ICT - Trading Plan Development 5.srt
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ICT: Okay folks, we are looking at the intermediate term
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trading plan example. Now what we're going to cover in this
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module is going to be just an example like it states here.
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There's going to me certain aspects of this particular
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example of a plan where I can In suggest that you could use
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other tools or applications and where I note those,
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obviously you can use the suggested mediums and tools at
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that time. It's not meant for you to use this as a specific
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trading plan. I'm not advocating that you take this and run
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with it, just invest real money with it. It's meant to
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stimulate prudent decision making on your part. Determine
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whether or not you have the patience and faculties really to
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be trader and follow a plan of this nature. And obviously,
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if we're talking about intermediate term trading, duration,
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the trade is absolutely absolutely different than what most
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folks are doing in terms of forex. By that means I'm
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referring to intraday and scalp trading. This is not very
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short term trading, its entire timeframe. Premise,
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predominantly, and your trades are going to take a whole lot
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of time to set up. And also equally more time to unfold to
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its completion. So, this module will, more or less demand a
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level of patience that probably the majority of traders will
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not have it at the early stages of their development.
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Alright, we're going to talk with the general market and the
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overall trading plan outline for trading intermediate term.
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Obviously, the timeframe that we're gonna be trading is the
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daily chart. Okay, the trading plan outline. Now, the
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timeframe that we are trading in this specific example is
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going to be referred to predominantly the daily chart. And
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its primary focus in this plan is to trade the intermediate
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term price swings found on daily chart. Typically, trade
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durations will last anywhere between several weeks to as
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many as months now in this Plan we're going to classify
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bullish conditions in bearish conditions. Okay, and this is
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more or less the, the market environment that will
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facilitate buys and sells. First we're obviously gonna look
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at the bullish conditions. And typically when you enter a
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seasonal tendency when you would expect a bullish market,
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obviously, that sets you on, on alert to look for terms or
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buying conditions in the marketplace that will facilitate
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long positions. We're going to be watching the interest
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rates, okay. And we wouldn't be expecting interest rates to
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be moving higher and or looking for divergence, okay in the
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yields to possibly indicate that we're battling out in the
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yield and we may be going higher because markets basically
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seek higher yields that is going to create the risk on
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effect that we're looking for for a bullish condition.
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Obviously, it goes without saying, if we're looking for a
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risk scenario, the US dollar is going to weaken at this
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timeframe. So we're going to be looking for topping
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formations or weakening of the US dollar on the daily chart.
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The Treasury notes, okay, two year five year and 10 year,
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we'll be looking for those futures markets because you're
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gonna be contrasting forex trading with the insights that we
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gleaned from the futures market. The daily charts on two
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five and 10 year should be declining. And because there's an
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inversion of relationship between the yields and the futures
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markets, tea notes will be going down on your daily charts.
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Wow. That indicates that the interest rate itself its yield
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would be moving higher.
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CBOT, this commodity
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tool that we use commitment traders. We're gonna be looking
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for hopefully, the commercials being a net long position or
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if they are net short we want to be looking for an
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aggressively lessening of They're short positions. Okay. And
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you can see that in open interest. sentiment, obviously, on
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the daily chart should be oversold. And the way we're going
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to determining that is we're gonna be looking at a daily
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Williams percent are okay, so that's going to be our tool to
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more or less indicate to us whether or not if the market
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sentiment is oversold or overbought. Okay in this case since
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we're looking for bullish conditions, ideally the sentiment
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should be oversold stock indices, hopefully at this time are
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firming and or bullish, okay. So, in other words, you're
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looking for some kind of failure swing between the major
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stock indices, and that would be at hopefully at a key
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support level commodities should be at this time bullish and
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we would reference that would be look at the CRB index and
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it should be trading firm to bullish at a key support level
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and maybe even looking for a buy pattern of some sort and
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Maybe an optimal trade entry something that nature. When I
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say firm it means indicating a unwillingness to go lower.
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Okay. And gold and oil obviously good benchmarks for the
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economy, they should be firm and or too bullish as well.
