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ICT YT - 2022-06-24 - ICT Mentorship 2022 Episode 41 and Final

Last modified by Drunk Monkey on 2022-07-09 07:14
1 00:00:07,529 --> 00:00:23,399 ICT: Alright folks, welcome back. This is our review and final discussion in the free 2020 ICT mentorship for YouTube. So this is June 23 2022. And we're looking
2 00:00:23,399 --> 00:00:34,709 at the E Mini s&p September contract for 2022. And this is an hourly chart. So I'm cutting right to the chase here. And this morning on Twitter, I was looking
3 00:00:34,709 --> 00:00:45,419 at while I was expecting actually a little bit more volatility around the Fed Chair Powell speaking at 10 o'clock in the morning, and we didn't get a whole
4 00:00:45,419 --> 00:01:01,079 lot of excitement. But what do you get to see ICTs expectation fall short. So that's one of the benefits of seeing it, live with me an expectation an analysis
5 00:01:01,079 --> 00:01:19,799 a call a viewpoint, that perspective, opinion. Not coming to pass, okay. And time of day, how I use it, and how you should use it going forward, and also how
6 00:01:19,829 --> 00:01:33,899 it kept me from looking at an incorrect set up that would otherwise maybe a catalyst for you having had a incorrect set up this morning, and I'll talk about
7 00:01:33,899 --> 00:01:46,589 that in a moment. But for now, this is the framework for today. It sells out according to here, the market drop down. So if that sell side out, rallied up by
8 00:01:46,589 --> 00:01:57,149 side here, I was looking for 38 05. Level today. And this is the reason why. And I was looking at it early on in the morning, I wanted to see it run up here and
9 00:01:57,149 --> 00:02:10,199 hit that if it was gonna hit, I would have been watching for a potential short deform. But it didn't do it. So that was my expectation based on this high back
10 00:02:10,199 --> 00:02:20,459 here we are in took sell side. So I was looking for a little bit deeper run into this high here. When we just went just above that short term high there gave up
11 00:02:20,459 --> 00:02:31,709 the ghost and went lower. And I had a trade got stopped up, plus two points. And I'll talk about that when we get into the lower timeframe. Alright, so here is
12 00:02:31,709 --> 00:02:41,339 the 15 minute time frame. And usually I have the charts blank, and I'll ask you to take a look at it. I don't want to do it tonight, because I want to get to
13 00:02:41,579 --> 00:02:53,459 the teachings at the end to kind of like bring this entire mentorship to a close the teachings itself will end for this model in this lesson. Okay, so
14 00:02:53,459 --> 00:03:03,839 technically, there's 41 videos that make up this mentorship. So if you take away the introductory video, it's basically what 40 Even. So that's not bad.
15 00:03:04,079 --> 00:03:16,679 Hopefully you found it insightful and helpful. But looking at this morning, we had the 10 o'clock Powell event here. And the market started to run up. And we
16 00:03:16,679 --> 00:03:23,189 took out the buy side here. But again, I was aiming for this, this is what I wanted to see I want to see it run up here, and actually took a long in here on
17 00:03:23,189 --> 00:03:34,889 wanting to see it run up into that level. And I was gonna do a reversal. And it didn't obviously give it to him. So notice the time of day here. This is New
18 00:03:34,889 --> 00:03:48,389 York index am session operating hours or Kildonan, if you want to call it that. And it's 830 in the morning to 11. Now, I can take trades after 11 o'clock, but
19 00:03:48,389 --> 00:03:59,459 I want to kind of like stick to the rules and present you opportunities to see were following the rules, you're gonna miss certain opportunities. It's okay,
20 00:03:59,489 --> 00:04:11,699 it's fine. You're gonna get it wrong, sometimes you watched me get something wrong today was no skin off my back. Nothing bad happened is I didn't get what I
21 00:04:11,699 --> 00:04:22,709 was looking for. And because it was late in the day, as we'll look at the lower timeframe in a moment, but it ran about the short term bias of liquidity here. I
22 00:04:22,709 --> 00:04:33,719 wanted the run up to here. But it broke down. And I was telling myself and also a US public on Twitter that I wasn't interested and I wasn't quite sure what it
23 00:04:33,719 --> 00:04:45,479 wanted to do, because it was approaching that noon hour. And I took a trade and I'll out plus two. So in other words, I was just covering expenses basically.
24 00:04:47,639 --> 00:04:58,199 And I was wrong on the initial run. So when I have that scenario and it's off of a Fed chair, or a high impact news event, and it didn't pan out like I was
25 00:04:58,199 --> 00:05:06,629 expecting it to In my experience, it's been better for me to just move away and say, Okay, I'm going to close the computer. And I'll come back later on and see
26 00:05:06,629 --> 00:05:17,699 what's going on. And I didn't want to trade any more of the morning session, leading into noon. So I had waited. And I'm just going to take a look at what it
27 00:05:17,699 --> 00:05:29,399 did in lunch hour and post lunch hour around 130. And see what there was opportunity to do anything then. But we have a fair a gap on the 15 minute
28 00:05:29,399 --> 00:05:40,949 timeframe here. See that. So the market eventually, after running the boss, I hear drew all way down, took out sellside, here, overrun this fair pay gap here.
