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54-ICT Mentorship Core Content - Month 5 - Stop Entry Techniques For  Long Term Traders

Last modified by Drunk Monkey on 2022-09-19 16:26
1 00:00:13,259 --> 00:00:26,999 ICT: Welcome back, folks, this is lesson 7.1 Stop entry techniques for long term traders. Okay buying with stock orders, preferably, you're gonna be looking for
2 00:00:26,999 --> 00:00:38,849 setups to have the monthly and or weekly, suggesting institutional order flow would be seeking a pdra above daily market price. Today daily should post a
3 00:00:38,849 --> 00:00:50,159 bearish candle, the daily chart must close the candle with a down close, it is not valid while the daily chart candle is trading or forming. And you're gonna
4 00:00:50,159 --> 00:01:07,679 be placing a buy stop at the bearish candles opening. Okay, here's the high the candle low of the candle. This is the opening on the candle. And here's close,
5 00:01:08,759 --> 00:01:23,159 you're gonna be placing a buy stop for an entry on long positions. At that price right here, this is where you place your buy stop entry. The concept is is
6 00:01:23,159 --> 00:01:30,959 you're gonna be using strength to get you long in the marketplace. Now, you're not going to be just buying any old down candle, you're gonna be looking at the
7 00:01:30,959 --> 00:01:44,549 PD arrays, that would be in a discount market. Or while you're in a long term uptrend every down candle promotes new buying opportunity for smart money. So
8 00:01:44,549 --> 00:01:55,049 you'll be using this entry technique here to get in sync with those long term trends. Again, you have to have a monthly and or weekly institutional order flow
9 00:01:55,709 --> 00:02:05,399 reference point in the form of a pdra. And it means that has to be a weekly order block that's bearish above daily price. It has to be a fair value gap
10 00:02:05,399 --> 00:02:15,269 above daily price in the form of a weekly or monthly chart, something on a monthly and weekly, preferably both is leading you to believe that price will be
11 00:02:15,269 --> 00:02:25,889 drawn up there on that timeframe, the daily, you're gonna be actually waiting for the move to go against that intended direction. That's why we're buying off
12 00:02:25,889 --> 00:02:35,969 of a down candle. We're using the opening price on the down candle. Now think about this for a second order block theory. This would be a bullish order block.
13 00:02:36,959 --> 00:02:46,859 A down candle is a bullish order block if price trades away from a down candle, and we trade back down into that opening of the down candle. That's also what if
14 00:02:46,859 --> 00:02:59,669 future entry long position. So see what we're doing here, we're using this buying of strength idea that the mechanics behind it is is that it should price
15 00:02:59,669 --> 00:03:08,879 trade back up to that opening price. And through it, we should be turning the corner and should be trading higher. But if it doesn't trade back above the
16 00:03:08,879 --> 00:03:17,429 opening price, you don't get a fill, you just gotta wait for another new down candle. And you keep moving forward every time you get a new successive down
17 00:03:17,429 --> 00:03:29,129 candle, you keep adding that new entry at the opening price. So you you will be consistently moving for one new trading day, every time a new candle paints. And
18 00:03:29,129 --> 00:03:38,279 if you don't get a fill on a daily basis, go to the next daily candle once as long as there's another down candle, you keep doing it. You may miss moves, you
19 00:03:38,279 --> 00:03:46,739 may not get a fill, you may get filled and eventually get stopped out. We'll talk about stops when we talk about trade management. But for now we're just
20 00:03:46,739 --> 00:03:53,669 focusing on the entry pattern and entry concept using a daily timeframe. And now think about this, we're actually dovetailing really nicely with order block
21 00:03:53,669 --> 00:04:03,119 theory. So if we're buying at the opening price on a down candle long term, expecting monthly and or weekly PD arrays to be the drop in price, in other
22 00:04:03,119 --> 00:04:09,179 words, something on them higher timeframe charts are going to bring price higher, the daily charts going to submit to those higher timeframe weekly and
23 00:04:09,179 --> 00:04:16,919 monthly ideas. And they're going to trade up into those levels, okay, but they won't just go straight up, they'll go up, then come back down to that same
24 00:04:16,919 --> 00:04:25,619 opening price many times giving you another opportunity to buy. So what you can do is when price moves away from the opening price and comes right back down,
25 00:04:26,099 --> 00:04:36,029 you are looking for confirmation you're gonna see new buying. And that may be another opportunity for you to add new positions. But that's only in instances
26 00:04:36,029 --> 00:04:46,319 where if you've taken profits off nodes at once this by entry is been executed and you're long. If you get several 100 pips in your favor, you can take some of
27 00:04:46,319 --> 00:04:53,909 that position off with the expectation and you may end up seeing a retracement back to that same opening price. If it does, you can put that same position that
28 00:04:53,909 --> 00:05:03,389 you took off in partial profits right back on at that same opening price and it gives you an option You're going to get basically the the average then same cost
29 00:05:03,389 --> 00:05:04,439 for that long price.
