ICT Charter PAM 3 - Trade Plan and Algorithmic Theory
Last modified by Drunk Monkey on 2024-01-06 07:13
Outline
00:03 - A price action model for swing trading.
- ICT outlines his Price Action Model #3 swing trading plan, focusing on 100-300 pip moves.
01:43 - Trading styles and approaches.
- Understand complete and concise trading methods to suit your lifestyle and personal preferences.
- ICT explains how he approaches trading, using a scalping mindset and implementing it on various time frames, including the weekly and monthly charts.
- ICT emphasizes the importance of experiencing the trade plans himself and understanding how he views price, rather than relying solely on intellectual explanations.
06:57 - Trading strategies and market analysis.
- ICT emphasizes the importance of repetition in learning trading strategies, using intraday charts to teach retention of specific price action patterns.
- By forcing students to go through 12 trade plans, ICT aims to create a well-rounded understanding of market analysis and trading protocols.
- The speaker refers to a monthly range for trading and notes that the data range for the week is determined by looking back 20, 40, or 60 days, depending on the situation.
- The speaker emphasizes the importance of considering the full spectrum of data, including 20, 40, and 60 days, when analyzing price action for swing trading.
12:55 - Swing trading strategies using seasonal tendencies and market analysis.
- Trader looks for convergence of news and economic events to stimulate volatility.
- Identify seasonal tendencies in the market, focusing on the strongest ones in the latter portions of March 2020 for April and May.
- Analyze the discount or raise under 20 Day estrus, and expect a monthly range expansion down if the CO T hedge program is bearish.
18:02 - Using Commitment of Traders data for hedging strategies.
- ICT explains the CFT hedge program, using a crude depiction to show the commercials' net position in CO2 data elements.
- The most recent example shows the commercials are net short in their hedging program, but their holding may actually be above the net zero line on a natural graph.
20:54 - Market analysis and trading strategies.
- ICT teaches how to identify low resistance liquidity runs using a crude depiction of market structure and economic calendar.
- ICT targets relative equal lows within a 20-40 day look back range for swing trading setups.
- ICT identifies premium arrays in the 20-40 day range for bullish CBOT hedge program, targeting highs or liquidity pools.
- When bearish, ICT focuses on the 60 day look back range for potential MFI range expansion down, with a goal of identifying relative equal highs.
27:30 - Trading strategies using price action and risk management.
- The trader looks for convergence of price movements in the 15-minute time frame to determine optimal trade entries, using standard deviations from the Asian range or central bank dealers range.
- Scalping protocols are implemented for further risk reduction, using the 15-minute time frame and confluence with the 62% fib level.
- ICT explains how to use smaller leverage on a 15-minute chart while still achieving the same relative risks as a 5-minute or 1-minute chart.
- ICT outlines a template for identifying the initial objective and scaling profits based on personal preferences and data analysis.
32:49 - Trading strategies and objectives.
- ICT emphasizes the importance of mapping out initial objectives on the daily chart, taking into account old daily highs and fair value gaps.
- ICT identifies the potential for 100-300 pips based on the model's objective, targeting buy side liquidity above old daily highs or fair value gaps.
- ICT uses a scalping strategy on the 15-minute chart, filtering longs at or below the European Open price and shorts at or above the European Open price.
- Alternative trade executions are used when the market doesn't reach the optimal trade entry level, such as placing a buy stop at the Asian range high or a sell stop at the Asian range low.
38:46 - Managing trade ideas with multiple orders.
- ICT sets a 50-pip objective for the first order and a 75-pip objective for the second order when shorting.
- ICT uses multiple orders to manage the trade idea and leaves one order open-ended to maximize potential profit.
42:01 - Swing trading strategies and risk management.
- Swing traders should accept a lower win-loss ratio and be comfortable with being wrong more often, as they aim to capture big moves over a longer time frame.
- Premature stop-loss exits can be costly, so traders must balance risk management with the potential for big gains in a swing trading approach.
- ICT outlines a trade plan for entering trades based on market structure, data range, and liquidity pools.
- The plan includes setting profit objectives, managing risk, and monitoring for secondary entries.
48:27 - Trading strategies and stop loss management.
- ICT emphasizes the importance of understanding institutional order flow and using the institutional order flow entry drill to get in sync with a move that's already unfolding.
- By using a well-rounded, comprehensive approach to price action, traders can eliminate fear of missing moves and have a clear understanding of what they're looking for and why.
- Trader prioritizes reading market signals over managing stop loss risk.
52:54 - Risk management and leverage in swing trading.
- The speaker emphasizes the importance of understanding the risks involved in trading and how to manage them effectively.
- The speaker highlights the need to overcome the spread in every trade and how to do it using universal protocols.
- ICT emphasizes the importance of using 25 pips stop loss for potential profit in swing trading.
- Michael emphasizes the importance of risk management in swing trading, specifically reducing leverage by 50% after a loss to minimize potential losses.
- He provides an example of how this strategy can lead to significant profits, even with a small initial investment, by taking advantage of mega trades or quarterly shifts.
59:45 - Managing risk and emotions in trading.
- ICT emphasizes the importance of controlling equity curve fluctuations by smoothing out gains and losses to avoid big downswings and maximize potential profits.
- He stresses the need for discipline and protocols in trading, avoiding emotional decision-making and maintaining consistent leverage to preserve capital and capture big moves.
01:02:27 - Managing emotions in trading.
- ICT emphasizes the importance of managing emotions and self-discipline in trading, as losing trades are inevitable and can lead to a toxic mindset if not addressed.
- By cutting maximum leverage in half after five winning trades, traders can minimize drawdown and preserve equity, allowing them to execute trades with a clear mindset and avoid fearful decision-making.
- ICT emphasizes the importance of surviving in the market, not becoming a multimillionaire overnight.
- He provides a swing trading model based on the commitment of traders and seasonal tendencies, with sample sets to be provided.
01:07:30 - Technical analysis of British pound vs US dollar.
- ICT is bearish on foreign currency and bullish on the US dollar, based on commercial reading data.
- ICT expects the British pound to drop lower in April, with commercials buying it back as it drops.
- The speaker is looking for lower prices in the market and identifies a potential liquidity pool in the form of a single or relatively equal low.
- The speaker provides a homework assignment to analyze the model and project potential profit targets based on standard deviations and historical data.
01:13:53 - Trading strategies using commentaries and market structure.
- ICT explains how to trade based on market structure shifts and lower timeframe entry strategies, using the dollar index as an example.
- ICT provides a trading plan with specific ideas to help refine the approach, including targeting the monthly low and using partial profits.
- The speaker discusses a simple trading strategy using optimal trade entry and fair value gap, with examples in the euro and stock index futures.
- The speaker finds it difficult to hold onto trades for long periods, preferring to be in multiple trades and parlaying them quickly for faster profits.
Transcription
| 1 | 00:00:03 --> 00:00:15 | ICT: Okay folks, welcome back. This is our price action model number three swing trading plan. And the objective is to focus on moves that are 100 to 300 pips |
| 2 | 00:00:15 --> 00:00:16 | portrayed |
| 3 | 00:00:27 --> 00:00:39 | Alright, so the ICT Price Action Model number three swing trade plan 100 To 300 pips portrayed. As I've already warned you, in the two previous trade plans, the |
| 4 | 00:00:39 --> 00:00:51 | slides are going to be repetitive. Okay, so to circumvent the need to keep saying this each time to prepare yourself, again, because what I'm doing is I'm |
| 5 | 00:00:51 --> 00:01:07 | building out my entire perception of the marketplace. So every time we add a new trade plan, I'm adding things to an existing format. So that way, you'll see how |
| 6 | 00:01:07 --> 00:01:17 | all of these models actually dovetail. I've said this before we started doing until, during the core content, as it were going through it and later stages, I |
| 7 | 00:01:17 --> 00:01:28 | said that we would go into trade plans, that would, after you see them all, you'll understand how they all are modular, they can be broken down in |
| 8 | 00:01:28 --> 00:01:41 | individual trade plans. Or, as I'm developing it, as we go through all 12 of them. All of these models take shape. And I'm utilizing them to some degree all |
| 9 | 00:01:41 --> 00:01:53 | the time. By understanding all of them in a complete and concise manner. It gives you a comprehensive overview of what it is I've been teaching in the |
| 10 | 00:01:53 --> 00:02:09 | mentorship. And then from applying your personal personality, your your affinity for one timeframe, over another a style of trading that is more appropriate for |
| 11 | 00:02:09 --> 00:02:20 | your lifestyle and your existence as a as a human being not just a trader. Because all of us have different walks of life, we all have different |
| 12 | 00:02:20 --> 00:02:28 | constraints that we have to operate in. And not all of us had the luxury to sit down in front and watch life one minute charts and five minute charts, we don't |
| 13 | 00:02:28 --> 00:02:42 | have that we have businesses, we have jobs, things that take our attention elsewhere. So while it may not be possible for you to take action in one |
| 14 | 00:02:42 --> 00:02:54 | particular approach of trading, like scalping or day trading, it's advised for you to understand how that is done. Because if you do this long enough, |
| 15 | 00:02:54 --> 00:03:03 | eventually you will have the opportunity to do those types of things. And whether you stay in that classification as a day trader or scalper will remain |
| 16 | 00:03:03 --> 00:03:13 | to be seen your own development. Not every one of you are going to do it. Some of you came into this mentorship with the expectation you're going to do one |
| 17 | 00:03:13 --> 00:03:23 | format or style trader, and you probably watched that morph over the year or so that we've been working together. And you've changed different styles and |
| 18 | 00:03:23 --> 00:03:43 | approaches to see what suits you. When we have completed all 12 Price Action Model trade plans, you'll see the whole collection of disciplines have specific |
| 19 | 00:03:43 --> 00:03:53 | concepts. Now it's not my objective to try to implement every single facet of the ICT mentorship, you know, some of you are saying, okay, he's given me every |
