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ICT YT - 2025-01-07 - 2025 Lecture Series - Making Money With SMC Concepts

Last modified by Drunk Monkey on 2025-01-08 09:05
1 00:00:00 --> 00:00:04 ICT: Hello Folks. All right, so we're going to start a new lecture series
2 00:00:04 --> 00:00:09 here. I don't want to really call it a mentorship, but we're going to do some
3 00:00:09 --> 00:00:16 discussions, and I'm going to talk about how if I were a new student of my own
4 00:00:16 --> 00:00:21 work, and I had recently completed my 2024 mentorship that's on this YouTube
5 00:00:21 --> 00:00:26 channel for free, and I was able to go through a lot of the core content that
6 00:00:26 --> 00:00:32 was produced in 2016 2017 through my paid mentorship. For anyone that is
7 00:00:32 --> 00:00:37 always asking, Can I join your private mentorship? It's basically uploaded for
8 00:00:37 --> 00:00:43 free on my YouTube channel. Okay, so dig into it, enjoy it and study it and take
9 00:00:43 --> 00:00:48 what works for you out of it. Not everything that I have ever taught is
10 00:00:48 --> 00:00:55 required to find consistently profitable trading, as you'll see in this lecture
11 00:00:55 --> 00:01:01 series over the next 20 videos, which won't be very long, their focus is
12 00:01:01 --> 00:01:09 primarily to illustrate how one might arrive at a model using the information
13 00:01:09 --> 00:01:14 that's been brought to light on this YouTube channel. I want to, kind of make
14 00:01:14 --> 00:01:20 it very simple, and I want to have every possible ICT concept, you know, that's
15 00:01:20 --> 00:01:23 available on the YouTube channel. I kind of like want to focus on what was
16 00:01:23 --> 00:01:31 discussed primarily off of the 2024 mentorship content. So for folks that
17 00:01:31 --> 00:01:36 went through it and it was your first exposure to Smart Money concepts, or my
18 00:01:36 --> 00:01:41 life's work, if you will, that introduction will be a little bit
19 00:01:41 --> 00:01:46 amplified. But again, even with this lecture series, I will not exhaust every
20 00:01:46 --> 00:01:51 possible concepts, approach or application, but I will hopefully
21 00:01:51 --> 00:01:58 provide you a example of an executable trading plan. It will be employed with a
22 00:01:58 --> 00:02:04 live, real money account that's a regulated CFTC, regulated broker. That
23 00:02:04 --> 00:02:07 means it's not Market Replay. That means it's not demo it's not paper trading,
24 00:02:07 --> 00:02:13 and you do have to pay taxes on the income that you make off of it. So if we
25 00:02:13 --> 00:02:19 are to go into this with the intended goal that I have for it, I want to cover
26 00:02:19 --> 00:02:26 basically five central tenants that anyone that goes through my content
27 00:02:26 --> 00:02:33 should try to consider as focal points. Okay, there's lots of different rabbit
28 00:02:33 --> 00:02:38 trails and things you can go down and study on a topical basis on this YouTube
29 00:02:38 --> 00:02:43 channel, but for the folks that simply want to have something to go into their
30 00:02:43 --> 00:02:50 back testing and look for, for them to go into a tape reading endeavor where
31 00:02:50 --> 00:02:54 they watch price they don't push a button, whether it be demo or live, and
32 00:02:54 --> 00:02:58 then they forward test with a demo account or paper trading account. And
33 00:02:58 --> 00:03:02 then eventually, and some of you will come to the point at which you'll
34 00:03:02 --> 00:03:06 discover that you feel that you have arrived at consistency in your paper
35 00:03:06 --> 00:03:11 trading or demo trading. And when you decide not when I decide for you, not
36 00:03:11 --> 00:03:15 when anybody else should, should decide it for you, it's something that you're
37 00:03:15 --> 00:03:21 going to come to your own decision. And you're going to want to eventually move
38 00:03:21 --> 00:03:27 from paper trading or demo trading to a live funded your real money account.
39 00:03:29 --> 00:03:33 When that happens, I get lots of questions on, how might that work for
40 00:03:33 --> 00:03:40 someone as a student, I'm going to pantomime in the month of February, how
41 00:03:40 --> 00:03:45 that might be done. It is not a panacea. That means it's not the be all, end all.
42 00:03:45 --> 00:03:49 The only way it can be done. It's just to provide an example. Okay, so that way
43 00:03:50 --> 00:03:56 it gives a a real world, realistic approach on how to transition from demo
44 00:03:56 --> 00:04:03 and paper trading to then slowly rolling out the implementation of live risk with
45 00:04:03 --> 00:04:07 real money. Okay? Now I know there's a lot of folks in my community that use
46 00:04:07 --> 00:04:11 prop counts. That means these companies that allow you to trade with demo
47 00:04:11 --> 00:04:15 accounts, and then if you're correct with them, and you do all the hop, skip
48 00:04:15 --> 00:04:21 and jump through the things that they add into the mix as a as a traitor.
49 00:04:22 --> 00:04:25 These rules that they create for you that, in my opinion, are above and
50 00:04:25 --> 00:04:30 beyond what is what is necessary. They complicate it. In my opinion, it's sold
51 00:04:30 --> 00:04:36 on the idea that it's to help you, but it's really a handicap, and very few
52 00:04:36 --> 00:04:41 people have the wherewithal to get through those rules. So I'm not trying
53 00:04:41 --> 00:04:49 to counsel you to use prop counts. I am encouraging you to eventually, if you
54 00:04:49 --> 00:04:54 decide to do this with real money, use a small amount of money. Okay, now, what's
55 00:04:54 --> 00:05:01 a small amount of money? Well, that's kind of I. Uh, relative to who you're
56 00:05:01 --> 00:05:05 talking to, a little bit of money for me may not be a little bit of money for
57 00:05:05 --> 00:05:10 you, and a lot of money for me may not be a lot of money to some of you that
58 00:05:10 --> 00:05:15 are listening. So it's all subjective to you know what it is that constitutes a
59 00:05:15 --> 00:05:20 large amount of money. But if you look at the prop firm, companies, if you look
60 00:05:20 --> 00:05:25 at what they're allowing you to lose before the the account is shut down. If
61 00:05:25 --> 00:05:31 you started a Live account with, say, half of what they allow for, for
62 00:05:31 --> 00:05:36 instance, some larger known prop companies may afford you to lose a
63 00:05:36 --> 00:05:41 hypothetical $3,000 and then you are essentially blown out and you have to
64 00:05:41 --> 00:05:50 reset. Others are $1,000 some are 1500 and it varies from company, company and
65 00:05:50 --> 00:05:58 whatever, I guess, plan or option you use to trade through. My opinion is that
66 00:05:58 --> 00:06:04 if you're going to trade with live funds, the very minimum, the very, very,
67 00:06:04 --> 00:06:10 very minimum is 1000 US dollars. Now when I say that, that doesn't mean that
68 00:06:10 --> 00:06:18 you go out and try to trade larger than you should with $1,000 account, if you
69 00:06:18 --> 00:06:23 trade with a micro account, which is what you're seeing this chart here, the
70 00:06:23 --> 00:06:28 upper left hand corner, you can see it says micro E, mini NASDAQ, 100 that
71 00:06:28 --> 00:06:35 means the point fluctuation. That means one point higher or lower represents a
72 00:06:35 --> 00:06:42 $2 profit or loss per contract. Now in mini contract, one point fluctuation
73 00:06:42 --> 00:06:49 higher or lower is a multiple of $20 profit or loss depending upon on the
74 00:06:49 --> 00:06:56 direction of the position you're holding. My advice is no one that ever
75 00:06:56 --> 00:07:03 transitions from paper trading into Live account trading and or prop should ever
76 00:07:04 --> 00:07:08 go right into mini contracts ever, because you're transitioning to a point
77 00:07:08 --> 00:07:13 at which now risk means something. It doesn't mean as much when you're trading
78 00:07:13 --> 00:07:16 with a demo account. Doesn't mean as much when you're tape reading or back
79 00:07:16 --> 00:07:19 testing. That doesn't It doesn't cost you anything if you're wrong. Doesn't
80 00:07:19 --> 00:07:23 cost you anything terms of pride or ego, and certainly doesn't cost you anything
81 00:07:23 --> 00:07:30 in terms of monetary loss. So starting with the very minimum that's available
82 00:07:30 --> 00:07:35 in terms of a futures trader, you have to start with the smallest, or least in
83 00:07:35 --> 00:07:40 terms of risk. And that is not a disadvantage. It is extremely
84 00:07:40 --> 00:07:45 advantageous for you to apply this approach going into live trading. So
85 00:07:45 --> 00:07:48 there's five central tenets I want to cover, and then we'll get into the nuts
86 00:07:48 --> 00:07:52 of this lecture, because I don't want to be too long. So making money with Smart
87 00:07:52 --> 00:07:58 Money concepts. 101, okay. The premise is this, you're going to settle in on
88 00:07:58 --> 00:08:04 one market or one asset class, okay? And since I'm predominantly talking about
89 00:08:04 --> 00:08:09 initially, but we're going to talk about forex two in this 2025 lecture series.
