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ICT Forex - Market Maker Series Vol 3 of 5.srt

Last modified by Drunk Monkey on 2021-07-30 20:13
1 00:00:30,840 --> 00:00:40,260 ICT: Right okay, well Magnus is one three of the internal trader market maker series. In this volume, I'll be teaching on market structure, key levels, and
2 00:00:40,260 --> 00:00:40,890 SMT.
3 00:00:45,990 --> 00:00:56,670 Alright, we're going to assume that when you're doing your qualitative analysis, that means we've already gone through all the quantitative we're assuming that
4 00:00:56,670 --> 00:01:09,480 the market price is up here. And your analysis suggests that there's a move likely to ensue. That takes us down to a key level low. Now, these key level
5 00:01:09,480 --> 00:01:27,000 lows can be weekly lows. Old highs have a higher timeframe like for our daily or monthly or weekly, they could be the top of an old trading range. There's
6 00:01:27,000 --> 00:01:39,150 multiple ideas that could be used for a key level. But what makes it a key level is it's on a monthly, weekly, daily or four hour, less importance and
7 00:01:39,150 --> 00:01:49,050 significance placed on the four hour, predominantly the higher timeframe daily, weekly, and monthly. Now, these levels are important, what makes them key is
8 00:01:49,200 --> 00:01:58,650 because they're used by large fund traders in their analysis, they're not really going into these 15 minute timeframes when our charts and things like that their
9 00:01:58,650 --> 00:02:10,740 analysis is predominantly linked and founded on the monthly, weekly and daily timeframes. Because the volume that they work in and out of the marketplace,
10 00:02:11,250 --> 00:02:19,290 requires them to be trading on those timeframes, because they don't have the luxury like you and I to get in and trade on one minute charts, five minute
11 00:02:19,290 --> 00:02:33,450 chart 15 minute intraday. So the idea is, we're expecting where the market is now, the trade down to this level, and then a reaction should ensue. Now, your
12 00:02:33,450 --> 00:02:44,010 choice as a trader is if we're here, and you think it's going down here to set up a move to go later higher. You can be a trader from this point here, down, or
13 00:02:44,040 --> 00:02:53,610 wait till it gets to this level, and then try to trade the bounce. I'm going to leave that to you to decide because a mentor should not try to press everyone
14 00:02:53,610 --> 00:03:07,710 into a mode, it isn't a one mode fits all. It's a approach to understanding how price is delivered. And then you as a trader, find a strategy or a process that
15 00:03:07,740 --> 00:03:18,420 allows you to engage price action without you feeling like you have to meet the same expectations that someone else is doing. So as the market trades down,
16 00:03:18,870 --> 00:03:27,840 inside this price Ling there's multiple opportunities in the form of swing trading, short term trading, day trading, scalping, and you can trade on both
17 00:03:27,840 --> 00:03:40,620 sides of the marketplace. But predominantly, the larger position and or more risk can be assumed on the short side. Whereas going long, maybe scalping
18 00:03:40,620 --> 00:03:50,820 something like that, get counter trend to this expectation in the marketplace, you'll use a lot less leverage and try to be much more nimble. Now what your
19 00:03:50,820 --> 00:03:59,610 objectives will be much more smaller than that of if you were trying to trade in line with this movement here. Once it trades at this level here, you'd expect
20 00:03:59,640 --> 00:04:08,460 higher prices and you can trade obviously, with the majority of your leverage on the long side. And any scalping or short term trades against this idea should be
21 00:04:08,460 --> 00:04:23,310 done so with very low leverage and very short term price objectives. Now let this image burnin. So that way when we transition to the market maker by model
22 00:04:25,230 --> 00:04:41,550 it's this idea we have in mind here, okay, market prices here. We're expecting to get trade down to a key level and then rally up. Now these lows can form two
23 00:04:41,550 --> 00:04:53,250 different ways. You can start by coming down, come off that short term low and then make a lower low creating the ultimate low in this price swing here and
24 00:04:53,250 --> 00:05:03,660 then price running higher. This sets up a ICT breaker where we have a low high low lower low, once it breaks that short term high in the middle, that trades
25 00:05:03,660 --> 00:05:12,900 back down into that we could be a buyer somewhere over here to capture another continuation outside. Conversely, there is another formation, you can see where
26 00:05:12,900 --> 00:05:27,750 it trades down, comes off the low and turns with a higher low and starts to trade higher. This one here, I like to see this form only if
27 00:05:28,470 --> 00:05:37,770 there is a SMT divergence. That would be in a market that's closely correlated to the one I'm looking at here for the analysis. And what do I mean by that?
