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Version 1.1 by Drunk Monkey on 2020-11-20 16:48
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3 ICT: Folks, all right, we are going to cover the need for a
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7 trading plan.
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11 If you're new to trading and you do not have a trading plan,
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15 it's hopefully my goal
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19 as an end result in this presentation to communicate the
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23 need for one. If you've already started trading, and you've
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27 been having difficulties, and you don't have a trading plan,
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31 I could pretty much guarantee if you just put some work into
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35 formulating a very clear, concise trading plan, your results
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39 would be dramatically different. Because basically having no
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43 plan equals emotional driven results, okay, you're not gonna
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47 have any understanding what to do going to be reacting more
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51 than you're anticipating. And that's the stark difference
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55 between a professional trader because they do have a
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59 detailed, organized trading plan. It's well written, it's
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63 it's by their trading desk, it's memorized. It's reviewed
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67 continuously. By having such they have an objective and
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71 result. And it really is the DNA of a successful trader. So
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75 having a trading plan is at the top of your list as far as
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79 being a consistently profitable trader. Right The majority
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83 of your time, what do you do as a trader? And where is it
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87 most spent in terms of time? Well, first, you got to
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91 understand that you have to manage your time wisely.
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95 Okay, no one's going to manage it for you.
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99 So it's important that you understand that the countless
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103 hours that you spend in analysis without having a clear
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107 objective premise to it is actually counterproductive. Okay,
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111 you feel like you're doing the right thing by spending a lot
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115 of time staring at the chart. But unless you have an
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119 understanding of exactly what it is you're looking for,
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123 you're just wasting your time. You need to spend quality
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127 time with the macro economic analysis and higher time frame
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131 support resistance levels. I can't stress this enough
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135 because most new traders come into the marketplace and he
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139 spent too far time in Five and 15 minute charts, and maybe
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143 even one minute charts, hoping to see some kind of
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147 mysterious neon sign saying buy me or sell me. Nothing
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151 significant occurs without first leaving telltale signs on a
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155 long term basis. That means if there's a significant price
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159 move, I guarantee you if you look at the higher timeframe
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163 charts, and I'm referring to the monthly, weekly, daily for
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167 hour and new, less than a one hour chart, those timeframes
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171 are going to have a clue as to what was the catalyst for
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175 that move prior to it actually unfolding. Follow the
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179 interest rates. This is where the majority of your time is
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183 gonna be spent. You need to get a feel for what interest
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187 rates are trying to do. Are they moving higher or are they
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191 moving lower? Keeping track of the overnight lending rate
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195 with the banks per country is absolutely significant
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199 information and insight you need as a consistent trader
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203 what's the least important part? And trading? Well, don't
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207 focus on the money number one. And unfortunately, we all get
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211 into this business for a number of things, okay, but top of
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215 the list should be to make money. But while you're trading,
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219 your focus should not be on the money. Don't focus on the
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223 amount of money that you hope to make, there's no guarantee
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227 you're going to make it on every trade. So there's no real
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231 point in hoping you just trade the process, trade your plan,
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235 and the end result should if you have a well grounded, well
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239 formulated trading plan, money will deposit into your
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243 account. Do not worry about losses, okay? You're going to
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247 have losing trades. If you accept that going in. You won't
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251 be demoralized from it. Okay, every good trader whether
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255 you're professional or not, they have losing streaks. Do not
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259 worry about missed trades. I'm going to tell you right now
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263 I'm probably miss more winning trades every single week than
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267 more than most of you realize. I don't take a whole lot of
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271 trades. I like to cherry pick. I like to take things And are
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275 really
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279 Unknown: set up.
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283 ICT: And if you have that mindset going in much like
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287 expecting losses, it's very comforting to know that you
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291 don't feeling rushed. And that's a very important
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295 characteristic of a professional trader. We aren't rushed to
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299 get in the marketplace. You know, we react slowly when
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303 trying to make money. And we react fast and quickly when
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307 we're trying to preserve our money. That's a very
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311 significant paradigm shift that you're going to need if you
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315 don't already have that mindset going in.
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319 The least important process in trading is the entry signals.
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323 And I'll probably stop you right there. But it really is
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327 least in terms of significance. If you don't have a macro
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331 understanding of what's going on in the marketplace and the
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335 higher timeframe directional bias, chances are, you're
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339 probably going to be wrong more times, and you're right. So
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343 it's my goal to really try to drive you to looking at the
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347 weekly the monthly, the daily in the four hour chart. And if
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351 you're going to go a little less than four hour, don't go
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355 below one hour, but spend most spend most of your time on
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359 the weekly and daily, those charts are going to be the most
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363 in significance. Because it's the banking levels are
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367 determined.
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371 Premise and sound basis is paramount. That means you have to
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375 have an understanding of what it is that you're doing.
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379 You're not just staring blindly at charts because that's not
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383 going to get you anywhere. I guarantee you unless you have a
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387 specific pattern, a motive that you use to get into a
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391 particular trade. And you hunt that whether you're back
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395 testing or walking forward with it. Unless you have that
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399 understanding of what it is specifically that you're looking
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403 for. You're just basically spinning your wheels and it's my
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407 advice not to do that. Keep the focus on the plan and work
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411 the trading edge that your method exploits
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415 All right, the general overview. Right trading plans are
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419 basically taking all the pieces of the puzzle to equate to
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423 successful trading and bringing those pieces together. Those
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427 pieces could be fundamental data technicals, inter market
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431 analysis. All these things go together in terms of building
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435 a trading plan. impeccable risk control is the first
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439 component to any successful trading plan. Flawless equity
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443 management, which is closely tied to risk control is
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447 essential to every successful trading plan. You can have all
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451 the bells and whistles on your trade monitor, but it means
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455 nothing unless you control your money and the risks involved
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459 in all your trades. fundamentals at any measure can always
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463 assist a trader in trade plan development. inter market
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467 analysis is key to a well balanced trading plan.
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471 Understanding how all the asset classes tie together in his
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475 Upon movement on the interest rate markets that is crucial
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479 for your long term success and longevity in trading.
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483 Technical analysis, and a comprehensive approach to sound
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487 tools and concepts is the framework to exercising a trading
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491 plan. If you don't have a concise list of specific tools
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495 that you use for specific times and reasons, you're going to
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499 be floating in and out with different oscillators, you're
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503 gonna be using different tools, understand what tools you're
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507 going to have and stick to those and understand what it is
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511 that those specific specific tools do. And try not to use
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515 them for any other reason except for those purposes only.
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519 executing a top down analysis with all the above components
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523 will deliver optimal results while controlling risk, which
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527 is the number one reason why we as traders last as long as
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531 we do in this business, we control risk. So all the pieces
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535 together it begins and ends with the control of risk.
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539 paradigm shift Alright guys, you are not the only predator
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543 in the marketplace. I know sometimes when we get these
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547 trading plans and trading tools and it's the first time
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551 you've ever probably looked at an organized structure of how
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555 to apply analysis to the marketplace, and you feel kind of
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559 like a big shot, and that's normal. It's kind of cool now,
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563 but dude Not overestimate the importance of knowing there's
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567 other people out there that want your mind to when you go in
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571 confident, or you develop confidence later on, understand
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575 overconfidence is actually counterproductive. overconfidence
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579 is actually an invitation for ego which also allows the
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583 input of emotions and that's not what you want your trading.
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587 Never assume your well designed trading plan won't hit a
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591 losing streak. I'm assuring you that it will. There's no one
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595 out there that is immune to it, you're going to have a
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599 losing streak, okay. always reflect on your wins as a
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603 victory and your losses as a learning opportunity. All
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607 learning opportunities that I've experienced in my trading
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611 have actually produced greater growth
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615 in
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619 my development as a trader. So losses are actually a
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623 beneficial thing. It will take preparation in advance to
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627 weather periods of inevitable draw down. Journal your
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631 results both good and bad. It's important you go back to
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635 that journal Because it periods of drawdown and strings of
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639 losses, it will help remind you that these are temporary
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643 events and that you do eventually trade out of them if you
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647 control risk and reduce your overall exposure as you
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651 continue to take losses. Do not overdrive your trading plan
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655 or attempt to trade outside its intended purpose. Do not
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659 turn a position trade, okay into multiple different
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663 timeframe trades. Okay. If you if your analysis suggests
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667 it's a position, trade, trade it like that, okay. Every
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671 great trader has one thing in common and it's the respect
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675 and understanding that the risk will always outweigh the
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679 reward unless it is properly managed. It's not about the
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683 profits. It's controlling risk.
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687 Pack small play big
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691 2% risk or less, is it really enough? I probably get this
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695 question emailed to me more than any other You when you get
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699 into trading guys, you probably fantasize about going to
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703 places like this. And you think you need to risk 2015 10% of
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707 your account to get there. And I can assure you, I've been
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711 to places like this. And I've done it with 2% risk or many
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715 times with less than that. And it's amazing. If you just
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719 understand the power of compound interest, you don't need a
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723 whole lot of risk exposure to build this wealth. The
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727 question will always be in the developing traders mind, how
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731 can I make a fortune with so little risk and hopefully by
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735 the end of this presentation, you'll see that you don't
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739 really need a whole lot of risk. You just need time and
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743 consistency. proficient consistent traders focus on the
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747 reality that their trading will not be perfect. We are not
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751 going in with the mindset of expecting our trades to be
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755 perfect, okay? We don't even need high accuracy,
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759 okay.
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763 But you do need consistently following a trading plan.
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766 00:13:56,940 ~-~-> 00:14:03,060
767 That's paramount. You have to continuously do that. You can
768
769 193
770 00:14:03,060 ~-~-> 00:14:06,960
771 make all the money you ever need risking 2% and many times
772
773 194
774 00:14:06,960 ~-~-> 00:14:11,880
775 even less than that portrayed. Wealth is built with time,
776
777 195
778 00:14:12,240 ~-~-> 00:14:20,010
779 not excessive risk exposure. Keeping realistic goals in
780
781 196
782 00:14:20,010 ~-~-> 00:14:25,170
783 focus. Alright guys, you've seen all of the internet gurus
784
785 197
786 00:14:25,170 ~-~-> 00:14:28,260
787 and you probably thought I was one like that as well. That
788
789 198
790 00:14:28,260 ~-~-> 00:14:30,120
791 promised riches real quick.
792
793 199
794 00:14:30,359 ~-~-> 00:14:33,269
795 You're gonna get, you know, 1000 pips every month.
796
797 200
798 00:14:34,350 ~-~-> 00:14:38,580
799 Guys, look, don't take the bait. Okay, that is meant for you
800
801 201
802 00:14:38,610 ~-~-> 00:14:43,830
803 to lose. Okay? Do not buy into that mindset. Your goal is to
804
805 202
806 00:14:43,830 ~-~-> 00:14:47,070
807 steadily build your account with little draw down as humanly
808
809 203
810 00:14:47,070 ~-~-> 00:14:51,900
811 possible. Your trading is not hinged on the premise. You
812
813 204
814 00:14:51,900 ~-~-> 00:14:55,230
815 must hit home run profits, every trade, or even weekly.
816
817 205
818 00:14:56,010 ~-~-> 00:14:59,670
819 There's a lot of times I'll have a losing week. There's many
820
821 206
822 00:14:59,670 ~-~-> 00:15:04,230
823 times on Have a losing day and then come back from that and
824
825 207
826 00:15:04,260 ~-~-> 00:15:08,280
827 be able to recoup it. But I'm not always hitting Win Win
828
829 208
830 00:15:08,280 ~-~-> 00:15:13,350
831 Win, win win, and you're not going to either. Your career
832
833 209
834 00:15:13,380 ~-~-> 00:15:17,400
835 should be built on a low, yet sufficient baseline target
836
837 210
838 00:15:17,400 ~-~-> 00:15:25,410
839 based on percent return, or pips per month or week. trading
840
841 211
842 00:15:25,410 ~-~-> 00:15:28,920
843 with risk controlled and profiting a net gain of 25 pips per
844
845 212
846 00:15:28,920 ~-~-> 00:15:34,110
847 week should be a new traders goal. After consistently
848
849 213
850 00:15:34,110 ~-~-> 00:15:37,800
851 harvesting 25 pips per week graduate to targeting 50 pips
852
853 214
854 00:15:39,090 ~-~-> 00:15:42,930
855 after 50 pips per week is achieved, aim for 75 pips and
856
857 215
858 00:15:42,930 ~-~-> 00:15:45,420
859 eventually move beyond that as your experience and tolerance
860
861 216
862 00:15:45,420 ~-~-> 00:15:46,710
863 for risk increases.