90 00:08:09 --> 00:08:12 But I have to start here, because this is predominantly where I'm going to be
91 00:08:13 --> 00:08:19 focusing my actual trading the futures market. Since I like trading index
92 00:08:19 --> 00:08:23 futures, I have a choice. I could trade the Dow futures. I could trade the s, p
93 00:08:23 --> 00:08:29 and or the NASDAQ. I prefer the NASDAQ, because of its volatility, it means it's
94 00:08:29 --> 00:08:35 a lot more wild when it moves, and because of that, it will afford me a lot
95 00:08:35 --> 00:08:41 of setups intraday. Okay, now I could trade less than one minute I can trade
96 00:08:41 --> 00:08:44 one minute charts, I can trade five minute charts, a 15 minute chart, an
97 00:08:44 --> 00:08:48 hourly chart, a daily chart, a weekly chart, but for the sake of using the
98 00:08:48 --> 00:08:52 information that was covered in 2024 and the core content, I'm going to try to
99 00:08:52 --> 00:09:01 focus on one minute or higher. And the idea is to teach how to go into trying
100 00:09:01 --> 00:09:07 to find a consistent, income driven model. It is not a get rich, it's not a
101 00:09:07 --> 00:09:12 win a Robin's cup, it's not a competition model. All those things can
102 00:09:12 --> 00:09:16 be tweaked, and I'll talk about that before we close the lecture series out.
103 00:09:16 --> 00:09:20 I don't know what point that will be, but sometime before I end it this year,
104 00:09:20 --> 00:09:25 I'll talk about how you can tweak that and make it so it's Olympic level. But I
105 00:09:25 --> 00:09:28 don't want anyone to go into this with the expectation that you're going in
106 00:09:28 --> 00:09:32 there to try to make the maximum amount of money. You're not trying to be the
107 00:09:32 --> 00:09:38 newest, highest paid out ICT, SMC, but don't want to call yourself an ICT
108 00:09:39 --> 00:09:45 student record holder in terms of what you make in Prop. So it's meant to make
109 00:09:45 --> 00:09:51 your ends meet. That means whatever bill that you have monthly, that's
110 00:09:52 --> 00:09:56 a real world cost for you. It might be a insurance premium, it might be a car
111 00:09:56 --> 00:10:00 note premium, it might be a rent or mortgage payment or a person. Percentage
112 00:10:00 --> 00:10:03 of it, you should sit down and figure out what that is that you're going to
113 00:10:03 --> 00:10:06 target as your realistic goal. It doesn't mean try to make all of your
114 00:10:06 --> 00:10:10 bill money, because that's again, trying to place an Olympic level expectation on
115 00:10:10 --> 00:10:15 yourself as a brand new trader transitioning from demo into real money
116 00:10:15 --> 00:10:20 risk with live funds. So you want to have very, very soft roll out of what it
117 00:10:20 --> 00:10:25 is that you're targeting. So by selling it on one market, and I'll be using
118 00:10:25 --> 00:10:30 predominantly the Nasdaq futures contract, I will be starting with a
119 00:10:30 --> 00:10:38 micro account, or not account, but employing the micro contract, because I
120 00:10:38 --> 00:10:42 want you to see how, even though that's a very small fluctuation in terms of
121 00:10:42 --> 00:10:48 monetary profit or loss, it starts to build up quickly. And that is,
122 00:10:48 --> 00:10:51 unfortunately, something that is overlooked by everyone, because they all
123 00:10:51 --> 00:10:57 see people trading 30 contracts, 15 contracts, multiple contracts of the
124 00:10:57 --> 00:11:01 many, and they see what the payouts can be if those are consistently done
125 00:11:01 --> 00:11:08 correctly, but they don't understand the power of fear and greed while holding
126 00:11:08 --> 00:11:12 those positions, and that's why you don't see most people that trade that
127 00:11:12 --> 00:11:15 big size. They don't hold those positions very long, because it wears
128 00:11:15 --> 00:11:18 them out emotionally and psychologically. So I want to kind of
129 00:11:18 --> 00:11:23 show you how to hold on to very small positions, and gradually transition to
130 00:11:23 --> 00:11:27 being comfortable holding and letting the concepts do all the work for you.
131 00:11:28 --> 00:11:32 But you have to grow in your understanding where there's now real
132 00:11:32 --> 00:11:37 money risk, and that can't be learned from a book. You can't hear me talk
133 00:11:37 --> 00:11:40 about it. You can hear other people talk about it. You have to experience it. And
134 00:11:40 --> 00:11:44 so many of you that have tried to do this in the past or about to try to do
135 00:11:44 --> 00:11:50 it, you're many times regretful for having done so, because you're trying to
136 00:11:50 --> 00:11:57 do too large of risk, holding too big of positions or trading too often. Central
137 00:11:57 --> 00:12:03 tenant number two is knowing how price tends to deliver based and by time, that
138 00:12:03 --> 00:12:07 means by using an economic calendar and understanding time based delivery, that
139 00:12:07 --> 00:12:13 means macros. That means certain aspects of the daily range. When do markets
140 00:12:13 --> 00:12:17 usually run? When do markets usually consolidate? When do they likely reverse
141 00:12:17 --> 00:12:21 those types of things? And I covered a lot of that in this YouTube channel, but
142 00:12:21 --> 00:12:26 I'm going to show you the things that I'm pantomiming. That means I'm going
143 00:12:26 --> 00:12:32 through the pretending aspect of a new trader using ICT concepts. So going
144 00:12:32 --> 00:12:39 through this with the approach of this is what I liked in 2024 content, and I'm
145 00:12:39 --> 00:12:43 going to apply this as the things I observed in my back testing that
146 00:12:43 --> 00:12:47 resonated with me. It does not mean that these are the things that you should
147 00:12:47 --> 00:12:52 adhere to or subscribe to. This is why I'm inviting you to go through the 2024
148 00:12:53 --> 00:13:02 content in your own time, at your own pace, so that way, you can subscribe to
149 00:13:02 --> 00:13:06 the things that mean much more to you, the things that I'm going to adopt here.