28 00:05:38,280 --> 00:05:47,940 Well, let's assume that this is the euro dollar. And I expect a euro dollar to trade from its market price down to a key low and then trade higher. At this
29 00:05:47,940 --> 00:06:02,670 low, if I see euro making the low and then a higher low. At the same time, pound dollar is making a low and then a lower low. That's an SMT divergence. Okay,
30 00:06:02,670 --> 00:06:09,840 smart money technique or smart money tool, I never really settled on the letter T what it would stand for, it was always interchangeably used as smart money
31 00:06:09,840 --> 00:06:21,090 technique or smart money tool. It's just simply a divergence between closely correlated assets or markets. What this indicates is there's a strong disparity
32 00:06:21,090 --> 00:06:34,530 between what the algorithm is pricing in for one currency versus another. The theory I operate under is all boats rise with the tide. And if we're expecting
33 00:06:34,530 --> 00:06:44,850 higher prices, in euro, it goes without saying that we should reasonably expect pound dollar to rally as well. Unless there's other factors that are outside the
34 00:06:44,850 --> 00:06:55,560 scope of this teaching. That would negate that. But for the majority of the time and general rule of thumb, all foreign currencies should be rallying together
35 00:06:55,860 --> 00:07:08,730 and falling dollar seen with that instance. Here, if we have below a higher low in euro and cable goes low, lower low, that's indicating that the algorithm is
36 00:07:08,730 --> 00:07:18,390 not wanting to take your dollar to a lower level like it did with cable Norbert spammers the US dollar and that cracking correlation many times signifies a
37 00:07:18,810 --> 00:07:28,050 timing aspect, that would be confirmation to expecting this level than here being significant or key that leads to an upward price swing later.
38 00:07:33,450 --> 00:07:41,190 Okay, with that idea in mind, usually the market will be in some measure of consolidation, I like to see some kind of a little short term trading range. And
39 00:07:41,220 --> 00:07:51,840 it is very subjective this part, okay, what is the trading range or a consolidation where price is having several candles not two, not three, not
40 00:07:51,840 --> 00:08:00,570 four, but it just stays in an area over a prolonged period of time. How much time Michael, it's all relative to the timeframe you're looking at. If you're
41 00:08:00,570 --> 00:08:12,030 looking at a 15 minute timeframe, it could be maybe 10 candles, or more. And I'm just giving you a rough idea because experience is going to guide you on how
42 00:08:12,030 --> 00:08:20,550 many candles really make up a consolidation, studying price, especially if you're a new student. This is gonna seem too vague. And then I had this
43 00:08:20,550 --> 00:08:29,640 complaint before. When I was teaching on baby pips. As soon as I started to introduce an idea, you know, right away, they expect to have the understanding
44 00:08:29,670 --> 00:08:39,240 entirely from one lesson. And you have to have something of a comprehensive study approach to what I'm teaching, because it's not simple. But it is simple
45 00:08:39,240 --> 00:08:48,090 once you understand all the moving parts. So from a modular standpoint, when I say that the market is usually in some kind of a short term consolidation, it
46 00:08:48,090 --> 00:08:57,240 could be, you know, consolidation on one timeframe, but just simply two or three candles on another timeframe that will be higher up. So it's all relative to
47 00:08:57,300 --> 00:09:06,510 what you're expecting in terms of the market price. If it's on a five minute chart, the consolidation may look a lot longer in terms of duration. versus if
48 00:09:06,510 --> 00:09:15,240 you look at it from the four hour chart, it's all within one candle and you don't even see a consolidation. But for the sake of continuity, let's assume
49 00:09:15,240 --> 00:09:22,680 that we understand there's a short term consolidation here. I'll be giving you an example here so that way, you're not left with too much bigness. So the
50 00:09:22,680 --> 00:09:32,370 market will leave this consolidation and inside this Klein, we wait for another area of either retracement back to the original consolidation, which it does not
51 00:09:32,370 --> 00:09:43,200 have to do. Okay, it does not need to do this. This is kind of like what the wycoff theory folks will look for. There's lots of times where it just doesn't
52 00:09:43,200 --> 00:09:51,930 do that. And that's why I don't teach wycoff that's why what I'm teaching you here is not like off. So as the market drops down, I allow in my analysis to
53 00:09:51,930 --> 00:09:59,160 potential to return back to the original consolidation, but if it does, I need to see a very sharp rejection there. It can't just come back to the original
54 00:09:59,160 --> 00:10:07,890 consolidation low And then hang around for a little while, it needs to come back up there. And in break, I like it even better if it tries to make an attempt to
55 00:10:07,890 --> 00:10:18,030 get back to the original consolidation low, okay, and fail to get there and then breaks hard. I really like that, because that indicates a very heavy market. And
56 00:10:18,030 --> 00:10:27,600 it's likely to continue going lower, but either for the next short term consolidation, and this doesn't usually last as long as the original
57 00:10:27,600 --> 00:10:36,240 consolidation up here. So what we're looking at as a consolidation, a market that breaks lower that may be trades up to here. And if it does, we'll look at
58 00:10:36,240 --> 00:10:45,540 for a sharp decline. If it doesn't, it just goes right into another area of consolidation, it usually will set up like an optimal trade entry. And if you're