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Conversely, obviously for the bearish conditions seasonally
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speaking, there should be a bearish market environment
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seasonally speaking, that should set you on on alert to look
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for sell scenarios. Interest rates at this time should be
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moving lower, okay because the market will shun lower
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yields. If the interest rates are dropping, that will
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indicate that there's a risk off scenario and if there's a
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risk off scenario, it goes without saying that the US dollar
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would be strengthening at that time. Treasury notes on a
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daily chart should be rising. And again, because there's an
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inverted relationship between yield and the futures market.
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The interest rates yield will be moving lower while the
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futures daily charts on the two year five year and 10 year
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should be rising. Me traders report the net position should
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show commercials net short and or aggressively increasing
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short positions and you find that with the referencing of
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the open interest sentiment should be overbought. And again
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it's based on a Williams percent our basis on a daily chart
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and we'll talk more about that when we start going in to the
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actual analysis. And obviously, the stock indices should be
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soft or too bearish on a daily chart so your NASDAQ dow and
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s&p indices should be topping in here and or trading at key
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resistance levels respectively. commodities at this point
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should be bearish and we will be referencing the CRB index
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again as well hopefully looking for some kind of topping
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formation key resistance levels or some rejections at the
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highs indicating that is now soft and or trading. bearishly
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and, again, referencing the golden oil benchmark for the
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economy should be soft. Maybe we resistance in both those
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markets as well, seeing softer prices and maybe two, as much
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as bearishness to facilitate further confidence in a bearish
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market condition.
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Okay, the anticipatory stage for this example plan.
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Obviously, we always begin with identifying the higher
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timeframe monthly, weekly and daily key support resistance
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levels, because those levels are going to be the catalyst
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for us looking for signals. So without these levels, okay,
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we're not going to be taking a trade. So we must have a
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higher timeframe monthly, weekly or daily key support
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resistance level to facilitate trade. Okay, so we're going
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to be waiting for these levels to be traded to Now while
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we're waiting for a setup okay when we're seasonally
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speaking bullish, okay, you're gonna be stalking the yields.
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Okay, the yield triads and I'm going to refer to basically
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my favorite pairs for this plan that being the fiber, Euro
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USD and the cable British Pound USD pairs, okay, because
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they are cross with the dollar if we're seasonally speaking
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bullish, okay, what we're going to be looking for is the
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yields, okay, five year 10 year and two year between those
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three interest rate yields. If one fails to make a lower
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low, okay, that's going to be a positive divergence
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indicating there's a possible turn in yield and that may
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indicate a possible increase in yields, which would cause a
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bullishness and a risk on scenario. Okay? If we're
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seasonally speaking bearish, okay. And we See the yields
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between the US the German in the UK countries yields fail to
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make equal highs in their yields. Okay, that's a yield triad
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divergence, okay? And you will talk about them also
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examples, if it's not very clear to you here, but that would
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indicate a bearish stage in the marketplace overall so we're
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anticipating that to unfold, okay. At the same time, we
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would obviously be hunting the same scenario with the US
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Dollar Index, okay, we would be looking for the lows in the
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US Dollar Index, versus the highs and across currencies.
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Okay. And again, we're looking at the Euro versus the Dollar
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and the British Pound versus the Dollar. So if we're making
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lower lows in the dollar, but failing to make higher highs
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in one and or the both fiber and cable Then that is a USD
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SMT divergence okay and that would be bearish for the euro
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and or cable if the dollar was making lower lows in the Euro
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or fiber I'm sorry yeah euro or cable was unwilling to go
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higher debts weakness they should be confirmation between
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the three if the dollar makes lower lows that should be seen
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with higher highs with the fiber and cable. If there's not
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there's a crack and correlation that may indicate something
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monitoring highs in the US Dollar Index versus the lows and
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across currency pairs. Okay fiber and cable. If we see
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higher highs in the dollar and a failure to go lower in the
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fiber or cable again, that's an SMP divergence for the US
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Dollar Index. And that may be a cracking correlation that
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may indicate something. Now this can also reverse itself. If
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you see higher highs in the Euro or cable But a failure to
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go lower on the lows on the dollar index. That is the same
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scenario that is bullish for the dollar, which would
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indicate bearishness for the Euro or cable. And again, this
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has to happen at a key resistance level for it to be bearish
