ICT YT - 2020-10-20 - ICT Price Action - View Price With Institutional Perception.srt
1
00:00:16,619 --> 00:00:19,709
ICT: Okay, folks, welcome back. And this is a brief lecture
2
00:00:19,709 --> 00:00:26,039
on intraday swing trading. And I'm gonna highlight a few
3
00:00:26,039 --> 00:00:29,369
things here that you can start to look for in your own price
4
00:00:29,369 --> 00:00:33,509
action study and look at past price swings. And you'll start
5
00:00:33,509 --> 00:00:36,389
seeing what I'm outlining here. So that we will develop your
6
00:00:36,389 --> 00:00:43,979
perception about smart money technique, or SMT. So, what is
7
00:00:43,979 --> 00:00:48,329
that? Well, when we look at price action in any timeframe,
8
00:00:48,359 --> 00:00:51,119
then we're only focusing on the one hour chart for this
9
00:00:51,119 --> 00:00:55,259
example, but it's applicable to all timeframes. When we look
10
00:00:55,259 --> 00:01:00,809
for key swings in the marketplace, invariably, the traders
11
00:01:00,839 --> 00:01:04,889
that are indoctrinated in trading, they will use
12
00:01:05,159 --> 00:01:10,019
oscillators, stochastic RSI, CCI MACD something to that
13
00:01:10,019 --> 00:01:15,539
effect. And while I don't subscribe to that view, I
14
00:01:15,539 --> 00:01:19,739
initially was thrusted into that myopic view of price
15
00:01:19,739 --> 00:01:27,029
action. I want to kind of stimulate your, your imagination
16
00:01:27,029 --> 00:01:33,149
on how you can just rely on price to give you that
17
00:01:33,149 --> 00:01:37,889
perception, that gives us the idea of divergence. Okay, I
18
00:01:37,889 --> 00:01:41,429
guess when I first started in the 90s, as soon as I saw
19
00:01:41,429 --> 00:01:44,849
stochastic indicator, and the books were saying, look, every
20
00:01:44,849 --> 00:01:48,449
time I made a higher high in price, and the stochastic
21
00:01:48,479 --> 00:01:52,169
failed to make a higher high and it diverged, it sold off?
22
00:01:52,619 --> 00:01:56,609
Well, naturally. That's the thing I was looking for all it
23
00:01:56,609 --> 00:01:59,009
was all along, I knew, that's when I saw that I was the
24
00:01:59,009 --> 00:02:01,949
thing I wanted. And then when I started trading in that in a
25
00:02:01,949 --> 00:02:08,339
Live account, it just kept going up, and up and up. So while
26
00:02:08,339 --> 00:02:14,309
there are times when indicators will flag a setup, the
27
00:02:14,309 --> 00:02:18,329
problem with that is the creators of these indicators and
28
00:02:18,329 --> 00:02:23,189
the authors and the promoters of them in their pet models or
29
00:02:23,189 --> 00:02:27,599
systems. They don't really go into a great detail on or at
30
00:02:27,599 --> 00:02:34,859
least not in the vein of accuracy. When do you When do you
31
00:02:34,889 --> 00:02:38,849
apply them to the chart accurately that that's, that's the
32
00:02:38,849 --> 00:02:46,139
thing that I discovered early on. That no real educator has
33
00:02:46,139 --> 00:02:48,959
the appropriate placement for these indicators, because
34
00:02:48,959 --> 00:02:52,979
they're relying on support and resistance in a classic
35
00:02:52,979 --> 00:02:57,929
sense. And then the overbought, oversold in the classic
36
00:02:57,929 --> 00:03:01,709
sense, and then applying the divergence. When it's like
37
00:03:01,709 --> 00:03:04,439
that, when you don't have an understanding of the narrative,
38
00:03:04,559 --> 00:03:07,469
like what market profile Are you trading in? Are you in a
39
00:03:07,469 --> 00:03:10,019
trending environment? Are you in a range bound environment
40
00:03:10,559 --> 00:03:14,849
and range bound environments? Generally, oscillators will do
41
00:03:14,849 --> 00:03:18,509
very well if you're looking at the trade divergence. But
42
00:03:18,509 --> 00:03:21,449
don't let me entice you into thinking that Okay, now he just
43
00:03:21,449 --> 00:03:24,209
gave us the invitation, start using indicators. Because if
44
00:03:24,209 --> 00:03:29,219
you're a student of mine, we shun all that stuff, because
45
00:03:29,219 --> 00:03:32,189
it's a distraction from the actual price itself. Because
46
00:03:32,189 --> 00:03:35,279
price will give you everything you need. The open high, low
47
00:03:35,279 --> 00:03:40,199
and close is all that is necessary. Smart Money,
48
00:03:41,219 --> 00:03:47,699
institutional order flow, the brains behind these price
49
00:03:47,699 --> 00:03:52,949
moves cannot hide their footprints, they cannot do it, it's
50
00:03:52,949 --> 00:03:56,939
impossible for them to do it. And I just want to put this in
51
00:03:56,939 --> 00:04:00,029
here as another little bullet point because I'm getting
52
00:04:00,029 --> 00:04:06,359
hammered by new students reaching out to me. And the common
53
00:04:06,359 --> 00:04:09,779
fear is if I'm teaching this, is it going to stop working?
54
00:04:10,439 --> 00:04:13,409
And let me just briefly speak on it for about a minute or
55
00:04:13,409 --> 00:04:14,969
two and then we'll go right into the heart of this lesson.
56
00:04:16,349 --> 00:04:20,219
Anything that I'm teaching, whether it be here or in my
57
00:04:20,219 --> 00:04:25,019
private mentorship, it is not going to change, okay, because
58
00:04:25,019 --> 00:04:30,839
it's rooted in the basis that the large order flows that
59
00:04:30,839 --> 00:04:39,059
exchange between the central banks, the large producers or
60
00:04:39,569 --> 00:04:47,669
creators of commodities. These entities are in lockstep with
61
00:04:47,789 --> 00:04:53,939
large fund traders. I'm not considered a large fund trader,
62
00:04:54,029 --> 00:04:58,739
I've traded large funds, but I'm not considered a large fund
63
00:04:58,769 --> 00:05:02,489
trader. So I'm not a Commercial trader, okay. And I'm not a
64
00:05:02,489 --> 00:05:07,259
large fund trader, in the sense that we look at Commitment
65
00:05:07,259 --> 00:05:08,999
of Traders data. So
66
00:05:10,530 --> 00:05:13,740
that relationship between these two parties the commercials,
67
00:05:13,920 --> 00:05:16,860
which will deem that as the central banks if we're gonna
68
00:05:16,860 --> 00:05:22,950
refer to currencies, okay, in deference to forex, so but
69
00:05:22,950 --> 00:05:25,620
it's not limited to forex, it's the same thing across your
70
00:05:25,620 --> 00:05:33,570
stock indices, everything. So because their marriage, okay
71
00:05:33,570 --> 00:05:38,760
and dance between the ebbs and flow of the marketplace, the
72
00:05:38,760 --> 00:05:42,960
commercials pair up with the large fund traders. And they're
73
00:05:42,960 --> 00:05:47,700
always diametrically opposed. So when the large fund traders
74
00:05:47,700 --> 00:05:51,870
are bullish, and they're buying long term trends, the
75
00:05:52,350 --> 00:05:56,520
commercial traders are providing that liquidity to be
76
00:05:56,520 --> 00:05:59,730
counterparty and they have deeper pockets, they can write
77
00:05:59,730 --> 00:06:03,510
out those long drawn out moves, because they understand that
78
00:06:03,510 --> 00:06:08,220
it's going to eventually revert back to the main. So if we
79
00:06:08,220 --> 00:06:13,590
apply that thought process to the question or concern that
80
00:06:13,590 --> 00:06:17,910
many of you have, it's going to stop working, it's not going
81
00:06:17,910 --> 00:06:23,670
to stop working. Because to say that means that large trade
82
00:06:24,480 --> 00:06:27,750
between commercial entities and large fund traders is going
83
00:06:27,750 --> 00:06:33,390
to disappear. And that's not going to happen. so badly if if
84
00:06:33,390 --> 00:06:37,110
that happens to disappear, if there's no large commercial
85
00:06:37,110 --> 00:06:39,930
producer of anything, or a central bank stops becoming a
86
00:06:39,930 --> 00:06:48,030
central bank, and they stop managing large funds, okay, then
87
00:06:48,030 --> 00:06:50,580
we have bigger problems to worry about. But as long as those
88
00:06:50,580 --> 00:06:54,630
two entities exist, the things I teach on, are never going
89
00:06:54,630 --> 00:06:59,790
to diminish, they're not going to stop working, and they're
90
00:06:59,790 --> 00:07:03,420
not going to fail, okay? It does not mean that you as the
91
00:07:03,420 --> 00:07:07,710
speculator will not interpret it incorrectly, because you
92
00:07:07,710 --> 00:07:10,620
are human, just like I'm human, I can make a mistake just as
93
00:07:10,620 --> 00:07:14,640
well as anyone else. So don't think that anything that I
94
00:07:14,640 --> 00:07:17,760
teach or have taught or will teach in the future, has an
95
00:07:17,760 --> 00:07:21,870
expiration date on it, because it doesn't. Alright, so with
96
00:07:21,870 --> 00:07:25,260
this lesson gonna talk on Well, if you've been a student of
97
00:07:25,260 --> 00:07:27,330
mine for a number of years, you are not going to be
98
00:07:27,330 --> 00:07:29,220
surprised by what I'm going to talk about. But I want to
99
00:07:29,220 --> 00:07:33,900
give you some framework to try to build in some perception
100
00:07:33,990 --> 00:07:36,720
of how you can go and look at price. Now everyone, everyone
101
00:07:36,720 --> 00:07:40,740
knows that my pet pairs are fiber and cable, which is euro
102
00:07:40,740 --> 00:07:43,860
dollar and British Pound versus US dollar. And I couple that
103
00:07:43,860 --> 00:07:47,850
with the dollar index. So that's my triad, I look at those
104
00:07:47,850 --> 00:07:54,180
three markets to get my bias, my analysis, my weekly profile
105
00:07:54,210 --> 00:07:57,030
I'm looking to trade in or my daily profile to day trade in.
