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Last modified by Drunk Monkey on 2024-02-09 09:32
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1 == Outline ==
2
3 ##00:06 -## Market maker models and trading strategies.
4
5 - Preparing trade ideas with current dealing range based on past 20-40-60 trading days.
6 - Identify discount PD array for shorting opportunities.
7
8 ##03:59 -## Trading plan and risk management strategies.
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10 - Trading strategy involves shorting gaps in a bearish market, targeting 60-pip objectives with multiple limit orders.
11 - Trader plans to manage risk by adjusting stop loss based on profit percentage.
12 - ICT advises using standard lots for optimal risk management, but they can be limiting.
13
14 ##10:41 -## Price action model #7 for trading.
15
16 - ICT emphasizes the importance of identifying low resistance liquidity runs in both the sell and buy sides of the market.
17 - He notes that sell-side low resistance liquidity runs tend to be more aggressive and violent, with more exaggerated magnitude of moves compared to buy-side runs.
18 - The speaker discusses the importance of analyzing intermarket relationships, macroeconomic, and geopolitical factors when predicting market movements.
19 - The speaker shares a personal experience of a significant oil price drop during a second stage distribution, highlighting the importance of extra analysis to determine if the market can overdeliver beyond expectations.
20
21 ##16:32 -## Market analysis and identifying trends.
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23 - ICT highlights contrasts between buy-side and sell-side low resistance liquidity runs, emphasizing the latter's potential for parabolic moves.
24 - ICT identifies fractal patterns in markets to anticipate price movements and avoid limit down moves.
25 - Distinguish between controlled demolition and cliff dives in market analysis to avoid missing opportunities or getting smashed.
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27 ##22:55 -## Market trends and potential price movements.
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29 - Market analyst discusses fractal patterns in intraday and weekly trading, with potential for violent declines in late 2022.
30 - ICT believes the market is setting up for a second stage distribution, potentially leading to sharp declines in certain commodities like energy prices.
31 - ICT expects energy prices to increase due to the lack of profitability during COVID-19 shutdowns, leading to a potential bullish scenario.
32 - ICT warns of controlled demolition in energy markets, potentially painful for investors.
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34 == Transcription ==
35
36 (% class="hover min" %)
37 |1 |00:00:06 ~-~-> 00:00:13 |ICT: Hey folks, welcome back ICT mentorship sellside. The market maker models Price Action Model number seven universal trade plan
38 |2 |00:00:24 ~-~-> 00:00:37 |all right, price action model number seven universal trade plan sell side of the market maker models. Like you've seen in every previous trade plan, we have five
39 |3 |00:00:37 ~-~-> 00:00:52 |stages to the trade plan. It's preparation, opportunity discovery, trade planning, trade execution, and finally trade management. Alright, so we're gonna
40 |4 |00:00:52 ~-~-> 00:01:02 |be noting all medium and high impact events for the markets that you're following. You're gonna study the events on the week to come and consider how
41 |5 |00:01:02 ~-~-> 00:01:16 |the current market structure and the calendar events may suggest a specific weekly profile for that week's range. Okay, we're going to be preparing the
42 |6 |00:01:16 ~-~-> 00:01:27 |ideas or trade idea with determining the IP to data ranges of the last 20 trading days. But this asterisk next to 20 can represent the last 20 trade days
43 |7 |00:01:27 ~-~-> 00:01:38 |last 40 trade days or less 60 trading days for the data range. Because it's a universal trade plan, we use all of those potential ranges and we do not count
44 |8 |00:01:38 ~-~-> 00:01:51 |Sundays. Note the highest high and the lowest low in the past 2040 or 60 trading days. This is your current dealing range. Inside this dealing range, we look for
45 |9 |00:01:51 ~-~-> 00:02:04 |the next draw on liquidity Where is price likely to trade to next below which old low we look for a discount pdra in the direction of the weekly range bias.
46 |10 |00:02:08 ~-~-> 00:02:18 |We anticipate price to move to a discount PD array that would support our weekly bias on a day and economic event found an economic calendar with of current or
47 |11 |00:02:18 ~-~-> 00:02:27 |next trading week. This volatility injection is what we wait for. This will be a run on bases of a low resistance liquidity run.
