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Version 1.1 by Drunk Monkey on 2020-11-20 16:49
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Drunk Monkey 1.1 1 1
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3 ICT: Okay, guys, we are looking at the top down ICT
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7 approach. Okay. And also, as we've always mentioned before
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11 in previous examples of education in my work, everything
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15 hinges upon the interest rate market. Okay, whenever you see
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19 in the interest rate market, we'll have a driving force in
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23 the United States Dollar Index, which is essentially the
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27 barometer for corn currency markets if the US dollar is weak
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31 at both 12 from bullish foreign currencies, and if the
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35 United States dollar is bullish, it bodes poorly for foreign
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39 currencies and expect lower prices and sympathy. And
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43 obviously, that train of command maintains its impact across
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47 all market asset classes that being the stock market, the
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51 commodity markets as well. It's not limited to just currency
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55 markets. So, obviously what do I mean by it all hinges on
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59 the interest rate markets well we watch the 10 year five
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63 year two year and 30 year market in the yields. Okay and by
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67 looking at the yields, what we look for is generally the
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71 yields are moving in tandem. Okay and then this example
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75 crudely examples, we're looking at a downward shift in
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79 yields. So that would indicate that yields are dropping,
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83 that is a risk off scenario. So while risk is off, we are no
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87 longer looking for buy signals, we're focusing more on the
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91 sell side until we see a divergence in the yields okay. And
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95 this could take form in five year it could be in a 10 year.
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99 Generally you want to be looking at
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103 three
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107 yields like for instance, like actually trade the British
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111 Pound in the fiber? Well, it's crossed with the US dollar.
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115 So, the triad, the yield triad that I use is the US yields
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119 the UK yields and the German yield test described here in
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123 this again, rather crude example, at some point, and usually
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127 between two to three months, couple times a year, there's a
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131 shift that takes place in the interest rate market. And its
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135 quarterly driven. So at some point, the yields will fail to
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139 make comparable lows. Okay, and just think, but more or less
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143 depth Dow Theory, because that's what I've applied here is
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147 they have to confirm one another. If they don't confirm one
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151 another, something's taking place. Fundamentally, I'm not
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155 claiming to understand what it is fundamentally that's
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159 taking place. I'm just stating that I see it in the chart,
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163 following the yields, so one diverges in this example, you
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167 see that the UK and the US yields failed to make lower lows
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171 while the German yields did, okay, that's generally an
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175 indication The German markets are less favored. But yes,
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179 they probably will move up in 10 in sympathy. So now we see
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183 a shift on their way now as yields are increasing for the
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187 next quarter. This generally will be bullish for foreign
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191 currencies and or bearish for the US dollar. And this will
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195 maintain its impact over the market for a period of time
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199 until at some point, the yields will encounter a resistance
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203 level of some kind. And that's going to come in the form of
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207 one yield failing to make a higher high and or more than one
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211 Okay, so what you're doing is you're looking for a shift in
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215 the overall trend of the yields, okay, so it's going to tip
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219 your hand that something fundamentally is slowing down.
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223 There's waning interest in risk and there may be a turn
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227 likely done soon. So now you want to be a little bit more
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231 cautious in your both buy signals. Because we may see a drop
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235 in yields which would be a call scenario and then the dollar
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239 should be rallying at this point. Okay, so these are the
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243 concepts that you have to apply, beginning with your top
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247 down analysis understanding are we in a risk on or risk off
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251 scenario overall in the interest rate markets and then once
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255 we have that, we can look at a more macro view down to a
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259 micro view.
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263 We are obviously beginning all of our analysis with the
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267 interest rate markets and you don't want to have to expect
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271 this to shift every single day okay, you want to be having a
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275 higher timeframe macro view on interest rates and monitoring
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279 that based on our buy signal? Are we in a buyer program or
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283 sell program? Next, obviously, we would be considering the
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287 direction of the United States dollar and the technical
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291 levels that that indicee is currently being impacted by
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295 obviously, it helps to trade with The understanding that's
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299 found in the futures market, that being the treasuries in
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303 the tea note markets that mean the five year 10 year and 30
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307 year treasuries. The stock indices are always a good to
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311 watch, I go from interest rates of the US dollar to Treasury
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315 markets. And I check out what the overall risk tone is in
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319 the stock market are the averages again confirming using Dow
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323 Theory, and if they're not, it may be an indication that
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327 there may be a short term and or longer term shift taking
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331 place in the marketplace. Then I obviously look at the CRB
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335 index i try to get a feel for Are we still in a risk on risk
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339 off scenario that's confirmed with the commodity markets and
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343 if the CRB is bullish, that would indicate that we are in
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347 fact risk going and that would be bearish for the dollar and
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351 bullish for foreign currencies. And obviously, it always
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355 helps to look at a few other select markets like golden
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359 Because those are good barometers for risk on risk off as
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363 well.
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367 For the anticipatory stage, Okay, first stage
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371 of analysis is always going to be the anticipatory stage.
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375 Okay, you're going to spend more time in this stage of your
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379 analysis than any other stage. And it begins with seasonal
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383 tendencies. That could be the are we in a bullish quarter or
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387 a bearish quarter based on price action? Are we in an area
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391 where seasonally we expect prices to rally or decline?
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395 That
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399 there's a subtle tension it takes place in generally every
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403 marketplace there that is tradable. And it's my advice to
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407 use that to learn what they are and I'm going to share with
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411 you a few of them that are very strong in this. This
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415 presentation over the course of this presentation. You're
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419 gonna learn more, but you have to have answers. of where we
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423 are seasonally. And obviously, you know, while we're looking
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427 for seasonal influences in the marketplace, you're always
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431 watching that yield SMT Okay, you know, we're looking for
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435 the triad to be diverging comparable to the highs and the
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439 lows, one's going to fail to make a higher high and that's
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443 going to give you an indication that we're probably seeing a
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447 shift from risk on risk off and vice versa. Okay, and we
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451 always look at correlated pairs that we trade and it's good
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455 to be a specialist in market trading because it's not to me
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459 it's me it's never been in the advantageous to be a trader
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463 in every single every market, okay? Because you can't watch
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467 too many things at one time and have really good you know,
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471 relationship with the marketplace. If you're spread too
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475 thin, obviously, you How are you going to get a fix on
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479 what's going on in price. So be a specialist you know, pick
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483 one or two bars that closely correlated strongly correlated
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487 and inspect is basically trade likes, look at correlate
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491 highs and lows. And obviously you and me looking at the
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495 stock market and sees NASDAQ Composite Index, the s&p and
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499 such. Okay, every week you want to be maintaining a watchful
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503 eye on the CBOT and we watch the net traders position. Okay,
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507 the overall net position, are they bullish or bearish? And
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511 are they lessening or increasing their shorts? That's going
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515 to be an indication whether or not the market is in fact,
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519 bullish, bearish or if the current market moves have been on
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523 their way is in fact legit or if it's not. You always watch
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527 the open interest and premiums between the nearby and next
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531 month out on your currencies. And you're going to be looking
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535 for indications that there may be a strong demand for or
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539 waning demand, if there is a premium for that particular
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543 market. market sentiment obviously, you know, this could be
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547 derived that by using Market vein numbers we can look at
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551 some sentiment based on chatter that's going on in the news,
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555 the forums, talking heads on TV, if everybody's expecting
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559 the same thing generally going to be the other way. And
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563 obviously, we always have a watchful eye on key higher time
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567 frame support resistance levels. That is the mack daddy of
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571 all things that we do in technical analysis, understand our
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575 key support resistance levels. Alright, the execution stage
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579 before we take any trade before we do any order entry, okay.
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583 Once we have a higher timeframe top down analysis done we
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587 have an understanding of where we are at in terms of yields
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591 and interest rates. Okay, we got to get for the day that you
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595 would actually be doing any trading, you still get a market,
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599 major market turn or are we still bullish overall going into
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603 the new day, and what I mean by that are we risk going on
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607 scoff you have to understand this because if you're buying
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611 generally in a risk on scenario, that's good. But if you're
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615 buying foreign currencies in a risk off scenario, you have
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619 the tide moving against you, and it's very, very difficult
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623 to make money in that situation. So it pays to understand
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627 what it is you're doing every single day and judging what
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631 markets doing going into London, are we rejecting highs or
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635 rejecting lows, probably pricing in the daily low daily
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639 high. You want to be trading in that directional premise.
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643 And obviously it goes without saying that if we have a buy
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647 or sell for programming, the higher timeframe based on
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651 directional premise on monthly, weekly, daily, and four hour
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655 and if we're in a bull program by program rather you will be
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659 focusing on the buy signals. Obviously, we have to have our
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663 macro support resistance levels from the higher time frame
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667 monthly, weekly, daily for hour and one hour on our sub 60
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671 minute charts. So in other words, our 515 minute charts have
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675 To have these higher time frame support resistance levels in
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679 the chart, you have to see them, be aware of them, okay?