29 00:05:41,399 --> 00:05:49,259 Why did it do that, because this is a larger one. So if we're going to go over top of this one, in trade to the top of this candle, which is the low end of
30 00:05:49,259 --> 00:06:00,569 that fair value gap, that's here, that's not noted on showing you by the respective candles, it was going to go here, that's also the high end of the
31 00:06:00,569 --> 00:06:09,959 Faraday gap here. So it's likely to go over top of this one and run into this one. Okay. And it does that as we're going into the noon lunch hour in New York,
32 00:06:10,499 --> 00:06:24,929 until one o'clock, where it makes the lows of the session after closing in the fair value gap. And then the 132 for New York local time. That's the pm session,
33 00:06:24,959 --> 00:06:35,579 New York index pm session, or afternoon session for index trading. In the market started to create a willingness to want to go higher, we'll look at a short term
34 00:06:35,579 --> 00:06:47,129 shift in market structure when we get into lower timeframe. But it draws all we back up to the target I was looking for in the morning. So the expectation of
35 00:06:47,129 --> 00:06:56,759 going to that specific level, let me explain to you what I was looking for. I wanted to go above, hit that and then sell off and go down to this area here for
36 00:06:56,759 --> 00:07:06,689 a discount and then create the run and then go beyond 3805. That's what I was really looking for today. That's what I wanted to do. But it failed to get to
37 00:07:06,689 --> 00:07:16,229 3205 It fell down into this area here. And I knew once it broke here, I don't want to go short, because I'm going into lunch hour, and I was concerned it was
38 00:07:16,229 --> 00:07:28,019 gonna consolidate a lot and then take forever to get down into and I don't want to hold anything new into lunch. So I'd prefer to see some kind of a stock run
39 00:07:28,349 --> 00:07:39,059 in the lunch hour, which is what we're seeing here. It runs down below that and then to fair value gap deep discount between low high trades down into it and
40 00:07:39,059 --> 00:07:58,259 then rallies up. This session here, we'll look at on the five minute chart. So we can see, obviously the initial poke above here. Inside this area. I was
41 00:07:58,259 --> 00:08:10,139 looking at a two minute fair value gap. I mentioned that on Twitter as it was forming. It rallied up and then once it took the short term high out when this
42 00:08:10,139 --> 00:08:20,579 was a boldface, bullish candle, I was thinking to myself, Okay, could expand up in here and I'm watching that. And I had a tweet ready to go I'm gonna sell
43 00:08:20,579 --> 00:08:28,439 short here and look for a run down into this level here never got okay. And I saw you probably going to hear this and say, Oh, yes, sure. Are you sure you
44 00:08:28,439 --> 00:08:35,939 did. I mean, it is what it is, folks. I mean, I was out there without a safety net. And I told everyone what I was expecting what I was looking for, it simply
45 00:08:35,939 --> 00:08:45,899 didn't pan out. And that's okay. But the market eventually breaks lower than after we get in to the lunch hour closing at one o'clock. And then I personally
46 00:08:45,899 --> 00:08:55,259 like to wait till 130 Because it's a little bit more cleaner price action, the market starts to rally away, just back down into an order block fair value got
47 00:08:55,349 --> 00:09:05,189 on a five minute chart that we have a shift in market structure here on the five minute chart creates a small little return to a fair pay gap there rallies and
48 00:09:05,189 --> 00:09:13,379 other fair Vega runs into it here. Rallies events, he takes up the short term high of the day and then runs to the levels drawing your attention to on
49 00:09:13,379 --> 00:09:27,509 Twitter. Alright, so here's the five minute chart zoomed in with the morning session. You see that run here on the buy side more and more here and eventually
50 00:09:27,509 --> 00:09:41,309 breaking down displacement, small little fairway you got here rolls down into the very gap here and then once again, you turn it back up into an imbalance and
51 00:09:41,309 --> 00:09:47,639 runs down to the low ones a fair value got turning basically at the low of the session at
52 00:09:48,960 --> 00:09:56,520 the low end of the fair pay gap at one o'clock. So closure of lunch time hour. It creates that low
53 00:10:00,000 --> 00:10:15,390 See this right here is the two minute chart. And this is the fair value gap I drew your attention to live. And it came down into it here. And inside the
54 00:10:15,390 --> 00:10:24,990 sphere of a gap as basically drawing attention to that as a potential wall, I did, and I was looking for a run into 3805. And it started the run took out the
55 00:10:24,990 --> 00:10:34,560 buy side here, I mentioned by said would likely be a drop in liquidity. It was, but I wanted to see a drop here. That's the specific level I was looking for.
56 00:10:35,070 --> 00:10:42,870 And the market comes back down into the Faraday gap again, once more, then rallies above the short term high here, this right here would have been a nice
57 00:10:42,870 --> 00:10:55,800 opportunity for me to basically say, pay the trader and me take something after I tweeted that off, but I didn't because I wanted this level here. Okay. Now
58 00:10:55,800 --> 00:11:01,680 what could argue and say, Oh, you're being greedy, or you didn't follow rules, or you didn't do this, and you didn't do that, and it's easy to armchair
59 00:11:01,680 --> 00:11:11,310 quarterback someone. And that's okay. If you want to do that in the comment section. That's fine. But just know that I'm doing this real time. And I'm okay
60 00:11:11,310 --> 00:11:24,420 with being wrong. Wrong isn't going to ruin me. I'm not 100%. But I'm generally on par better than the average bear. Okay. We'll just say it that way without
61 00:11:24,420 --> 00:11:33,810 sounding like I'm bragging. But once it came back down in it stopped me out because I rolled my stop up to a level that I wasn't willing to. Whether a
62 00:11:33,810 --> 00:11:43,830 deeper retracement because this is the takeaway, fair value got. We trade down into it, we get movement that's good. comes back down again, complete closure,
63 00:11:43,830 --> 00:11:52,380 the fair value get. Okay, that's acceptable. Does it start to rally way? Yes, that's why I felt confident that it was going to go up to here. Because if it is
64 00:11:52,380 --> 00:12:00,570 going to go above here, then it should just spread its wings and run that 30 to five level with no problem. It wasn't having it, the market dropped back down
65 00:12:01,350 --> 00:12:10,080 and didn't quite take out the short term low with any displacement. So while this fear may get exists, it's not one that I would have taken. Because we
66 00:12:10,080 --> 00:12:20,490 didn't see a displacement with meaningful movement below that low. So this is not a fair value gap that I would have been a participant in. So looking at
67 00:12:20,490 --> 00:12:30,600 that, I'm thinking I'm not interested, I'm going to close up shop in there it is because I didn't get this run below here. Now, had I seen that I may have, I'm
68 00:12:30,600 --> 00:12:38,310 not gonna go out on a limb and say, Absolutely, but I may have if it would have shown like this type of movement on this candle below that low. And then we
69 00:12:38,310 --> 00:12:46,860 moved back up into this here, then I probably would have said, well, I'm gonna go short. And aim for this low here. And then at noon, if I didn't get here, I
70 00:12:46,860 --> 00:12:56,100 would just close it off, and then ride out the lunch hour. So that was kind of like what was going on in my head. Because it was an event around power, I
71 00:12:56,100 --> 00:13:03,900 didn't want to give you guys a lot of things to be concerned about or getting lost in the commentary. And plus, I didn't want to be worrying about someone
72 00:13:03,900 --> 00:13:10,590 doing something hurting themselves. I knew invariably, some of you are waiting there with a live account ready to click a button because I've said something.