150 00:13:06 --> 00:13:10 It's not limited to this. You could add more to it. You can reduce it or replace
151 00:13:10 --> 00:13:15 some of the things. But the things I'm focusing on is not the only smart money
152 00:13:15 --> 00:13:20 concept, winning profile. That's not the only model that is going to yield
153 00:13:20 --> 00:13:24 profitability. That's not the only thing that I can do as a trader. I can employ
154 00:13:24 --> 00:13:28 everything I've ever taught and things I'm never going to teach you. But for
155 00:13:28 --> 00:13:32 the sake of stripping it down to the brass tacks of this is you should be
156 00:13:32 --> 00:13:37 looking for as a simplistic approach to building a model that you can carve out
157 00:13:37 --> 00:13:41 and trade with the confidence that you don't have to have anything else. You
158 00:13:41 --> 00:13:44 don't have to subscribe to a signal service, you don't have to buy
159 00:13:44 --> 00:13:47 somebody's mentorship. You don't have to make payments to get into a discord
160 00:13:47 --> 00:13:52 room. You don't have to do any of those things, all those things that everyone
161 00:13:52 --> 00:13:55 else is trying to rush to, try to make money and not understand fully what it
162 00:13:55 --> 00:13:58 is they're doing because they're blindly following someone else. I don't want you
163 00:13:58 --> 00:14:04 blindly following me, but I am going to share an approach on how you can build a
164 00:14:04 --> 00:14:10 smart money concept model using the 2024 content and then use a real account
165 00:14:10 --> 00:14:15 billion central tenant number three is understanding key pools of liquidity.
166 00:14:15 --> 00:14:22 Okay, there it's a misnomer that you know, obviously common sense tells you
167 00:14:22 --> 00:14:25 there's a sell stop and there's a buy stop, so therefore the market should do
168 00:14:25 --> 00:14:29 this and do that, but understanding these key pools of liquidity and how
169 00:14:29 --> 00:14:35 they're going to be engaged by price, that means why it should draw there. I'm
170 00:14:35 --> 00:14:41 going to give you some details that have never been taught and why I observed
171 00:14:41 --> 00:14:47 these things hypothetically in back testing, tape reading, demo trading, and
172 00:14:47 --> 00:14:51 then finally transitioning. So it's that part of that pantomime I'm showing you
173 00:14:51 --> 00:14:54 some of the things that I have had emails from students all around the
174 00:14:54 --> 00:14:59 world give me feedback about the things that they adopted, and in those same
175 00:14:59 --> 00:15:03 emails. They would say they were not interested in SMT divergence, they would
176 00:15:03 --> 00:15:07 say, I'm not interested in order blocks, or I'm not interested in fair value
177 00:15:07 --> 00:15:11 gaps, but I am interested in order blocks. Everybody has their own, I
178 00:15:11 --> 00:15:17 guess, adoption of the things that made sense to them in what I taught. So there
179 00:15:17 --> 00:15:22 isn't just one way of doing it, but I'm going to focus on the key pools of
180 00:15:22 --> 00:15:27 liquidity while building this model out. Central tenant number four is
181 00:15:27 --> 00:15:32 identifying inefficiencies in price. That means which ones really matter to
182 00:15:32 --> 00:15:37 me in this model. So that way, it kind of helps you filter out the ones that
183 00:15:37 --> 00:15:40 are going to be problematic for just the average person, because everyone thinks
184 00:15:40 --> 00:15:45 that, you know, inefficiencies have always been traded by everybody in the
185 00:15:45 --> 00:15:51 marketplace. And that's not true. It's actually a relatively new thing and an
186 00:15:51 --> 00:15:55 observation and price action. Because if you look at the oldest texts, I'm
187 00:15:55 --> 00:16:03 talking things that are 1980 1970s books about trading, you don't see any measure
188 00:16:03 --> 00:16:10 of attention placed on inefficiencies in price. And you don't really see it in
189 00:16:10 --> 00:16:18 even the white golf, the Gan the old heads of technical analysis and number
190 00:16:18 --> 00:16:22 five, finally, is utilizing simple points of entry and low hanging fruit,
191 00:16:22 --> 00:16:28 price objectives for targets, and then simply wash, rinse, repeat over and over
192 00:16:28 --> 00:16:32 again, doing the same thing. So with those five central tenants now placed in
193 00:16:32 --> 00:16:36 your hands, and the central focus of this discussion, I kind of like want to
194 00:16:36 --> 00:16:42 flesh that out and show you what that looks like over what took place today,
195 00:16:42 --> 00:16:48 and kind of like give you a small little sampling of what it is and how the model
196 00:16:48 --> 00:16:53 that I'll be fleshing out over the next 19 videos. They all won't be this long,
197 00:16:54 --> 00:16:59 but I have to have the luxury of having a little bit of introduction. So that
198 00:16:59 --> 00:17:03 way, it kind of like builds the premise of what it is that we're doing. It
199 00:17:03 --> 00:17:07 frames the whole lecture series about what it is I'm focusing on. So that way,
200 00:17:07 --> 00:17:13 you know what it is I'm doing. The model that I'm teaching works in forex. The
201 00:17:13 --> 00:17:16 model I'm teaching works in currency futures. It works in just about
202 00:17:16 --> 00:17:21 everything you can trade, but I can't co sign crypto, okay? So just know that I'm
203 00:17:21 --> 00:17:24 not, I'm not trying to sell the idea that you should apply it to that asset
204 00:17:24 --> 00:17:30 class, but everything else commodities, it all works there too. Okay, but what
205 00:17:30 --> 00:17:35 we're looking at here is the micro E Mini NASDAQ 100 index futures, or said
206 00:17:35 --> 00:17:40 simply, it's the NASDAQ micro contract, meaning that every fluctuation in price
207 00:17:40 --> 00:17:46 is worth $2 make it or break it coming out of your account. So what I'm showing
208 00:17:46 --> 00:17:51 you here is the regular trading hours. And I taught this in the 2024 content,
209 00:17:51 --> 00:17:57 and it was mentioned also in my paid mentorship, and actually mentioned it in
210 00:17:57 --> 00:18:04 lectures a long time ago on Internet Relay Chat in 1996 when I actually
211 00:18:04 --> 00:18:09 started teaching, when I really wasn't prepared to be teaching. But I taught a
212 00:18:09 --> 00:18:12 lot of things about regular trading hours, which was Globex hours and such.
213 00:18:12 --> 00:18:15 But we're looking at regular trading hours
214 00:18:16 --> 00:18:21 the difference between where we settled previous day and then where we open up
215 00:18:21 --> 00:18:26 at 930 that's what this is highlighting here. The benefit of having that
216 00:18:26 --> 00:18:33 information, it gives us the opening range gap. Now I'm going to have very
217 00:18:33 --> 00:18:37 specific lectures on how I'm going to use the opening range gap, what sets up
218 00:18:37 --> 00:18:40 conditions that where it makes me interested in a trade, whether bullish
219 00:18:40 --> 00:18:43 or bearish. That's not going to be covered in this video. This video, but
220 00:18:43 --> 00:18:48 it will be its own individual video. I'm going to talk about the opening range,
221 00:18:48 --> 00:18:51 which is the first 30 minutes of trading. I don't care what anybody else
222 00:18:51 --> 00:18:55 says, that's the only range the algorithm worries about. Okay, then I'm
223 00:18:55 --> 00:19:02 going to teach you the first 60 minutes dealing range, totally different, and
224 00:19:02 --> 00:19:06 how to use that, and what that means, and how it can help you understand the
225 00:19:06 --> 00:19:11 power three, or the characteristics of a daily range, how I'm going to employ
226 00:19:11 --> 00:19:14 that consistently, going back in, looking for the same things all the
227 00:19:14 --> 00:19:18 time. If those rules are not met, I'm not trading on that, on that basis, then
228 00:19:18 --> 00:19:22 I have to sit still. That's why we have a model. That's why we have to flesh out
229 00:19:22 --> 00:19:26 some kind of trading plan that we're going to stick to and adhere to, and
230 00:19:26 --> 00:19:31 that way, we will have measurable progress if we stick to rules that are
231 00:19:31 --> 00:19:36 based on sound logic. Then it goes without saying that it's reasonable to
232 00:19:36 --> 00:19:40 anticipate progress that's profitable. It doesn't mean every trade is going to
233 00:19:40 --> 00:19:44 be a winning trade. It doesn't mean that it's going to be, you know, a lot more
234 00:19:44 --> 00:19:50 wins than losing. It just means that the net result should be profitable, and in
235 00:19:50 --> 00:19:54 your first year, that's what you should be aiming for. It should not be to have
236 00:19:54 --> 00:20:00 a windfall profitable year, and you'll never hear anyone that's being paid. It
237 00:20:00 --> 00:20:04 as a mentor or teaching or selling books and courses. They're never going to tell
238 00:20:04 --> 00:20:09 you that, because they want you sold on the idea that as long as you listen to
239 00:20:09 --> 00:20:12 what they're saying or what they're teaching and what they're selling,
240 00:20:12 --> 00:20:16 basically, is that you're going to get rich or make lots of money. And I can't
241 00:20:16 --> 00:20:19 make that promise for you, and I'm certainly not doing it in here. Okay, so
242 00:20:19 --> 00:20:23 you're going to see losing trades. You're going to see me lose trades
243 00:20:23 --> 00:20:27 because I'm going to use rules and I'm going to place myself in situations like
244 00:20:27 --> 00:20:32 a new student that transitions from paper trading into live trading. You'll
245 00:20:32 --> 00:20:36 see it. You're going to see it in a broker statement. You're going to see
246 00:20:36 --> 00:20:40 the ebb and flow of equity rising and falling, and you're going to see the
247 00:20:40 --> 00:20:45 benefits of using a micro contract initially, because imagine you yourself.