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683 Don't just have them written on a piece of paper, have them
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687 on your chart, look at them know where they are, where
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691 they're at, you'll get a better feel for prices actually
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695 trying to do
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699 market structure. Okay, before we execute, we have to
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703 understand where are we at. If we're bullish, we're looking
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707 for immediate term or long term lows on the left hand side
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711 of our chart, okay, so we're going to be looking for short
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715 term to me term lows to be keying off of to get ourselves in
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719 sync with the higher time frame macro view. Okay, and market
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723 structure is a key role in that understanding and execution
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727 in your trading. If you're bearish, okay, you want to be
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731 seeing out long term or short term high on the left hand
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735 side of your chart and where you're trading Now you won't be
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739 shooting for enemy term highs or short term highs to be
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743 getting short and getting in sync with that overall market
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747 structure that is bearish. The market flow Obviously, you
748
749 188
750 00:13:02,130 ~-~-> 00:13:05,340
751 have to understand, simply because the market is poised to
752
753 189
754 00:13:05,340 ~-~-> 00:13:10,470
755 trade higher, and technically, yields may be moving up and
756
757 190
758 00:13:10,470 ~-~-> 00:13:14,190
759 risk own. All those things are in place, you know, support
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761 191
762 00:13:14,340 ~-~-> 00:13:19,710
763 has been traded to. It makes a lot easier trading if we use
764
765 192
766 00:13:19,740 ~-~-> 00:13:23,670
767 market flow and a higher timeframe for our daily to make
768
769 193
770 00:13:23,670 ~-~-> 00:13:24,900
771 sure that we have the
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773 194
774 00:13:25,649 ~-~-> 00:13:26,969
775 tide in our favor.
776
777 195
778 00:13:27,210 ~-~-> 00:13:30,360
779 Okay. And then once it starts moving, it makes trading a lot
780
781 196
782 00:13:30,360 ~-~-> 00:13:33,540
783 easier. Okay, so we have a bullish market structure, bullish
784
785 197
786 00:13:33,540 ~-~-> 00:13:36,360
787 market flow with a bullish macro view, okay, and we're
788
789 198
790 00:13:36,360 ~-~-> 00:13:42,060
791 trading with risk on scenarios in a buy program. Now, simply
792
793 199
794 00:13:42,060 ~-~-> 00:13:45,540
795 moving to a simple time and price theory of expecting the
796
797 200
798 00:13:45,810 ~-~-> 00:13:50,280
799 low to form during London. Okay, you can expect the Asian
800
801 201
802 00:13:50,280 ~-~-> 00:13:55,320
803 range to be a very key role in your order placement. You'd
804
805 202
806 00:13:55,320 ~-~-> 00:13:57,420
807 be looking for the Asian range high or less than look for
808
809 203
810 00:13:57,420 ~-~-> 00:14:00,450
811 your buy signals and vice versa. If you're acting Back to a
812
813 204
814 00:14:00,450 ~-~-> 00:14:03,870
815 risk off scenario, you'd be using the time of day principle
816
817 205
818 00:14:03,870 ~-~-> 00:14:07,890
819 of the Asian range low or greater looking for you to swing
820
821 206
822 00:14:07,980 ~-~-> 00:14:13,710
823 up and looking for your shorts to be, you know, anywhere in
824
825 207
826 00:14:13,710 ~-~-> 00:14:17,520
827 the London open and or the New York open sessions to be
828
829 208
830 00:14:17,550 ~-~-> 00:14:20,700
831 keying off of that directional premise in the higher
832
833 209
834 00:14:20,700 ~-~-> 00:14:24,570
835 timeframe drilled down through all the steps we just covered
836
837 210
838 00:14:24,570 ~-~-> 00:14:29,310
839 here. More detail obviously will be given as we go through
840
841 211
842 00:14:29,310 ~-~-> 00:14:33,330
843 actual real top down analysis and real breakdown of a market
844
845 212
846 00:14:33,630 ~-~-> 00:14:36,420
847 moved it took place in the spring into summer months of
848
849 213
850 00:14:36,420 ~-~-> 00:14:40,230
851 2012. But for now, what we're doing is is we're outlining
852
853 214
854 00:14:40,230 ~-~-> 00:14:44,250
855 really the top down approach in a nutshell so that we you
856
857 215
858 00:14:44,280 ~-~-> 00:14:47,250
859 going into your charts every day, this is the framework that
860
861 216
862 00:14:47,250 ~-~-> 00:14:50,610
863 you should have in your your psyche as a trader, what it is
864
865 217
866 00:14:50,610 ~-~-> 00:14:53,880
867 that you're doing every day is that on a daily basis, is it
868
869 218
870 00:14:53,880 ~-~-> 00:14:56,820
871 the same thing over and over again, this is my routine. You
872
873 219
874 00:14:56,820 ~-~-> 00:14:59,040
875 may tweak it a little bit, you may take some things out of
876
877 220
878 00:14:59,040 ~-~-> 00:15:01,320
879 here and move it around. You do something a little bit
880
881 221
882 00:15:01,320 ~-~-> 00:15:04,170
883 different in terms of order. But these are essential to me
884
885 222
886 00:15:04,170 ~-~-> 00:15:07,200
887 in terms of my concepts, my material, the things that I use
888
889 223
890 00:15:07,200 ~-~-> 00:15:10,920
891 when I do my analysis. And then finally, once we understand
892
893 224
894 00:15:10,920 ~-~-> 00:15:12,510
895 what we're supposed to be doing based on the higher time
896
897 225
898 00:15:12,510 ~-~-> 00:15:17,400
899 frame premise, it goes into your order entries. Okay? And
900
901 226
902 00:15:17,430 ~-~-> 00:15:20,370
903 90% of the time, I'm using limit orders to get in and get
904
905 227
906 00:15:20,370 ~-~-> 00:15:26,490
907 out and stop orders for protection. And unless I'm trading a
908
909 228
910 00:15:26,490 ~-~-> 00:15:31,230
911 breakout, and I want to be buying strength or selling
912
913 229
914 00:15:31,230 ~-~-> 00:15:34,440
915 weakness, okay, that's the only time I'm using a stop, and
916
917 230
918 00:15:34,440 ~-~-> 00:15:36,960
919 it's 10% of the time. So what does that tell you? 90% of the
920
921 231
922 00:15:36,960 ~-~-> 00:15:39,960
923 time, I'm not trading breakouts. Okay, I'm actually feeding
924
925 232
926 00:15:39,960 ~-~-> 00:15:43,830
927 the market moves, trade entry orders. We're going to talk
928
929 233
930 00:15:43,830 ~-~-> 00:15:46,320
931 about that in the last module, because we're gonna actually
932
933 234
934 00:15:46,320 ~-~-> 00:15:50,370
935 give you specific orders and specific examples on how to use
936
937 235
938 00:15:50,370 ~-~-> 00:15:55,860
939 these orders for actual demo trading counts. So you can you
940
941 236
942 00:15:55,860 ~-~-> 00:15:59,340
943 can practice in the sandbox and see whether or not these
944
945 237
946 00:15:59,340 ~-~-> 00:16:07,740
947 things work. For you going forward. Alright, the reactionary
948
949 238
950 00:16:07,740 ~-~-> 00:16:12,210
951 stage right there. Basically there's times the market where
952
953 239
954 00:16:12,540 ~-~-> 00:16:16,920
955 if you're in the trade, okay, and you have little to no
956
957 240
958 00:16:16,920 ~-~-> 00:16:21,150
959 movement at all, you've anticipated a market move and price
960
961 241
962 00:16:21,150 ~-~-> 00:16:24,900
963 does go stagnant. It is nowhere just starts going sideways.
964
965 242
966 00:16:24,990 ~-~-> 00:16:29,580
967 Okay? That's a time for you to more or less killed the
968
969 243
970 00:16:29,580 ~-~-> 00:16:33,600
971 trade, especially if you're expecting a price move and we're
972
973 244
974 00:16:33,600 ~-~-> 00:16:37,860
975 moving into a specific time of day where volatility should
976
977 245
978 00:16:37,860 ~-~-> 00:16:41,700
979 be increasing, but it isn't. Okay, it's just better just to
980
981 246
982 00:16:41,700 ~-~-> 00:16:47,190
983 close the trade. Do not expect your success to be hinged
984
985 247
986 00:16:47,190 ~-~-> 00:16:51,660
987 upon one single event, one single trading day. Okay. And I
988
989 248
990 00:16:51,660 ~-~-> 00:16:55,590
991 think if you really take a look at your heaviest losses,
992
993 249
994 00:16:55,620 ~-~-> 00:16:58,920
995 look at your biggest losing days, okay, or your string of
996
997 250
998 00:16:58,920 ~-~-> 00:17:03,870
999 losing days. I guarantee if you go back the mindset you had
1000
1001 251
1002 00:17:03,870 ~-~-> 00:17:07,860
1003 going into that trade is that you are expecting and hoping
1004
1005 252
1006 00:17:07,860 ~-~-> 00:17:11,820
1007 and praying that this move is the winner. This is going to
1008
1009 253
1010 00:17:11,820 ~-~-> 00:17:13,920
1011 be the one that puts you over the top or get you back to
1012
1013 254
1014 00:17:13,950 ~-~-> 00:17:20,040
1015 even. Okay. Don't Don't think like that. Okay? demand the
1016
1017 255
1018 00:17:20,040 ~-~-> 00:17:24,750
1019 tools to place you in optimal trade entry. If it doesn't
1020
1021 256
1022 00:17:24,750 ~-~-> 00:17:28,320
1023 provide you that and you don't see a very short term near
1024
1025 257
1026 00:17:28,320 ~-~-> 00:17:32,670
1027 term feedback in your trade. In other words, are you seeing
1028
1029 258
1030 00:17:32,670 ~-~-> 00:17:35,190
1031 the things that you're expecting in terms of volatility? Are
1032
1033 259
1034 00:17:35,190 ~-~-> 00:17:37,410
1035 you seeing a rejection at the lows that you were buying
1036
1037 260
1038 00:17:37,410 ~-~-> 00:17:39,960
1039 into? Are you seeing are you seeing follow through the
1040
1041 261
1042 00:17:39,960 ~-~-> 00:17:42,870
1043 upside after you bought that long? If you're not seeing that
1044
1045 262
1046 00:17:42,870 ~-~-> 00:17:44,940
1047 and it's going stagnant and you're getting close to the end
1048
1049 263
1050 00:17:44,940 ~-~-> 00:17:47,670
1051 of the day going into London close or if you're going into
1052
1053 264
1054 00:17:47,670 ~-~-> 00:17:51,780
1055 New York open, okay, and prices are stagnant. It may
1056
1057 265
1058 00:17:51,780 ~-~-> 00:17:55,320
1059 actually bounce up against you. If you're, if you're short.