59 00:10:45,540 --> 00:10:55,050 new to this channel, you're just watching this video for the first time, I have a plethora of videos that teaches my optimal trade entry pattern. It's very
60 00:10:55,050 --> 00:11:02,400 simple little pattern, it repeats every single day, it repeats on every single timeframe, you just need to know what you're looking for and why it should be
61 00:11:02,400 --> 00:11:12,480 forming there. And this is really the point of this lesson is wearing market structure should things occur. And how do we interpret it and how we anticipate
62 00:11:12,480 --> 00:11:23,580 it. So in this area here, usually you're gonna see an optimal trade entry short, it'll be a low, retracement back up into a bearish order block and then slams
63 00:11:23,580 --> 00:11:34,410 lower, or it could be a low short term high and then a higher short term high that runs out short term buy stops, then it sells off. So either one of those
64 00:11:34,410 --> 00:11:43,590 instances will allow for me to take a trade going short, because remember, I'm waiting for some level down here I've indicated at the beginning of this
65 00:11:43,590 --> 00:11:53,490 discussion that I think it's going to trade down to, or I'm watching price. And I'm not really engaging price, I'm just monitoring it and practicing and reading
66 00:11:53,490 --> 00:12:02,700 price. And I anticipate some measure of selling in this area, or I'm watching price that way. It just keeps me closer to the marketplace. And I'm practicing
67 00:12:02,700 --> 00:12:11,130 either with a paper trade or a demo trade or illustrating something with my teeth, my teachings and loot and lessons. I'm just anticipating whether I'm
68 00:12:11,130 --> 00:12:16,170 engaging or not another price leg lower. And when it comes should it come,
69 00:12:16,919 --> 00:12:26,189 we're waiting for some expansion lower. And sometimes we'll get a secondary level of distribution which will be another either optimal trade entry sell or a
70 00:12:26,189 --> 00:12:35,159 short term high as right now with a higher short term high and then leads to another level of lower prices, until we get into that area where we expect that
71 00:12:35,159 --> 00:12:46,559 key level to be reached. This is where the market goes into Smart Money reversal. Okay, usually it will form the same way as outlined in the price swing
72 00:12:46,559 --> 00:12:58,799 where a create a low a lower low and then look for a breaker or it goes low, higher low. And if it occurs like that, again, using the intermarket
73 00:12:58,799 --> 00:13:07,889 relationships I mentioned earlier, if it creates a low with a higher low, versus one definitive low that takes up previous short term low. In other words, the
74 00:13:07,889 --> 00:13:19,469 diagram I outlined when it was just that big blue V, giving you a rough depiction of a price swing, the little animations I put in the low, those are
75 00:13:19,469 --> 00:13:32,369 the only two things that can happen. That's it. So how they trade and form in price leads to what process you look for next, I'm not really interested in a
76 00:13:32,369 --> 00:13:43,169 market that will give me a dull, flat, blunt ended low, I will avoid that at all costs, avoid debt, because that means I'm gonna have to wait because we could be
77 00:13:43,169 --> 00:13:52,919 seeing just another level of distribution that leads to another break lower, and then I'll revisit the analysis at a later time. But if we see price trade
78 00:13:52,919 --> 00:14:03,419 higher, we're going to assume that the smart money has accumulated and lungs and here they are not pushing price up when they go along. By the way. We're seeing
79 00:14:03,419 --> 00:14:11,279 price trade down to this level and then it kind of like spends a little bit of time down here and not a lot. Certainly nowhere near the length of time that
80 00:14:11,279 --> 00:14:20,279 they original consolidation looks like very short term little consolidation. And the algorithm keeps price in that range. Okay, it's a small little dealing range
81 00:14:20,279 --> 00:14:30,449 it works in and then it will reprice if Smart Money traders do not buy, they missed that move. So they'll have to wait for a low risk buy at usually will
82 00:14:30,449 --> 00:14:42,239 happen over here in the small little consolidation, which will form in what in the form of a optimal trade entry buy or a low and then I'll short term lower
83 00:14:42,239 --> 00:14:52,349 low, that takes out buy stocks and then rallies. Remember I taught in a previous lesson in this series, that usually right before significant price advances hire
84 00:14:52,559 --> 00:15:00,869 some little short term loans taken out for stop rates, and they assume those positions when the stops are taken. Their cell stops flood the market. Selling.
85 00:15:01,559 --> 00:15:08,909 So that way counterparties that understand what the algorithm is about to do with price setting and higher, they'll buy those sell stops. And they'll be
86 00:15:08,909 --> 00:15:19,289 positioned for a rally higher, we would expect price to trade higher until we get to another level of accumulation. So what we've already seen here is
87 00:15:19,319 --> 00:15:32,819 consolidating, and accumulation of shorts, accumulate more shorts, accumulate more shorts in this area, you might only get one area of distribution. And then
88 00:15:32,819 --> 00:15:47,189 it trades down to the Smart Money reversal, where they distribute their shorts down here. So they're going to buy to sellers at a low price. And everything
89 00:15:47,189 --> 00:15:59,369 they assumed over here should be hopefully offloaded here, some of it here, and some of it here. So they're heavy positions are entered here. Some of it's taken