30 00:05:05,700 --> 00:05:11,940 They hold it for that remaining portion of your trade. You can do this every single time there's a new down candle that you enter on a buy stop at the
31 00:05:11,940 --> 00:05:21,240 opening price. It's the same concept as going forward every single time until you reach that monthly and or weekly PD array in the form of a premium market.
32 00:05:21,240 --> 00:05:28,950 So once it gets overbought, if you will, when there's monthly and weekly charts, then as long as that's not there, we continuously follow along with the
33 00:05:28,950 --> 00:05:36,990 marketplace on a daily chart, every down candle promotes new buying opportunities for smart money, the higher we get on the monthly and weekly range
34 00:05:37,080 --> 00:05:45,330 and get closer to those premium ranges, the less likely these candles are going to promote strong buying. So just be careful about that you will be buying
35 00:05:45,330 --> 00:05:56,160 preferably at equilibrium or less than the range that you would identify on the monthly and weekly charts. Okay, selling with stop orders. Okay, the monthly and
36 00:05:56,160 --> 00:06:06,480 or weekly should suggest institutional order flow, we'll be seeking a pdra below daily market price to daily should post a bullish candle. The daily chart must
37 00:06:06,480 --> 00:06:16,470 close the candle with a up close and it is not valid while the daily chart candle is trading indoor forming. The sell stop is placed at the bullish candles
38 00:06:16,620 --> 00:06:30,870 open, here's your high, here's the high of the candle, the low of the candle, the close of the candle, the open of the candle. And right here's where you're
39 00:06:30,870 --> 00:06:40,050 gonna place your cell stop for short entry in the premise behind this is we're gonna be expecting weakness to take us into the marketplace. Now again, think
40 00:06:40,050 --> 00:06:49,650 about what we just showed you in terms of the buy stop on a down candle at the opening price. It's just like a return to a bullish order block because we buy
41 00:06:49,650 --> 00:07:00,390 at the opening price. This same premise here is the entry price technique that we use to go short at a bearish order block, which is the last up candle right
42 00:07:00,390 --> 00:07:11,130 for the down price move. We're going to sell on a stop right at that opening price. And if we get profitability in our trade and we'd looks like we can see a
43 00:07:11,130 --> 00:07:21,270 retracement back to that same order block or same up candle in this case, we could get short again with the partial profit we've taken off so for instance a
44 00:07:21,270 --> 00:07:32,850 say we go short on daily chart and we get short on a stop at the opening price of this this bullish candle. We could look for several 100 pips in our favor in
45 00:07:32,850 --> 00:07:42,090 terms of profitability, take a portion of it off bank some profits. Then if we do get a retracement back to that same opening price we can sell short again
46 00:07:42,090 --> 00:07:50,970 with that same portion we just took partial profits and reestablish that same initial position back on again at that same average price. Again, the premises
47 00:07:50,970 --> 00:07:58,950 is we're expecting the market to be drawn lower from a monthly and weekly standpoint. So there's a PD array that's going to be drawing that weekly and
48 00:07:58,950 --> 00:08:07,290 monthly chart lower. Okay, so we're trading on the higher timeframe monthly and weekly but we're executing on the daily. So while the monthly and weekly are
49 00:08:07,290 --> 00:08:17,010 poised to go lower, institutionally speaking, we're waiting for a move that's opposite that direction by having an up candle or a bullish candle. We're seeing
50 00:08:17,010 --> 00:08:26,010 the market have a short term retracement or creating a short term overbought scenario. When we see the opening price on the up candle traded too many times
51 00:08:26,010 --> 00:08:35,760 you're gonna see that it never turns back from that that low it just keeps on going and the opening price becomes a very good trigger for short selling or a
52 00:08:35,760 --> 00:08:50,520 sell program. Case take a look at this few examples here. We have a nice meal up here we have small little down candle and you'd be placing a buy stop at the
53 00:08:50,520 --> 00:09:03,060 opening price. So by stop at that opening price on that daily candle and we're gonna say that we didn't get a fail here so it'd be a missed opportunity. We
54 00:09:03,060 --> 00:09:18,150 have a new down candle place a buy stop on the opening price of the down candle we see the next candle we opened lower than that down candles open and so that
55 00:09:18,150 --> 00:09:26,790 was the very next green candle or bullish candle it opened lower than our down candle or bearish candles opening price. So our buy stop would have been
56 00:09:26,790 --> 00:09:37,740 triggered as that bullish candle trades up so we would be triggered long in that position. But now we have another down candle so we could take a look at that
57 00:09:37,740 --> 00:09:49,200 opening price. And should we see price trade back up to that level we could be entered long again on a buy stop. Same thing happens here. market trades up
58 00:09:49,200 --> 00:10:02,550 through it and gives us a nice little pop. And here we have that successive 123 Candles lower all being down candles each time line, we have the opportunity to
59 00:10:02,550 --> 00:10:05,670 be net long, the one in the middle.