1060
1061 266
1062 00:17:55,800 ~-~-> 00:17:57,660
1063 Or if you're if you're long it may actually pull back
1064
1065 267
1066 00:17:57,660 ~-~-> 00:18:01,200
1067 against your could just go into longer term. consolidation.
1068
1069 268
1070 00:18:01,590 ~-~-> 00:18:05,670
1071 Why sit in? Okay, if it's showing you failure to move,
1072
1073 269
1074 00:18:06,360 ~-~-> 00:18:09,180
1075 that's your time to react kill the trade. There's no risk
1076
1077 270
1078 00:18:09,180 ~-~-> 00:18:12,660
1079 now. Okay? If it runs off if you would have stayed in made
1080
1081 271
1082 00:18:12,660 ~-~-> 00:18:17,610
1083 money, big deal, let it go. Okay. But we act quickly when
1084
1085 272
1086 00:18:17,610 ~-~-> 00:18:22,560
1087 trying to preserve our capital. We act slowly when we're
1088
1089 273
1090 00:18:22,560 ~-~-> 00:18:23,670
1091 trying to make money.
1092
1093 274
1094 00:18:23,700 ~-~-> 00:18:26,850
1095 Okay, we want to be methodical. We want to be very, very
1096
1097 275
1098 00:18:26,850 ~-~-> 00:18:31,770
1099 focused. Okay and detail oriented. When it comes to exposing
1100
1101 276
1102 00:18:31,770 ~-~-> 00:18:36,180
1103 our money to risk. We want to really put it to work when
1104
1105 277
1106 00:18:36,180 ~-~-> 00:18:39,390
1107 there's something highly probable in our favorite to take
1108
1109 278
1110 00:18:39,390 ~-~-> 00:18:44,310
1111 advantage of why risk on very low odd setups.
1112
1113 279
1114 00:18:45,150 ~-~-> 00:18:47,430
1115 There's no reason to you there's enough of them happening in
1116
1117 280
1118 00:18:47,430 ~-~-> 00:18:49,470
1119 a week. There's enough of them happening in a month in over
1120
1121 281
1122 00:18:49,470 ~-~-> 00:18:51,450
1123 a year Good grief. You have tons and tons of opportunity to
1124
1125 282
1126 00:18:51,450 ~-~-> 00:18:55,320
1127 make money. Don't sit in questionable trades. If it's not
1128
1129 283
1130 00:18:55,320 ~-~-> 00:18:59,460
1131 moving for you kill the trade. Take another setup. If you
1132
1133 284
1134 00:18:59,460 ~-~-> 00:19:02,460
1135 see rejection, A key support level that's counter your
1136
1137 285
1138 00:19:02,460 ~-~-> 00:19:05,940
1139 expectation or you're injured and you're in the trade. Kill
1140
1141 286
1142 00:19:05,940 ~-~-> 00:19:10,920
1143 it, why eat up open profits, okay? Turn your paper profits
1144
1145 287
1146 00:19:10,920 ~-~-> 00:19:14,400
1147 into literal profits, go to cash, move to the sidelines,
1148
1149 288
1150 00:19:14,400 ~-~-> 00:19:17,430
1151 take your profits and get out. Okay? If you see rejection,
1152
1153 289
1154 00:19:17,430 ~-~-> 00:19:20,880
1155 strong rejection, something comes across, you know, the
1156
1157 290
1158 00:19:20,880 ~-~-> 00:19:25,500
1159 wires and hits, you know, unexpectedly, which, you know, in
1160
1161 291
1162 00:19:25,500 ~-~-> 00:19:28,740
1163 the event that, you know, major catastrophe or global
1164
1165 292
1166 00:19:28,740 ~-~-> 00:19:32,100
1167 national event, something of that nature, you know, that
1168
1169 293
1170 00:19:32,100 ~-~-> 00:19:34,230
1171 could rock the markets, you never really know when that's
1172
1173 294
1174 00:19:34,230 ~-~-> 00:19:37,440
1175 going to happen. So if you see that it's just better to
1176
1177 295
1178 00:19:37,440 ~-~-> 00:19:40,530
1179 collapse the trade and just get out. You could always get
1180
1181 296
1182 00:19:40,530 ~-~-> 00:19:44,340
1183 back in, always get back in even for those folks that are in
1184
1185 297
1186 00:19:44,340 ~-~-> 00:19:48,240
1187 carry trades. Okay, you can get back in those moves. Okay.
1188
1189 298
1190 00:19:48,240 ~-~-> 00:19:52,260
1191 And look what happened in Japan. If, you know, the
1192
1193 299
1194 00:19:52,260 ~-~-> 00:19:56,760
1195 earthquake hit New tsunami took out you, reactors and the
1196
1197 300
1198 00:19:56,760 ~-~-> 00:20:00,090
1199 whole world's waiting for you in Japan. You slip into The
1200
1201 301
1202 00:20:00,090 ~-~-> 00:20:04,530
1203 ocean in dissolve those things, we can't expect them in
1204
1205 302
1206 00:20:04,530 ~-~-> 00:20:07,830
1207 their acts of God. So we have to, more or less just take
1208
1209 303
1210 00:20:07,830 ~-~-> 00:20:11,550
1211 ourselves out of out of the risk environment, okay in stand
1212
1213 304
1214 00:20:11,550 ~-~-> 00:20:14,610
1215 on the sidelines where it's no more risk, okay? And we can,
1216
1217 305
1218 00:20:14,970 ~-~-> 00:20:17,790
1219 you know, hopefully gain a more objective view of the
1220
1221 306
1222 00:20:17,790 ~-~-> 00:20:21,480
1223 marketplace and then react object new with objective
1224
1225 307
1226 00:20:21,480 ~-~-> 00:20:25,350
1227 analysis not you know, reactionary gambling and trying to
1228
1229 308
1230 00:20:25,350 ~-~-> 00:20:29,100
1231 get in there and throw the dice and chase the market chasing
1232
1233 309
1234 00:20:29,310 ~-~-> 00:20:32,190
1235 you mentality. That's not that's not how we make money,
1236
1237 310
1238 00:20:32,220 ~-~-> 00:20:35,670
1239 okay? You want to react by getting out and take yourself out
1240
1241 311
1242 00:20:35,670 ~-~-> 00:20:39,180
1243 of the risk. And obviously, if you're sick, and if you have
1244
1245 312
1246 00:20:39,180 ~-~-> 00:20:41,910
1247 a life, you know, event that takes place and requires your
1248
1249 313
1250 00:20:41,910 ~-~-> 00:20:44,880
1251 time, your kid might have something that you know, requires
1252
1253 314
1254 00:20:44,880 ~-~-> 00:20:48,120
1255 you as a parent, where your spouse needs you to do something
1256
1257 315
1258 00:20:48,120 ~-~-> 00:20:51,450
1259 with them. You What takes precedence is your relationship in
1260
1261 316
1262 00:20:51,450 ~-~-> 00:20:54,720
1263 the real world or the charts. Okay? Hopefully, you know, I
1264
1265 317
1266 00:20:54,720 ~-~-> 00:20:56,670
1267 appreciate you guys wanting to spend time with me in these
1268
1269 318
1270 00:20:56,670 ~-~-> 00:21:00,180
1271 video modules, but I certainly enjoy it but I enjoy My
1272
1273 319
1274 00:21:00,180 ~-~-> 00:21:03,000
1275 family more and you know if it's going to be a choice
1276
1277 320
1278 00:21:03,000 ~-~-> 00:21:06,060
1279 whether if it's you and YouTube and baby pips, it's going to
1280
1281 321
1282 00:21:06,060 ~-~-> 00:21:09,420
1283 be my family. Okay? So if something takes place that
1284
1285 322
1286 00:21:09,420 ~-~-> 00:21:13,800
1287 requires me and my time or if I get sick you got to react
1288
1289 323
1290 00:21:13,800 ~-~-> 00:21:16,860
1291 and if you're in a trade and you just think that you're not
1292
1293 324
1294 00:21:16,860 ~-~-> 00:21:20,940
1295 going to be able to adequately managed to position react
1296
1297 325
1298 00:21:21,120 ~-~-> 00:21:24,900
1299 react responsibly and just collapse the trade and or tighten
1300
1301 326
1302 00:21:24,900 ~-~-> 00:21:28,500
1303 up the stop loss so that way if you do fall, ill or you fall
1304
1305 327
1306 00:21:29,070 ~-~-> 00:21:32,340
1307 disconnected to the marketplace because of life events that
1308
1309 328
1310 00:21:32,430 ~-~-> 00:21:34,200
1311 need to take place maybe there's a death in your family.