864
865 217
866 00:15:50,670 ~-~-> 00:15:52,260
867 Alright, let's look at a case study here we're going to look
868
869 218
870 00:15:52,260 ~-~-> 00:15:52,890
871 at a
872
873 219
874 00:15:53,819 ~-~-> 00:15:57,839
875 trading model that more or less targets and shoots a goal
876
877 220
878 00:15:57,839 ~-~-> 00:16:03,749
879 for 25 pips for the week. And we're looking at possibly
880
881 221
882 00:16:03,749 ~-~-> 00:16:08,549
883 making 6% return for the month, and we're risking 2% per
884
885 222
886 00:16:08,549 ~-~-> 00:16:13,079
887 trade and 30 PIP stops are used, and the monthly goal only
888
889 223
890 00:16:13,079 ~-~-> 00:16:18,269
891 equates to 90 pips for the entire month. Now, if you look at
892
893 224
894 00:16:18,269 ~-~-> 00:16:20,759
895 these numbers, okay, this is a spreadsheet so there's going
896
897 225
898 00:16:20,759 ~-~-> 00:16:25,739
899 to be a little bit of, you know, rounding issue but 23 pips,
900
901 226
902 00:16:26,069 ~-~-> 00:16:30,509
903 okay, per week, roughly we'll just call 25 pips that would
904
905 227
906 00:16:30,509 ~-~-> 00:16:34,649
907 equate to 6% return per month. If you start with 20 $500. In
908
909 228
910 00:16:34,649 ~-~-> 00:16:38,909
911 one year, your account goes to over $5,000, which is more
912
913 229
914 00:16:38,909 ~-~-> 00:16:44,069
915 than doubling. After two years, it goes to $10,122. Okay, so
916
917 230
918 00:16:44,069 ~-~-> 00:16:45,929
919 you see, essentially you're doubling your money every single
920
921 231
922 00:16:45,929 ~-~-> 00:16:49,019
923 year, you're only risking 2% and you're only looking for 25
924
925 232
926 00:16:49,019 ~-~-> 00:16:52,679
927 pips per week. Now notice over here we have daily calm,
928
929 233
930 00:16:52,889 ~-~-> 00:16:57,899
931 okay, this is more or less to stimulate the idea that if you
932
933 234
934 00:16:57,899 ~-~-> 00:17:02,009
935 trade on a daily basis, and you scout I don't really teach
936
937 235
938 00:17:02,969 ~-~-> 00:17:06,779
939 traders to go in and try to scalp scalp five pips. But just
940
941 236
942 00:17:06,779 ~-~-> 00:17:08,639
943 for the sake of argument we're going to look at you know,
944
945 237
946 00:17:08,999 ~-~-> 00:17:12,179
947 every day if you scalp five pips, that would give you your
948
949 238
950 00:17:12,179 ~-~-> 00:17:14,939
951 25 pips for the week. Obviously, if you're trading the best
952
953 239
954 00:17:14,939 ~-~-> 00:17:16,859
955 days of the week, which were Tuesday, Wednesday and
956
957 240
958 00:17:16,859 ~-~-> 00:17:21,569
959 Thursday, regardless of what pair you trade, eight pips per
960
961 241
962 00:17:21,569 ~-~-> 00:17:24,509
963 day, three times a week would give you your goal for the
964
965 242
966 00:17:24,509 ~-~-> 00:17:27,989
967 week and obviously 11 should be around rough rounded up like
968
969 243
970 00:17:27,989 ~-~-> 00:17:32,909
971 12 twice a week would give you your weekly PIP haul. So you
972
973 244
974 00:17:32,909 ~-~-> 00:17:39,419
975 can see over time your money is growing steadily. And while
976
977 245
978 00:17:39,419 ~-~-> 00:17:42,059
979 it's not a whole lot of money, you got to look at what
980
981 246
982 00:17:42,059 ~-~-> 00:17:43,979
983 you're starting with and what you're really aiming for.
984
985 247
986 00:17:44,009 ~-~-> 00:17:46,859
987 Okay, and I think 25 pips per week if you're brand new
988
989 248
990 00:17:46,859 ~-~-> 00:17:53,879
991 trader is an absolutely wonderful goal to start with. Okay,
992
993 249
994 00:17:53,879 ~-~-> 00:17:57,179
995 look at another case studies is 50 pips per week, okay, and
996
997 250
998 00:17:57,179 ~-~-> 00:17:59,819
999 we're gonna be targeting 10% per month sign with the same
1000
1001 251
1002 00:17:59,819 ~-~-> 00:18:03,389
1003 account. 20 $500 now this time we're going to exercise the
1004
1005 252
1006 00:18:03,389 ~-~-> 00:18:10,799
1007 risk exposure of one and a half one and a half percent 30
1008
1009 253
1010 00:18:10,799 ~-~-> 00:18:14,039
1011 pips per stop, and a monthly goal in terms of pips is 200
1012
1013 254
1014 00:18:14,039 ~-~-> 00:18:17,639
1015 pips and the weekly goal is 50 pips per week, and if you
1016
1017 255
1018 00:18:17,639 ~-~-> 00:18:21,659
1019 trade everyday scalping 10 pips per day, equates to 50 pips.
1020
1021 256
1022 00:18:22,049 ~-~-> 00:18:24,659
1023 And three times Tuesday, Wednesday and Thursday looking for
1024
1025 257
1026 00:18:24,659 ~-~-> 00:18:30,659
1027 17 pips per day or two times for the week at 25 pips per
1028
1029 258
1030 00:18:31,109 ~-~-> 00:18:37,829
1031 trade. The first year your account would move to $7,846 and
1032
1033 259
1034 00:18:37,829 ~-~-> 00:18:43,739
1035 then in second year, it would be at $24,624 not bad and
1036
1037 260
1038 00:18:43,739 ~-~-> 00:18:45,719
1039 you're not really hitting homeruns yet guys, are you it's
1040
1041 261
1042 00:18:45,719 ~-~-> 00:18:52,589
1043 only 50 pips. Okay, look at a case study where we're looking
1044
1045 262
1046 00:18:52,589 ~-~-> 00:18:56,549
1047 for 75 pips per week. Now I can tell you, you can build a
1048
1049 263
1050 00:18:56,549 ~-~-> 00:19:01,049
1051 career on this, okay. 75 pips is absolutely Astonishing if
1052
1053 264
1054 00:19:01,049 ~-~-> 00:19:06,029
1055 you use it the right way 10% per month, risking only 1% per
1056
1057 265
1058 00:19:06,029 ~-~-> 00:19:11,609
1059 trade using a 30 PIP stop loss, the goal 300 pips 75 pips
1060
1061 266
1062 00:19:11,609 ~-~-> 00:19:15,269
1063 per week, if you day trade every single day 15 pips would be
1064
1065 267
1066 00:19:15,269 ~-~-> 00:19:18,959
1067 your goal 25 if you're trading three times per week and 38
1068
1069 268
1070 00:19:19,559 ~-~-> 00:19:23,969
1071 pips twice a week with equate to your goal and in one year,
1072
1073 269
1074 00:19:23,969 ~-~-> 00:19:29,279
1075 your 20 $500 would essentially grow to 7846. And again
1076
1077 270
1078 00:19:29,279 ~-~-> 00:19:31,769
1079 $24,624
1080
1081 271
1082 00:19:37,980 ~-~-> 00:19:40,560
1083 modular thinking steady progress.
1084
1085 272
1086 00:19:41,490 ~-~-> 00:19:46,620
1087 Now small consistency can still surprise you. It takes an
1088
1089 273
1090 00:19:46,620 ~-~-> 00:19:50,640
1091 exponential mindset, little things over a period of time
1092
1093 274
1094 00:19:50,790 ~-~-> 00:19:54,870
1095 equals big results. Building your trading plan flexibility,
1096
1097 275
1098 00:19:55,140 ~-~-> 00:19:58,020
1099 you're not always going to see it on the timeline that you
1100
1101 276
1102 00:19:58,020 ~-~-> 00:20:02,610
1103 want. You might have a weekly goal that may require shorter
1104
1105 277
1106 00:20:02,610 ~-~-> 00:20:07,020
1107 term day trades or scalps to achieve. Do not force yourself
1108
1109 278
1110 00:20:07,020 ~-~-> 00:20:09,510
1111 into hunting or believing you need to make your goals daily
1112
1113 279
1114 00:20:09,510 ~-~-> 00:20:14,220
1115 and or weekly. Your weekly goals might fall short a week or
1116
1117 280
1118 00:20:14,220 ~-~-> 00:20:18,090
1119 two, but still might be met in the course of the same month.
1120
1121 281
1122 00:20:18,450 ~-~-> 00:20:23,520
1123 It may just average out guys. Your monthly goal might
1124
1125 282
1126 00:20:23,520 ~-~-> 00:20:26,700
1127 average out over the quarter or over the entire year. Don't
1128
1129 283
1130 00:20:26,700 ~-~-> 00:20:30,540
1131 be so rigid and allow the market to pay you when and how it
1132
1133 284
1134 00:20:30,540 ~-~-> 00:20:37,110
1135 will. Your goals might fall short of your forecast and
1136
1137 285
1138 00:20:37,110 ~-~-> 00:20:41,310
1139 hopes. However, do not be disappointed if this occurs, you
1140
1141 286
1142 00:20:41,310 ~-~-> 00:20:43,590
1143 will still be heading in the right direction and that's
1144
1145 287
1146 00:20:43,590 ~-~-> 00:20:51,240
1147 really what matters. Success without homeruns Is it
1148
1149 288
1150 00:20:51,240 ~-~-> 00:20:54,690
1151 possible? Well, let's look at this. This is kind of lost the
1152
1153 289
1154 00:20:54,690 ~-~-> 00:21:00,720
1155 I admit, but this is what could happen. 20% per month Now
1156
1157 290
1158 00:21:00,720 ~-~-> 00:21:04,530
1159 it's rather impressive analysis. That's another way that you
1160
1161 291
1162 00:21:04,650 ~-~-> 00:21:08,190
1163 many fantasize about. We're going to be risking 2% per trade
1164
1165 292
1166 00:21:08,190 ~-~-> 00:21:12,150
1167 maximum. And now we have an understanding what we knew using
1168
1169 293
1170 00:21:12,150 ~-~-> 00:21:15,360
1171 our trading plan and we have some consistency. We understand
1172
1173 294
1174 00:21:15,360 ~-~-> 00:21:17,940
1175 how to use a lower timeframe so we can use now 20 pips stop
1176
1177 295
1178 00:21:17,940 ~-~-> 00:21:22,860
1179 losses. The monthly goal is 200 pips still in terms of many
1180
1181 296
1182 00:21:22,860 ~-~-> 00:21:26,460
1183 expectations of traders, that's very, very modest, weekly
1184
1185 297
1186 00:21:26,460 ~-~-> 00:21:30,120
1187 PIP goal 50 pips and if you break that down, it could be
1188
1189 298
1190 00:21:30,120 ~-~-> 00:21:33,300
1191 done over a course of everyday 10 pips three times a week is
1192
1193 299
1194 00:21:33,300 ~-~-> 00:21:38,910
1195 17 pips and 25 times two per week 20 $500 in one year gross
1196
1197 300
1198 00:21:38,910 ~-~-> 00:21:45,810
1199 of $22,290 and in two years, it goes to 198,000 and in 34
1200
1201 301
1202 00:21:45,810 ~-~-> 00:21:49,890
1203 months, gross to what everyone fantasizes about in trading
1204
1205 302
1206 00:21:49,920 ~-~-> 00:21:51,210
1207 the $1 million mark.
1208
1209 303
1210 00:21:58,140 ~-~-> 00:22:01,950
1211 Keep something pay yourself You have to learn to be
1212
1213 304
1214 00:22:01,950 ~-~-> 00:22:04,950
1215 methodical about taking first profit guys, no one's going to
1216
1217 305
1218 00:22:04,950 ~-~-> 00:22:07,080
1219 pay you, your broker is not going to take first profit for
1220
1221 306
1222 00:22:07,080 ~-~-> 00:22:09,000
1223 you. They're not going to scale some of your position and
1224
1225 307
1226 00:22:09,000 ~-~-> 00:22:12,090
1227 make sure you get some profit out of a winning trade. It's
1228
1229 308
1230 00:22:12,090 ~-~-> 00:22:15,120
1231 your responsibility. So before taking any trade, it's
1232
1233 309
1234 00:22:15,120 ~-~-> 00:22:18,480
1235 crucial for you to know at what level you will take first
1236
1237 310
1238 00:22:18,480 ~-~-> 00:22:22,830
1239 profit and then start to reduce or remove risk altogether.
1240
1241 311
1242 00:22:24,600 ~-~-> 00:22:27,540
1243 Limiting risk after taking half of your original position
1244
1245 312
1246 00:22:27,540 ~-~-> 00:22:31,440
1247 off will remove emotional and psychological pressures you
1248
1249 313
1250 00:22:31,440 ~-~-> 00:22:35,310
1251 may feel while the position is open. If you take first
1252
1253 314
1254 00:22:35,310 ~-~-> 00:22:40,530
1255 profit, that will absolutely remove all of the rush for you
1256
1257 315
1258 00:22:40,530 ~-~-> 00:22:42,540
1259 to be able to close the trade because how many times you've
1260
1261 316
1262 00:22:42,540 ~-~-> 00:22:45,540
1263 been in a trade, even a demo account if you guys are new,
1264
1265 317
1266 00:22:45,780 ~-~-> 00:22:47,760
1267 and you see a profit and you just want to close it out
1268
1269 318
1270 00:22:47,760 ~-~-> 00:22:50,010
1271 because you just want to see it in your account as
1272
1273 319
1274 00:22:50,010 ~-~-> 00:22:52,950
1275 registering as a profit. Okay, when you take some off and
1276
1277 320
1278 00:22:52,950 ~-~-> 00:22:55,500
1279 you split your position in half, take some of it off and
1280
1281 321
1282 00:22:55,500 ~-~-> 00:22:58,260
1283 move your stop to break even or reduce it to half of what
1284
1285 322
1286 00:22:58,260 ~-~-> 00:23:03,150
1287 your original profit was. That's a wonderful position to be
1288
1289 323
1290 00:23:03,150 ~-~-> 00:23:05,940
1291 in because now no matter what you either make half of your
1292
1293 324
1294 00:23:05,940 ~-~-> 00:23:10,320
1295 first positions profit potential when it was first profit,
1296
1297 325
1298 00:23:10,890 ~-~-> 00:23:14,340
1299 or you stop at an event and you collect your first you know
1300
1301 326
1302 00:23:14,340 ~-~-> 00:23:18,840
1303 first profit and it was it taking first profit at a
1304
1305 327
1306 00:23:18,840 ~-~-> 00:23:21,750
1307 predetermined level will assist in building confidence and
1308
1309 328
1310 00:23:21,750 ~-~-> 00:23:25,410
1311 removes the sting of the trade losing should it reverse on
1312
1313 329
1314 00:23:25,410 ~-~-> 00:23:28,170
1315 you and stop you out of breakeven. How many times you had a
1316
1317 330
1318 00:23:28,170 ~-~-> 00:23:30,720
1319 winning trade and then go against you and become a losing
1320
1321 331
1322 00:23:30,720 ~-~-> 00:23:33,840
1323 trade? Okay, I know that's like, I'm not immune to that I
1324
1325 332
1326 00:23:33,840 ~-~-> 00:23:37,440
1327 experienced that. The greatest thing you can do is learn to
1328
1329 333
1330 00:23:37,440 ~-~-> 00:23:45,090
1331 take profits take first profit, and scale. Continuing our
1332
1333 334
1334 00:23:45,090 ~-~-> 00:23:47,910
1335 theme success without homeruns Now let's take a look at an
1336
1337 335
1338 00:23:47,910 ~-~-> 00:23:50,730
1339 example. Let's assume for a moment we are a trader that now
1340
1341 336
1342 00:23:50,730 ~-~-> 00:23:56,370
1343 uses two positions. Okay, to enter on a trade. In other
1344
1345 337
1346 00:23:56,370 ~-~-> 00:23:59,970
1347 words, we take a maximum of 2% risk and we split it in half
1348
1349 338
1350 00:24:00,000 ~-~-> 00:24:04,560
1351 If the first portion of a trade we take first profit at 30
1352
1353 339
1354 00:24:04,560 ~-~-> 00:24:08,190
1355 pips, we're going to be risking 20 pips. So we're already
1356
1357 340
1358 00:24:08,190 ~-~-> 00:24:11,730
1359 risking 1.5 to one reward the risk.