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for the cross currency. Okay, the dollar index may be
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trading down to a support level and make a higher low when
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the key one five or maybe made a higher high, it looks
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bullish on their charts. But behind the scenes, you can see
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that there's actually strengthening going on at a key
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support level for the dollar index. And again, same thing
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happens if you reverse it if the US Dollar Index fails make
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a higher high while the lower lows that are seen in the
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cable or fiber are met equally and lower. There's lower lows
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and in the cross currency euro or cable. There's a cracking
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correlation as well. So you have to compare the highs and
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lows between the three Okay, and That'll also segue into the
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correlator pair SMT you're going to be looking for the lows
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between the pound and the euro. Okay, so though generally
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they move in tandem. If we see trading at a key support
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level, and one fails to make a lower low, that's correlated
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pair SMT divergence, possibly indicating there should be a
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short term shift in the marketplace for a bounce higher. And
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obviously comparing the highs at
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key resistance levels if the pound and euro fail to make
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equal highs, that's a correlated pair SMT possibly
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indicating some distribution in the marketplace and there
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may be a short term shift in the marketplace lower. We'll be
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watching the stock market indices Okay, looking for SMP
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divergence as well. Looking for the Dow, s&p 500 and NASDAQ
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Composite Index to compare comparable Make higher highs and
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lower lows if we're bullish, and we're in a bullish
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environment and we see the Dow s&p 500 and NASDAQ trading
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lower in tandem, eventually one fails to make that lower low
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at a key support level at a time frame when everything else
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is lining up. That is a stock market SMT divergence Okay, so
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we we want to be seeing confirmation we want to be measuring
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on a daily basis monitoring the overall risk on a risk off
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scenario. So using Dow Theory, essentially, we want to be
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looking for these three averages to confirm higher highs for
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continuation on the upside and or looking for follow
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continuation and confirmation between a three as they go
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lower, there should be lower lows between the three if one
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starts to buck that trend at a key resistance or support
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level. There's an indication that you may have to pay closer
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attention because it may be something setting up or if
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you're in a trade it may be indicating it's time to tighten
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up. stop losses and take some profits or even exit the
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trade. Again, referring to the movement traders net
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position, we're going to be looking for long positions when
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the commercials are net long. And obviously looking for
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shorts when the commercials are net short, looking at the
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overall trend of where the commercials are trading on the
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weekly charts, using the Commitment of Traders net position,
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you'll be able to see where they're trading in terms of a
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long term macro trend. And when we're getting in sync with
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that, using the si t and our timeframe, key support
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resistance levels. open interest, um, we've discussed this
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in other modules, and obviously we're not going to beat it
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to death here. But basically it's when we're in bullish
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condition and we're trading as support if we see a 15 to
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20%. Drop in open interest. That is a very, very strong
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indication that a buy signal is either forming and or it has
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formed and it's bullish. In bearish conditions when price is
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trading at resistance, and we see a increase in open
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interest 15 to 20% or more, it doesn't have to be just 20
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made many times be even greater than that in terms of an
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increase. But you want to see it rapidly increasing not you
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don't see a gradual because you want to see a rapid increase
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and just as well as you want to see an increase. When it
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drops for bullishness, you want to see it rapidly do that,
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because that's an indication that the commercials are really
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really adjusting positions and allocating funds to offset
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the initial risk or risk on scenario that may impact the
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market to actually working with him. So if you see an
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increase in open interest at a resistance level that's
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bearish. market sentiment, obviously we would be expecting
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sell signals when we are at key resistance levels and
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overbought based on the daily chart. And we would be looking
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for buy signals when we're at key support and oversold on a
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daily
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Alright, the execution stage, obviously, again, referencing
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the monthly, weekly and daily key support resistance levels.
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We're gonna be determining before we do any trades at all,
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we're going to be turning that specific moment are we on
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risk or off risk for that particular day or that session
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that we're trading? If we are risk on obviously your buy
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scenarios our ago, if we are risk off your sell scenarios,
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our ago, you wouldn't be referring to the daily buy and sell
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programs. Okay, and that means are we trading off of a key
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support and off a swing point formation on a daily chart?