| 20 | 00:03:53 --> 00:04:03 | one of these tools, every one of these applications every one of these conditions for this or that. So what he must be saying is, there's a situation |
| 21 | 00:04:03 --> 00:04:12 | where it allows me to toggle all these boxes and check them all off. And that's the perfect million dollar trade. It's not, that's not how it works. You're |
| 22 | 00:04:12 --> 00:04:26 | going to see how using a scalping mindset, or approach or process or protocol utilized in this model, because I'm going to talk about where you would |
| 23 | 00:04:26 --> 00:04:44 | implement that. You can also take this strategy and zoom it out to a weekly chart and trade long term position trades. Okay, so that's the understanding I'm |
| 24 | 00:04:44 --> 00:04:56 | giving you but you're probably just focusing on specifics. And looking at the Okay, well, he says a weekly chart or a monthly chart, so it should only work |
| 25 | 00:04:56 --> 00:05:09 | there now. It's completely universal because price action is fractal. When you understand how we can operate on a macro level with this model, don't forget how |
| 26 | 00:05:09 --> 00:05:19 | you can go back in using the short term concepts that you learned in the core content and in the previous short term model, trade plan. And in the scalping |
| 27 | 00:05:19 --> 00:05:33 | trade plan, all of those ideas can be used to complement this model. Okay, and don't limit yourself to just that, because you'll find as I go back into another |
| 28 | 00:05:33 --> 00:05:44 | swing trade, trade plan, later on in the year, when we get to that, you'll see that I'm going to be bringing in other things that you've seen me talk about, in |
| 29 | 00:05:44 --> 00:05:57 | swing trading that haven't made their way into this one yet. So again, this is a it's a complete, progressive unveiling, of how I sit down and look at a market, |
| 30 | 00:05:57 --> 00:06:08 | I get lots of questions. You know, how do I know when to go into a trade as a day trader or a scalper or a short term trader? Or when is it feasible for me to |
| 31 | 00:06:08 --> 00:06:22 | be in a swing trade mindset? Okay? Those answers are provided by going through these 12 trade plans, and then experiencing them yourself. Because I have an |
| 32 | 00:06:22 --> 00:06:32 | understanding of what it means to me. But it's literally impossible for me to articulate that in a way where it's going to be appreciated or understood. And |
| 33 | 00:06:32 --> 00:06:43 | I'm not saying that I'm so intellectually lofty that you can't grasp what I'm gonna say, because I'm not an I'm not a mental giant, clearly. But it's |
| 34 | 00:06:43 --> 00:06:53 | something you have to experience yourself. And then you'll understand what it is that I'm saying. And what is it I'm trying to say is that you're going to |
| 35 | 00:06:53 --> 00:07:02 | understand more about how they view price. By the way, I'm showing you this, and repetitively repeating a lot of the same things like this slide you're looking |
| 36 | 00:07:02 --> 00:07:15 | at here. It feels like cutting corners, it feels like holding information back, it feels like all those things, because you're on that side of your |
| 37 | 00:07:15 --> 00:07:24 | understanding. But when we're going through the entire 12 trade plans, and then we implement the algorithmic principles that will be applied to each one of them |
| 38 | 00:07:24 --> 00:07:37 | as well, but not in such a long drawn out process. The the understanding you'll have and the ability to read price, in moments of just sitting down and looking |
| 39 | 00:07:37 --> 00:07:46 | at the charts working from a monthly down into a one or five minute chart, you'll know right away what you should be doing relative to position trading, |
| 40 | 00:07:46 --> 00:07:57 | swing trading, short term trading, intraday, scalping, you'll know what it is, you're going to be most likely to elect as the mode of engagement for that |
| 41 | 00:07:57 --> 00:08:10 | particular time. Which gives you a well rounded, holistic approach to analysis. It's not just simply a top down, but you'll understand not only top down, but |
| 42 | 00:08:10 --> 00:08:21 | you'll know what it is you'll reach for, that has the highest probability of panning out because let's face it, not every market is a long term position |
| 43 | 00:08:21 --> 00:08:34 | market, you have to go through long periods of consolidation or reversals into really ugly market price action. So there's always a scalpers mentality, okay, |
| 44 | 00:08:34 --> 00:08:43 | available to any market environment that's always there, which is the primary reason why I like to teach with intraday charts. That's the reason why I taught |
| 45 | 00:08:43 --> 00:08:54 | the first trade plan as such. That's the reason why I taught in my free YouTube channel, the scalping series, because it is absolutely essential to |
| 46 | 00:08:54 --> 00:09:03 | understanding price action, because it gives you the repetitiveness of seeing things playing out over and over again, much in the same way I'm delivering |
| 47 | 00:09:03 --> 00:09:12 | these trade plans, they're going to look almost identical. There's a couple little variations here and there. But because I'm forcing you to go through |
| 48 | 00:09:12 --> 00:09:24 | them, it the minimum 12 times the retention of specific things that most of you aren't paying a lot of attention to, or minimizing in your approach to digesting |
| 49 | 00:09:24 --> 00:09:36 | this information. It forces you to have it subconsciously. And then when you watch price action live, and you're looking at charts develop in real time. Your |
| 50 | 00:09:36 --> 00:09:46 | ability to recall this information, and the specific protocols that make these trade plans will be called into action. And it won't be like Oh, I got to think |
| 51 | 00:09:46 --> 00:09:57 | about the it'll just happen because you have been forced to learn it this way. Okay. So again, like we said in a previous to tree plans, and I'll say this |
| 52 | 00:09:57 --> 00:10:11 | another nine more times, but The cycle for every trade plan is preparation, opportunity discovery, trade planning, trade execution, and trade management. |
| 53 | 00:10:14 --> 00:10:24 | Alright, so with our preparation, we always refer to our economic calendar for the coming week. We want to note all medium and high impact events for the |
| 54 | 00:10:24 --> 00:10:34 | markets that you are following. Study the events on the week to come and consider how the current market structure and the calendar events may suggest a |
| 55 | 00:10:34 --> 00:10:48 | specific weekly profile for that week's range. Now, remember, this trade plan for price action model that we're flushing out until trade plan is specifically |
| 56 | 00:10:48 --> 00:10:59 | aimed at trading in the direction of a monthly range. Okay, so don't let this fool you here, you still have to flesh out that monthly range was for weekly |
| 57 | 00:10:59 --> 00:11:12 | candles. So we're still keeping that in the forefront of our mind. Okay, so again, moving into the data ranges. Now, because we're working with swing |
| 58 | 00:11:12 --> 00:11:25 | trading, we're working primarily with a larger degree of price, and duration looking back. So while we've been primarily looking at the last 20 days, if the |
| 59 | 00:11:25 --> 00:11:36 | data breach, in terms of look back, reflect we're focusing on in bringing in the full spectrum of 2040 and 60 trading days. So while the depiction here is |
| 60 | 00:11:36 --> 00:11:49 | basically the same, what we're saying is today, if we look back is 20 days, if we don't see any, if the data ranges that work, for our top down analysis, we go |
| 61 | 00:11:49 --> 00:12:00 | to the 40 day, look back. And if we don't see anything that's notable, then we'll look back 60 trading days, okay, so we're not counting Sundays, but we're |
| 62 | 00:12:00 --> 00:12:08 | gonna be noting the highest high and the lowest low in the past 20. And that little asterisk next to that 20 is implying that we're referring to not only |
| 63 | 00:12:08 --> 00:12:20 | just 20 days look back, but as much as up to 60 days, look back. Okay, so while this indicates what we've shown in the previous trade plan, the graphic that I |
| 64 | 00:12:20 --> 00:12:31 | created here, all I'm trying to do is save myself a lot of legwork. And just ringing in the reminder that the maximum if the data range is referred to here, |
| 65 | 00:12:31 --> 00:12:41 | because we're in swing trading. So again, we're, whenever we sit down in front of our charts, we're calling we're calling that today. Our look back is 20 days, |
| 66 | 00:12:41 --> 00:12:50 | not counting Sundays, and then we look back 40 days, if there's nothing that we can really work with in terms of the 20 day if the data range, and a 40 days |
| 67 | 00:12:50 --> 00:13:00 | doesn't give us anything to frame a context on, we'll look back to 60. Okay, that's your current dealing range, knowing the highest high and the lowest low |
| 68 | 00:13:00 --> 00:13:11 | in that 2040 or 60 days respectively. defining these highest high and lowest low, that's going to be the range you work within for looking for your entries, |
| 69 | 00:13:12 --> 00:13:23 | looking for your targets. And not only your terminus, where you expect to see the trade go to ultimate objective, but where along the way you should be |
| 70 | 00:13:23 --> 00:13:36 | looking for potential partials to take in profit. Now inside this dealing range, we look for the next draw on liquidity. Where's price likely to trade to next? |
| 71 | 00:13:37 --> 00:13:50 | An old high or low a fair value gap or liquidity pool? We look for a PDE right in the direction of the monthly range bias. Now, what does that mean? That does |
| 72 | 00:13:50 --> 00:13:59 | create something new for you to understand or wrestle with know the same things that we talked about on a 15 minute timeframe that makes up our intraday daily |
| 73 | 00:13:59 --> 00:14:10 | fluctuations and ebb and flow that create the daily range. It's the same context. Okay, we're looking at for a monthly range. So all the things that we |
| 74 | 00:14:10 --> 00:14:21 | look for on any other timeframe, we're looking for to occur on a monthly range. The premium PD arrays when bullish and discount arrays when bearish are going to |
| 75 | 00:14:21 --> 00:14:37 | be focused on day preparation, we anticipate price to move to a PD array that would support our monthly bias one a day and an economic event found on economic |
| 76 | 00:14:37 --> 00:14:49 | calendar with the current war next trading week. This is what we're waiting for. Okay, we're we're looking for a convergence of the right kind of news, high |
| 77 | 00:14:49 --> 00:15:00 | impact or medium impact that's going to stimulate volatility in that particular market. Now, by itself, it doesn't mean much. We're going to bring in In another |
| 78 | 00:15:00 --> 00:15:07 | component, but that's what we're primarily looking for, we're looking for that, that smokescreen that the central banks will use in the form of economic |
| 79 | 00:15:07 --> 00:15:20 | calendar, medium or high impact event. Now, this can either be a run on liquidity, or rebalancing, inefficient price delivery. Opportunity discovery, |
| 80 | 00:15:20 --> 00:15:30 | what we're gonna be focusing on for swing trades, is gonna be identifying the current seasonal tendency for the time of your price action study. So if we're |
| 81 | 00:15:30 --> 00:15:39 | looking at a particular market, for instance, say we're looking at the euro, you want to go through your core content and go to the section where we talked about |