106
00:07:57,600 --> 00:08:02,880
And I don't need to do anything else. So if I want to be a
107
00:08:02,880 --> 00:08:06,540
deviant, then I will trade dollar CAD, which in recent
108
00:08:06,570 --> 00:08:11,280
months have been really lackluster, I haven't had a lot of
109
00:08:11,430 --> 00:08:15,120
interest in that pair. But I will sometimes go to Australian
110
00:08:15,120 --> 00:08:21,120
dollar and or New Zealand dollar. But it requires something
111
00:08:21,750 --> 00:08:26,400
very dry in price action for a euro and cable for me to come
112
00:08:26,430 --> 00:08:29,670
out of those two pairs of find something else. And it's
113
00:08:29,730 --> 00:08:32,610
usually in instances where I'm really pushing hard, which is
114
00:08:32,610 --> 00:08:35,730
not a good thing to do. But because I'm an educator, I like
115
00:08:35,730 --> 00:08:39,300
to use examples outside of my two pet pairs. Because just
116
00:08:39,300 --> 00:08:41,340
like the question of will these things stop working? Because
117
00:08:41,340 --> 00:08:45,270
I'm teaching it on a large scale? No, that won't. But does
118
00:08:45,270 --> 00:08:50,580
it work in other pairs. And it makes me smile, because I
119
00:08:50,580 --> 00:08:53,580
used to think that way too. It only works on special
120
00:08:53,580 --> 00:08:56,670
markets. And it works on every pair and works on every asset
121
00:08:56,670 --> 00:09:01,890
class. Okay, so just understand what I'm sharing here. It's
122
00:09:01,890 --> 00:09:06,540
very powerful, but you need to study it and compare old
123
00:09:06,570 --> 00:09:10,500
price moves. And you'll really appreciate how strong it is.
124
00:09:10,980 --> 00:09:13,770
But we're looking at a range bound market here and without
125
00:09:13,770 --> 00:09:18,870
reaching for an oscillator, like stochastic MACD or RSI to
126
00:09:18,870 --> 00:09:22,200
look for overbought, oversold and divergence, we can look at
127
00:09:22,200 --> 00:09:23,070
just price action.
128
00:09:24,720 --> 00:09:27,300
We have equal Highs over here. So everyone in the retail
129
00:09:27,300 --> 00:09:30,960
universe is going to say hey, look, this is resistance. So
130
00:09:30,960 --> 00:09:34,560
therefore it's stopped here stopped here and traded lower.
131
00:09:34,560 --> 00:09:37,320
When it trades back up to what should happen. It should hit
132
00:09:37,320 --> 00:09:41,220
that level that imaginary level and it should go down. But
133
00:09:41,220 --> 00:09:45,660
it goes up a little bit higher. trades lower. starts to do
134
00:09:45,660 --> 00:09:48,810
the same thing here that it did here. So we're seeing equal
135
00:09:48,810 --> 00:09:52,950
highs. Equal highs or as I call them relative equal highs.
136
00:09:53,610 --> 00:09:58,680
So between this high in this high and this high in this high
137
00:09:59,220 --> 00:10:05,550
we can end participate by stops to form and start pulling.
138
00:10:05,880 --> 00:10:10,770
And the words start to collect or gather just above these
139
00:10:10,770 --> 00:10:14,010
highs, because traders that want to buy on a breakout, they
140
00:10:14,010 --> 00:10:17,160
think buying strength, like it broke out here, they have
141
00:10:17,190 --> 00:10:20,670
orders to trip them in the marketplace to go long. And their
142
00:10:20,670 --> 00:10:25,380
stop loss will be below some low down here. Or traders that
143
00:10:25,380 --> 00:10:28,470
have been looking at the idea that this is resistance. And
144
00:10:28,470 --> 00:10:30,750
now this is resistance, and they're trying to sell it,
145
00:10:30,960 --> 00:10:33,540
because I don't know about you. But when I first started
146
00:10:33,540 --> 00:10:37,620
trading, I believe that everybody that was making big money
147
00:10:37,650 --> 00:10:41,880
was selling tops and buying bottoms. And I soon found out
148
00:10:41,880 --> 00:10:45,600
that that's not true. They're buying after the move
149
00:10:45,690 --> 00:10:48,930
establishes itself and trades to a level that's highly
150
00:10:48,930 --> 00:10:52,440
probable. And they're getting the large portion in between
151
00:10:52,470 --> 00:10:55,620
the turning points. And it took a long time for me to get to
152
00:10:55,620 --> 00:11:00,030
that point where I was content with that, and I stopped
153
00:11:00,030 --> 00:11:05,250
chasing these endless pursuits of perfection. Now, it's not
154
00:11:05,250 --> 00:11:07,950
to say that my obsessive compulsive disorder, which is what
155
00:11:07,950 --> 00:11:11,850
I live with and wrestle with, doesn't flare up, and I look
156
00:11:11,850 --> 00:11:15,780
for certain things that is unreasonable for the average
157
00:11:15,780 --> 00:11:19,530
trader. But that's also been a blessing and not just a
158
00:11:19,530 --> 00:11:23,160
curse, because it's helped me pursue things that would
159
00:11:23,160 --> 00:11:25,440
otherwise would have never made its way into the community
160
00:11:25,440 --> 00:11:31,380
and analysis or technical analysis concepts. So when we look
161
00:11:31,380 --> 00:11:34,560
at these levels here, just understand that as it creates
162
00:11:34,560 --> 00:11:38,130
these relative equal highs, they are signatures that I teach
163
00:11:38,130 --> 00:11:41,400
my students to look for. Now, there are instances where
164
00:11:41,460 --> 00:11:44,730
trading above these levels, it goes right to it and then
165
00:11:44,730 --> 00:11:49,050
reverses. Other times, it's a continuation to go higher,
166
00:11:49,260 --> 00:11:52,230
that, again, is narrative that is not going to be within the
167
00:11:52,230 --> 00:11:54,750
scope of the teaching here. But you're going to be able to
168
00:11:54,750 --> 00:11:57,990
look back in your old trades. And maybe if you look at
169
00:11:57,990 --> 00:12:01,050
trades where you've lost, and it was stopped out or went the
170
00:12:01,050 --> 00:12:03,630
other way, you're going to discover you're probably trading
171
00:12:03,630 --> 00:12:06,870
counter to what I'm going to show you here. But
172
00:12:07,830 --> 00:12:13,680
there is a way of measuring divergence, okay, and the price
173
00:12:13,680 --> 00:12:17,910
action. And the way I do it is I put a closely correlated
174
00:12:17,910 --> 00:12:21,210
market with the market, I'm looking to trade, and I just
175
00:12:21,210 --> 00:12:25,320
overlay it. So Alright, so you start by having an underlying
176
00:12:25,350 --> 00:12:29,910
premise, what should the market be reacting to? Why should
177
00:12:29,910 --> 00:12:33,510
it be reacting to it, in the sense that it gives you a buy
178
00:12:33,510 --> 00:12:37,530
or sell scenario? In other words, what is your bias? What
179
00:12:37,530 --> 00:12:40,050
are you anticipating happening once price trades to a
180
00:12:40,050 --> 00:12:42,630
particular price level? Well, as I mentioned, here, we have
181
00:12:42,630 --> 00:12:46,890
Basilicata here and here, and the market trades up and then
182
00:12:47,130 --> 00:12:51,360
breaks down. Now there's two schools of thought here, you
183
00:12:51,360 --> 00:12:55,740
can be the trader that is down here buying and exits above
184
00:12:55,800 --> 00:12:59,070
these levels. And there's nothing wrong with that. Or you
185
00:12:59,070 --> 00:13:02,040
could be a trader that wants to trade above these levels
186
00:13:02,040 --> 00:13:06,330
here and look to go short. Now that might be a little
187
00:13:06,330 --> 00:13:08,340
frightening for you, especially if you're a new trader or
188
00:13:08,340 --> 00:13:12,510
new student, it feels uncomfortable, because the markets
189
00:13:12,510 --> 00:13:15,510
been going up. And your natural tendency is to believe that
190
00:13:15,510 --> 00:13:19,020
it's going to continue going up. And if you look at your
191
00:13:19,020 --> 00:13:22,650
trades that you lost money on, I guarantee you, especially
192
00:13:22,650 --> 00:13:26,730
if you're a new student, or a new trader, you were trying to
193
00:13:26,730 --> 00:13:30,120
buy something that has already been going up for a length of
194
00:13:30,120 --> 00:13:33,210
time. Okay, now, what's your buying, like in here thinking
195
00:13:33,210 --> 00:13:35,730
it's going to keep going up cuz it's a bull flag. We've
196
00:13:35,730 --> 00:13:38,250
already went above this. Suppose that resistance and
197
00:13:38,250 --> 00:13:41,130
refining some support level here, supposedly, and it starts
198
00:13:41,130 --> 00:13:45,060
to move higher, and you chase it. everyone's done that every
199
00:13:45,060 --> 00:13:51,210
single trader has always done that stupid mistake of chasing
200
00:13:51,210 --> 00:13:55,050
price in some silly early stage of their development. They
201
00:13:55,050 --> 00:13:58,020
did that everyone did that. There's no reason to feel silly,
202
00:13:58,200 --> 00:14:01,290
to the point where you beat yourself up about it. But it's
203
00:14:01,380 --> 00:14:03,510
something you got to smile about. Now look back saying, you
204
00:14:03,510 --> 00:14:06,090
know, I'm glad we don't do those things anymore. But if
205
00:14:06,090 --> 00:14:08,310
you're a new student, and you're still falling victim to
206
00:14:08,310 --> 00:14:09,750
that this lesson is going to give you a different
207
00:14:09,750 --> 00:14:13,740
perspective. And how to fight that tendency of chasing price
208
00:14:13,740 --> 00:14:18,330
because we don't like to buy above old highs. That's a rule
209
00:14:18,330 --> 00:14:23,040
right away in your notes you should have never buy above old
210
00:14:23,040 --> 00:14:25,890
highs and onwards if we just traded above old highs. We
211
00:14:25,890 --> 00:14:30,120
can't take new Long's there that they can't happen just as
212
00:14:30,120 --> 00:14:36,600
well. We can't sell short below old lows. We can't do that.