73 00:13:10,770 --> 00:13:25,410 Okay, so that weighs heavily on me when I comment on Twitter, so I just want you to be careful, okay, doing a demo, don't do it a Live account. But we had
74 00:13:25,410 --> 00:13:32,520 another fair value gap in here, trades up into that nice closure perfectly, and runs down to the top of the fair value gap on that 15 minute timeframe. One more
75 00:13:32,520 --> 00:13:46,920 little bounce in and rolls over and goes deeper into the vacant. Alright, here is the afternoon session. And this is where we're gonna be doing the bulk of the
76 00:13:46,920 --> 00:13:56,790 discussion on the remaining portion of this video. And I'll frame the logic around risk management and stop loss management. And that will complete the
77 00:13:56,790 --> 00:14:04,710 model the the roles I'm going to give you are static, they they're always the same. So that way, you know, once you put a position on your demo account,
78 00:14:04,920 --> 00:14:16,110 where's your stop? How much are you risking? When do you move your stop? Okay, and this is the role that I use. And sometimes
79 00:14:17,370 --> 00:14:27,060 you've seen me show trades where I get in and I'm not really trying to move my stop loss. I'm taking partials along the way, but I'm not really trying to rush
80 00:14:27,060 --> 00:14:37,320 my stop loss up. I'm going to show you the rules I follow. So that way it makes sense to you. And it'll help you also trust taking partials like that become a
81 00:14:37,320 --> 00:14:46,320 better way of managing position and trade and not be fearful about being stopped out because the stop loss is there to do its job. You pay it well to do that.
82 00:14:46,590 --> 00:14:55,470 But if you're worrying about that stoploss being tripped versus following along in price action and continuously measuring whether or not price is giving you
83 00:14:55,470 --> 00:15:01,710 what you're expecting in terms of bullishness or bearishness is the institutional order flow still bullish If you're long, or is it still bearish,
84 00:15:01,710 --> 00:15:10,020 when you're short, those types of things are more important than worrying about whether you're gonna get stopped out or not. That's not to minimize, obviously,
85 00:15:10,020 --> 00:15:18,840 the, the risk that's respected. Obviously, you should be respecting the risk by actually putting a hard stop in. But if you don't put a hard stop in, you're not
86 00:15:18,840 --> 00:15:28,110 really respecting the risk, what you're saying is, I'm risking this trade, because I believe I'm right. But if I'm wrong, I'll figure out where I'm wrong
87 00:15:28,110 --> 00:15:37,890 when it gets there. You don't want to do that. Okay, so anyway, we'll close that portion of the discussion at the end of the video. But here, it's a two minute
88 00:15:37,890 --> 00:15:50,310 chart showing the afternoon or pm session for index futures. And you see we trade down into this is showing a weird time because it's two minutes, but this
89 00:15:50,310 --> 00:16:02,520 is one o'clock hour, it hits the low, and then starts to rally up, short term shift in market structure here, key time of day 130, it trades back down into an
90 00:16:02,520 --> 00:16:12,690 order block last enclosed candle, there is a fair value gap right here, and it knows it because it's going to be too cluttered up. And I'm going to be
91 00:16:12,720 --> 00:16:23,580 basically doing a lot of discussion in this area. And I don't want it to be over left with too many things to be navigating. So this is the 50 minute survey got.
92 00:16:24,000 --> 00:16:33,060 And it's trading down to an order block after a shift in market structure After trading down and closing in a 15 minute timeframe for a gap, and then it trades
93 00:16:33,060 --> 00:16:43,530 into an optimal trade entry, which is the flagship pattern on this YouTube channel. Fairbury get with an order block and optimal trade entry is the gold
94 00:16:43,530 --> 00:16:59,310 standard of the ICT pattern that's taught on this YouTube channel. This is where you can be long and expect price to reach for here. And here. Okay, so we have
95 00:17:00,060 --> 00:17:09,660 objectives in here where we can look for this imbalance here, buy sell liquidity here, buy sell liquidity here. And we'll watch and see does it continuously
96 00:17:09,660 --> 00:17:24,150 March higher. So we have a run from here to the short term high, then we have this fair value gap here that runs here up into the 35 level. So this Pm session
97 00:17:24,180 --> 00:17:36,360 I was long in. And I'm not going to try to build the case to outline everything because I want to give you what's salient, to close this mentorship and show you
98 00:17:36,360 --> 00:17:46,860 how to use the stock placement risk management and give you a working example. And as some of you like to see, did I really take a trade? Yeah, I was trading
99 00:17:46,860 --> 00:18:00,750 today. So you can see here, a live account. And on $1,975, okay. Back to the lesson. And you'll see what it means to go through the process of determining
100 00:18:01,530 --> 00:18:16,920 risk management and stop loss placement and when you move your stop. Alright, so we're zoomed in here. And looking at the five minute chart. And again, that's
101 00:18:16,920 --> 00:18:28,980 the fair value gap. We're gonna be using here the frame it. So if you're looking at the idea, have you traded down into that fair value gap? Does it show
102 00:18:28,980 --> 00:18:38,580 willingness to go higher? Yes. Is there a short term shift in market structure? Yes. Is there a gap? Yes, down closed candle to the left of it Yes. Drops down
103 00:18:38,580 --> 00:18:48,120 in bullish order block optimal trade entry. In other words, that would be a 62 to 70 retracement level, less than equilibrium relative to the high and the low,
104 00:18:48,330 --> 00:19:03,660 respectively. So we would be looking for a limit order to be at 3754 75 We'll use that. Okay, so one quarter point less than this candles low. So that would
105 00:19:03,660 --> 00:19:14,760 be our hypothetical limit order to buy going long. And we use the low here for our stop loss. So 37 45.7 by
106 00:19:16,380 --> 00:19:26,040 essentially, nine points of risk. Okay, so we'll come back that in a couple minutes. But for now, what we'll be reaching for what will be the drop in
107 00:19:26,040 --> 00:19:35,340 liquidity from this high, down to that low, we want to get to a premium level. Get the percents about right in here, eyeballing it, we don't need to have a fib
108 00:19:35,340 --> 00:19:44,430 on that. You should do it for yourself. But then we have this imbalance here. So the first low hanging fruit objective would be this candles high. That's 3780
109 00:19:44,430 --> 00:19:57,840 and a quarter. So we're looking at about 25 and a half handles of potential points profit per contract. So we're risking nine points to make 25 and a half.