| 82 | 00:15:39 --> 00:15:53 | seasonal tendencies. And there are two areas where I talked about it, where we talked about mega trades. And the the month five content, we're actually wrong |
| 83 | 00:15:53 --> 00:16:04 | and seasonal tendencies as a as a general idea. You want to be looking at the highest probability seasonal tendencies that suggest a strong chance of |
| 84 | 00:16:04 --> 00:16:11 | bullishness or bearishness, at that current time, what's the current time, the time when you're sitting down in front of the charts? What month are you in? |
| 85 | 00:16:12 --> 00:16:25 | Okay, what time what season of the year? Are you in? Are you in the spring decline? Or are you in the fall rally? Okay, that's set seasonal tendency for |
| 86 | 00:16:25 --> 00:16:35 | the for the year that we look at the money cycle, we're looking for the individual quarterly effects, okay, or its quarterly shifts that take place in |
| 87 | 00:16:36 --> 00:16:47 | the marketplace, we want to be looking at what is the strongest one right now. So at the time of this recording, it's the latter portions of March 2020. So I |
| 88 | 00:16:47 --> 00:17:00 | would be looking at what seasonal tendencies are going to be highly probable for the month of April in May. So the seasonal tendencies that are strongest in |
| 89 | 00:17:00 --> 00:17:10 | those periods. That's the markets I want to be focusing on. And if it lines up technically, with the data ranges as outlined and other factors we'll cover in |
| 90 | 00:17:10 --> 00:17:20 | this trade plan, but we're focusing in limiting our focus to the highest probability, we're not trying to sit down and do some willingly trades. Swing |
| 91 | 00:17:20 --> 00:17:33 | Trading requires a lot more analysis, it requires a lot more patience, and you're going to have to demand a lot of things to happen. Okay, we're going to |
| 92 | 00:17:33 --> 00:17:47 | identify the discount or raise under 20 Day estrus, which means if it's not 20 days, 40 days or up to 60 days, if the data range when the bias is bearish, then |
| 93 | 00:17:47 --> 00:17:59 | we're gonna identify the premium arrays inside the 20 day, 40 day or 60 day, if the data range when the CO T hedge program is bearish, we're gonna be expecting |
| 94 | 00:17:59 --> 00:18:11 | a monthly range expansion down. Now, as you can see here, this is the crude depiction I gave when we are utilizing the co2 hedge program. And that's my way |
| 95 | 00:18:11 --> 00:18:19 | of interpreting Commitment of Traders, where we're only looking at the commercials and we're not looking at the large specs or low interest, small |
| 96 | 00:18:19 --> 00:18:30 | specks, we care less of a thing because it's Street money. We're looking at the 12 month look back on that commercial activity, and we get the highest high and |
| 97 | 00:18:30 --> 00:18:41 | the lowest low of where they have placed their net position. And then we split that range in half. And then we look at where we have recently traded to are we |
| 98 | 00:18:41 --> 00:18:51 | at the lower end or above that central line, okay, because that's going to denote whether they're primarily hedging long, or hedging short, regardless of |
| 99 | 00:18:51 --> 00:19:02 | their natural net position that you would see in a classic net traders position chart or graph, their net zero line is of no interest to me, I could care less |
| 100 | 00:19:02 --> 00:19:10 | about that. What we do, and it's mentioned in the core content, so you'll have to go back through and look at it. And what you find that is in the commodity |
| 101 | 00:19:10 --> 00:19:23 | section, it should be would that be? And it was June of 2017 when I did the content, so you'll have to look at it and just know that it's, it's the month |
| 102 | 00:19:23 --> 00:19:29 | that we did bonds, stocks, and commodities. So I think that's |
| 103 | 00:19:31 --> 00:19:39 | it got that for like, I can't recall what it is. So I apologize, but I just know, that's where you'll get the information for the CFT hedge program, ideas |
| 104 | 00:19:39 --> 00:19:51 | that I teach. Now, as you can see in this crude depiction here, the most recent in this example, as I'm hypothetically showing is that they will be net short in |
| 105 | 00:19:51 --> 00:20:03 | their hedging program. Now at that same time, where they're holding would be deemed as a net short hedge program. This may actually be above the net zero |
| 106 | 00:20:03 --> 00:20:14 | line on a natural graph of co2 data elements, the net traders position chart, this whole business up and down, up and down may actually be above the zero line |
| 107 | 00:20:14 --> 00:20:23 | which would indicate a constant bullishness or net long position by the commercials. In in classic definition. That's true. But as I taught him the core |
| 108 | 00:20:23 --> 00:20:34 | content, that's not what I'm focusing on. I'm looking at the ebb and flow of what they're doing on a time basis. And why 12 months because everything is |
| 109 | 00:20:34 --> 00:20:43 | seasonal. So the factors that are seen in repeating over and over again, why are we even considering seasonal tendencies, because there is a likelihood, a |
| 110 | 00:20:43 --> 00:20:52 | likelihood, it's not a panacea, it's not a be all end all. It's not a guarantee, it's the general roadmap of things might happen again, because it's done this a |
| 111 | 00:20:52 --> 00:21:02 | lot at that same time a year. Now, by itself, it is absolutely no invitation for you to get in the market and take a trade. But when you group that, together |
| 112 | 00:21:02 --> 00:21:13 | with the data ranges and the market structure ideas that I've taught you, then bringing in the economic calendar for a timing, or smokescreen, when he would |
| 113 | 00:21:13 --> 00:21:24 | facilitate that movement, you have just about as best a situation you can in terms of probability. So what would it look like in the price action, price |
| 114 | 00:21:24 --> 00:21:32 | would have been going up. And primarily, we're looking for some premium array. We traded above an old high. So we're looking at a liquidity pool and this crude |
| 115 | 00:21:32 --> 00:21:39 | depiction, we had the market breakdown. Now, in this price, like here, this is actually indicating like a daily chart. So all of this movement here would |
| 116 | 00:21:39 --> 00:21:50 | represent a daily chart inside of this leg here from this low up to this high when we went lower here, primarily there should be a short term load that was |
| 117 | 00:21:50 --> 00:21:59 | broken, and then you would have a market structure break, then this has retraced back up. And that by itself is enough to look for a return back to a fair value |
| 118 | 00:21:59 --> 00:22:11 | got that would be considered bearish. And you're coupling that with the CVT hedge program. And on a monthly chart, we would expect the monthly rains to |
| 119 | 00:22:11 --> 00:22:21 | expand to the downside. Okay, now again, we don't require that the market closes on that monthly range on the low or even lower, we just anticipate the movement |
| 120 | 00:22:22 --> 00:22:34 | to offer an opportunity. So just like I teach you in low resistance liquidity runs in month one. Here is your sell stop this yourself high liquidity, the |
| 121 | 00:22:34 --> 00:22:44 | market would look to expand down over the course of the next 234 months of weeks rather than it got monthly range. And we will be targeting these relative equal |
| 122 | 00:22:44 --> 00:22:53 | lows. So we're trying to sell near the high end of the range. What's the range, the low to this high? That is your dealing range. So you will be looking at this |
| 123 | 00:22:53 --> 00:23:03 | old low for at the data range. How far back is that? Is that in the 20? day look back? Or is that an 40? day look back? How about this? And how about this, this |
| 124 | 00:23:03 --> 00:23:13 | low or equal lows, relative equal lows that we're targeting here, that has to be within the constraints of the 60 day look back the maximum, okay? Otherwise, we |
| 125 | 00:23:13 --> 00:23:24 | will be forced to look at something like this low here. If it was at the 60 day or less, for a 40 day look back, okay, this could be a 40 day look back. And |
| 126 | 00:23:24 --> 00:23:31 | that would make it even better. For your notes. When we have these setups like this, we're looking for relative equal lows to be ran out for low resistance |
| 127 | 00:23:31 --> 00:23:42 | liquidity run using this model and swing trading. If you can get these relative equal lows within 40 or 20, the probabilities of getting there quick is higher |
| 128 | 00:23:42 --> 00:23:52 | than if it is on a 60 day look back. So ideally, you want to be looking at 20 to 40 day. But if you're forced, because of the seasonal tendency in the market |
| 129 | 00:23:52 --> 00:24:03 | structure, you got to go as far back as 60 days look back. And as long as you have that low or relative equal lows in in that range. In other words, if the 60 |
| 130 | 00:24:03 --> 00:24:12 | day look back is here, you can't say well, here's 60 days look back, but this is really the equal. So I'm gonna go back there. Now, you got to look at the 60 day |
| 131 | 00:24:12 --> 00:24:21 | and then consider maybe a fair value gap. Okay, don't get greedy, you might want to hold on to something like that. Okay, and leave a piece on, but don't expect |
| 132 | 00:24:21 --> 00:24:30 | all of your trades to come off down and don't get greedy with that. Alright, so we're gonna identify the premium arrays inside of the 20 day if the data range |
| 133 | 00:24:31 --> 00:24:42 | when the CRT hedge program is bearish, and we're going to expect a MFI range expansion down. Opposite is said here when things are bullish. We're gonna |
| 134 | 00:24:42 --> 00:24:54 | identify the premium arrays above the 20 day 40 Day or 60 day look back inside of the data range and when this bias is bullish, so two scenarios such co2 hedge |
| 135 | 00:24:54 --> 00:25:02 | program we split the last 12 months range on the commercial activity only. Not factor bring in large specs because they're going to always be a mirror image of |
| 136 | 00:25:02 --> 00:25:12 | what commercials are doing anyway because they provide the liquidity for the large funds. When the hedge program is bullish, looking back the last 12 months, |
| 137 | 00:25:12 --> 00:25:20 | the market has come down, it's taken an old low, we've really pressed the market lower, and inside this swing from this high to this low and this movement up |
| 138 | 00:25:20 --> 00:25:29 | here, there should be some kind of a short term high over here that it broke, there's your market structure break, or comes back down into a discount array. |
| 139 | 00:25:29 --> 00:25:38 | So we're gonna be identifying the discount arrays inside of the 2014 60 day. If the data range when the CBOT hedge program is bullish, that's this. Okay, we're |
| 140 | 00:25:38 --> 00:25:47 | anticipating and expecting the MFI range to expand up, we're looking for relative equal highs, it's gonna be a liquidity pool. Now, if this relative |
| 141 | 00:25:47 --> 00:25:57 | equal high is outside of the look back period of 60 days maximum, this is just a pipe dream objective, you're going to have to look for where are the liquidity |
| 142 | 00:25:57 --> 00:26:08 | pools, old highs or fair value gaps, the target with this model, and while that may be something that trades to, we're looking to follow rules to have |
