy stops closing in a liquidity void that didn't get filled in completely when this first pass came up, or it came into a
61 00:10:29,640 --> 00:10:39,090 bearish order block. And they fell short of their order block here. Or maybe this is just a simply an old high in price comes right back above the old high,
62 00:10:39,360 --> 00:10:48,390 and then rejects and trades lower. You don't have to fear this pattern here. If you can't, if you don't have the confidence to get in here and sell that idea,
63 00:10:48,990 --> 00:10:57,330 like an institutional trader would go right in here and sell it right as it trades through it. Wait for it to break down. That takes out that short term
64 00:10:57,330 --> 00:11:06,270 low. When market trades back up to that trigger point right here. That's when you would be looking to be a seller. The wonderful thing again is about this
65 00:11:06,270 --> 00:11:15,750 pattern is we already have the stop run. So if it's already stopped out those individuals here, there's no reason for them to come back up and trade back in
66 00:11:15,750 --> 00:11:23,550 there because these traders are already knocked out. So we can be a seller here with a great deal of confidence that our stop loss could actually be above this
67 00:11:23,550 --> 00:11:32,580 high or rate at that high likelihood of it coming back up there after an aggressive breakdown. Once a level has already been arrived at discerning that
68 00:11:32,580 --> 00:11:41,940 there is been a an expectation of the market being bearish, if we see evidence is that we've already seen a stop run here. If we've seen a move, start to break
69 00:11:41,940 --> 00:11:50,460 lower at or just below that, that resistance level. This is going to lull traders into believing and let you know what it feels like as well. You want to
70 00:11:50,460 --> 00:11:57,840 see price action moving in your favor maintenance as a new trader. So this dropping off will get traders short, where's their bias that might be placed
71 00:11:57,840 --> 00:12:07,530 right above this high. So this passthrough clears out that by side liquidity that they can engineer new shorts on. So when we see it returned back up to this
72 00:12:07,530 --> 00:12:16,230 level here, it gives a great deal of confidence, even on a daily timeframe that we're most likely not going to see price trade back up to this level here,
73 00:12:16,230 --> 00:12:23,580 because it's already done its job of knocking out those players that are already short, they don't want to give them an opportunity to get a good price. In a
74 00:12:23,580 --> 00:12:33,750 short, they've already done that themselves. by knocking out the initial bears. This breaking point here we want to be selling at that point right there. So
75 00:12:33,930 --> 00:12:44,340 when we look at price, we're looking for this pattern for ourselves. This is the highest most probable condition to be a short seller in the marketplace because
76 00:12:44,340 --> 00:12:52,020 it has a built in advantage. Even though it's the most fearful thing for you right now, you don't want to sell above an old high, because you haven't
77 00:12:52,020 --> 00:12:59,850 practiced enough, you haven't seen the effects of looking at institutional order flow on a higher timeframe or any other timeframe for that matter. That frames
78 00:12:59,940 --> 00:13:10,890 the support ideas around these particular raids on stops. The same thing is said just an opposite terms for when you're looking to be a buyer, you want to see
79 00:13:10,890 --> 00:13:19,080 our short term low form at or just above a key support level, it could be a bullish order block, it could be a liquidity void, it hadn't filled in on this
80 00:13:19,080 --> 00:13:29,070 past here that does here, it could be an old load, it just simply runs down below. If it's an old low, there is no limit to time between this low and the
81 00:13:29,070 --> 00:13:38,280 new load its forms. Okay, in that, in that regard, there's no, there's no time limit, like you can look at an old low here, and it could be six months. And
82 00:13:38,280 --> 00:13:46,380 then finally it trades down below that low and then it runs. That's still the same pattern here. Okay. Ideally, you want to see something that has just
83 00:13:46,380 --> 00:13:54,090 recently created a low, came back a little bit of a few days, maybe a week, and then it dries one more time through it and hits your bullish
84 00:13:55,500 --> 00:14:03,600 institution institutional reference point, it could be again, trading down to an old high, or it could be a lower low, and it trades down. But the main thing is,
85 00:14:03,600 --> 00:14:13,650 is you want to see a low, that makes no real sense, stopping there and giving a little tiny little bounce, and then expect that drive lower closing in on that
86 00:14:13,650 --> 00:14:24,930 real level you're having on your chart, which constitutes support. Just like we mentioned over here, the opposites set here. Any buyers over here on this little
87 00:14:24,930 --> 00:14:34,770 pop is going to have their protective cell stop just below that low. We want to think institutionally about accumulating those sell stops. So if they're going
88 00:14:34,770 --> 00:14:41,520 to sell it to us, we're going to be a buyer. And we're gonna be buying it at a deep discount with the expectation. Now here's the thing. You want to see an
89 00:14:41,520 --> 00:14:50,670 immediate response away from that level. You don't want to see a trade down below this low and hanging around for a while. Okay, you don't want to see that.