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Because that's what you need for buys. And if we are in a
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sell program and we see a swing high forming a key
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resistance level, okay, that's an indication that we are in
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fact, a go for risk off scenario and daily self harm. Okay,
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so that that has to happen for us to be confident with our
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trading for this style trading. When we have that scenario,
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in effect, you're going to be transposing those key levels
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from the higher time frame monthly, weekly and daily, down
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to your lower timeframe, 60 minute, 15 minute and five
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minute charts, you're going to wait for price to trade to
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dues higher timeframe key support resistance levels, you
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want to only be trading in the direction the market
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structure that you find it's on the daily chart. So your
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market structure is going to be daily basis. Okay, you're
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not looking at market flow on one hour charts for our
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charts, you're only trading in the direction of the market
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structure that you find on a daily chart. You're using
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optimal trade entry. Now, this point here, you can use any
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trading pattern of your choice if you'd like the reflection
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pattern, you can trade that if you'd like MACD divergence,
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this is what you would use here. If you are type one bearish
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divergence for stochastics. That's, that's the pattern you
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would use here. If you'd like turtle suit patterns, that's
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the pattern you would use here, okay, but you have to trade
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it at a lower timeframe at a key support resistance level in
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the direction of the market structure on a daily chart.
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Okay, so the plug and play aspect here is you can use any
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entry pattern that you want, but it has to be in conjunction
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with the things that we've already discussed so far. Okay.
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Entry ideally should be traded in a major session open.
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Obviously I don't have it here Asia could be one. London and
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New York open are good because they're, they're just good
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times to be trading our timeframe setups for the fiber and
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cable. But if you're a yen pair trader or if you're an
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Aussie trader, or Kiwi trader or something like that, you
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could trade your positions in the asian session opening
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okay? Because Cuz those, those currencies have a lot of
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activity during those times a day. So, if you are a Aussie
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Kiwi or yen trader, obviously the asian session would be in
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session that you could be utilizing for higher timeframe
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intermediate term trades as well for entry. Our entry orders
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are going to be based on limit orders and we'll be keying
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off of the 60 to 70.5 and 79% retracement levels on the fibs
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to arrive at our entry points. And every one of our trades
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will always have a maximum risk of 2% never more. And
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ideally, you know less if we take a loss we reduce the risk
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as we go through if you don't know the return to go to our
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video for handling losses, and it gives you a program how to
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apply risk reduction procedures in terms of how to preserve
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your equity and it's always good to have that not always
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walking in the marketplace. Looking for exponential growth
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of your equity, you always have to have a shield and you're
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going to have losses you have string losses. So, this
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this example is not exempt from that you will have losses if
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you use this, okay? And again, I'm stressing this, use this
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in a demo account, okay? You determine if you have the
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capabilities to be a trader using this as a model, okay? It
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will help develop patience, it'll help develop anticipatory
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skills as a trader, but you won't have a whole lot of trait,
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00:22:32,789 --> 00:22:37,319
okay, but it teaches you the concept and in processes that's
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needed, because if you can understand how to do this, all of
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the aspects of trading on a short term basis short term
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trading, day trading, scalping, if that's what you want to
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do. those facets of trading will be far easier if you
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understand this higher timeframe premise where you have that
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major tide in your favor, okay? It's kinda like a fish.
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Okay. If you're efficient in the stream, okay, what's easier
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if you stream if you swim downstream with the current or if
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you swim upstream? Okay, obviously goes without saying it's
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easy to swim downstream. There's a fish. That's a salmon,
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very small, the strongest fish in nature, it actually swims
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up current, okay, and leaps up out of the water, in scales
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over rocks and everything. And a lot of folks that know that
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will say, you know, I can be like that salmon, okay, I'm
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going to swim against the current. And, you know, I could
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prove how strong I am. And I'll be a contrarian trader every
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single time and never try to worry about getting in sync
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with the overall tide. And that's fine. Okay, granted you
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you'll probably get to where you're going. But if you're
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using the salmon as an example, you might want to recall
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also when the salmon gets to where it's got to go to
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fertilize those eggs, it dies. So, I mean, it's good that
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you get there, but you know, if you're exhausted you croak.