1360
1361 341
1362 00:24:12,390 ~-~-> 00:24:14,280
1363 Okay, so we're making, we're making a little bit more
1364
1365 342
1366 00:24:14,579 ~-~-> 00:24:18,839
1367 than what we're risking for the initial first profit. And if
1368
1369 343
1370 00:24:18,839 ~-~-> 00:24:21,539
1371 we just did that alone in the second portion of our trade,
1372
1373 344
1374 00:24:22,139 ~-~-> 00:24:24,809
1375 we moved to break even and it stops out every single time we
1376
1377 345
1378 00:24:24,809 ~-~-> 00:24:27,359
1379 trade for the entire year, our account would still double.
1380
1381 346
1382 00:24:27,869 ~-~-> 00:24:33,779
1383 Okay. Risking 1% it would equate to 6% so that's still good.
1384
1385 347
1386 00:24:34,979 ~-~-> 00:24:37,619
1387 But now let's look what happens if we allow the second
1388
1389 348
1390 00:24:37,619 ~-~-> 00:24:44,579
1391 portion of our trade to run. What happens if the second
1392
1393 349
1394 00:24:44,579 ~-~-> 00:24:47,189
1395 portion captures the average daily range? Now the average
1396
1397 350
1398 00:24:47,189 ~-~-> 00:24:49,619
1399 daily range for the sake of argument we're just going to use
1400
1401 351
1402 00:24:49,619 ~-~-> 00:24:50,459
1403 is 100 pips.
1404
1405 352
1406 00:24:52,200 ~-~-> 00:24:55,020
1407 Now, that would equate to if you just did this
1408
1409 353
1410 00:24:56,759 ~-~-> 00:24:59,879
1411 once per week, okay, now don't look at the daily three
1412
1413 354
1414 00:24:59,879 ~-~-> 00:25:02,309
1415 times. For a week or twice a week on numbers, we'll block
1416
1417 355
1418 00:25:02,309 ~-~-> 00:25:06,299
1419 that out here. But the weekly number that 100 that's going
1420
1421 356
1422 00:25:06,299 ~-~-> 00:25:09,479
1423 to be more or less equate to one solid trade for the week
1424
1425 357
1426 00:25:09,509 ~-~-> 00:25:13,829
1427 where you nail down one average daily range or collect 100
1428
1429 358
1430 00:25:13,829 ~-~-> 00:25:18,869
1431 pips in other words in terms of intraday trade. That would
1432
1433 359
1434 00:25:18,869 ~-~-> 00:25:21,869
1435 equate to 20%.
1436
1437 360
1438 00:25:23,940 ~-~-> 00:25:24,660
1439 Now think
1440
1441 361
1442 00:25:25,920 ~-~-> 00:25:32,160
1443 20% plus 6%. What are you making? We'll get that in a
1444
1445 362
1446 00:25:32,160 ~-~-> 00:25:37,830
1447 moment. But if we able to do this, our money 1% risk grows
1448
1449 363
1450 00:25:38,040 ~-~-> 00:25:45,180
1451 exponentially. Now taking both of those examples together
1452
1453 364
1454 00:25:45,180 ~-~-> 00:25:48,600
1455 and assuming ideal scenarios at the end, or both are
1456
1457 365
1458 00:25:48,600 ~-~-> 00:25:53,610
1459 profitable, that would equate to about 26% return your
1460
1461 366
1462 00:25:53,610 ~-~-> 00:25:56,460
1463 20 $500 would grow to $40,000 in one year
1464
1465 367
1466 00:25:58,109 ~-~-> 00:25:59,639
1467 and 640,000 in two years.
1468
1469 368
1470 00:26:01,829 ~-~-> 00:26:05,219
1471 Notice that you're really not even risking more than 320
1472
1473 369
1474 00:26:05,219 ~-~-> 00:26:06,719
1475 average per Pip.
1476
1477 370
1478 00:26:47,400 ~-~-> 00:26:51,480
1479 Alright guys interest rates. That is the market's driving
1480
1481 371
1482 00:26:51,480 ~-~-> 00:26:53,850
1483 force, okay? If you've never learned about interest rates,
1484
1485 372
1486 00:26:53,850 ~-~-> 00:26:55,020
1487 you're gonna learn a little bit of that in this
1488
1489 373
1490 00:26:55,020 ~-~-> 00:26:58,170
1491 presentation. But what makes the markets go around whether
1492
1493 374
1494 00:26:58,170 ~-~-> 00:27:01,770
1495 it be stocks, commodities, you No forex it's all interest
1496
1497 375
1498 00:27:01,770 ~-~-> 00:27:05,460
1499 rates need to get to know the interest rate market okay
1500
1501 376
1502 00:27:05,460 ~-~-> 00:27:11,460
1503 because that will be the key to unlocking the mind. The
1504
1505 377
1506 00:27:11,460 ~-~-> 00:27:15,240
1507 entire global markets are interconnected and they spin on
1508
1509 378
1510 00:27:15,240 ~-~-> 00:27:20,760
1511 the gyrations in the interest rate market. Each country we
1512
1513 379
1514 00:27:20,760 ~-~-> 00:27:23,790
1515 trade currencies with has their own interest rates and thus
1516
1517 380
1518 00:27:23,790 ~-~-> 00:27:26,940
1519 these rates influence the demand or disenchantment with its
1520
1521 381
1522 00:27:27,180 ~-~-> 00:27:32,460
1523 own currency. The market will always seek yield and the
1524
1525 382
1526 00:27:32,460 ~-~-> 00:27:38,430
1527 higher the yield, the bigger the demand on average. There
1528
1529 383
1530 00:27:38,430 ~-~-> 00:27:41,100
1531 are several types of interest rates that traders can track
1532
1533 384
1534 00:27:41,100 ~-~-> 00:27:46,440
1535 and utilize to determine a trade idea. Understanding how
1536
1537 385
1538 00:27:46,440 ~-~-> 00:27:50,310
1539 they trade and the yields will make long term trends easier
1540
1541 386
1542 00:27:50,310 ~-~-> 00:27:51,000
1543 to determine.
1544
1545 387
1546 00:27:55,980 ~-~-> 00:27:58,050
1547 Interest Rate spreads and differentials.
1548
1549 388
1550 00:27:59,580 ~-~-> 00:28:01,830
1551 Alright guys, you Need to track the country's overnight
1552
1553 389
1554 00:28:01,830 ~-~-> 00:28:06,060
1555 lending rates? Okay, that's an it's one of the core
1556
1557 390
1558 00:28:06,060 ~-~-> 00:28:10,320
1559 principles to having long term trend analysis. And if you
1560
1561 391
1562 00:28:10,980 ~-~-> 00:28:15,180
1563 just Google any country and look for historical data, you
1564
1565 392
1566 00:28:15,180 ~-~-> 00:28:18,480
1567 can get that keep a spreadsheet. And you can do a whole lot
1568
1569 393
1570 00:28:18,480 ~-~-> 00:28:21,960
1571 with that information. It's not my goal to do that here. You
1572
1573 394
1574 00:28:21,960 ~-~-> 00:28:24,600
1575 can find sources on the internet to actually do these for
1576
1577 395
1578 00:28:24,600 ~-~-> 00:28:30,720
1579 you. But the currency markets, they more or less trend on
1580
1581 396
1582 00:28:30,720 ~-~-> 00:28:35,340
1583 long term basis based on interest rates. And understanding
1584
1585 397
1586 00:28:35,340 ~-~-> 00:28:38,130
1587 which country has higher interest rates and which have lower
1588
1589 398
1590 00:28:38,130 ~-~-> 00:28:41,820
1591 rates can be a differential play or carry trade. And not
1592
1593 399
1594 00:28:41,820 ~-~-> 00:28:45,450
1595 only can you trade profit by directional bias in your
1596
1597 400
1598 00:28:45,450 ~-~-> 00:28:48,330
1599 trading, but it also could be paid interest on top of that.
1600
1601 401
1602 00:28:50,640 ~-~-> 00:28:54,030
1603 If the country sees lower interest rates, this will weaken
1604
1605 402
1606 00:28:54,030 ~-~-> 00:28:57,930
1607 the base currency. At the con On the contrary, if the rates
1608
1609 403
1610 00:28:57,930 ~-~-> 00:29:00,390
1611 are increasing, this will prop up to come on trees in
1612
1613 404
1614 00:29:00,390 ~-~-> 00:29:09,150
1615 currency, million dollar futures insights, yes, seasonal
1616
1617 405
1618 00:29:09,150 ~-~-> 00:29:12,900
1619 tendencies. Now, some of you folks have already been
1620
1621 406
1622 00:29:12,900 ~-~-> 00:29:16,530
1623 introduced to this graph this is the British Pound seasonal
1624
1625 407
1626 00:29:16,530 ~-~-> 00:29:21,780
1627 tendency is a chart that I've had held dear to me for many
1628
1629 408
1630 00:29:21,780 ~-~-> 00:29:25,980
1631 years since 1995. I got this from Larry Williams
1632
1633 409
1634 00:29:26,310 ~-~-> 00:29:27,030
1635 course.
1636
1637 410
1638 00:29:27,449 ~-~-> 00:29:32,489
1639 And it was among other seasonal tendencies, but because I've
1640
1641 411
1642 00:29:32,489 ~-~-> 00:29:36,479
1643 grown to trade the British Pound more than any other pair.
1644
1645 412
1646 00:29:38,849 ~-~-> 00:29:42,569
1647 This seasonal tendency chart is kind of like, it gives you
1648
1649 413
1650 00:29:42,569 ~-~-> 00:29:46,769
1651 like a macro roadmap of what should transpire. Now, one of
1652
1653 414
1654 00:29:46,769 ~-~-> 00:29:49,709
1655 the most impressive concepts you can learn is the nature of
1656
1657 415
1658 00:29:49,709 ~-~-> 00:29:53,879
1659 seasonal tendencies in the marketplace. The commodity market
1660
1661 416
1662 00:29:53,879 ~-~-> 00:29:56,909
1663 is one such market that has a very cyclical seasonal
1664
1665 417
1666 00:29:56,909 ~-~-> 00:30:00,629
1667 tendencies that have an uncanny ability to forecast Major
1668
1669 418
1670 00:30:00,629 ~-~-> 00:30:05,129
1671 price swings. Now I have used seasonal tendencies for nearly
1672
1673 419
1674 00:30:05,129 ~-~-> 00:30:09,209
1675 20 years and they still amaze me. One such seasonal tendency
1676
1677 420
1678 00:30:09,209 ~-~-> 00:30:11,849
1679 is the British pound to make a major low in February to
1680
1681 421
1682 00:30:11,849 ~-~-> 00:30:16,769
1683 March, June, September, October in December, and major highs
1684
1685 422
1686 00:30:16,769 ~-~-> 00:30:17,639
1687 in April to May.
1688
1689 423
1690 00:30:20,819 ~-~-> 00:30:23,369
1691 This is also seen in stocks as well.
1692
1693 424
1694 00:30:29,910 ~-~-> 00:30:34,650
1695 Let's look at the comparison of the British pound. And since
1696
1697 425
1698 00:30:34,650 ~-~-> 00:30:37,530
1699 we've already learned at the interest rate market is what
1700
1701 426
1702 00:30:37,950 ~-~-> 00:30:41,190
1703 more or less pushes the markets all around. We're going to
1704
1705 427
1706 00:30:41,190 ~-~-> 00:30:44,280
1707 look at the US Treasuries. Yes, it does have a seasonal
1708
1709 428
1710 00:30:44,280 ~-~-> 00:30:48,510
1711 tendency. Now, I want to draw your attention to the fact
1712
1713 429
1714 00:30:48,510 ~-~-> 00:30:52,410
1715 that usually in April and May, if you look at the British
1716
1717 430
1718 00:30:52,410 ~-~-> 00:30:57,150
1719 Pound chart on the left, you can see that there's a red line
1720
1721 431
1722 00:30:57,540 ~-~-> 00:31:01,110
1723 and a blue line. Okay. And what that This is measuring the
1724
1725 432
1726 00:31:01,110 ~-~-> 00:31:04,440
1727 bullish years and the bearish years together to get a
1728
1729 433
1730 00:31:04,440 ~-~-> 00:31:09,210
1731 composite index. And the blue line is the 25 year historical
1732
1733 434
1734 00:31:09,210 ~-~-> 00:31:13,410
1735 data. And the red line is a 15 year historical data. So you
1736
1737 435
1738 00:31:13,410 ~-~-> 00:31:14,460
1739 can see over
1740
1741 436
1742 00:31:15,929 ~-~-> 00:31:18,809
1743 overall basically the seasonal tendencies pretty solid.