90 00:14:51,540 --> 00:15:00,000 The problem you're going to encounter is because we're trading on a daily timeframe, as position traders. We're going to have to wait a long time
91 00:15:00,000 --> 00:15:11,790 Sometimes, for that confirmation, it may, it may require the whole entire daily range before the daily candle creates the wick here. So this many times will
92 00:15:11,790 --> 00:15:21,300 become the wick, the market will trade down, make that low here and then wick away from that low. And then you'll see what many people get excited about as a
93 00:15:21,300 --> 00:15:33,270 hammer or some kind of a doji. Okay, and I'm teaching classical, if you want to call it that candlestick patterns, but the idea is candlestick traders trade,
94 00:15:33,270 --> 00:15:44,370 the candlesticks that have formed institutional traders, we trade it when it's a bowl face candle, before it becomes that, that wick or that hammer or a doji. It
95 00:15:44,370 --> 00:15:52,350 takes a great deal of confidence in the buying down here, below an old low, whereas retail traders, they all have reasons to justify why something should be
96 00:15:52,350 --> 00:16:03,480 done after some form of confirmation. If you're demanding confirmation, you're not going to get this entry down here. But you can get a favorable entry point.
97 00:16:07,050 --> 00:16:15,630 By waiting for market structure shift here. So when the market structure shifts on the bullish side here, all eyes go back to this reference point here. We're
98 00:16:15,630 --> 00:16:25,920 not worried about coming down down here. Again, we don't care about that. We're worried just simply for a return to this level here. So again, the same mindset
99 00:16:25,920 --> 00:16:38,340 we said about the sell side or bearish breaker on swing point, this we know this has already been arrayed on sell stops, there's no expectation or reason to
100 00:16:38,400 --> 00:16:45,060 believe that the market needs to come back down into this level. Again, because it's already done its work, it's cleared out the sell stops in the market, it's
101 00:16:45,060 --> 00:16:58,950 quickly rejected the market, if it does give you an opportunity to come back down into this breaking point, we can be a buyer here, with the exception, that
102 00:16:58,950 --> 00:17:05,760 there may be a bullish order block over here, it doesn't have to come back down to this level, just like it doesn't have to come all the way back up to this
103 00:17:05,760 --> 00:17:14,220 level, it could just come right back up to an area over here where there'll be another order block to trade off of depending on how aggressive the selling was
104 00:17:14,220 --> 00:17:22,440 away from this high or where the buying was in terms of magnitude, you may never get that return back down to this price point, it may just keep on screaming
105 00:17:22,440 --> 00:17:30,060 higher. And it's sometimes going to happen. And that's going to be a missed opportunity. But I want you to think about the marketplace in two conceptual
106 00:17:30,060 --> 00:17:40,710 ways as it relates to swing points. You have a breaker swing point, which is what we're describing here. And I'm giving you the classification of it. And I'm
107 00:17:40,740 --> 00:17:48,180 teaching this one first, because this is the one I trade predominantly, because it's based around the pattern I like to trade which is a turtle soup, a false
108 00:17:48,180 --> 00:17:58,770 break above an old high rejection and quickly it moves away. And if I don't get the entry off, like I want to, I always give it an opportunity to get back in
109 00:17:58,770 --> 00:18:10,170 here. So it's like a two chance setup. And many times you don't get to second chances and trading, you know, either miss it, and you never get it again or you
110 00:18:10,170 --> 00:18:20,550 take it and you lose money. And here, this pattern is, in my opinion, the best pattern in in market structure when you're looking for institutional evidence as