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You were good as that. So you want to be having things
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majority in your favor and trading with the tide. Okay,
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that's a joint that's What your focus should be okay and
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trading on the higher time frame premise, intermediate term
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timeframe, your short term day trades and your scalps in
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that direction also will have very, very immediate feedback
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00:24:14,189 --> 00:24:15,989
you'll know right away if you're you're going to be
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profitable in the trades. You don't get that lackadaisical
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price action you usually get when you're trading counter
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trend. Stop Loss orders obviously always are going to
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originate at a 30 PIP stop from our entry point. And
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obviously whatever your entry price is take 30 pips from
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that above for short and below for Long's first profit is
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always going to be taken at 50% of our position at 30 pips
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profits and almost once a position goes to 30 pips profit,
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00:24:43,739 --> 00:24:47,429
we take 50% of position off, and once we get that our stop
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00:24:47,429 --> 00:24:50,009
loss moves to a break even status, okay, so now we're in a
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risk free scenario. Okay, we've already profited. We got
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half the position off. So basically making 1% on the trade.
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00:24:57,689 --> 00:25:00,569
We're locked at breakeven. We cannot lose anything. We've
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00:25:00,569 --> 00:25:05,129
already made and booked 1% profit. The remaining balance of
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the trade, you would look for targets based on Fibonacci
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extensions 127 extension and 162 extension, or I don't have
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it listed here, but you could have the two on an extension
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as well. Now you have 50% of your remaining position,
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00:25:18,209 --> 00:25:21,569
there's a couple ways you can handle that. If you are
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uncomfortable and you're still learning, my advice would be
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to take 30% off when it gets to 127 extension and then take
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10 more off at 162 and maybe even another final 10% off at
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the 200 extension or take 30 off at 127 take 20 off at 162
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and just paper trade the remaining portion you don't have
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any open position, but then see if it goes to 200 extension,
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okay. But really the 127 wants you to you want to have at
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least 70 to 80% of your trade already in profit and then if
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you have a small portion obviously, you can leave that to
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00:25:55,019 --> 00:25:59,039
ride to 200% or even greater. Okay, but you want to be
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taking profits employees Then at 127 and wants you to have
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the swing that you're trading.
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Okay, let's look at the 10 year t notes and how we can use
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these in conjunction with yield analysis. And what we're
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00:26:24,239 --> 00:26:28,559
looking at here, so this is March, April of this year, in
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00:26:28,559 --> 00:26:33,239
2012 going into spring, and we have a weekly swing low
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00:26:33,239 --> 00:26:38,969
formed at the 128. Big figure for the 10 year Tinos, the US
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00:26:38,999 --> 00:26:46,469
10 year t note. Note also that we have a old low here just
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above the 127 figure, and we have a rally up to the 132
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figure. And then we saw a decline down into March where we
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00:26:56,579 --> 00:26:59,999
had support found that 128 big figure now that's an optimal
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00:26:59,999 --> 00:27:03,959
Trade entry, okay. So if we see a swing low on a weekly
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00:27:03,959 --> 00:27:10,289
chart on a 10 year and we see a pivot or swing low form at a
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00:27:11,189 --> 00:27:16,079
big figure like this 128 we also see open interest
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00:27:16,109 --> 00:27:18,989
declining. Okay. You can see at the bottom here, the purple
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00:27:18,989 --> 00:27:24,269
level here, how open interest was declining? We would expect
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00:27:24,269 --> 00:27:28,469
prices to rally up. Now, the tea notes rallying up that
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00:27:28,469 --> 00:27:33,659
means that the yield is going to be dropping. If deal if,
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again, this is what happened later on going into the year,
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we saw that spring rally up seasonally speaking, that is an
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inverse relationship between the bonds. Okay, bond yields.
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00:27:49,409 --> 00:27:54,749
So as the march low was formed, and we rallied up into May,
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June time period that was going to be mirrored In the yield,
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00:28:01,559 --> 00:28:06,269
okay, dropping, so if the tea notes rally up, the yield
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00:28:06,269 --> 00:28:09,689
itself is going to be declining, okay? So that's going to be
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00:28:09,689 --> 00:28:16,559
bearish, that's going to drag risk out of the market, okay.