90 00:15:59,369 --> 00:16:11,669 off in profit here, some of it's taken off in profit here and here. Or they'll go short here, add more here, add more here and dump it all off here. So there's
91 00:16:11,699 --> 00:16:23,519 two ways for them to engage price. And work within this market maker by model. The Long's that they assume here, they may not get them all alone, and not add
92 00:16:23,519 --> 00:16:32,849 more here. And then add more here. Because as price is rallying up, it's going to be targeting the original consolidation, until it targets the by stuff
93 00:16:32,910 --> 00:16:41,550 above this relative equal high or consolidation. All those buy stuff will be the target of all of this. So if you're looking at price, and you think that's gonna
94 00:16:41,550 --> 00:16:53,730 trade lower to go higher, the original consolidation, aim there, you might have a higher timeframe target, some somewhere beyond that. But initially study all
95 00:16:53,850 --> 00:17:06,480 old price data, price swings, and you'll see this phenomenon is occurring. And you don't have to have all the complications that are introduced with retail
96 00:17:06,480 --> 00:17:15,750 concepts. I mean, this might seem too vague, and it may seem an over simplistic approach to describing something. But I promise you to go into charts and study
97 00:17:15,750 --> 00:17:25,290 it, you'll see this very thing unfolding. It happens on all timeframes. And it happens on buy and sell. This is a market maker by model where they're taking
98 00:17:25,290 --> 00:17:35,880 price down, not the traders, the algorithm, all the algorithms are working together, it takes price down, then allows traders that know what to anticipate
99 00:17:36,210 --> 00:17:47,070 to onboard here. And then they take it in scalings, here and here. And finally, the last bit of a run, it's in a hurry to get above here. And this is a complete
100 00:17:47,070 --> 00:17:57,450 market maker by model. This is unique to me, this is something that I introduced years and years ago. And there's been some subtleties, you know, people adding
101 00:17:57,480 --> 00:18:07,110 like off to make it look like it's wycoff. It's not like golf, it's very specific things and elements that are here, have to agree with over here, and
102 00:18:07,110 --> 00:18:17,610 vice versa. And, again, that's outside the scope of this teaching, but just know that there's logic that is very precise, it's extremely precision oriented. But
103 00:18:17,640 --> 00:18:30,420 this general idea here will serve you well as a roadmap for studying price swings. Now, conversely, we can look at price doing the opposite where this is
104 00:18:30,450 --> 00:18:38,760 ICT market makers. So model, we're going to assume that the market price is down here. And we think that the price is going to go up to some key high. Again,
105 00:18:38,760 --> 00:18:47,790 that could be running out of old high, it could be trading to an old high and just falling short of it because you don't think it's gonna go higher, it could
106 00:18:47,790 --> 00:18:59,520 be trading back into an optimal trade entry. So there's all kinds of things that would be outlining this as a key level. But what makes it key again, is it's a
107 00:18:59,520 --> 00:19:10,470 monthly, weekly or daily level, and at the lowest four hour, but again, I'm only throwing the four out there as just an extra side note because predominantly,
108 00:19:10,470 --> 00:19:20,310 the levels are going to be key because they're on top higher timeframe. daily, weekly, monthly. So as the market trades higher and runs into that you could be
109 00:19:20,310 --> 00:19:34,020 a participant in buying that up or studying it as it rallies up into that key level and then the expectation of lower prices. If it materializes, this whole
110 00:19:34,290 --> 00:19:49,740 fractal. Okay, our price swing is what we're trying to strip down to its basic components. Okay? What elements occur inside this entire price range. That's
111 00:19:49,740 --> 00:20:01,620 what we're highlighting here with the models. The high conform obviously, with the higher high and then breaking down which sets up A potential bearish ICT
112 00:20:01,620 --> 00:20:07,650 breaker, which will be over here somewhere, but the high and then higher high forming this high.
113 00:20:09,090 --> 00:20:20,910 This is what I like to see, I'm more confident with this pattern. But conversely, if we're looking at it, where we have high in a failed higher high
114 00:20:22,110 --> 00:20:32,730 and then it breaks here, this is only significant and market structure break, if we have intermarket relationship confirmation. Again, as soon promoted, this is
115 00:20:32,730 --> 00:20:43,380 British Pound versus US dollar. And British Pound versus US dollar makes a high in a short term lower high in in breaks down. This is ideally a break in market
116 00:20:43,380 --> 00:20:54,510 structure on cable or pound dollar, if euro dollar makes a high, low, higher high, and then it breaks down, because that would be a correlated pair s&p
117 00:20:54,510 --> 00:21:04,380 divergence, smart money technique or smart money tool. Because what that is indicating is that cable was underlying only weak from an algorithmic
118 00:21:04,380 --> 00:21:14,670 standpoint, it was unable to make a higher high where euro was. And I'm speaking hypothetically, obviously. But that's how I would use this lower high formation.
119 00:21:15,780 --> 00:21:25,620 So in other words, if I think is likely to form a lower high than my potential go to a correlated market like, again, if this is assuming pound dollar, I'm
120 00:21:25,620 --> 00:21:34,170 going to be really watching euro dollar. And I want to see if this is occurring here in cable, I want to see in almost demand that it's a higher high in euro.