1744
1745 437
1746 00:31:20,730 ~-~-> 00:31:23,520
1747 It usually makes a rally of some kind late
1748
1749 438
1750 00:31:25,049 ~-~-> 00:31:30,359
1751 February, early March, and trades up into the April May time
1752
1753 439
1754 00:31:30,359 ~-~-> 00:31:32,279
1755 period where it makes a significant high and then trades
1756
1757 440
1758 00:31:32,279 ~-~-> 00:31:38,339
1759 down into the June timeframe. Well, if the bonds are
1760
1761 441
1762 00:31:38,339 ~-~-> 00:31:43,409
1763 inverse, okay, in other words, as currencies go down, the
1764
1765 442
1766 00:31:43,409 ~-~-> 00:31:45,749
1767 bond market or the futures market will go up.
1768
1769 443
1770 00:31:45,930 ~-~-> 00:31:46,290
1771 And
1772
1773 444
1774 00:31:46,320 ~-~-> 00:31:50,760
1775 while the bonds go up, the yield is inverted. So the yield
1776
1777 445
1778 00:31:50,760 ~-~-> 00:31:53,100
1779 would be going down while the bond goes up. And for
1780
1781 446
1782 00:31:53,100 ~-~-> 00:31:58,110
1783 instance, let's look at the April May time period on the
1784
1785 447
1786 00:31:58,110 ~-~-> 00:32:01,770
1787 bond and you can see that it Has seasonal tendency to rally
1788
1789 448
1790 00:32:02,280 ~-~-> 00:32:05,460
1791 that would indicate that interest rates would be going down.
1792
1793 449
1794 00:32:05,850 ~-~-> 00:32:10,530
1795 Okay? Now if interest rates are going down, that would drive
1796
1797 450
1798 00:32:10,530 ~-~-> 00:32:13,950
1799 What? currencies lower, there won't be any demand. So what
1800
1801 451
1802 00:32:13,950 ~-~-> 00:32:16,500
1803 will they be doing? It'll be a flight to quality that will
1804
1805 452
1806 00:32:16,500 ~-~-> 00:32:20,340
1807 rally the dollar. Okay? And that would be essentially a risk
1808
1809 453
1810 00:32:20,340 ~-~-> 00:32:26,820
1811 off scenario. Now look at January and February. Okay. In the
1812
1813 454
1814 00:32:26,820 ~-~-> 00:32:31,290
1815 bond market, we see the bonds are sliding down into the
1816
1817 455
1818 00:32:31,290 ~-~-> 00:32:36,030
1819 April May time period. That means that interest rates would
1820
1821 456
1822 00:32:36,030 ~-~-> 00:32:40,380
1823 be increasing. Now, if interest rates are increasing, that's
1824
1825 457
1826 00:32:40,380 ~-~-> 00:32:43,020
1827 going to have demand for foreign currency and it'll be a
1828
1829 458
1830 00:32:43,020 ~-~-> 00:32:46,830
1831 risk on scenario the dollar index will be falling at that
1832
1833 459
1834 00:32:46,830 ~-~-> 00:32:52,440
1835 time period. Okay. Look at January February time period. And
1836
1837 460
1838 00:32:52,440 ~-~-> 00:32:57,240
1839 you can see where in the 15 year basis, it was making lows
1840
1841 461
1842 00:32:57,270 ~-~-> 00:33:00,240
1843 and even in a 25 year basis, it was making lows where it Did
1844
1845 462
1846 00:33:00,240 ~-~-> 00:33:04,830
1847 rally up, and essentially around the march time period, it
1848
1849 463
1850 00:33:04,830 ~-~-> 00:33:07,920
1851 got in sync and maybe it's low, and then it'll trade up into
1852
1853 464
1854 00:33:07,920 ~-~-> 00:33:11,640
1855 that spring time period, making a high. So study these
1856
1857 465
1858 00:33:11,640 ~-~-> 00:33:14,610
1859 charts and you can see there's a huge advantage of having
1860
1861 466
1862 00:33:14,610 ~-~-> 00:33:18,450
1863 insight like this, because it can put you on one track to
1864
1865 467
1866 00:33:18,450 ~-~-> 00:33:21,240
1867 finding a long term trend. And this waiting for interest
1868
1869 468
1870 00:33:21,240 ~-~-> 00:33:22,590
1871 rates to get in sync with this.
1872
1873 469
1874 00:33:27,390 ~-~-> 00:33:28,920
1875 co2 and commercial trends.
1876
1877 470
1878 00:33:30,330 ~-~-> 00:33:31,710
1879 tracking the smart money.
1880
1881 471
1882 00:33:33,359 ~-~-> 00:33:36,539
1883 Okay, guys, you've probably seen this a few times in some
1884
1885 472
1886 00:33:36,539 ~-~-> 00:33:40,799
1887 other tutorials. But mainly, you wouldn't be looking at
1888
1889 473
1890 00:33:40,799 ~-~-> 00:33:43,229
1891 higher timeframe charts and you want to spend some time
1892
1893 474
1894 00:33:43,289 ~-~-> 00:33:46,079
1895 analyzing the net positions of the large commercial traders.
1896
1897 475
1898 00:33:46,409 ~-~-> 00:33:49,229
1899 You want to be looking at the trend where their net
1900
1901 476
1902 00:33:49,229 ~-~-> 00:33:52,979
1903 positions are moving, are they continuously moving higher
1904
1905 477
1906 00:33:52,979 ~-~-> 00:33:57,389
1907 low or higher, lower overall, bearish or bullish? In other
1908
1909 478
1910 00:33:57,389 ~-~-> 00:34:01,439
1911 words, are these swinging bullish Above the baseline zero
1912
1913 479
1914 00:34:01,439 ~-~-> 00:34:06,539
1915 line, okay doing uptrend or are they doing that during
1916
1917 480
1918 00:34:06,569 ~-~-> 00:34:08,969
1919 downtrend? Okay. And what we're doing we're looking at the
1920
1921 481
1922 00:34:08,969 ~-~-> 00:34:11,609
1923 higher timeframe weekly chart and determine if the price is
1924
1925 482
1926 00:34:11,609 ~-~-> 00:34:14,939
1927 going higher. And if it is, you won't be waiting for the
1928
1929 483
1930 00:34:14,969 ~-~-> 00:34:18,779
1931 commercials to be net long or extremely lightening up on
1932
1933 484
1934 00:34:18,779 ~-~-> 00:34:22,049
1935 their net short positions because that would equate to a
1936
1937 485
1938 00:34:22,049 ~-~-> 00:34:27,779
1939 bullish scenario. The trend on the weekly chart and the
1940
1941 486
1942 00:34:27,779 ~-~-> 00:34:31,259
1943 swings from net long to net short are very easy to spot and
1944
1945 487
1946 00:34:31,259 ~-~-> 00:34:34,319
1947 determine the long to intermediate term trends or direction.
1948
1949 488
1950 00:34:36,599 ~-~-> 00:34:39,269
1951 Looking for trades in this trend or directional bias will
1952
1953 489
1954 00:34:39,269 ~-~-> 00:34:42,089
1955 further increase your odds of capturing trades with large
1956
1957 490
1958 00:34:42,089 ~-~-> 00:34:44,219
1959 institutional sponsorship behind the moves.
1960
1961 491
1962 00:34:48,480 ~-~-> 00:34:49,500
1963 trading the news
1964
1965 492
1966 00:34:50,850 ~-~-> 00:34:53,520
1967 All right, I basically look at trading the news or
1968
1969 493
1970 00:34:54,120 ~-~-> 00:35:00,780
1971 news releases as volatility injections. Okay. Don't fear
1972
1973 494
1974 00:35:00,780 ~-~-> 00:35:04,320
1975 news, but I certainly respect it. There are certain reports
1976
1977 495
1978 00:35:04,320 ~-~-> 00:35:07,350
1979 and events that I more or less will step outside of and more
1980
1981 496
1982 00:35:07,350 ~-~-> 00:35:10,230
1983 trade. But one of the most difficult ways to trade the
1984
1985 497
1986 00:35:10,230 ~-~-> 00:35:14,580
1987 markets is to try to trade the news releases themselves. The
1988
1989 498
1990 00:35:14,580 ~-~-> 00:35:17,400
1991 internet is littered with so called robots or programs
1992
1993 499
1994 00:35:17,400 ~-~-> 00:35:20,130
1995 designed to quickly give you trading profits on a knee jerk
1996
1997 500
1998 00:35:20,130 ~-~-> 00:35:25,380
1999 reactions to the news. To me, this is pure and simple
2000
2001 501
2002 00:35:25,650 ~-~-> 00:35:30,030
2003 gambling. We can never know for sure what the numbers will
2004
2005 502
2006 00:35:30,030 ~-~-> 00:35:32,790
2007 be in the reports and the guests is just ridiculous.
2008
2009 503
2010 00:35:34,500 ~-~-> 00:35:38,070
2011 However, we can wait for the release in watch the reaction
2012
2013 504
2014 00:35:38,070 ~-~-> 00:35:41,220
2015 in many times a signal will form shortly after the release.
2016
2017 505
2018 00:35:41,670 ~-~-> 00:35:47,250
2019 Many times counter direction to the intended news hawks use
2020
2021 506
2022 00:35:47,250 ~-~-> 00:35:52,410
2023 news releases for injections and volatility and fuel trade
2024
2025 507
2026 00:35:52,410 ~-~-> 00:35:54,210
2027 ideas based on price action.
2028
2029 508
2030 00:35:59,640 ~-~-> 00:36:05,550
2031 Key Market moving indicators, key economic releases, okay,
2032
2033 509
2034 00:36:05,550 ~-~-> 00:36:10,650
2035 we're going to be looking at the US market, the UK market
2036
2037 510
2038 00:36:10,770 ~-~-> 00:36:14,610
2039 and the German market. Okay, we're gonna start with the UK,
2040
2041 511
2042 00:36:14,880 ~-~-> 00:36:21,000
2043 the British pound, daily rate decision, retail sales,
2044
2045 512
2046 00:36:21,030 ~-~-> 00:36:24,570
2047 consumer prices, claimant count, GDP and industrial
2048
2049 513
2050 00:36:24,570 ~-~-> 00:36:28,560
2051 production. Those are reports that I have on my calendar
2052
2053 514
2054 00:36:28,590 ~-~-> 00:36:32,190
2055 times when they're going to come out. And I will absolutely
2056
2057 515
2058 00:36:32,190 ~-~-> 00:36:36,510
2059 be aware of these and I will be more or less looking for
2060
2061 516
2062 00:36:36,510 ~-~-> 00:36:41,190
2063 trades to either be propelled in the direction that I've
2064
2065 517
2066 00:36:41,190 ~-~-> 00:36:45,270
2067 been prior to the report, or I'll be looking for a signal to
2068
2069 518
2070 00:36:45,270 ~-~-> 00:36:48,480
2071 generate shortly after one of these reports are released.
2072
2073 519
2074 00:36:56,460 ~-~-> 00:36:59,010
2075 All right, the US dollar we're gonna get the North American
2076
2077 520
2078 00:36:59,010 ~-~-> 00:36:59,460
2079 market
2080
2081 521
2082 00:37:01,470 ~-~-> 00:37:04,620
2083 Federal Reserve rates, retail sales consumer and producer
2084
2085 522
2086 00:37:04,650 ~-~-> 00:37:08,010
2087 prices, non farm payroll I avoid that I do not touch it
2088
2089 523
2090 00:37:08,550 ~-~-> 00:37:12,930
2091 gross domestic product GDP trade balance consumer confidence
2092
2093 524
2094 00:37:12,930 ~-~-> 00:37:16,560
2095 reports and service and manufacturing ICM you want to note
2096
2097 525
2098 00:37:16,560 ~-~-> 00:37:19,740
2099 these as well because all of your crosses with the dollar
2100
2101 526
2102 00:37:20,130 ~-~-> 00:37:21,750
2103 will be impacted by this as well.
2104
2105 527
2106 00:37:31,050 ~-~-> 00:37:33,540
2107 Okay the German market we're gonna look at the euros
2108
2109 528
2110 00:37:34,860 ~-~-> 00:37:38,340
2111 okay rate decision German IFO German unemployment German
2112
2113 529
2114 00:37:38,340 ~-~-> 00:37:41,460
2115 consumer prices German GDP and manufacturing and services
2116
2117 530
2118 00:37:41,460 ~-~-> 00:37:45,180
2119 sector PMI. You want to have these on your calendar when
2120
2121 531
2122 00:37:45,180 ~-~-> 00:37:47,880
2123 time they're gonna be released and be aware of these because
2124
2125 532
2126 00:37:47,880 ~-~-> 00:37:50,430
2127 these absolutely will move the market considerably.
2128
2129 533
2130 00:37:55,200 ~-~-> 00:37:56,910
2131 I plan for news impact.
2132
2133 534
2134 00:37:58,830 ~-~-> 00:38:02,610
2135 You have to have awareness of your economic calendar folks.
2136
2137 535
2138 00:38:05,100 ~-~-> 00:38:07,380
2139 Now there are a few resources that you can use to determine
2140
2141 536
2142 00:38:07,380 ~-~-> 00:38:10,230
2143 when high impact news will release and hit the market.
2144
2145 537
2146 00:38:11,400 ~-~-> 00:38:14,130
2147 Number one, obviously baby pips, coms calendar,
2148
2149 538
2150 00:38:16,379 ~-~-> 00:38:18,929
2151 forex factory comm calendar.
2152
2153 539
2154 00:38:20,670 ~-~-> 00:38:24,270
2155 And you can actually Google econo day calendars. You can
2156
2157 540
2158 00:38:24,270 ~-~-> 00:38:29,370
2159 find some at Bloomberg and a few other resources, but they
2160
2161 541
2162 00:38:29,370 ~-~-> 00:38:31,140
2163 have a very good format. And I like that they're
2164
2165 542
2166 00:38:31,440 ~-~-> 00:38:32,430
2167 very user friendly.