110 00:19:58,380 --> 00:20:10,830 Not bad. It's better than Two and a half r. So you're going to risk $1 To make $2.50, basically. And that's on a run from here to here. We don't need to know
111 00:20:10,830 --> 00:20:21,270 if it's gonna go up to here yet. Okay? This right here is one trade from here to here, then it creates another opportunity in here, where it can run from here to
112 00:20:21,270 --> 00:20:25,950 here. And we'll talk about that when it gets into the discussion on risk management, trade management.
113 00:20:32,820 --> 00:20:45,090 Alright, so risk management. Anytime you're trying to consider what lot size or how much you're supposed to be trading or whatever. There are free tools if you
114 00:20:45,090 --> 00:20:54,870 google them. Okay. It's amazing how many folks ask me and other educators out there the most simplest questions that are answered just by a Google search.
115 00:20:55,020 --> 00:21:06,810 Okay, I know, it feels easier, I think it's a matter of getting a personal response from the educator, or whoever it is you're asking. And it's not
116 00:21:07,110 --> 00:21:14,850 possible for me to go through every single person's question and reply to them. So hopefully, you understand that there's simply no way for me to do that. I
117 00:21:14,850 --> 00:21:25,380 don't have enough time in the day to do that. Nobody really does. But simple things like lot size calculators, okay, you can do a Google search on that. And
118 00:21:25,380 --> 00:21:34,440 there are some wonderful free applications and tools that will make that known to you, by you, just plugging in how much money you have in your account, what
119 00:21:34,620 --> 00:21:45,000 risk percentage are you trying to use? What size stoploss you're going to use, and it'll tell you how much leverage if you're trading Forex, or you know what
120 00:21:45,000 --> 00:21:55,470 your lot size should be for futures. Now, I understand that's probably not the response that you're wanting, because you want to have a interactive experience
121 00:21:55,470 --> 00:22:05,250 with your educator, or mentor. But these are really basic types of things that can be learned and understood and found the solution to by simply doing a little
122 00:22:05,250 --> 00:22:14,430 bit of the legwork yourself. With that said, I'm gonna give you one example here, and kind of like walk it out for you, assuming you had $10,000, and you're
123 00:22:14,430 --> 00:22:25,860 trading index futures. And you were using this trade idea that I'm outlining here, that I was monitoring in the afternoon session 10,000 equity, you want to
124 00:22:25,860 --> 00:22:40,470 take 1% risk per trade. So you're gonna take that $10,000 times it by point 01, that's going to give you a figure of 100, that's $100. That's what 1% of $10,000
125 00:22:40,470 --> 00:22:51,150 is, that means that's the total amount of risk that you're willing to assume. We determined from the hypothetical entries of your demo account, 3754, and three
126 00:22:51,150 --> 00:23:02,490 quarters, and a stop at 3745 and three quarters, that's nine points, or nine handles, okay. That's what that nine is. So we're taking the dollar amount,
127 00:23:02,970 --> 00:23:17,280 which is the 1% of our equity, giving us $100, or 1% of $10,000. Total movement that we're willing to absorb as a risk, or our stop loss is nine points. So we
128 00:23:17,280 --> 00:23:35,160 take nine divided into 100. That gives us 11. Okay, 11. times, we can get the figure nine, that 11. If we're going to trade a mini, for E Mini futures
129 00:23:35,160 --> 00:23:46,170 contract on the s&p, the multiplier per contract is 50 bucks. So divide 50 into 11. You can't so you right away, you know you can't trade a mini if you're going
130 00:23:46,170 --> 00:23:58,260 to be risking 1%. So you had dropped down into the micros. So now we have 11 with the multiple of five, so micro lot on E Mini micro, instead of 50 hours per
131 00:23:58,260 --> 00:24:12,660 point. It's $5 per point. So how many fives can you go into 11 with it, too, so you can do two micro lots. Now, this might not be for you. Because when I do
132 00:24:12,660 --> 00:24:21,150 risk management, I don't really factor in commissions. I'll just do the math like this. So you might look at that and say, Well, what about commissions that
133 00:24:21,150 --> 00:24:29,190 might not allow me to do 1% If you're gonna be very hardline about the risk management and I get some of you should be like that in the beginning. But as
134 00:24:29,190 --> 00:24:39,270 you get more experience, you'll start thinking on you know, the covered costs of commissions and such. Over time, it's fine. I'll work that out. But for risk
135 00:24:39,270 --> 00:24:52,440 management, just for the entry to stop loss, not factoring commission costs and fees with your broker or spread, okay? All those ideas need to be considered,
136 00:24:52,920 --> 00:24:58,740 but we're going to assume that they're not going to be considered for this example. You have to figure that out on your own if that's how you want to do
137 00:24:58,740 --> 00:25:07,590 your risk management but for me Don't ever factor in the cost, because costs are always going to be there like taxes, you can't avoid them. So just eat it. Okay.