111 00:18:20,550 --> 00:18:30,240 to what should be taking place in price. When you see this pattern unfold, and you learn to anticipate it, you're going to have the highest probable entries
112 00:18:30,270 --> 00:18:38,760 for all your setups because you're actually entering at the lowest possible point for buys. And you're selling at the highest possible point for sells. And
113 00:18:38,760 --> 00:18:46,920 yes, it takes a great deal of conviction to do that. But it also doesn't demand it, you can wait for this pattern to give it to you
114 00:18:48,150 --> 00:18:59,970 by waiting for the break above the market structure here. Which is ironic because you don't get that same forgiving this with the next pattern we're gonna
115 00:18:59,970 --> 00:19:11,730 talk about which is the failure swing. Right, this is the failure swing is the second form of institutional swing points. And again, I understand that, you
116 00:19:11,730 --> 00:19:20,010 know, you probably understand this a little bit, but I'm giving you some additional points because if we're going to start breaking the market down into
117 00:19:20,040 --> 00:19:29,100 modular form where we can go in and start utilizing these things, not to speak about them in broad terms. I want you to narrow your focus to only two ways of
118 00:19:29,100 --> 00:19:37,890 dealing the marketplace when it turns. We already mentioned the breaker swing point. And now we're talking about the failure swing. The failure swing is when
119 00:19:37,890 --> 00:19:52,020 you identify when there is a resistance level and it trades through it breaks down and comes back and retests it. It can't make another pass through. Now this
120 00:19:52,020 --> 00:20:01,020 level could be up here it could have been just touching it here and then failed to make another pass to it. It's the same thing and same can do Questions, but
121 00:20:01,020 --> 00:20:13,230 we're focusing primarily on is the ability for the market to get back to this high and make a higher high, or the fact that it makes a failure swing. We don't
122 00:20:13,230 --> 00:20:25,140 ever know with great deal of conviction if we're going to get the breaker setup. So while this may be unfolding, we could be anticipating this high being taken
123 00:20:25,140 --> 00:20:34,230 out to be a seller up here. But many times what will happen is, is the market will come up and fall short and then break lower. And that's a missed
124 00:20:34,230 --> 00:20:42,660 opportunity, we can't be a seller at a high price, we may have may have even second guessed this entry as a short, but we are demanding a breaker to occur,
125 00:20:43,500 --> 00:20:49,800 which would be selling above this old high, but it doesn't give it to you here, that would be a missed opportunity. But it doesn't mean there's no trading
126 00:20:49,800 --> 00:20:59,460 opportunity. Same thing can be said for the buy side, we have a support level down here, the market trades down into it may trade through it, or the blue line
127 00:20:59,460 --> 00:21:08,190 representing our support level could be down here right at the low. It's not important as it relates to where the actual level is. What we're anticipating
128 00:21:08,190 --> 00:21:18,330 is, is the market is going to probably make another pass through and retest this low. Again, we're aiming for an trying to get breaker swing points. If we don't
129 00:21:18,330 --> 00:21:29,190 get the breaker swing point, that's not a problem, we have an opportunity to trade off of this pattern as well. If we get the buy set up like this, and it
130 00:21:29,280 --> 00:21:38,190 retraces off of the level that we are anticipating seeing support, and it comes back and starts to come back down and fails and makes one more pass up. If it
131 00:21:38,190 --> 00:21:46,350 takes out this short term high. Or on the sell side takes out this short term low, we have another opportunity.