2168
2169 543
2170 00:38:34,470 ~-~-> 00:38:37,890
2171 And if for more information on this topic, and if you have
2172
2173 544
2174 00:38:37,890 ~-~-> 00:38:41,100
2175 any more interest on interest rates, I would recommend that
2176
2177 545
2178 00:38:41,100 ~-~-> 00:38:44,970
2179 Chris Lori's inside the banks webinar. I purchased this A
2180
2181 546
2182 00:38:44,970 ~-~-> 00:38:48,570
2183 number of years ago and I was very impressed with his
2184
2185 547
2186 00:38:49,950 ~-~-> 00:38:56,400
2187 presentation on the banking level in terms of interest rates
2188
2189 548
2190 00:38:56,400 ~-~-> 00:39:00,630
2191 and how they move and propel the marketplace. So if This
2192
2193 549
2194 00:39:00,630 ~-~-> 00:39:01,890
2195 isn't if this isn't,
2196
2197 550
2198 00:39:03,180 ~-~-> 00:39:05,190
2199 more or less get to the
2200
2201 551
2202 00:39:06,509 ~-~-> 00:39:10,199
2203 understanding you're looking for. I would counsel you to,
2204
2205 552
2206 00:39:10,229 ~-~-> 00:39:12,989
2207 you know, do a little investment in your career, and it's
2208
2209 553
2210 00:39:12,989 ~-~-> 00:39:15,479
2211 not much money at all. But it absolutely is a wonderful
2212
2213 554
2214 00:39:15,479 ~-~-> 00:39:19,259
2215 resource. It doesn't really good job in that webinar. You
2216
2217 555
2218 00:39:19,259 ~-~-> 00:39:24,059
2219 can reach Chris Laurie at Chris laurie.com. And you can get
2220
2221 556
2222 00:39:24,059 ~-~-> 00:39:27,989
2223 his webinar from his website. He's actually the only one
2224
2225 557
2226 00:39:27,989 ~-~-> 00:39:33,209
2227 that I recommend any folks buy material from? I have
2228
2229 558
2230 00:39:33,569 ~-~-> 00:39:38,669
2231 everything but his Aussie yen course and I just don't trade
2232
2233 559
2234 00:39:38,669 ~-~-> 00:39:41,009
2235 yen crosses, otherwise, I probably would have bought that as
2236
2237 560
2238 00:39:41,009 ~-~-> 00:39:45,029
2239 well. He does a really good job of teaching. He's very, very
2240
2241 561
2242 00:39:45,029 ~-~-> 00:39:48,209
2243 interested in your success. And that separates him as far as
2244
2245 562
2246 00:39:48,209 ~-~-> 00:39:52,169
2247 my concern from all the other folks out there. So you know,
2248
2249 563
2250 00:39:52,679 ~-~-> 00:39:53,399
2251 kudos to him.
2252
2253 564
2254 00:40:33,150 ~-~-> 00:40:36,390
2255 Alright guys, 30 year treasuries and tea notes. Okay, now
2256
2257 565
2258 00:40:36,390 ~-~-> 00:40:39,120
2259 some of my best concepts are found in my early days as a
2260
2261 566
2262 00:40:39,120 ~-~-> 00:40:42,720
2263 futures trader and the bond market is a big market and it
2264
2265 567
2266 00:40:42,720 ~-~-> 00:40:46,410
2267 provides so much insight and leading information. Now, I
2268
2269 568
2270 00:40:46,410 ~-~-> 00:40:48,810
2271 don't trade bonds anymore, but I absolutely monitor the
2272
2273 569
2274 00:40:48,810 ~-~-> 00:40:51,450
2275 futures on a daily basis. This market can tell you
2276
2277 570
2278 00:40:51,480 ~-~-> 00:40:54,300
2279 everything you need to know in any market asset class if you
2280
2281 571
2282 00:40:54,300 ~-~-> 00:40:57,000
2283 understand it. The scope of the bond market is not the
2284
2285 572
2286 00:40:57,000 ~-~-> 00:41:00,150
2287 objective here, but we will use it to discover some rap are
2288
2289 573
2290 00:41:00,150 ~-~-> 00:41:03,390
2291 impressive techniques to ferret out some blockbuster trades.
2292
2293 574
2294 00:41:06,570 ~-~-> 00:41:10,410
2295 10 year Treasury notes, okay, much like the 30 year treasury
2296
2297 575
2298 00:41:10,410 ~-~-> 00:41:14,130
2299 bond, I used these early on in my career as a futures
2300
2301 576
2302 00:41:14,130 ~-~-> 00:41:20,190
2303 trader. And there's a little caveat to understand the the
2304
2305 577
2306 00:41:20,190 ~-~-> 00:41:22,560
2307 bond market, whenever you see the price chart on the
2308
2309 578
2310 00:41:22,560 ~-~-> 00:41:28,980
2311 futures, when they rally up, they will have an inverse
2312
2313 579
2314 00:41:28,980 ~-~-> 00:41:31,680
2315 relationship. In other words, as the price data goes higher,
2316
2317 580
2318 00:41:32,130 ~-~-> 00:41:35,220
2319 the yield will actually be going down. So you have to have
2320
2321 581
2322 00:41:35,220 ~-~-> 00:41:39,030
2323 that in your mind. Now, since I trade the cable and the
2324
2325 582
2326 00:41:39,030 ~-~-> 00:41:44,130
2327 fiber exclusively, you know, I trade tracking the German 10
2328
2329 583
2330 00:41:44,130 ~-~-> 00:41:50,640
2331 year bond as well. The five year Treasury note much like the
2332
2333 584
2334 00:41:50,640 ~-~-> 00:41:55,620
2335 10 year and 30 year and when price runs up on the contract
2336
2337 585
2338 00:41:55,800 ~-~-> 00:42:00,000
2339 price on the futures market. The yield will be basically the
2340
2341 586
2342 00:42:00,000 ~-~-> 00:42:03,300
2343 creasing are dropping and obviously if the chart would be
2344
2345 587
2346 00:42:03,300 ~-~-> 00:42:06,060
2347 dropping on the futures, that would mean the yield would be
2348
2349 588
2350 00:42:06,060 ~-~-> 00:42:10,830
2351 increasing as well. And much like the 10 year I also track
2352
2353 589
2354 00:42:10,830 ~-~-> 00:42:15,450
2355 the five year German bond as well. And two year Treasury
2356
2357 590
2358 00:42:15,450 ~-~-> 00:42:20,070
2359 note much like the five year and 10 year I track that on a
2360
2361 591
2362 00:42:20,070 ~-~-> 00:42:25,620
2363 German basis as well and by having an understanding of all
2364
2365 592
2366 00:42:25,620 ~-~-> 00:42:29,340
2367 three of those we can find some pretty neat things we're
2368
2369 593
2370 00:42:29,340 ~-~-> 00:42:30,660
2371 going to learn about here shortly
2372
2373 594
2374 00:42:32,220 ~-~-> 00:42:34,500
2375 obviously goes without saying the US Dollar index
2376
2377 595
2378 00:42:36,900 ~-~-> 00:42:41,250
2379 i like daily FX calm if you go to the net Dania charting now
2380
2381 596
2382 00:42:41,280 ~-~-> 00:42:45,930
2383 do not go to net Dania calm Okay, it's very important. Go to
2384
2385 597
2386 00:42:45,930 ~-~-> 00:42:49,380
2387 daily FX calm and use the net Dania charting it's free.
2388
2389 598
2390 00:42:49,710 ~-~-> 00:42:54,540
2391 Okay, and you open up a US Dollar Index chart, and it'll
2392
2393 599
2394 00:42:54,540 ~-~-> 00:42:58,590
2395 give you what I like to see in terms of the US Dollar Index
2396
2397 600
2398 00:43:01,410 ~-~-> 00:43:06,600
2399 I look at the cash basis also. And the chart to the right
2400
2401 601
2402 00:43:06,600 ~-~-> 00:43:09,720
2403 here. This is the futures chart of the United States Dollar
2404
2405 602
2406 00:43:09,720 ~-~-> 00:43:16,380
2407 Index. If you like these types of charts, and you want to
2408
2409 603
2410 00:43:16,380 ~-~-> 00:43:18,780
2411 subscribe to them, it's not very expensive or things like
2412
2413 604
2414 00:43:18,780 ~-~-> 00:43:23,520
2415 $25 a month, but you can get that at price charts calm. You
2416
2417 605
2418 00:43:23,520 ~-~-> 00:43:26,370
2419 don't need to pay for futures charts, but I do prefer this
2420
2421 606
2422 00:43:26,370 ~-~-> 00:43:30,480
2423 format because I'm used to reading them since 1990s. I've
2424
2425 607
2426 00:43:30,480 ~-~-> 00:43:35,100
2427 just grown accustomed to having them in my repertoire. Now I
2428
2429 608
2430 00:43:35,100 ~-~-> 00:43:38,100
2431 like to use SMT concepts to spot diverging highs and lows
2432
2433 609
2434 00:43:38,100 ~-~-> 00:43:41,100
2435 between the US dx and relative price points in the fiber and
2436
2437 610
2438 00:43:41,100 ~-~-> 00:43:46,890
2439 cable. And you knew that as my us dx SMT and I look for the
2440
2441 611
2442 00:43:46,890 ~-~-> 00:43:54,000
2443 bond and us dx SMT as well. Major stock market indices,
2444
2445 612
2446 00:43:54,300 ~-~-> 00:43:56,910
2447 okay, the major stock market indices are one of my favorite
2448
2449 613
2450 00:43:56,910 ~-~-> 00:44:00,720
2451 tools to gauge long term price swings. If we are failing and
2452
2453 614
2454 00:44:00,720 ~-~-> 00:44:03,480
2455 highs on the daily charts as we see here in the image to the
2456
2457 615
2458 00:44:03,480 ~-~-> 00:44:07,950
2459 right. This suggests a possible risk off scenario. Expect
2460
2461 616
2462 00:44:07,950 ~-~-> 00:44:11,640
2463 weaker stock prices and possibly foreign currencies. The US
2464
2465 617
2466 00:44:11,640 ~-~-> 00:44:15,150
2467 Dollar index will confirm this with a rally at support. At
2468
2469 618
2470 00:44:15,150 ~-~-> 00:44:19,140
2471 the same juncture, simply reverse for risk on scenarios. The
2472
2473 619
2474 00:44:19,140 ~-~-> 00:44:22,290
2475 markets as a whole are interconnected and it pays to monitor
2476
2477 620
2478 00:44:22,290 ~-~-> 00:44:29,190
2479 them and hunt for clues. The CRB Commodity Index, okay, now
2480
2481 621
2482 00:44:29,190 ~-~-> 00:44:32,670
2483 I usually watch this on the cash basis. And you can get that
2484
2485 622
2486 00:44:32,670 ~-~-> 00:44:35,970
2487 from the price charts calm. I'm sure if you do a google you
2488
2489 623
2490 00:44:35,970 ~-~-> 00:44:38,280
2491 probably find that as well. But again, I just really like
2492
2493 624
2494 00:44:38,280 ~-~-> 00:44:41,340
2495 this, this chart, I think it's real crisp, and we print them
2496
2497 625
2498 00:44:41,340 ~-~-> 00:44:43,830
2499 out. There's nothing like printing out charts and marking
2500
2501 626
2502 00:44:43,830 ~-~-> 00:44:47,520
2503 them up by hand. I'm like Flintstone caveman. I like being
2504
2505 627
2506 00:44:47,520 ~-~-> 00:44:50,790
2507 able to carve up, you know, some notes and draw my charts.
2508
2509 628
2510 00:44:50,820 ~-~-> 00:44:53,700
2511 You know, I like sharing with you guys electronically. But
2512
2513 629
2514 00:44:53,970 ~-~-> 00:44:55,890
2515 you know, if it's going to be a matter of preference, I
2516
2517 630
2518 00:44:55,890 ~-~-> 00:44:58,830
2519 would love to have you printed charts every single day.
2520
2521 631
2522 00:44:58,830 ~-~-> 00:45:04,770
2523 That's this is my My opinion really, now I like the CRB
2524
2525 632
2526 00:45:04,770 ~-~-> 00:45:07,560
2527 index, because it usually has a inverse relationship to the
2528
2529 633
2530 00:45:07,560 ~-~-> 00:45:11,070
2531 dollar index. And I like to confirm a swing higher in dollar
2532
2533 634
2534 00:45:11,400 ~-~-> 00:45:16,680
2535 with shorting fiber and or cable with a CRB decline. Now the
2536
2537 635
2538 00:45:16,680 ~-~-> 00:45:19,890
2539 CRB index tends to be a little bit early and can one of
2540
2541 636
2542 00:45:19,890 ~-~-> 00:45:23,220
2543 possible long term shifts in the trend. It's a dynamite tool
2544
2545 637
2546 00:45:23,220 ~-~-> 00:45:25,950
2547 to use for major market analysis and pinning down long to
2548
2549 638
2550 00:45:25,950 ~-~-> 00:45:32,310
2551 intermediate term directional bias. All right, well in gold
2552
2553 639
2554 00:45:32,340 ~-~-> 00:45:34,290
2555 now, I like looking at these two markets, I don't trade
2556
2557 640
2558 00:45:34,290 ~-~-> 00:45:37,590
2559 them. But I'd like to use them as barometers more or less to
2560
2561 641
2562 00:45:37,590 ~-~-> 00:45:41,580
2563 see if there's risk on a risk off scenario is underway. And
2564
2565 642
2566 00:45:42,120 ~-~-> 00:45:45,300
2567 basically, you want to be looking at the same way that you
2568
2569 643
2570 00:45:45,300 ~-~-> 00:45:49,260
2571 know, foreign currencies and CRB all those markets should be
2572
2573 644
2574 00:45:49,530 ~-~-> 00:45:51,060
2575 moving in tandem with both.