402
00:28:16,589 --> 00:28:22,049
In other words, the risk off scenario will unfold. Okay,
403
00:28:22,049 --> 00:28:25,079
there'll be a flight to quality and during this timeframe,
404
00:28:25,289 --> 00:28:31,199
we would see the dollar index rally and obviously, risky
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00:28:31,199 --> 00:28:34,649
assets in foreign currencies and such, they would be
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00:28:34,649 --> 00:28:39,059
declining. Okay, so we have seasonal tendency, we see the
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00:28:39,059 --> 00:28:42,809
support and concepts that we utilize in all of our trading,
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00:28:43,109 --> 00:28:45,749
optimal trade entry trading at a key support level, we would
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00:28:45,749 --> 00:28:49,799
expect a rally up in this timeframe. Okay, April May time
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00:28:49,799 --> 00:28:52,979
period going into the June months. Okay, let's see what
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00:28:52,979 --> 00:28:59,939
happens in the five year t note. same scenario, we see a
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00:28:59,999 --> 00:29:03,329
weakly optimal trade entry trading down into 122. Big
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00:29:03,329 --> 00:29:07,829
figure, we see a swing point low. Okay, going into April.
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00:29:09,509 --> 00:29:13,109
What unfolds obviously much in the same capacity we saw in
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00:29:13,109 --> 00:29:18,059
the 10 year, the five year rallies up into the end of May,
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00:29:18,089 --> 00:29:22,619
early June, okay, and even higher in the case of September
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00:29:22,619 --> 00:29:26,909
this year, but we saw the shift that takes place with a
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00:29:26,909 --> 00:29:30,629
bullish move going higher in the treasuries and T notes.
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00:29:31,529 --> 00:29:34,139
Now, if the futures contracts going higher, again, remember
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00:29:34,139 --> 00:29:36,629
their inverse relationship, that means it's going to see a
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00:29:36,629 --> 00:29:41,219
decline in the yield so we see dollar up because dollar is
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00:29:41,219 --> 00:29:44,219
gonna be trading in pretty much the same direction that the
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00:29:44,219 --> 00:29:47,909
treasuries are going to lead it. Many times the dollar will
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00:29:47,909 --> 00:29:52,799
lead treasuries, okay. It's vice versa. It's kind of like it
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00:29:52,799 --> 00:29:55,919
one follows the other. Okay, but do you want to add the
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00:29:55,919 --> 00:30:00,689
seasonal influences in a time of year like We only trade
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00:30:00,689 --> 00:30:03,719
intraday we have time of day theory, we have time of year
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00:30:03,719 --> 00:30:08,429
theory, where we see a spring decline or risk off scenario.
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00:30:09,149 --> 00:30:16,679
Okay, and you'll see the dollar increase in bonds rally. So
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00:30:16,679 --> 00:30:19,229
what does that look like in the yield? Okay, well, what
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00:30:19,229 --> 00:30:21,269
we're looking at is a bond yield triad.
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And we're looking at specifically is the five year us,
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Treasury, Tino? The UK five year bond yield and the German
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00:30:33,629 --> 00:30:36,809
five year bond yield. And how I got this chart, I went to
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00:30:36,809 --> 00:30:41,699
bloomberg.com. And if you go actually and do Google, do
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00:30:41,699 --> 00:30:47,009
Google on five year US Treasury, government bond yield,
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00:30:47,279 --> 00:30:50,609
okay, and click on that and you'll see that the Bloomberg
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00:30:50,849 --> 00:30:55,349
link, do the same thing with a UK five year bond yield.
439
00:30:55,829 --> 00:30:58,499
Bloomberg, put that in your Google search and obviously do
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00:30:58,499 --> 00:31:02,609
the same thing with a German five year bond yield Bloomberg.
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00:31:02,819 --> 00:31:05,969
And when you Google that, you'll get the link for a click on
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00:31:05,969 --> 00:31:09,419
it. And when you get the chart that opens up similar to
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00:31:09,419 --> 00:31:15,359
this, you'll just simply add the symbols you see here for a
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00:31:15,359 --> 00:31:22,529
five year US Treasury or T note, yield. It's us GG. Number
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00:31:22,529 --> 00:31:31,559
five, why are calling ind for a UK five year bond yield,
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00:31:31,559 --> 00:31:39,539
it's g UK, g five colon ind. And for a German five year bond
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00:31:39,539 --> 00:31:46,709
yield, it's G, D, br five, colon ind. Now what I want to
448
00:31:46,709 --> 00:31:50,279
draw your attention to real quick is if you look at the the
449
00:31:50,279 --> 00:31:53,069
darker orange color, and I don't, I can't pick the colors.