121 00:21:34,800 --> 00:21:45,210 Now, if it creates a higher high in cable, and it creates a higher high in euro, that means we might not be really topping yet and I'll have to wait for more
122 00:21:45,210 --> 00:21:56,760 information or a real strong breakdown. And then I can get back in sync and trade with it later on. As you'll see. All right, again, the assumption is we're
123 00:21:56,760 --> 00:22:04,620 in a market price. Now here it could be trading in relatively cool lows or consolidation. And then it leaves the consolidation. At this point, again the
124 00:22:04,620 --> 00:22:15,870 same, it could come back to the original consolidation high. But it doesn't have to. We're waiting for it to rally up into another area where it creates an
125 00:22:15,870 --> 00:22:25,680 optimal trade entry long. Or it creates a short term low and then another short term low that's lower than it, it takes out sell stops. And then we anticipate
126 00:22:25,740 --> 00:22:41,850 higher prices rallying higher until we get to know the level of accumulation. So each one of these levels over here is accumulation. And no point of advancement
127 00:22:41,850 --> 00:22:52,920 on the outside until we get to our key level where we anticipate Smart Money reversal. Okay, so smart money reversal occurs with some measure of
128 00:22:52,950 --> 00:23:01,230 consolidation, not a lot. Okay, but works, we're anticipating expecting the algorithm to kind of like hold up here for a little while once a little while,
129 00:23:01,230 --> 00:23:08,970 Michael, again, it's all relative to the timeframe you're studying. Because if this is a five minute chart, it's not going to spend 20 candles in a five minute
130 00:23:08,970 --> 00:23:16,980 interval up in this area, you know, I'm saying like it's, it's going to be very short lived. Whereas if we were on a four hour chart, and we're seeing this
131 00:23:16,980 --> 00:23:23,490 pattern, and we're looking at a five minute chart, then it's gonna probably look like a whole lot of candles. So it's all relative to what you're what you're
132 00:23:23,550 --> 00:23:33,330 looking at through what timeframe. And again, the way you learn how to do this and get better at reading. What I'm suggesting here is you'd look at old data,
133 00:23:33,360 --> 00:23:41,820 the back testing and studying old data, every successful trader, every single one, whether they come through my camp or on their own, or wherever else they
134 00:23:41,820 --> 00:23:51,900 went through it, they're always going to be better and versed because of their own study, the time they spend looking at old data and studying those price
135 00:23:51,900 --> 00:24:03,090 swings. Because those things repeat that element from rallying hear up to some key level and then expecting it to trade lower, it will have all these elements
136 00:24:03,090 --> 00:24:13,260 to it. They might look slightly different each time, but they generally have the same repeating themes. After there's a smart money reversal, they expect price
137 00:24:13,470 --> 00:24:23,400 to trading break lower until we get to another level over here where we would see another optimal trade entry sell. So it'd be a blow a retracement back in
138 00:24:23,610 --> 00:24:32,550 maybe to a bearish order block, and then a displacement lower until we get to another level of distribution. Now in here, it could be the optimal trade entry
139 00:24:32,550 --> 00:24:43,020 sell or it could be a short term high and a higher short term high and then break down. Same thing here. It could be Apple trade entry. So or a little
140 00:24:43,020 --> 00:24:50,520 retracement or creates a short term high starts to go low and runs up one more time. Take that out. No question you're probably asking is when is it do that?
141 00:24:50,550 --> 00:24:59,250 When will it do that in an auto trend? Like for instance, if you go to trade, thinking it's an apple trade entry, so here or here, how do you know that it's
142 00:24:59,250 --> 00:25:07,590 not going to be One of those trades where it takes out the short term high that you went into going short, and you get stopped out, that's going to happen.
143 00:25:08,040 --> 00:25:16,680 I can't promise that you're gonna walk through this marketplace. Without having news cuts and scratches and bruises, you might break a bone or two, you're going
144 00:25:16,680 --> 00:25:24,420 to lose some money. But let's assume for a moment, you're taking an optimal trade entry short here, this goes for the same thing at this mentioned, on the
145 00:25:24,420 --> 00:25:32,910 market maker by model, this is the market maker sell model, just reverse everything I'm saying here for for the other one. If you take an optimal trade
146 00:25:32,910 --> 00:25:43,620 entry sell here, and it starts to go down and then runs up and take you out of the trade, then what you can do is put a sell stop below the short term Lotus
147 00:25:43,620 --> 00:25:51,030 form thus far. And if the market goes down there, it could take you right into the market short. And if it's going to do what we're expecting here, it probably
148 00:25:51,030 --> 00:25:59,130 is going to do a short term high, a short term high, it's higher than a short term high, it's higher, that's unlikely can happen. Yes, so rare, it's probably
149 00:25:59,130 --> 00:26:08,490 never gonna happen. But it can. So there's no reason for you to fear being knocked down or kicked out of the marketplace and take a loss because if your
150 00:26:08,490 --> 00:26:17,880 analysis is correct, then you're probably still going to capture some move in, overcome that drawdown you've taken here. And if you get this other opportunity
151 00:26:17,880 --> 00:26:23,610 here, and you have to stop around here, chances are, you're probably not going to get a stop around here, it'll probably just be the optimal trade entry run,
152 00:26:24,270 --> 00:26:33,150 right from a bearish order block down. And it usually will be aggressive and quick to get down to the low of the rhythm consolidation where cell stops
153 00:26:33,150 --> 00:26:43,470 arresting. So this is the elements to a market maker sell model. And again, for someone new for someone that has not been looking at price charts for a long
154 00:26:43,470 --> 00:26:55,080 time, this is going to look too Elementary, too simple, too vague, too. Well, it's not really showing me anything, I'm not really grasping it. But I promise
155 00:26:55,110 --> 00:27:03,900 if you go through your old charts and look at a price swing, say on a four hour chart that does basically something like this. And then you study it from a 15
156 00:27:03,930 --> 00:27:17,190 or five minute chart, and you'll see this general idea. Right, so let's go over to the British pound. And if you've been following along in recent weeks, the
157 00:27:17,220 --> 00:27:27,150 discussion on pound dollar I gave you guys in is very serious, too. But let's take it back a little bit. And assume that we're looking at this level here.