1312
1313 329
1314 00:21:34,800 ~-~-> 00:21:36,660
1315 You're gonna be able to think objective Lee during that.
1316
1317 330
1318 00:21:37,500 ~-~-> 00:21:42,480
1319 Okay, grief can have a major impact on a trader psyche, and
1320
1321 331
1322 00:21:42,570 ~-~-> 00:21:45,180
1323 it's just better to just more or less, remove yourself from
1324
1325 332
1326 00:21:45,180 ~-~-> 00:21:47,280
1327 the risk. Okay, and you can always get back in.
1328
1329 333
1330 00:21:52,710 ~-~-> 00:21:57,090
1331 Alright guys, fractal analysis in price action. All right,
1332
1333 334
1334 00:21:57,090 ~-~-> 00:22:04,260
1335 what's a fractal? Well a fractal is A pattern in nature and
1336
1337 335
1338 00:22:04,260 ~-~-> 00:22:11,400
1339 in many things that you know, as a as a Christian, okay. I
1340
1341 336
1342 00:22:11,400 ~-~-> 00:22:16,080
1343 believe there is a creator. Okay. And I give thanks to him
1344
1345 337
1346 00:22:16,140 ~-~-> 00:22:19,440
1347 on a daily basis for the insights that I've been blessed
1348
1349 338
1350 00:22:19,440 ~-~-> 00:22:25,680
1351 with. And I share with you and I think that the fractals are
1352
1353 339
1354 00:22:26,010 ~-~-> 00:22:30,840
1355 one little signature on his part. also need to show there's
1356
1357 340
1358 00:22:30,870 ~-~-> 00:22:34,110
1359 so there's a design to this, okay, everything around this
1360
1361 341
1362 00:22:34,290 ~-~-> 00:22:39,990
1363 has a specific design. Okay, there it shows intelligence
1364
1365 342
1366 00:22:40,020 ~-~-> 00:22:45,180
1367 behind it. And everything in nature has the same phenomenon.
1368
1369 343
1370 00:22:45,180 ~-~-> 00:22:52,320
1371 It's much like Fibonacci. But a fractal is defined simply as
1372
1373 344
1374 00:22:52,350 ~-~-> 00:22:59,460
1375 a pattern that is repeated in infinite size up and down. In
1376
1377 345
1378 00:22:59,460 ~-~-> 00:23:02,670
1379 other words, Something that you see on one scale. Okay, if
1380
1381 346
1382 00:23:02,670 ~-~-> 00:23:06,360
1383 you scale into it and zoom in, you can see it same pattern
1384
1385 347
1386 00:23:06,750 ~-~-> 00:23:11,310
1387 repeated on lower levels. And obviously the same thing if
1388
1389 348
1390 00:23:11,310 ~-~-> 00:23:16,320
1391 you magnify it out and look at it as a macro view. Well,
1392
1393 349
1394 00:23:16,320 ~-~-> 00:23:20,790
1395 that same principle is an effect in price. Okay and price
1396
1397 350
1398 00:23:20,790 ~-~-> 00:23:26,820
1399 because I'll give you a real generic way of viewing it. When
1400
1401 351
1402 00:23:26,820 ~-~-> 00:23:32,430
1403 I say price. Okay, what comes to mind to you? Is it a daily
1404
1405 352
1406 00:23:32,430 ~-~-> 00:23:37,410
1407 chart? Is it a one minute chart? Is it a tick chart? For
1408
1409 353
1410 00:23:37,410 ~-~-> 00:23:39,840
1411 some of you have may have been a weekly chart, or it could
1412
1413 354
1414 00:23:39,840 ~-~-> 00:23:44,490
1415 have been a five minute chart. It doesn't matter what time
1416
1417 355
1418 00:23:44,490 ~-~-> 00:23:48,270
1419 frame that we are referring to. It's always just the last
1420
1421 356
1422 00:23:48,270 ~-~-> 00:23:48,780
1423 price.
1424
1425 357
1426 00:23:49,890 ~-~-> 00:23:50,610
1427 Think about that.
1428
1429 358
1430 00:23:51,360 ~-~-> 00:23:56,520
1431 You're looking at price right now. At the time of this
1432
1433 359
1434 00:23:56,520 ~-~-> 00:24:03,450
1435 recording the cables trading at 161 70 For that 164 by
1436
1437 360
1438 00:24:03,450 ~-~-> 00:24:07,230
1439 itself absolutely is useless to you, unless you have a
1440
1441 361
1442 00:24:07,590 ~-~-> 00:24:11,520
1443 understanding where you're at in terms of the big picture.
1444
1445 362
1446 00:24:11,910 ~-~-> 00:24:15,180
1447 Okay, by having the big picture. And using a higher
1448
1449 363
1450 00:24:15,180 ~-~-> 00:24:18,060
1451 timeframe, perspective in your analysis and understanding
1452
1453 364
1454 00:24:18,060 ~-~-> 00:24:21,150
1455 key support resistance levels, you can go into the
1456
1457 365
1458 00:24:21,150 ~-~-> 00:24:25,470
1459 marketplace and see patterns that repeat over and over and
1460
1461 366
1462 00:24:25,470 ~-~-> 00:24:28,620
1463 over again. There's specific fractal patterns. And I'm not
1464
1465 367
1466 00:24:28,620 ~-~-> 00:24:31,140
1467 going to reveal them all in this module, but you'll have a
1468
1469 368
1470 00:24:31,140 ~-~-> 00:24:33,630
1471 few of them shared throughout the presentation over the last
1472
1473 369
1474 00:24:33,660 ~-~-> 00:24:39,630
1475 few parts of the series. But the the fractal analysis
1476
1477 370
1478 00:24:39,660 ~-~-> 00:24:43,110
1479 concept can be applied to the simple optimal trade entry.
1480
1481 371
1482 00:24:43,590 ~-~-> 00:24:48,630
1483 Okay. What does that mean? How do we how do we go into the
1484
1485 372
1486 00:24:48,630 ~-~-> 00:24:51,510
1487 marketplace looking for a fractal? What is it okay, it's one
1488
1489 373
1490 00:24:51,510 ~-~-> 00:24:54,360
1491 thing that you, myself and other folks to understand
1492
1493 374
1494 00:24:54,360 ~-~-> 00:24:56,850
1495 practical analysis. We can go and show you a chart in
1496
1497 375
1498 00:24:56,850 ~-~-> 00:24:58,890
1499 hindsight I look this is where this did that. This is where
1500
1501 376
1502 00:24:59,250 ~-~-> 00:25:03,270
1503 it that's Great, okay, but without a firm understanding of
1504
1505 377
1506 00:25:03,300 ~-~-> 00:25:06,450
1507 what a fractal is and what it looks like and how it's
1508
1509 378
1510 00:25:06,450 ~-~-> 00:25:09,390
1511 applied to the marketplace, it's not going to do anybody any
1512
1513 379
1514 00:25:09,390 ~-~-> 00:25:11,670
1515 good. Okay, so this section is really just going to
1516
1517 380
1518 00:25:11,670 ~-~-> 00:25:16,530
1519 highlight an example of one form of a fractal. Okay. And
1520
1521 381
1522 00:25:16,560 ~-~-> 00:25:19,800
1523 there's all types of fractals. There's many different kinds
1524
1525 382
1526 00:25:19,800 ~-~-> 00:25:24,840
1527 of fractals in terms of price action. But the main thing is,
1528
1529 383
1530 00:25:24,840 ~-~-> 00:25:28,200
1531 is if you can't understand what a fractal is on a higher
1532
1533 384
1534 00:25:28,200 ~-~-> 00:25:32,820
1535 time frame premise, okay? It's going to mean little to no
1536
1537 385
1538 00:25:32,820 ~-~-> 00:25:35,730
1539 good use to you, if you're trying to apply it to intraday
1540
1541 386
1542 00:25:35,730 ~-~-> 00:25:39,270
1543 charts. Okay, so what am I, what am I saying here? Okay,
1544
1545 387
1546 00:25:39,270 ~-~-> 00:25:42,900
1547 well, in this example, we're going to talk about a fractal
1548
1549 388
1550 00:25:42,930 ~-~-> 00:25:47,370
1551 okay? And this is going to give you a price swing, and we're
1552
1553 389
1554 00:25:47,370 ~-~-> 00:25:50,490
1555 going to more or less break it down and show you more
1556
1557 390
1558 00:25:50,490 ~-~-> 00:25:54,720
1559 insights on how price in itself works within a fractal
1560
1561 391
1562 00:25:54,780 ~-~-> 00:26:00,000
1563 nature. Alright, we're looking at it could be any price any
1564
1565 392
1566 00:26:00,000 ~-~-> 00:26:03,690
1567 commodity any stock, it could be anything. But for now we're
1568
1569 393
1570 00:26:03,690 ~-~-> 00:26:10,170
