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59-ICT Mentorship Core Content - Month 6 - Classic Swing Trading Approach

Last modified by Drunk Monkey on 2022-09-21 04:44
1 00:00:25,710 --> 00:00:33,360 ICT: Okay, folks, we're looking at less than three, February 2017 content for the ICT mentorship, we're dealing specifically with classic swing trading
2 00:00:33,360 --> 00:00:33,870 approach.
3 00:00:39,240 --> 00:00:48,210 When defining market conditions, we think in terms of where the price can reach for both in a rally and his decline, this is the foundation to determining
4 00:00:48,570 --> 00:01:00,510 likely market direction. The PD arrays that have been traded to or executed on most recently indicate the opposite PD array spectrum will be reached for if
5 00:01:00,510 --> 00:01:09,930 discount arrays have provided support for price probabilities increase the premium arrays will be sought after, above the market price. If premium arrays
6 00:01:09,930 --> 00:01:24,810 have provided resistance for price probabilities increased a discount a raise will be sought below the market price. Go assume this is the market price. This
7 00:01:24,810 --> 00:01:33,990 could be in any asset class, it doesn't make a difference. But we're going to specifically talk about let's say this was Frank. And we're looking at a monthly
8 00:01:33,990 --> 00:01:46,920 chart, what we do is in reference to current market price, we define the range that we're presently in. And we look for the nearest bearish mitigation block
9 00:01:46,950 --> 00:01:58,890 above us. And we look for the nearest bullish mitigation block. Now again, these arrays may not exist in current price action. But this is the spectrum do you
10 00:01:58,890 --> 00:02:13,260 look through above and below the marketplace in this order? Above you look and see if there's any bearish breakers that have not yet been traded up to. And you
11 00:02:13,260 --> 00:02:25,860 look below you for any bullish breakers that have not been traded to. above you, you look for liquidity voids, where price is quickly drawn lower or repriced
12 00:02:26,070 --> 00:02:35,910 aggressively fast leaving a big range of only downside delivery. And conversely, you would look for any liquidity voids below you where price has shown a strong
13 00:02:35,910 --> 00:02:50,100 willingness to rally quickly leaving a porous wake of only by side delivery in price settlements big ranges up. And above current market price, you would look
14 00:02:50,100 --> 00:03:05,850 for any fair value gaps. And below you any fair value gaps. You'd look for the nearest bearish order block above you. And below, you'd look for the nearest
15 00:03:05,850 --> 00:03:19,230 bullish order block. And you would look for the candles to have wicks at short term highs. Any candle that has wicks above it, we would be noting the bodies of
16 00:03:19,230 --> 00:03:29,520 the candle, because there would be liquidity resting just above the bodies of the candle. And boy, you below the candles that have wicks, you would look at
17 00:03:29,520 --> 00:03:41,100 the candles bodies and below it, it would have liquidity below it. And they would be rejection blocks respectively. And you would look at the old high or
18 00:03:41,100 --> 00:03:53,310 any historical load that were below. And you would look for any old blow or any historical high that we're above framing the PD arrays above market price is in
19 00:03:53,310 --> 00:04:07,830 the premium spectrum. And the arrays below market price is the discount spectrum. What you're doing is you're going to be looking at the monthly, the
20 00:04:07,830 --> 00:04:18,270 weekly, the daily and the four hour the same way as I'm outlining here. So when we are referring to determining the premium arrays and determined discount
21 00:04:18,300 --> 00:04:30,060 arrays, this is what we're referring to. Okay, this is the PD array matrix. And every array above market price is the premium spectrum. And every array below
22 00:04:30,060 --> 00:04:43,740 current market action is the discount spectrum. What you're looking for is which side of the marketplace has most recently shown a displacement where has price
23 00:04:43,740 --> 00:04:53,760 moved away from has it moved away from the price levels aggressively? Was there speed involved? Was there large ranges indicating to there has been a massive
24 00:04:53,760 --> 00:05:03,240 push by smart money because we understand that that entity has more money than us collectively, and it's there Business. So if they push price around on these
25 00:05:03,240 --> 00:05:12,510 higher timeframe charts, there's a great deal of probability that that direction is most likely going to be, at least tradable in the same direction.