213
00:14:37,200 --> 00:14:40,620
Because above old highs, there's bias out liquidity that's
214
00:14:40,620 --> 00:14:45,930
buy stops. You're entering like the retail trader does. You
215
00:14:45,930 --> 00:14:49,620
have buy interest there. When we as institutionally minded
216
00:14:49,620 --> 00:14:54,450
traders are not looking at that. With the buying interest.
217
00:14:54,750 --> 00:14:58,530
We're either looking for it to offer a counterparty and
218
00:14:58,530 --> 00:15:01,890
we're going to sell short to those buyers. interests, or
219
00:15:01,890 --> 00:15:06,060
want to wait to see if it drops away from that level. And
220
00:15:06,060 --> 00:15:09,240
that's the more conservative approach. And there's nothing
221
00:15:09,240 --> 00:15:11,070
wrong with that either. And the way you would do that, and
222
00:15:11,070 --> 00:15:16,920
this is just one instance of how you can do it, you find a
223
00:15:16,920 --> 00:15:29,100
breaker, the breaker is essentially this high to that low in
224
00:15:29,100 --> 00:15:33,780
this low up to this higher high. Can you see that? So it's
225
00:15:33,780 --> 00:15:38,580
this pattern. So what you want to do is train your eyes to
226
00:15:38,580 --> 00:15:41,310
look at that last down closed candle, because that last down
227
00:15:41,310 --> 00:15:48,960
close candle is the actual new future resistance level. It's
228
00:15:49,380 --> 00:15:54,600
not ambiguous. It's not a question of which low do I use
229
00:15:54,600 --> 00:15:58,230
here, because every one of these lows it in some way, shape
230
00:15:58,230 --> 00:16:02,010
or form, educator or a teacher will say, it's this one, it's
231
00:16:02,010 --> 00:16:07,350
that one. The fact that we had this run higher clearing
232
00:16:07,740 --> 00:16:12,300
these highs, this particular candle, right did that one down
233
00:16:12,300 --> 00:16:15,600
close candle, I mean, take this out, move it away just one
234
00:16:15,600 --> 00:16:17,670
little bit. Alright, so you can see the heavy down closed
235
00:16:17,670 --> 00:16:21,990
candle there. That candle is the actual bearish ICT breaker.
236
00:16:23,580 --> 00:16:29,130
When market trades below that low, we wait for the trade
237
00:16:29,130 --> 00:16:32,640
back up into it. Once it trades back up into it, then you
238
00:16:32,640 --> 00:16:37,350
could look for to trade to what the low that formed prior to
239
00:16:37,350 --> 00:16:39,930
this retracement. That in itself
240
00:16:40,350 --> 00:16:46,590
is a complete trading model. By itself, it is all one of you
241
00:16:46,800 --> 00:16:49,680
out here listening to me is all that you're ever going to
242
00:16:49,680 --> 00:16:53,850
need to do in trading. And you can find this pattern on five
243
00:16:53,850 --> 00:16:58,110
minute charts, 15 minute charts, for our charts, eight hour
244
00:16:58,110 --> 00:17:01,740
charts, daily charts, weekly charts, monthly charts. And you
245
00:17:01,740 --> 00:17:07,200
can frame that whole model on the timeframe in duration that
246
00:17:07,200 --> 00:17:10,380
you would like to trade in relative to that timeframe. If
247
00:17:10,380 --> 00:17:13,500
you want a lot of setups, you can trade them on a 15 minute,
248
00:17:14,730 --> 00:17:19,140
multiple times a week on a 15 minute chart, it's not going
249
00:17:19,140 --> 00:17:24,000
to offer a huge amount of pips because it's framed on this
250
00:17:24,000 --> 00:17:27,660
movement here. And you're selling short at a logical level.
251
00:17:28,800 --> 00:17:31,860
And you're going to take profits below the low that foreigns
252
00:17:31,860 --> 00:17:37,350
prior to that return to the breaker. Okay, so once this
253
00:17:37,350 --> 00:17:41,790
occurs, once you go below this low, you're out, you're done.
254
00:17:42,600 --> 00:17:46,500
Or if you have framed this whole thing, on the basis that
255
00:17:46,500 --> 00:17:49,890
it's a little bit longer term setup, then you can take off
256
00:17:49,890 --> 00:17:53,730
some portion, I don't know, I don't want to say too much
257
00:17:53,730 --> 00:17:56,040
here and try to drive too much of your decision making
258
00:17:56,040 --> 00:17:59,820
process. But you could say, say take off half, okay, or more
259
00:17:59,820 --> 00:18:03,210
than half below this low as it trades below it. And then you
260
00:18:03,210 --> 00:18:06,630
leave a stop that's reasonable locking in something, then
261
00:18:06,630 --> 00:18:10,020
you let the remainder trade. And if it can go lower, you'll
262
00:18:10,020 --> 00:18:12,930
be able to participate in that and then keep scaling out as
263
00:18:12,930 --> 00:18:18,000
it keeps going lower. But initially, when you first start to
264
00:18:18,000 --> 00:18:20,580
look for things like this, you want to try to take all of
265
00:18:20,580 --> 00:18:23,910
your profit here because you want to train yourself to feel
266
00:18:23,910 --> 00:18:28,560
comfortable, engaging number one, and then clearing the
267
00:18:28,560 --> 00:18:35,220
trade with a profit banking banking completely. If you see
268
00:18:35,220 --> 00:18:39,180
this pattern in hindsight, and you study you want to print
269
00:18:39,240 --> 00:18:42,330
out or at least screen capture and save these in your
270
00:18:42,330 --> 00:18:45,330
electronic journal. Okay, so every one of you in this
271
00:18:45,360 --> 00:18:49,110
community should have a study journal, if you just watch my
272
00:18:49,110 --> 00:18:52,170
videos, or if you just watch my videos and just go to your
273
00:18:52,170 --> 00:18:56,010
charts and look and don't make any annotations, don't screen
274
00:18:56,010 --> 00:18:59,310
capture anything, you're wasting your time. You clearly are
275
00:18:59,310 --> 00:19:01,920
wasting your time and you're not gonna be able to develop in
276
00:19:02,310 --> 00:19:09,150
you're looking at ICT is forex Netflix? And listen. That's
277
00:19:09,150 --> 00:19:12,450
not equivalent to learning how to do it yourself. You have
278
00:19:12,450 --> 00:19:15,840
to train yourself. And that only happens by practicing and
279
00:19:15,840 --> 00:19:20,280
putting the work into it. But what about in these relative
280
00:19:20,280 --> 00:19:24,810
equal highs? What can we see to anticipate these turning
281
00:19:24,810 --> 00:19:30,990
points? Well, you can go to the Compare tab. Put in this
282
00:19:30,990 --> 00:19:34,170
pair here is the New Zealand dollar. So a closely correlated
283
00:19:34,170 --> 00:19:42,930
pair would be Aussie dollar Alright, so here's the
284
00:19:42,930 --> 00:19:47,310
Australian dollar. And I want you to look at how price we
285
00:19:47,310 --> 00:19:50,520
had these relative equal highs. The market trades higher and
286
00:19:50,520 --> 00:19:54,060
look even the Australian dollars making higher highs. See
287
00:19:54,060 --> 00:19:59,070
all this this commutative line. That's basically the price
288
00:19:59,070 --> 00:20:02,010
action for me Take this away as you can see it, that's
289
00:20:02,010 --> 00:20:05,190
essentially the price action for Ozzy versus the US dollar.