60 00:10:07,410 --> 00:10:19,170 The other three down candles, you may have been tripped in long on that particular entry point. But your stop loss as you'll learn will be below the
61 00:10:19,170 --> 00:10:28,920 swing low that's most recently been created on a daily chart and below a specific reference point which were outlined in Lesson Eight. But you could be
62 00:10:29,100 --> 00:10:42,120 long here. And you can also then use this opening price as well to add to it. So you have a buy stop on the opening price of this down candle. You see, price
63 00:10:42,120 --> 00:10:53,280 does fill that and you'd be net long from that price. And we have another down candle, we could watch this buy stop in triggered animal along entry at this
64 00:10:53,310 --> 00:11:04,680 opening price. Price does eventually make a lower candle. And then that lower candles opening price does get trip two candles to the right of it and
65 00:11:04,680 --> 00:11:20,010 eventually sees another little move higher. And we're gonna take a look at now using his idea for selling wanna stop. Here's a section of the Japanese yen
66 00:11:20,070 --> 00:11:31,950 looking at old high from 2007. You can see how price made a piercing of that 123 50 level and price rejected, had a break in market structure and have a sell
67 00:11:31,950 --> 00:11:40,140 off, we're going to break that whole area down in the shaded area. You see there's a market structure break here. That's the initial one. But there's a
68 00:11:40,140 --> 00:11:48,900 secondary one that we're going to focus on this one primarily, we're gonna assume that you could see that this market on daily timeframe was getting in
69 00:11:48,900 --> 00:12:01,410 sync with the lower objectives for the monthly and weekly dollar yen and PD arrays that we'll be looking for lower prices, withdrawal price on the daily
70 00:12:01,410 --> 00:12:10,800 chart lower and I mapped out every one of the up candles that went back to the premium of the ranges that price was trading and for the daily chart. And every
71 00:12:10,800 --> 00:12:21,540 opening price. Once it's triggered, you would be net short. So there's 12345 examples in here where each one of the candles just a short time after its
72 00:12:21,570 --> 00:12:32,490 formation of the up candle. It trips you short for the Japanese yen. And you can see another example here where the price trades back up to a mitigation block
73 00:12:33,630 --> 00:12:43,620 and the up candle you would look to sell short at the opening price. And you'd see that down arrow indicating that was this candle that you'd be using the very
74 00:12:43,620 --> 00:12:54,030 next candle you would be short. And that's that same level right there just shown in a more higher timeframe view of it. Several 100 pips again and this
75 00:12:54,030 --> 00:13:04,200 last one here over 1000 pips available in terms of downside potential. And again, this is using the MFI weekly PD arrays as your directional bias, and then
76 00:13:04,200 --> 00:13:16,200 using the up candles and down candles in relationship to using the stop entry. In this case, we're using the selling less stop at the opening of a up candle.
77 00:13:16,740 --> 00:13:23,370 And opportunity is in maintenance. If you look at these candles here, you can see how they returned back to those same candles you shorted from when to stop.
78 00:13:24,090 --> 00:13:32,460 They become bearish order blocks at a later time too. So you can actually put more positions in and you can build in larger positions. If you start with a
79 00:13:32,460 --> 00:13:41,400 small amount allocated to the initial position, you can build another position. In other words, if you go with a half position or half your traditional size you
80 00:13:41,400 --> 00:13:51,180 can go and add more back in but have already profited on portions that otherwise may not have been viewed as an opportunity. So until we talk next time, I wish
81 00:13:51,180 --> 00:13:52,830 you good luck and good trading