26 00:05:18,060 --> 00:05:28,350 Okay, higher timeframe sequence, when we're looking at shorting opportunities, okay, in my free tutorials, you've always heard me refer to sell and buy
27 00:05:28,350 --> 00:05:39,720 programs. Okay, and what is a sell program? Well, it first starts with a monthly chart, and we look for the market to move away from a resistance level, that
28 00:05:39,720 --> 00:05:48,600 could be a bearish order block, it could be trading away from an old high, it could be trading away from a historical low as resistance. But when that
29 00:05:48,600 --> 00:05:59,190 timeframe is indicated, wants to go lower and want to trade lower, that is a sell program. Okay, so we look for monthly charts to go into a sell program, or
30 00:05:59,220 --> 00:06:10,050 come out of a premium spectrum. And we would look for the same thing to occur in the weekly chart. So we would look for premium arrays in a weekly chart to
31 00:06:10,050 --> 00:06:20,490 indicate that the price wants to reach for the discount arrays below us so that we create a sell program on the weekly chart. This continues into the daily
32 00:06:20,490 --> 00:06:31,200 chart, you'd look for premium arrays to call it a sell program or bearish prices for the daily. And for our executable timeframe for Swing Trading sets the four
33 00:06:31,200 --> 00:06:40,950 hour chart, you would look for the same thing as well, on the four hour you would look for premium arrays to look for price to reject or resist going higher
34 00:06:41,940 --> 00:06:53,550 and expand lower seeking discount spectrum PD arrays. So for ideal shorting conditions and opportunities, we look for the monthly weekly daily and for our
35 00:06:53,580 --> 00:07:04,140 to be in alignment with price moving away from premium PD arrays and the opposite said for buying opportunities. We look for the monthly chart to be in a
36 00:07:04,140 --> 00:07:15,420 buy program. That means it's moving away from Discount arrays and seeking to move higher to reach up into premium arrays. There was this would be a buy
37 00:07:15,420 --> 00:07:27,450 program on the monthly chart. And on a weekly chart we'd be looking for price finding sensitivity at discount arrays moving price into a bi program. So you
38 00:07:27,450 --> 00:07:38,820 would expect to see the weekly chart to be moving higher or trading higher. The daily chart also, when it's finding support at discount arrays, we would expect
39 00:07:38,820 --> 00:07:47,070 to see price moving higher on the daily chart. And on the four hour executable timeframe, we would be looking for sensitivity in the discount arrays for buying
40 00:07:47,070 --> 00:07:58,380 opportunities. So that way we get in sync with the monthly, weekly daily and for our all being in sync for bullish or buy program opportunities. When we're swing
41 00:07:58,380 --> 00:08:08,460 trading, the easiest and the most probable direction setups are when all monthly, weekly, daily and four hour are in alignment. So when we have the
42 00:08:08,460 --> 00:08:16,650 monthly that's bullish, the weekly that's bullish, and the daily that's bullish, and the four hour trades down into a discount and find support at for instance,
43 00:08:16,650 --> 00:08:25,920 let's just say a bullish order block, that's a high probability condition, because you have the monthly weekly and daily in sync with you. And it's already
44 00:08:25,920 --> 00:08:34,920 in an existing up market. So it's bullish undertones are going to be supporting the idea on a four hour chart if you're looking for bullish order blocks or
45 00:08:35,520 --> 00:08:44,100 buying below an old low scooping up sell stops just like a market maker would or trading back down into a liquidity void. For instance like an optimal trade
46 00:08:44,100 --> 00:08:56,400 entry for a fair value trade going back into a fair value gap. Same thing all these ideas are going to be supported with the notion that monthly weekly and
47 00:08:56,400 --> 00:09:04,380 daily are already bullish. And therefore the four hour should be in agreement with it. And your buying opportunity should be high probability and the reverse
48 00:09:04,380 --> 00:09:14,160 is said for bearish opportunities. When the monthly weekly and daily are moving lower and they're in sell programs. When you see the four hour golf into premium
49 00:09:14,190 --> 00:09:24,990 PD arrays, bearish order blocks, bearish liquidity voids bearish, fair value gaps, bearish breakers or trading above an old high to run out by stops. Those
50 00:09:24,990 --> 00:09:31,680 conditions are high probability because you had the monthly weekly and daily in sync, looking for lower prices and there's higher timeframes going to draw
51 00:09:31,680 --> 00:09:41,610 heavily on that lower timeframe for our chart to those probabilities shift to a great deal of favor for you as a trader that wants to go short in those
52 00:09:41,610 --> 00:09:42,300 conditions.