1571 just gonna talk about this being a currency pair. Okay. So
1572
1573 394
1574 00:26:10,170 ~-~-> 00:26:13,710
1575 price is trading within a specific range. Okay. And we
1576
1577 395
1578 00:26:13,710 ~-~-> 00:26:17,310
1579 noticed that above where prices currently, this is a key
1580
1581 396
1582 00:26:17,340 ~-~-> 00:26:21,300
1583 resistance level, okay. One would expect if we're this close
1584
1585 397
1586 00:26:21,300 ~-~-> 00:26:25,410
1587 to it, price would eventually try to run up to that key
1588
1589 398
1590 00:26:25,410 ~-~-> 00:26:29,460
1591 resistance level. Now as price runs higher and approaches
1592
1593 399
1594 00:26:29,460 ~-~-> 00:26:32,760
1595 that resistance level, at some point, it will hit that
1596
1597 400
1598 00:26:32,760 ~-~-> 00:26:37,500
1599 level. We as traders and technical traders, we would expect
1600
1601 401
1602 00:26:37,500 ~-~-> 00:26:40,950
1603 reasonably there would be a pullback or a bounce away from
1604
1605 402
1606 00:26:41,130 ~-~-> 00:26:46,230
1607 that particular price level. At some point price will come
1608
1609 403
1610 00:26:46,230 ~-~-> 00:26:50,400
1611 down in that retracement, okay and swing low, make a small
1612
1613 404
1614 00:26:50,400 ~-~-> 00:26:53,790
1615 little short term low. When that takes place, we now have a
1616
1617 405
1618 00:26:53,790 ~-~-> 00:26:59,040
1619 new reference point for short term support. Okay, now
1620
1621 406
1622 00:26:59,520 ~-~-> 00:27:02,640
1623 obviously If we have short term support here, and a key
1624
1625 407
1626 00:27:02,640 ~-~-> 00:27:06,420
1627 resistance level like that, a technical trader like we are
1628
1629 408
1630 00:27:06,480 ~-~-> 00:27:10,350
1631 or aspiring to be, when prices starting to bounce, again, on
1632
1633 409
1634 00:27:10,350 ~-~-> 00:27:13,920
1635 a short term basis, we could reasonably expect or anticipate
1636
1637 410
1638 00:27:14,340 ~-~-> 00:27:18,720
1639 another retest or run attempt to get back to that resistance
1640
1641 411
1642 00:27:18,720 ~-~-> 00:27:23,220
1643 level. Okay? At some point, it may get up here and blow
1644
1645 412
1646 00:27:23,220 ~-~-> 00:27:27,240
1647 through it, but many times it will fail to do that. Okay,
1648
1649 413
1650 00:27:27,240 ~-~-> 00:27:30,090
1651 and then start to come back down again. Now, here's where if
1652
1653 414
1654 00:27:30,090 ~-~-> 00:27:33,450
1655 you understand optimal trade entry, in which is basically 60
1656
1657 415
1658 00:27:33,450 ~-~-> 00:27:40,230
1659 to 70% trace level on the price swing. If you see this, this
1660
1661 416
1662 00:27:40,230 ~-~-> 00:27:44,130
1663 could load you into believing that this could be perhaps a
1664
1665 417
1666 00:27:44,130 ~-~-> 00:27:50,340
1667 bull flag. It could be perhaps another ABCD price extension,
1668
1669 418
1670 00:27:51,060 ~-~-> 00:27:51,480
1671 okay,
1672
1673 419
1674 00:27:51,749 ~-~-> 00:27:52,829
1675 or it could be
1676
1677 420
1678 00:27:54,120 ~-~-> 00:27:54,750
1679 a top
1680
1681 421
1682 00:27:55,920 ~-~-> 00:27:58,620
1683 Okay, we have to go back to the higher time frame,
1684
1685 422
1686 00:27:58,950 ~-~-> 00:28:04,110
1687 resistance level. That takes precedence. That is the one
1688
1689 423
1690 00:28:04,110 ~-~-> 00:28:07,920
1691 that we have more emphasis behind, not the short term little
1692
1693 424
1694 00:28:07,920 ~-~-> 00:28:12,240
1695 blips in the marketplace, okay. We expect sellers to be
1696
1697 425
1698 00:28:12,330 ~-~-> 00:28:17,820
1699 heavier in market than buyers. Okay? And we anticipate price
1700
1701 426
1702 00:28:18,090 ~-~-> 00:28:22,230
1703 to break below the low here. Okay? If we see that break
1704
1705 427
1706 00:28:22,230 ~-~-> 00:28:27,270
1707 below, okay, that's going to give us a shift in what market
1708
1709 428
1710 00:28:27,270 ~-~-> 00:28:32,250
1711 flow and market structure. We're looking at a market that's
1712
1713 429
1714 00:28:32,250 ~-~-> 00:28:33,180
1715 breaking down
1716
1717 430
1718 00:28:33,809 ~-~-> 00:28:34,319
1719 if
1720
1721 431
1722 00:28:34,769 ~-~-> 00:28:40,169
1723 this low is taken out. Now, if price does break down lower
1724
1725 432
1726 00:28:41,909 ~-~-> 00:28:45,209
1727 and breaks through that now we are confirmed, we have a
1728
1729 433
1730 00:28:45,209 ~-~-> 00:28:50,999
1731 bearish market flow and a early market structure reversal.
1732
1733 434
1734 00:28:51,839 ~-~-> 00:28:56,699
1735 Okay, so now, we could reasonably expect this higher
1736
1737 435
1738 00:28:56,699 ~-~-> 00:29:01,199
1739 timeframe optimal trade entry. Okay. That would be the
1740
1741 436
1742 00:29:01,199 ~-~-> 00:29:05,279
1743 higher timeframe turning point. And now we can look for
1744
1745 437
1746 00:29:05,309 ~-~-> 00:29:11,129
1747 continued sell signals okay. So we see here a very standard
1748
1749 438
1750 00:29:11,129 ~-~-> 00:29:16,289
1751 optimal trade entry top formation the market broke down
1752
1753 439
1754 00:29:16,739 ~-~-> 00:29:20,999
1755 okay. In itself this is a fractal okay look at this pattern
1756
1757 440
1758 00:29:20,999 ~-~-> 00:29:26,879
1759 right here. This in itself is a pattern that is applicable
1760
1761 441
1762 00:29:26,909 ~-~-> 00:29:33,689
1763 in fractal analysis as price breaks down and moves further
1764
1765 442
1766 00:29:33,689 ~-~-> 00:29:38,669
1767 lower Okay, go back to the concepts we just learned in part
1768
1769 443
1770 00:29:38,669 ~-~-> 00:29:41,909
1771 two of the trading plan development series. Range
1772
1773 444
1774 00:29:41,909 ~-~-> 00:29:47,849
1775 contraction, range expansion and trading range to trend
1776
1777 445
1778 00:29:47,939 ~-~-> 00:29:50,999
1779 trading rings the trend okay so consolidation
1780
1781 446
1782 00:29:51,900 ~-~-> 00:29:52,620
1783 to trend
1784
1785 447
1786 00:29:53,340 ~-~-> 00:29:57,900
1787 consolidation to trend in this region here even though we
1788
1789 448
1790 00:29:57,900 ~-~-> 00:30:01,800
1791 saw price movement Up, Down Up down to make the optimal
1792
1793 449
1794 00:30:01,800 ~-~-> 00:30:06,570
1795 trade entry formation here. That's still a consolidation.
1796
1797 450
1798 00:30:07,680 ~-~-> 00:30:08,790
1799 See the range here?
1800
1801 451
1802 00:30:10,530 ~-~-> 00:30:11,730
1803 That's a consolidation.
1804
1805 452
1806 00:30:12,660 ~-~-> 00:30:19,380
1807 This move here is the trend, okay, or the price swing out of
1808
1809 453
1810 00:30:19,380 ~-~-> 00:30:23,550
1811 consolidation. So now, when price breaks down like this,
1812
1813 454
1814 00:30:23,700 ~-~-> 00:30:27,870
1815 what do we as technical traders expect to see another
1816
1817 455
1818 00:30:27,870 ~-~-> 00:30:30,540
1819 consolidation. So what's going to take place in the
1820
1821 456
1822 00:30:30,540 ~-~-> 00:30:35,040
1823 consolidation is going to be a bounce. It could trade up to
1824
1825 457
1826 00:30:35,040 ~-~-> 00:30:38,700
1827 another resistance level, okay, which would be old support
1828
1829 458
1830 00:30:40,710 ~-~-> 00:30:44,280
1831 and price will eventually trade back into a consolidation.
1832
1833 459
1834 00:30:44,790 ~-~-> 00:30:48,720
1835 Okay, and we can now look for inside this consolidation,
1836
1837 460
1838 00:30:48,960 ~-~-> 00:30:53,550
1839 smaller short term, optimal trade entry tops.