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00:31:53,069 --> 00:31:56,099
It just does it by default. But if you look at how, in
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00:31:56,099 --> 00:32:00,239
March, April, okay, the US Treasury was able to Make a
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00:32:00,239 --> 00:32:06,119
higher high and yield. Okay? No, it would have went lower on
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00:32:06,149 --> 00:32:07,139
the Tina.
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00:32:08,429 --> 00:32:09,059
The
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00:32:10,440 --> 00:32:16,530
green level law yield, that's the UK, it was able to make a
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00:32:16,560 --> 00:32:22,860
modestly lower in comparison in terms of highs made in the
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00:32:22,920 --> 00:32:30,570
US. Then we see the German was also weaker as well. Okay, so
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00:32:30,990 --> 00:32:36,840
it wasn't able to go lower in its futures contract. But the
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00:32:36,840 --> 00:32:40,380
yields you can see the disparity that's shifting in place
460
00:32:40,620 --> 00:32:45,600
that takes place where the US Treasury five year went
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00:32:45,600 --> 00:32:50,010
higher. So we have SMT divergence, okay. There is a
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00:32:50,130 --> 00:32:54,750
confirmation to there is a weakness underway going into
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00:32:54,810 --> 00:32:58,950
April. So we see that weakness translated in the form of
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00:32:58,950 --> 00:32:59,970
these overlays.
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00:33:02,820 --> 00:33:07,500
If you take the
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00:33:08,849 --> 00:33:12,509
UK off, okay, so now we're just looking at the German five
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00:33:12,509 --> 00:33:16,049
year in the US five here, you can see a little bit clear now
468
00:33:16,049 --> 00:33:21,119
that the green level green is the German and the orange
469
00:33:21,119 --> 00:33:27,059
color is the US, US was able to make a higher high in yield,
470
00:33:27,539 --> 00:33:32,099
while the German was unable to make that higher high in
471
00:33:32,099 --> 00:33:36,809
going into March going into April. So we see a slide, lower
472
00:33:36,809 --> 00:33:39,989
in yield and that was translated in the rally up in the tea
473
00:33:39,989 --> 00:33:42,809
note that we saw in the US Treasury. So there's this
474
00:33:43,289 --> 00:33:46,049
symmetry between the two you want to be watching the yield
475
00:33:46,049 --> 00:33:47,789
you want to be watching the teenage you want to be watching
476
00:33:47,789 --> 00:33:53,159
the German yield. With the German futures contract, you can
477
00:33:53,159 --> 00:33:57,089
you can trade the trade but you can track it with its
478
00:33:58,499 --> 00:34:04,499
futures contract. In the UK as well. Seeing these big
479
00:34:04,529 --> 00:34:09,689
divergence, okay, adds confidence to your expectation
480
00:34:09,779 --> 00:34:13,709
expectancy, that we should be seeing weaker British pound
481
00:34:13,739 --> 00:34:18,689
and fiber prices and a rally in the dollar, April May
482
00:34:18,689 --> 00:34:23,159
timeframe when the spring seasonal influence should be
483
00:34:23,159 --> 00:34:32,039
coming underway. Now looking at the US and the UK, you can
484
00:34:32,039 --> 00:34:37,649
see that same thing happening. The orange level, it's the US
485
00:34:38,069 --> 00:34:44,039
and the green is the UK five year yield. We were unable to
486
00:34:44,039 --> 00:34:48,359
make that comparable higher high in the yield in the UK. So
487
00:34:48,359 --> 00:34:53,069
we see the SMT divergence that we would expect to see going
488
00:34:53,069 --> 00:34:57,719
into April so we saw further evidence by removing one you
489
00:34:57,719 --> 00:35:00,449
can slip a little clear you can see it dive divergence
490
00:35:00,449 --> 00:35:07,619
between the two yields. And by looking at just simply the UK
491