53 00:09:49,980 --> 00:10:01,260 Okay, so for classic swing trading approach, the general concept is what we're going to refer to here. Now. I've given you a sample ID You, okay, and I'm gonna
54 00:10:01,260 --> 00:10:11,250 give you PDF files in August that give you different scenarios that really completely outline everything in a flowchart format. So certain conditions will
55 00:10:11,250 --> 00:10:20,640 lead you to certain decision points. And once you get to those decision points, you have to wait for price to either confirm or negate the opportunity. But for
56 00:10:20,640 --> 00:10:30,480 instance, for this simple, classic trading approach model that we're outlining here, market is already going to be pre disposed or poised to trade higher on
57 00:10:30,480 --> 00:10:38,250 higher timeframe. Now, this could be arrived at and determined by your analysis in the form of looking at the seasonal interest rate driven. Obviously, this
58 00:10:38,250 --> 00:10:48,360 should always be involved in your trading Commitment of Traders report, or data. In other words, large commercial traders, are they net long on Swiss franc? And
59 00:10:48,360 --> 00:10:56,700 if that's the case, and their trend of their hedging program has indicated they have been buying long term and every time that goes to a net long position, or
60 00:10:56,700 --> 00:11:07,890 if they aggressively lessen their short positions on the CBOT commitment traders report or line graph, when that occurs, that would be supportive of bullish
61 00:11:07,890 --> 00:11:18,240 prices for Swiss franc. And or inter market analysis supports the bullishness. Now, this could be in the form of SMT divergence, it could be market structure,
62 00:11:18,300 --> 00:11:28,050 you just need a few things on a macro scale, to support the idea that on a higher timeframe, prices should be trading higher. You don't need everything in
63 00:11:28,050 --> 00:11:38,250 an agreement, you need a small sample size of a few things and agreements, posing that the higher timeframe direction should be bullish. When you have a
64 00:11:38,250 --> 00:11:47,190 few things in your favor, that's indicating that's the case and least interest rates. You know, I think that's the highest probability one in your favor. So if
65 00:11:47,190 --> 00:11:55,860 you have interest rates, for instance, like the interest rate differential, for instance, like the most recently in our mentorship, we've indicated that the New
66 00:11:55,860 --> 00:12:02,730 Zealand dollar and the Australian dollar, because of their interest rate being the highest among all the other current season countries around the world, it's
67 00:12:02,730 --> 00:12:12,000 traded in the Forex, the differential between those currencies to other currencies, they have the higher interest rate, so therefore, the yield is going
68 00:12:12,000 --> 00:12:21,180 to be higher on those countries in their currencies. So more people are gonna be more likely to buy those currencies than they are to sell them, because the
69 00:12:21,300 --> 00:12:33,420 differential between the interest rate that's available. But let's assume for a moment, we've already arrived at whatever combination of conditions that you're
70 00:12:33,420 --> 00:12:43,590 using to employ with your higher timeframe. Fundamental. Okay, I'm using my fingers to make quotations here, your fundamental outlook on price on a higher
71 00:12:43,590 --> 00:12:55,230 timeframe. And it's an agreement with a measure of inter market analysis, okay supporting that bullishness. The market will rally higher and then were we
72 00:12:55,230 --> 00:13:05,430 waiting for a retracement, we have to take our hands and sit on them until we wait for the retracement to come to fruition. Once that retracement occurs, then
73 00:13:05,430 --> 00:13:17,610 we have the stage for the setup to occur. So in other words, we have a condition in the marketplace that outlines bullishness long term, and then we wait for
74 00:13:17,610 --> 00:13:26,160 markets that have these conditions to already we want to see them rally. Okay, this is the highest probable direction type trading for Swing Trading. And when
75 00:13:26,160 --> 00:13:34,470 the market rallies, okay, or it shows displacement as an impulse price when it moves away from some specific price level, maybe it's a level we were
76 00:13:34,470 --> 00:13:44,490 anticipating support to come in, or we are waiting for an old low to not see further slides lower in price, maybe we're looking for a turtle soup by now it's
77 00:13:44,490 --> 00:13:51,810 a false break below an old low. But we don't really want to buy that yet. We just haven't built up our confidence yet. Or we're not as a student in price
78 00:13:51,810 --> 00:14:00,990 action as we had hoped to be at our current development stages. So we're going to wait then see if price is going to give us clues and confidence that it has
79 00:14:01,020 --> 00:14:09,300 made a low and ran out to stop and then starts to go higher. When that rally occurs, we just simply wait for a retracement. Once that retracement occurs,
80 00:14:09,570 --> 00:14:20,970 then you have a stage at which the market will be setting up a condition that permits you to take a trade entry. So there is a condition first. Then there's
81 00:14:20,970 --> 00:14:25,230 the stage portion of taking the trade and then there's the execution.