1840
1841 461
1842 00:30:55,260 ~-~-> 00:30:55,980
1843 Thank you.
1844
1845 462
1846 00:30:56,550 ~-~-> 00:30:59,610
1847 We have a higher time frame price leg that's already turned
1848
1849 463
1850 00:30:59,610 ~-~-> 00:31:04,830
1851 on 100 timeframe key support and resistance level. As price
1852
1853 464
1854 00:31:04,830 ~-~-> 00:31:11,220
1855 broke down, we are now in our minds focusing on lower level
1856
1857 465
1858 00:31:12,120 ~-~-> 00:31:17,430
1859 515 one hour basis, optimal trade entries to look for what
1860
1861 466
1862 00:31:17,520 ~-~-> 00:31:21,690
1863 lower prices, okay? So by having this mindset going in and
1864
1865 467
1866 00:31:21,690 ~-~-> 00:31:26,130
1867 trading during consolidations, we're essentially limiting
1868
1869 468
1870 00:31:26,130 ~-~-> 00:31:32,730
1871 our exposure to the market by only selling short. Basically
1872
1873 469
1874 00:31:32,730 ~-~-> 00:31:37,110
1875 an established weak market, okay? And we have a bias going
1876
1877 470
1878 00:31:37,110 ~-~-> 00:31:40,440
1879 into our analysis. So we're not going to be subjective and
1880
1881 471
1882 00:31:40,860 ~-~-> 00:31:43,950
1883 just be lulled into new buying and selling, buying and
1884
1885 472
1886 00:31:43,950 ~-~-> 00:31:46,020
1887 selling simply because the price is doing whatever it's
1888
1889 473
1890 00:31:46,020 ~-~-> 00:31:49,350
1891 doing the time we sit down in front of our monitors. We are
1892
1893 474
1894 00:31:49,350 ~-~-> 00:31:54,750
1895 focused on one specific process and we have a higher time
1896
1897 475
1898 00:31:54,750 ~-~-> 00:31:58,560
1899 frame. support resistance levels are or on our side we have
1900
1901 476
1902 00:31:58,560 ~-~-> 00:32:01,620
1903 the fact that we have broken markets. Market flows on our
1904
1905 477
1906 00:32:01,620 ~-~-> 00:32:04,950
1907 side. Okay, cuz now think just looking at this price chart
1908
1909 478
1910 00:32:04,950 ~-~-> 00:32:10,830
1911 chart right here if this is a currency market flow is still
1912
1913 479
1914 00:32:10,860 ~-~-> 00:32:16,290
1915 bearish until we take out this swing high before this swing
1916
1917 480
1918 00:32:16,290 ~-~-> 00:32:20,580
1919 high formed, market structure was still bearish until this
1920
1921 481
1922 00:32:20,580 ~-~-> 00:32:23,160
1923 swing high was taken out. Obviously we keep making lower
1924
1925 482
1926 00:32:23,160 ~-~-> 00:32:29,040
1927 lows and lower highs and we maintain a sell scenario in our
1928
1929 483
1930 00:32:29,040 ~-~-> 00:32:34,440
1931 trading. Looking for shorter term you know where it's lesser
1932
1933 484
1934 00:32:34,440 ~-~-> 00:32:38,610
1935 timeframe, fractal pattern of optimal trade entry tops,
1936
1937 485
1938 00:32:38,850 ~-~-> 00:32:44,010
1939 okay. Again, price will stay within this consolidation as
1940
1941 486
1942 00:32:44,010 ~-~-> 00:32:48,600
1943 price moves up inside of each one of these price legs. Every
1944
1945 487
1946 00:32:48,600 ~-~-> 00:32:52,470
1947 single one of these, if this is a daily chart, every one of
1948
1949 488
1950 00:32:52,470 ~-~-> 00:32:56,580
1951 these smaller price swings in here. If you look at smaller
1952
1953 489
1954 00:32:56,580 ~-~-> 00:33:00,000
1955 timeframe charts, you'll see optimal trade entries on a
1956
1957 490
1958 00:33:00,000 ~-~-> 00:33:03,990
1959 Lower timeframe near the highs and the tops. They're going
1960
1961 491
1962 00:33:03,990 ~-~-> 00:33:07,770
1963 to be there because it's fractal in nature. Okay, it's going
1964
1965 492
1966 00:33:07,770 ~-~-> 00:33:09,990
1967 to be there, I guarantee you, we're going to look at some
1968
1969 493
1970 00:33:09,990 ~-~-> 00:33:12,000
1971 examples. Because I know you're probably scratching your
1972
1973 494
1974 00:33:12,000 ~-~-> 00:33:13,860
1975 head saying, Okay, this is great you to show me a line
1976
1977 495
1978 00:33:13,860 ~-~-> 00:33:17,130
1979 chart, Michael, but I really want to see, I want to be able
1980
1981 496
1982 00:33:17,130 ~-~-> 00:33:18,990
1983 to digest what you're what you're showing me and I'm gonna
1984
1985 497
1986 00:33:18,990 ~-~-> 00:33:22,350
1987 get to that. But this is the theory. Okay, so we, we have to
1988
1989 498
1990 00:33:22,350 ~-~-> 00:33:24,540
1991 have this before we go into the price chart. Otherwise, this
1992
1993 499
1994 00:33:24,540 ~-~-> 00:33:25,920
1995 is gonna look like I'm cherry picking.
1996
1997 500
1998 00:33:27,960 ~-~-> 00:33:28,680
1999 Eventually,
2000
2001 501
2002 00:33:28,740 ~-~-> 00:33:32,340
2003 price will move outside of the consolidation and into a
2004
2005 502
2006 00:33:32,340 ~-~-> 00:33:35,790
2007 trending move again. So we move from consolidation, to
2008
2009 503
2010 00:33:35,790 ~-~-> 00:33:39,630
2011 trending move to consolidation to trending move. Now we have
2012
2013 504
2014 00:33:39,630 ~-~-> 00:33:44,220
2015 a complete fractal on the higher time frame inside of this
2016
2017 505
2018 00:33:44,250 ~-~-> 00:33:48,060
2019 overall price structure. This pattern can be broken down
2020
2021 506
2022 00:33:48,060 ~-~-> 00:33:51,990
2023 into smaller sub units on the lower timeframes, and you'll
2024
2025 507
2026 00:33:51,990 ~-~-> 00:33:56,040
2027 see the same pattern you see here on the lower timeframes as
2028
2029 508
2030 00:33:56,040 ~-~-> 00:34:01,680
2031 well by having this perspective, going into analysis, having
2032
2033 509
2034 00:34:01,680 ~-~-> 00:34:04,350
2035 it on a higher timeframe first and then moving down to a
2036
2037 510
2038 00:34:04,350 ~-~-> 00:34:07,920
2039 lower timeframe. It helps with your daily bias. It keeps you
2040
2041 511
2042 00:34:07,920 ~-~-> 00:34:10,020
2043 on the right side of the market generally unless there's a
2044
2045 512
2046 00:34:10,020 ~-~-> 00:34:13,050
2047 major market reversal. Hopefully if you're if you're
2048
2049 513
2050 00:34:13,050 ~-~-> 00:34:15,300
2051 monitoring that macro view Anyway, you should be
2052
2053 514
2054 00:34:15,300 ~-~-> 00:34:18,000
2055 anticipating that anyway unless there's an act of God or
2056
2057 515
2058 00:34:18,000 ~-~-> 00:34:21,660
2059 something new, unexpected takes place in rocks the market.