290
00:20:06,120 --> 00:20:12,030
Now, if we put New Zealand price back on it, look at how the
291
00:20:12,030 --> 00:20:16,500
high in New Zealand went higher here. But look at the highs
292
00:20:16,590 --> 00:20:21,090
comparably. In the Australian dollar, it was lower on par,
293
00:20:21,180 --> 00:20:26,400
you see that? That is my SMT divergence, okay, or smart
294
00:20:26,400 --> 00:20:29,940
money technique or smart money tool. However, when usable
295
00:20:29,970 --> 00:20:33,780
spend always been abbreviated as SMT. There's a lot of
296
00:20:33,780 --> 00:20:36,360
people on Instagram, a lot of people on the internet that's
297
00:20:36,360 --> 00:20:40,920
created supposedly courses around it. And they'll show you
298
00:20:40,920 --> 00:20:45,390
examples, but they don't ever have the narrative ahead of
299
00:20:45,540 --> 00:20:48,420
the curve, where they're looking for the SMT divergence
300
00:20:48,420 --> 00:20:51,750
before it happens. Like you never see them do a video where
301
00:20:51,780 --> 00:20:55,860
they use it before it forms. And then the trade goes there.
302
00:20:56,100 --> 00:20:59,850
It's always this perfect excuse of in hindsight, okay, but
303
00:21:00,120 --> 00:21:02,790
when you first learn how to do it, or look for it,
304
00:21:02,820 --> 00:21:06,120
obviously, like anything else, you have to see it in
305
00:21:06,120 --> 00:21:08,310
hindsight, and this is how I'm teaching you how to look for
306
00:21:08,310 --> 00:21:15,690
it. There are several examples of SMT divergence per week.
307
00:21:16,500 --> 00:21:18,930
And if you drop into 15 minute time frames, you get a lot
308
00:21:18,930 --> 00:21:21,810
more of them. And in five minute charts, you get, again, a
309
00:21:21,810 --> 00:21:24,870
lot more of them. But just because there's a divergence
310
00:21:24,870 --> 00:21:28,710
between the relationships of the highs, like here's the
311
00:21:28,710 --> 00:21:32,970
higher high in New Zealand, and the lower high in Aussie
312
00:21:32,970 --> 00:21:36,360
dollar. Just because it does that
313
00:21:38,220 --> 00:21:42,630
doesn't necessarily mean there's going to be a trade, you
314
00:21:42,630 --> 00:21:45,930
have to have, like I was showing you moments ago, before I
315
00:21:45,960 --> 00:21:50,760
included the Australian dollar overlay is you have these
316
00:21:50,790 --> 00:21:53,400
understandings that the buy side liquidity is going to be
317
00:21:53,400 --> 00:21:57,810
tapped. Now, you may not know that it's going to go up here
318
00:21:58,020 --> 00:22:01,650
and reverse, you don't need to know that. Okay, that's the
319
00:22:01,680 --> 00:22:04,470
benefit of having the understanding of my breaker pattern,
320
00:22:05,340 --> 00:22:09,060
you are just going to simply wait. And believe me,
321
00:22:10,200 --> 00:22:12,960
initially, you look at these types of trades here and say,
322
00:22:12,960 --> 00:22:15,930
Wow, I want to sell up here. And I want to get out down
323
00:22:15,930 --> 00:22:19,950
here, I want to sell here and get out down here. And okay,
324
00:22:19,950 --> 00:22:23,490
that's fine. But you have to graduate into that, no one's
325
00:22:23,610 --> 00:22:25,920
going to just step out here in trading, watch a couple
326
00:22:25,920 --> 00:22:29,790
videos or read a book, or go to a seminar, buy course, and
327
00:22:29,790 --> 00:22:32,340
go out there and start doing that it just doesn't happen.
328
00:22:32,370 --> 00:22:37,890
You have to really train yourself gradually modularly to get
329
00:22:37,890 --> 00:22:40,770
to that point. And the easiest training wheels to get to
330
00:22:40,770 --> 00:22:43,950
that is using the breaker pattern, that means learn to
331
00:22:43,950 --> 00:22:47,640
anticipate this high forming and then reject, but don't
332
00:22:47,640 --> 00:22:51,810
trade that yet. Once it breaks down, you know, all you're
333
00:22:51,810 --> 00:22:53,760
going to do is wait for this candle to get traded back up to
334
00:22:54,420 --> 00:22:59,910
right here. Once it trades back up into the breaker, you're
335
00:22:59,910 --> 00:23:05,760
going to frame a short that has the stop loss above the
336
00:23:05,760 --> 00:23:10,170
breaker candle. You have to have closed candle in here,
337
00:23:10,200 --> 00:23:13,680
that's a bearish order block, a close candle a closed
338
00:23:13,680 --> 00:23:18,060
candle, so your stop has to be above this candle. Because
339
00:23:18,060 --> 00:23:23,730
you're comparing the order block with the location of the
340
00:23:23,730 --> 00:23:26,850
breaker, the order block gives you a little bit higher, yes,
341
00:23:27,180 --> 00:23:30,840
doesn't have to be a big stop. But as it trades up into this
342
00:23:30,840 --> 00:23:33,120
level, you're going to be looking for a stop loss above
343
00:23:33,120 --> 00:23:35,760
that. And then you don't have to worry about it. If you get
344
00:23:35,760 --> 00:23:37,710
stopped out, you get stopped out you did it wrong. It's a
345
00:23:37,710 --> 00:23:40,080
wrong selection on the trade. And there's no reason for you
346
00:23:40,080 --> 00:23:42,330
to going out there trying to avoid every losing trade.
347
00:23:42,600 --> 00:23:45,510
That's also a problem with new traders because I did that
348
00:23:45,510 --> 00:23:48,180
stuff too. You're going to lose, okay, there's no reason for
349
00:23:48,180 --> 00:23:52,320
you to worry about losing if you have a sound model. And
350
00:23:52,320 --> 00:23:57,330
this is a sound model like this is the complete model. You
351
00:23:57,330 --> 00:23:59,730
don't need to do anything else. But look for these types of
352
00:23:59,730 --> 00:24:04,230
setups. And they form weekly, every single week, this
353
00:24:04,230 --> 00:24:08,880
pattern forms, but you have to know what you're looking for.
354
00:24:08,880 --> 00:24:10,200
And the only way you're gonna know what you're looking for
355
00:24:10,200 --> 00:24:14,760
is by repetitive study, taking snapshots of your own charts
356
00:24:14,820 --> 00:24:17,910
with your own annotations. And what's that mean? Like I have
357
00:24:17,940 --> 00:24:20,790
these little markers here. And maybe in these areas over
358
00:24:20,790 --> 00:24:23,790
here, you can put some additional notes like how many
359
00:24:24,360 --> 00:24:26,970
candles did it take to get up to this level here after it
360
00:24:26,970 --> 00:24:31,500
broke. Because when you see this breakdown like that, the
361
00:24:31,500 --> 00:24:34,230
first thing is I want to get right back to this this candle
362
00:24:34,230 --> 00:24:37,470
here if you understand my breaker and you don't necessarily
363
00:24:37,470 --> 00:24:39,780
know how to submit to the amount of time that can take
364
00:24:39,780 --> 00:24:42,510
place. So when you do your screen captures in your study
365
00:24:42,510 --> 00:24:45,390
journal, you want to record how much time it takes from the
366
00:24:45,420 --> 00:24:48,660
initiation of the setup which once it trades below this low
367
00:24:49,170 --> 00:24:54,990
here that sets the stage for okay now your setup is the next
368
00:24:56,760 --> 00:25:02,760
action point. Okay, the next process The natural order of
369
00:25:03,330 --> 00:25:07,170
the trade process. So this sets the stage, now you are in
370
00:25:07,170 --> 00:25:09,570
waiting mode, what are you waiting for it needs to trade
371
00:25:09,570 --> 00:25:13,020
back up into that candle. How long does it take to do that,
372
00:25:13,530 --> 00:25:16,770
because it takes several days to get to it. Because it's an
373
00:25:16,770 --> 00:25:19,410
hourly chart, sometimes it can happen within the same day.
374
00:25:20,700 --> 00:25:26,220
But until you appreciate him any varying examples, there's
375
00:25:26,250 --> 00:25:31,320
going to be you have to submit to that time. And it's real
376
00:25:31,320 --> 00:25:36,990
impatient. For a new trader, or as a new trader is
377
00:25:36,990 --> 00:25:39,840
impatient, I say that should say it like that, for the
378
00:25:39,840 --> 00:25:43,890
setup, and sometimes they just lose their mind, because they
379
00:25:43,890 --> 00:25:45,840
want to get in there and do it, they want to take the trade.