138 00:25:08,130 --> 00:25:25,620 So you can do two micro lots at $5 per point, making profit or taking in drawdown or loss per point, fluctuation. So if we're buying it 3754 In three
139 00:25:25,620 --> 00:25:33,570 quarters, and we're risking nine points. How much money is that
140 00:25:35,190 --> 00:25:51,150 $90 risk. So we're under 1%. So we're not even risking a full 1%. Our target is 25 and a half points, or $255. Because two micro at five hours at the multiplier
141 00:25:51,150 --> 00:26:04,800 of each point, two times five is 10. So you're making $10 per point, because you're holding two micros so 25 and a half points here, at $10 Total multiplier,
142 00:26:05,340 --> 00:26:14,730 based on the two micro lots, which would be basically two and a quarter percent return. So you're going to risk 1%, they make two and a quarter percent. One One
143 00:26:14,730 --> 00:26:23,670 intraday scalp here. And then you have another one here. And if you were trying to do shorter here, you could have done something equivalent to that as well. So
144 00:26:23,670 --> 00:26:37,680 it's not hard to make one to three to 5%. In one day, with intraday price swings. The problem is, you're gonna get over excited and think that you can do
145 00:26:37,680 --> 00:26:46,890 every single fluctuation and price action. And these types of movements. While they're exciting when you do the math on them. And you see the potential. A lot
146 00:26:46,890 --> 00:26:58,440 of times people will say, Well, 1%, I can't make money with 1%. Man, you can make a lot of money with 1%. Okay, if you can make 1% a day. That's enormous,
147 00:26:58,440 --> 00:27:09,240 because that compounds over time. And it's not a matter of saying, Well, if I make 1% a day, and I do that Monday through Friday, that means I made 5% in the
148 00:27:09,240 --> 00:27:19,710 week, or 20% for the month. Correct. That's what most of you are probably thinking right now, when in fact, you're actually able to get 22% a month,
149 00:27:20,460 --> 00:27:33,120 because of the effects of compounding to do 1% per day. You chatting Monday through Friday, for weeks average per month, one could make 22% a month now 22%
150 00:27:33,150 --> 00:27:44,370 A month is phenomenal. Like that's ridiculous rates of return. professional money managers and fund managers don't try to do that for a whole year. Some of
151 00:27:44,370 --> 00:27:55,230 them do anywhere between 12 to 15% a year and they call that an stellar year. And they make 20% or more. And that's a blockbuster year, and their parade
152 00:27:55,230 --> 00:28:03,570 around in front of their clients, they see that type of return and bolster their confidence to put more money in, that's usually when they'll say hey, you want
153 00:28:03,570 --> 00:28:14,520 to allocate more money, because they get paid to do that? Well, 1% is, in my opinion, obviously, it's not going to be the case for a new student or new
154 00:28:14,520 --> 00:28:31,050 trader, but my opinion 1% Every single day is unrealistic. But for a seasoned trader 1% average per day is really easy. But you're gonna have to get the
155 00:28:31,050 --> 00:28:41,340 experience to do that. And again, that also equates to the average of 1%. So in other words, if I had one trade a week, and I make 5%, that's equivalent to 1% a
156 00:28:41,340 --> 00:28:52,500 day. For the week, I'm not going to sit around the charts to try to make 1% Each day, it's not reasonable for me, I have things take care of businesses around
157 00:28:52,500 --> 00:29:06,060 and family tend to. And I can find setups that I can frame and make, you know 5% on one setup, or first partial of a trade. So it's a matter of how you're going
158 00:29:06,060 --> 00:29:14,550 to form fit this for yourself. Okay. And obviously, the best scenario would be if you're going to be eventually getting some point we can risk 2% You can do
159 00:29:14,550 --> 00:29:26,130 this framework for one limit order to be buying it 3754 and three quarters, use the stop as explained here and do a second order the same way but don't use this
160 00:29:26,130 --> 00:29:38,190 as your profit objective. Use this short term high here or the target on that line 30 to five and a half. And then you would be able to get a run from here to
161 00:29:38,190 --> 00:29:48,390 here on one that would close out. And then the second one would hopefully run up in here and get the daily range. And you can do obviously better than two and a
162 00:29:48,690 --> 00:29:59,940 quarter percent. Just on this one. You'd have two and a quarter. twice because the one that you bought, I'm sorry, the one you bought here that got out here.
163 00:30:00,000 --> 00:30:08,400 If that's your bank, two and a quarter percent hypothetically, then the second one would be running here and rolling through that level up to here. So you
164 00:30:08,400 --> 00:30:21,960 could be making as much as four and a half percent more on the second position. So what are you really making six and three quarter percent one day to orders
165 00:30:22,050 --> 00:30:32,670 one trade. And a lot of you guys are trying to do those funded account challenges. And they give you like, you got to make 10%. To do this. If you
166 00:30:32,670 --> 00:30:35,970 learn how to trade, and you learn what I'm teaching you, folks, listen,
167 00:30:37,320 --> 00:30:51,180 those numbers are achievable. But you have to know what you're doing. And also, how to weather drawdown, drawdown would be having your account reduced from
168 00:30:51,210 --> 00:31:00,960 either its starting balance or after you've made equity increases, you start taking losses, that's drawdown, well, that drawdown has to be managed. So if you
169 00:31:00,960 --> 00:31:09,750 have a trade, and for instance, say you took this hypothetical trade here with one order, and you got in at that 3074 and three quarters, and you got stopped
170 00:31:09,750 --> 00:31:22,470 out down here, okay, you would have taken less than 1% loss. So your next trade, you should do half a 1%. Why? Because number one, you have emotions,
171 00:31:22,500 --> 00:31:29,580 psychological impact of taking a loss, you're going to be most likely wanting to have revenge, and you're probably going to want to do more leverage than you
172 00:31:29,580 --> 00:31:35,970 should. And you're probably gonna want to get it faster than you should. And other words, being patient is not going to be the right thing for you. And
173 00:31:35,970 --> 00:31:43,230 you're going to feel like impatience is eating at you. So therefore, you have to hurry up, get right back in there and try to get your money back. And that is a
174 00:31:43,230 --> 00:31:58,140 loser's cycle, gamblers mentality. So by reducing the risk on your next trade, once you take a loss, then you have to make back 50%, of what you lost. So in
175 00:31:58,140 --> 00:32:06,810 this case, if you would have got stopped down here, we'll just round it to 100 out of commission, you have to make $50. Back before you can go back to your for
176 00:32:06,810 --> 00:32:16,890 1% risk. And that's it's easy, that's easy to do. It's not easy to follow this logic. So what happens if you take that second trade and risking a half of 1%.
