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63-ICT Mentorship Core Content - Month 6 - Keys To Selecting Markets That Will Move Explosively

Last modified by Drunk Monkey on 2022-09-28 11:01
1 00:00:14,639 --> 00:00:21,809 ICT: Welcome to Lesson Seven folks in the swing trading model, this teaching is going to be teaching the keys to selecting markets that will move explosively.
2 00:00:27,690 --> 00:00:38,820 can cover the hallmarks to explosive swing trades. And the first in the list of eight things I like to look for that are going to deliver, in my opinion, the
3 00:00:38,820 --> 00:00:47,370 highest probability for explosive price moves where it's this dynamically moving one sided, you want to be in those types of moves. And obviously, as a swing
4 00:00:47,370 --> 00:00:56,730 trader, we want to focus on markets that provide these in terms of the highest probability. What we look for is market profiles that show that the major four
5 00:00:56,730 --> 00:01:07,020 asset classes that mean the interest rate markets, stocks, commodities, and currencies, they are all trying to trend. They're not held in a consolidation.
6 00:01:07,230 --> 00:01:15,420 They're not at odds with one another than conflicting. And if you get one or two of the asset classes showing willingness to trend, that gives us a really
7 00:01:15,420 --> 00:01:24,120 favorable market conditions to trade in for swing trades. It doesn't matter that all four of them are trending. We want at least to have a see at least half of
8 00:01:24,120 --> 00:01:38,010 the four or two of them, showing a profile where there's trending environments underway. intermarket analysis confluences. This is the approach that using all
9 00:01:38,010 --> 00:01:48,960 the other asset classes to justify or confirm the idea that you have as a trade are in fact, in alignment. So I'll give you an example. If we think that there's
10 00:01:48,960 --> 00:01:59,280 a bullish dollar underway, we should see commodities. Therefore, at resistance levels of close across the major sectors in the commodity markets. That means
11 00:01:59,280 --> 00:02:08,100 that we're also going to see commodities fail to make higher highs, even if they break out, there'll be false breakouts, and we'll see commodities, very easily
12 00:02:08,100 --> 00:02:16,050 breaking their lows, or failing to make a rally. Okay, all of those conditions would be there, if we're expecting to see bullish dollar, the opposite would be
13 00:02:16,050 --> 00:02:23,310 seen, if we're looking for a bearish dollar. If the dollar is expected to go lower, based on our analysis, we will be looking for commodities to have very
14 00:02:23,310 --> 00:02:34,470 little resist resistance in terms of wanting to go higher and strong support levels. Okay, so highs were going to be broken on commodities and lows are going
15 00:02:34,470 --> 00:02:43,260 to be supported and very little breakdown on commodities will be seen, that would be an idea that would support the idea of a bearish dollar. Same thing
16 00:02:43,260 --> 00:02:52,620 would be said with, you know, once we arrive at that condition for the dollar, if we're expecting dollar to be bullish, we would be looking for bear scenarios
17 00:02:52,860 --> 00:03:03,570 where like Euro dollar, Aussie dollar POUND DOLLAR, New Zealand Dollar, those parents would be at resistance, okay, and they would be breaking lows, and have
18 00:03:03,600 --> 00:03:11,040 difficulty making higher highs or if they make higher highs, there are false breakouts and they trade lower, that would be supportive of bullish dollar. The
19 00:03:11,040 --> 00:03:19,560 reverse would be said for $1 that we bearish and then it means that we will be seeing Euro dollar POUND DOLLAR New Zealand dollar Aussie dollar, those pairs
20 00:03:19,560 --> 00:03:29,250 add support. And they would not be willing to make lower lows or if they do that quickly rejected and highs and those foreign currencies would be easily traded
21 00:03:29,250 --> 00:03:37,470 through. Okay, and that would also support the idea that weak dollar third in our list is the co2 hedging program alignment. This is where we look back in the
22 00:03:37,470 --> 00:03:46,740 last 12 months on the net positions held by the commercial traders. And then we get a range over the last 12 months with the highest level was and the lowest
23 00:03:46,740 --> 00:03:54,810 level for their holdings, regardless of their net short and long. And whatever that range is we divide that in half and then we define that in terms of being