132 00:21:51,900 --> 00:22:02,130 Because what we have here is the markets already shown and willingness to do what it's run an area of liquidity out. It's trapped traders above here. And
133 00:22:02,130 --> 00:22:12,630 traders below here. So sellers are stuck down here. And buyers are stuck up here. They're not giving them an opportunity to get out there quickly repricing
134 00:22:12,630 --> 00:22:24,120 here. So now when we understand that, think like an institutional trader, if you know you have a guy on the hook or a fund on the hook up here, but he's, he's
135 00:22:24,120 --> 00:22:36,150 long now, if you can reprice the market and go lower with it, leave them holding the bag up here, or vice versa. They sold on some weakness down here, because
136 00:22:36,150 --> 00:22:44,820 again, think like those turtle traders, long term position traders, they're selling on a breakout. They're selling below 20 period lows and buying above 20
137 00:22:44,820 --> 00:22:54,060 period highs. So if we can see this phenomenon taking place where they move away from a low aggressively came down but failed to make a low and then broke
138 00:22:54,060 --> 00:23:03,720 through a short term high. In an area where we anticipate bullishness on an institutional basis, we have to sit back and simply just wait. Because we'll
139 00:23:03,720 --> 00:23:12,030 understand that this movement could have been moved in to an order block that's bullish, this could be a bearish order block, this could be a move that goes
140 00:23:12,090 --> 00:23:23,100 into a old high the run out by stops here. It could be an order hot high is not being shown in this diagram. Just like this could be an older low, you know to
141 00:23:23,100 --> 00:23:30,480 the left of the truck, it wouldn't be shown in this diagram. But we're seeing the evidence is that they've already did the manipulation down here. We don't
142 00:23:30,480 --> 00:23:44,340 know that for certain until we see the retracement back up here. So all this retracement here, this is the gray area, we don't know for certain if this is
143 00:23:44,340 --> 00:23:52,050 going to stop here. Or if it's going to continue up and give us a break or swing point. Just like we don't know that there's going to be a continuation to go
144 00:23:52,050 --> 00:24:00,210 lower to have a break or swing point for buys here. We don't know if it's gonna go down below that low. I never know that for certain I never knew that. I
145 00:24:00,210 --> 00:24:08,670 anticipated the most optimal entry. I'm looking for that scenario, but it may not give it to me. So if it doesn't, and it starts to run the other way, I'm
146 00:24:08,670 --> 00:24:21,030 just simply going to put my eyesight right here for the buy in here for the sell. If I can't get a retracement back here or on an idea for short, if I don't
147 00:24:21,030 --> 00:24:28,620 see anything to justify a short here, and sometimes that occurs, sometimes I just knew I don't get it right. And I'm human just like anybody else will. If I
148 00:24:28,620 --> 00:24:36,810 can't get a short off there and I don't have strong convictions to sell there is no problem. I'm going to just simply wait for that swing point right here to be
149 00:24:36,810 --> 00:24:45,660 violated. And then I'm going to be aiming for this level right there. That's where I'll sell now. If I'm going to sell at this level here, I can have great
150 00:24:45,660 --> 00:24:53,760 confidence that myself can be protected with a buy stop above this short term high because it's instant inside this area at which they had already ran. This
151 00:24:53,760 --> 00:25:02,280 stops out on the form five stops. So if my boss stop is here now they're not going to come back up here and give these up. Kennedy to get off, they're not
152 00:25:02,280 --> 00:25:12,240 going to let them out. So I can be a seller here with my stop here and look for lower prices. Same way can the same thing can be said here. If I don't know with
153 00:25:12,240 --> 00:25:22,860 great deal conviction that this is a good buy, or I miss it, and it takes off, it's no problem. I'm waiting for this little swing point here to be broken. Once
154 00:25:22,860 --> 00:25:33,810 that high is broken, I can wait for price to come back down to this level right here. When this level has retreated to down here, I can be a buyer with a great
155 00:25:33,810 --> 00:25:41,640 deal of confidence that my stop loss can be placed just below this low because it's going to be in an area where they had already ran the cell stops. Now, this
156 00:25:41,640 --> 00:25:55,470 is probably very 101 ICT, okay, but I want you to come away with this idea that the institutions go into the marketplace to trap or they go into knock off.