2576
2577 645
2578 00:45:58,200 ~-~-> 00:46:02,160
2579 Okay, we're looking at the Tina Note yields, okay, these are
2580
2581 646
2582 00:46:02,160 ~-~-> 00:46:08,070
2583 going to be the two year, five year and 10 year. And you can
2584
2585 647
2586 00:46:08,070 ~-~-> 00:46:12,450
2587 look at the legend up here to determine which is which as we
2588
2589 648
2590 00:46:12,450 ~-~-> 00:46:17,130
2591 go through. And what I'm highlighting here is when there is
2592
2593 649
2594 00:46:17,130 ~-~-> 00:46:23,010
2595 a divergence between these yields, okay, these are t note
2596
2597 650
2598 00:46:23,070 ~-~-> 00:46:27,360
2599 yields. And this line is not the T note price, it's the
2600
2601 651
2602 00:46:27,360 ~-~-> 00:46:31,260
2603 actual t note yield. So, the yield is actually inverse is an
2604
2605 652
2606 00:46:31,260 ~-~-> 00:46:35,250
2607 inversion of the futures charts price of the T note, okay,
2608
2609 653
2610 00:46:35,250 ~-~-> 00:46:39,600
2611 so I kind of monitor both, but the yield when you monitor it
2612
2613 654
2614 00:46:39,600 ~-~-> 00:46:45,690
2615 like this, it will basically mirror what foreign currencies
2616
2617 655
2618 00:46:45,690 ~-~-> 00:46:48,600
2619 should be doing. In other words, as the yields were
2620
2621 656
2622 00:46:48,600 ~-~-> 00:46:51,630
2623 increasing here, that would have been bullish for foreign
2624
2625 657
2626 00:46:51,630 ~-~-> 00:46:56,490
2627 currency and contrary as the yields drop, that would be
2628
2629 658
2630 00:46:56,520 ~-~-> 00:47:00,720
2631 bearish for foreign currencies. Okay. You You see these
2632
2633 659
2634 00:47:00,750 ~-~-> 00:47:03,540
2635 confirmations in your technicals on your charts. In other
2636
2637 660
2638 00:47:03,540 ~-~-> 00:47:09,090
2639 words, if there's a buy signal for foreign currencies and in
2640
2641 661
2642 00:47:09,090 ~-~-> 00:47:13,110
2643 your daily charts or respective timeframes that you trade,
2644
2645 662
2646 00:47:13,890 ~-~-> 00:47:18,570
2647 and there is a sell signal being confirmed in the US dollar,
2648
2649 663
2650 00:47:19,170 ~-~-> 00:47:22,380
2651 that is a confirmation that you probably got a, you know, a
2652
2653 664
2654 00:47:22,380 ~-~-> 00:47:26,520
2655 good probability of a nice swing for your respective
2656
2657 665
2658 00:47:26,520 ~-~-> 00:47:29,580
2659 timeframe. Now, what we're referring to here is a daily
2660
2661 666
2662 00:47:29,580 ~-~-> 00:47:33,420
2663 basis, this is really going to give you a buy, program or
2664
2665 667
2666 00:47:33,420 ~-~-> 00:47:37,980
2667 sell program. Okay, this is the beginnings of a buy program.
2668
2669 668
2670 00:47:38,370 ~-~-> 00:47:43,320
2671 This is the termination of a buy program and a beginning of
2672
2673 669
2674 00:47:43,320 ~-~-> 00:47:47,520
2675 a sell program. Now, the main thing I want you to focus on
2676
2677 670
2678 00:47:47,730 ~-~-> 00:47:51,960
2679 is that there's typically a three or four month cycle, okay?
2680
2681 671
2682 00:47:51,960 ~-~-> 00:47:55,140
2683 It's like almost like a quarterly effect that takes place in
2684
2685 672
2686 00:47:55,170 ~-~-> 00:47:58,740
2687 the yields and it's based basically on interest rates and
2688
2689 673
2690 00:47:59,610 ~-~-> 00:48:02,160
2691 macro Economics and things of that nature. But I'm not going
2692
2693 674
2694 00:48:02,160 ~-~-> 00:48:05,070
2695 to bore you with that here. But just basically, if you look
2696
2697 675
2698 00:48:05,070 ~-~-> 00:48:08,670
2699 at the charts, and on historical perspective, you'll see
2700
2701 676
2702 00:48:08,670 ~-~-> 00:48:13,260
2703 that that is, in fact, what happens on the average. And
2704
2705 677
2706 00:48:13,260 ~-~-> 00:48:16,020
2707 we're going to do is we're going to talk about at the time
2708
2709 678
2710 00:48:16,020 ~-~-> 00:48:21,510
2711 of this recording, this is June 2012. And what I'm looking
2712
2713 679
2714 00:48:21,510 ~-~-> 00:48:27,840
2715 at is trying to go over why we saw the precipitous slide in
2716
2717 680
2718 00:48:28,380 ~-~-> 00:48:32,190
2719 the foreign currency market, namely the British pound and
2720
2721 681
2722 00:48:32,310 ~-~-> 00:48:40,020
2723 the Euro, USD, pairs, cable and fiber. And we're gonna look
2724
2725 682
2726 00:48:40,020 ~-~-> 00:48:43,140
2727 at how that relates to these yields here, okay. And what
2728
2729 683
2730 00:48:43,140 ~-~-> 00:48:46,170
2731 we're looking at again, on this chart is the United States
2732
2733 684
2734 00:48:46,230 ~-~-> 00:48:49,920
2735 10 year, United States, five year in the United States, two
2736
2737 685
2738 00:48:49,920 ~-~-> 00:48:53,850
2739 year t notes. Okay, and again, these are the yields and
2740
2741 686
2742 00:48:53,850 ~-~-> 00:48:57,390
2743 basically what you're looking for is at a specific time,
2744
2745 687
2746 00:48:57,390 ~-~-> 00:49:01,350
2747 seasonally, and quarterly. There will be divergence that
2748
2749 688
2750 00:49:01,350 ~-~-> 00:49:06,300
2751 posts in these yields. And that looks like this. We have, it
2752
2753 689
2754 00:49:06,300 ~-~-> 00:49:09,210
2755 may be a little difficult to see I understand but the orange
2756
2757 690
2758 00:49:09,330 ~-~-> 00:49:14,670
2759 line here which is the two year, the high made back here is
2760
2761 691
2762 00:49:14,670 ~-~-> 00:49:19,860
2763 lower than the high made in March April time period. Okay,
2764
2765 692
2766 00:49:20,130 ~-~-> 00:49:21,840
2767 or actually in March 19.
2768
2769 693
2770 00:49:23,610 ~-~-> 00:49:24,150
2771 The
2772
2773 694
2774 00:49:24,899 ~-~-> 00:49:27,449
2775 high here on the 10 year
2776
2777 695
2778 00:49:31,080 ~-~-> 00:49:32,460
2779 was just about equal.
2780
2781 696
2782 00:49:35,250 ~-~-> 00:49:38,010
2783 And same thing here we have
2784
2785 697
2786 00:49:38,280 ~-~-> 00:49:38,730
2787 the
2788
2789 698
2790 00:49:39,030 ~-~-> 00:49:39,780
2791 five year
2792
2793 699
2794 00:49:41,940 ~-~-> 00:49:42,810
2795 just about equal.
2796
2797 700
2798 00:49:43,050 ~-~-> 00:49:46,230
2799 Okay, so we have a divergence between the two year five year
2800
2801 701
2802 00:49:46,230 ~-~-> 00:49:52,350
2803 and 10 year. Okay. That typically is a reason to start
2804
2805 702
2806 00:49:52,350 ~-~-> 00:49:56,190
2807 looking for other reasons to support a decline in yields
2808
2809 703
2810 00:49:56,190 ~-~-> 00:49:59,430
2811 which would represent a decline in foreign currency, any
2812
2813 704
2814 00:49:59,430 ~-~-> 00:50:03,600
2815 rally The US Dollar Index. Okay, so let's take a look at a
2816
2817 705
2818 00:50:03,600 ~-~-> 00:50:06,810
2819 few other examples and we're looking at the foreign bond
2820
2821 706
2822 00:50:06,810 ~-~-> 00:50:13,410
2823 markets. Right now we're looking at the five year notes on
2824
2825 707
2826 00:50:13,500 ~-~-> 00:50:18,930
2827 the UK 10 year, I'm sorry, UK five year note, the German
2828
2829 708
2830 00:50:18,930 ~-~-> 00:50:23,910
2831 five year note and against the United States five year
2832
2833 709
2834 00:50:24,150 ~-~-> 00:50:24,750
2835 Treasury note.
2836
2837 710
2838 00:50:26,250 ~-~-> 00:50:27,120
2839 Okay, and
2840
2841 711
2842 00:50:29,070 ~-~-> 00:50:33,210
2843 we're going to look at this time frame in here. Okay, going
2844
2845 712
2846 00:50:33,210 ~-~-> 00:50:35,160
2847 back to this chart real quick, just to reference again,
2848
2849 713
2850 00:50:36,180 ~-~-> 00:50:41,640
2851 we're looking in 2012, March, April time period. Okay, we're
2852
2853 714
2854 00:50:41,640 ~-~-> 00:50:45,990
2855 going to go and look at this area here. And what I want to
2856
2857 715
2858 00:50:45,990 ~-~-> 00:50:48,480
2859 draw your attention to is the fact that we had
2860
2861 716
2862 00:50:49,710 ~-~-> 00:50:50,280
2863 the
2864
2865 717
2866 00:50:51,270 ~-~-> 00:50:52,800
2867 US five year note
2868
2869 718
2870 00:50:53,910 ~-~-> 00:50:56,130
2871 higher, respectively
2872
2873 719
2874 00:50:58,020 ~-~-> 00:51:05,040
2875 while the German Five Year note was lower. And the UK five
2876
2877 720
2878 00:51:05,040 ~-~-> 00:51:09,390
2879 year note was lower. Okay. And what I'm gonna do is I'm
2880
2881 721
2882 00:51:09,390 ~-~-> 00:51:14,280
2883 gonna take off to UK so you can see there is a clear
2884
2885 722
2886 00:51:14,640 ~-~-> 00:51:17,520
2887 divergence between the US and the German metal sufficiently.
2888
2889 723
2890 00:51:17,520 ~-~-> 00:51:25,980
2891 So the divergence Okay, see the high here, too high on the
2892
2893 724
2894 00:51:25,980 ~-~-> 00:51:31,050
2895 red line, that's the German five year note. It's bearish
2896
2897 725
2898 00:51:32,220 ~-~-> 00:51:36,810
2899 while at the same time the US five year note was making a
2900
2901 726
2902 00:51:36,810 ~-~-> 00:51:42,690
2903 higher high in yield. Okay and then you saw them slide
2904
2905 727
2906 00:51:42,690 ~-~-> 00:51:52,410
2907 together that that is a yield SMT divergence. Okay, as I
2908
2909 728
2910 00:51:52,470 ~-~-> 00:51:54,900
2911 look at it, you can see a
2912
2913 729
2914 00:51:55,350 ~-~-> 00:51:56,340
2915 contrary
2916
2917 730
2918 00:51:57,030 ~-~-> 00:52:03,660
2919 signal here back in October. As of 2010, where the German
2920
2921 731
2922 00:52:03,660 ~-~-> 00:52:08,100
2923 five year note was failing to make lower lows in the yield.
2924
2925 732
2926 00:52:08,490 ~-~-> 00:52:12,720
2927 At the same time, the US five year note was making a lower
2928
2929 733
2930 00:52:12,720 ~-~-> 00:52:17,610
2931 low. Okay, and then we saw both yields increase together.