24 00:03:54,810 --> 00:04:03,720 bullish or bearish. If we are supporting the idea that foreign currencies are going to go higher and therefore the dollar index is going lower, we would
25 00:04:03,720 --> 00:04:14,640 probably see the CIT hedging program show bullishness for like Euro dollar, cable, Aussie dollar and the more you see the commercials holding net long
26 00:04:14,640 --> 00:04:23,670 positions in their hedges or their hedging program, that more likelihood you're gonna have an explosive move in your favor with a bullish foreign currency idea
27 00:04:23,700 --> 00:04:34,890 when in a weaker dollar in the reverse would be said in terms of when you're looking for a stronger dollar. You would expect to see the bearish stance in
28 00:04:34,920 --> 00:04:45,030 hedging done by the commercial and I'll show you examples that would make this clear. And an open interest we look at that because all of the pairs I trade are
29 00:04:45,060 --> 00:04:54,420 the majors and they're calm, they're kondiles to commodity dollars. So I can get the insight gleaned from Commitment of Traders and the open interest that cannot
30 00:04:54,420 --> 00:05:02,310 be seen in spot market. So if we look at the open interest, we can actually track the smart money movement of buying and selling. And I'll kind of go over
31 00:05:02,310 --> 00:05:12,300 that, again, in this teaching and seasonal tendency, we can see that there's times when there's a very good probability for markets to want to trade higher
32 00:05:12,300 --> 00:05:21,000 or lower based on seasonality. And if you can have that in alignment with with your trade idea, it obviously pushes the probabilities for an explosive move in
33 00:05:21,000 --> 00:05:21,570 your favor.
34 00:05:23,760 --> 00:05:33,630 And we now talk about volatility filters. Okay, now, volatility filter is a way of gauging when the market gets quiet. Okay, and or there's a contraction in the
35 00:05:33,630 --> 00:05:45,000 ranges. If this is seen, what you're seeing is the market going into contraction right before a big explosive type of move. That is a hallmark that spells wild
36 00:05:45,000 --> 00:05:52,140 profitability, if you get the direction, right. Okay, it doesn't mean that you know, the direction because the markets are going into small ranges, it just
37 00:05:52,140 --> 00:05:59,490 means that you're going to see another big explosive move. And if you had the direction, right, many times, you're gonna see that explosive move takes off in
38 00:05:59,490 --> 00:06:07,230 the direction you anticipated based on your major market ideas, your inter market analysis and with hedging programs suggest by the commercials, or the
39 00:06:07,230 --> 00:06:15,780 buying or the selling and open interests are we tracking smart money buying and selling in relationship to lose ideas. If that occurs, at the same time, their
40 00:06:15,780 --> 00:06:23,310 seasonal tendency for it to rally higher and volatility starts to squeeze into small little ranges, there's going to be a high probability that moves going to
41 00:06:23,310 --> 00:06:33,780 be explosive to the upside. Major news headlines I like this one, because if we have a condition stage, and we think that the market is going to go higher,
42 00:06:34,110 --> 00:06:44,850 based on our major market analysis markets as a whole on the four categories or asset classes, stocks, interest rates, commodities and currencies, if two of the
43 00:06:44,850 --> 00:06:53,490 four groups are in trending environments, because one can always be held in consolidation, not really trending, if we see at least half of the four major
44 00:06:53,490 --> 00:07:05,400 asset classes trending, we are in a good swing trading model environment, if that happens, and we are bullish on an environment or a particular market, and a
45 00:07:05,400 --> 00:07:13,980 news event comes out and starts jawboning, weak, it's weak, it's not, it's not as bullish or something's wrong with that idea. Don't expect it to go higher
46 00:07:14,130 --> 00:07:23,610 than anything a talking head would have in their headline. That to me is fueling the fire if I'm bullish. So if I see there's headlines at a time when I want to
47 00:07:23,610 --> 00:07:35,730 be a buyer, that to me, helps my trade many times to be explosive in nature. And lastly, in our list, market sentiment, and all I do is gauge the bullishness or
48 00:07:35,730 --> 00:07:48,330 bearishness, based on the retail universes use of indicators. Okay, let's take a closer look and discussion about major market analysis and being one sided in
49 00:07:48,330 --> 00:08:00,930 this being a trending profile. If we look at the currencies, stocks, commodities and interest rates, those four asset classes we use those for our Inter market