157 00:25:56,280 --> 00:26:06,030 That's what they do. They are in the business of knocking the funds out when they're going to be correct. And they'd like to put them in on the wrong side
158 00:26:06,360 --> 00:26:15,810 when they have pending orders that allow them to be offside. For instance, in this case here, funds could have buy stops here with expectation if it goes out
159 00:26:15,810 --> 00:26:23,970 they're thinking this could be a long term trend following buy program where they can hold on to it for many months, the institutions will drive the price up
160 00:26:23,970 --> 00:26:32,280 there, take those buy stops in but when there's buy starts become market orders to buy, they're selling with the expectation, they're going to reprice
161 00:26:32,280 --> 00:26:37,680 aggressively, and then go short. I may read it wrong, just like you're going to read it wrong,
162 00:26:37,710 --> 00:26:46,920 I may be looking for a break or scenario up here where it makes a pass above this old high, I may be looking to sell this old high turtle suit, it may never
163 00:26:46,920 --> 00:26:56,850 give it to me. And I may not be astute enough watching price. This see this is the scenario to really be selling it. So if I miss it, just like you're going to
164 00:26:56,850 --> 00:27:04,980 miss it too. And you see this breakdown in here, no problem, wait for the trade back up to this level here. And that's where your short is going to be. And your
165 00:27:05,340 --> 00:27:13,950 your position is going to be protected. With a stop loss rate above this high, it's going to be in an area where it's already been traded to with manipulation,
166 00:27:14,670 --> 00:27:23,010 by stocks have already been violated here, they're not going to come back up to take those out. If it does, you're probably wrong anyway you want to be at. Same
167 00:27:23,010 --> 00:27:30,360 thing instead of over here, just in the opposite terms. When the market comes down here and rejects, you may not see that initially as a rejection, you may
168 00:27:30,390 --> 00:27:39,960 anticipate one more pass lower to get the ideal buy. It didn't doesn't do it. And if you can't get this off as long, and it starts to take off, no problem,
169 00:27:39,960 --> 00:27:46,680 you go right back to this price point here. And we could come back down, you can be a trader, that takes a long position there with your stop loss, we're here,
170 00:27:47,280 --> 00:27:54,870 again with the expectation that if your stop loss is already below this low, you're in an area where they already ran out sell stops. So there's no reason
171 00:27:54,870 --> 00:28:03,510 for them to want to come back down here again, especially if they have a very dynamic price response here. The magnitude of which they move away here. And the
172 00:28:03,510 --> 00:28:15,360 magnitude at which they move away here indicates that they have already trapped a sizable number of orders net long here. And sizable orders that are net short
173 00:28:15,360 --> 00:28:24,540 here, do not go into what they let them off. And if they are short, how can they get out of their short position, if they aggressively reprice higher, they're
174 00:28:24,540 --> 00:28:31,080 going to collapse their trade by doing what buying it back, they're going to reprice quickly. So that really forced them to buy back at a higher price where
175 00:28:31,080 --> 00:28:42,450 they can now start scaling off their position that they bought down here and down here at a net profit. And the opposite is being said here, where they could
176 00:28:42,480 --> 00:28:54,330 quickly reprice here. Smart Money sells here and sells here. So if price aggressively moves lower, those that are long, in this point here, they're going
177 00:28:54,330 --> 00:29:02,010 to want to collapse their trade and they have to sell it. So they're not going to sell it down here where Smart Money can buy it back after being short from
178 00:29:02,010 --> 00:29:13,530 this point here. So when we look at price, I want you to think again, in two institutional swing point theories, you have a breaker, which is the ideal most
179 00:29:13,560 --> 00:29:24,810 optimal trade entry pattern there is in the marketplace. Because it's absolutely the deepest discount buy, and the absolute most premium to sell. It's scary to
180 00:29:24,810 --> 00:29:32,520 do it. It's absolutely uncomfortable when you first start doing it and I know what that feels like. It's scary. But that's the whole purpose of getting into a
181 00:29:32,520 --> 00:29:39,900 demo account. When you learn to do those types of things. You cannot learn it doing this live money. That's all part of this mentorship, you have to be