| 143 | 00:26:08 --> 00:26:15 | continuity and consistency as its goal. We don't just go in and say okay, well, it looks like it's a double top here. And as your boss says, I'm going to target |
| 144 | 00:26:15 --> 00:26:23 | that. How many times have we seen in recent years, and even in the commentary, I've even looked at specific levels like that and said it could get there and it |
| 145 | 00:26:23 --> 00:26:32 | never went there. So it's something that's going to happen to you as well. So you have to stay within the guidelines of the data range between 2014 and 6060 |
| 146 | 00:26:32 --> 00:26:42 | is your maximum. As I mentioned earlier, when it was the model for when it's bearish. When it's bullish, the best scenarios are going to see your highs and |
| 147 | 00:26:42 --> 00:26:51 | or premium arrays you're targeting targeting rather, inside of the 20 to 40 day. Now, I'm not trying to stare at you from trading using the 60 day look back, I'm |
| 148 | 00:26:51 --> 00:27:04 | just stating that you want to primarily focus your attention on the 20 and 40. And use the 60 day if the daily range premium race, in this case here as your |
| 149 | 00:27:04 --> 00:27:11 | best best best case scenario, and you're going to have very little on your position left at that point to be holding out for it anyway. So you're not gonna |
| 150 | 00:27:11 --> 00:27:20 | be holding that level of the position that you started it with. With the expectation it's going to go to that objective because that's just too myopic |
| 151 | 00:27:20 --> 00:27:27 | and silly to demand that of every trade, especially with swing trading, because it could change on a dime on some kind of news, like the Coronavirus at the time |
| 152 | 00:27:27 --> 00:27:38 | of this recording. Alright, so trade planning. When the market is primed, we want to look for convergence of both manipulation in price opposite to our trade |
| 153 | 00:27:38 --> 00:27:50 | bias. At a time the economic calendar suggests volatility injection will likely unfold, we will short bearish optimal trade entries and by bullish optimal trade |
| 154 | 00:27:50 --> 00:28:05 | entry setups. When we are bearish, we will frame a short entry when price has moved up into a 15 minute premium PD array that converges at a standard |
| 155 | 00:28:05 --> 00:28:15 | deviation of no more than plus three standard deviation. And that's going to be in the form of the Asian range. Central Bank dealers range or flout using the |
| 156 | 00:28:15 --> 00:28:27 | rules for that selection, and I gave you those in Kabul content. So you'll have to go back into your notes and get that during London Open and or New York open |
| 157 | 00:28:27 --> 00:28:41 | at the 62% fib level of the optimal trade entry. So we're looking for a confluence of our entry at the 62%. And it has to converge within five pips of |
| 158 | 00:28:41 --> 00:28:51 | your standard deviation plus three. We're going to be implementing or we can rather implement scalping protocols. At this stage for further reduction in |
| 159 | 00:28:51 --> 00:29:00 | risks. In other words, the things that you would use for your scalping one to five and one minute basis or that approach to doing it. You can further reduce |
| 160 | 00:29:00 --> 00:29:11 | it from using our 15 minute time frame here down into a five or one minute chart allowing your stops to be even more reduced in terms of risk. When we are |
| 161 | 00:29:11 --> 00:29:22 | bullish, we will frame a long entry when the price has moved down into a 15 minute discount PD array that converges with a standard deviation of no more |
| 162 | 00:29:22 --> 00:29:31 | than negative three standard deviations. Again, the standard deviations are based on age and range flout or central bank dealers range. I gave you roles to |
| 163 | 00:29:31 --> 00:29:32 | know which one you would focus on. |
| 164 | 00:29:34 --> 00:29:43 | There has to be a confluence between that and during the kill zone of London Open in New York open and at 62% fib level. So if we're using the 15 minute time |
| 165 | 00:29:43 --> 00:29:52 | frame, what am I saying? You're going to look at the price swing on a 15 minute time basis. In that 15 minute chart, your fifth level is going to be pulled from |
| 166 | 00:29:52 --> 00:30:01 | the low formed activity minute timeframe during the one open and it rallies up breaks a market structure It comes back down wherever that's a stupid |
| 167 | 00:30:01 --> 00:30:14 | retracement level is it should line up with no no more than three standard deviations down. So there's your clue which one of the three do you use, since |
| 168 | 00:30:14 --> 00:30:26 | my dealers range flout or Asian range, whichever one converges with that idea? Light Bulb this one one. We can implement scalping protocols on this stage as |
| 169 | 00:30:26 --> 00:30:36 | well for further reduction in risk. So what I've said mentioned in the previous slide, and we were referring to it as when it's bearish. Everything that I |
| 170 | 00:30:36 --> 00:30:43 | taught how to use in terms of the five minute chart and one minute chart you could use here and reduce the risk that would be seen otherwise, on that 15 |
| 171 | 00:30:43 --> 00:30:55 | minute chart, break it down. That way, you can use larger leverage, but still keep the relative risks the same, if not lower. When we are bearish, we will |
| 172 | 00:30:55 --> 00:31:06 | target the sell side liquidity below any old daily low or fair value get inside of the 24 year 60 day if the daily range. As I mentioned in the slides when I |
| 173 | 00:31:06 --> 00:31:16 | was showing you the CMT hedge program, outline that as individual general templates, that's what I'm talking about there. So go back to that slide. And |
| 174 | 00:31:17 --> 00:31:25 | listen to that. Again, if you don't understand that that is the home builders referring to I just said that that time. The immediate or next logical discount |
| 175 | 00:31:25 --> 00:31:37 | array will be the initial objective. So that means you're low in the last 20 days, that's going to be your first objective. Now if it's too small of an |
| 176 | 00:31:37 --> 00:31:46 | objective, what is that long, it's all gonna be relative to what you want to make and how you want to manage your trade. The low inside of those last 20 days |
| 177 | 00:31:46 --> 00:31:57 | may not be sufficient enough for you to take your first profit for you know, once they won't appease you. It won't be it may not be even 40 pips. So maybe |
| 178 | 00:31:57 --> 00:32:07 | your first scale is 75 pips. Why 75 pips because as a short term trader, that your high end Pitfall, or at least that's how I interpreted because I look for |
| 179 | 00:32:07 --> 00:32:19 | 50 to 75 pips a week. So I use what I would expect as my maximum weekly, one shot one kill, that's my first take profit or partial, when I'm swing trading, I |
| 180 | 00:32:19 --> 00:32:29 | demand that at minimum. So whatever that is, in terms of the 20 or 40 data, if the data range that loads that you're looking at, or fair value get, it has to |
| 181 | 00:32:29 --> 00:32:40 | offer that for you. Now, don't use that as a gospel like it has to always be just that fine tune where it meets your personality you feel comfortable with it |
| 182 | 00:32:40 --> 00:32:49 | may not be 75 pips and me 50 pips is good for you. Yeah, it can be a good partial right there, you banked something, move your stop accordingly. And so |
| 183 | 00:32:49 --> 00:33:00 | we'll touch base and cover in a couple minutes. And we'll get to that slide. But you want to have your ideal initial objectives mapped out on your chart on a |
| 184 | 00:33:00 --> 00:33:11 | daily chart and they're determined on the daily, not your four hour not your one hour. Your partials are scaled and scheduled on that daily chart. So you're not |
| 185 | 00:33:11 --> 00:33:21 | trying to guess as trades goes on or you get caught by an expansion railroad fastening. He's thinking okay, well, I'm going to keep a hold on I got no you |
| 186 | 00:33:21 --> 00:33:30 | have to be sober minded about it. Because if you don't, many times you're gonna see trades turn on you. It swings in swing trading, and you have to sit through |
| 187 | 00:33:30 --> 00:33:38 | longer periods of drawdown. And if you didn't, we're not drawdown but a retracement because you may have opened profits, but may have given up a large |
| 188 | 00:33:38 --> 00:33:47 | portion of them. So if you take your logical scalings and mark them on your daily chart, when price gets there, you'll know that that's what you should be |
| 189 | 00:33:47 --> 00:33:55 | doing. Okay, and when we get there are orders, you'll see we have already made concession for that as we've done in previous models. There will likely be |
| 190 | 00:33:55 --> 00:34:06 | multiple old daily lows inside of the 50 day range that means the last 2040 and 60 days, but we use the one that frames the potential of at least 100 to 300 |
| 191 | 00:34:06 --> 00:34:16 | pips because that's this models objective. When we are bullish, we will target the buy side liquidity above any old daily high or fair value gap inside of the |
| 192 | 00:34:16 --> 00:34:25 | 20 day, 40 day and 60 day if the data range. The immediate or next logical premium array will be the initial objective for everything I mentioned in the |
| 193 | 00:34:25 --> 00:34:33 | previous slide regarding the definition or what would define your initial objective for scaling out your first profit. That's what I'm referring to here |
| 194 | 00:34:33 --> 00:34:43 | just only when we're looking at from the scope of being bullish. So you have to identify your old high or your premium fair value gap that you are expecting |
| 195 | 00:34:43 --> 00:34:55 | price to rebalance to that has to meet your minimum objective for a initial target. So again, mine is for Swing Trading 75 pips, so if it's not allowing |
| 196 | 00:34:55 --> 00:35:07 | that you got to look back further than 20 Good look back into 40, and then up to 60 days. So but you want to have again mapped out where on the daily chart, not |
| 197 | 00:35:07 --> 00:35:15 | the hour, not the four hour, not the 15. On the five minute, you're looking for your logical scaling objectives on the daily chart because that's exactly what |
| 198 | 00:35:15 --> 00:35:25 | we're trading, we're trading the daily chart with the expectation the bias of the monthly range. There will likely be multiple old daily highs inside of the |
| 199 | 00:35:25 --> 00:35:38 | data range, but we use the one that frames the potential for at least 100 to 300 pips. When we are bullish, we will note the European Open price on Tuesday and |
| 200 | 00:35:38 --> 00:35:48 | filter all longs at or below this price level, we will anticipate a 15 minute optimal trade entry to form inside of a retracement lower during London Open and |
| 201 | 00:35:48 --> 00:36:01 | or New York open kills. And for a sell stop rate that means a run on a very low level 15 minute equal lows. If you trade below that, take the stops there and |
| 202 | 00:36:01 --> 00:36:10 | then reject. Now you may not feel comfortable taking that trade, you would then wait for that to occur and then wait for a market structure shift on the 15 |
| 203 | 00:36:10 --> 00:36:19 | minute timeframe. Or once you get the the rate below the equal lows or your 15 minute time frame, then you could drop down into a five minute chart use your |
| 204 | 00:36:19 --> 00:36:29 | scalping setups. Everything is plug and play like I promised, but you have to know the core content well, to know what I'm showing you here. But everything |
| 205 | 00:36:29 --> 00:36:40 | I'm showing you here is basically what I do when I'm giving you the commentary on Wednesdays and weekends. I'm using these ideas to flesh out what I'm saying |