50 00:08:00,930 --> 00:08:09,570 analysis. But before we get into our Inter market analysis, we have to look at are those markets now trending or are they held in consolidation. Again, we're
51 00:08:09,570 --> 00:08:17,880 looking for at least two of the categories to be trending. And if they are trending, that means that the other two Nady just lagging and they're going to
52 00:08:17,880 --> 00:08:24,030 eventually go into a training environment two, preferably all four of them should be trending. But there's not going to be times where it's going to be
53 00:08:24,030 --> 00:08:31,680 like that you have to demand at least just two of the major categories to be in a trending environment. If that's the case, then we're going to see a swing
54 00:08:31,680 --> 00:08:39,630 traders environment unfold in the markets that you've whittled down through a tip top down analysis. See the things we're going to talk about here and the
55 00:08:39,630 --> 00:08:49,680 actual process. In Lesson Eight. It'll give you the framework it'll give you the hallmarks to look for to frame out high probability trades with explosive nature
56 00:08:49,680 --> 00:09:03,270 in price action. If we see a market asset class like the commodity market being in consolidation, if that's the case, then stocks should be trending. Okay or
57 00:09:03,270 --> 00:09:12,390 vice versa. If stocks are in consolidation, then commodities should be trending interest rates and currencies one of those two should be trending as well. Okay,
58 00:09:12,390 --> 00:09:21,630 so if we're going to divide it in into into two special special groups, you want to group commodities and stocks together one of those must be in a trending
59 00:09:21,630 --> 00:09:31,950 environment and currencies and interest rates one of those two must be in a trending environment. Okay. So, you have to have one of the two groups being in
60 00:09:31,950 --> 00:09:39,480 a trending environment and that helps really frame the models that the algorithms will use to move price around not just in foreign exchange, but in
61 00:09:39,480 --> 00:09:52,290 all the other asset classes with the exception of commodities which are really focused in on real supply and demand factors. Okay, inter market analysis
62 00:09:52,290 --> 00:09:54,030 confluences. Okay,
63 00:09:54,180 --> 00:10:03,720 we talked about inter market analysis we've already taught how I look at and what things I look for For, but I want to bring it up as a hallmark here and not
64 00:10:03,720 --> 00:10:12,510 beat it to death. But you already know how I look at Inter market analysis, because there was a specific teaching in January about it. The the market as a
65 00:10:12,510 --> 00:10:23,460 whole, okay, we look for specific inverse relationships and positively correlated markets to suggest that if we're bullish on one asset class, or that
66 00:10:23,460 --> 00:10:32,340 one market in that asset class, is there supporting ideas through the use of inter market analysis to build a confluence? Is it supported in other asset
67 00:10:32,340 --> 00:10:43,890 classes or other markets. And if we're gonna be trading Forex, if we're looking for the dollar index to be bullish, we would look for commodities to be at
68 00:10:43,920 --> 00:10:55,680 levels of resistance, okay, or inability to to rally higher, or if it does make a higher high, it fails and goes lower. The commodities would be moving lower
69 00:10:55,680 --> 00:11:01,950 very easily or trending lower in that environment when the dollar would be bullish. And then obviously, it would be said opposite terms. If we're looking
70 00:11:01,950 --> 00:11:13,980 for a bearish dollar, commodities would be easily trading through their old highs and very stubbornly going below their old lows. And they would be moving
71 00:11:14,010 --> 00:11:23,130 aggressively higher, with very little consolidation more upside than they do anything else. And anything below an old low, when the dollar is weak. For
72 00:11:23,130 --> 00:11:29,820 commodities, if they take out an old low, many times, you could expect turtle soup scenarios in that condition and they would rally higher. So that's that's
73 00:11:29,850 --> 00:11:40,350 what we looking for for inter market analysis in conferences. So if we have those ideas seen across many sectors and commodities, not just the CRB Index as
74 00:11:40,350 --> 00:11:49,650 being indicated here, are the grain markets. If we're bullish on the dollar, are we seeing soybeans and wheat and corn fail to make higher highs? Or if they do