82 00:14:26,279 --> 00:14:34,919 When the market expands up to higher prices, that's what you're trying to profit on. So the normal procedure is is you're looking for a market that's predisposed
83 00:14:34,919 --> 00:14:42,809 to go higher. You have higher timeframe macro ideas behind the idea that that market should go higher. The market has to rally first and that has to be
84 00:14:42,809 --> 00:14:51,869 displacement market creates an impulse pricing. When that impulse price swing occurs we wait for the retracement. So in other words, it's okay. For instance
85 00:14:51,869 --> 00:15:01,889 we're looking at the marketplace. And we think that Swiss franc should be rallying from this point of origin when we see price move higher, we know that
86 00:15:01,889 --> 00:15:11,129 there is a displacement there. So we have an impulse price swing. Now, in this entire rally during this time, the public or less informed traders or
87 00:15:11,129 --> 00:15:23,939 reactionary traders are going to be dogpiling on this thing. We do not do that. We wait. We look for conditions in the marketplace while it's rallying up, where
88 00:15:23,939 --> 00:15:32,429 it could offer resistance and this is going to be in the form of premium arrays. In other words, it could be a bear shorter block, a breaker, mitigation block
89 00:15:32,429 --> 00:15:41,609 void fair value gap old high old low, something to that effect that we wait and we anticipate the market to start topping out and eventually giving us a
90 00:15:41,609 --> 00:15:51,479 retracement, we're not trying to time the retracement. But during this small retracement back if this is a monthly chart, or weekly chart, that red area of
91 00:15:51,479 --> 00:16:00,839 retracement that could be a counter trend opportunity. Now I'm not teaching that for Swing Trading here. But you will be given those ideas in August going to a
92 00:16:00,839 --> 00:16:12,269 PDF portion of our time together. So you'll have a when to counter trend swing trade. It will be basically doneness periods shown graphically in the move in
93 00:16:12,269 --> 00:16:21,119 red. So you'd be taking shorts there. But we're looking primarily look for high probability long entries. So when the retracement occurs, what we're looking for
94 00:16:21,119 --> 00:16:32,189 is we're looking for specific levels specific price levels at which we expect and anticipate sensitivity for bullish buy opportunities. During that
95 00:16:32,189 --> 00:16:42,479 retracement, we're hunting, we're looking for things that line up. For us to get in sync with the long term analysis that we've arrived at that we believe that
96 00:16:42,479 --> 00:16:52,139 the higher timeframe is going to be moving up or bullish from where we're at now. And eventually price, we're anticipating this portion, this is going to be
97 00:16:52,139 --> 00:17:03,659 the expansion swing. In other words, this portion is where price reaches for some higher timeframe resistance level of some sort. We have our range defined
98 00:17:03,659 --> 00:17:11,789 by a point of origin and the intermediate term high prior to the retracement. Once you identify those two markers, what you're doing is you're all you're
99 00:17:11,789 --> 00:17:24,509 doing is making that range defined in terms of discount to premium. Everything below that high down to the point of origin is going to be referred to as your
100 00:17:24,509 --> 00:17:35,639 discount PD array matrix. Inside that range, you're gonna be looking for all of the things we looked for and mapped out for the discount matrix. First thing you
101 00:17:35,639 --> 00:17:45,719 would look for, is there any mitigation blocks? Is there any bullish breakers? Is there any liquidity voids? Is there any fair value gaps? Is there a bullish
102 00:17:45,749 --> 00:17:54,389 order block? Is there any candles that have long wicks? So we can look for the market to seek liquidity below the bodies of those candles? And ultimately,
103 00:17:54,419 --> 00:18:04,529 what's the ultimate low? And or is there a historical high that we may find support at all those ideas are going to be looked at inside of the impulse swing
104 00:18:04,589 --> 00:18:12,419 from the point of origin, all the way through the impulse swing that makes that intermediate term high right before it retraces inside the impulse swing, we're
105 00:18:12,419 --> 00:18:23,789 looking for all those PD erased on a discount basis. We're looking that map out what levels would be indicative of having strong likelihood to buy or where we
106 00:18:23,789 --> 00:18:33,779 would see institutional order flow step in and start sending price higher again. Once you do this, you've already outlined what it is you're looking for, you'll
107 00:18:33,779 --> 00:18:38,519 know what price levels you're looking for. And that's how you map out your discount array matrix.
108 00:18:44,550 --> 00:18:55,260 Okay, the swing trade procedure. Okay, what you're gonna be doing is on the monthly and the weekly, you're looking for the nine to 18 month market profile.
109 00:18:56,070 --> 00:19:04,140 Are we in a trending environment? Are we in a range bound consolidation. And if we're in consolidation, what you're looking for is a market that leaves a
110 00:19:04,140 --> 00:19:11,910 consolidation aggressively. In other words, it moves out of a small trading range and moves aggressively higher on a monthly or weekly chart that shows
111 00:19:11,910 --> 00:19:19,140 there's displacement we got to start following that marketplace because it's most likely going to want to trend and we have to be looking for those
