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62-ICT Mentorship Core Content - Month 6 - Reducing Risk and Maximizing Potential Reward In Swing Setups

Last modified by Drunk Monkey on 2022-09-24 07:30
1 00:00:14,099 --> 00:00:24,209 ICT: Welcome back, folks, this is less than six February 2017 ICT mentorship, swing trading our topic for this month. This teaching is going to be focused on
2 00:00:24,209 --> 00:00:27,989 reducing risk and maximizing potential reward swing setups
3 00:00:34,080 --> 00:00:46,530 Okay, reducing risk. This begins with knowing your maximum risk, purchase setup or trade, you should not allow high risk percent portrayed. This equates to
4 00:00:46,530 --> 00:01:01,470 gambling obviously. And professionals. When they're trading they look to frame setups with low risk and high reward. Now with swing trades, we're only focusing
5 00:01:02,250 --> 00:01:13,830 on framing the monthly and weekly levels ideally. So when we look at monthly and weekly levels, that means the PD arrays for a premium we're looking to sell
6 00:01:13,830 --> 00:01:23,910 those levels. That means we're looking for bearish order blocks. Bearish liquidity voids the trade up into the sell short optimal trade entries. Bearish
7 00:01:24,450 --> 00:01:33,150 fair value gaps, we're looking for old highs the short of false break above, we're looking for rejection blocks candles that have real long wicks, we're
8 00:01:33,150 --> 00:01:42,840 gonna look to try to sell above the bodies of those candles, we're gonna be looking to sell it old lows and old highs either or that same thing is seen as a
9 00:01:42,840 --> 00:01:55,050 premium. Or obviously everything in reverse. We're looking for mitigation blocks breakers, which are blocks voids below us. Old lows and old highs and rejection
10 00:01:55,050 --> 00:02:05,700 blocks with candles to have long wicks will will look for cell stops below the bodies of those candles before rejection block. And by only framing trades along
11 00:02:05,700 --> 00:02:19,800 those monthly and weekly levels. Now again, I like to use order blocks in the teachings because to make the videos with every possible scenario, it would be
12 00:02:19,830 --> 00:02:30,000 ridiculous in terms of length, but you're looking for in terms of the pdra matrix, everything above you, you go in the order to that matrix shows you and
13 00:02:30,000 --> 00:02:39,090 again there may not be avoided may not be a fair value gap. But as you progress through that list from the bottom up for premium PD arrays, and from that list,
14 00:02:39,150 --> 00:02:48,960 top down for the discount PD arrays. That's the order in which you hunt the current range of trading. By using those levels or those arrays on the monthly
15 00:02:48,960 --> 00:02:59,130 and weekly charts. It will give you the context of what you're going to be trading off of. If we see the market is going to give us a monthly and weekly
16 00:02:59,490 --> 00:03:10,830 level for bearishness, we're going to be looking for monthly discount arrays to reach into, and we're gonna be looking for the very first one in the list, that
17 00:03:10,830 --> 00:03:21,990 may be a mitigation block, it may be a bullish breaker, it may be a liquidity void. It's below us. Again, anything in terms of the discount PD arrays, that
18 00:03:21,990 --> 00:03:31,470 will be objective on the monthly chart. So you're framing a trade on the monthly and you're framing the objective on the monthly, so you're looking for massive
19 00:03:31,470 --> 00:03:44,370 amounts of range. So even though these ranges are huge, many times, traders, if they are trying to trade big moves like this, they still maximize their leverage
20 00:03:44,370 --> 00:03:53,280 and he still maximize their risk. And there's no reason to do that. Don't try to put too much risk on your trade. And try to get rich in a handful of trades. It
21 00:03:53,280 --> 00:04:00,390 doesn't work. Don't try to double your account every single month. It's not it's not necessary. And especially for some of you out there in his mentorship that
22 00:04:00,390 --> 00:04:10,230 are aspiring to be fund managers, you simply don't want to do that. You want to keep your risk really, really small, because that sells your business model to
23 00:04:10,950 --> 00:04:19,710 potential clients when they see how very low your risk is, and how consistently you're pulling in returns. And as we're going to outline in this teaching how
24 00:04:19,710 --> 00:04:32,610 we're going to get those returns to be really big in relationship to the risks that's used. Again, looking at higher timeframe, PD arrays, and using for our
25 00:04:32,610 --> 00:04:41,970 entries, this is going to permit your setups to have tighter stops. Now obviously if we go into the later teachings in this mentorship, you'll be able
26 00:04:41,970 --> 00:04:53,670 to reduce the risk even more than we're going to outline in here. But for the average Joe does, you know operating a business or working a job, a desk jockey
27 00:04:53,730 --> 00:05:02,010 someone has no real free time to be in here day trading every day. You don't need anything less than a four hour. It If you can't check your phone a couple
28 00:05:02,010 --> 00:05:07,980 times throughout the day, and you don't need a whole lot of time checking it, but you just need to be able to have access to a four hour chart. And many
29 00:05:07,980 --> 00:05:18,630 times, you're going to see that the setups actually are around the close of the day, you'll be able to do a lot of these trades framed the day before or the
30 00:05:18,630 --> 00:05:19,380 night before.