2060
2061 516
2062 00:34:26,970 ~-~-> 00:34:29,190
2063 Okay, so we have our fractal pattern here.
2064
2065 517
2066 00:34:29,490 ~-~-> 00:34:30,060
2067 It's a
2068
2069 518
2070 00:34:30,840 ~-~-> 00:34:36,900
2071 down swing in prices, a swing that you can see in any
2072
2073 519
2074 00:34:36,900 ~-~-> 00:34:41,820
2075 timeframe, it's not limited to any specific one. But what
2076
2077 520
2078 00:34:41,820 ~-~-> 00:34:47,580
2079 would it look like in a real chart? Well, it just so happens
2080
2081 521
2082 00:34:47,580 ~-~-> 00:34:52,410
2083 that I'm looking at the cable and we're going to use today's
2084
2085 522
2086 00:34:52,410 ~-~-> 00:34:55,440
2087 example. So it's, it's more timely, it's it's something that
2088
2089 523
2090 00:34:55,440 ~-~-> 00:34:58,800
2091 you can look at right now. I know some of you probably are
2092
2093 524
2094 00:34:58,800 ~-~-> 00:35:01,410
2095 watching this video. Probably From the time I did the
2096
2097 525
2098 00:35:01,410 ~-~-> 00:35:05,520
2099 recording, but as of the moment I did this I screen captured
2100
2101 526
2102 00:35:05,520 ~-~-> 00:35:09,180
2103 what price was doing and this is a 15 minute chart of the
2104
2105 527
2106 00:35:09,180 ~-~-> 00:35:17,160
2107 cable British Pound USD. Alright and if you look at this
2108
2109 528
2110 00:35:19,170 ~-~-> 00:35:23,250
2111 alright if you look at this we have a major resistance level
2112
2113 529
2114 00:35:23,250 ~-~-> 00:35:27,630
2115 here 163 price trades up to that much in the same way we are
2116
2117 530
2118 00:35:27,690 ~-~-> 00:35:32,370
2119 our crude example to the left, shows price goes up, comes
2120
2121 531
2122 00:35:32,370 ~-~-> 00:35:36,930
2123 down, okay and then comes up and makes another attempt to
2124
2125 532
2126 00:35:36,930 ~-~-> 00:35:40,860
2127 get back to that resistance level but it fails and it gives
2128
2129 533
2130 00:35:40,860 ~-~-> 00:35:46,380
2131 you an optimal trade entry. Note this low right here. And
2132
2133 534
2134 00:35:46,380 ~-~-> 00:35:50,970
2135 now note the fractal example in the upper left. That's that
2136
2137 535
2138 00:35:50,970 ~-~-> 00:35:56,250
2139 low that would shift everything to bearish Okay, that is
2140
2141 536
2142 00:35:56,250 ~-~-> 00:36:00,960
2143 broken here. So now what you would be looking for His
2144
2145 537
2146 00:36:01,020 ~-~-> 00:36:04,230
2147 optimal trade entry sell patterns because now you are an
2148
2149 538
2150 00:36:04,230 ~-~-> 00:36:08,610
2151 established bearish market. Okay, everything you do from
2152
2153 539
2154 00:36:08,610 ~-~-> 00:36:13,320
2155 that point on should be looked for selling Okay, even your
2156
2157 540
2158 00:36:13,320 ~-~-> 00:36:17,100
2159 scalps okay? If you're an intraday trader look for smaller
2160
2161 541
2162 00:36:17,100 ~-~-> 00:36:20,730
2163 short term optimal trade entries sell signals okay focusing
2164
2165 542
2166 00:36:20,730 ~-~-> 00:36:25,680
2167 on one pattern in fractal in nature you can find several
2168
2169 543
2170 00:36:25,710 ~-~-> 00:36:29,250
2171 opportunities in this example alone that gives you optimal
2172
2173 544
2174 00:36:29,250 ~-~-> 00:36:36,870
2175 trade entries. For instance this optimal trade entry that we
2176
2177 545
2178 00:36:36,870 ~-~-> 00:36:41,430
2179 see here when it broke this example of market
2180
2181 546
2182 00:36:42,060 ~-~-> 00:36:43,920
2183 flow changing
2184
2185 547
2186 00:36:43,950 ~-~-> 00:36:44,700
2187 to bearish
2188
2189 548
2190 00:36:45,780 ~-~-> 00:36:49,950
2191 this swing high has to break before it becomes bullish
2192
2193 549
2194 00:36:49,950 ~-~-> 00:36:56,670
2195 again. price moves lower trades up and inside here. Just a
2196
2197 550
2198 00:36:56,670 ~-~-> 00:37:00,990
2199 small little timeframe moving in here A small optimal trade
2200
2201 551
2202 00:37:00,990 ~-~-> 00:37:06,810
2203 entry in here and sells off. Look at this high here to this
2204
2205 552
2206 00:37:06,810 ~-~-> 00:37:10,410
2207 high here, I mean this low here. Do you see how price trades
2208
2209 553
2210 00:37:10,410 ~-~-> 00:37:13,050
2211 down up into an apple trade entry and then look at the sell
2212
2213 554
2214 00:37:13,050 ~-~-> 00:37:20,430
2215 off. See that? Look at this high here in this low here in
2216
2217 555
2218 00:37:20,430 ~-~-> 00:37:25,740
2219 this high here. That's optimal trade entry. Okay. Look how
2220
2221 556
2222 00:37:25,740 ~-~-> 00:37:29,910
2223 many times it gives you optimal trade entries just in that
2224
2225 557
2226 00:37:29,910 ~-~-> 00:37:34,500
2227 small section of time. See this high here
2228
2229 558
2230 00:37:35,820 ~-~-> 00:37:36,720
2231 to this low here.
2232
2233 559
2234 00:37:38,070 ~-~-> 00:37:42,210
2235 Price trades down, comes all the way back up. Optimal trade
2236
2237 560
2238 00:37:42,210 ~-~-> 00:37:46,530
2239 entry sells off again. Look at the price structure here. It
2240
2241 561
2242 00:37:46,530 ~-~-> 00:37:50,880
2243 trades down comes back up. Optimal trade entry again, sells
2244
2245 562
2246 00:37:50,880 ~-~-> 00:37:55,800
2247 off. You see how by using a higher time frame premise. You
2248
2249 563
2250 00:37:55,800 ~-~-> 00:38:01,170
2251 can use fractal fractal analysis to keep you On one side of
2252
2253 564
2254 00:38:01,170 ~-~-> 00:38:04,890
2255 the market keying off of one specific approach to trading,
2256
2257 565
2258 00:38:04,950 ~-~-> 00:38:08,610
2259 in this case being a seller and it will keep you more or
2260
2261 566
2262 00:38:08,610 ~-~-> 00:38:18,690
2263 less you know with the right bias, okay? Now notice the high
2264
2265 567
2266 00:38:18,780 ~-~-> 00:38:24,570
2267 to low here, okay this high to this low. This is one price
2268
2269 568
2270 00:38:24,600 ~-~-> 00:38:29,790
2271 lake or one major dominant price swing then we had a major
2272
2273 569
2274 00:38:29,820 ~-~-> 00:38:34,050
2275 retracement deep in here, okay? If you go and look at these
2276
2277 570
2278 00:38:34,050 ~-~-> 00:38:37,950
2279 high here to this low we have a optimal trade entry. Okay.
2280
2281 571
2282 00:38:38,340 ~-~-> 00:38:43,950
2283 So now think about it. We use the fractal pattern here in
2284
2285 572
2286 00:38:43,950 ~-~-> 00:38:48,930
2287 this leg here, but now zoom out and don't look so close. In
2288
2289 573
2290 00:38:48,930 ~-~-> 00:38:53,730
2291 other words if we move maybe to an hourly chart, you would
2292
2293 574
2294 00:38:53,730 ~-~-> 00:39:01,410
2295 see this high to this low up to this high as a fractal
2296
2297 575
2298 00:39:01,440 ~-~-> 00:39:06,750
2299 pattern in sync capacity shows here, okay. So this high to
2300
2301 576
2302 00:39:06,750 ~-~-> 00:39:12,090
2303 the low would be more or less established. And an example of
2304
2305 577
2306 00:39:12,090 ~-~-> 00:39:16,530
2307 buying this high to this low and this low to this high would
2308
2309 578
2310 00:39:16,530 ~-~-> 00:39:20,700
2311 be crudely exampled by this low to this high. So watch what
2312
2313 579
2314 00:39:20,700 ~-~-> 00:39:24,990
2315 happens the same concept is now going to be applied with
2316
2317 580
2318 00:39:24,990 ~-~-> 00:39:29,880
2319 this price swing from high to low to high. This is a low
2320
2321 581
2322 00:39:30,870 ~-~-> 00:39:34,950
2323 market structure breaks down here. Okay, see this low? It
2324
2325 582
2326 00:39:34,950 ~-~-> 00:39:39,240
2327 breaks right there. So now what do you do? You look for
2328
2329 583
2330 00:39:39,870 ~-~-> 00:39:44,880
2331 optimal trade entry shorts. Here's your high trades down to
2332
2333 584
2334 00:39:44,880 ~-~-> 00:39:48,480
2335 a low starts to run up. What do you expect optimal trade
2336
2337 585
2338 00:39:48,480 ~-~-> 00:39:55,440
2339 entry? high low. Here's your retracement down. Look what
2340
2341 586
2342 00:39:55,440 ~-~-> 00:39:56,070
2343 happens again.
2344
2345 587
2346 00:39:56,400 ~-~-> 00:39:58,770
2347 See this high to this low
2348
2349 588
2350 00:39:59,700 ~-~-> 00:40:04,980
2351 also Trade entry down. Okay. Same thing here very short term
2352
2353 589
2354 00:40:06,000 ~-~-> 00:40:10,500
2355 high down the low end in here. And this is where we start to
2356
2357 590
2358 00:40:10,500 ~-~-> 00:40:13,470
2359 see what a breakdown did not fulfill.
2360
2361 591
2362 00:40:14,580 ~-~-> 00:40:15,540
2363 Look what happens here.
2364
2365 592
2366 00:40:18,300 ~-~-> 00:40:22,290
2367 See what's happened we have this high turn. So now we have a
2368
2369 593
2370 00:40:22,590 ~-~-> 00:40:26,610
2371 probable change in direction where now market flow has
2372
2373 594
2374 00:40:26,610 ~-~-> 00:40:31,980
2375 shifted to bullishness. So this, this fractal is now a
2376
2377 595
2378 00:40:31,980 ~-~-> 00:40:35,580
2379 replication of this price swing. So if we look at this high
2380
2381 596
2382 00:40:36,480 ~-~-> 00:40:41,730
2383 to this low in terms of pit magnitude and towards the price
2384
2385 597
2386 00:40:41,730 ~-~-> 00:40:46,410
2387 swing, it's replicated in terms of distance and the words
2388
2389 598
2390 00:40:46,410 ~-~-> 00:40:50,160
2391 this range from low to high is essentially the same thing
2392
2393 599
2394 00:40:50,160 ~-~-> 00:40:52,950
2395 you see here this high to this low
2396
2397 600
2398 00:41:00,000 ~-~-> 00:41:03,840
2399 Market turning points. All right, we talked about market
2400
2401 601
2402 00:41:03,840 ~-~-> 00:41:08,880
2403 flow. And we talked about market structure. But without
2404
2405 602
2406 00:41:08,880 ~-~-> 00:41:13,410
2407 having it understood on the actual individual candles or
2408
2409 603
2410 00:41:13,410 ~-~-> 00:41:18,240
2411 bars. It could be a little unnerving to some folks that are
2412
2413 604
2414 00:41:18,240 ~-~-> 00:41:20,280
2415 just starting to watch this and scratching their head
2416
2417 605
2418 00:41:20,280 ~-~-> 00:41:22,380
2419 thinking, you know, what, what am I supposed to be looking
2420
2421 606
2422 00:41:22,380 ~-~-> 00:41:25,590
2423 for? Well, regardless of what time frame you're looking at,
2424
2425 607
2426 00:41:25,860 ~-~-> 00:41:31,500
2427 okay, if you have a pattern that is looking for a sell
2428
2429 608
2430 00:41:31,500 ~-~-> 00:41:36,600
2431 scenario, okay? You're looking for a sell scenario, there
2432
2433 609
2434 00:41:36,600 ~-~-> 00:41:41,280
2435 are several opportunities to use price to get you into a
2436
2437 610
2438 00:41:41,280 ~-~-> 00:41:45,690
2439 move. Okay, and for instance, we're going to take this is a
2440
2441 611
2442 00:41:45,900 ~-~-> 00:41:50,340
2443 turning point for a sell as price runs up, and we're going
2444
2445 612
2446 00:41:50,340 ~-~-> 00:41:52,440
2447 to be assuming that this is a resistance level up in here of
2448
2449 613
2450 00:41:52,440 ~-~-> 00:41:56,430
2451 some kind. And maybe this is a five minute chart. Okay, you
2452
2453 614
2454 00:41:56,430 ~-~-> 00:42:00,000
2455 zoom down to a five minute chart into that resistance level.