182 00:29:39,900 --> 00:29:49,260 practicing in a demo, where you can literally go in your step in front of the marketplace once it rolls into a new high, sell it. Get that responsiveness of
183 00:29:49,350 --> 00:29:56,010 seeing what happens in price sometimes it will keep on going okay, no problem. You're going to be wrong. But you're going to know right away that you're wrong
184 00:29:56,100 --> 00:30:06,630 and you don't have 100 pip stop on. You're gonna have a relatively new A lot of stuff on. Point is, when you're right, you get immediate feedback. And it's very
185 00:30:06,630 --> 00:30:15,810 encouraging it's confidence building. And usually, if you enter on the right side, and you're selling an old high, it's amazing, because you'll see how fast
186 00:30:15,810 --> 00:30:23,790 the market tanks. If you buy an old low, and you're doing it on a breaker setup, and it's a swing point in the form of a breaker, you're going to be able to see
187 00:30:23,790 --> 00:30:33,270 dynamic rallies just like that take off, and it there'll be explosive. So don't think in terms of classical chart patterns, like head and shoulders or think in
188 00:30:33,270 --> 00:30:41,550 terms of bear flags and bull flags, and things like that. Only try to convince yourself that there's only two real ways the market is going to turn around,
189 00:30:41,670 --> 00:30:49,770 it's going to be on a breaker where they run stops, or it's going to be a failure swing. Both of them are indicating a manipulation. But they both have to
190 00:30:49,770 --> 00:30:57,690 be used, slightly different. The first one being the breaker swing point, that is the ideal one, you want to be looking for that scenario all the time, on any
191 00:30:57,690 --> 00:31:07,860 timeframe, not just the daily chart, but any timeframe. But if you can't get the breaker, don't fear or be upset about missing that move, because it still gives
192 00:31:07,860 --> 00:31:14,400 you the opportunity to get in there. Because they're only going to turn the market one of these ways. That's it and nothing else happens in price.
193 00:31:15,060 --> 00:31:23,280 I challenge you to go in and show me something where it doesn't do this because I can tell you, it's either a breaker, or it's a ferry swing every single time.
194 00:31:23,310 --> 00:31:29,820 It's never anything else. So you're you're limited. It's really just two conditions in the marketplace. If you're going to be a seller, how are you going
195 00:31:29,820 --> 00:31:36,720 to be a seller you're going to be selling it at Ojai? Are you gonna be selling it on a retracement back to a break in market structure? That's it. If you're
196 00:31:36,720 --> 00:31:45,360 going to be a buyer, are you gonna be buying an old low? Or are you gonna be buying on a return or retracement back to a market structure break to be a buyer
197 00:31:45,360 --> 00:31:53,610 at support there? It's just that simple. Nothing else can happen. There's no there's not 50,000 patterns to be looking for. There's not all these different
198 00:31:53,640 --> 00:32:02,280 candlestick patterns and memorize. Okay, new dark clouds covering this and no inverted hammer that it's just simply understanding where are the orders
199 00:32:02,760 --> 00:32:11,010 relative to old institutional order flow reference points, key support resistance on high timeframes? How is the market behaving at that level? Was it
200 00:32:11,010 --> 00:32:17,910 able to pass through it and then it reject. If it went up to it fell short, it's probably gonna make one more pass higher. And it might give you that breaker
201 00:32:17,910 --> 00:32:26,760 entry. If it doesn't give you a break or entry and it gives you a fairer swing. This is how you trade them. But there's nothing you need to worry about in a
202 00:32:26,760 --> 00:32:34,140 demo account while you're teaching yourself. If you're if you're worrying about rushing the game with live money. If you don't know the characteristics between
203 00:32:34,140 --> 00:32:41,340 these two swing points Aries, you're going to hurt yourself, you're going to be frustrated, you're not going to be able to focus and you're going to end up
204 00:32:41,340 --> 00:32:48,300 chasing price or blowing your account and then you're gonna be frustrated. You know, we're taken taken completely out of the marketplace where you can't
205 00:32:48,330 --> 00:32:54,180 fulfill your dreams as a trader. So hopefully this has been insightful to you guys. I'm going to wish you good luck and good trading and I'll talk to you
206 00:32:54,180 --> 00:32:55,320 again in the next lesson.