48 |12 |00:02:34 ~-~-> 00:02:47 |Opportunity to discovery identify a discount pdra below the market. That means wherever we're trading it now, wherever we're at, at market below where that
49 |13 |00:02:47 ~-~-> 00:02:56 |market price is we're focusing on a specific price that will likely reach down to before completing a market maker sell model. We're going to wait for stage
50 |14 |00:02:56 ~-~-> 00:03:13 |one or stage two redistribution periods to go short and target to terminus at a discount pdra. Identify a discount pdra Old low below the market. That price
51 |15 |00:03:13 ~-~-> 00:03:23 |will likely reach down to begin a market maker by model wait for stage one or stage two redistribution periods to go short and target determinants at the
52 |16 |00:03:23 ~-~-> 00:03:36 |discount PD array. So what I've shown here is both selling short in a market maker sell model and now selling short when a market maker by model. So we're
53 |17 |00:03:36 ~-~-> 00:03:48 |focusing only on the side of the marketplace that is likely to drop. Trade planning when the market is primed to drop lower, we want to look for a
54 |18 |00:03:48 ~-~-> 00:03:59 |convergence of both manipulation and price. Opposite to our trade bias at a time the economic calendar suggests a volatility injection will likely occur. We will
55 |19 |00:03:59 ~-~-> 00:04:12 |short premium therapy gaps or short buy stops in stage one or stage two redistribution. When we are bearish, we will frame a short entry when price has
56 |20 |00:04:12 ~-~-> 00:04:21 |moved up into a 15 minute or five minute premium fair value gap PD array that converges with a standard deviation of no more than plus three standard
57 |21 |00:04:21 ~-~-> 00:04:34 |deviation. During London Open or New York open. We can implement scalping protocols on this stage as well for further reduction in risk. When we are in a
58 |22 |00:04:34 ~-~-> 00:04:46 |market maker by model we will target the sell side liquidity below the old lows at Terminus. If we are in a market maker sell model we will target the original
59 |23 |00:04:46 ~-~-> 00:04:58 |consolidation of the market maker so model trade executions when we are bearish we will anticipate a five minute chart institutional order flow entry drill,
60 |24 |00:04:59 ~-~-> 00:05:12 |trade entry to warm inside of a retracement higher during London Open and or New York open kill zones or a buy stop read that we will go short when it unfolds
61 |25 |00:05:15 ~-~-> 00:05:26 |short trade management when we are entering a short we will place a sell limit order when all positions we will execute in our demo account. We will use the
62 |26 |00:05:26 ~-~-> 00:05:37 |standard deviation and pdra convergence minus five pips as our entry price when using the sell limit order. If multiple orders are used, all use the same entry
63 |27 |00:05:37 ~-~-> 00:05:48 |price and the sell limit order. When we are entering a short, we will place a limit order to take 20 pips as our objective on one position, we will place a
64 |28 |00:05:48 ~-~-> 00:05:58 |second limit order to take 40 pips as our second objective. We will use multiple orders to manage the trade idea. If you capture a 60 Pip objective, close 80% of
65 |29 |00:05:58 ~-~-> 00:06:11 |the trade and see if it has more to run. When we're entering a short, we will note the premium array and standard deviation convergence we aim to enter at we
66 |30 |00:06:11 ~-~-> 00:06:24 |will place our stop loss above this high plus 20 pips we will reenter if the trade stops out. We can monitor it for secondary entries, day trades may require
67 |31 |00:06:24 ~-~-> 00:06:39 |multiple attempts to secure a solid entry Do not fear that we are in profit 25% of our expected objective stop loss can be reduced by 25%. When we are in profit
68 |32 |00:06:39 ~-~-> 00:06:55 |50% of our expected objective stop loss can be reduced by 50%. When the position is at 75% of expected profit objective stop must be at breakeven. And like every
69 |33 |00:06:55 ~-~-> 00:07:04 |other trade plan, you've seen the slides but for the sake of completeness and drilling and home money management the position size calculation formula is your
70 |34 |00:07:04 ~-~-> 00:07:17 |position size equals account equity times your risk percent divided by your stop loss and pips. position size is the amount of leverage or trade or trades assume
71 |35 |00:07:17 ~-~-> 00:07:26 |account equity is the total amount in your trading account. risk percent is the percent of risk you are willing to take on portrayed. The difference between the
72 |36 |00:07:26 ~-~-> 00:07:37 |entry price and your stop loss is the number of pips you will use to divide the result of equity times our percent or risk percent. In example, account equity
73 |37 |00:07:37 ~-~-> 00:07:55 |at 20,000 US Dollars risk per trade is 1.5% or 20,000 times 1.5%. Bringing us to $1 amount of $300 stock requires for this trade 20 pips, so in microwatts that
74 |38 |00:07:55 ~-~-> 00:08:13 |would be one kg each, or 10 cents per pip 20 pips at 10 cents is $2 risked $3 divided by $2 equals 150 Micro lots per trade or 1.5% of the account equity,