75 00:11:49,650 --> 00:11:56,850 make higher highs? Are they rejecting them quickly? And are they seeing their lows blown out? And are they trending lower, that supportive of bullish dollar
76 00:11:56,850 --> 00:12:09,450 in reverse would be seen? You know, in looking for a weaker dollar, we would see those commodities, making higher highs and very little resistance at all in
77 00:12:09,480 --> 00:12:18,030 strong support levels. And if lows are taken out in commodities, while the dollar is weak or expected to be weak, those lows and commodities would just be
78 00:12:18,030 --> 00:12:24,270 turtle soup Long's where there'll be a false break below and a low and then you see higher prices and commodities. If you see that you have confirmation that
79 00:12:24,270 --> 00:12:32,910 the dollar is in fact strong or weak relative to those ideas. If the dollar is strong and news classifications, then we can see bearishness in foreign
80 00:12:32,910 --> 00:12:42,840 currencies. And if the dollar is weaker, you know, you pair that up with stronger foreign currency. And it's goes without saying that's how we use the
81 00:12:42,840 --> 00:12:52,530 confluences for inter market analysis. So we look for trading environments as a whole. Either stocks or commodities have to be in trending environments, or, and
82 00:12:52,530 --> 00:13:03,180 I'm sorry, inter market analysis suggests that we see the reflection of trending environments in currencies and interest rates as well one of those two has to be
83 00:13:03,180 --> 00:13:11,880 in a training environment. So between the two major asset classes, we have to have at least two in a trending environment to support the idea that there is
84 00:13:11,880 --> 00:13:23,220 going to be an explosive, high probability swing trade CIT hedging program alignment. What we look for in this is the last 12 months of the commitment of
85 00:13:23,220 --> 00:13:33,180 traders report held by the commercials. The commercials are the largest producers or providers of a commodity. And they may manufacture it, they may
86 00:13:33,210 --> 00:13:43,680 grow it, they may offer it in terms of like a currency like a bank. That's their commodity, if you will. So they make it available. They're the storehouse of it.
87 00:13:44,400 --> 00:13:55,470 And I'd like to look back over the last 12 months because hedging is usually done over a plan using the last 12 months data. So what was pricing like last 12
88 00:13:55,470 --> 00:14:06,120 months? What was the commodity price based on real supply and demand factors? Last March, what was it last January? What was it last August? What was it last
89 00:14:06,420 --> 00:14:16,950 December, okay, and by looking at a range of 12 months, it gives them an idea on how they should hedge pricing because they use the last last 12 months to frame
90 00:14:16,950 --> 00:14:26,040 their expectation on what may be normal or what would be reasonable to expect going forward for the next 12 months. So they use that for hedging. Because of
91 00:14:26,040 --> 00:14:37,650 that many times they're gonna see long term net short positions in a commodity through the use of the commitment trade report. So by looking at their net
92 00:14:37,650 --> 00:14:45,750 position being heavily net long or net short, for instance, if we're looking at a market that has a long term long
93 00:14:46,800 --> 00:14:55,290 net short position being held by the commercials that would be seen with the red line here in this example, you can see from January 2016 all the way to the
94 00:14:55,290 --> 00:15:06,180 present. They have been below the zero line. That and it's They'll buy standard definitions. And by way of teachings by Larry Williams, who did the majority of
95 00:15:06,180 --> 00:15:13,920 the early work on commitment treasurer's reports being made public, this would be deemed as bearish. And this was a frustration for me. And I'm not going to
96 00:15:13,920 --> 00:15:21,510 rehash all that because of the teachings on this. But I like to look as a hallmark I want to see are commercials buying, or are they selling in their
97 00:15:21,600 --> 00:15:30,330 hedging program right now as I'm doing the trade, or about to take the trade. And what I do is I frame the last 12 months and look at the highest high and
98 00:15:30,330 --> 00:15:39,870 lowest low and divide it in half. And then I have a new zero line. So I ignore the zero line on the standard net traders position chart that everybody has
99 00:15:39,870 --> 00:15:49,200 access to, you can find this on bar chart.com. And the lesson number eight actually do a walk through you can actually see me do this whole process. But I