2456
2457 615
2458 00:42:00,000 ~-~-> 00:42:02,910
2459 And a time of day when you would expect the turn to take
2460
2461 616
2462 00:42:02,910 ~-~-> 00:42:07,020
2463 place for instance in London and we see the price run up
2464
2465 617
2466 00:42:07,080 ~-~-> 00:42:09,870
2467 okay on this one, one kilohertz is going to represent in
2468
2469 618
2470 00:42:09,870 ~-~-> 00:42:13,950
2471 this example a five minute candle. Then we see the lower
2472
2473 619
2474 00:42:13,980 ~-~-> 00:42:18,630
2475 candle here form. So now we have a five minute swing high.
2476
2477 620
2478 00:42:20,070 ~-~-> 00:42:23,160
2479 Now price will come down, okay and it may even come up here.
2480
2481 621
2482 00:42:23,370 ~-~-> 00:42:27,840
2483 Now what does this look like? This would be what an optimal
2484
2485 622
2486 00:42:27,840 ~-~-> 00:42:29,970
2487 trade entry sell signal okay?
2488
2489 623
2490 00:42:31,170 ~-~-> 00:42:31,920
2491 in here
2492
2493 624
2494 00:42:33,180 ~-~-> 00:42:36,630
2495 okay in here, we have another short term,
2496
2497 625
2498 00:42:37,770 ~-~-> 00:42:38,610
2499 swing high.
2500
2501 626
2502 00:42:39,780 ~-~-> 00:42:43,410
2503 This is a high with two lower highs going sorry with two
2504
2505 627
2506 00:42:43,410 ~-~-> 00:42:46,020
2507 lower highs on either side of it. So if you see this
2508
2509 628
2510 00:42:46,020 ~-~-> 00:42:49,560
2511 pattern, okay, in this whole range, this whole range could
2512
2513 629
2514 00:42:49,560 ~-~-> 00:42:56,190
2515 be as little as five pips. 10 pips, okay. You could be
2516
2517 630
2518 00:42:56,190 ~-~-> 00:43:01,290
2519 selling right here on this candle at market. Okay, or You
2520
2521 631
2522 00:43:01,290 ~-~-> 00:43:05,670
2523 can use a break below this candle here on a sell stop. Okay,
2524
2525 632
2526 00:43:05,670 ~-~-> 00:43:09,960
2527 so if you if you break down here, so be selling on a stop or
2528
2529 633
2530 00:43:09,960 ~-~-> 00:43:15,180
2531 selling at the market, okay, or using this low here. Okay
2532
2533 634
2534 00:43:15,180 ~-~-> 00:43:17,790
2535 because we have a low with a higher low on either side, this
2536
2537 635
2538 00:43:17,790 ~-~-> 00:43:22,350
2539 is a swing low, we can use this low as a indication to sell
2540
2541 636
2542 00:43:22,350 ~-~-> 00:43:26,760
2543 on a limit at this price or higher. So, for example, we'll
2544
2545 637
2546 00:43:26,760 ~-~-> 00:43:31,590
2547 say this is the cable, and this price is 161 50, we could
2548
2549 638
2550 00:43:31,590 ~-~-> 00:43:35,310
2551 have a limit order to sell at 161 50. And on this candle
2552
2553 639
2554 00:43:35,700 ~-~-> 00:43:38,490
2555 right here, once we see this candle close and it starts to
2556
2557 640
2558 00:43:38,490 ~-~-> 00:43:43,200
2559 open up here, entering a limit order at 161 50. To sell
2560
2561 641
2562 00:43:43,560 ~-~-> 00:43:46,710
2563 would fill you in this candle and then we would expect an
2564
2565 642
2566 00:43:46,740 ~-~-> 00:43:50,550
2567 anticipate price to break down below this low if we see that
2568
2569 643
2570 00:43:50,970 ~-~-> 00:43:54,090
2571 that's what you expect to see in market turning points and
2572
2573 644
2574 00:43:54,090 ~-~-> 00:43:57,930
2575 then you can look for range expansion to the downside and
2576
2577 645
2578 00:43:57,930 ~-~-> 00:44:01,170
2579 then manage your stops above the recession. Stop the highs
2580
2581 646
2582 00:44:01,170 ~-~-> 00:44:08,520
2583 up here as well. Okay, obviously the same thing applies is
2584
2585 647
2586 00:44:08,520 ~-~-> 00:44:11,220
2587 reversing it. If we are expecting bullishness in the
2588
2589 648
2590 00:44:11,220 ~-~-> 00:44:13,650
2591 marketplace, we're going to assume that there's a support
2592
2593 649
2594 00:44:13,650 ~-~-> 00:44:16,500
2595 level down here. We wait for again, this is a five minute
2596
2597 650
2598 00:44:16,500 ~-~-> 00:44:21,240
2599 chart, we could see a low with two higher lows on either
2600
2601 651
2602 00:44:21,240 ~-~-> 00:44:25,350
2603 side of it here, and price runs up. Okay, and eventually it
2604
2605 652
2606 00:44:25,350 ~-~-> 00:44:28,440
2607 starts to come back down again in here. It doesn't have to
2608
2609 653
2610 00:44:28,470 ~-~-> 00:44:32,040
2611 do this. Okay, you could just use the previous swing here.
2612
2613 654
2614 00:44:34,020 ~-~-> 00:44:38,130
2615 And if it breaks that, obviously that would be what you're
2616
2617 655
2618 00:44:38,130 ~-~-> 00:44:40,260
2619 looking for. But you want to be getting in before the
2620
2621 656
2622 00:44:40,260 ~-~-> 00:44:42,600
2623 expansion takes place you want to be getting in when prices
2624
2625 657
2626 00:44:42,930 ~-~-> 00:44:45,690
2627 on a tear tarps and you're starting to run, you want to be
2628
2629 658
2630 00:44:45,690 ~-~-> 00:44:47,760
2631 in before that you want to be in the accumulation phase,
2632
2633 659
2634 00:44:47,760 ~-~-> 00:44:50,250
2635 like we have here. This is a consolidation. You want to be
2636
2637 660
2638 00:44:50,280 ~-~-> 00:44:53,400
2639 in that, okay. So if we do get opportunity where it comes
2640
2641 661
2642 00:44:53,400 ~-~-> 00:44:55,440
2643 back and gives you a smaller short term, optimal trade entry
2644
2645 662
2646 00:44:55,440 ~-~-> 00:44:59,220
2647 in here, that's ideal. Okay, so you can use this swing high
2648
2649 663
2650 00:44:59,220 ~-~-> 00:45:03,630
2651 here By when a stop above this high here or you can put a
2652
2653 664
2654 00:45:03,630 ~-~-> 00:45:08,310
2655 limit order at this price or lower, okay to get in long and
2656
2657 665
2658 00:45:08,310 ~-~-> 00:45:12,180
2659 then obviously you're using the swing low and 30 pips, 20
2660
2661 666
2662 00:45:12,180 ~-~-> 00:45:14,040
2663 pips, whatever your risk manager is going to permit you for
2664
2665 667
2666 00:45:14,040 ~-~-> 00:45:18,660
2667 the trade to do your, your long setup and obviously you
2668
2669 668
2670 00:45:18,660 ~-~-> 00:45:21,420
2671 anticipate once you get in the move, you anticipate
2672
2673 669
2674 00:45:21,690 ~-~-> 00:45:24,150
2675 expansion and then when you start seeing these short term
2676
2677 670
2678 00:45:24,150 ~-~-> 00:45:27,810
2679 swing highs break out, okay, then you have what you expect
2680
2681 671
2682 00:45:27,810 ~-~-> 00:45:31,590
2683 to see in in your trade and then hopefully, you reach for
2684
2685 672
2686 00:45:31,590 ~-~-> 00:45:34,530
2687 your upper objectives and price for your profit taking