112 00:19:19,140 --> 00:19:30,210 opportunities to come to fruition. We're determined the monthly PD arrays and we're gonna refer to the active discount arrays. Now we're since we're looking
113 00:19:30,210 --> 00:19:38,430 at bullish markets here. We're gonna be looking at what active discount rates bullish order blocks liquidity voids below the marketplace fair value gaps
114 00:19:38,430 --> 00:19:51,180 underneath market price. Where's the old lows at bullish breakers bullish mitigation blocks. Now if the market shows the monthly discount array is
115 00:19:51,180 --> 00:20:02,940 supporting price, you got to determine now where are the premium arrays on the monthly and when monthly discount over A's are active. That means you're hunting
116 00:20:02,940 --> 00:20:13,080 and you know which ones they are, you're going to be moving down into the weekly chart and transpose those monthly levels over to your weekly chart that are
117 00:20:13,080 --> 00:20:24,630 going to determine your weekly PD arrays and you're gonna refer specifically to the active discount arrays on your weekly chart. If weekly discount arrays are
118 00:20:24,630 --> 00:20:37,740 supporting price determined premium arrays on the weekly chart as well. And when the weekly discount arrays are active, in other words, you've already defined
119 00:20:37,770 --> 00:20:48,390 where the bullish discount weekly chart, bullish order blocks, liquidity voids that are bullish, bullish breakers, bullish mitigation blocks, old lows, fair
120 00:20:48,390 --> 00:20:59,070 value gets below the marketplace. Once you arrive at them, you want to transpose those to your daily chart. Okay, then you got to determine your daily discount
121 00:20:59,070 --> 00:21:09,780 arrays, and you got to refer to the active discount arrays on your daily defining each on that daily timeframe. And once you understand where the daily
122 00:21:09,780 --> 00:21:19,020 discount arrays are, they're active, you know which ones are not there. In other words, there may not be a void there may not be a breaker, but whichever ones
123 00:21:19,020 --> 00:21:30,030 are active in the discount spectrum, you take those and you transpose those over to a four hour chart. Then you get to determine your four hour discount erase
124 00:21:31,350 --> 00:21:39,570 labeling, which ones are in the discount, they may not be breakers they may not be avoid may not be a gap. But there are old lows, there are bullish order
125 00:21:39,570 --> 00:21:52,740 blocks and those neatly defined you can be referring to the active discount rates on that timeframe as well. Now what you're doing is you're going to buy
126 00:21:52,770 --> 00:22:05,490 all for our discount erase elements, every bullish order block every bullish breaker, every mitigation blocked, it's bullish. Every old love it's violated
127 00:22:05,490 --> 00:22:13,950 we'd love to see some buying opportunity that could be a turtle soup, long entry. Every rejection block below candles have wicks, we look for price to go
128 00:22:13,950 --> 00:22:21,930 just below the the bodies of the candles. And we'll trade right below that, like a turtle soup doesn't need to go through the wicks. And when we take these long
129 00:22:21,930 --> 00:22:31,260 entries, we look to scale out at daily, weekly and monthly premium arrays that's already been defined and transposed to our four hour chart.
130 00:22:36,150 --> 00:22:46,080 The ideal scenario is that we look to trade setups to offer at least three and preferably more times the range between your entry and the closest premium array
131 00:22:46,110 --> 00:22:53,820 from all timeframes. So if you're looking for a trade that you think that the monthly has the range to go higher, and it's in a buy program, if you're taking
132 00:22:53,820 --> 00:23:01,140 an entry on a four hour, you're really trying to aim for that monthly level but you don't hold everything for that monthly level, you're going to take something
133 00:23:01,140 --> 00:23:11,700 off at the premium arrays on the four hour chart and at the daily chart and at the weekly chart. And as you get closer and closer to that premium range on the
134 00:23:11,700 --> 00:23:17,730 monthly and weekly you want to have very small portions of your position on and have already taken profits along the way.
135 00:23:24,180 --> 00:23:35,970 Setup your protocol. Now if the by setup on the for our discount array fails you and the trade results in a loss, don't worry about it, don't freak out and don't
136 00:23:35,970 --> 00:23:46,110 panic. Okay, all you're going to do is simply look for a lower priced for our discount or ready to buy it. Now if the four hour chart has no more discount or
137 00:23:46,110 --> 00:23:56,010 ways to buy it, you're going to refer to the daily the weekly and the monthly discount arrays to buy at a lower price. At the lower discount array you're
138 00:23:56,010 --> 00:24:08,160 going to buy at 50% of the position size of the initial trade or the previous failed trade that you just utilized. Do not try to win all of the lost equity
139 00:24:08,160 --> 00:24:20,040 back in the subsequent trade. It may take a few trades to get back that loss Do not rush Do not force it. Always confirm lower timeframe for our premium arrays
140 00:24:20,070 --> 00:24:33,210 give way or fail as price moves in your favor in new discount arrays support price as it moves toward the premium arrays on the higher timeframe. In other