75 |39 |00:08:14 ~-~-> 00:08:25 |always round down. Again, the assumption here is we're going to be looking at mini lots, same equity balance of 20,001 and a half percent risk three and ours
76 |40 |00:08:25 ~-~-> 00:08:39 |is still the maximum amount of risk for the trade 20 pips is stop in many lots, that's 10,000 leverage each end at $1 per pip. So 20 pips at $1 per pip, it's
77 |41 |00:08:39 ~-~-> 00:08:53 |$20 wrist, and $20 divided into 300 hours of the one and a half percent equity risk divided by $20 gives us a maximum of 15 Mini lots portrayed or one and a
78 |42 |00:08:53 ~-~-> 00:09:03 |half percent of the account equity again, always round down. And if you're gonna be using standard lots, which I always tell a grown up to do, because it doesn't
79 |43 |00:09:03 ~-~-> 00:09:15 |give you that flexibility. But using a standard lot which would be $10 per pip 20 pip stop at $10 per pip is 200 hours. And that can only allow you one and a
80 |44 |00:09:15 ~-~-> 00:09:25 |half standard lots which you have to round down to one standard lots can see the difficulty in framing your ideal risk management when using standard lots and
81 |45 |00:09:25 ~-~-> 00:09:37 |lots are not ideal for optimal risk management. If your demo account takes a loss on a trade, and it is the full risk percent you assumed dropped at risk
82 |46 |00:09:37 ~-~-> 00:09:48 |percent by 50% on your next trade when the loss is recovered by 50% of the initial loss. In other words, if you lost three and an hour's if you make back
83 |47 |00:09:48 ~-~-> 00:09:58 |$150 Then you can go back to your original risk percent. You're then permitted to return to the maximum our percent portrayed. However, if you're reduced our
84 |48 |00:09:58 ~-~-> 00:10:09 |percent trade assumes a loss You reduced our percent by 50% Again, and you do this until the previous trade losses recovered by 50%. This allows leveling in
85 |49 |00:10:09 ~-~-> 00:10:22 |your drawdown versus just a roller coaster decline. If you take a series of five winning trades in a row, drop your risk percent by 50%. No reason why is because
86 |50 |00:10:22 ~-~-> 00:10:31 |you're likely to assume a loss eventually. And this will build in equity leveling and reduce the likelihood of a large drawdown. You want a smooth equity
87 |51 |00:10:31 ~-~-> 00:10:43 |curve that slopes or stair steps higher, not a jagged roller coaster with deep declines. Alright, start back testing. Now you got to be collecting multiple
88 |52 |00:10:43 ~-~-> 00:10:51 |sample sets with this trade plan. If you're unclear about some of the process, rewatch the lessons on this price action model, I will provide sample sets but
89 |53 |00:10:51 ~-~-> 00:11:00 |do not rely or wait for mine dig into your charts and study which was provided here. Alright, folks, so gonna be our algorithmic lecture and discussion on
90 |54 |00:11:00 ~-~-> 00:11:08 |price action model number seven, it's a universal trading model, it specifically targets sells high low resistance liquidity runs in practice. So obviously, I
91 |55 |00:11:08 ~-~-> 00:11:20 |gave a little bit of a long one for model number six. And a lot of things I said in model six algorithmic lecture is obviously reversed. So this one won't be as
92 |56 |00:11:20 ~-~-> 00:11:34 |long. Because I'll be just basically saying the opposite of whatever I said in the previous model. So I kind of like want to leave you with ideas that when you
93 |57 |00:11:34 ~-~-> 00:11:46 |were looking for trades, and you're looking for setups, whether you're a short term trader, a day trader or a scalper, or swing or position trader, the main
94 |58 |00:11:46 ~-~-> 00:12:03 |thing is looking for these types of setups, okay. Now, initially, when I first set up to be a trader, in 1992, I was overwhelmed, obviously, with a lot of the
95 |59 |00:12:03 ~-~-> 00:12:14 |things that my uncle used to talk to me about when I was 15, and 16 years old, want to go in one ear out the other. And over the time of learning and enduring
96 |60 |00:12:14 ~-~-> 00:12:18 |a lot of hardships, I have discovered that
97 |61 |00:12:20 ~-~-> 00:12:34 |the fastest markets are going to be the markets that decline. Okay, it's easy for people to want to pull out and not want to be a part of the game. Okay. And
98 |62 |00:12:34 ~-~-> 00:12:45 |that's why I believe the market goes down as fast as it does, it's not because sellers are pushing it down. It's the fact that the market is rushing to get
99 |63 |00:12:45 ~-~-> 00:12:55 |them before they get out at their own price. And what do I mean by that? Well, think of a stock market crash, you know, when a crash or any market crashes,
100 |64 |00:12:56 ~-~-> 00:13:08 |it's pretty relentless. And the relationships of the sell side low resistance liquidity runs, versus though the long side or you buy side, low resistance,
101 |65 |00:13:08 ~-~-> 00:13:22 |liquidity runs. the sell side, generally performs the most aggressive, the most ferocious, there's their speedy, they're very quick, they're violent, they can
102 |66 |00:13:22 ~-~-> 00:13:33 |tend to be a little bit more volatile. And the magnitude of the move tends to be much more exaggerated than that of a buyside. low resistance liquidity run.