| 206 | 00:36:40 --> 00:36:52 | to you and and that's why the market trades the way it does. Alternative trade executions now this could be viewed as if you missed the optimal trade entry or |
| 207 | 00:36:53 --> 00:37:03 | your order didn't get filled because your spread didn't allow for alternative trade executions here for when we were bullish. We will note the Asian range |
| 208 | 00:37:03 --> 00:37:14 | high on Tuesday and place a buy stop at this level plus one pip after 2am Eastern Standard Time. We will anticipate a price to have made the low of day |
| 209 | 00:37:14 --> 00:37:29 | after price starts it's declined under the Asian range low and or European opening price trade executions. When we are bearish, we will note the European |
| 210 | 00:37:29 --> 00:37:38 | opening price on Tuesday and filter all shorts at or above this price level. We will anticipate a 15 minute chart optimal trade entry to form inside of |
| 211 | 00:37:38 --> 00:37:48 | retracement higher during the London Open and or New York open kill zones or a buy stop rate and always running out by liquidity relatively equal highs, wait |
| 212 | 00:37:48 --> 00:37:55 | for that to run those and then if it does, it starts to drop lower we can get a market structure break there, then you can look for the fair value get the form |
| 213 | 00:37:55 --> 00:38:07 | in that or drop down to a five minute chart and use your scalping protocols to get you in on the short Kay alternative trade executions when we are bearish. We |
| 214 | 00:38:07 --> 00:38:17 | will note the Asian range low on Tuesday and place a sell stop at this level minus one pip after 2am Eastern Standard Time. We will anticipate a price to |
| 215 | 00:38:17 --> 00:38:30 | have made the high of the day after price starts its ascent above the Asian range high and or above the European opening price. short trade management when |
| 216 | 00:38:30 --> 00:38:39 | we're entering a short we will place a sell limit order on all positions. We will execute with our demo account. We will use the standard deviation and pdra |
| 217 | 00:38:39 --> 00:38:50 | convergence minus five pips as our entry price when using the sell limit order. If multiple orders are used, all use the same entry price in the sell limit |
| 218 | 00:38:50 --> 00:39:03 | order. When we're entering a short we will place a limit order to take 50 pips we're using that as an objective for the low end number I said the weekly one |
| 219 | 00:39:03 --> 00:39:13 | shot one kill my target ranges 50 to 75 pips now you see why I have these here. It wasn't just willy nilly picked out because of the previous model. Everything |
| 220 | 00:39:13 --> 00:39:21 | is framed on the context of how I trade you sign up to learn how I look at interpret the market and analyze it. This is how I do it. |
| 221 | 00:39:22 --> 00:39:33 | Taking 50 pips is objective one, we will take a second order and take 75 pips as a second objective. We will use multiple orders to manage the trade idea if you |
| 222 | 00:39:33 --> 00:39:45 | capture a 300 Pip objective close 80% of the trade and see if it has any more room to run. Now, this slide here, you can fine tune this, you can say where I |
| 223 | 00:39:45 --> 00:39:53 | have 50 pips as your initial objective on the one of the limit orders. Okay, that could be your 75 pips. Then the next one where I have 75 pips you can |
| 224 | 00:39:53 --> 00:40:06 | actually make that 100 pips or 125 pips or 150 pips whatever lined up up with your next discount array or old lower old discount fair value got that you would |
| 225 | 00:40:06 --> 00:40:20 | be aiming for when short found on that daily chart. But as a general rule of thumb, you may elect to have your first objective be 50 pips as I said earlier |
| 226 | 00:40:20 --> 00:40:36 | in the discussion. Me personally, mine would be 75 pips, then 130 pips. Why 130 It's something I've done for a long time. We will use multiple orders to manage |
| 227 | 00:40:36 --> 00:40:46 | the trade idea, if you capture a 300 Pip objective, close 80% of the trade and see if it has more room to run. What do I mean by that? If you have multiple |
| 228 | 00:40:46 --> 00:40:59 | orders, and if you've used to the first and second objective, we're implying or assuming here, that you've used three orders to put on this trade. So that way |
| 229 | 00:40:59 --> 00:41:12 | you can manage it. When you have this set up like that, you're able to leave that third one one to see if it is basically caught a tiger by the tail. If it |
| 230 | 00:41:12 --> 00:41:24 | starts running. You can open up your objective to be open ended and manage the tray with your stop loss. You can put some crazy wild objective like 500 pips as |
| 231 | 00:41:24 --> 00:41:35 | the best case scenario, it may never even get there. But in environments like we're in now, and 2020 We've seen some pretty astonishing moves over 3000 pips |
| 232 | 00:41:35 --> 00:41:46 | in Euro Ozzy. So by having that one leader in there, okay, no more, it's leaving a line in the water. If you catch a runner, and that market starts to take off. |
| 233 | 00:41:47 --> 00:41:56 | Why would you want to limit your profit objective to just 300 pips, that's the ideal scenario 100 to 300. But if we are in a high probability, seasonal |
| 234 | 00:41:56 --> 00:42:05 | tendency, and the market structure is implying that your direction is probably right. And that MFI range really expands that monthly candle could really open |
| 235 | 00:42:05 --> 00:42:14 | up and give you 1000 pips or so. So you want to make yourself available to capturing that move in that you're not strangle your position and get out too |
| 236 | 00:42:14 --> 00:42:25 | prematurely on your last portion. When we are entering a short, we will note the premium array and sand deviation convergence, we aim to enter at, we will place |
| 237 | 00:42:25 --> 00:42:37 | our stop loss above this high plus 25 pips. We will reenter if the trade stops out. Notice we said we're going to reenter here why we're going to be monitoring |
| 238 | 00:42:37 --> 00:42:47 | if we get stopped out for a secondary entry, because swing trades may require multiple attempts to secure a solid entry. Do not fear this, especially if |
| 239 | 00:42:47 --> 00:42:54 | you're going to really hone in on this as your bread and butter approach to trading. And you're not going to be a short term trader or scalper or day |
| 240 | 00:42:54 --> 00:43:05 | trader, you're going to have to accept the fact that your win loss ratio is going to be lower in this model, because number one, you're going to be waiting |
| 241 | 00:43:05 --> 00:43:16 | a lot more time for setups and you're primarily going to jump the gun a lot, you're going to be fearful of missing the move. So you have to make make a plan |
| 242 | 00:43:16 --> 00:43:26 | for that plan for stuttering. Okay, fleeing for the inability to nail down the absolute best entry and in writing all the way out because that's not realistic, |
| 243 | 00:43:26 --> 00:43:34 | especially as a developing trader. So what does that mean, you definitely want to keep your risk low as a swing trader, because you're trying to capture big |
| 244 | 00:43:34 --> 00:43:41 | moves. So you don't want to offer your two minutes risk when you do these. Whereas if we did short term intraday trading, you can trade with a little bit |
| 245 | 00:43:41 --> 00:43:51 | larger spectrum of risk, because your your win to loss ratio should be higher. And your frequency of waiting for another setup is very, very slim. It's |
| 246 | 00:43:51 --> 00:44:01 | probably the next trading session, not even the next day. So with this model and this approach to trading, you want to make sure that you have the personality |
| 247 | 00:44:01 --> 00:44:11 | trait that allows for and is comfortable with being wrong more often than you probably would think you would be if you sat down and say okay, I'm going to be |
| 248 | 00:44:11 --> 00:44:18 | a trader, traders are 90 cent accurate. I knew they always make money and they're only losing a little bit of time. You can't think that way as a swing |
| 249 | 00:44:18 --> 00:44:26 | trader, because swing trades are going to come back on you quickly. If you're too aggressive about managing your stop loss, you'll get stopped out |
| 250 | 00:44:26 --> 00:44:38 | prematurely. And what do you do? Do you forget the whole idea? You can't do that with swing trading because if you let one trade stop out to undo what you have |
| 251 | 00:44:38 --> 00:44:47 | made in terms of your top down analysis, then you're not doing it correctly because what led to that setup in your mind to be bearish because you're looking |
| 252 | 00:44:47 --> 00:44:57 | at the expectation that monthly range expanding down. You're looking for a minimum of a weekly expansion down if not a series of them to make that monthly |
| 253 | 00:44:57 --> 00:45:09 | range go lower and If you get stopped out what has what has fundamentally changed about the situation? Probably nothing except for the fact that you |
| 254 | 00:45:09 --> 00:45:20 | strangled your trade and got stopped out prematurely, or entered into soon. Fearful of missing the move. Okay, so you have to allow for that. Don't fear it, |
| 255 | 00:45:20 --> 00:45:30 | because you're gonna most likely see, it's gonna take you multiple attempts to secure the ideal interest you're looking for. And really, in swing trading, |
| 256 | 00:45:30 --> 00:45:37 | you're probably not going to get a lot of the ideal entries, many times you're gonna be looking at it because it takes off and you missed the ideal entry and |
| 257 | 00:45:37 --> 00:45:46 | you'll have to use some kind of a retracement to a fair value gap anyway. Long trade management when we are entering along we will place a buy limit order on |
| 258 | 00:45:46 --> 00:45:55 | all positions we will execute with our demo account. We will use the sand deviation and pdra convergence plus five pips as our entry price when using the |
| 259 | 00:45:55 --> 00:46:06 | buy limit order. If multiple orders are used, all the same entry prices are used for the buy limit order. When we're entering along, we will place a limit order |
| 260 | 00:46:07 --> 00:46:16 | to take 50 pips again these are flexible now these are just suggestions, take 50 pips as our objective on one position, we will place a second limit order to |
| 261 | 00:46:16 --> 00:46:30 | take 75 pips as our secondary objective. And if you have three orders on, you'd leave that one on to capture 100 Pip objective and or lock into the 100 pips and |
| 262 | 00:46:30 --> 00:46:39 | then leave that open ended portion. Like we were mentioning, when we were looking at the short slide, you don't want to strangle your trade. So how you |
| 263 | 00:46:39 --> 00:46:51 | set these parameters up, they're going to be distinct to you unique to you. Okay, so that that portion of this trade plan is going to have you entering what |
| 264 | 00:46:51 --> 00:47:01 | you feel based on what the market structure is implying, what's the 2040 day and 60 day if the data range make available for you? Where are the premium fair |
| 265 | 00:47:01 --> 00:47:08 | value gaps that you would look for to retrace back up to and rebalance, whereas the old highs that you expect in the trade to and above the buy, sell liquidity |
| 266 | 00:47:08 --> 00:47:19 | pools, wherever they are, you're going to be using that in reference to what these profit objectives would be. But always leaving room for an order to run |