177 00:32:17,250 --> 00:32:27,960 And that trade gets knocked out to a loss, what size you use on your next trade one quarter of 1%. And that's obviously the lowest you can go with. So you have
178 00:32:27,960 --> 00:32:38,220 to determine what your risk is. And it's going to obviously reduce the number of trades you can take. That's why I tell everyone, you know, there's a lot of you
179 00:32:38,220 --> 00:32:47,760 out here that are starting on a shoestring meaning you don't have a lot of money. And you're trying to speculate with live funds with a $50 account, or
180 00:32:47,760 --> 00:32:59,100 $100 account. And I get it I understand it's hard. If you don't come from money, if you don't have the resources where you are new globally, it feels like you're
181 00:32:59,400 --> 00:33:09,660 out of reach. Learning the skill set. Okay, I promise you, if you learn the skill set, you can do fund that account type things as a venture or find
182 00:33:09,660 --> 00:33:17,700 partners that will come in with you. You don't need the money, it doesn't have to be your money, you can make a lot of money with other people's money. But
183 00:33:17,700 --> 00:33:26,520 funded accounts provide a way for you to go in with a very small amount of money. And you learn the skill set I'm laying down here in public. You can walk
184 00:33:26,520 --> 00:33:34,320 right in any monies funded account challenges, if you want to call it a challenge, and just walk right through it and take it over an insecure whatever
185 00:33:34,350 --> 00:33:50,160 size account you're trying to go for. And then trade it soberly. You aim for 10% a month, 15% a month. And just make that in Stop. Don't try to push it. Don't
186 00:33:50,160 --> 00:33:59,910 try to get rich real quick. You want that 10 to 15% a month, coming into your hands after the split that you do with whoever that count is registered with
187 00:33:59,910 --> 00:34:13,350 whatever fund that account company that's helping you find the scratch to get started. But knowing how to manage that drawdown will keep you from going into
188 00:34:13,380 --> 00:34:22,620 obviously blowing your account. It'll control the equity drawdown it won't be a sharp, jagged, falling off a cliff. It'll be you run up to new equity highs and
189 00:34:22,620 --> 00:34:28,530 you have a losing trade which is reasonable. Everyone has a losing trade and you might have a series of losing trades. But you take a 1% loss and then you take
190 00:34:28,530 --> 00:34:41,100 another loss at half 1% And you take another loss at a quarter of 1% You're only down one and three quarters percent. That's not a lot of drawdown. But you've
191 00:34:41,100 --> 00:34:51,990 now taken three losing consecutive trades. That's easy to come back from versus taking 1% loss. Then saying okay, I'm going to double up and try to make it back
192 00:34:51,990 --> 00:35:01,920 with 2% risk because I don't have to just get here for the position movement I took as a loss and then you take a full 2% loss One, negative 3% on two trades,
193 00:35:02,220 --> 00:35:11,610 then you go in again thinking, Well, I'm going to do it again with 2%. Or worse, you go higher, risking 3% or 4%. And then you just stop or you move your stop
194 00:35:11,640 --> 00:35:20,760 opening it up with more risk. And then suddenly, it's very easy to fall into 10% drawdown. And then it becomes a psychological wrestling match, where now you
195 00:35:20,760 --> 00:35:29,220 feel embarrassed or ashamed. You feel like you have to have it back. Otherwise, you're a failure.
196 00:35:30,780 --> 00:35:40,380 When professional money managers, they don't care about being in drawdown. They care about managing their expectations, and the discipline that's required to
197 00:35:40,380 --> 00:35:49,890 operate and engage, they are not allowed to touch their account when they're highly charged or emotional. So that's all part of risk management. It's not
198 00:35:49,890 --> 00:35:59,130 just the numbers game, it's a psychological game to it, you have to manage that and quell that whole desire to get right back to where you were before you took
199 00:35:59,130 --> 00:36:13,020 that loss. That feeling comes because you are an infant in this industry. And that's not a knock against you. Okay, it's the truth. If you were working with
200 00:36:13,020 --> 00:36:21,360 me one on one, and I was standing in the same room with you, I would say to your face, you're an infant, if you think like that, it's infantile to think that
201 00:36:21,360 --> 00:36:32,670 way. It's not a rude comment, it's the facts. Because you want to get your toy that was taken from you back right away. And you don't need it back right away.
202 00:36:33,660 --> 00:36:42,120 When you have a loss, or if you go through drawdown, the professional money manager views it as it's a loan that you're gonna collect interest on. When a
203 00:36:42,120 --> 00:36:56,850 bank lends out money is crying about how to get out your down payment for a home, or your boat loan. Or some other purchase that you made a loan with them
204 00:36:56,850 --> 00:37:07,980 with Buddy, Buddy upset about giving you that big lump of money? No. Are they expecting to get it back right away? No, no, in fact, they don't want you to
205 00:37:07,980 --> 00:37:17,040 take it in pay it off real quick. Because that's their business model, they want to lend out the money and get as much interest as possible. So while we don't
206 00:37:17,040 --> 00:37:27,060 want to leave drawdown in long periods out there, we look at or at least I look at, when I take a loss when I go into drawdown, it's just alone, I know, I know,
207 00:37:27,060 --> 00:37:37,530 I'm gonna get interest on it. Because my career isn't going to be framed by the last five trades, or the last five weeks or the last five months or last five
208 00:37:37,530 --> 00:37:49,080 years, I have a long term view. And that's the problem with being an infant in this industry. It's too easy for you to want to quit because you don't see past
209 00:37:49,470 --> 00:37:59,760 what's happened to you right now. Or what happened to you last week, or the last trade and that last trade that one singular event you've made such a monumental
210 00:37:59,910 --> 00:38:10,110 experience out of and it's make it or break it, every single trade is a make it a break. I've read two people, one on Twitter and one on the comment section of
211 00:38:10,110 --> 00:38:22,050 the videos I have. And they're basically saying you think I'm packing in I can't do this. And that that's true. Congratulations, you found where your breaking
212 00:38:22,050 --> 00:38:35,010 point is. And you're not willing to go any further into that. And if you know yourself, well. Godspeed. But there's a lot of folks that get frustrated. And if
213 00:38:35,010 --> 00:38:44,040 you're going to quit, you're not going to post it on the internet. You're not okay. I believe these individuals that do that they just want to be encouraged.