100 00:15:49,200 --> 00:16:00,990 define that new range in the last 12 months of commercial activity. That's my net short or net long basis, the 50% mark of that range, January 16, you can see
101 00:16:00,990 --> 00:16:10,740 that sort of the highest portion of their holdings were that at the time was still underneath the net sum zero line. So they would be either neutral or bare
102 00:16:10,740 --> 00:16:22,440 slightly in January 2016. And then in July 2016, the redline went as low as it shows there. And that's the range, they need to find that by a high level and a
103 00:16:22,440 --> 00:16:34,080 low level divided in half. And that's going to be your new zero level, or bullish or bearish level. You can see in December of 2016, we went above that
104 00:16:34,080 --> 00:16:46,800 new adjusted or makeshift zero line, as I'm indicating here, by looking at their hedging program. So they were buying again, aggressively in December. So if they
105 00:16:46,800 --> 00:16:55,920 see if we see this, even though they're below the net sum zero line from a net traders vision chart, from everyone's perspective, in the retail world, I see
106 00:16:55,920 --> 00:17:06,180 that as buying in December going into January, and still presently now they're they're buying. So if we see this in alignment with the expectation that the
107 00:17:06,180 --> 00:17:13,350 market should be going in a trending environment, and inter market analysis suggests that the market itself is going to go higher, and other markets that
108 00:17:13,350 --> 00:17:21,480 are inversely correlated to it are going to go lower. Then we have the co2 hedging program in alignment stating that yes, the commercials are in fact
109 00:17:21,480 --> 00:17:33,600 they're buying. So we can go into our next stage of analysis looking at open interest. If we see the market when conditions were bearish, if this is the
110 00:17:33,600 --> 00:17:44,820 environment, you would see where we're above that zero line, and the markets been trending lower, and we are seeing this, this would not be supportive of a
111 00:17:44,850 --> 00:17:54,630 strong sell this would be at odds with that idea. So you'd have to wait for that red line to go back down below that new zero basis line or that heavy thick
112 00:17:54,630 --> 00:17:57,480 black line that created separating them green and the red line.
113 00:17:59,970 --> 00:18:08,370 Okay, open interest, we're going to look at the relationship of open interest because it shows us an x ray view, if you will, of what the smart money's doing.
114 00:18:08,490 --> 00:18:17,760 Now open interest real quick if we see a increase or reduction of open interest. And as delineated by that purple line here, it's a cumulative line of showing
115 00:18:18,000 --> 00:18:25,110 the total open interest in any one market. And it's going to be only shown through a commodity because that's where you get this information from. If open
116 00:18:25,110 --> 00:18:34,740 interest declines 10 or 15% or more, that's indicative of commercial short covering, if there is a reduction of open interest that shows their willingness
117 00:18:34,740 --> 00:18:43,080 to not want to offer liquidity or expect lower prices, because they think that prices are going to go higher significantly. Otherwise, they would hold on to
118 00:18:43,080 --> 00:18:51,000 their open positions. And they're having that short position. It's confirmed when you see the red line, which is commercials in a net trading position chart
119 00:18:51,270 --> 00:19:02,910 go higher towards the zero line. So that's a reduction of open interest and a confirmation that they are reducing their short positions. Otherwise, that red
120 00:19:02,910 --> 00:19:11,820 line would be either staying flat or going lower, it's going up at the same time that purple line drops down from November to November into December, there was a
121 00:19:11,820 --> 00:19:22,950 huge reduction in open interest over 500,000 contracts down to just five to 400,000. Okay, so there's over 100,000 contracts taken off that were short and
122 00:19:22,950 --> 00:19:31,800 you can see that that reduction is seen with that increase or movement higher in the red line but by the commercial traders, this is confirmation that your trade
123 00:19:31,800 --> 00:19:42,930 would be a bullish scenario and explosive price action should be expected. If we see an increase of open interest 10 to 15% or more at a time when the
124 00:19:42,930 --> 00:19:57,570 commercials increase their net selling okay or the red line goes lower that is bearish to see the open interest declining here, November going into December.