103 |67 |00:13:34 ~-~-> 00:13:45 |Okay, so what I mean by that, let's say we're looking at a bearish market. And we have anticipated the market running up into a period of resistance as some
104 |68 |00:13:45 ~-~-> 00:13:54 |sort of premium pdra We're looking for it to sell off, and we'll get to the second stage distribution. And while I teach you to look for this area over
105 |69 |00:13:54 ~-~-> 00:14:06 |here, it's important for you to also consider the intermarket relationships, the macro economic and geopolitical front. That's the time with the trade you're
106 |70 |00:14:06 ~-~-> 00:14:16 |taking. And there's a lot of things that could lead to a major meltdown in the marketplace right now at the time of this recording. So in 2022, you know, we
107 |71 |00:14:16 ~-~-> 00:14:28 |could be looking at things that would you send these markets rocking and rolling. But putting that aside, that may so you're like always bringing up the
108 |72 |00:14:28 ~-~-> 00:14:41 |tinfoil hat? No, not here. But the second stage distribution when the markets bearish it's important to note when this is forming, is it likely to create an
109 |73 |00:14:41 ~-~-> 00:14:53 |over zealous and exaggerated type of sell off? Because not every short opportunity is going to create that but if you're in a climate where it presents
110 |74 |00:14:53 ~-~-> 00:15:07 |that opportunity, for instance, consider crude oil lulav Back when we watched it go negative $4 a barrel. It created a scenario like this, where it was just
111 |75 |00:15:08 ~-~-> 00:15:21 |Paramount is kept on going down. Now, that was a real supply and demand factor, because it's commodity commodities are real supply and demand markets. It's a
112 |76 |00:15:21 ~-~-> 00:15:31 |real thing, folks, okay, you need oil to run machinery, automobiles, things like that. And when they shut down the economy, and you just simply can't turn off
113 |77 |00:15:31 ~-~-> 00:15:40 |the pumps, and the wells rather, it takes a little bit of doing to make that stop. So they had to keep pumping oil. And they were basically paying people to
114 |78 |00:15:40 ~-~-> 00:15:52 |come and get their oil. So that move, where it just completely just fell out of beds, blew out every objective, you know, I think I had like $11 was my target
115 |79 |00:15:52 ~-~-> 00:16:01 |for oil. And it just went right on through that and went below zero. And I would have put my entire fortune on it and would never have done something like that,
116 |80 |00:16:01 ~-~-> 00:16:15 |and I would have lost. So it's a testimonial to understanding how when these markets are primed to go down, whatever market it is, if we're looking at second
117 |81 |00:16:15 ~-~-> 00:16:27 |stage distributions like this in a market that's bearish, it's really important to do an extra lap or two, in your analysis to see, can this over deliver from
118 |82 |00:16:27 ~-~-> 00:16:37 |what you're expecting? Can it go way beyond that? And most of the time, it won't. Let's be fair, okay. But it's important to note and I wanted to draw a
119 |83 |00:16:37 ~-~-> 00:16:47 |contrast between that of what I was giving you for the buyside low resistance Cody run signatures in the market maker models, versus the sell side low
120 |84 |00:16:47 ~-~-> 00:17:01 |resistance liquidity run, because these markets are designed to take from you and whoever else participates. Obviously, the idea is they sell the idea, or