| 267 | 00:47:19 --> 00:47:31 | beyond the scope of 300 pips. But you want to capture in one of these orders, you want to capture at least 100 pips that's that's a, like a medium objective. |
| 268 | 00:47:32 --> 00:47:40 | You want to try to at least get that somewhere. Now that may be for some of you, your first profit objective, some of you may say, No, I have to be getting 100 |
| 269 | 00:47:40 --> 00:47:50 | pips. Because if I'm going to be risking 25 pips, I need to be trading better than three to one, and that would be four to one. So all these things, again, |
| 270 | 00:47:50 --> 00:48:00 | allow for your unique fingerprint on it, I'm just giving you a rough idea. And then you're going to take these models, and you're gonna gravitate to one of |
| 271 | 00:48:00 --> 00:48:08 | them and say, Okay, I like this, but I'm going to include this, and I'm gonna change and tweak that, and not do it so wildly that it turns into something |
| 272 | 00:48:08 --> 00:48:19 | that's unlikely to occur. When we're entering along, we will note the discount array and standard deviation convergence we aim to enter at, we will place our |
| 273 | 00:48:19 --> 00:48:29 | stop loss below this low minus 25 pips, we will reenter if the trade stops out, we can monitor it for secondary entries. Why, because swing trades may require |
| 274 | 00:48:29 --> 00:48:40 | multiple attempts to secure a solid entry. Again, do not fear this, if you're going to trade swing trading, expect to lose, expect to lose, because you're |
| 275 | 00:48:40 --> 00:48:46 | going to lose. And just because you got stopped out or you missed the trade. |
| 276 | 00:48:47 --> 00:48:56 | Your ideal entry, don't abandon the idea because think about it, you are doing analysis with the assumption that the market is going to move in upwards of 300 |
| 277 | 00:48:56 --> 00:49:06 | pips or so. So if it's moved from where you're trying to get in at, and it's only done so in a capacity of 30 to 40 pips has it? Have you missed the trade? |
| 278 | 00:49:06 --> 00:49:17 | No, you just missed one entry point. That's the reason why I state that learning, short term trading and scalping will facilitate ideal entries that are |
| 279 | 00:49:17 --> 00:49:28 | after your ideal swing trade entry. You follow what I'm saying? So if you're looking at the Daily setup, in a daily market structure on a daily chart, and |
| 280 | 00:49:28 --> 00:49:39 | you were honed in on a specific price level, that was a fair value gap or something that of that idea or mindset, you may not have been able to capture |
| 281 | 00:49:39 --> 00:49:49 | that entry point. So the market starts to move down and it moves 3040 50 pips, but you have done your analysis and it's suggested that you have 200 or more |
| 282 | 00:49:50 --> 00:49:59 | pips to go when a downside, or in this case long up above us. It could run that much more. Do you abandon the swing trade idea because you didn't get your |
| 283 | 00:49:59 --> 00:50:09 | Perfect Entry No, absolutely not. That's the benefit of understanding institutional order flow. And using the institutional order flow entry drill, |
| 284 | 00:50:09 --> 00:50:19 | because you can get in sync with a move that's already happened, and unseen starts to unfold, where other people will say, you know, I missed my entry. I'm |
| 285 | 00:50:19 --> 00:50:28 | scared now, like deer in headlights, we don't have that problem. You don't have to have the best best best entry. You don't have to have that. And that's what |
| 286 | 00:50:28 --> 00:50:37 | my core content teaches you like, you can literally sit down and plug yourself into any market environment and say, Okay, this is what it's doing. This is |
| 287 | 00:50:37 --> 00:50:46 | where it's going, and where can I get in right now, and be a part of that move. And it may still be a swing trade that's unfolding, but you just didn't get it |
| 288 | 00:50:46 --> 00:50:54 | the highest higher to lowest low. So again, price action is fractal. And understanding it with a well rounded, comprehensive approach, like I'm teaching |
| 289 | 00:50:54 --> 00:51:02 | you, you will have no fear of missing moves, you won't feel rushed to get in, and you'll understand what it is you're looking for and why you're doing it. |
| 290 | 00:51:04 --> 00:51:15 | Stop Loss management, when we are in profit 25% of our expected objective stop loss can be reduced by 25%. That means you're still holding open risk. That is a |
| 291 | 00:51:15 --> 00:51:27 | little unnerving. It doesn't fit my particular risk appetite. But this is the model. Okay? When we are in profit 50% of our expected objective stop loss can |
| 292 | 00:51:27 --> 00:51:39 | be reduced by 50%. When the position is that 75% of the expected profit objective stop must be at breakeven or better. Don't try to strangle the trade. |
| 293 | 00:51:39 --> 00:51:53 | Now. This same stop loss management is universal. Every model has the same one. It's the same way. The reason why is because I'm not trading my stop loss. I'm |
| 294 | 00:51:53 --> 00:52:00 | not worrying about my stop loss, the stop loss is there to do its job. What I'm trading is the future delivery of price. And is it still giving me the |
| 295 | 00:52:00 --> 00:52:09 | signatures I'm looking for, if I'm bullish, is every down closed candle supporting price is it rejecting and moving higher, if it does, is it breaking |
| 296 | 00:52:09 --> 00:52:19 | through up close candles because that is institutional order flow as I define it, that's mine. That's my interpretation of how you can see visually how large |
| 297 | 00:52:19 --> 00:52:30 | institutional flows are coming in and sending the market higher. If we start to see a close candles start keeping price from going through them, we're starting |
| 298 | 00:52:30 --> 00:52:41 | to see institutional order flow, slow down on the buy side and sell side may start to ramp up and it may start to be a imbalance and then break lower. So |
| 299 | 00:52:41 --> 00:52:51 | what we're doing is we're reading that, and by not worrying about your stop loss and having protocols in place, ultimately, the love, there's risk always, and |
| 300 | 00:52:51 --> 00:52:57 | you don't want to be worrying about are you gonna get stopped out prematurely. So using this model here, you're never going to worry about that. But you're |
| 301 | 00:52:57 --> 00:53:06 | always going to have concerned that you're going to take a loss. But that's what we always have to incur when we take trades, you're always going to likely lose |
| 302 | 00:53:06 --> 00:53:15 | in a position. Because every trade starts as a loser, you have to overcome that spread. So if you're not trading Forex, and you're trading futures, you have to |
| 303 | 00:53:15 --> 00:53:24 | overcome your commission. So you always have something to overcome. Every trade opens up as a losing position. And you have to trade your way on the opposite |
| 304 | 00:53:24 --> 00:53:34 | side of that. Not worrying about your stop loss is one of the best things you can do in your formulation of a trade plan. And these are universal protocols |
| 305 | 00:53:34 --> 00:53:47 | for that. Matter management, these are the same slides. So I'm not going to read this, you know, because it's I don't want to do it. I'm being Nonconformist, you |
| 306 | 00:53:47 --> 00:53:58 | can read it this as long as I can say it. And not all these slides are again, reinforcing the idea of what you're doing. Every numbering here is replaced with |
| 307 | 00:53:58 --> 00:54:07 | what you would be utilizing in terms of equity. So if we're looking at, in the case here, 20,000, most of you probably wouldn't start with 20,000, it would be |
| 308 | 00:54:07 --> 00:54:16 | 5000. So the 5000, you would do the math, as shown here. And they would give you new figures. And then you would use that to determine how much you would trade |
| 309 | 00:54:16 --> 00:54:28 | with. Now, you can go online and get leverage calculators online for free, and just Google Forex leverage calculator. And you just put in how much money you |
| 310 | 00:54:28 --> 00:54:35 | have, how much you're willing to risk and what stopped size are you trying to trade with based on what you're seeing in the market. And it'll tell you all |
| 311 | 00:54:35 --> 00:54:43 | this information here. So while all this is still useful, it's not really necessary in today's climate because you have so many tools that are readily |
| 312 | 00:54:43 --> 00:54:51 | available to you for free. You can go on there and just Google it. But this gives you an idea on how to do it by hand so that we all have to depend on some |
| 313 | 00:54:51 --> 00:55:06 | outside reference or resource. And just for completeness sake, I'm just toggling through it. And you nothing's really changed. So if your demo account takes a |
| 314 | 00:55:06 --> 00:55:17 | loss on a trade, I want to talk about this because this is really important. And you're using your 4% are that your trade opened up with numbers if you're using |
| 315 | 00:55:18 --> 00:55:27 | a maximum of 2%, which I don't think anybody should do as a swing trader should never, never, never do that 1% or less, if that's going to be the way you're |
| 316 | 00:55:27 --> 00:55:37 | going to trade with, because remember, you're going to take potentially multiple hits going in, and you're expecting the long haul trades to pan out. And if |
| 317 | 00:55:37 --> 00:55:50 | you're using 25 pips stop loss, it gives you a huge upward are multiple for profit potential. And again, my example would be to refer to Euro Ozzy in recent |
| 318 | 00:55:50 --> 00:56:00 | months, or recent weeks here, during the month of March, where it exploded on the upside. And I taught you that last we were going through the markets, I |
| 319 | 00:56:00 --> 00:56:09 | showed you how to find relative strength, and how to look for the leadership currencies. In that buy point I showed you which one is going to outperform all |
| 320 | 00:56:09 --> 00:56:19 | of them and it did buy 3000 Plus pips, there's no other currency after more than that. So if you use that as your basis, okay, because that's your quarterly move |
| 321 | 00:56:19 --> 00:56:31 | for the first quarter. That was your megatrade Okay, for the first quarter of 2020. Euro Ozzy? How many pips did it move 3000 plus. So if you nail down an |
| 322 | 00:56:31 --> 00:56:44 | entry, with 25% 25 pips as your stop loss, say you took a loss to say you lost three trades in a row, okay. 1%, you took on the first trade you lose, so you |
| 323 | 00:56:44 --> 00:56:53 | got to drop it down to a half percent, take another hit boom, now you can only risk one quarter of 1% does not look, that's not a lot of money, Michael, I |
| 324 | 00:56:53 --> 00:57:00 | can't make money with that, well, too bad, you got to change your perspective on that. Because you're not trying to get rich quick, you're trying to survive to |
| 325 | 00:57:00 --> 00:57:09 | that for you to allow yourself the time and opportunity to catch these big moves. If you had one quarter of 1% risk. If you've taken two losses, you're |
| 326 | 00:57:09 --> 00:57:20 | only in the hole, one and a half percent. So it doesn't take a lot for you to get out of that. But now you're trading with one quarter of 1% leverage. What |
| 327 | 00:57:20 --> 00:57:30 | have you done each time you took a loss, you dropped your AR by 50%. And you cannot let you increase that back up until you recoup your previous loss by 50%. |
| 328 | 00:57:31 --> 00:57:42 | So, what that does is allows your equity to not see these big rollercoaster dips, okay, you'll go up. And once you start making money, you and you're going |