141 00:24:33,210 --> 00:24:42,630 words, you're going to be looking for bearish breakers you're going to be looking for bearish mitigation blocks that give way you know what's the day
142 00:24:42,630 --> 00:24:49,470 shouldn't hold price back you should just be going right through those. You should be going through up candles which would be noted as potential bearish
143 00:24:49,470 --> 00:24:58,080 order blocks and you're not going through old highs and coming back with deep retracements you're going through Oh highs and you're expanding higher. That is
144 00:24:58,110 --> 00:25:09,150 a clear indication you have a strong trade on your side and you have institutional order flow behind you. Alright, so let's take a look at a swing
145 00:25:09,150 --> 00:25:20,280 trade progression. Let's just say for instance, this is a monthly chart. Okay, as you have a first impulse swing then there's a retracement. If you're in a
146 00:25:20,280 --> 00:25:29,010 bullish market environment, you'd expect another expansion price swing, and then a retracement and then another impulse price swing, then a retracement and
147 00:25:29,010 --> 00:25:38,220 another expansion swing. But all along making higher highs and higher lows that's a normal classic textbook trend that would be deemed bullish by anyone's
148 00:25:38,220 --> 00:25:47,580 standards. But what we look for the say this is a weekly chart. Okay, this can be done on a monthly too, but let's just for instance, refer to this as a
149 00:25:47,610 --> 00:26:01,050 condition that's in our weekly chart. If we look at the first impulse swing to the left, inside that impulse swing, our daily chart, it may have a smaller
150 00:26:01,050 --> 00:26:11,460 impulse swing with a deep retracement and then our secondary expansion swing. You won't see it on the weekly sometimes, but if you break the weekly chart,
151 00:26:11,640 --> 00:26:26,880 impulse swing down and look deeper, you'll see two stages sometimes in the daily chart. The expansion swing that occurs later in this example, inside that
152 00:26:26,880 --> 00:26:35,730 expansion swing the same thing is seen if this is a daily chart we're looking inside that expansion swing inside that on a daily chart, because price is
153 00:26:35,730 --> 00:26:47,760 fractal you would see subsequently smaller price swings and impulse swing retracement expansion swing and the impulse swing that occurs on the right side
154 00:26:47,760 --> 00:26:57,270 of our charts here. Inside the impulse swing if this was a weekly that would be a daily chart that could have a impulse swing smaller daily retracement and then
155 00:26:57,270 --> 00:27:08,760 an expansive price swing and then the second or last expansion swing on a larger price move inside that expansion swing there will be smaller impulse swings with
156 00:27:08,760 --> 00:27:22,560 retracements and the lower timeframe expansion swing. So everything in price is fractal. The very first impulse swing on the daily that would have a smaller
157 00:27:22,590 --> 00:27:32,550 impulse swing retracement and expansion in the daily charts expansion price swing would have in itself a smaller impulse swing retracement and expansion and
158 00:27:32,550 --> 00:27:41,700 that would be seen on the four hour chart. So the larger impulse swing initially on the left hand side, this could represent a weekly range or weekly charts
159 00:27:41,700 --> 00:27:51,480 impulse swing and in a smaller range inside of that weekly could be seen with a daily impulse swing retracement and expansion and then that daily each
160 00:27:51,480 --> 00:28:03,360 individual Price swing higher up would have for our impulse swings, retracements and expansions. And this is seen for every price swing along the spectrum from
161 00:28:03,360 --> 00:28:10,350 monthly, weekly, daily and four hour. Now with this information, we can see that there are
162 00:28:12,150 --> 00:28:23,400 discount arrays in each one of these price swings. If you're buying at any one of these and they fail, you just simply dropped down into the next higher
163 00:28:23,400 --> 00:28:37,530 timeframe discount array and you would look for ideas inside of that to be a buyer to be in sync with the larger monthly and or weekly macro uptrend. So we
164 00:28:37,530 --> 00:28:48,480 look at pricing the fractal basis, but we also look at it in terms of defining in terms of PD arrays and awards premium to discount. When price pulls back and
165 00:28:48,480 --> 00:28:57,240 the algorithm gets back into these discount arrays it will look to seek that liquidity below the market price to allow traders at the bank level to populate
166 00:28:57,240 --> 00:29:00,300 those levels with orders and then the market will take off
167 00:29:07,020 --> 00:29:15,600 okay, for bearish markets. The general concept is we have a market that's poised or predisposed to trade lower on a higher timeframe. And again, I use the same
168 00:29:15,600 --> 00:29:23,490 defining terms we did with the bullish market conditions. It may be a seasonal tendency that supposes the market should be bearish or the asset class you're
169 00:29:23,490 --> 00:29:33,690 trading you should be having some bearish price activity, seasonally long term and consistently showing that repeats a lot more than it does trade higher that
170 00:29:33,690 --> 00:29:42,480 season. Tendency should have an influence on price, not by itself not fantasy and that's not a it's not a be all end all. But we use it as a supporting idea.