31 00:05:19,409 --> 00:05:28,019 So it's not like you have to be in here every five minute basis and checking all the time. But by using the higher timeframe, PD arrays, as we discussed a moment
32 00:05:28,019 --> 00:05:37,679 ago, and we're reference to the monthly and weekly levels. If we are looking for that to frame our trade, think about the massive range that could potentially be
33 00:05:37,679 --> 00:05:48,509 there. And then we're going to reduce down to a four hour time frame to frame the entry. By doing so, we remove all the necessity have a big huge stop. As we
34 00:05:48,509 --> 00:05:59,969 discussed in the position trading method in January, we were framing and entirely on a daily chart. Now, I'm not going to rehash the entry techniques
35 00:05:59,999 --> 00:06:11,279 that was taught in January, I'm going to refer to you back to that same limit order and buying want to stop selling or stop those entry patterns or those
36 00:06:11,279 --> 00:06:18,719 entry techniques, they're going to be applicable to your swing trading. Okay, so just gonna refer back to those previous lessons that we don't have to do a lot
37 00:06:18,719 --> 00:06:33,869 of rehash. But those same entry patterns used with your swing trades on a four hour basis. Those patterns for entry can help you reduce your risk. Now, if we
38 00:06:33,869 --> 00:06:43,739 are focusing on these maximum timeframes monthly and weekly, and that's giving us the context for our trade, again, the range has been very large. Monthly
39 00:06:43,739 --> 00:06:56,039 ranges can be several 100 pips, weekly range could be a couple 100 pips, daily 100 pips or so by having a four hour it reduces the ranges to a smaller, more
40 00:06:56,789 --> 00:07:10,139 conservative number in terms of what we can frame our risk around. us nothing less than three to one reward to risk ratios. Now, I say this as just a
41 00:07:10,139 --> 00:07:18,959 reminder, but you're going to absolutely have a difficult time, having trades with just three to one, using this criteria, it many times it's going to be five
42 00:07:18,959 --> 00:07:28,859 to 110 to one is not unheard of. And we'll show an example in this teaching and actually give you homework to go in and look for other ones. But three, one is
43 00:07:28,889 --> 00:07:40,469 easy. And when you trade with reward to risk ratio conditions, you only need to be accurate 30% of the time to be profitable. Nothing about you can lose 70% of
44 00:07:40,469 --> 00:07:53,009 the time, if you're trading with three to one, reward the risk. Imagine being wrong 70% of the time, and only right 30% of the time, and still being net
45 00:07:53,009 --> 00:08:07,439 positive, being profitable, being wrong that many times. Now, if you compound that with the fact that you can get with five to 110 to one, reward the risk.
46 00:08:07,859 --> 00:08:23,609 How many times can you afford to be wrong in those conditions, you can be wrong a lot and still be extremely profitable. Now leverage is your holy grail in
47 00:08:23,609 --> 00:08:33,719 swing trading, okay, you're gonna look to control your leverage, and you're not trying to maximize it just because your broker's trying to give you 50 to one in
48 00:08:33,719 --> 00:08:41,339 the states and who knows where you're at in the in the globe where they're trying to give you 100% or more. I don't know, I don't keep up with it anymore.