248 00:20:45 --> 00:20:48 You know yourself, you're probably impatient, you're in a rush to go out
249 00:20:48 --> 00:20:53 there and start making money. Don't you think that you'd feel a little
250 00:20:53 --> 00:20:57 unsettled, scared, if the first trade you put on was a losing trade, you'd
251 00:20:57 --> 00:21:01 have a lot of regrets, right? A lot of remorse, and you would have wished you
252 00:21:01 --> 00:21:06 would have started on a smaller contract basis instead of doing two or three
253 00:21:06 --> 00:21:12 minis because your prop firm or your account allowed you to do it. I'm trying
254 00:21:12 --> 00:21:20 to give you a real, practical approach on how I believe that a student that
255 00:21:20 --> 00:21:24 makes their decision to do this. I'm not suggesting all of you should do it. A
256 00:21:24 --> 00:21:29 lot of this should never be done by any of you, because you're not prepared.
257 00:21:30 --> 00:21:34 Eventually, when you are prepared, and you've proven to yourself by
258 00:21:34 --> 00:21:38 consistently yielding results following a model, most of you probably don't even
259 00:21:38 --> 00:21:43 stick to the same model. So I'm going to, I'm going to show you how, by doing
260 00:21:43 --> 00:21:46 that, it gives you confidence that you don't have to worry about what ICT or
261 00:21:46 --> 00:21:50 somebody else on the internet is doing, because their results, my results, are
262 00:21:50 --> 00:21:54 not something that you can benefit from. You can't spend the money and you don't
263 00:21:54 --> 00:21:57 have to sleep on the losses that we take either. So you have to have that
264 00:21:57 --> 00:22:01 experience in your own hands. So by having revenue trading hours, it
265 00:22:01 --> 00:22:06 benefits us by knowing where, if there is a opening range gap, and by knowing
266 00:22:06 --> 00:22:10 where we settled the previous day, that's the benefit in it. So I want you
267 00:22:10 --> 00:22:20 to see that for today, we had market trade higher here, and we have this
268 00:22:20 --> 00:22:29 large gap that has traded since 930 this morning. So that opening price there and
269 00:22:29 --> 00:22:33 the settlement price there, that difference is the opening range gap. Now
270 00:22:34 --> 00:22:40 I'm going to show you also by dropping into a one minute chart. We're going to
271 00:22:40 --> 00:22:45 scrub back here, and you want to do your measurements on the opening range gap
272 00:22:45 --> 00:22:50 with the one minute chart in regular trading hours. So having the open and
273 00:22:50 --> 00:22:58 close on this here is the same price, essentially. And this is the beginning
274 00:22:58 --> 00:23:05 points of making money with Smart Money concepts, you have to have a frame of
275 00:23:05 --> 00:23:10 reference. Got to know. Where do you start? Well, if you're day trading and
276 00:23:10 --> 00:23:15 you're trading index futures, this is where you start. Is there a gap? We can
277 00:23:15 --> 00:23:21 see that the market opens up at 930 we now have what is described by me as the
278 00:23:21 --> 00:23:27 opening range gap. It's the regular trading hours difference between today's
279 00:23:27 --> 00:23:32 opening and previous days, regular trading hours close. That's all it's
280 00:23:32 --> 00:23:43 doing. Now when we do that, if the gap is larger, then, say, 20 handles. You
281 00:23:44 --> 00:23:47 can start running your fib across it. And I'll let you see my settings,
282 00:23:47 --> 00:23:53 because I know I get asked that a lot on Toggle this for now, these are the
283 00:23:53 --> 00:23:57 settings. So this is the lower quadrant, upper quadrant, midway point, consequent
284 00:23:57 --> 00:24:02 encroachment. And then you can highlight zero and one, which is going to give you
285 00:24:02 --> 00:24:06 basically the same levels that I've already highlighted here with those
286 00:24:06 --> 00:24:14 black lines. So it would look like that. Okay, so we have a premium gap opening,
287 00:24:15 --> 00:24:19 and I'm not interested in trading long on that when it's such a large gap
288 00:24:19 --> 00:24:25 opening like that. So I'm going to let it trade higher. I want to see where it
289 00:24:25 --> 00:24:28 could likely trade to Okay, remember, we have to know how price is likely to
290 00:24:28 --> 00:24:35 deliver and buy time. And we know it's Non Farm Payroll week, so we want to be
291 00:24:35 --> 00:24:40 trading on Monday. But we have a large gap like this. We have a tendency to do
292 00:24:40 --> 00:24:48 what keep going in the direction of the gap. But eventually, in the afternoon,
293 00:24:49 --> 00:24:54 between 10 o'clock and 11 o'clock, we could see a change or a shift in market
294 00:24:54 --> 00:24:59 structure as we enter into that lunch hour, and then we could anticipate a
295 00:24:59 --> 00:25:06 move back into. To that gap being the separation between previous day
296 00:25:06 --> 00:25:13 settlement and the opening price. So the upper quadrant, that's a very important
297 00:25:13 --> 00:25:18 level. I think that that is a high probability draw on liquidity, if the
298 00:25:18 --> 00:25:23 market eventually can show me that it wants to trade lower. So by knowing
299 00:25:23 --> 00:25:27 where the market may likely draw to before it can reverse and trade lower,
300 00:25:28 --> 00:25:33 those are important factors in what it is I'm trying to ascertain in price
301 00:25:33 --> 00:25:37 action. So I sit on my hands. I'm not interested. I'm not interested in
302 00:25:37 --> 00:25:41 trading this long, but I'm also not trying to pick the top either. I want to
303 00:25:41 --> 00:25:48 see how the market can produce a turn lower. I don't need to pick the top in
304 00:25:48 --> 00:25:53 that. And I want to see the market provided time based delivery. That's a
305 00:25:53 --> 00:25:58 macro. And I'll talk about macros in this lecture series, and how I'm going
306 00:25:58 --> 00:26:03 to employ them with this model. It is not again, it's not the panacea. It's
307 00:26:03 --> 00:26:08 not the be all, end all, with macros. This is how I arrived at a model. Using
308 00:26:08 --> 00:26:11 them. You can make lots of different models. I could make a model every
309 00:26:11 --> 00:26:15 single day using the macros for 365 days, and they would never be the same
310 00:26:15 --> 00:26:21 model. Okay? It's it provides you such a wonderful tapestry of applying this
311 00:26:21 --> 00:26:24 information on an individual and unique basis, nobody's trading model is going
312 00:26:24 --> 00:26:28 to be the same. And it doesn't mean that you can't be profitable. All of you can
313 00:26:28 --> 00:26:31 be profitable with with a different model, using what I've already taught in
314 00:26:31 --> 00:26:36 Smart Money concepts. So since we have the opening range gap here defined, and
315 00:26:36 --> 00:26:41 we have all the gradient levels here, obviously moving half gap, which would
316 00:26:41 --> 00:26:46 be much more significant of a move. I don't require that what's the highest
317 00:26:46 --> 00:26:52 probability direction that it's likely to trade to go below this low, because
318 00:26:52 --> 00:26:56 that's the lowest low of the day at the New START of regular trading hours. That