171 00:29:43,380 --> 00:29:54,390 Or as I said roadmap, if you will. Obviously interest rates would be a strong deciding factor here on a macro level and maybe Commitment of Traders their
172 00:29:54,690 --> 00:30:05,010 commercial positions are heavily net short. So therefore we're looking for cutting uation or they have been hedging over the last six or nine months or so
173 00:30:05,010 --> 00:30:13,890 on that weekly chart, you can see how they have worked. Price lower every time they went net short, they pulled price heavily lower in a downtrend. And it may
174 00:30:13,890 --> 00:30:22,200 be now your market your trading has them as commercial traders being heavily net short. If that's the case, then you have seasonal tendencies on your side and
175 00:30:22,200 --> 00:30:29,460 you have interest rates on your side that would be drawing price lower. And the commitment of traders report with a heavily net short position by the
176 00:30:29,460 --> 00:30:38,640 commercials. Commercials are large hedgers, and we'll talk about that when we get into commodities. The inter market analysis supports the idea to this is
177 00:30:39,060 --> 00:30:52,500 institutional market structure. This is s&p Divergence those ideas the market will have a decline lower okay and it moves away from a point of origin we may
178 00:30:52,980 --> 00:31:00,930 have already expected that move lower or we may be surprised by that move. It doesn't make a difference. We look for displacement that first price swing is
179 00:31:00,930 --> 00:31:10,500 the impulse price swing. That's what's drawing price away from a level that we either expected to see bearishness or again if we're surprised by something we
180 00:31:10,500 --> 00:31:16,980 didn't expect now we have to say okay, well what's what's going on in here? Is there going to be a retracement? The market goes on the retracement. And if we
181 00:31:16,980 --> 00:31:26,160 go and look at the higher timeframe or something changes that we didn't notice before. For a pair that we just caught our eye. We are seeing the impulse price
182 00:31:26,160 --> 00:31:35,610 swing and now we have the retracement. We're expecting or anticipating the expansion price swing that's where we look to profit. But we have to go into the
183 00:31:35,610 --> 00:31:47,070 marketplace during that retracement. Okay, we're going to be studying price and defining in terms of PD arrays. So we go back to the point of origin and the
184 00:31:47,070 --> 00:31:57,150 short term low we saw price bounced out that causes that retracement to come to fruition. We then take the low at the short term low L we up to the point of
185 00:31:57,150 --> 00:32:05,790 origin. And we define that in the terms of premium pdra matrix. In other words, this is where all the bearish waterblocks bearish liquidity voids bearish
186 00:32:05,790 --> 00:32:15,390 breakers. Bearish mitigation blocks bearish fair value gaps, old highs the sell above and rejection blocks which are candles that have long wicks. And we look
187 00:32:15,390 --> 00:32:26,460 to sell just above the bodies of the candles when we're bearish. What we do is we go into the marketplace and we do this on a monthly, a weekly, daily and four
188 00:32:26,460 --> 00:32:37,020 hour. So we define and determine all of the premium arrays for all those timeframes and we transpose them over to the lower timeframe.
189 00:32:43,500 --> 00:32:52,950 Okay, the swing trade procedure. Again, you're gonna determine the nine to 18 month market profile. Preferably you want to see price moving out of a
190 00:32:52,950 --> 00:33:01,080 consolidation not being in a range, you want to see it wanting to trend, the more likely the market is trending and trending lower, the higher the
191 00:33:01,080 --> 00:33:08,910 probability is that you're going to get a nice swing trade on the short side. You're gonna determine the monthly PD arrays, you're gonna refer to the most
192 00:33:08,910 --> 00:33:18,210 active premium arrays that means on a monthly chart, did we just recently move away from from that point of origin was that a bearish order block was an old
193 00:33:18,210 --> 00:33:28,530 high was it the old historical low that acted as resistance? What was the framework that caused that move. And if the monthly premium arrays are resisting
194 00:33:28,530 --> 00:33:38,880 price, we determined now to discount arrays on the monthly chart. So it's where should price reach down to and when the monthly premium arrays are active. And
195 00:33:38,880 --> 00:33:48,780 once we defined what they are on the monthly levels, we move those levels to the weekly chart. Then we take the same thing we applied to the weekly, we break
196 00:33:48,780 --> 00:34:00,660 down the PD arrays in a premium basis. And then we refer to all of the active what would be seen as premium arrays on the weekly chart. If the weekly premium
197 00:34:00,900 --> 00:34:09,870 array is resisting price, we determine where the discount rates are on the weekly chart. So we're defining our range in terms of premium to discount on the
198 00:34:09,870 --> 00:34:18,270 weekly as well. When the weekly premium arrays are active know what you defined what they are, if there's bearish shorter blocks, if there's breakers that are
199 00:34:18,270 --> 00:34:29,040 bearish old highs where they're at where the rejection block would be any fair value gaps above you that is transposed to the daily chart being determined at
200 00:34:29,040 --> 00:34:39,270 daily premium arrays. I'm going to refer to the most active premium arrays on the daily. In other words, is there a bearish breakout on the daily chart? Is
201 00:34:39,270 --> 00:34:48,150 there mitigation blocks above us on the daily chart? Is there fair value gaps or voids? Where's the old highs that is there any candles that have long wicks on
202 00:34:48,150 --> 00:34:57,180 them? We're going to be focusing on the bodies of the candles just to pierce above that just to do a turtle soup idea. Then you're gonna take those and when