2932
2933 734
2934 00:52:18,060 ~-~-> 00:52:24,300
2935 And here the high, you saw an inability for the US to trade
2936
2937 735
2938 00:52:24,690 ~-~-> 00:52:29,460
2939 higher in yield while the German yield went higher, and you
2940
2941 736
2942 00:52:29,460 ~-~-> 00:52:33,330
2943 can see there was a shift in the major market sentiment. And
2944
2945 737
2946 00:52:33,330 ~-~-> 00:52:35,280
2947 that's really what this is measuring market sentiment
2948
2949 738
2950 00:52:35,430 ~-~-> 00:52:39,270
2951 because you're, you're chasing the yield. Okay. And the
2952
2953 739
2954 00:52:39,270 ~-~-> 00:52:41,970
2955 markets always going to seek yield. Okay, so if the yields
2956
2957 740
2958 00:52:42,390 ~-~-> 00:52:44,610
2959 are increasing, that's going to be bullish for major
2960
2961 741
2962 00:52:44,610 ~-~-> 00:52:46,860
2963 currencies, and it's going to be
2964
2965 742
2966 00:52:47,010 ~-~-> 00:52:49,020
2967 bearish for the dollar
2968
2969 743
2970 00:52:50,460 ~-~-> 00:52:53,550
2971 and vice versa. And we seen the same thing here and this
2972
2973 744
2974 00:52:53,550 ~-~-> 00:53:00,330
2975 April 2010. Okay, the US five year made higher highs While
2976
2977 745
2978 00:53:00,360 ~-~-> 00:53:05,220
2979 the German five year note was unable to make equivalent, new
2980
2981 746
2982 00:53:05,220 ~-~-> 00:53:08,580
2983 hot, and there was your shift, and notice this is happening
2984
2985 747
2986 00:53:08,910 ~-~-> 00:53:13,650
2987 march april time period. And we just recently at the time of
2988
2989 748
2990 00:53:13,650 ~-~-> 00:53:16,380
2991 this recording also had another divergence which is a
2992
2993 749
2994 00:53:16,380 ~-~-> 00:53:20,130
2995 continuation of this longer term downtrend in the yield. And
2996
2997 750
2998 00:53:20,130 ~-~-> 00:53:23,430
2999 again, here is a 10 year comparison we're going to compare
3000
3001 751
3002 00:53:23,430 ~-~-> 00:53:33,240
3003 the German which is the orange, the UK, green and the
3004
3005 752
3006 00:53:33,660 ~-~-> 00:53:38,010
3007 lighter Orange is the US 10 year Treasury note. Do you see
3008
3009 753
3010 00:53:38,010 ~-~-> 00:53:42,210
3011 the same thing happening here where the German was making
3012
3013 754
3014 00:53:42,210 ~-~-> 00:53:48,390
3015 higher highs while the US and UK 10 year notes were failing
3016
3017 755
3018 00:53:48,390 ~-~-> 00:53:51,600
3019 to make higher highs in their yield? And the same thing is
3020
3021 756
3022 00:53:51,600 ~-~-> 00:53:58,230
3023 also that low was formed in the fall of 2010. We saw the
3024
3025 757
3026 00:53:58,230 ~-~-> 00:54:02,940
3027 German 10 year failed to make lower lows in yield while the
3028
3029 758
3030 00:54:03,150 ~-~-> 00:54:07,830
3031 US Treasury made on its 10 year basis made a lower yield and
3032
3033 759
3034 00:54:07,830 ~-~-> 00:54:13,200
3035 the UK failed to make a lower yield also in that was your
3036
3037 760
3038 00:54:13,350 ~-~-> 00:54:16,440
3039 sentiment shift to bullish and that would have been looking
3040
3041 761
3042 00:54:16,440 ~-~-> 00:54:20,850
3043 for buy programs on major currencies and sell signals okay
3044
3045 762
3046 00:54:21,750 ~-~-> 00:54:24,150
3047 in the dollar, okay. In other words, the dollar would have
3048
3049 763
3050 00:54:24,150 ~-~-> 00:54:27,780
3051 been declining all during this period here. And at this
3052
3053 764
3054 00:54:27,930 ~-~-> 00:54:30,780
3055 point where we saw a major shift, okay and the yield
3056
3057 765
3058 00:54:30,780 ~-~-> 00:54:35,370
3059 diverged, the sentiment now was going to send the dollar
3060
3061 766
3062 00:54:35,730 ~-~-> 00:54:40,350
3063 bullish and then major currencies on the farm would be
3064
3065 767
3066 00:54:40,440 ~-~-> 00:54:44,760
3067 declining. So that would be a risk off scenario here or sell
3068
3069 768
3070 00:54:44,760 ~-~-> 00:54:50,160
3071 program from forex. And this is a bi program, okay,
3072
3073 769
3074 00:54:50,189 ~-~-> 00:54:52,379
3075 where the, the
3076
3077 770
3078 00:54:54,000 ~-~-> 00:54:57,420
3079 current foreign currency markets would be rallying and the
3080
3081 771
3082 00:54:57,420 ~-~-> 00:55:01,620
3083 US dollar at this time period would be declining. Okay, so
3084
3085 772
3086 00:55:01,920 ~-~-> 00:55:03,930
3087 it just basically think in terms of make it real easy for
3088
3089 773
3090 00:55:03,930 ~-~-> 00:55:07,620
3091 yourself, when the yields are going up. The foreign currency
3092
3093 774
3094 00:55:07,620 ~-~-> 00:55:10,620
3095 markets should be trailing in sympathy, okay? Because
3096
3097 775
3098 00:55:10,620 ~-~-> 00:55:13,140
3099 they're going to chase yield. And as the yields drop,
3100
3101 776
3102 00:55:13,260 ~-~-> 00:55:16,080
3103 foreign currencies are going to chase that down as well,
3104
3105 777
3106 00:55:16,080 ~-~-> 00:55:18,000
3107 there won't be any demand for that foreign currency and
3108
3109 778
3110 00:55:18,000 ~-~-> 00:55:21,780
3111 they'll be a flight to safety in the form of going back to
3112
3113 779
3114 00:55:21,780 ~-~-> 00:55:28,410
3115 the dollar and buying bonds. Okay. So, again, there's an
3116
3117 780
3118 00:55:28,410 ~-~-> 00:55:31,080
3119 inverse relationship between the bond market itself and the
3120
3121 781
3122 00:55:31,080 ~-~-> 00:55:34,890
3123 yield as bonds would go up, the yields would drop and vice
3124
3125 782
3126 00:55:34,890 ~-~-> 00:55:39,300
3127 versa. Okay. So it that's basically the panoramic view of a
3128
3129 783
3130 00:55:39,300 ~-~-> 00:55:43,530
3131 risk on risk off scenario and determining, buy and sell
3132
3133 784
3134 00:55:43,530 ~-~-> 00:55:49,140
3135 programs on the daily basis. And this is one really strong
3136
3137 785
3138 00:55:49,140 ~-~-> 00:55:53,250
3139 powerful way of keeping yourself in sync with the macro
3140
3141 786
3142 00:55:53,370 ~-~-> 00:55:55,890
3143 economic view. And you don't have to go through all this
3144
3145 787
3146 00:55:56,520 ~-~-> 00:55:59,430
3147 economic data. This is this is visual for you. You can see
3148
3149 788
3150 00:55:59,430 ~-~-> 00:56:02,730
3151 it happening. every three to four months, just look for a
3152
3153 789
3154 00:56:02,730 ~-~-> 00:56:06,450
3155 shift to occur. And when you start seeing these things occur
3156
3157 790
3158 00:56:06,450 ~-~-> 00:56:09,630
3159 on your on the yield, okay? That's when you want to be
3160
3161 791
3162 00:56:09,630 ~-~-> 00:56:11,820
3163 looking at your, your price charts and looking for maybe
3164
3165 792
3166 00:56:11,820 ~-~-> 00:56:16,470
3167 some top formations and some reversal scenarios. Okay? And
3168
3169 793
3170 00:56:16,710 ~-~-> 00:56:19,380
3171 same thing in here. So we're using seasonal tendencies,
3172
3173 794
3174 00:56:19,530 ~-~-> 00:56:26,640
3175 cyclical analysis and the yield analysis where the market
3176
3177 795
3178 00:56:26,640 ~-~-> 00:56:29,430
3179 will always seek yield and if yields are dropping, that's
3180
3181 796
3182 00:56:29,430 ~-~-> 00:56:32,190
3183 going to be bearish for major currencies and bullish for the
3184
3185 797
3186 00:56:32,190 ~-~-> 00:56:32,850
3187 US dollar.
3188
3189 798
3190 00:57:16,920 ~-~-> 00:57:20,040
3191 Key support and resistance, you got to know your key levels
3192
3193 799
3194 00:57:20,040 ~-~-> 00:57:23,010
3195 guys. If you don't have a firm grasp on support resistance,
3196
3197 800
3198 00:57:23,370 ~-~-> 00:57:26,070
3199 all this is going to be a waste of time because none of your
3200
3201 801
3202 00:57:26,070 ~-~-> 00:57:29,190
3203 signals are ever going to confirm entry or exit unless they
3204
3205 802
3206 00:57:29,190 ~-~-> 00:57:32,880
3207 get to on these key levels. The cornerstone to your success
3208
3209 803
3210 00:57:32,880 ~-~-> 00:57:35,580
3211 in trading will be your patience in determining high
3212
3213 804
3214 00:57:35,580 ~-~-> 00:57:38,670
3215 timeframe key support resistance levels, and waiting for the
3216
3217 805
3218 00:57:38,670 ~-~-> 00:57:42,120
3219 setups to form at those same levels. Once you have
3220
3221 806
3222 00:57:42,120 ~-~-> 00:57:45,390
3223 directional bias based on the major market analysis, you
3224
3225 807
3226 00:57:45,390 ~-~-> 00:57:48,630
3227 identify key price levels from the 60 minute chart up to the
3228
3229 808
3230 00:57:48,630 ~-~-> 00:57:52,140
3231 monthly nothing less than a 60 minute chart and ideally, the
3232
3233 809
3234 00:57:52,140 ~-~-> 00:57:56,730
3235 daily basis is optimal. Determined monthly, weekly previous
3236
3237 810
3238 00:57:56,730 ~-~-> 00:58:00,000
3239 day's session highs and lows as well as pivot levels and age
3240
3241 811
3242 00:58:00,000 ~-~-> 00:58:08,460
3243 Marines highs and lows, market sentiment, you have to avoid
3244
3245 812
3246 00:58:08,580 ~-~-> 00:58:12,660
3247 them a herd mentality. if everybody's doing it, it's
3248
3249 813
3250 00:58:12,660 ~-~-> 00:58:15,570
3251 probably not a good thing in the futures market or Forex.
3252
3253 814
3254 00:58:15,930 ~-~-> 00:58:18,720
3255 It's usually probably petered out. And so you want to be
3256
3257 815
3258 00:58:18,720 ~-~-> 00:58:23,250
3259 looking to trade against the majority. Now when decided to
3260
3261 816
3262 00:58:23,250 ~-~-> 00:58:25,590
3263 take action in the market, it is important to remain on the
3264
3265 817
3266 00:58:25,590 ~-~-> 00:58:30,870
3267 side of the market that is the minority. Looking for trades
3268
3269 818
3270 00:58:30,870 ~-~-> 00:58:34,410
3271 when the market is by all parents bullish when you want to
3272
3273 819
3274 00:58:34,410 ~-~-> 00:58:37,890
3275 short is ideal. And you might have already guessed it, when
3276
3277 820
3278 00:58:37,890 ~-~-> 00:58:42,960
3279 it looks bearish, do your buying. This might sound rather
3280
3281 821
3282 00:58:42,960 ~-~-> 00:58:45,900
3283 obvious and elementary but consider how little actually
3284
3285 822
3286 00:58:46,260 ~-~-> 00:58:51,720
3287 followed this mindset. Consider the intraday Judas swing for
3288
3289 823
3290 00:58:51,720 ~-~-> 00:58:55,020
3291 example. This is a sentiment play by all standards, and it's
3292
3293 824
3294 00:58:55,020 ~-~-> 00:58:58,500
3295 used to quantify an entry in the opposite direction.
3296
3297 825
3298 00:59:04,319 ~-~-> 00:59:10,379
3299 market structure, hunt intermediate term price swings. If
3300
3301 826
3302 00:59:10,379 ~-~-> 00:59:13,829
3303 you find all of your trading occurring at long term
3304
3305 827
3306 00:59:13,829 ~-~-> 00:59:16,439
3307 intermediate term price swings, you're going to find that
3308
3309 828
3310 00:59:16,439 ~-~-> 00:59:21,869
3311 your trading is absolutely mind blowing. The ideal setups
3312
3313 829
3314 00:59:21,869 ~-~-> 00:59:24,809
3315 for trading low risk high probability swings is to limit
3316
3317 830
3318 00:59:24,809 ~-~-> 00:59:27,449
3319 your consideration to only trade the intermediate term highs
3320
3321 831
3322 00:59:27,479 ~-~-> 00:59:31,979
3323 for shorts and intermediate term lows for Long's. Taking
3324
3325 832
3326 00:59:31,979 ~-~-> 00:59:35,129
3327 short term scalps and or day trades in the same direction is
3328
3329 833
3330 00:59:35,129 ~-~-> 00:59:39,419
3331 advised. Your trading plan is not to capture every move in
3332
3333 834
3334 00:59:39,419 ~-~-> 00:59:45,179
3335 the market, just the easy low hanging fruit. Using daily
3336
3337 835
3338 00:59:45,179 ~-~-> 00:59:48,119
3339 four hour and hourly market structure and nesting fractals
3340
3341 836
3342 00:59:48,239 ~-~-> 00:59:51,719
3343 can be a wildly profitable price action approach. This is my
3344
3345 837
3346 00:59:51,719 ~-~-> 00:59:53,189
3347 core price action concepts
3348
3349 838
3350 00:59:57,510 ~-~-> 00:59:59,190
3351 open interest and premiums
3352
3353 839
3354 01:00:00,630 ~-~-> 01:00:03,960
3355 open interest reflects Smart Money activity. And open
3356
3357 840
3358 01:00:03,960 ~-~-> 01:00:06,450
3359 interest is basically only going to be found in the futures
3360
3361 841
3362 01:00:06,450 ~-~-> 01:00:09,930
3363 market. And the open interest in for instance, is example
3364
3365 842
3366 01:00:09,930 ~-~-> 01:00:12,090
3367 here. Okay, in this example, we're looking at the Swiss
3368
3369 843
3370 01:00:12,090 ~-~-> 01:00:16,650
3371 franc. And what I've noted here is that price had ran up,
3372
3373 844
3374 01:00:16,650 ~-~-> 01:00:20,160
3375 it's been an uptrend and we moved into a trading range.