| 329 | 00:57:42 --> 00:57:53 | to anticipate losing eventually, okay, you're going to scale back. But if you do take a loss in this example, imagine if you got in with a 25% of 1% leverage |
| 330 | 00:57:54 --> 00:58:03 | using a 25 pip stop loss want to move like Euro Ozzy. Now, yes, we're hypothetically speaking, okay, you know, this isn't always going to create the |
| 331 | 00:58:03 --> 00:58:18 | 1000 Plus trades. But if you risk one quarter of 1% and you have that one quarter of 1% spread over 25 pips as your setup and stop loss, and it moves 3000 |
| 332 | 00:58:18 --> 00:58:32 | pips for you. What's the R multiple on that? It's astronomical. So you'll make back your one, one and a half percent loss plus a huge R in return. Even though |
| 333 | 00:58:32 --> 00:58:41 | you've used one quarter of 1% That's how you swing trade. You want to swing trade the mega trades or the quarterly shifts. If you don't know how to do that, |
| 334 | 00:58:41 --> 00:58:47 | then you don't want to be trading swing trading, you want to be trading short term trading to get good at understanding what the swing trades setups are. |
| 335 | 00:58:48 --> 00:59:01 | So dropping the our percent by 50% when the loss is recovered by 50% numbers if you lost $200 In you're able to make $100 of that back then your next trade you |
| 336 | 00:59:01 --> 00:59:12 | can go back up to your previous risk exposure which would be 1% for Swing Trading. If the reduced our trade assumes a loss, you reduce it like I was |
| 337 | 00:59:12 --> 00:59:19 | explaining just a moment ago we went into the trade idea type theoretically with 1% If we take a loss we dropped down to a half a 1% If we take a loss again we |
| 338 | 00:59:19 --> 00:59:29 | dropped down to a quarter percent and you stay at a quarter percent and two you make the loss that you took at a half a percent 50% of that loss that you took |
| 339 | 00:59:29 --> 00:59:39 | when you're using half of 1% when that's made back then you can trade back to one half percent leverage. And the same thing is said when you make one half of |
| 340 | 00:59:39 --> 00:59:48 | the loss you took it 1% back you're not expecting to make it all back just 50% of it. What this does, it smooths your equity curve out and you don't get that |
| 341 | 00:59:48 --> 00:59:57 | real big up and down roller coaster ride. You don't get huge drawdown you shocking all scenario. You don't get scared at have taken the next trade because |
| 342 | 00:59:57 --> 01:00:09 | you're controlling not only yourself But you're trading your equity curve. Think about that. You're not trading your stop loss, you're focusing on delivery price |
| 343 | 01:00:09 --> 01:00:19 | is the market giving you what you're looking for in terms of institutional order flow. And you're trading your equity curve. That is how you throttle back your |
| 344 | 01:00:19 --> 01:00:29 | leverage. You don't say, Man, I'm really killing it, I've had the last 18 trades were winners, I'm gonna go in full bore 5% risk. I've done stupid stuff like |
| 345 | 01:00:29 --> 01:00:38 | that. Okay, I've done 20% risk on trades when I was a commodity trader, and I got my rear end handed to me, okay, it never ever, ever works Murphy's Law, |
| 346 | 01:00:38 --> 01:00:48 | whatever can go wrong, expect that plus more, that's the type of pain that can come. So you have to have all these protocols in place. And it will preserve the |
| 347 | 01:00:48 --> 01:00:57 | likelihood for you to capture big moves. But it doesn't guarantee it. But if you don't do these things, I can guarantee you'll never make them. Now, if you make |
| 348 | 01:00:57 --> 01:01:07 | a series of five winning trades in a row, you're going to drop your R percent by 50%. It's just like if you took a loss, because you're expecting to take a loss. |
| 349 | 01:01:07 --> 01:01:15 | And you don't want to eat up the five winning trades that you've built your equity up with, you don't want to take the next loss with your maximum risk |
| 350 | 01:01:15 --> 01:01:26 | exposure. So again, we're creating plateaus in our equity curve, it's going to go up like a staircase, it goes up, then it goes sideways, the up, if it starts |
| 351 | 01:01:26 --> 01:01:38 | to drop down, it won't go down much. And then you get another rise in equity, and you keep doing it. It is control of self. It's discipline, you are trading |
| 352 | 01:01:38 --> 01:01:50 | equity, you are trading probabilities, you are not trading Emotion. Emotion comes by saying, I always use the same leverage, I always take the same size |
| 353 | 01:01:50 --> 01:02:00 | trade, that's dumb, that's dumb, that type of thought process, or it's going to ruin you, because you're going to get caught up in the feelgood moment of what |
| 354 | 01:02:00 --> 01:02:08 | you just did in the last six 710 trades. If you get a hot, lucky streak and everybody's capable of doing it, you're going to break rules that are going to |
| 355 | 01:02:08 --> 01:02:17 | lead to you losing because what's going to happen is for instance, you had five winning trades in a row you feel good. You got that King Kong feeling you beat |
| 356 | 01:02:17 --> 01:02:23 | your chest, you're gonna go online, tell her by how good you are, show her body, your your winning trades, even show where you went in and got out, got out that |
| 357 | 01:02:23 --> 01:02:31 | your screen catches, that's the one everybody puts out there on the internet. The next trade you take is going to be a losing trade. Well, you can't share |
| 358 | 01:02:31 --> 01:02:39 | that online. And you can't share that to your spouse. And you don't want to see it. So what are you left with? You're internally wrestling with that I should |
| 359 | 01:02:39 --> 01:02:50 | have never did that. I gotta fix it. Well, now you created the whole paradigm of the loser cycle. You don't want to enter that. So the way you can, Pete with |
| 360 | 01:02:50 --> 01:02:59 | that natural tendency is after you take five winning trades, cut your highest maximum leverage that you usually would start with, cut that in half, whatever |
| 361 | 01:02:59 --> 01:03:09 | that is, if it's 1% Didn't win your six trade after five winning trades, you dropped down to one half of 1% period and the story no discussions. That's the |
| 362 | 01:03:09 --> 01:03:15 | way it is. Because if you take a loss, you've only lost one half percent. And then when you drop down, what are you going to you're going down to one quarter |
| 363 | 01:03:15 --> 01:03:26 | of 1%. If you're entering a period of drawdown, how much are you losing with one quarter of 1% Not much and and you're not going to lose any sleep over that. It |
| 364 | 01:03:26 --> 01:03:37 | preserves your equity. And it preserves the, the mental capital that you need. Because once you start losing money, and you get that toxic feeling of I'm |
| 365 | 01:03:37 --> 01:03:43 | losing, I'm losing, you can forget about it, because you're gonna see things in price action that aren't really there. And you're gonna get scared out of |
| 366 | 01:03:43 --> 01:03:50 | trades, because, okay, I just made $50 Out of the 100 bucks at this loss. I can't let this go down, I gotta get out. I just can't stand anymore, and you |
| 367 | 01:03:50 --> 01:03:58 | close the trade. And then it runs to your objective and many times beyond that. And then you got to think about that instead of taking the next trade. And it's |
| 368 | 01:03:58 --> 01:04:06 | toxic thinking, that's what these things help you do. If you want to smooth equity curve, this is how you get one. There's no other way for it. There's no |
| 369 | 01:04:06 --> 01:04:19 | other super, super technique. There's no secret science. There's no you know, there's nothing out there. But just this, this is how it's done. Period. And the |
| 370 | 01:04:19 --> 01:04:26 | story, no one else is doing it any other way. This is how you manage yourself. You manage your emotions. This way you manage the trade psychology this way you |
| 371 | 01:04:26 --> 01:04:35 | manage your self discipline this way, you have to execute with this in mind, if you don't, you're going to lose and you're going to lose more money because |
| 372 | 01:04:35 --> 01:04:43 | you're going to throw fearful trades on or stand on the sidelines when the next trade setups there. And you won't take the trade and it starts to pan out and |
| 373 | 01:04:43 --> 01:04:51 | then you say Oh, I should have done that. Then you chase price because you're in pain. And then you go through that loser cycle again, and it creates drawdown |
| 374 | 01:04:51 --> 01:05:00 | that nobody wants to go through. But you're going to have measured drawdown your entire career. You're always going to have losing trades every single trade It |
| 375 | 01:05:00 --> 01:05:08 | opens up as a loser. And you got to trade your way out of that, how you do it over a long period of time? Well, that's your career, but you're gonna have a |
| 376 | 01:05:08 --> 01:05:18 | lot of losing trades. But if you let these losing trades that come in by natural order of things, it's a natural process, it's the business cost of doing this, |
| 377 | 01:05:18 --> 01:05:27 | okay? You will absolutely survive if you do this. Now, notice what I said, I didn't say you're going to be a multimillionaire in six months, I didn't say |
| 378 | 01:05:27 --> 01:05:37 | that. I said, you're going to survive. If you do this. Over time, the experience factor will kick in. And then you'll see where your sweet spot is an analysis |
| 379 | 01:05:37 --> 01:05:45 | and what you're looking for all the time at setups. And that is the model that you will stay with the rest of your life, you won't change it, you won't tweak |
| 380 | 01:05:45 --> 01:05:56 | it, you don't care what anybody says, Even me, and you'll just be consistent, steady, Eddy, okay, you'll be on your path to take wherever your objective is, |
| 381 | 01:05:56 --> 01:06:08 | that's the vehicle you'll use to get there. Now, with all this, like everything else I've shown in model two and model one, you're gonna collect a month or two |
| 382 | 01:06:08 --> 01:06:16 | of sample sets with this trade plan. Now, if you're unclear about some of the processes here, you're going to rewatch the lessons on this price action model, |
| 383 | 01:06:16 --> 01:06:24 | and almost all the components to things I'm talking about here, go back into your core content and revisit those ideas. And you'll reach out, you'll reset |
| 384 | 01:06:24 --> 01:06:33 | your mindset about what I'm referring to, and it fills in those gaps. I will provide sample sets I know I haven't done yet for module two or one, but it will |
| 385 | 01:06:33 --> 01:06:42 | happen. I'll provide sample sets but do not rely on me or wait for mine, dig into your charts and study what is provided here, a lecture on algorithmic |
| 386 | 01:06:42 --> 01:06:52 | theory for price action model number three. And as you know, it's a swing trading model. And again, also, this is not to go through the entire trading |
| 387 | 01:06:52 --> 01:07:01 | plan, the components that make up this model that's already been taught to you. So I kind of like want to give you the thought process and also go through what |
| 388 | 01:07:01 --> 01:07:11 | has recently transpired we were one side, we were looking for the market that go this direction. And this is basically the swing traders perspective on what it |
| 389 | 01:07:11 --> 01:07:23 | is that we were looking at. And using this model. Now, the idea is to build it on the premise of the commitment of traders, you can also incorporate seasonal |