214 00:38:44,160 --> 00:38:54,180 Like, don't, don't stop me, that's it's a cry for help. Because honestly, if I would have had that, as a medium, when I was coming up, I would have went on the
215 00:38:54,180 --> 00:39:03,150 internet and said, help. I'm gonna quit, somebody stopped me from quitting, I'm gonna walk out the door. It's kind of like a relationship. When your lady wants
216 00:39:03,150 --> 00:39:10,170 to leave, she does that say I'm leaving you. And she really doesn't want to leave. She just wants to see what your reaction is going to be. As you see
217 00:39:10,170 --> 00:39:17,520 you're walking towards the door, or grabbing a couple of things of her clothing. If she's gonna leave, she ain't telling you, you're gonna come home and her
218 00:39:17,520 --> 00:39:24,720 stuff is gone. And if you're going to quit this industry, you're not going to talk about it, you just ain't going to be here anymore. So again, roll your
219 00:39:24,720 --> 00:39:32,790 sleeves up. Just understand this is what it's like to be a trader, you're going to be in periods where it's very difficult. And no matter what you do, what you
220 00:39:32,790 --> 00:39:42,510 follow what I taught you what somebody else taught you, whatever worked in the past, you are going to encounter losing trades, plural. You're going to do it
221 00:39:42,510 --> 00:39:51,570 wrong. You're going to have an expectation in the marketplace that isn't gonna pan out like you thought guess what that means you may take a monetary loss and
222 00:39:51,570 --> 00:40:01,890 that's a tax on success. You have to pay it. Nobody gets around that. Nobody gets around that. And some of you in here For whatever reason, think that you're
223 00:40:01,890 --> 00:40:12,930 going to straw right on in here. Because you're going to be the exception to the rule. And guess what, folks, I'm promising you, you aren't that special. If I
224 00:40:12,930 --> 00:40:25,560 wasn't that special, nobody's exempt from it. You all, we all, every single speculator has to pay their toll. And occasionally, guess what?
225 00:40:27,060 --> 00:40:36,990 The Fairy man's got his bony hand holding out, waiting for you to drop, whatever the next sacrifice of your losing trades is going to be. And you have control of
226 00:40:36,990 --> 00:40:49,050 how bad that's going to be. You limited. But you have to do the math. And stick to it. Otherwise, if you trade willy nilly, whatever happens, I don't really use
227 00:40:49,050 --> 00:40:58,380 a hard stop. But I know when I want to get out. I hate hearing traders say that. That's so disappointing to hear. Because really what that is communicating is
228 00:40:58,410 --> 00:41:10,650 you really don't have it together. If you don't know where to place a stop loss, you really don't know what you're doing. You don't. So with this model, I've
229 00:41:10,650 --> 00:41:26,700 removed that guess that mystery. Your hard stop needs to be placed period. If it gets hit, it's done you a favor, period. But if it does you that favor of
230 00:41:26,700 --> 00:41:36,810 protecting and limiting risk, it's your job as the trader to listen to the analyst next trade it provides, you'll have to manage the trade with less risk.
231 00:41:37,470 --> 00:41:47,400 Because you have a task now you have to come out of drawdown, no matter what the drawdown is, you have to come back incrementally. So let's assume you do a 2%
232 00:41:47,400 --> 00:41:58,320 risk trade and you lose the full 2%. Your next trade, you can only risk 1%. And that would be basically what I'm showing you here with one contract or one limit
233 00:41:58,320 --> 00:42:09,210 order that contract that would be the equivalent of if you're doing 2%, you'd be doing basically four micro lots entering at 3754 and three quarters hypothetical
234 00:42:09,210 --> 00:42:25,590 entry on a demo, and your stop loss at 3745. In three quarters, nine points risk across the four micro lots. 20 hours per point. Okay, so if you take that full
235 00:42:25,590 --> 00:42:39,810 loss at 2%, your next trade, you can only do what's being shown here. 1% risk, and you got to determine where is your trade the find in terms of points, or
236 00:42:39,810 --> 00:42:49,620 pips, if it's Forex? How much of a stoploss do you need? In this case, we're using this factor here, okay, nine, that's the number of points that's required
237 00:42:49,620 --> 00:42:58,620 for the stock for this particular trade. Not every trade is going to require a static nine point stop. Sometimes you can do a stop, you know, with five points.