49 00:08:41,399 --> 00:08:51,569 In terms of who allows what brokerage firm? Did you give that type of unheard of leveraging. But I'm going to be frank with you. You don't need that much. You
50 00:08:51,569 --> 00:09:00,419 know, in futures, it's about 10 to one. Generally, it's that the leverage you get when you're trading commodities, forex and states, we have a maximum
51 00:09:00,479 --> 00:09:10,949 leverage benchmark at 50 to one and you don't need that to get wealthy. You certainly don't need that to get wealthy in a very short period of time. And I'm
52 00:09:10,949 --> 00:09:22,439 not trying to define it in terms of weeks or months. But you can certainly get there before your 401 K would get you there. Alright, so maximizing the reward.
53 00:09:22,769 --> 00:09:31,589 Okay, this is obviously what everybody does, when they're trying to trade to try to get the most bang for their buck. Well, the key is only trading higher
54 00:09:31,589 --> 00:09:41,759 timeframe monthly and weekly level. We already said this, but I have to keep beating in your head because you're so interested in these lower timeframes. Not
55 00:09:41,759 --> 00:09:50,279 so much now because we've been spending such a long time on the higher time frames and you've seen the importance of it. But these higher timeframe levels,
56 00:09:50,579 --> 00:10:02,429 they are exactly what you're looking for in relationship to Smart Money plays. Smart Money can't see the five minute order block Okay, the algorithm is
57 00:10:02,579 --> 00:10:09,359 allowing the price get down to those levels, and then you're getting responsiveness off that off based on limit orders. But those responses are
58 00:10:09,359 --> 00:10:15,899 really patterned off of a higher timeframe price level. That means a daily, a weekly or a monthly
59 00:10:17,310 --> 00:10:29,250 and they layer their orders just above or just below these levels, they don't all have the set entry order at the same price. So when we have these daily
60 00:10:29,250 --> 00:10:38,520 levels, or for our levels, there's going to be a specific level in mind, for instance, can be the big figure, it could be a 20 level, it could be a 80 level
61 00:10:38,520 --> 00:10:47,550 or 50 level. But just above it would be for instance, if we're looking at the mid figure level, and we're checking some bullishness, it could be a bullish
62 00:10:47,550 --> 00:10:58,800 order block that forms at the 60 level, which is just 10 pips above the mid figure. But overall, they're averaging around at 50 as a whole, but you can see
63 00:10:58,800 --> 00:11:07,350 orders start building in with the lower timeframes, as we'll talk about when we get into short term trading and day trading and scalping. But we don't
64 00:11:07,350 --> 00:11:17,100 necessarily need any of that to get involved with these types of trades using a four hour. So timing of for our entry, on higher timeframe levels, that offers
65 00:11:17,100 --> 00:11:28,140 the maximum our multiples now within our multiple, that's your reward on the the risk that you're associating to that trade. So if you're trying to get a
66 00:11:28,140 --> 00:11:41,040 multiple of, say, five, or get five are on your trade, you're trying to get $5 for $1 risk. So if we're framing our trades with nothing less than three to one,
67 00:11:41,340 --> 00:11:51,480 and again, it's very, very hard to find a three to one trade on these types of setups. Many times, it's like I said, five or higher, sometimes 1012, even 15 to
68 00:11:51,480 --> 00:12:01,410 one. In some instances, if you look hard, and you wait for the setups to come, believe me, they are there. But having these are multiples, that's what
69 00:12:01,410 --> 00:12:12,300 professionals do, we put very little money at risk, to get huge price moves, massive price moves in relationship to overall risk that we put to our account.