380
00:25:46,380 --> 00:25:48,810
But this is the benefit of going through your charts
381
00:25:48,810 --> 00:25:51,630
yourself and the markets that you'd like to follow. And
382
00:25:51,630 --> 00:25:56,100
you'll see by capturing examples like this, you'll be able
383
00:25:56,100 --> 00:25:58,680
to see how many opportunities have formed over a week or a
384
00:25:58,680 --> 00:26:02,610
month, and how much time it takes from when the setup is
385
00:26:02,610 --> 00:26:07,350
initiated to its actual formation? How much of a stoploss Do
386
00:26:07,350 --> 00:26:10,800
you need to use? And how much does it offer in terms of
387
00:26:10,800 --> 00:26:12,660
pips, so
388
00:26:13,769 --> 00:26:18,959
by itself, again, this is all some of you will ever require,
389
00:26:19,169 --> 00:26:21,779
you would never need to buy a course, you would never need
390
00:26:21,779 --> 00:26:24,719
to watch another ICT video, I know you're not gonna do that
391
00:26:24,719 --> 00:26:27,059
you're gonna keep watching videos. But the point is, is you
392
00:26:27,059 --> 00:26:30,239
don't need to do it. Okay, you'll be doing it just because
393
00:26:30,239 --> 00:26:34,499
you like it. But as far as knowing what to look for, for
394
00:26:34,499 --> 00:26:38,339
some of you, this is all you ever need. But the point is
395
00:26:38,339 --> 00:26:41,699
this, you have to look at the relationships, again, with
396
00:26:41,789 --> 00:26:45,449
correlated pairs, or correlated markets. The fact that the
397
00:26:45,449 --> 00:26:48,719
Australian dollar, okay, see how it's made that lower high
398
00:26:48,719 --> 00:26:51,869
here relative to this high, whereas the New Zealand dollar
399
00:26:51,869 --> 00:26:55,859
high here, it has a slightly higher high, whenever this
400
00:26:55,859 --> 00:27:01,409
occurs in price action, okay, this is indicating that
401
00:27:01,409 --> 00:27:06,419
there's a lot of selling going on in Australian dollar. The
402
00:27:06,419 --> 00:27:09,899
fact that the Australian dollar was not able to get back up,
403
00:27:10,169 --> 00:27:13,319
and trade above its old high like the New Zealand dollar did
404
00:27:13,319 --> 00:27:18,809
here, it's tipping its hand that these two pairs are likely
405
00:27:18,809 --> 00:27:23,999
to go down. Because they're closely correlated. If we see
406
00:27:23,999 --> 00:27:28,229
that the Australian dollar is having the lower high form, or
407
00:27:28,229 --> 00:27:31,109
it's failing to make that, then what that means to me as a
408
00:27:31,109 --> 00:27:33,389
trader is that we're running above these relative equal
409
00:27:33,389 --> 00:27:37,469
highs. And this is a fake out. This is just a run on stops,
410
00:27:37,709 --> 00:27:41,459
and anticipate a rejection or a reversal. And then you get
411
00:27:41,459 --> 00:27:48,839
it here. So the underlying, I guess, signature here is you
412
00:27:48,839 --> 00:27:51,779
want to look for relative equal highs, here in a
413
00:27:51,779 --> 00:27:54,929
consolidating market, and then look at a closely correlated
414
00:27:54,929 --> 00:27:59,219
asset, no words if, say, the candlestick chart portion of
415
00:27:59,219 --> 00:28:03,749
this example was British pound. And the red overlay was euro
416
00:28:03,749 --> 00:28:08,039
dollar. If that occurred here, the same would be expected.
417
00:28:08,459 --> 00:28:12,179
Okay. So euro dollar and cable are very closely correlated
418
00:28:12,449 --> 00:28:14,909
pairs, not all the time, sometimes there's a cracking
419
00:28:14,909 --> 00:28:18,239
correlation. But generally, they move pretty close to one
420
00:28:18,239 --> 00:28:24,239
pillar. When it doesn't exist like that, then you have
421
00:28:24,239 --> 00:28:29,969
trades in like euro pound, when you have the markets in
422
00:28:29,969 --> 00:28:37,019
consolidation as a whole, and we see this pattern here. This
423
00:28:37,049 --> 00:28:41,189
also indicates that we have a weak pair like Aussie dollar
424
00:28:41,399 --> 00:28:45,209
is showing us here. And you can combine that with a strong
425
00:28:45,209 --> 00:28:49,649
pair like in recent days, euro dollar, and then you can get
426
00:28:49,919 --> 00:28:56,519
a very strong setup for a buy in euro Ozzy. So it doesn't
427
00:28:56,519 --> 00:29:00,659
just limit to just giving you a turning point here, it shows
428
00:29:00,659 --> 00:29:03,629
you that this pet this pair of Aussie is underlying the
429
00:29:03,629 --> 00:29:09,359
week. And I gave my students and mentorship a cell example
430
00:29:10,079 --> 00:29:13,799
before it happened using this criteria here. And they're
431
00:29:13,799 --> 00:29:17,309
learning more about that set up that that was not exposed to
432
00:29:17,309 --> 00:29:20,939
them in my mentorship, but they're seeing more, you know,
433
00:29:21,059 --> 00:29:28,049
underlying narrative behind it. So using this idea, finding
434
00:29:28,199 --> 00:29:32,999
underlying the weak currencies and coupling it with a strong
435
00:29:32,999 --> 00:29:37,589
currency, we can do something like this, because the euro
436
00:29:42,449 --> 00:29:46,829
and I'll take this off. We don't need that. So here's euro,
437
00:29:47,129 --> 00:29:51,539
and you're always been trading pretty strong. If we look at
438
00:29:51,539 --> 00:29:56,279
that relationship of Aussie dollar being weak, when euro has
439
00:29:56,279 --> 00:30:00,749
been strong, that's going to cause a really nice up I move
440
00:30:00,779 --> 00:30:05,759
for Euro Aussie, but the run on euro dollar has been
441
00:30:05,789 --> 00:30:11,819
essentially 130 hundred 40 pips. That's not bad. But for you
442
00:30:11,819 --> 00:30:15,809
freaks out there. When you want to do a couple more legs in
443
00:30:15,809 --> 00:30:18,449
your analysis, you'll be able to find times when the Euro
444
00:30:18,449 --> 00:30:23,339
Ozzy cross pair will have an outperformance where it moves,
445
00:30:24,119 --> 00:30:31,259
one to 300 plus pips. So the question is this, are you going
446
00:30:31,259 --> 00:30:34,709
to be comfortable trading? A major, which is like euro
447
00:30:34,709 --> 00:30:38,789
dollar pound dollar? The Aussie dollar New Zealand dollar
448
00:30:38,849 --> 00:30:44,909
dollar CAD dollar? yen? Are you going to be comfortable
449
00:30:44,909 --> 00:30:49,589
trading those majors and not participate in these big moves?
450
00:30:51,209 --> 00:30:55,499
settling for reasonable 100 pips or so? Or do you feel like
451
00:30:55,499 --> 00:30:58,469
you have to be this type of trader, because that's the next
452
00:30:58,469 --> 00:31:00,629
level in your development. Once you understand what I'm
453
00:31:00,629 --> 00:31:05,519
showing you in prior discussion with between New Zealand
454
00:31:05,519 --> 00:31:09,629
dollar and Aussie dollar, the the highest form of analysis
455
00:31:09,629 --> 00:31:13,499
is to find the strongest leadership and institutional
456
00:31:13,499 --> 00:31:15,329
sponsorship and all the process.
457
00:31:16,019 --> 00:31:20,219
But the crosses only have these pair move like this, when we
458
00:31:20,219 --> 00:31:24,719
are in an underlying consolidation as a whole. Like, look at
459
00:31:24,719 --> 00:31:27,719
the Dollar Index, the dollar index is consolidating, as
460
00:31:27,719 --> 00:31:30,359
doesn't mean it's not moving on lower timeframes, but it's
461
00:31:30,359 --> 00:31:33,329
still in a consolidation. So when they put a stranglehold on
462
00:31:33,329 --> 00:31:37,949
dollar, your mind as a trader should start thinking, Okay,
463
00:31:38,369 --> 00:31:41,639
we are in an area or environment that the crosses are going
464
00:31:41,639 --> 00:31:45,629
to have the big moves. There's all kinds of these educators
465
00:31:45,629 --> 00:31:49,049
out there to tell you, this is how you use this and you find
466
00:31:49,049 --> 00:31:51,449
a bigger move here. And you go here and you do that, and
467
00:31:51,449 --> 00:31:55,469
it's fresh in this and tetanus Look, this is the only thing
468
00:31:55,469 --> 00:32:01,289
the algorithm does. If the dollar is in consolidation, okay,
469
00:32:01,289 --> 00:32:06,239
if it's in an intervention range, okay. If the feds holding
470
00:32:06,659 --> 00:32:11,999
dollar in a narrow range, you immediately start going
471
00:32:11,999 --> 00:32:15,419
through and finding the strong and the weak pairs using what
472
00:32:15,419 --> 00:32:18,269
I showed you here by comparing and contrasting their
473
00:32:18,269 --> 00:32:21,479
relative equal highs or relative equal lows, and in which
474
00:32:21,479 --> 00:32:24,869
one's the strongest, and then start looking for other pairs
475
00:32:24,929 --> 00:32:28,739
that are stronger. Okay, and then find a strong versus a
476
00:32:28,739 --> 00:32:32,759
weak currency. And you'll get this type of move here. Now,
477
00:32:32,789 --> 00:32:38,039