125 00:19:58,410 --> 00:20:08,250 At the same time, the red line is increasing in value, which is the reduction of short selling. So they don't have a heavy net short position on. And at the same
126 00:20:08,250 --> 00:20:16,620 time, we've been interested to claim this is bullish, because they're not trying to hold on to a heavy short position. Okay, moving on seasonal tendencies. And
127 00:20:16,620 --> 00:20:24,810 we want to find, obviously times when we take a swing trade when seasonal tendencies aren't aligned for movement. And so if we have our major market
128 00:20:24,810 --> 00:20:35,970 analysis suggesting that there's trending profiles in two of the major categories, open interest is declined. We have our hedging program suggesting
129 00:20:35,970 --> 00:20:43,590 the commercials are buying into market analysis suggest that this market is poised to go higher, because other markets are suggesting that confirmation,
130 00:20:43,590 --> 00:20:51,690 that's the case. And we see a seasonal tendency for the market to watch a rally, as it's indicated here, December into January, and growing over to the next
131 00:20:51,690 --> 00:21:00,570 year, you can still see January going into February, there's a strong tendency still for this market to go higher. If that's the case, we have, we now have
132 00:21:01,080 --> 00:21:09,270 five things in our favor suggesting there's going to be an explosive price action in this particular market. And if we're suggesting it's going to go
133 00:21:09,270 --> 00:21:17,730 higher, we know now that there's a strong degree of probability there's going to be explosive price move going higher. Prices should move higher, not in small
134 00:21:17,730 --> 00:21:28,830 ranges, but to be explosive. And it shouldn't be a lethargic price action move. Now we're talking about volatility filters. And a volatility filter is simply a
135 00:21:28,860 --> 00:21:37,290 contraction idea where price moves from a large range down to a small range. And it's universal, it can be applied to monthly, weekly, daily or any other
136 00:21:37,290 --> 00:21:47,160 timeframe. But if we look at the green candle as a monthly candle, and we see the next candle or next month's candle, trade down to a smaller range, we look
137 00:21:47,160 --> 00:21:54,930 at the body of the candle, not the wicks. Okay, so you can see that that smaller secondary candle or the Black Candle, it doesn't make a difference. If it's up
138 00:21:54,930 --> 00:22:06,750 close or down close, it's not important here, what we look for is the lower high in the higher low. This is called an inside candle or inside bar. Conceptually,
139 00:22:06,750 --> 00:22:16,920 it's a volatility contraction, that means there's a high probability that the next candle or the next candle after it will be a large range candle, especially
140 00:22:16,920 --> 00:22:24,180 if you have a condition that's poised to go higher or lower. So if it's trading at a level that would be offering a support, and we have all the factors that we
141 00:22:24,180 --> 00:22:31,680 mentioned so far in alignment, suggesting that it's going to be an explosive price move and then we had the direction picked as bullish. The next candle or
142 00:22:31,680 --> 00:22:44,760 next month's candle should be an explosive up candle or green candle, or if not that one, the very next one. So it gives us a anticipatory expectation for price
143 00:22:44,760 --> 00:22:54,210 to explode the upside. But it doesn't give you timing, it just gives you the stage that yes, this is going to very likely have an explosive price move to the
144 00:22:54,210 --> 00:22:54,660 upside.