70 00:12:14,100 --> 00:12:26,040 Now higher timeframe levels to offer ranges of 200 to 500 pips, they can yield up to 10. Our wins, at means imagine you put $1 off, you're gonna get $10 back
71 00:12:26,040 --> 00:12:36,810 for that when, how many times do you need to do that over the course of a year, if you're managing funds to return a return of, I don't know 20% 30%, where
72 00:12:36,810 --> 00:12:44,520 everybody goes a static as an industry standard. If you can hit that me and you're killing it, you don't have to do very much to do that. And that's why I'm
73 00:12:44,520 --> 00:12:54,390 trying to stress that if you think you have to trade a lot to do very well in this business, you are mistaken. Because you can manage other people's money and
74 00:12:54,390 --> 00:13:05,790 get a great deal of money doing that and do very little trading the public to the uninformed money that place funds in your hands. They're basically
75 00:13:05,790 --> 00:13:16,350 uneducated, they assume for you general principle that you're in here every day, like a day trader, basically, like you've been doing before you join us
76 00:13:16,350 --> 00:13:27,330 mentorship, every single day scouring over intraday charts working you're raring off, to get very little. So if your clients think that you have that work ethic,
77 00:13:27,720 --> 00:13:34,740 and you're working very, very hard, when you're really not working all that hard. That's why these fund managers live the lifestyle they have because they
78 00:13:34,740 --> 00:13:44,580 do very little to get what returns they have. They put very little risk in there because they don't want to scare the clients away with a lot of drawdown. But if
79 00:13:44,580 --> 00:13:54,030 they take big massive moves out of the marketplace with very small risk, it looks amazing on paper, and it compounds the bottom line, and it's a very
80 00:13:54,030 --> 00:14:00,930 handsome reward over the year. Now, granted, some of you are probably thinking, I don't want 30% Michael that says simply not enough, I need more than that per
81 00:14:00,930 --> 00:14:11,880 year. Let me tell you something. When you have $10 million in your management, and you show a 30% return, believe me, you don't just keep $10 million people
82 00:14:11,880 --> 00:14:20,250 will start knocking on your door beating your door down ringing your phone off the hook, please take my money, large, big buyers, large investors will be
83 00:14:20,250 --> 00:14:30,090 beating your door down to get a hold of you so you can manage their money. And remember, there's typically one to two swing trades per every four to six weeks.
84 00:14:30,570 --> 00:14:38,670 So about a month and a half or so, about a month, month and a half. Generally you're gonna get one, maybe two swing trades. The second one is just basically
85 00:14:38,670 --> 00:14:46,830 usually beginning around that time, but the frequency is about one every four to six weeks. And that's a pretty safe assumption. And if you look at the timeframe
86 00:14:46,830 --> 00:14:56,850 on a daily chart, you'll see that that's pretty much the average. So that means you're presented a lot of time to prepare for these trades. You're not over the
87 00:14:56,850 --> 00:14:59,970 charts every five minutes. You don't have to be there every single day either.
88 00:15:00,000 --> 00:15:07,590 You can miss a day if you have to, you have a life of a business you're on, you know, you got to do a business trip or whatever, you can still swing trade, you
89 00:15:07,590 --> 00:15:18,840 don't need to do a whole lot to do this. By removing high leverage, and coupling, higher timeframe setups with high Rs. This is key. So if you can
90 00:15:19,140 --> 00:15:30,210 remove the high leverage, in other words, we're not trading with 50 to one, we're not trading with 100 to one 200 to one or 401, if even still allow that
91 00:15:30,210 --> 00:15:42,900 anymore. By removing the high leverage, you can actually trade with just three to one leverage. That means if you have a $10,000 account, you're only trading
92 00:15:42,900 --> 00:15:52,680 with three minis. And then it probably just blew your mind what I didn't come here to learn that Sure you did. You came here to learn, be profitable, and have
93 00:15:52,710 --> 00:16:05,130 risk managed low risk, high reward. The way you answer that equation is number one, you have to remove your leverage, your leverage is going to kill you, when