it's said that when markets are in carry trade mode, where
478
00:32:38,639 --> 00:32:45,029
one currency is giving a stronger or higher interest rate,
479
00:32:45,419 --> 00:32:49,439
so if you buy that one, and sell basically, because it's
480
00:32:49,439 --> 00:32:53,309
what we're doing, we when we buy euro dollar, we're buying
481
00:32:53,309 --> 00:32:56,069
euros and selling dollars. In essence, that's what you're
482
00:32:56,069 --> 00:33:01,139
essentially doing. But if you look at a currency that has a
483
00:33:01,139 --> 00:33:04,109
higher interest rate, and it happens to be the currency that
484
00:33:04,109 --> 00:33:08,369
you're buying, and you're selling short, a currency that has
485
00:33:08,369 --> 00:33:13,709
the lower interest rate, the common idea is that that is a
486
00:33:13,709 --> 00:33:17,309
carry trade idea. And it should keep going up because of the
487
00:33:17,339 --> 00:33:20,969
underlying interest rate differential. And that is not
488
00:33:20,969 --> 00:33:24,449
always true. And a perfect example, it's looking at Euro
489
00:33:24,449 --> 00:33:30,269
dollar this year. So if you go back to euro dollar, and look
490
00:33:30,269 --> 00:33:36,029
at it on a daily chart, back in here, this right here this
491
00:33:36,029 --> 00:33:39,629
very day here in my mentorship, and folks that are joining
492
00:33:39,629 --> 00:33:43,259
in in January, you can go back and listen to my archives,
493
00:33:43,259 --> 00:33:45,899
and you'll hear me talk about how if I was making the market
494
00:33:45,899 --> 00:33:48,659
for euro dollar, I would just take it below this low here,
495
00:33:48,839 --> 00:33:51,029
and then run it above this high here. And eventually we were
496
00:33:51,029 --> 00:33:57,209
looking for these over here. And we got all that here. But
497
00:33:57,659 --> 00:33:59,879
I'm not here to beat my chest. I know some of you don't like
498
00:33:59,879 --> 00:34:04,439
that. But my point is this all through here, if you look at
499
00:34:04,439 --> 00:34:08,669
the interest rate differential, you would not have expected
500
00:34:08,879 --> 00:34:13,289
this type of move just on the basis of interest rates. Now
501
00:34:13,289 --> 00:34:15,959
there are times when you want to be using that interest rate
502
00:34:15,989 --> 00:34:21,179
differential where it's a good time to be a buyer with
503
00:34:21,539 --> 00:34:25,649
pairing up a strong interest rate, economy and currency
504
00:34:25,949 --> 00:34:30,329
versus a low interest rate or weaker economy. And you'll
505
00:34:30,329 --> 00:34:35,399
have just really easy trading. We have not had that
506
00:34:35,399 --> 00:34:39,299
environment this year because of the illness that's been
507
00:34:39,299 --> 00:34:41,519
making its way around the world. And that's all I'm gonna
508
00:34:41,519 --> 00:34:46,289
say about that. Okay, but it that has upset a lot of the
509
00:34:46,289 --> 00:34:50,459
normal see in the marketplace. And I have learned a great
510
00:34:50,459 --> 00:34:55,079
deal in this environment, not new trading techniques. But
511
00:34:55,079 --> 00:34:59,699
I've learned a lot about myself as a trader and I'm more
512
00:34:59,999 --> 00:35:03,659
risk averse. I've been more risk averse this year than I've
513
00:35:03,689 --> 00:35:07,739
ever been. And not just because of the illness, but because
514
00:35:07,739 --> 00:35:09,929
it's an election year, all the turmoil and stuff that's
515
00:35:09,929 --> 00:35:13,919
going on. And it just, you can't rely on in this
516
00:35:13,919 --> 00:35:16,769
environment, I've seen that you can't rely on your typical
517
00:35:16,769 --> 00:35:21,449
classical ideas, okay? Because there's people out here that
518
00:35:21,479 --> 00:35:24,779
have videos on YouTube, and they're selling the idea that,
519
00:35:24,779 --> 00:35:27,719
you know, the interest rate in this markets better. And I'm
520
00:35:27,719 --> 00:35:30,149
going to hold this and hold this, okay, you're going to hold
521
00:35:30,149 --> 00:35:33,869
this trade, it's going to clean your clock. Because at some
522
00:35:33,869 --> 00:35:38,309
point, the dollar did have a higher interest rate. But it
523
00:35:38,309 --> 00:35:42,719
was declined, it dropped. And the Euro doesn't have
524
00:35:42,719 --> 00:35:48,299
anything, it's like it's nothing. So you can't rely on this
525
00:35:48,299 --> 00:35:52,019
type of movement with that type of technique or analysis
526
00:35:52,019 --> 00:35:55,649
concept. And it's it doesn't, it doesn't bode well, for
527
00:35:55,649 --> 00:35:58,739
expecting the type of moves here. You need to rely on other
528
00:35:58,739 --> 00:36:04,139
things. And I relied on in front of my mentorship, the just
529
00:36:04,139 --> 00:36:05,009
pure
530
00:36:05,130 --> 00:36:08,580
reading of dollar. Okay. And there was periods throughout
531
00:36:08,580 --> 00:36:12,480
this year that I was uncertain. To the point where I said, I
532
00:36:12,690 --> 00:36:15,570
don't know, I really don't know. And it took a week or two
533
00:36:15,570 --> 00:36:19,350
for us to get more information. And then once it showed us
534
00:36:19,350 --> 00:36:22,860
then I was back in sync. And I had a good, a good run with
535
00:36:22,920 --> 00:36:25,440
everything lining up with what I was expecting. But you
536
00:36:25,440 --> 00:36:29,910
can't. And you shouldn't have a lot of expectation,
537
00:36:30,840 --> 00:36:34,440
especially this year, because this is not your a typical
538
00:36:34,440 --> 00:36:38,370
year like this has been a very challenging year for me, like
539
00:36:39,360 --> 00:36:44,460
November 5 will be 28 years I've been doing this. And I
540
00:36:44,460 --> 00:36:51,690
don't ever recall the level of difficulty that this year has
541
00:36:52,590 --> 00:36:56,940
shown me like I felt like I did when I first started trading
542
00:36:57,810 --> 00:37:01,050
many times throughout this year, because I had so many
543
00:37:01,050 --> 00:37:04,320
conflicting signals. And while that's not a problem, because
544
00:37:04,320 --> 00:37:06,870
usually if I have a conflicting signal, then I'm just going
545
00:37:06,870 --> 00:37:10,530
to sit on my hands and do nothing. It's no problem. But
546
00:37:10,530 --> 00:37:13,920
because I'm obligated to give my interpretation, and I have
547
00:37:13,920 --> 00:37:18,240
to cosign every single time I sit down with my students, I
548
00:37:18,240 --> 00:37:20,910
have to make a decision. Whereas I normally wouldn't have to
549
00:37:20,910 --> 00:37:22,860
worry about it, I wouldn't be doing anything. And I'm
550
00:37:22,860 --> 00:37:25,710
comfortable with that. And that's a normal thing. That's a
551
00:37:25,710 --> 00:37:28,350
position and it wins all the time, you don't suffer any
552
00:37:28,350 --> 00:37:34,380
loss. But this year, there were a couple times where I was
553
00:37:34,380 --> 00:37:39,300
forced to make a determination gun to my head type scenario.
554
00:37:40,080 --> 00:37:44,610
And a couple of times I was wrong. I'm still okay for the
555
00:37:44,610 --> 00:37:49,470
year a more way more than I'm wrong. I'm right more times
556
00:37:49,470 --> 00:37:54,930
than that. But it's still surprising to see how the things I
557
00:37:54,930 --> 00:37:57,900
teach still hold up well, even in this environment. So
558
00:37:57,900 --> 00:38:00,330
that's what I meant when I said I learned a lot. There's
559
00:38:00,360 --> 00:38:05,550
also a greater appreciation for risk for me now. And it may
560
00:38:05,550 --> 00:38:08,610
be me getting older, and maybe the fact that I have more
561
00:38:08,610 --> 00:38:13,020
people under my wing, and I feel more compelled to talk
562
00:38:13,020 --> 00:38:16,020
about risk and managing it better. And I guess it's a good
563
00:38:16,020 --> 00:38:20,700
thing all around anyway. But I went down this rabbit trail.
564
00:38:21,150 --> 00:38:23,430
And I'm thinking about as I'm talking now. And it was not
565
00:38:23,550 --> 00:38:26,580
inside the scope of the discussion. But I just felt like
566
00:38:26,580 --> 00:38:32,880
including it. I don't know why. So we're we're here. But if
567
00:38:33,720 --> 00:38:38,760
you start looking at closely correlated markets, okay, and
568
00:38:38,760 --> 00:38:43,050
you start comparing that a good way of using this approach
569
00:38:43,050 --> 00:38:45,960
would be if you look at commodity markets, okay, and you
570
00:38:45,960 --> 00:38:51,120
look at the metals, like LOOK AT Gold, look at silver.
571
00:38:53,040 --> 00:38:56,160
Generally, you'll see some type of information like what I
572
00:38:56,160 --> 00:39:01,320
just showed you here. High Grade copper tend to be a
573
00:39:01,320 --> 00:39:03,930
different animal altogether, palladium and platinum. Again,
574
00:39:03,930 --> 00:39:06,300
same thing, they have a little bit of a different thing.