121 |85 |00:17:01 ~-~-> 00:17:15 |commodity or currency or market, okay, they are the seller, that the sell side of the market. So they're providing the liquidity to buy something. If they want
122 |86 |00:17:15 ~-~-> 00:17:26 |to reprice it lower, and get liquidity below the marketplace, they're going to aggressively go lower faster. Because it's going to drive those sell stops or
123 |87 |00:17:26 ~-~-> 00:17:36 |sell side liquidity into the market for them to cover and buy from. And that's the reason why when these markets are crashing, they create these parabolic real
124 |88 |00:17:36 ~-~-> 00:17:46 |sudden words almost instantaneous. One minute, it's at one price, and then it's down so much. You hear about to call the flash crash. And they blame it on all
125 |89 |00:17:46 ~-~-> 00:17:55 |the things that what would otherwise be accepted because of people just don't know. But these markets reprice because they want them to be repriced, to that
126 |90 |00:17:55 ~-~-> 00:18:05 |level. And yet, be careful and be able to discern when you're looking at these types of setups here second stage distribution on a sell side low resistance
127 |91 |00:18:05 ~-~-> 00:18:18 |liquidity run. This is those setups that really over deliver and go way beyond either my best objective or targets. So that's different from when we're looking
128 |92 |00:18:18 ~-~-> 00:18:28 |for buy side low resistance Cody runs, and it's a second stage re accumulation. Where are you trying to buy that second, little retrace before it blasts off.
129 |93 |00:18:28 ~-~-> 00:18:41 |Now, you will catch parabolic moves when it's extremely bullish using that for model number six. But I wanted to draw a stark contrast between that of the buy
130 |94 |00:18:41 ~-~-> 00:18:51 |side versus the sell side, low resistance liquidity run. Because this one here is what everybody is fearful of. But they don't know how to find them. So when
131 |95 |00:18:51 ~-~-> 00:19:05 |the markets conditioned to go lower, and everything is pointing going down. And it creates this model here. Second Stage distribution can be a amazing sell off
132 |96 |00:19:06 ~-~-> 00:19:18 |point where you can see it coming. And there's been a few times where I was in markets where I've read them wrong early on in the late 90s. And because of my
133 |97 |00:19:18 ~-~-> 00:19:29 |understanding about this fractal and the understanding of how prices delivered, it kept me from getting caught in limit down moves in the meats in the grains,
134 |98 |00:19:29 ~-~-> 00:19:40 |okay, I was looking at markets thinking I was going to try to catch the bottom. And I just was doing it for sale stuffs admittedly taking a gamble. But because
135 |99 |00:19:40 ~-~-> 00:19:48 |I was able to see these types of things here, it prevented me from holding on and if I would have held on to it. My Account would have been locked limit for a
136 |100 |00:19:48 ~-~-> 00:20:03 |few days. And it's not fun if you have 1020 contracts of something that can move a lot. So on the sell side of the curve A market like bimodal. This isn't going
137 |101 |00:20:03 ~-~-> 00:20:15 |to be as bearish as the one I just described. Where this is more or less, it's going to be parabolic for a short time to get to an objective we're looking for.