319 00:26:56 --> 00:27:04 means 930 today, and then the next quadrant is here. So 21,006 72 even to
320 00:27:04 --> 00:27:12 me, is high probability. It means it's likely to draw to this low and as much
321 00:27:12 --> 00:27:15 as that level here, and it could trade down to half. But I'm not going to
322 00:27:15 --> 00:27:19 require that. So what's low hanging fruit objective, eventually trading down
323 00:27:19 --> 00:27:25 here? What's high probability, draw the upper quadrant using the opening range
324 00:27:25 --> 00:27:29 gap, and I'll talk more about it in its own individual video. But for here, it's
325 00:27:30 --> 00:27:33 accomplished a method. So now what we're going to do is we're going to go up to a
326 00:27:33 --> 00:27:43 60 minute chart, and I want you to look at how we have the data that's shown
327 00:27:43 --> 00:27:49 here. This is the opening range gap on the 60 minute chart. Again, register
328 00:27:49 --> 00:27:55 trading hours. If you look at over here, we have this drop from high down to that
329 00:27:55 --> 00:28:01 low. This is a lot of gaps in here, so I'm going to remove all that mess in
330 00:28:01 --> 00:28:07 noise and go into electronic trading hours, and we're going to clean up that
331 00:28:07 --> 00:28:12 range. So now I can go and look at this same thing here, so we have this high
332 00:28:14 --> 00:28:20 and this low. So this was the old range, okay, or old dealing range, if I note
333 00:28:20 --> 00:28:24 this, like this
334 00:28:30 --> 00:28:38 and this low here, when the market broke below this low here there, the market
335 00:28:38 --> 00:28:42 was bearish. Now, obviously, I know there's going to be some very cynical
336 00:28:42 --> 00:28:47 people that I'm never going to see the comment from. They're going to say it's
337 00:28:47 --> 00:28:51 obvious, it's hindsight, but you have to do this stuff, impact testing, studying
338 00:28:51 --> 00:28:55 it, get the information, see it. Get used to seeing the pattern, get used to
339 00:28:55 --> 00:28:58 seeing the order flow, and then how the market runs for liquidity. But we can
340 00:28:58 --> 00:29:03 see how it was bearish here, and the market creates a low, lower low, lower
341 00:29:03 --> 00:29:06 low, and finally, does, in fact, trade below that low here. So what was resting
342 00:29:06 --> 00:29:12 below that low? It's sell side. So because we are not demanding that the
343 00:29:12 --> 00:29:17 market created a low or long term or enemy a term low here to trade back
344 00:29:17 --> 00:29:22 above this high, we don't need to have that high broken. So all I need to know
345 00:29:22 --> 00:29:28 is, where is premium, where's discount, relative to now this high and this low.
346 00:29:28 --> 00:29:31 Why am I referring to those two reference points? Now? Because this
347 00:29:31 --> 00:29:39 range was attacked and traded outside of by these two lows here, and it's
348 00:29:39 --> 00:29:43 reasonable see the price, I want to come back up, take out this high. What does
349 00:29:43 --> 00:29:49 this high form low, I lower low. That takes liquidity. That's a high
350 00:29:49 --> 00:29:54 probability. ICT, smart money concept breaker. It's a bullish breaker. And you
351 00:29:54 --> 00:29:59 can see that's occurring right there trades higher and all of these buy side.
352 00:30:00 --> 00:30:05 It could be pools here, here, here, and then this one here has the added benefit
353 00:30:05 --> 00:30:09 of what to the left of it an inefficiency in the form of a sell side
354 00:30:09 --> 00:30:13 imbalance, buy side inefficiency. So we can take this little area here and zoom
355 00:30:13 --> 00:30:21 in right there. So it's this candle, this candle and this candle. So if we
356 00:30:21 --> 00:30:26 highlight that this price,
357 00:30:31 --> 00:30:45 and we'll make it like that, it's that way next a little bit. So we have this
358 00:30:45 --> 00:30:55 closing price to this opening price, this closing price is slightly higher
359 00:30:55 --> 00:30:58 than that one. That's why I'm using it, because this is a small, little, tiny
360 00:30:58 --> 00:31:02 volume of balance. If you look at the closing price, which I don't show here.
361 00:31:02 --> 00:31:04 Let me add that now apologize.
362 00:31:10 --> 00:31:12 The closing price here is
363 00:31:19 --> 00:31:30 21,006 95.75 and the opening price here is 21,006 94.75 so there's a difference
364 00:31:30 --> 00:31:34 of one handle, but that's enough to create a volume of balance. So that's
365 00:31:34 --> 00:31:39 why we're using this opening price and not the wick. Okay, so otherwise, if
366 00:31:39 --> 00:31:45 these two, if this closing price was over lapping where this price opened, or
367 00:31:45 --> 00:31:49 candlestick opened, there wouldn't be a volume imbalance. So because there is
368 00:31:49 --> 00:31:54 one, there's a volume imbalance that we have to use this candlesticks opening.
369 00:31:55 --> 00:31:59 Otherwise, if this was lower than this candlesticks opening, it would be
370 00:31:59 --> 00:32:05 resting on this candles, wick high. Same thing here. This candlesticks closing
371 00:32:05 --> 00:32:11 price comes in at 21,008 94 even you see that here, and this candlesticks open is
372 00:32:11 --> 00:32:19 what, 21,008 93.75 so it's one quarter of a point, okay, or one tick. So
373 00:32:19 --> 00:32:23 there's a separation. So we have to anchor the self centered balance by
374 00:32:23 --> 00:32:29 sound efficiencies, labeling or overlay with the Rectangle tool on this
375 00:32:29 --> 00:32:34 candlestick closing price. If this candlesticks closing price was lower
376 00:32:34 --> 00:32:38 than this candlesticks open, we would simply use this candlesticks low on the
377 00:32:38 --> 00:32:43 wick. So that way. Now you understand how I'm going to use that information
378 00:32:43 --> 00:32:47 when I'm looking at cities and buy side of balance, cell significance. This is
379 00:32:48 --> 00:32:52 all of my inefficiencies are defined like that. Okay, by doing this, you're
380 00:32:52 --> 00:32:56 going to get the algorithmic precision of where consequent encroachment is, and
381 00:32:56 --> 00:33:00 you'll see what I mean in a moment. So I'm going to take this and highlight the
382 00:33:00 --> 00:33:06 extend to right, and that way, when we draw back out to this perspective,
383 00:33:06 --> 00:33:12 everything will be clear. So now we have several things in reference. Now we have
384 00:33:12 --> 00:33:17 this inefficiency here that is inside of a premium. How do I know that? Well, we
385 00:33:17 --> 00:33:23 have this range low and this range high. So the market has traded between this
386 00:33:23 --> 00:33:31 range high, down to this low. This level here defines equilibrium, and anything
387 00:33:31 --> 00:33:36 at that price or higher is a premium. That means it's expensive. It's a target
388 00:33:36 --> 00:33:39 for when you're bullish, or it's a place at which you want to use the sell short
389 00:33:39 --> 00:33:45 at at this price or lower, it's discount. That means it's a target for
390 00:33:45 --> 00:33:50 anything that's short or it's a place to go long when you want to be bullish.