575
00:39:06,660 --> 00:39:09,660
Back in the 90s. In the 80s, they were a little bit closer
576
00:39:09,720 --> 00:39:12,660
and the way they traded. And you could use this tool really
577
00:39:12,660 --> 00:39:17,040
easy. But there's been the separation between the metals. It
578
00:39:17,040 --> 00:39:19,320
works really well with the grain market. So if you're an
579
00:39:19,320 --> 00:39:22,920
agricultural trader that trades commodities, I use this
580
00:39:22,950 --> 00:39:27,660
concept to outline soybeans that moved over $10,000 per
581
00:39:27,660 --> 00:39:30,840
contract this year. I outlined the setup, outline the
582
00:39:30,840 --> 00:39:33,960
framework outline where it was going, and it was using what
583
00:39:33,960 --> 00:39:37,770
I just showed you here tonight. Now $10,000 per contract in
584
00:39:37,770 --> 00:39:43,920
soybeans is a pretty respectable move. And while corn and
585
00:39:43,950 --> 00:39:50,730
wheat went up in sympathy, the leadership was soybeans. And
586
00:39:50,730 --> 00:39:52,860
that was the market I mentioned that was the market I said
587
00:39:52,860 --> 00:39:54,600
was going to lead that was a market that was going to
588
00:39:54,600 --> 00:39:59,610
outperform and it did, so it's not limited to forex. Okay,
589
00:39:59,610 --> 00:40:02,790
so when you Have this perception of price and reading it
590
00:40:02,820 --> 00:40:05,820
like an X ray view. Behind the scenes, I didn't reach for
591
00:40:05,820 --> 00:40:09,570
any indicators here. The only thing I was looking at was
592
00:40:10,590 --> 00:40:13,110
reading price how it was going above old highs. So there's a
593
00:40:13,110 --> 00:40:15,420
little leg line segment trend lines, okay, they're there
594
00:40:15,420 --> 00:40:17,910
just for you to understand what I'm focusing on. But they're
595
00:40:17,910 --> 00:40:22,530
not on my charts, when I'm trading. The overlay is just
596
00:40:22,530 --> 00:40:26,010
another market. That's not an indicator, I'm just making it
597
00:40:26,070 --> 00:40:29,910
show up as an overlay and aligned format. And there it is.
598
00:40:30,450 --> 00:40:34,770
Now, you might not like let's go back to Aussie, or actually
599
00:40:34,800 --> 00:40:35,610
New Zealand.
600
00:40:41,580 --> 00:40:46,110
Okay, and well, I can see hourly chart. And we'll add again,
601
00:40:48,090 --> 00:40:49,020
the Aussie dollar.
602
00:40:54,570 --> 00:40:59,550
Okay. Now, you might not like this line, being here. And as
603
00:40:59,550 --> 00:41:03,360
you move it around, it might shift a little bit, see how it
604
00:41:03,360 --> 00:41:07,110
does that. One of the things you can do on trading view,
605
00:41:07,110 --> 00:41:10,560
which I just recently found myself, which I thought was
606
00:41:10,560 --> 00:41:12,840
interesting, if you go here over here, and you click on
607
00:41:12,840 --> 00:41:15,720
this, and you type in or not type and click on the histogram
608
00:41:17,190 --> 00:41:23,730
over here and then change and change the opacity. Okay, and
609
00:41:23,730 --> 00:41:27,720
there you go. To me, I like this, I actually like this
610
00:41:27,720 --> 00:41:30,540
better than the line, because you can see the divergence,
611
00:41:30,930 --> 00:41:35,400
the high, lower high in Ozzy, high, higher high in New
612
00:41:35,400 --> 00:41:41,010
Zealand, you can see the low, higher low and Ozzy, low,
613
00:41:41,040 --> 00:41:44,760
lower low and New Zealand. If you look at a marketplace like
614
00:41:44,760 --> 00:41:48,060
this, and you anticipate the market reaching for liquidity
615
00:41:48,060 --> 00:41:51,540
below lows, and you see this pattern here that diverges,
616
00:41:51,930 --> 00:41:54,660
what that is actually showing and why this works, because
617
00:41:54,660 --> 00:41:57,690
you're probably new and you're listening to me saying what
618
00:41:57,690 --> 00:42:00,570
is what is the point of this? What is the fact that it's not
619
00:42:00,570 --> 00:42:03,390
making a higher high or failing to make a higher high? What
620
00:42:03,390 --> 00:42:05,700
is it indicating and was indicating when the Australian
621
00:42:05,700 --> 00:42:08,310
dollar is failing to make that lower low here, when the New
622
00:42:08,310 --> 00:42:10,380
Zealand dollar made a lower low than it did here? What does
623
00:42:10,380 --> 00:42:15,540
that indicating? That is the reason why I said in the
624
00:42:15,540 --> 00:42:19,860
beginning of this video, what I'm teaching you will never
625
00:42:20,430 --> 00:42:24,240
diminish, it will always be there because just like they
626
00:42:24,240 --> 00:42:28,290
were a lot of buying in Australian dollar here. And
627
00:42:28,290 --> 00:42:33,540
Australian dollar went higher. It led to a sympathy move on
628
00:42:33,570 --> 00:42:36,810
New Zealand dollar to it followed suit. But the crack and
629
00:42:36,810 --> 00:42:40,620
correlation between the two which we have a lower low in New
630
00:42:40,620 --> 00:42:44,820
Zealand and a higher low in Australian dollar. That's what
631
00:42:44,820 --> 00:42:48,240
we're seeing here. This is an SMP divergence that's bullish.
632
00:42:49,140 --> 00:42:52,500
What is it saying? It's saying that this currency, the
633
00:42:52,500 --> 00:42:55,950
Australian dollar is the stronger of the currency at that
634
00:42:55,950 --> 00:43:00,570
moment. And that this run below this low here on this low on
635
00:43:00,600 --> 00:43:03,960
New Zealand. This is a stock run. So you can feel confident
636
00:43:04,170 --> 00:43:09,330
buying below this low. Because you're buying up sell stops.
637
00:43:10,620 --> 00:43:15,240
But you can use this idea and say okay, at this moment here,
638
00:43:15,450 --> 00:43:20,700
Australian dollar is strong. At that moment, you would go
639
00:43:20,700 --> 00:43:23,700
through the same cycling through your currencies to find a
640
00:43:23,730 --> 00:43:29,070
weak currency. And then find a core a correlated forex pair
641
00:43:29,280 --> 00:43:32,880
that meets that criteria where all z is strong and a weaker
642
00:43:32,880 --> 00:43:38,070
currency is paired up with it. And the underlying
643
00:43:38,070 --> 00:43:42,420
bullishness of Australian dollar would lead that currency in
644
00:43:42,420 --> 00:43:45,150
this directional premise. Anyway, I gave you a lot in this
645
00:43:45,150 --> 00:43:48,930
video. And I probably confused a great deal of you. But
646
00:43:48,930 --> 00:43:52,620
that's not what I was intending to do. I love doing this. I
647
00:43:52,620 --> 00:43:56,460
love talking about the markets. I love teaching them I love
648
00:43:57,030 --> 00:43:59,940
tipping my hand and showing you all outside of my
649
00:43:59,940 --> 00:44:04,740
mentorship, things that you might not be thinking of. And I
650
00:44:04,740 --> 00:44:07,710
do talk about SMT in this YouTube channel. So don't think
651
00:44:07,710 --> 00:44:11,370
I'm dangling a carrot and saying you only have to learn this
652
00:44:11,400 --> 00:44:15,450
by going into my mentorship. That's not what I'm doing here.
653
00:44:15,480 --> 00:44:20,310
But I am drawing a contrast and you know, a basic
654
00:44:21,750 --> 00:44:27,480
differentiation between what we do and what is then provided
655
00:44:27,480 --> 00:44:30,660
here for free on YouTube because there's a big gap, okay,
656
00:44:31,020 --> 00:44:34,230
but you can find this. And clearly I just added another one
657
00:44:34,230 --> 00:44:37,080
to the library here, where you can go in and if the market
658
00:44:37,080 --> 00:44:40,230
is in consolidation, and I hope all of you can see that this
659
00:44:40,230 --> 00:44:43,650
isn't a range bound market. If you have a range bound market
660
00:44:43,650 --> 00:44:48,450
like this, this model works extremely well. And there are
661
00:44:48,450 --> 00:44:52,140
models that work well in trending models that you use the
662
00:44:52,140 --> 00:44:56,910
SMT for also, but this one I think is like the easiest one
663
00:44:56,970 --> 00:45:00,540
ground level entry level student just coming My YouTube
664
00:45:00,540 --> 00:45:04,050
channel, this is where they should start, okay, because if
665
00:45:04,050 --> 00:45:07,710
you're in a trending environment, it would be better for you
666
00:45:07,710 --> 00:45:10,920
not to reach for SMT when the market is trending, because
667
00:45:10,920 --> 00:45:15,600
it's going to have less likelihood of creating a setup for
668
00:45:15,600 --> 00:45:18,630
you to find it's easy to see where it's when it's range
669
00:45:18,630 --> 00:45:24,750
bound, it's easy to see a SMT divergence. But in final
670
00:45:24,750 --> 00:45:25,170
point,
671
00:45:26,699 --> 00:45:30,389
when the currencies have this relationship, where the
672
00:45:30,389 --> 00:45:32,849
Australian dollar was failing to make that lower low here
673
00:45:32,879 --> 00:45:36,839
and indicated, a higher low, at the time of the New Zealand
674
00:45:36,839 --> 00:45:42,089
dollar made this lower low, that's showing a lot of buying
675
00:45:42,239 --> 00:45:45,719
in Australian dollar. They're buying New Zealand dollar too
676
00:45:45,719 --> 00:45:51,509
clearly. But the fact that they're not always lockstep with
677
00:45:51,509 --> 00:45:54,929
one another, because if the markets were perfect, okay, if
678
00:45:54,929 --> 00:45:57,479
they were perfect, that means the Australian dollar would
679
00:45:57,479 --> 00:46:00,149
make a lower low here too. And then they would both go
680
00:46:00,149 --> 00:46:03,149
higher. And then right here on this higher high on New
681
00:46:03,149 --> 00:46:05,879
Zealand, relative to this high here, the Australian dollar
682
00:46:05,879 --> 00:46:09,449
should have made a higher high there as well. And if we just
683
00:46:09,449 --> 00:46:10,439
go to Australian dollar,
684
00:46:15,420 --> 00:46:19,890
you can see it didn't make that. Okay, so there's your
685
00:46:19,890 --> 00:46:23,670
relationship between the two and the strong contrast thing,
686
00:46:24,060 --> 00:46:28,740
views. But this was indicating there's a lot of selling in
687
00:46:28,770 --> 00:46:36,120
Australian dollar. And if that occurs in any asset, it shows
688
00:46:36,120 --> 00:46:40,650
you that there is a overwhelming desire, on an institutional
689
00:46:40,650 --> 00:46:45,060
level, that the volume of their buying and selling will
690
00:46:45,060 --> 00:46:48,120
create these cracks in correlation, or the SMT divergence in
691
00:46:48,120 --> 00:46:52,260
itself. Okay, so that's what causes this deviation between
692
00:46:52,650 --> 00:46:56,280
the relationships of higher highs and lower lows. If we ever
693
00:46:56,280 --> 00:47:01,200
see that occurring, that is the surest sign if you have the
694
00:47:01,200 --> 00:47:04,410
profile, correct. And if it's range bound, and that's easy
695
00:47:04,410 --> 00:47:06,540
for you, hopefully, it should be easy for you to see this,
696
00:47:07,260 --> 00:47:13,260
then you'll be able to have an X ray view and see that the
697
00:47:13,260 --> 00:47:16,830
markets are in this point here under heavy distribution, and
698
00:47:16,830 --> 00:47:21,330
right here under heavy accumulation. And I use this concept.