94 00:16:05,130 --> 00:16:13,230 you build your positions up to the point where you can eventually trade at a larger size and say you get into $2 million dollar mark, you can start
95 00:16:13,260 --> 00:16:22,320 considering going into and you really should consider going into prime brokerage prime brokerage will not allow you to leverage your D leverage set means
96 00:16:22,320 --> 00:16:29,190 whatever you have on deposit, that's the maximum you're going to do. And then frankly, you're not even going to trade with that leverage either, you're going
97 00:16:29,190 --> 00:16:39,300 to actually be under leveraged. In other words, if you have a million dollars on deposit, you're not trading with a million dollars leverage. Many times you're
98 00:16:39,300 --> 00:16:49,890 trading with a half a million dollars. And it probably sounds counterproductive. But you're actually doing very well when you have those seven digits. And you
99 00:16:49,890 --> 00:16:58,740 don't need very much return to keep doing very well. And again, at that, at that point, you don't want to risk anything, you want to keep your risk very small,
100 00:16:59,040 --> 00:17:08,460 and still allow your big profits in terms of reward to pan out. Now, if you consider that leverage a three to one, okay, and you're looking for setups that
101 00:17:08,460 --> 00:17:23,340 pay out as high as 10 are, you can can yield up to 15%. So if you're risking one and a half percent on your equity, per trade, and you get a reward of 10 for $1,
102 00:17:23,730 --> 00:17:36,810 you're making upwards of 15% on that one transaction or that one trade. How many of those do you need per year? Now do the math, say you're getting an average of
103 00:17:36,840 --> 00:17:45,630 six really choice swing trades per year. And already know somebody's thinking, Man, this is not active enough, I need to be doing something more. Now you don't
104 00:17:46,590 --> 00:17:55,650 know you don't? Well, who says you have to do more, you're here to learn how to be profitable. So if you can have a wife do other things outside of trading, and
105 00:17:55,650 --> 00:18:09,600 still do exceptionally well. Think about it 15% If you manage funds, okay, and you're risking one and a half percent risk, and using three to one leverage, and
106 00:18:09,600 --> 00:18:23,130 you're using an average of 5050 pips per stop, okay? When you do that, focusing on just six swings per year alone. And that set up an offering of 10 reward to
107 00:18:23,130 --> 00:18:34,470 risk for $1, you get back 10. If you do that you're more than doubling that equity. Now think about that for a second, folks. If you can look for setups
108 00:18:34,470 --> 00:18:44,670 that yield 10 to one. And believe me, when you go through the homework that I'm going to give you in this teaching, you're going to see just how easy 10 to one,
109 00:18:45,120 --> 00:18:58,650 multiples are defined in swing trading. If you just take six of them per year, six trades. That's it. Six trades, risking one and a half percent, using three
110 00:18:58,650 --> 00:19:11,940 to one leverage and about a 50 pip stop. You're more than doubling your equity every single year. Now that's not doubling your money every single month. It's
111 00:19:11,940 --> 00:19:30,000 not getting 25% every week. It's not getting 15% on your day trades. It's being very very conservative, very low frequency. The opportunity for drawdown is
112 00:19:30,000 --> 00:19:38,850 very, very low because your frequency is low. And your risk is already predefined at one and a half percent. You know what you're looking for. There's
113 00:19:38,850 --> 00:19:51,690 a frequency of about one trade every four to six weeks. And you're looking for ideal setups around a monthly and or a weekly level by framing these ideas and
114 00:19:51,690 --> 00:19:54,360 hunting setups to offer 10 to one.
115 00:19:55,920 --> 00:20:06,510 This will give you the context and framework to double your equity or Your managed fund equity in the course of just six trades per year, you don't have to
116 00:20:06,510 --> 00:20:15,330 rush, you don't have to take every single swing trade. If it doesn't look, right, just wait. There's something setting up something, you know, every four
117 00:20:15,330 --> 00:20:24,240 to six weeks or some kind of trade that offers you an opportunity to do something in the marketplace. But if you're framing the setups on a monthly and
118 00:20:24,240 --> 00:20:31,320 or weekly level, these can offer huge multiples of reward to risk.