158 00:27:27,420 --> 00:27:34,110 It's a daily chart, it's relatively equal low. So you know what's resting below that cell stops. And we're trading right here. So we're looking at this high,
159 00:27:34,560 --> 00:27:43,830 low, and we retraced in and we look like we're about to break lower, we have relatively good lows in here. So sell stops there. Lots of sell stops there. So
160 00:27:43,830 --> 00:27:54,510 we would expect to see price trade down here. So this is a key level. Ultimately, price does cascade lower. All of this here, my students and
161 00:27:54,510 --> 00:28:05,520 mentorship we knew about this, we outlined this talked about before it happened. And the market has now at this point, traded sell stops, accumulated longs. And
162 00:28:05,520 --> 00:28:15,480 then we have these relative equal highs. Okay, in the last lesson in the series, I talked about how this is the next draw on liquidity in the market trades up
163 00:28:15,480 --> 00:28:27,300 into that on Thursday of the week of this production and today's Friday. So the market trades up and we've completed a accumulation of sell stops and a
164 00:28:27,300 --> 00:28:38,820 distribution to buy stops, smart money buy sell stops, and sells to buy stops. Okay, so we can use all this information here for the weekly rains to get to our
165 00:28:38,820 --> 00:28:51,120 objective, one weekly PIP objectives. Let's assume that's this is that area where we were looking for the buy stops. And this is where the old low was on
166 00:28:51,120 --> 00:29:02,340 the daily chart where the sell stops were. Look what we have here. The markets consolidating it leaves the consolidation of why doesn't come back up here is a
167 00:29:02,340 --> 00:29:16,290 need to so it's better for it not to do that. And we have what we have the level of distribution here, because we have what Apple trade entry sells off level
168 00:29:16,290 --> 00:29:28,710 here. Apple trade entry sells off. trades below that old relative equal low on a daily chart and it's that blue level on the daily chart that equal lows. Those
169 00:29:28,710 --> 00:29:40,500 sell stops are being absorbed here. The algorithm holds price in this little consolidation, allowing smart money to accumulate. Their buying does not send
170 00:29:40,500 --> 00:29:50,220 price up. It that's not how this works. So I know you have books, and they have authors and teachers and want to be mentors that tell you that the buying sends
171 00:29:50,220 --> 00:30:00,180 price up like this. It does not. How many times have you seen people saying, Oh yeah, we bought this and I bought I'm long. I'm long. Everybody's long. Ever But
172 00:30:00,180 --> 00:30:08,610 he was long in Bitcoin before 20,000, back in several years ago, and I called that top on that.
173 00:30:10,230 --> 00:30:18,360 But everybody was buying. But this still the insane price higher, it went the other way. Because these markets are manipulated, they're controlled folks, I
174 00:30:18,360 --> 00:30:25,590 know it doesn't feel good to hear that it doesn't feel warm and fuzzy, because it feels like man, I really don't have a chance. No, in fact, you really do have
175 00:30:25,590 --> 00:30:35,280 a chance. If you understand how these markets are manipulated, you follow suit with what the algorithm will do, you're not going to always know I don't always
176 00:30:35,280 --> 00:30:44,250 know, I know a lot. I know lots of times when it's going to do specific things. And I know when it's not likely to do the things that I would normally expect.
177 00:30:44,310 --> 00:30:53,520 And I avoid trading. But in this instance, here, the markets consolidating allowing smart money to accumulate Long's, once it takes off here, they can't,
178 00:30:53,730 --> 00:31:03,390 they can't enter, they've already missed that opportunity. So they're gonna have to wait for some new level of accumulation. We have a low, a high Apple trade
179 00:31:03,390 --> 00:31:19,050 entry in here rallies up, we have another level here. From this low to this low, that's optimal trade entry does have a high, low, higher low. rally, trades up
180 00:31:19,050 --> 00:31:29,190 consolidates rise again, and then drops down, takes out that short term low. We talked about this in the previous discussion, or volume accumulates and goes
181 00:31:29,520 --> 00:31:42,270 higher. The algorithm is driving price up here. It's not the buyers. Okay, it's not the buyers. The question is this. If it was just the buying pressure, why
182 00:31:42,270 --> 00:31:52,920 didn't it run from here? All the way up to breakout above here? Because that's what we were aiming for. Why didn't run from here? Right above here in one shot?
183 00:31:52,950 --> 00:32:02,070 Why is it doing all this consolidation? I mean, think about if the buyers are really controlling price, and in retail traders coming in behind any buyer later
184 00:32:02,100 --> 00:32:13,290 chasing price, why doesn't all that translate into just singular price runs, where it just goes in one shot. Because that's not how the markets book. Okay,
185 00:32:13,290 --> 00:32:25,320 it's not how it works, works. All of these lows here are critical, as we'll talk about in later discussions there outside this video. But nonetheless, we're
186 00:32:25,320 --> 00:32:36,240 looking at how price trades down into levels that take out short term lows. Short term rates are taken here it rallies short term low was here, it took it
187 00:32:36,240 --> 00:32:46,380 out, and then it rallies. Short term low here trades down below it. And then on FOMC FOMC, right there. It wakes it up one more time and then rallies, then it
188 00:32:46,380 --> 00:32:56,820 takes out this level here, which will be critical later in other videos in this series. And ultimately takes out all the buy stops above this relative equal
189 00:32:57,030 --> 00:33:08,850 high and origin consolidation. So this is a market maker buy model. This was what I hinged the analysis on in this video series live as we were walking
190 00:33:08,850 --> 00:33:17,370 through this week with you. And my mentorship students knew about this as well. The bias, why I was looking for what I was looking for what I was expecting in
191 00:33:17,370 --> 00:33:26,610 cable, it's based on what I'm showing you here. Now there's a lot more things I'm teaching mentorship students that aren't going to be included in this
192 00:33:26,610 --> 00:33:34,440 series, obviously, and you can get upset and be mad. Or you can say you know what, I appreciate what you're showing me here. This is enough, you can make
193 00:33:34,470 --> 00:33:45,600 lots and lots of money with this. Okay, lots of you don't need a job, you can win fmos. And you can do all these funded account contests and get funded using
194 00:33:45,600 --> 00:33:56,220 what I'm teaching you on this YouTube channel. You do not need to buy mentorship, I'm not offering seats, so it anymore that areas closed down. But
195 00:33:56,220 --> 00:34:08,010 this is something you can study on your own. And go into your charts and see what I'm showing you here, repeats over and over and over again in 2022 after
196 00:34:08,010 --> 00:34:18,030 March because I'm gonna take a month off. I'm gonna be more active on a YouTube channel. And I'll be teaching a lot of these types of things, real time. So that
197 00:34:18,030 --> 00:34:26,280 way you'll be able to see over my shoulder, what I think is gonna happen. And I'm gonna just use what you've been introduced in this YouTube channel, and
198 00:34:26,280 --> 00:34:35,220 you're gonna see how quickly and easily you can hit the ground running and find consistency. And I'll be like a little bit of a guide through you to doing that.