238 00:42:59,820 --> 00:43:08,430 It's hard, I'm not suggesting that you should be trying to do that. But other trades are gonna require you to do what, more than nine, maybe 10, maybe 12
239 00:43:08,430 --> 00:43:21,960 points. So you have to consider what that's going to do for you in terms of risk management. And eventually, you may get to the point where you lose so much in
240 00:43:21,960 --> 00:43:33,990 drawdown that you really can't technically do one micro, even if you have the margin to cover it. So that's why it's important for you to be very diligent
241 00:43:33,990 --> 00:43:43,110 about managing your risk and controlling drawdown. Don't think oh, well, you know, I'm going to start off with 1%. And then once you make a trade and it's
242 00:43:43,110 --> 00:43:58,530 easy, think Well, I can do 3% Because if I can do 3% risk, and I get a multiple of five are gonna take 15% one trade, and what about do that every day? Even
243 00:43:58,530 --> 00:44:09,630 better? What if I do that in the morning session in the afternoon, and if I can do that, why not lose sleep and trade long into Wow, that's 45% One day Good
244 00:44:09,630 --> 00:44:21,780 grief, I could probably quit my job next Sunday. I did that kind of stuff, folks. It doesn't work like that. Doesn't work like that at all. So you had to
245 00:44:21,810 --> 00:44:37,050 use low threshold objectives and work your way up from that your career is not going to be 10 trades and you made it no longevity, control risk and peccable
246 00:44:37,050 --> 00:44:47,940 risk management. That's how you get here. That's how you arrive at consistently profitable and losing trades. I don't mean anything. This by anybody watching
247 00:44:47,940 --> 00:45:00,900 you if you do it publicly. a losing trade is nothing but a tax on success. That's it. All right, stop management. This is going to close The mentorship
248 00:45:02,190 --> 00:45:12,060 in terms of the teachings and pass this video I'll be doing obviously, reviews and topical studies when I feel led to do so. But as far as the model itself and
249 00:45:12,060 --> 00:45:22,920 the mentorship, okay for you to this free series I did this is done, you'll have everything that you need here. I'm confident in saying that what has been
250 00:45:23,400 --> 00:45:31,290 provided to you after this discussion here, you have enough. And obviously the things I've taught you'll need to channel in other lessons and maybe other
251 00:45:31,290 --> 00:45:41,880 future lessons I might do. They'll just be amplifications and help you refine what this has already given you freely. But stop management. Okay, when you
252 00:45:41,880 --> 00:45:50,910 place your stop loss down here, when can you and when do I move my stop loss? Well, you have to determine what you're getting in it, and what you're trying to
253 00:45:50,910 --> 00:46:05,580 get as a target. So that's your range from 3754 and three quarters to 3780 and a quarter. So technically 25 and a half points. Okay, so what is that 12 and three
254 00:46:05,580 --> 00:46:16,230 quarters points, something like that was rounded to 12 and a half points. If we see price move 12 and a half points above the entry point that you enter that if
255 00:46:16,230 --> 00:46:28,710 it moves 12 and a half points, your stop loss can move 25%. Up from where what's 25% of what range where your stop loss is and your entry. So split that range in
256 00:46:28,710 --> 00:46:43,680 terms of points. If this goes up 12 and a half points, which would be 50% of the expected range, then your stop loss can be reduced or trimmed down to 25%. So
257 00:46:43,680 --> 00:46:51,240 it's going to give you that little bit of a cookie that feel good moment, you trimmed some of the risk, you're not jamming it up up above the breakeven,
258 00:46:51,510 --> 00:47:00,090 because you're going to worry about it, you're just moving a little bit. Now when price moves to 75% of the expected targeted range, and it needs from your
259 00:47:00,090 --> 00:47:13,680 entry to here. If it moves 75% of that, then the stock goes to break even period. There's your systematic movement of your stop loss, you're not jamming
260 00:47:13,680 --> 00:47:21,390 it to breakeven, you're not going to be worried about getting stopped out, you're gonna be more likely to be watching does it still keep reaching for your
261 00:47:21,390 --> 00:47:32,340 objective, down close candles keep supporting price does run below short term loan and run higher with a lot of energy. Because short term sell stops now is
262 00:47:32,340 --> 00:47:40,350 it dropping down to a fair value gap and re accumulating and sending in another higher price leg higher. That's what you're watching. That's the things that
263 00:47:40,350 --> 00:47:48,540 you're looking for. And as long as it's doing those things, collectively or individually, you are one side, that means you're on the right side of the
264 00:47:48,540 --> 00:47:58,860 market and keep holding for your position to hit target. If you're doing multiple positions, say you're doing competition level leverage, and for me
265 00:47:58,890 --> 00:48:10,560 that's anywhere between the range of 3% to four and a half percent, then you are going to be looking to take partials, okay, that partial might be once it goes
266 00:48:10,560 --> 00:48:19,290 20 points in your favor, you have a static number, it always hits 15 or 20. Once it does that you no matter what you're doing, you take something off. Okay,
267 00:48:19,290 --> 00:48:26,010 that's something you might want incorporate in your own trading model as well. But that part is for you to determine don't let me give you static roles that
268 00:48:26,520 --> 00:48:36,510 are considered you cast in stone ironclad can't change it, you know, I hate doing it with my students because it takes away the uniqueness, the
269 00:48:36,510 --> 00:48:48,210 individualism that you're bringing as the traitor to your own model. So these are just basic foundational points that I think will serve you well. But you're
270 00:48:48,210 --> 00:48:58,230 going to obviously evolve and come up with better ways that meet your expectations and also fit your personality. Okay. So I think that's going to be
271 00:48:58,230 --> 00:49:04,920 it. And I absolutely want to congratulate all of you that you've gone through every single one of these videos, if you've done the work and back testing and
272 00:49:04,920 --> 00:49:16,050 looking at things and studying. And you're convinced that the patterns really there. Kudos to you. Okay, for those that have not got it yet. My encouragement
273 00:49:16,050 --> 00:49:26,940 is for you to keep doing it. And I promise it won't take you long. In fact, if you just started and you just found this channel, I promise you, if you give it
274 00:49:26,940 --> 00:49:35,280 six months, you'll see things that you'd never saw before. But at the end of one full year, because it might take some of you to do that. You'll have it you'll
275 00:49:35,280 --> 00:49:40,380 understand what you're looking for, doesn't mean you're gonna be trading every single day. It doesn't mean going under the bias every single day. It doesn't
276 00:49:40,380 --> 00:49:47,070 mean you're not going to have losing trades. It means that you're going to know what you're doing. And even though you may have short term hardships with being
277 00:49:47,070 --> 00:49:56,610 stopped out or missing moves, or reading it wrong, you still will have enough faith in this model, because you know it will repeat in the future more times
278 00:49:56,610 --> 00:49:57,630 than it fails.
279 00:49:58,650 --> 00:50:06,060 And I'm challenging you To determine whether that statement is true or not until next time good luck and good trading