3376
3377 845
3378 01:00:20,490 ~-~-> 01:00:26,970
3379 Okay? And if you look at the circle here, that is open
3380
3381 846
3382 01:00:26,970 ~-~-> 01:00:30,840
3383 interest, that cumulative line that goes along, and all of a
3384
3385 847
3386 01:00:30,840 ~-~-> 01:00:34,200
3387 sudden drops off precipitously drops straight down. Okay,
3388
3389 848
3390 01:00:34,680 ~-~-> 01:00:37,320
3391 that is open interest declining while the market is in a
3392
3393 849
3394 01:00:37,320 ~-~-> 01:00:43,500
3395 range. What do you think that translates to? Well, this is a
3396
3397 850
3398 01:00:43,500 ~-~-> 01:00:46,020
3399 concept that I adopted from Larry Williams and it still
3400
3401 851
3402 01:00:46,020 ~-~-> 01:00:49,350
3403 served me well today. The open interest while in a market
3404
3405 852
3406 01:00:49,410 ~-~-> 01:00:52,620
3407 market consolidation or range can tip the hand of the smart
3408
3409 853
3410 01:00:52,620 ~-~-> 01:00:57,090
3411 money if you understand what to look for. If the open
3412
3413 854
3414 01:00:57,090 ~-~-> 01:01:00,000
3415 interest drops off, 20% or more rapidly, this is a trick
3416
3417 855
3418 01:01:00,000 ~-~-> 01:01:03,180
3419 tributed to commercial short covering, if open interest
3420
3421 856
3422 01:01:03,180 ~-~-> 01:01:06,810
3423 increases 20% or more rapidly in a consolidation, this is
3424
3425 857
3426 01:01:06,810 ~-~-> 01:01:10,230
3427 commercial short selling. Commercial traders are the largest
3428
3429 858
3430 01:01:10,290 ~-~-> 01:01:12,960
3431 hedgers in the marketplace. And when you hedge, you're
3432
3433 859
3434 01:01:12,960 ~-~-> 01:01:15,510
3435 essentially shorting the market, you're selling something
3436
3437 860
3438 01:01:15,510 ~-~-> 01:01:19,920
3439 you already have. So, if open interest declines, that means
3440
3441 861
3442 01:01:19,920 ~-~-> 01:01:22,830
3443 that they're lightening up aggressively on their shorts. Why
3444
3445 862
3446 01:01:22,830 ~-~-> 01:01:25,920
3447 would they do that? Because they anticipate price going
3448
3449 863
3450 01:01:25,920 ~-~-> 01:01:30,420
3451 higher. When you have a premium in the futures contracts,
3452
3453 864
3454 01:01:30,630 ~-~-> 01:01:34,140
3455 that means the nearby contract is selling at a higher price
3456
3457 865
3458 01:01:34,230 ~-~-> 01:01:38,940
3459 than the next month out in the future. That is a premium.
3460
3461 866
3462 01:01:39,030 ~-~-> 01:01:42,210
3463 Okay, that means there's a high demand for that particular
3464
3465 867
3466 01:01:42,210 ~-~-> 01:01:46,920
3467 commodity or currency. If you see open interest dropping off
3468
3469 868
3470 01:01:46,920 ~-~-> 01:01:49,860
3471 in that scenario, this is a near perfect trade scenario you
3472
3473 869
3474 01:01:49,860 ~-~-> 01:01:56,190
3475 need to be buying. And as a result, this was a mega trade.
3476
3477 870
3478 01:01:56,250 ~-~-> 01:01:59,160
3479 This is in 2010. If you look at your charts around the
3480
3481 871
3482 01:01:59,160 ~-~-> 01:02:03,330
3483 Fourth of July in two 2010 you can see how in the FX market,
3484
3485 872
3486 01:02:03,570 ~-~-> 01:02:09,900
3487 the pair for the swissy fell out of bed like a rock. This
3488
3489 873
3490 01:02:09,900 ~-~-> 01:02:13,200
3491 trade in the futures market actually moved 2300 points, and
3492
3493 874
3494 01:02:13,200 ~-~-> 01:02:16,950
3495 it did less than half of two months. And the open interest
3496
3497 875
3498 01:02:16,950 ~-~-> 01:02:21,510
3499 dropped while in the range its support at 118. And it was in
3500
3501 876
3502 01:02:21,510 ~-~-> 01:02:25,200
3503 an existing trend already. And that's an absolutely mind
3504
3505 877
3506 01:02:25,200 ~-~-> 01:02:29,340
3507 boggling profit. And if you have that type of scenario
3508
3509 878
3510 01:02:29,340 ~-~-> 01:02:31,200
3511 unfold in the marketplace and you see a couple of these
3512
3513 879
3514 01:02:31,200 ~-~-> 01:02:34,860
3515 happen a year, you can really absolutely kill it catch some
3516
3517 880
3518 01:02:34,860 ~-~-> 01:02:37,830
3519 explosive price moves. So I would counsel you to look at
3520
3521 881
3522 01:02:37,830 ~-~-> 01:02:40,080
3523 open interest in the futures markets on the pair's you
3524
3525 882
3526 01:02:40,080 ~-~-> 01:02:44,190
3527 trade. Swiss franc as an example here, but it's not limited
3528
3529 883
3530 01:02:44,190 ~-~-> 01:02:47,100
3531 to that it's you can use it in the dollar index. You can use
3532
3533 884
3534 01:02:47,100 ~-~-> 01:02:50,970
3535 it the Canadian dollar, Australian dollar, British pound,
3536
3537 885
3538 01:02:51,210 ~-~-> 01:02:59,310
3539 Japanese yen, and even the Euro higher timeframe directional
3540
3541 886
3542 01:02:59,310 ~-~-> 01:03:02,730
3543 bias Maintaining a focus on the weekly daily and possibly
3544
3545 887
3546 01:03:02,730 ~-~-> 01:03:04,890
3547 the four hour time frames will keep your trading in the
3548
3549 888
3550 01:03:04,890 ~-~-> 01:03:08,190
3551 highest probable direction. Look for support or resistance
3552
3553 889
3554 01:03:08,190 ~-~-> 01:03:11,670
3555 on these levels determine where price is trying to reach to.
3556
3557 890
3558 01:03:12,180 ~-~-> 01:03:15,090
3559 If price is trading lower on the daily look for an old low
3560
3561 891
3562 01:03:15,120 ~-~-> 01:03:18,120
3563 or high in the left side of your chart to determine if
3564
3565 892
3566 01:03:18,150 ~-~-> 01:03:21,900
3567 there's time and price available for trade. Given that
3568
3569 893
3570 01:03:21,900 ~-~-> 01:03:27,000
3571 direction. Reverse for looking for buy setups. The main
3572
3573 894
3574 01:03:27,000 ~-~-> 01:03:30,510
3575 point is to keep the higher timeframe in your trading. It
3576
3577 895
3578 01:03:30,510 ~-~-> 01:03:31,770
3579 really does pay off
3580
3581 896
3582 01:04:13,110 ~-~-> 01:04:17,310
3583 general market risk on or risk off, you want to start with
3584
3585 897
3586 01:04:17,310 ~-~-> 01:04:20,370
3587 the interest rates? Are we seeing yields dropping or
3588
3589 898
3590 01:04:20,370 ~-~-> 01:04:23,490
3591 increasing? Is there weakness or strength in the stocks
3592
3593 899
3594 01:04:23,520 ~-~-> 01:04:27,150
3595 commodity and treasuries? is gold and or oil giving you any
3596
3597 900
3598 01:04:27,150 ~-~-> 01:04:30,720
3599 clues? Is the dollar index confirming recent highs or lows
3600
3601 901
3602 01:04:30,720 ~-~-> 01:04:34,590
3603 compared to the interest rates? Are there any market reports
3604
3605 902
3606 01:04:34,590 ~-~-> 01:04:38,610
3607 do that might change the current market tone. The more the
3608
3609 903
3610 01:04:38,610 ~-~-> 01:04:41,910
3611 other asset classes confirm or negate your trade idea, the
3612
3613 904
3614 01:04:41,910 ~-~-> 01:04:46,950
3615 better risk off dollar rallies risk on it slides. It's that
3616
3617 905
3618 01:04:46,950 ~-~-> 01:04:55,530
3619 simple. anticipatory stage of analysis. This is the stage of
3620
3621 906
3622 01:04:55,530 ~-~-> 01:04:58,350
3623 analysis where you will spend the majority of your time it
3624
3625 907
3626 01:04:58,350 ~-~-> 01:05:01,890
3627 is on the weekly daily time. Since the trades are based on
3628
3629 908
3630 01:05:01,890 ~-~-> 01:05:04,320
3631 these higher timeframes, there might be a few days or so
3632
3633 909
3634 01:05:04,320 ~-~-> 01:05:07,200
3635 before a trade actually sets up. Don't worry, that's a good
3636
3637 910
3638 01:05:07,200 ~-~-> 01:05:10,590
3639 thing. You want to track the interest rates, you want to be
3640
3641 911
3642 01:05:10,710 ~-~-> 01:05:14,280
3643 paying attention to cod Commitment of Traders reports, major
3644
3645 912
3646 01:05:14,280 ~-~-> 01:05:17,400
3647 market indices, seasonal tendencies, key support resistance
3648
3649 913
3650 01:05:17,400 ~-~-> 01:05:20,550
3651 levels and inter market analysis with correlated assets.
3652
3653 914
3654 01:05:21,210 ~-~-> 01:05:24,240
3655 This stage of analysis is the foundation to your successful
3656
3657 915
3658 01:05:24,240 ~-~-> 01:05:31,440
3659 trading career. execution stage of analysis This is stage of
3660
3661 916
3662 01:05:31,440 ~-~-> 01:05:34,800
3663 analysis where you hunt setups based on the insights and
3664
3665 917
3666 01:05:34,800 ~-~-> 01:05:37,500
3667 conclusions you arrived at in the anticipatory stage of
3668
3669 918
3670 01:05:37,500 ~-~-> 01:05:41,190
3671 analysis. If risk is on, look for setups to buy currencies
3672
3673 919
3674 01:05:41,190 ~-~-> 01:05:44,220
3675 and confirm the setups with higher moving or poised to rally
3676
3677 920
3678 01:05:44,220 ~-~-> 01:05:49,620
3679 stock indices, CRB oil golden SMT concepts. If risk is off,
3680
3681 921
3682 01:05:49,800 ~-~-> 01:05:52,620
3683 look for setups to sell currencies and confirm these setups
3684
3685 922
3686 01:05:52,620 ~-~-> 01:05:56,130
3687 with lower moving or poised to decline, stock indices, the
3688
3689 923
3690 01:05:56,130 ~-~-> 01:06:03,750
3691 CRB index oil, gold and SMT concepts Management stage of
3692
3693 924
3694 01:06:03,750 ~-~-> 01:06:07,290
3695 analysis This is the stage that requires your concepts for
3696
3697 925
3698 01:06:07,290 ~-~-> 01:06:10,710
3699 trade management on open positions, the management of stop
3700
3701 926
3702 01:06:10,710 ~-~-> 01:06:13,680
3703 loss orders, limit orders, initial profit objectives and
3704
3705 927
3706 01:06:13,680 ~-~-> 01:06:17,730
3707 scaling later portions. Your trading plan must have clear
3708
3709 928
3710 01:06:17,730 ~-~-> 01:06:20,400
3711 concepts and techniques for the process that you will adhere
3712
3713 929
3714 01:06:20,400 ~-~-> 01:06:24,060
3715 to. When managing open positions. This stage of analysis is
3716
3717 930
3718 01:06:24,060 ~-~-> 01:06:27,540
3719 crucial for consistently and having longevity in this
3720
3721 931
3722 01:06:27,540 ~-~-> 01:06:32,430
3723 career. You can find wonderful setups, enter at optimal
3724
3725 932
3726 01:06:32,430 ~-~-> 01:06:35,370
3727 entry points and still miss manage the trade and in this
3728
3729 933
3730 01:06:35,370 ~-~-> 01:06:39,360
3731 stage, you will find results bring with it loss and regret
3732
3733 934
3734 01:06:39,360 ~-~-> 01:06:48,300
3735 if you do not manage your analysis correctly. reactionary
3736
3737 935
3738 01:06:48,300 ~-~-> 01:06:52,020
3739 stage of analysis. This stage of analysis is seen where your
3740
3741 936
3742 01:06:52,020 ~-~-> 01:06:55,740
3743 trades are open and you suspect or clearly see reasons to
3744
3745 937
3746 01:06:55,740 ~-~-> 01:06:58,860
3747 collapse the trade and cut your losses or take what profits
3748
3749 938
3750 01:06:58,860 ~-~-> 01:07:01,860
3751 you have open. There must be clear parameters in your
3752
3753 939
3754 01:07:01,860 ~-~-> 01:07:05,310
3755 trading plan that will invoke an immediate trade termination
3756
3757 940
3758 01:07:05,310 ~-~-> 01:07:08,460
3759 and abort when your original trade idea. This might be a
3760
3761 941
3762 01:07:08,460 ~-~-> 01:07:12,900
3763 result of a report or news event, global catastrophe and or
3764
3765 942
3766 01:07:13,020 ~-~-> 01:07:15,870
3767 you realize you're simply human and essentially wrong.
3768
3769 943
3770 01:07:16,320 ~-~-> 01:07:17,880
3771 Imagine that making a mistake.
3772
3773 944
3774 01:07:23,250 ~-~-> 01:07:26,760
3775 The documentation stage of analysis. This stage of analysis
3776
3777 945
3778 01:07:26,760 ~-~-> 01:07:29,550
3779 is where you record in your journal, what your trade idea
3780
3781 946
3782 01:07:29,550 ~-~-> 01:07:34,200
3783 was based on what tools you used in why screenshots and how
3784
3785 947
3786 01:07:34,200 ~-~-> 01:07:37,380
3787 you felt going into the trade while the position was open,
3788
3789 948
3790 01:07:37,410 ~-~-> 01:07:40,470
3791 and what made you nervous. The results of the trade should
3792
3793 949
3794 01:07:40,470 ~-~-> 01:07:43,890
3795 be documented and reflection on the trade plan and was it
3796
3797 950
3798 01:07:43,890 ~-~-> 01:07:47,430
3799 here too from the beginning to end? document any lessons
3800
3801 951
3802 01:07:47,430 ~-~-> 01:07:49,410
3803 learned from the trade and what you would have liked to have
3804
3805 952
3806 01:07:49,410 ~-~-> 01:07:53,100
3807 done differently? determine what leverage and or lot size
3808
3809 953
3810 01:07:53,100 ~-~-> 01:07:56,340
3811 your next trade will be using? Keep these records and refer
3812
3813 954
3814 01:07:56,340 ~-~-> 01:07:59,160
3815 to them when you experience a period of drawdown and or a
3816
3817 955
3818 01:07:59,160 ~-~-> 01:08:02,160
3819 string of losses. It will remind you that temporary losing
3820
3821 956
3822 01:08:02,160 ~-~-> 01:08:03,300
3823 streaks come and go.