199 00:34:39,420 --> 00:34:50,790 Now, we're talking about SMT Smart Money tool or smart money technique. When we are down below these relatively low lows on British Pound
200 00:34:52,409 --> 00:35:03,839 we're expecting price to accumulate those sell stops. How do we know that that's really going on? How can we trust that well Bringing the dollar the Dixie dx y
201 00:35:04,019 --> 00:35:13,949 is being overlaid on the pound dollar chart. And on trading view, you can see that the dollar index went a little bit higher than the short term high there.
202 00:35:14,639 --> 00:35:29,009 At the same time, pound dollar was unable to go lower than its previous low. Now think if the dollar is going higher, pound should be going lower. But if pound
203 00:35:29,009 --> 00:35:40,919 is going higher dollar should be going lower, or vice versa. But if you look for times when there should be a key level influencing price, this is when you go to
204 00:35:40,919 --> 00:35:53,249 SMT not taught SMT on baby pips like 10 years ago, and everybody took that and ran with it and tried to make SMT occur on all timeframes every time they wanted
205 00:35:53,249 --> 00:36:04,019 to get a trade, they're looking for it. You only consider using SMT, which is a divergence between correlated or inversely correlated markets. If you're looking
206 00:36:04,019 --> 00:36:15,089 at the Dollar Index against the pound, or if you're looking at the index versus the Euro, or the dollar index versus the Australian, okay, that's a USD x, SMP
207 00:36:15,089 --> 00:36:28,949 divergence or dollar SMP. If you're looking at correlated pairs that are like euro and cable, or like, let's say it this way, euro dollar, comparing its lows
208 00:36:28,979 --> 00:36:41,159 to pound dollar, that is a correlated pair s&p divergence, if you see them break their correlation on words, this is a breaking correlation. This high with a
209 00:36:41,159 --> 00:36:53,309 higher high on dollar should have been seen with a low and a lower low on cable. But notice what's happening. This right here is how the algorithm tips off the
210 00:36:53,309 --> 00:36:54,869 traders that are in the know,
211 00:36:56,520 --> 00:37:04,320 we already know go malodors relative equal lows, that their sell stuff, and it's probably gonna go down here occasionally and go higher, that's likely, but how
212 00:37:04,320 --> 00:37:14,460 do we really know and trust that's going to happen, the dollar index gives us the insight X ray view, if you will, where it went high, higher high, low
213 00:37:14,550 --> 00:37:26,100 failed, lower low. So it's telling the traders without really broadcasting it, that okay, cables gonna start going higher, because it failed to make that lower
214 00:37:26,100 --> 00:37:37,470 low where the dollar mean higher high. So this is SMT. diversions, higher, high, higher low. This is occurring at the same time. We're below there's daily equal
215 00:37:37,470 --> 00:37:50,010 lows. And we're expecting price to go higher anyway. And all this does is confirm SMT is not a timing tool. It's a confirmation tool. Okay, it confirms
216 00:37:50,010 --> 00:37:58,950 something that you were already expecting anyway. And this is why a lot of folks that learn from me on baby pips, it's not that Oh, SMT doesn't work. It doesn't
217 00:37:58,950 --> 00:38:05,880 work, because I tried to look for here and there, and it failed here. It failed there. You don't go into your charts looking for divergence between highs and
218 00:38:05,880 --> 00:38:14,550 lows. That's not what you're doing. You have to have logic and some measurable narrative behind what it is you're looking for. Otherwise, the divergence could
219 00:38:14,580 --> 00:38:24,450 be there momentarily, and then completely evaporate. And then what do you trade on? You trade it on the basis of like an indicator. And this is not an indicator
220 00:38:24,450 --> 00:38:33,840 when it's done correctly, because I'm comparing the price of one benchmark currency, the dollar versus another currency pair. And they should be mirroring
221 00:38:33,840 --> 00:38:43,530 one another. Okay, so if this is higher highs, there should be lower low. If it doesn't do that. That to me indicates as a cracking correlation, therefore, it's
222 00:38:43,530 --> 00:38:52,860 tipping off algorithmically. This is the signal it sends. It's not Oh, it went down and there was not enough sellers to send it lower. Whatever it is, it's an
223 00:38:52,860 --> 00:39:02,070 also isn't a low and there's too many buyers to let it go down. It's not that either. I'm telling you what it is. I'm telling you exactly what it is. And
224 00:39:02,910 --> 00:39:11,010 majority of you aren't going to agree with it. Because you know, you probably read 14 books, okay, or watch a couple videos on somebody else's YouTube
225 00:39:11,010 --> 00:39:19,740 channel. And they swear up and down that it's this and it's that any maybe have exotic cars that they're leasing and trying to convince you with facts in mind,
226 00:39:19,740 --> 00:39:30,180 they're carrying around with them all the time going on trips, go into a chart, okay, and use these things I'm teaching you, okay, and study like that. And
227 00:39:30,180 --> 00:39:36,420 you'll earn far more than any book out there is going to give you because most of the books that's being written now are just bleeding information from what