138 |102 |00:20:15 ~-~-> 00:20:24 |Versus let me go back up one slide, where this one is already part of a bearish market move, and we're expecting it to go to some kind of a premium, just to see
139 |103 |00:20:24 ~-~-> 00:20:35 |them send it lower again. So this is just like the last bus stop before you heading to Tallahassee. Okay. Versus this short, where if you go into second
140 |104 |00:20:35 ~-~-> 00:20:44 |states distribution here, we're not expecting or wouldn't expect, where we wouldn't expect the parabolic crash, where it's we're seeing a controlled
141 |105 |00:20:45 ~-~-> 00:20:56 |demolition to a level where we anticipate seeing a return or reverse from here, start going higher. So when you're looking at your markets, you want to make
142 |106 |00:20:56 ~-~-> 00:21:02 |sure you're trying to draw a distinction between what type of move Are you looking for, even though you're in second stage distribution or second stage
143 |107 |00:21:02 ~-~-> 00:21:12 |accumulation, whether you're bullish or bearish? You have to make a distinction between what type of move should it be? Is it controlled demolition, where it's
144 |108 |00:21:12 ~-~-> 00:21:21 |going down to a level that you anticipate seeing support being found, it moves from that discount to a premium? Or is it likely to fall off
145 |109 |00:21:23 ~-~-> 00:21:34 |a cliff and just completely melt. Those distinctions need to be considered when you're doing your analysis. If you fail to do that, one of two things can
146 |110 |00:21:34 ~-~-> 00:21:45 |happen. Number one, you can miss an amazing opportunity to capture a windfall profit, or you'll fall victim to that and not see it coming. And worst case
147 |111 |00:21:45 ~-~-> 00:21:58 |scenario, you offside and you just get smashed. And in those types of moves, you can see your stop loss doesn't do the best job. Because it can reprice beyond
148 |112 |00:21:58 ~-~-> 00:22:09 |your stop in the first trading price. That's where your market order, well, your your stop would be triggered, and then becomes a huge amount of slippage from
149 |113 |00:22:09 ~-~-> 00:22:18 |where you hoped that your stock would execute, versus where you're actually being filled. Because the market price has moved way beyond your stop loss. And
150 |114 |00:22:18 ~-~-> 00:22:27 |I know that sounds like it shouldn't be possible. But that's how the market works. I mean, that's that's the basis of liquidity, and repricing and that's
151 |115 |00:22:27 ~-~-> 00:22:36 |the reason why I teach this way, because I want you to understand that you want to be doing the most work in determining what side the marketplace is likely to
152 |116 |00:22:36 ~-~-> 00:22:46 |deliver. So that way, you're really putting an emphasis on you trying to be in sync with the market versus trying to pick a top or trying to pick a bottom. And
153 |117 |00:22:46 ~-~-> 00:22:56 |at first glance, you know, a neophyte or someone that hasn't been spending any time with me would consider this as someone trying to pick up on them. It's not
154 |118 |00:22:56 ~-~-> 00:23:05 |the assumption is this is already a bullish market, in the markets consolidated, broke down, returned back the consolidation, first phase distribution, second
155 |119 |00:23:05 ~-~-> 00:23:16 |stage distribution that takes us into a level where we anticipate a measure of support, then we look for a turn, okay. So this can be applied to a intraday
156 |120 |00:23:16 ~-~-> 00:23:30 |basis or a market reversal. Like say New York reversal profile, or it could be a weekly profile, where this is Monday and Tuesday, Wednesday, Thursday creates
157 |121 |00:23:30 ~-~-> 00:23:40 |the low of the week and then starts to trade higher, and you get completely reversed weekly range, where it completely takes out the high the weak and
158 |122 |00:23:40 ~-~-> 00:23:52 |closes above it. Or it doesn't actually close above it. But this fractal must match. Like I mentioned in model number six, this lecture is universal, it can
159 |123 |00:23:52 ~-~-> 00:24:05 |be applied in all timeframes. And knowing the distinctions, and that characteristic that model six doesn't have, whereas model seven does because
160 |124 |00:24:05 ~-~-> 00:24:15 |it's focusing on the sell side of the marketplace. You're looking at the relationships of the market maker by model net should not present a crash
161 |125 |00:24:15 ~-~-> 00:24:25 |scenario. This is this is going to go down to a discount to go higher, whereas the market maker sell model in a second stage distribution if you are not
162 |126 |00:24:25 ~-~-> 00:24:36 |considering the overall economic climate, the geopolitical climate. Look, we just went through with the COVID Nonsense. Look at what we were about to go
163 |127 |00:24:36 ~-~-> 00:24:49 |through again because of all the things that are trying to cook up. So they're making a scenario for the fall of 2022. That means like late last week of August
164 |128 |00:24:49 ~-~-> 00:25:03 |to September, October, November and the Sunday, we could see some pretty crazy declines this year. Much more violent than Some of us might expect, especially