391 00:33:50 --> 00:33:55 Well, since the market has worked off a bullish breaker here, it trades up. I'm
392 00:33:55 --> 00:33:59 not interested in going along here. Why? Because we have a large opening range
393 00:33:59 --> 00:34:07 gap at 930 opening. So I don't want to be in this market doing anything long,
394 00:34:07 --> 00:34:15 because I want to see how it's going to trade to this inefficiency here. So we
395 00:34:15 --> 00:34:18 have the upper quadrant, which is right around what optimal trade entry would
396 00:34:18 --> 00:34:22 be. Remember the old flagship idea that I taught on this YouTube channel. So the
397 00:34:22 --> 00:34:27 market trades up, hits that and then it starts to roll over. And then what I
398 00:34:27 --> 00:34:32 want to see is, does the market in fact attack after 930 is opening? Does it
399 00:34:32 --> 00:34:36 attack the upper quadrant this level here, which is part of the opening range
400 00:34:36 --> 00:34:41 gap? So now with this frame of reference, we know that the market did,
401 00:34:41 --> 00:34:44 in fact, trade up into a premium. We completely overlapped this sell side of
402 00:34:44 --> 00:34:48 balance, buy side and efficiency. So efficient delivery has been given this
403 00:34:48 --> 00:34:53 one single can down. What's it lacking? Overlapping price delivery that's on the
404 00:34:53 --> 00:34:58 upside. In other words, buy side is offered to the marketplace. That means a
405 00:34:58 --> 00:35:04 candle or candle. Plural has overlapped this entire range that's highlighted in
406 00:35:04 --> 00:35:09 pink. We see that happening here. See that? And then we have a small little
407 00:35:09 --> 00:35:13 wick outside of it, and then we break lower. And then that it does, in fact,
408 00:35:13 --> 00:35:16 trade to the upper quadrant. It does not trade to the consequent encroachment, or
409 00:35:16 --> 00:35:20 middle of the opening range gap, which, again, is defined by these two black
410 00:35:20 --> 00:35:24 lines here. So now we're going to drop into a one minute chart and flesh this
411 00:35:24 --> 00:35:36 out. If you look at what we've seen today, initially, at 930 we see the
412 00:35:36 --> 00:35:41 market. Well, at 916 it dives down and does, in fact, trade to the upper
413 00:35:41 --> 00:35:47 quadrant of the opening range gap level. But we don't know what that level is the
414 00:35:47 --> 00:35:52 upper quadrant yet, because we have to have first the opening bell at 930 so
415 00:35:52 --> 00:35:56 that means, at this candlestick, right here, at 930 you can see that that
416 00:35:56 --> 00:36:00 opening price is what's it's laying on top of. So that's your opening price at
417 00:36:00 --> 00:36:11 930 right there. Okay, so this upper quadrant level is not salient at this
418 00:36:11 --> 00:36:15 moment here. It just so happens that it does, in fact, trade down in there. Look
419 00:36:15 --> 00:36:19 at the bodies respecting that level as well. So I think that's a little
420 00:36:19 --> 00:36:23 algorithmic, but it's outside the scope of this discussion. At this point here,
421 00:36:23 --> 00:36:30 at 930 then we do, actually do have the opening range gap defined by that
422 00:36:30 --> 00:36:35 opening price down to the previous day's settlement price. And then we have the
423 00:36:35 --> 00:36:39 lower quadrant consequent encroachment and the upper quadrant level, and then
424 00:36:39 --> 00:36:45 the opening price at 930 so this is, in in its entirety, the opening range gap.
425 00:36:45 --> 00:36:50 So as I defined earlier, I'm only interested because he has such a large
426 00:36:50 --> 00:36:54 opening gap. It's several 100 handles. That means it could potentially keep
427 00:36:54 --> 00:36:59 trading higher in that direction. So you got to be real careful. It's too big of
428 00:36:59 --> 00:37:06 a gap. So I'm going to elect to not do anything by going long and chasing the
429 00:37:06 --> 00:37:11 direction of the gap. And I'm also not looking to sell short initially just to
430 00:37:11 --> 00:37:15 see it go down to the opening range gap and trade into the opening portion of
431 00:37:15 --> 00:37:21 it. I have to defer that interest until later on. What constitutes that. That
432 00:37:21 --> 00:37:28 means we have to wait for it to trade up into that 60 minute imbalance. So it
433 00:37:28 --> 00:37:32 does, in fact, trade up into it there. Look at the bodies respecting it. This
434 00:37:32 --> 00:37:38 is a one minute chart, that small little deviation outside of that city. And we
435 00:37:38 --> 00:37:42 spend some time here at the high end of it, and we start to roll over. You can
436 00:37:42 --> 00:37:47 see how trading into the lunch hour. We're getting a little bit of a
437 00:37:47 --> 00:37:51 retracement. Notice the halfway point. This is constant consequence
438 00:37:51 --> 00:37:56 encroachment of this pink shaded one hour inefficiency. It's in a premium
439 00:37:56 --> 00:38:01 relative to the large one hour range. And now we're starting to work that
440 00:38:01 --> 00:38:06 level here. It's that midpoint of this pink shaded area. And they work through
441 00:38:06 --> 00:38:12 lunch like this. And then at 130 we start looking for the pm session trade.
442 00:38:13 --> 00:38:19 Now I have the market trading to the low end of that one hour city. That's that
443 00:38:19 --> 00:38:23 pink shaded area here. So I've already seen it trade down below the midpoint,
444 00:38:23 --> 00:38:27 and then it traded back up to it and look at the bodies respecting it. So is
445 00:38:27 --> 00:38:31 it indicating at that time that the market is wanting to explore anything
446 00:38:31 --> 00:38:39 higher? No. And at 130 We're now entering algorithmically, the pm stress
447 00:38:39 --> 00:38:43 or the afternoon trading. So what do we have at this point? We have the market
448 00:38:43 --> 00:38:51 trading up to and completing the full delivery to that 60 minute sell side,
449 00:38:51 --> 00:38:54 and balance by sudden efficiency. Then we want to watch and see, does the
450 00:38:54 --> 00:38:59 market does it move lower? It does. Does it breach the midpoint of that
451 00:38:59 --> 00:39:03 inefficiency? It does. Once it does that, does it show a willingness? These
452 00:39:03 --> 00:39:07 are all algorithmic signatures. These are, these are indications that the
453 00:39:07 --> 00:39:11 algorithm that's offering price, it's not the buying and selling pressure that
454 00:39:11 --> 00:39:17 the algorithm is offering. The signatures proving okay, like flashing a
455 00:39:17 --> 00:39:21 neon sign, like a billboard sign on a highway, that this thing is going to go
456 00:39:21 --> 00:39:26 lower. Don't anticipate anything in the upper range of this now, because it's
457 00:39:26 --> 00:39:30 already been fulfilled by this run here. And look how much time it's spent up
458 00:39:30 --> 00:39:37 there. So now at 130 the gears have now changed to now looking for the market to
459 00:39:37 --> 00:39:42 move lower. And now I have a trade stage where I can now engage price action, but
460 00:39:42 --> 00:39:46 I don't want to just simply go into it willy nilly. That means I want to go in
461 00:39:46 --> 00:39:52 with something that's algorithmically timed by a macro. I want to target
462 00:39:52 --> 00:39:58 liquidity. I want to have a very simple entry strategy, and I want to know where
463 00:39:58 --> 00:40:03 it's likely to draw to. And. And afford myself the opportunity to catch a runner
464 00:40:03 --> 00:40:07 if it wants to trade down to the midpoint of the gap or consequent
465 00:40:07 --> 00:40:12 encroachment, which is that blue line here. So I want to frame an idea around
466 00:40:12 --> 00:40:17 all those things. So let's take a look at that now, right? So here we have the
467 00:40:17 --> 00:40:26 market trained in on the 250 to 310 macro time we're trading near the low of
468 00:40:26 --> 00:40:32 that 60 minute city. And here's that upper quadrant level on the opening
469 00:40:32 --> 00:40:35 range gap. And if I scrunch this up a little bit more, you'll see that the 50%
470 00:40:35 --> 00:40:39 level of the opening range gap is down here. So that is a wild card. I don't
471 00:40:40 --> 00:40:43 know. You don't know. No one knows if it's going to trade down there. Down
472 00:40:43 --> 00:40:46 there, but we do have a high degree of probability that it's likely to draw to
473 00:40:46 --> 00:40:51 that upper quadrant level. So that's what I'm focusing on in the trade idea.