119 00:20:36,450 --> 00:20:47,370 Alright, we're gonna take a look at an example here, and start giving you some ideas how you can flush this out by maximizing reward and reducing risk. In this
120 00:20:47,370 --> 00:20:57,060 example, we're gonna be looking at the euro dollar. And I want to take a look at this high here. The high was born in 2011 in April, and we're using an old
121 00:20:57,090 --> 00:21:10,140 monthly high, so we're high in the range. So we're deep, deep, deep in terms of the premium in relationship to an old high back in 2009, October, we've defined
122 00:21:10,140 --> 00:21:18,780 the bearish order block, which is the last up candle in October. And we've defined the mean threshold of that last candle as well. We extended out out in
123 00:21:18,780 --> 00:21:31,470 time. And we got to April in March of 2011, where we hit those levels. And we're going to now take that idea and reduce it down to a lower timeframe executable
124 00:21:31,470 --> 00:21:42,630 timeframe of four hours. I want you to take a look at this down candle here. Okay, so now we're actually gonna start looking at the monthly PD arrays. So
125 00:21:42,630 --> 00:21:54,330 we're trading off of a level of premium of a bearish order block and focusing on the mean threshold. And below that level would be this old high, that will be
126 00:21:54,330 --> 00:22:08,610 the very first discount pdra. Remember, it's an old high, that could be a potential discount pdra. So we have a down candle here, which is an old high
127 00:22:08,910 --> 00:22:22,530 that's left or to the left of the entry technique or pattern that we're looking to trade short at. And that's this level here. So all we're looking for is the
128 00:22:22,530 --> 00:22:33,720 range between that down candles high and entering up at that mean threshold from the order block from October 2009. Now we're going to say that that levels
129 00:22:33,750 --> 00:22:50,010 142 80. Drop down into a four hour time frame at that same level going into May, we can see price trades up into that level. And we have the mean threshold and
130 00:22:50,010 --> 00:23:02,010 bearish order block noted here. And we have 148 65 is the mean threshold. And I want you to look very closely. We can see here we had a bearish order block.
131 00:23:03,420 --> 00:23:12,840 Last up candle right for the down move. And it's highlight with the arrow above and below it plenty and we split the candle in half at the mean threshold as
132 00:23:12,840 --> 00:23:24,210 well. And we delineate the low on that for the bearish order block. We're going to assume that we're going to use the for our for entry, we're looking to go
133 00:23:24,210 --> 00:23:37,800 short. And we're using the mean threshold on the monthly candle. And it's also the opening of that bullish candle that makes the high and we're going to risk a
134 00:23:37,800 --> 00:23:54,990 stop one pip above the highest high of that candle. Can we have a 70 pip stop loss? The blue shaded area is our potential reward. The horizontal line that's
135 00:23:55,260 --> 00:24:16,620 delineating 140 to 80 That's that old monthly high. This comes to a reward range of 585 pips, so we're risking 70 pips. And so you're cringing by now 70 pips I
136 00:24:16,620 --> 00:24:31,110 can't handle 70 pips 70 pips risk to make 585 pips. And you can see that that monthly old high that again is the first discount PDA rate that we would come to
137 00:24:31,110 --> 00:24:47,790 from that high at 149 20 or so. So basically, what we have there is an eight to one reward the risk. So for every $1 we're risking, we're getting a potential of
138 00:24:47,820 --> 00:24:58,110 $8 back as a reward. So in essence, what we can see here it just in this trade framework, we have the potential in just one trade to make as high as 12 and a
139 00:24:58,110 --> 00:25:10,080 half percent return Now, that's an amazing amount of money in the amount of percentage for one trade. And the amount of risk is minut. Compared to the
140 00:25:10,080 --> 00:25:20,610 reward, it's framed on a monthly level. And the objective to take profit is framed on a monthly level. So by framing the PD arrays and using the PD array
141 00:25:20,610 --> 00:25:28,590 matrix properly, we can frame trades to have enormous amount of reward the risk potential
142 00:25:31,590 --> 00:25:40,380 Can I give you a scenario this is going to be homework. Okay, now we're going to focus on this high here or last bullish candle right for the down move. And