165 |129 |00:25:03 ~-~-> 00:25:14 |if we do not continue higher up in the stock indices, but we've had a little bit of a retracement here higher, if it has run out of steam, or if it goes up a
166 |130 |00:25:14 ~-~-> 00:25:25 |little bit more than peters out and starts to go down. And we're working lower into the month of August, that really sets the stage for, in my opinion, that
167 |131 |00:25:25 ~-~-> 00:25:36 |type of scenario right there, where we are in an area where that can create that second stage distribution. That is absolutely bonkers. Like it could create big
168 |132 |00:25:36 ~-~-> 00:25:48 |declines. Because there's a lot at risk in the US markets because of the midterm elections, all the things is going on. And food, food prices and food prices are
169 |133 |00:25:48 ~-~-> 00:26:02 |going to create situations where you that element for a bullish market, because commodity prices are going up the sell models, okay will create these types of
170 |134 |00:26:02 ~-~-> 00:26:11 |events where it's going down, but it's going to go down to pick up the discount to send those commodity prices higher, like grains and meats and like the
171 |135 |00:26:11 ~-~-> 00:26:21 |energies, I think the energies are gonna go ballistic, like crude oil. Honestly, I don't even have a target for crude oil, I just think the moon, I think they
172 |136 |00:26:21 ~-~-> 00:26:34 |are absolutely going to put the screws to everyone. Because they had to go through negative $40 a barrel, you think that there goes on sit back eat that
173 |137 |00:26:35 ~-~-> 00:26:47 |new way. That's why we're seeing what we're seeing. So gas prices are going up, oil prices are going up natural gas is going to go up, everybody's gonna have a
174 |138 |00:26:47 ~-~-> 00:27:01 |enormous bill for heating, cooling their homes and fueling their vehicles. If you use heating oil, that's probably going to be outrageous too. So in this
175 |139 |00:27:01 ~-~-> 00:27:09 |instance, where we have a market with a bimodal, and one on the sell side of the curve, we could see models like this in those commodities, where it goes down.
176 |140 |00:27:09 ~-~-> 00:27:16 |And even though we have a second phase distribution, it could be a sharp decline, but it's going down to create this longer term bullish scenario, not
177 |141 |00:27:16 ~-~-> 00:27:26 |something like this, where I don't I don't think this is going to be the case for energy prices, because they have a lot of money to make. They weren't making
178 |142 |00:27:26 ~-~-> 00:27:36 |money when they everything was shut down. Because of COVID. Nobody could go anywhere, you know, vacations couldn't be had travel was impacted. So I don't
179 |143 |00:27:36 ~-~-> 00:27:44 |think that this is the event that we'll see for energies, I think it is a matter of the opposite. We're looking for it to drop down the pickup at this camp to go
180 |144 |00:27:44 ~-~-> 00:27:56 |higher. And it may not even drop down, you might be just seeing parabolic price moves from summer into mid October or something to that effect. Because think
181 |145 |00:27:56 ~-~-> 00:28:11 |about it like this. If you are a company that provides, well, let's say like let's say you are heating oil company, and you subscribe to the futures market
182 |146 |00:28:11 ~-~-> 00:28:19 |that keep tabs on when you have to be buying your oil, because you have to be a merchant, in case you hit the buy it when it's cheap and buy it before it gets
183 |147 |00:28:19 ~-~-> 00:28:30 |too expensive. Well, if we're in a climate like we have right now, where energy prices could obviously go parabolic higher, and there's no reason for it to go
184 |148 |00:28:30 ~-~-> 00:28:43 |down. They have a built in vested interest to make trillions of dollars doing it, then we have to understand that risk. So we're not going to look at this
185 |149 |00:28:43 ~-~-> 00:28:54 |type of event. If it's going up to a premium to drop down like this, we wouldn't expect that in the energies, we would expect it to be a controlled demolition
186 |150 |00:28:54 ~-~-> 00:29:02 |where it goes down just to pick up a discount go higher. But it may not like I said they may not even drop, you may just see parallel price rallies. So it's
187 |151 |00:29:02 ~-~-> 00:29:11 |going to be painful for a lot of folks. But hopefully, you've learned something in this mentorship that'll help at least mitigate some of that expense that's
188 |152 |00:29:11 ~-~-> 00:29:21 |coming your way. And none of us can avoid it. And if you have the distinctions meet beforehand before you do your trades. If you're in America, a bearish
189 |153 |00:29:21 ~-~-> 00:29:30 |market like this, that second stage distribution, always be mindful, go through and think are we in a situation that could create this as a crashing scenario?
190 |154 |00:29:32 ~-~-> 00:29:42 |Because if it is, you treat it differently, you don't take the bulk of your trade off here. You take a small portion and just let it ride and maybe get a
191 |155 |00:29:42 ~-~-> 00:29:47 |windfall victory. So if you've done this one, it's like gone. So I'll talk to you next time. Be safe.