474 00:40:52 --> 00:40:57 This candlestick we opened lower here the very next one minute candle, I want
475 00:40:57 --> 00:41:02 to be short, so when it opens, I want to use that open, and anything that trades
476 00:41:02 --> 00:41:06 back into this candlesticks, body or wick. So you can look at the low of that
477 00:41:06 --> 00:41:10 candlestick there. It's at 21,007 10.50
478 00:41:12 --> 00:41:17 and by using that as a immediate rebalance, this next candle here we
479 00:41:17 --> 00:41:24 open, we trade up a little bit the high that candle comes in at 12.50 and I only
480 00:41:24 --> 00:41:32 had basically 1.25 separation between the two. There was literally no drawdown
481 00:41:32 --> 00:41:37 at all from the entry, though. It trades up to it hits the immediate rebalance
482 00:41:37 --> 00:41:42 and then delivers lower. So I have immediate feedback. I'm on one side. I'm
483 00:41:42 --> 00:41:45 targeting this level down here, but I don't want to just simply take profits
484 00:41:45 --> 00:41:50 as it hits that level. I want to try to get to that level and lower, because I
485 00:41:50 --> 00:41:55 might get lucky and see it trade to half the opening range gap. So I want to
486 00:41:55 --> 00:41:58 trade with this and watch how it delivers and move away from this 60
487 00:41:58 --> 00:42:02 minute cities low, which it does aggressively here. We have a little bit
488 00:42:02 --> 00:42:06 of retracement back and forth in here. And finally, we have a little bit of on
489 00:42:06 --> 00:42:09 this candlestick. When it was breaking lower, I thought that we were going to
490 00:42:09 --> 00:42:12 have a pretty good chance of getting to that consequent encroachment of the
491 00:42:12 --> 00:42:19 opening range gap. So what I did was I rolled the stop to 21,006, 66.50, and
492 00:42:19 --> 00:42:23 you can see that it does, in fact, hit that it was based on being in the upper
493 00:42:23 --> 00:42:26 portion of this body. So I felt if it did that, it probably would have rounded
494 00:42:26 --> 00:42:32 this low out and then moved back up into this area and maybe trade back up into
495 00:42:32 --> 00:42:36 the 60 minute city. And in fact, that's what you see here. So there's the entry,
496 00:42:36 --> 00:42:41 I'm sorry, the exit being stopped out. And here's the entry point there, using
497 00:42:41 --> 00:42:46 the immediate rebalance. Okay, so those are concepts that were taught in 2024
498 00:42:47 --> 00:42:51 also they were taught in core content. So it's all throughout this Youtube
499 00:42:51 --> 00:42:59 channel. No, you don't find that in my goth or game or emails. So if I had to
500 00:42:59 --> 00:43:02 toss that out, it couldn't go without saying it could you No, I can't. I'm
501 00:43:02 --> 00:43:07 sorry, but that's just the truth. Okay, so the difference is that there is about
502 00:43:08 --> 00:43:17 50 handles or so between the entry point here and down there. Now it's done with
503 00:43:17 --> 00:43:22 one contract. That is that it's done with a micro now, when you first start
504 00:43:22 --> 00:43:26 trading, you might not look at this and think, wow, that's that's not a lot of
505 00:43:26 --> 00:43:31 money. But what this does is it gives you the confidence that you can, number
506 00:43:31 --> 00:43:35 one, see the price action deliver. You have some measure of precision. You
507 00:43:35 --> 00:43:38 don't need it to be perfect. You don't need to be surgical, but you have
508 00:43:38 --> 00:43:44 something that is lending well to the discovery of what you've seen on this
509 00:43:44 --> 00:43:47 YouTube channel, and then put it into practice. And you can make a model out
510 00:43:47 --> 00:43:51 of it. And then we get into the last trading hour of the day, in regular
511 00:43:51 --> 00:43:55 trading hours, which is three o'clock, this thing could do what it could start
512 00:43:55 --> 00:44:00 to draw back up into the range and as exactly what it did. So watching from
513 00:44:00 --> 00:44:03 that point on here, you can see that it does, in fact, trade higher and moves in
514 00:44:03 --> 00:44:06 consolidation and eventually trades up into
515 00:44:13 --> 00:44:18 higher portions of that city and then back down and outside of it once more,
516 00:44:18 --> 00:44:21 hitting that upper quadrant of the opening range, gap level. One more time,
517 00:44:21 --> 00:44:23 look at the reaction off that you don't that. You don't think that's
518 00:44:23 --> 00:44:34 algorithmic. Price comes right back up trades into the settlement at 414, again
519 00:44:34 --> 00:44:42 in an upper portion, right here, almost back to consequent encouragement of that
520 00:44:42 --> 00:44:51 city on the 60 minute chart. So knowing when to trade the morning session versus
521 00:44:51 --> 00:44:55 knowing when to trade the pm session, when there's a very, very large gap
522 00:44:55 --> 00:45:00 opening, I'm not terribly excited about that. I kind of like want to. It and
523 00:45:00 --> 00:45:05 wait, and then if I know it's likely to draw into that opening range gap. And
524 00:45:05 --> 00:45:09 there's times where, based on what the market does in the morning session, the
525 00:45:09 --> 00:45:13 first 60 minutes of trading, which I'll have a video entirely about, that it'll
526 00:45:13 --> 00:45:17 give me insights about whether I sit on my hands and do nothing, or I wait for a
527 00:45:17 --> 00:45:22 reversal and then I play after the reversals done, proven itself, and kind
528 00:45:22 --> 00:45:27 of tips its hand. I don't want to kind of convey the idea that you should be in
529 00:45:27 --> 00:45:31 here trying to capture the highs and lows and back and forth, up down. That's
530 00:45:31 --> 00:45:36 what the 33 years of experience Michael can do. In the beginning. You're not
531 00:45:36 --> 00:45:40 going to have that level of experience. So it's not reasonable or practical for
532 00:45:40 --> 00:45:44 me to try to inspire you to do that. If I'm teaching you and I'm telling you,
533 00:45:44 --> 00:45:47 you shouldn't try to do that initially, and then you shouldn't either, because
534 00:45:47 --> 00:45:52 you're acting on infancy in terms of experience, and it's not meant to be
535 00:45:52 --> 00:45:56 derogatory or talk down to you. It just means that we're talking practical. And
536 00:45:57 --> 00:46:00 if we're going to transition from demo trading and back testing and tape
537 00:46:00 --> 00:46:03 reading and all that to now we're dealing with real risk. And if you
538 00:46:03 --> 00:46:07 haven't noticed, yes, that's a amp Live account right there. And this is
539 00:46:07 --> 00:46:12 actually a trade that my son and I worked with, and I walked him through
540 00:46:12 --> 00:46:16 it, and this is what it looks like he pushed the button, clearly, but it was
541 00:46:16 --> 00:46:19 based on the logic that I shared with them, so that way you understand the
542 00:46:19 --> 00:46:26 mechanics of what's here? So again, live account, live execution, real world
543 00:46:26 --> 00:46:30 trade with real risk. And going back to it, you might ask yourself, you know,
544 00:46:31 --> 00:46:36 what would a trade like that require in terms of a stop loss? And I don't want
545 00:46:37 --> 00:46:43 Caleb to have more risk than what 15 handles on this with a micro so what
546 00:46:43 --> 00:46:50 does that translate in terms of monetary risk? It's only $30 so let me ask you a