699
00:47:22,470 --> 00:47:25,410
And I learned it from Larry Williams, it was just his
700
00:47:25,440 --> 00:47:30,480
relative strength market analysis. But it was just a real
701
00:47:30,810 --> 00:47:34,980
basic introduction to it. And if you look at his book, how I
702
00:47:34,980 --> 00:47:36,600
made a million dollars trading commodities, I think
703
00:47:36,600 --> 00:47:40,170
everybody should have that book in their library. It's still
704
00:47:40,200 --> 00:47:43,650
some things like the the moon phases and stuff, like I don't
705
00:47:43,680 --> 00:47:49,200
subscribe to that. But the idea of his intermarket
706
00:47:49,200 --> 00:47:54,180
relationships and looking at which contract month the buyer
707
00:47:54,180 --> 00:47:59,040
sell, and what market the buyer, so comparing the relative
708
00:47:59,040 --> 00:48:01,410
strength between them, not the indicator, RSI, but the,
709
00:48:01,710 --> 00:48:05,730
like, I'm comparing the actual price action of New Zealand
710
00:48:05,730 --> 00:48:09,480
versus the underlying overlay ahead of Aussie dollar, that
711
00:48:09,480 --> 00:48:13,650
relationship between the two. That is, in essence, relative
712
00:48:13,650 --> 00:48:17,610
strength analysis, as Larry Williams teaches it. The reason
713
00:48:17,610 --> 00:48:21,150
why I say this a smart money technique or smart money tool,
714
00:48:21,360 --> 00:48:25,530
I'm not trying to rename his just basic view of his
715
00:48:25,530 --> 00:48:29,790
interpretation of it, I found that it occurs at every
716
00:48:29,790 --> 00:48:33,840
liquidity pool of any importance. You don't hear him talk
717
00:48:33,840 --> 00:48:36,060
about that. He doesn't even mention that in his books. He
718
00:48:36,060 --> 00:48:39,540
didn't do I have everything he's ever put out. There's no
719
00:48:40,800 --> 00:48:46,080
teaching like this. But I always want to credit, the
720
00:48:46,080 --> 00:48:49,560
influencer, that stimulated my thought process, just like he
721
00:48:49,560 --> 00:48:54,000
stimulated my whole power three, he stated his weakness of
722
00:48:54,090 --> 00:48:58,770
wishing he knew where to buy on the low candles below the
723
00:48:58,770 --> 00:49:03,150
opening before it goes up. And I discovered how to do that.
724
00:49:03,510 --> 00:49:10,080
So I used his weakness as a pursuit in my life. And I use
725
00:49:10,080 --> 00:49:12,780
one of the things that he used for relative strength
726
00:49:12,780 --> 00:49:18,840
analysis. And I blended that with Dow Theory. And it started
727
00:49:18,840 --> 00:49:20,730
making sense to me, it's like, you know, if the market is
728
00:49:20,730 --> 00:49:23,940
going to have these internal turning points, that major
729
00:49:23,940 --> 00:49:28,080
intermediate term highs and lows. There should be some kind
730
00:49:28,080 --> 00:49:31,080
of signature there some kind of fingerprint, some kind of
731
00:49:31,080 --> 00:49:34,890
reoccurring phenomenon that I need to decipher what that is.
732
00:49:35,670 --> 00:49:40,260
And this is what I found. It's always there in a range bound
733
00:49:40,260 --> 00:49:44,370
market. It's in specific places in trending environments,
734
00:49:44,370 --> 00:49:47,520
but I'm not teaching that here. And it's something that
735
00:49:47,520 --> 00:49:52,560
relies on multiple supportive theories and concepts to make
736
00:49:52,560 --> 00:49:57,630
it usable, okay? It's not like this where it's pretty cut
737
00:49:57,630 --> 00:50:02,430
and dry. But I want you to understand That there's a way for
738
00:50:02,430 --> 00:50:06,750
you to see real accumulation and real distribution. And you
739
00:50:06,750 --> 00:50:11,190
can see it by looking at just the price. No indicators, none
740
00:50:11,190 --> 00:50:18,000
whatsoever. Now, if I put that chart back up over top of the
741
00:50:18,000 --> 00:50:28,860
New Zealand dollar, and I change it to the histogram if I
742
00:50:28,860 --> 00:50:33,180
was on Instagram, okay, and I did something like this, and I
743
00:50:33,180 --> 00:50:35,970
masked this over here, so you couldn't see that that was the
744
00:50:35,970 --> 00:50:39,960
overlay. People would flip out, oh, he's using an indicator.
745
00:50:42,090 --> 00:50:47,730
It's not, I'm using price, price will tell you everything.
746
00:50:48,180 --> 00:50:50,910
And the relationships between the two, here's Australian
747
00:50:50,910 --> 00:50:56,610
dollar, and I'm going to close this video. Here's that lower
748
00:50:56,610 --> 00:51:00,090
high, while the New Zealand dollar
749
00:51:06,060 --> 00:51:09,420
makes the higher high. So that's the cracking correlation,
750
00:51:09,420 --> 00:51:14,190
whenever you see this, that's indicating, on a grand scale,
751
00:51:14,310 --> 00:51:17,520
that heavy distributions coming into the marketplace. So if
752
00:51:17,520 --> 00:51:20,730
heavy distribution is coming in, how do we know that because
753
00:51:20,730 --> 00:51:23,520
the Australian dollar is unable to make that higher high,
754
00:51:23,730 --> 00:51:26,340
like the New Zealand is, so they're selling heavily?
755
00:51:26,640 --> 00:51:29,610
Australian dollar. So why are they selling Australian dollar
756
00:51:29,610 --> 00:51:34,320
heavy? Because they believe it's going to go lower? Why is
757
00:51:34,320 --> 00:51:36,900
it going to go lower? Because they're pricing it lower?
758
00:51:37,260 --> 00:51:42,810
Okay. It's controlled, 100% controlled. So if you reverse
759
00:51:42,810 --> 00:51:46,530
that theory, why is New Zealand dollar going up, it's to
760
00:51:46,530 --> 00:51:49,200
knock out the traders that are using this as resistance,
761
00:51:50,100 --> 00:51:54,660
clearing their stops, and then it drops. Okay, so I gave you
762
00:51:55,320 --> 00:51:58,680
lots of different ways to skin this cat. But I taught you
763
00:51:58,680 --> 00:52:03,180
again how to use the X ray view of using price action alone,
764
00:52:03,210 --> 00:52:07,380
no indicators, none whatsoever. And you can get a better
765
00:52:07,380 --> 00:52:11,010
read on accumulation and distribution. And the manipulation
766
00:52:11,010 --> 00:52:14,250
that takes place at key times one of those key times when
767
00:52:14,250 --> 00:52:16,920
the markets range bound, and it goes above relative equal
768
00:52:16,920 --> 00:52:20,250
highs. Look for the s&p divergence when that happens. You
769
00:52:20,250 --> 00:52:26,130
either are confident to trade the higher high market or wait
770
00:52:26,130 --> 00:52:29,670
for it to break down and get the breaker and then write it
771
00:52:29,670 --> 00:52:33,600
to a level of sells on liquidity. That my friends is a
772
00:52:33,600 --> 00:52:40,380
complete 100% from beginning to end price action model. You
773
00:52:40,380 --> 00:52:43,800
can use this on any timeframe. You can use this in
774
00:52:44,130 --> 00:52:50,940
commodities, you can use it in Well, clearly forex and you
775
00:52:50,940 --> 00:52:55,110
can use it for any type of trading, intraday, day trading,
776
00:52:55,290 --> 00:52:58,320
short term trading, swing trading, long term position
777
00:52:58,320 --> 00:53:03,270
trading, it's 100% scalable, and you can do this multiple
778
00:53:03,270 --> 00:53:08,070
times a week. It's there all the time. Don't believe me. I
779
00:53:08,070 --> 00:53:10,890
want you to go on your charts and look for it. So until I
780
00:53:10,890 --> 00:53:13,230
talk to you next time, I wish you good luck and good trading