145 00:22:56,880 --> 00:23:07,380 Now this can be seen as also the smallest range in the last seven days. That's another filter you can use. You can do also the last three days, the small
146 00:23:07,380 --> 00:23:17,670 change in the last three days. So I use the last three days, the last seven days. And I use any inside candle or inside bar to frame the context around a
147 00:23:17,670 --> 00:23:25,170 trade that I have already seen coming. If I get this, this, this really adds to it. It's like that little wind up of a spring again, that analogy I like to use
148 00:23:25,170 --> 00:23:35,340 and it's going to be let go and it's gonna be dynamic price movement. Major news headlines, if I'm bullish on a particular market and say we're looking at gold
149 00:23:35,340 --> 00:23:46,110 as an example, we have all these things lending well to the conclusion that gold should be bullish everything in in the cards that suggested higher prices. If
150 00:23:46,110 --> 00:23:55,470 I'm about the buyer, I'm looking to the buyer. I like to see headlines that show describing weakness or justifying why price went down. Because if I see that I
151 00:23:55,470 --> 00:24:01,680 know it's going to build in market sentiment for retail minded traders. When they see this, like the stuff, they don't want to buy gold, they think I'm gonna
152 00:24:01,680 --> 00:24:10,500 sell gold because they think that the news media, or the talking heads or CNBC, they're smart people, therefore they are traders. And that's not the case. If
153 00:24:10,500 --> 00:24:16,740 they were traders, they know what they're doing. They wouldn't be on the anchor position talking to us about why something already happened. They would be home
154 00:24:16,740 --> 00:24:28,260 trading it live before the fact. So if we're also bearish on a particular commodity or a pair or market, if we're bearish and we see price trade up until
155 00:24:28,260 --> 00:24:36,300 level we want to be short. Ideally, you want to see news headlines that are talking about how good it's been moving up or how it's hitting all historic
156 00:24:36,300 --> 00:24:46,320 highs or it's done something that looks underlying bullish in the commentary they put on there. For futures, I subscribe to futures magazine, and they do
157 00:24:46,320 --> 00:24:54,300 every month they talk about a particular market or two. And they say how great this markets been moving or how bad something's been happening. Usually I think
158 00:24:54,330 --> 00:25:01,500 the catalyst that really sets up really nice swing trade and if you can start seeing that also, at a time on On the internet, just go through the major
159 00:25:01,500 --> 00:25:11,310 headlines go like on market watch or CNBC, anything that has a lot of talking heads, and a lot of audience members usually following it if they start talking
160 00:25:11,310 --> 00:25:19,260 about a market when you're looking to be a bullish buyer, and they're giving headlines that are bearish or heavy, and it's like a loaded deal. So it's so
161 00:25:19,260 --> 00:25:26,760 good to see that. And it's also diametrically opposed to what you would expect to see retail sees this and they don't want to trade gold long. They think it's
162 00:25:26,760 --> 00:25:36,840 going lower. But we go in step right in front and say, Okay, we're trading right in there when the sentiment is most weak. Which brings us to market sentiment. I
163 00:25:36,840 --> 00:25:46,500 use a indicator for this. And yes, I heard that right, I use an indicator. If the waves percent are into my opinion, it's the most accurate in terms of an
164 00:25:46,500 --> 00:25:58,770 indicator for overbought oversold. And what I do is I plot a 15 period Mauryans percent or on a daily basis. And I do a simple overbought oversold idea. And I
165 00:25:58,770 --> 00:26:11,850 divided and use anything at the 50 level or below that is oversold and a buying area. And everything above the 50 level is over bought or a selling area. And if
166 00:26:11,850 --> 00:26:22,110 we're at the 50 level, and we've left the oversold scenario, I will still factor a potential buy. And if we left an overbought condition recently and traded down
167 00:26:22,140 --> 00:26:32,550 hovering around the 50 level, I will favor the overbought side to over the oversold condition onwards. If we're at a point of equilibrium or at the 50
168 00:26:32,550 --> 00:26:41,280 level, wherever we left most recently, whether it be overbought or oversold, I like to go with that sentiment. And that's it. They're the hallmarks that I look
169 00:26:41,280 --> 00:26:49,620 for for explosive swing trades they actually will be referred to again later on in the mentorship when we start talking about making trades. But I'm actually
170 00:26:49,620 --> 00:26:58,590 gonna give you an outline in Lesson Eight to incorporate some of these ideas. And also we're gonna break down the actual swing trading model, what we do from
171 00:26:58,620 --> 00:27:04,890 step one to execution and management on the trade. Till next lesson, wish good luck and good trading