547 00:46:50 --> 00:46:58 question. If you were willing to risk $30 but you could make $90 or more, is
548 00:46:58 --> 00:47:06 that a reasonable risk to reward three to one, you're risking $1 to make $3 so
549 00:47:06 --> 00:47:12 you can, you can be wrong a couple times in a series of trades and still be net
550 00:47:12 --> 00:47:17 profitable on the week, the month or the year. If you can model that eventually
551 00:47:17 --> 00:47:21 you want to try to do things that allow for a five to one or more, but you're
552 00:47:22 --> 00:47:26 going to need a little bit more insight and more execution and experience before
553 00:47:26 --> 00:47:30 you can do those types of things. So I could start with one to one, but I know
554 00:47:30 --> 00:47:33 that that's going to invite a whole lot more trading ideas for some of you that
555 00:47:33 --> 00:47:37 are going to try to mimic and parrot what it is I'm doing in this model, and
556 00:47:37 --> 00:47:41 I'm not trying to inspire you to copy me. So that's why none of the trades are
557 00:47:41 --> 00:47:44 going to be a live stream type thing, because I don't want you to hurt
558 00:47:44 --> 00:47:50 yourself. I'm not infallible, you know, I have a very large audience, and it is
559 00:47:51 --> 00:47:56 basically inviting, you know, more liquidity to pull around a specific
560 00:47:56 --> 00:48:02 price level. And it's very simple to reprice to that and not show any real
561 00:48:02 --> 00:48:07 benefit of following that idea, because if everybody's dog piling in on the same
562 00:48:07 --> 00:48:11 absolute price level, if I'm live streaming, and for the people that don't
563 00:48:11 --> 00:48:14 know how to trade or don't know how to markets, actually book price, this
564 00:48:14 --> 00:48:18 doesn't sound normal to them. It sounds like an excuse. But again, you're seeing
565 00:48:18 --> 00:48:22 broker statements. You're seeing a Live account down here. These are all things
566 00:48:22 --> 00:48:28 that you can't fake. Okay? It's actually something that I want you to appreciate,
567 00:48:28 --> 00:48:31 because I don't have to do these things like I could just sail off into the
568 00:48:31 --> 00:48:38 sunset and be done. I mean, I really can, but to show you, you how the actual
569 00:48:38 --> 00:48:47 transition should be done from back testing to logging to forward testing
570 00:48:47 --> 00:48:51 and demo trading, and then finally making the decision to move from those
571 00:48:51 --> 00:48:58 risk free environments to now allowing and affording yourself actual risk, but
572 00:48:58 --> 00:49:01 then also managing that risk appropriately so that way you're not
573 00:49:01 --> 00:49:08 trying to do much more than that that's required. So basically getting in with a
574 00:49:09 --> 00:49:21 entry point at 711.25 your stock will also be 71. 26.25, so that is a 15
575 00:49:21 --> 00:49:33 handle stop. So that is up here, right there. Okay, so you can see it didn't
576 00:49:33 --> 00:49:36 even have any interest in getting out to that point. Okay. Does that mean every
577 00:49:36 --> 00:49:41 trade is going to be a 15 handle stop? No, it might be smaller, but because of
578 00:49:41 --> 00:49:49 the nature of today, we had the election certification today, we had, you know,
579 00:49:50 --> 00:49:53 all the other things that's going on. So it's just reasonable. It was practical
580 00:49:53 --> 00:49:58 for me to suggest to Caleb that he uses a 15 handle stop loss here, and then to
581 00:49:58 --> 00:50:02 target that upper quadrant. The opening range gap, and then see if he could
582 00:50:02 --> 00:50:06 trade lower. He could have had an exit down here that would have been much more
583 00:50:06 --> 00:50:12 favorable. But we discussed it, and he agreed that let's just see if it can
584 00:50:12 --> 00:50:15 trade down into that consequent encroachment. If it stops him out, it
585 00:50:15 --> 00:50:21 doesn't matter. It's still about 50 handles or so, and that is a really good
586 00:50:22 --> 00:50:28 return. It's it's a really good return for the risk that was implemented. And
587 00:50:28 --> 00:50:33 if you can try to target trades where you're risking three to one or four to
588 00:50:33 --> 00:50:37 one or five to one or higher, you're not going to get as many trades as you could
589 00:50:37 --> 00:50:41 if you were trading 10 for 10. You can do that all day long when you know
590 00:50:41 --> 00:50:47 you're doing but again, this lecture series is based on the the new student
591 00:50:47 --> 00:50:53 transitioning to live funds. How might that occur? And it's not an instruction
592 00:50:53 --> 00:50:57 manual for you to copy this. I'm not trying. I'm not telling you to do this
593 00:50:57 --> 00:51:01 and you're going to make money. I'm showing you as a an example, nothing
594 00:51:01 --> 00:51:07 more, just simply an example of how it could be done and how, using the ideas
595 00:51:07 --> 00:51:12 that were taught in 24 that that mentorship, I gave you a lot of
596 00:51:12 --> 00:51:18 wonderful, practical, algorithmic truths to what price does and why it does it.
597 00:51:18 --> 00:51:22 And again, another example here with a live account. It's not Market Replay,
598 00:51:23 --> 00:51:29 it's not demo, okay, there's real money at risk here, albeit in this example,
599 00:51:29 --> 00:51:33 it's not much money at risk, but it's still money that, you know, if Caleb
600 00:51:33 --> 00:51:36 would have lost, he would have felt it, you know, he would have said, you know,
601 00:51:36 --> 00:51:41 it's not fun. But when you have wins that are measurable based on the logic
602 00:51:41 --> 00:51:47 that sound it repeats more than it doesn't. That means there is an edge
603 00:51:47 --> 00:51:52 there, and it's based on time, based delivery and price. That's not white
604 00:51:52 --> 00:51:57 cough, that is not Gan that is not anything else. It's simply what the
605 00:51:57 --> 00:52:03 market simply does because it's scripted and by waiting for these signatures to
606 00:52:03 --> 00:52:09 manifest itself in price action, we can trust that the edge is now shifted,
607 00:52:09 --> 00:52:14 potentially not guaranteed, in our favor. And if we follow rule based ideas
608 00:52:14 --> 00:52:22 and we manage risk impeccably, we stand a good chance, not an absolute panacea
609 00:52:22 --> 00:52:27 be all in though profitability, it just means that we have a good chance that if
610 00:52:27 --> 00:52:31 we manage it appropriately, we can potentially yield a positive or
611 00:52:31 --> 00:52:36 profitable outcome. But because we're not risking a whole lot, we can weather
612 00:52:36 --> 00:52:42 the storm of a loss, a series of losing trades, and work our way out of that.
613 00:52:42 --> 00:52:47 And hopefully you'll see examples of that with real broker accounts and
614 00:52:47 --> 00:52:51 statements and things like that. So hopefully you found this one insightful.
615 00:52:51 --> 00:52:54 It was inspiring to you, and I hope you stick with this lecture series. It's
616 00:52:54 --> 00:52:59 again, 19 more lectures this month. They'll be complete by the last Friday
617 00:52:59 --> 00:53:04 of January and only delivered on Monday through Friday. On the weekends, there's
618 00:53:04 --> 00:53:07 no lectures, there's no videos, okay, and so I'll talk to you tomorrow evening
619 00:53:07 --> 00:53:09 at 8pm Eastern time. Be safe. You.