| 390 | 01:07:23 --> 01:07:37 | tendencies. But at the time of this recording, it's May 2022. And we have been bullish on Dollar index. So obviously, the respective counterparty to that would |
| 391 | 01:07:37 --> 01:07:47 | be bearish on foreign currency ie, the British pound. That's what we're seeing here, sis pound versus US dollar. And this is a chart you can find on bar |
| 392 | 01:07:47 --> 01:08:02 | chart.com using the interactive chart. And what I did was I used April, look back 12 months, got the high and low, respectively, midpoint. And you can see |
| 393 | 01:08:02 --> 01:08:17 | that we have had heavy selling by commercials sent at lower significant highs in the marketplace. And then we had this little bit of a build up here where it was |
| 394 | 01:08:18 --> 01:08:23 | rolling back up into a short term premium. Broke lower. |
| 395 | 01:08:25 --> 01:08:38 | Important high here. So again, not the reteach this whole commitment traders, hedging program. But I break this cod data down like this, but just the |
| 396 | 01:08:38 --> 01:08:50 | commercial reading. We're looking at the trend. Okay, is it causing significant highs and lows? And we're focusing primarily on what direction is market likely |
| 397 | 01:08:50 --> 01:09:02 | to go we've been bearish on foreign currency bullish on dollar. So after we see a negative reading like this, we're expecting continuation lower. So we have |
| 398 | 01:09:02 --> 01:09:14 | everything indicating that this wants to go lower going into April. And let me go back up real quick here, you're gonna you're gonna see this and say, Well, |
| 399 | 01:09:14 --> 01:09:22 | look at this, this is going up. How can you use that? Again, it's the trend, go back and listen to teachings with the community traitors hedging program. Okay, |
| 400 | 01:09:22 --> 01:09:35 | you can find that in the core content lessons. So if you look at what we've been doing here and go that route with the notes you've been taken with my |
| 401 | 01:09:35 --> 01:09:45 | commentaries, I've been calling these markets lower, I've been calling dollar higher. So when we're using this tool here, it's a intermediate term to long |
| 402 | 01:09:45 --> 01:09:56 | term approach. I don't trade intermediate term or long term, okay. You have been taught how to do this. We've been looking for lower prices. I'm not going to sit |
| 403 | 01:09:56 --> 01:10:06 | down and try to do something that I'm not sure fit for with my personality, I've taught you how to do it. And this is, again, one more example of how this model |
| 404 | 01:10:06 --> 01:10:20 | works. I don't have the patience, it requires so much patience for me to hold a position this long, I just don't have it in me. So anyway, we're likely to see |
| 405 | 01:10:20 --> 01:10:28 | the rollover like this. And while it does that, the commercials will obviously be buying it back as it drops. So that's why you're seeing all this running up |
| 406 | 01:10:28 --> 01:10:39 | here. Okay, which is normal. Alright, so here's the British pound versus US dollar monthly chart. And obviously, we're looking for lower prices. So the |
| 407 | 01:10:39 --> 01:10:49 | model says we look for a liquidity pool in the form of a single or relatively equal low. In this case, we're looking for lower prices. So we can look for this |
| 408 | 01:10:49 --> 01:10:58 | low in here. Okay, we recently taken out this one here, so you can look at that also, and do that as an additional study for yourself. But we're looking at this |
| 409 | 01:10:58 --> 01:11:10 | one here. Okay. So the sell side here is the draw on liquidity, we're likely to keep continuously going lower, higher on dollar. So we have our Inter market |
| 410 | 01:11:10 --> 01:11:28 | relationships there. And here is a zoomed in view of how the market in fact, traded this month, year, which is April of 2022. And again, the expectation is |
| 411 | 01:11:28 --> 01:11:40 | we want to see the expansion of that monthly candle reach for a liquidity pool. We're seeing that happen here. And we want to go into this and see how the model |
| 412 | 01:11:40 --> 01:11:57 | worked. Okay, in the daily chart, here, you can see we have market retracing up into this price swing here, delivering below the old low D now rather deeply in |
| 413 | 01:11:57 --> 01:12:11 | here, you can see the optimal trade entry from high to low. There's your optimal trade entry levels. So the market trades up into that. And then we would expect |
| 414 | 01:12:11 --> 01:12:24 | every subsequent day after that, to try to work towards that old monthly love. And here's an objective down here. And we're going to drop down into the four |
| 415 | 01:12:24 --> 01:12:40 | hour you can see that and trade entry here trades up into the imbalance here delivers and this happens to be a Monday. Okay, so if you look at Monday's |
| 416 | 01:12:40 --> 01:12:51 | trading, on this particular day in April, that split this model is specifically aiming one looking for shorting on a Monday, Tuesday and or Wednesday, and |
| 417 | 01:12:51 --> 01:13:07 | looking for three 100 to 300 pips of profit, because the swing traders model and you can see entering up here at 131. Or just about just we'll call it 138. We'll |
| 418 | 01:13:07 --> 01:13:33 | do that. So 130 80 to 126 80 before we can get to this level here that is 400 points or 400 pips, so we have 100 200 300 400. And then looking for a target, |
| 419 | 01:13:33 --> 01:13:43 | how far can we go below that low, run your fit from here to here, do your standard projections. And you have your standard deviation that mines have this |
| 420 | 01:13:43 --> 01:13:58 | level here. Okay, that's your homework for this lecture here. So, I want you to think about how simple this is. It's not a lot of moving parts. It's using the |
| 421 | 01:13:58 --> 01:14:08 | commentaries, the directional bias I'm pointing to and if this is your style of trading, if you can't do on a day trade, you can use this model here. Now you |
| 422 | 01:14:08 --> 01:14:19 | can use the lower timeframe entry strategies once we enter into this area here. You just start using like the market structure shifts and then use a fair value |
| 423 | 01:14:19 --> 01:14:30 | get to get into a lower timeframe. Like the model I've been teaching on YouTube, okay, which will be our model number 13. All kinds of ways to get into this move |
| 424 | 01:14:30 --> 01:14:39 | after hits here expecting it to go lower. Okay, there's so many ways it's been taught to you to enter the marketplace and there plug and play. You can use |
| 425 | 01:14:39 --> 01:14:46 | lower timeframe strategies to get in after it hits this level here. And then once it starts to move lower, obviously you're holding for it to go down below |
| 426 | 01:14:46 --> 01:14:54 | here and resisting the temptation to collapse the trade entirely because it gives you a little bit of retracement anywhere in here. Nothing to do on this |
| 427 | 01:14:54 --> 01:15:05 | candle here. But this here, this is classic return back up into an imbalance rate before delivery to that monthly low. Again, go back and consider what the |
| 428 | 01:15:05 --> 01:15:15 | dollar index was dealing here. So everything fits together. It's not overwhelming, okay, it's not a lot of things that you have to know and in demand |
| 429 | 01:15:15 --> 01:15:27 | of yourself. But I gave you a trading plan with this approach. I've given you specific ideas to help you refine it. But once you understand what the market is |
| 430 | 01:15:27 --> 01:15:36 | likely to do, you can strip it down to this, this right there, that's all it is, knowing the bias, where is it likely to go, you're expecting that monthly range |
| 431 | 01:15:36 --> 01:15:44 | to expand, we're bearish, right, so we're expecting that monthly range or candle to go lower, we don't need it to close on its low. We just wanted to trade |
| 432 | 01:15:44 --> 01:15:54 | lower, offer up opportunity. That's what this is doing from here to the old monthly low, you can get out just above it, who says that's wrong? Nobody. You |
| 433 | 01:15:54 --> 01:16:08 | can get out at that very market low or below it. Or if you're overzealous and you want to get really gung ho type of targeting under your belt, you can reach |
| 434 | 01:16:08 --> 01:16:17 | for objectives where their standard deviations below it. But logically, you want to take something new just before the level because it might not hit it. And |
| 435 | 01:16:17 --> 01:16:25 | obviously at or below it, take a partial there and see what you can get for the remainder of the moon. Okay, and use some of the strategies and ideas I gave you |
| 436 | 01:16:25 --> 01:16:36 | in the trading plan in the entire model, explanation and supplementary lessons. Okay. But you don't need to make this complicated. Know what you're looking for |
| 437 | 01:16:36 --> 01:16:48 | bias. What's the narrative? Why should it go there? And how can you incorporate a entry strategy, this model uses optimal trade entry. Simple. If you combine |
| 438 | 01:16:48 --> 01:16:59 | the optimal trade entry and a fair value gap, you have, what is my opinion, a very, very strong entry strategy. But notice we're not doing a whole lot of |
| 439 | 01:16:59 --> 01:17:07 | acrobatics, we're not trying to complicate it, we're not trying to add everything that's available in the mentorship. We're just using simple |
| 440 | 01:17:07 --> 01:17:18 | strategies at the right time, looking for them to fulfill based on the logic that is in concert with the narrative and commentaries I'm giving you on a |
| 441 | 01:17:18 --> 01:17:32 | weekly basis. So here is model number three delivering as you would expect it to, and stripped down in much in the same way I've already done with the YouTube |
| 442 | 01:17:32 --> 01:17:42 | model. It's not a lot of things, it's not a lot of moving parts, it's very simple little strategy, you're looking for the market to pull back up into a |
| 443 | 01:17:42 --> 01:17:56 | range with expectation, it's eventually going to draw down to that old monthly low. And if you go back to the very first slide. If you compare the commitment |
| 444 | 01:17:56 --> 01:18:10 | traitors data like this with the euro, the euro will communicate better. With this hedging program application on teach with the co2 data, it actually is a |
| 445 | 01:18:10 --> 01:18:19 | better read on predicting lower prices in Euro. So you can look at doing euro as a case study as well. And also |
| 446 | 01:18:21 --> 01:18:29 | make sure that you're blending the expectations we had with the dollar index. And you'll see that this model is not hard. What's difficult is it's very |
| 447 | 01:18:29 --> 01:18:40 | difficult for me personally, to hold on to a trade that long, because the entire time of holding that type of move where I allocate funds to a position, get |
| 448 | 01:18:40 --> 01:18:52 | short and hold on to it and ride that out. I could be in 70 to 100 different trades in parlay that up quicker than just putting something in here. And then |
| 449 | 01:18:52 --> 01:19:01 | worrying about this one, when my attention has obviously been during the time of this recording, being in the stock index futures, but we've had moves in here, |
| 450 | 01:19:01 --> 01:19:11 | but the better moves in my opinion, if I'm going to compare apples to oranges. It's been a lot more dynamic and explosive, and predictable in stock index |
| 451 | 01:19:11 --> 01:19:19 | futures. So kind of like when I incorporate that here in case you refer back to it again 10 years from now, and that we can see there's a reason why we were |
| 452 | 01:19:19 --> 01:19:24 | doing what we were doing. So if you found this one insightful until next time, be safe |