228 00:39:36,420 --> 00:39:43,590 I'm giving you here on this YouTube channel or from my mentorship. And that's the truth. And if it sounds arrogant, I'm sorry, that sounds arrogant. I'm not
229 00:39:43,590 --> 00:39:50,190 trying to be arrogant. I'm just telling you, if you're going to learn how to do this, you need to learn it from the source. And that's me. I'm going to show you
230 00:39:50,190 --> 00:39:58,710 how to use this stuff and make money with it. Real Money, not demo dollars that I teach. Third for compliance reasons, because I'm not licensed to give you
231 00:39:58,710 --> 00:40:08,640 trade advice, but I've promise you this, if you learn this stuff, and you get good with a demo account, what separates the ability for you to do the same
232 00:40:08,640 --> 00:40:20,730 thing in a demo account in a Live account? fear and greed. And I have modules in this YouTube channel to help you conquer that also. So there's no reason for you
233 00:40:20,730 --> 00:40:27,330 not to be making money, there's no reason for you not to be passing a funded account challenge so that we can get out here and start making money because
234 00:40:27,330 --> 00:40:37,260 times are gonna start to get real tough sing books, real tough. And if you're relying on your job, I'm telling you, you are setting yourself up for failure,
235 00:40:38,970 --> 00:40:49,800 I can be your best friend. And all I got to do is a pad and pen, sit down, take notes and study and experience will guide you, I'm going to put you in the right
236 00:40:49,800 --> 00:41:00,810 place in studying. But all that work is your new, you have to do all this stuff, you have to study it, and go through example, after example of hindsight data.
237 00:41:01,290 --> 00:41:09,570 And then you train yourself to see these things. You don't go in looking for divergence, because that's the same thing as a student that trades with retail
238 00:41:09,570 --> 00:41:17,640 logic will look at an RSI and say, okay, it's going higher and higher. But look at this RSI it's diverging variously, and he tried to go short, and they get
239 00:41:17,640 --> 00:41:25,830 their clock cleaned. In this case, I'm going 100. Because they don't understand the underpinnings of the marketplace, why should that market be turning there?
240 00:41:26,220 --> 00:41:36,210 There has to be some reason for that. If it's not underlying Lee positioned to trade lower, it doesn't make a difference what indicator you slap on that chart.
241 00:41:36,840 --> 00:41:48,300 They're all gonna flash bear signals. Because it's measuring mathematically a number of bars in the past. And by default, it's going to be going lower. And
242 00:41:48,300 --> 00:41:58,050 people don't understand that because they're not they're not versed in basic math, okay. There's simple things that you're being tricked by, but because they
243 00:41:58,050 --> 00:42:07,200 show example after example of doing this or that in the past, then you go into thinking, Okay, well, I believe that this is going to happen, because I've seen
244 00:42:07,200 --> 00:42:15,810 it in the book four or five times. Never seen the author trading with it, never seen the author doing it with a Live account. Never seen them show you in live
245 00:42:15,810 --> 00:42:22,800 market conditions. You don't see those things. But they have cherry picked hindsight examples. We're talking about the left side of the chart all the time.
246 00:42:24,210 --> 00:42:41,700 I did this series, I did this series, again, for you too. But I used real market action, real analysis to deliver it. How better can you expect from a mentor to
247 00:42:41,700 --> 00:42:52,650 be able to do it, outline it, I signed my name on it where I thought Kayden was going to go in here this I didn't want a week going FOMC and I even traded FOMC
248 00:42:53,100 --> 00:43:03,600 I put the trade on my telegram. It's there you can see it. And it went up and traded. And I did a one shot one kill set up with that. All of that with this
249 00:43:03,600 --> 00:43:13,950 logic here. better view of what I'm referring to here is s&p divergence. On the right hand side, it's the chart on the pound dollar and left hand side it's the
250 00:43:13,950 --> 00:43:26,100 dollar index, here's that higher high in its own chart. And then here's that higher low on its independent chart on cable. So these two price points are
251 00:43:26,790 --> 00:43:36,420 correlated to these two price points. This should have went to a lower low than this one. It didn't, because it didn't do that. And we're below those relative
252 00:43:36,420 --> 00:43:46,860 equal lows on a daily chart on cable. This was accumulation of Long's the algorithm is signaling to interbank traders, this is going to go higher, not
253 00:43:46,860 --> 00:43:58,410 because of buying and selling pressure deficiencies. But because it's being controlled and manipulated. Don't take my word for it. I don't want you to
254 00:43:58,410 --> 00:44:05,850 believe me. I don't want you to believe me at all that what I'm showing you here, I want you to go into the charts and study it with this premise in mind.
255 00:44:06,570 --> 00:44:14,670 Go into it looking to disprove what I'm saying. And you're going to shock yourself because it's there. It's been there all this time. And until I start
256 00:44:14,670 --> 00:44:20,820 talking about it, no one paid any attention to it. So until we talk next time, be safe.