203 00:34:57,180 --> 00:35:06,750 that's active, you're going to take those premium Arrays on a daily chart, and you're gonna move them over to your four hour chart and transpose those. They're
204 00:35:06,750 --> 00:35:13,890 gonna do the same thing on your four hour chart, you're gonna determine whether premium arrays are bearish, waterblocks, old highs, bearish breakers mitigation
205 00:35:13,890 --> 00:35:23,400 blocks that are above you, all those premium arrays, you're going to take them and determine which occur or appear in four hour. And then you got to refer to
206 00:35:23,400 --> 00:35:31,440 the active premium arrays for that timeframe only. So otherwise, you're going to only focus on the ones that are in the four hour chart, because they may not be
207 00:35:31,440 --> 00:35:39,210 a breaker, it's bearish, there may not be any mitigation blocks in the current range that you're looking at, for our chart. But whatever ones that are active
208 00:35:39,240 --> 00:35:48,960 in your current market environment, that's what you take, and you label those for your four hour chart. You're going to sell every four hour premium array, it
209 00:35:48,960 --> 00:35:59,550 means bearish order block, there's breaker mitigation block, trade back up into fair value closing a range or fair value gap. Or you'll sell short and Ojai or a
210 00:35:59,940 --> 00:36:08,700 candle that's bold with very short little wick at the top, you'll look for the price to trade through that high. The key is is you want to look for price to
211 00:36:08,700 --> 00:36:16,920 not go through the wicks many times and that's the rejection block when you see the long wick candles and you're bearish, chances are it probably won't go above
212 00:36:16,920 --> 00:36:24,090 the wicks it many times will just go above the body to the candles and then fail there, that's the rejection block, you'll sell it all those on a four hour basis
213 00:36:24,120 --> 00:36:37,860 and any level that's been transposed from the daily, the weekly and the monthly as well. As you sell short, you're gonna be looking to take profits at the Daily
214 00:36:37,860 --> 00:36:45,810 the weekly and the monthly discount arrays. In other words, all the bullish ideas that would support price as you reach them, and prices move in your favor
215 00:36:45,810 --> 00:36:53,670 to the daily and the weekly and the monthly, you're gonna be scaling out I should get to those and the more you get to the monthly and weekly discount
216 00:36:53,670 --> 00:37:02,310 range on those timeframes, the less likely price will continue going lower, and you want to be at your smallest portion of your trades. At that time, you don't
217 00:37:02,310 --> 00:37:09,180 want to be holding your biggest portion now because of price read traces or reverses altogether, you get back a lot of open profits and it's never fun.
218 00:37:10,740 --> 00:37:19,020 Okay, gonna look to trade setups that offer at least three preferably more times than the range between your entry and the closest discount array on all
219 00:37:19,020 --> 00:37:28,770 timeframes. So you're basically framing your risk reward to be at least for $1 risk you're trying to make $3 or more. Preferably, you want to look for
220 00:37:28,770 --> 00:37:33,240 scenarios between you and I, you want to look for things that have like five to one reward the risk.
221 00:37:40,020 --> 00:37:52,650 Setup failure protocol, it's a sell set up on the for our premium array fails. In a trade results in a loss. All you have to do is don't panic, except the
222 00:37:52,650 --> 00:38:00,570 walls. But now you just have to simply look for the higher priced. For our premium array to sell at work, you may be sold short at what you saw was a
223 00:38:00,570 --> 00:38:08,670 mitigation block and it just ran right on through you go to the next premium array and you look to sell it again. Again, we're focusing on monthly, weekly
224 00:38:08,670 --> 00:38:17,250 and daily conditions that are bearish. So if we're executing on a four hour, you may get stopped out at noon your initial trade, not always but sometimes you
225 00:38:17,250 --> 00:38:24,060 will if that happens, you just simply got to the next higher priced, premium array. In other words, there may be a bear shorter bucket needs to trade to mean
226 00:38:24,090 --> 00:38:33,900 to trade through an old high, you take every single one of them. If the our chart has no more premium arrays to sell at refer to the daily, weekly and
227 00:38:33,900 --> 00:38:42,750 monthly premium arrays to sell at a higher price than you currently have. At the higher premium array, you're going to sell with 50% of the position size that
228 00:38:42,750 --> 00:38:54,240 you use from your initial trade or previous failed trade that you utilize. Do not try to win all the lost equity back in the subsequent trade. Get what you
229 00:38:54,240 --> 00:39:04,920 can get from the trade. Don't try to force it all back if the trade only pans out and it slips to less probability and you have 60% of what you lost. Be happy
230 00:39:04,920 --> 00:39:17,040 with the situation at least you're mitigating the losses. Always confirm lower timeframe for our discount arrays give away or fail as price moves in your
231 00:39:17,040 --> 00:39:26,790 favor. And new premium arrays resist price as it moves towards discount arrays on the higher timeframe charts. In other words, basically what this means is you
232 00:39:26,790 --> 00:39:38,460 want to be looking for bullish order blocks or down candles that be broken every support level be broken. You want to see new resistance levels found at old up
233 00:39:38,460 --> 00:39:45,840 candles and as long as you keep seeing that you're seeing institutional sponsorship on your side and that's a great condition to be in when you're short
234 00:39:52,530 --> 00:40:00,720 so now we're gonna take a look at some specific setups that we can use with this idea for Swing Trading. I'll see you in less Number Four