143 00:25:40,380 --> 00:25:51,030 we're going to be looking at that candle here as a potential short misses for homework. And I want you to look at the bullish order block. The last candle,
144 00:25:51,390 --> 00:26:03,180 that opening price that comes in, we're going to round it to a level 141 55. I want you to go into your charts on the Eurodollar. And use a four hour timeframe
145 00:26:03,210 --> 00:26:17,100 and use the entry techniques that I taught in the position trading concepts for January's content, go into that four hour timeframe. As price hit that 141 55
146 00:26:17,100 --> 00:26:27,900 level, okay, study down on the four hour and use the entry techniques that I taught you in January for position trading. Where would you look to take profits
147 00:26:27,900 --> 00:26:38,670 at the first one, you're going to be looking for the mean threshold of that last down candle in 2010. And we've already traded there once. But I want you to
148 00:26:38,700 --> 00:26:50,790 consider that as your first objective. And then you consider the down candle in October. That same candles low, it has equal lows with the green candle to the
149 00:26:50,790 --> 00:27:02,880 right of it seen here. That would be your objective looking for an opportunity for a low end swing trade. So again, we're looking for the opportunities to be
150 00:27:02,880 --> 00:27:15,540 short, at that 141 55 level, using the entry technique that I taught you for position trading in January. And I want to see the homework shared on the forum.
151 00:27:16,200 --> 00:27:26,760 You can do it in one chart, just post your four hour chart and put it in our February questions in the answer section on our forum. And I like to see some
152 00:27:26,790 --> 00:27:34,530 real interaction this time. So that means the I noticed a lot of people doing the homework, don't copy everybody's answer. Don't read to the forum first to
153 00:27:34,530 --> 00:27:44,010 see what everybody else is doing. There's no wrong answer. Just it again, it's for interactive purposes, and for study and also for feedback from me so that I
154 00:27:44,010 --> 00:27:55,740 can get a collective view of what you're all doing with the content. I believe that you'll find it there's a setup there as well. And to reward again here is
155 00:27:57,180 --> 00:28:06,300 well if you consider it's 135 as a potential area as a downside objective, I mean 141 55 If that's the price you get, it's probably gonna be higher than
156 00:28:06,300 --> 00:28:20,130 that, that you would use to get entry for short. That is over 650 pips for one setup. So if you can frame your trade with a 60 pips stop loss, you can find a
157 00:28:20,430 --> 00:28:31,470 10 to one reward to risk scenario on this trade here, premium PD arrays, and then using the monthly discount PD arrays, as we noted here, with the mean
158 00:28:31,470 --> 00:28:46,470 threshold of the last down candle in October 2010. Are we November actually, probably the downside objective is again, several 100 pips. So suddenly, when
159 00:28:46,470 --> 00:28:54,360 you start doing these things, you start applying it, don't stop here at this example, for the remainder of the weekend, go through and try to find five
160 00:28:54,360 --> 00:29:04,800 examples. Somewhere else in another pair. It doesn't matter where at doesn't matter what time of year, go in and look for a scenario just using a monthly and
161 00:29:04,800 --> 00:29:15,030 or weekly scenario. And framing out a couple trades how to find five that yield at least five to one, reward the risk scenario. So you have really two
162 00:29:15,030 --> 00:29:26,550 homeworks. Yeah, the one that I'm giving you here and then you have a secondary, we had to look for five scenarios using only a monthly or weekly PD array for
163 00:29:26,550 --> 00:29:38,010 premium or discount and try to find a case like this, try to find four to five buys and two sells using this criteria to frame out swing trades. And look for
164 00:29:38,010 --> 00:29:44,970 five to one payouts or potential to pay out and obviously you had the benefit of hindsight and that goes without saying but this is how you study it is that you
165 00:29:44,970 --> 00:29:52,380 get in there and you get excited about seeing how powerful it is and how infrequently need to worry about trading. You have to worry about trading all
166 00:29:52,380 --> 00:30:01,980 the time. You can get in massive amount of return on your equity, doing very little work, putting very little risk exposure to your account so hopefully you
167 00:30:01,980 --> 00:30:06,120 found this insightful until next lesson I wish good luck and good trading