00:35:07,619 --> 00:35:14,429
and German yields, you can see that the German and UK yields
492
00:35:14,609 --> 00:35:19,679
were not able to make comparable highs between December and
493
00:35:19,679 --> 00:35:25,889
the middle of March. The UK was able to trade higher at the
494
00:35:25,889 --> 00:35:31,289
same time, the German was weaker, okay and was unable to
495
00:35:31,289 --> 00:35:35,249
make a higher high and yield. And you seen that also going
496
00:35:35,279 --> 00:35:40,319
into the actual price levels, that the fiber itself was
497
00:35:40,319 --> 00:35:41,729
trading because that's what the Germans going to be
498
00:35:41,729 --> 00:35:46,469
measuring the yield for that specific country. The UK is for
499
00:35:46,469 --> 00:35:50,909
the cable. Well, if you look at the the underlying weakness
500
00:35:51,389 --> 00:35:54,749
that was in the yield for the German you can see how we were
501
00:35:54,749 --> 00:35:58,589
really really weak really soft in the march april time
502
00:35:58,589 --> 00:36:02,369
period. For for For the five or so, there was really no
503
00:36:02,369 --> 00:36:06,149
participation whatsoever or interest in chasing any higher
504
00:36:06,149 --> 00:36:08,939
yield there. They were actually selling into that and you
505
00:36:08,939 --> 00:36:14,219
could see the the weakness really accelerate going into June
506
00:36:14,219 --> 00:36:23,489
and the middle of July Okay folks, we're looking at bar
507
00:36:23,489 --> 00:36:28,949
chart.com Okay, this is a free website absolutely zero fees
508
00:36:28,949 --> 00:36:34,139
whatsoever. So give you access to commodities and commodity
509
00:36:34,139 --> 00:36:37,739
traders reports and open interest. When you go to the
510
00:36:37,739 --> 00:36:41,039
homepage is what pops up you go over here to this little tab
511
00:36:41,039 --> 00:36:45,629
here says select the commodity. Tap that and we'll start
512
00:36:45,629 --> 00:36:49,799
with the US Dollar Index. Okay, when when opens up you'll
513
00:36:49,799 --> 00:36:53,429
get onto top a list to please the cash you don't want that
514
00:36:54,359 --> 00:36:58,559
year is the nearby contract December next month house March
515
00:36:58,559 --> 00:37:04,259
following by June and September, just click the top contract
516
00:37:04,259 --> 00:37:08,669
here to one that has a month again using cash. Click on
517
00:37:08,669 --> 00:37:12,569
December, it'll obviously depend upon what time of the year
518
00:37:12,569 --> 00:37:16,769
you're trading. And looking at the resource. It'll be a
519
00:37:16,769 --> 00:37:19,199
different month obviously, but you just want to the top one
520
00:37:19,229 --> 00:37:21,599
is going to be the nearby contract. Then go to this area
521
00:37:21,599 --> 00:37:26,789
here where it says customized chart, click that tab. And
522
00:37:26,789 --> 00:37:31,589
that'll open up a window to get you a chart like this. Okay,
523
00:37:31,589 --> 00:37:33,359
and what you're going to do is you're going to scroll down
524
00:37:33,389 --> 00:37:35,999
to this little area down here, we can set the parameters.
525
00:37:36,659 --> 00:37:39,929
You want to set the frequency to weekly nearest, what that's
526
00:37:39,929 --> 00:37:43,139
going to do is going to give you a chart based on weekly
527
00:37:43,139 --> 00:37:48,389
ranges using the nearby contract always. Okay, I'm gonna
528
00:37:48,389 --> 00:37:52,799
change it to candlesticks. I'm gonna change it to one year.
529
00:37:54,239 --> 00:37:58,019
And make sure this is saying total volume. Okay, total
530
00:37:58,019 --> 00:38:00,809
volume and the reason why you won't get The open interest
531
00:38:00,809 --> 00:38:05,039
and volume as you see down here, otherwise, click draw.
532
00:38:10,950 --> 00:38:13,590
Okay, and you'll get a window pops up with a new chart here.
533
00:38:14,040 --> 00:38:17,850
And what this is, this is a weekly chart using weekly range
534
00:38:17,850 --> 00:38:23,370
highs and lows derived from the nearest contract month of
535
00:38:23,370 --> 00:38:26,820
the US Dollar Index. Okay. And if you look at the bottom
536
00:38:26,820 --> 00:38:31,470
here, this purple line here, it's moving along here sneaking
537
00:38:31,470 --> 00:38:36,570
up and down. Okay, that delineates the total open interest
538
00:38:36,570 --> 00:38:40,380
for the dollar index. And obviously, it goes without saying
539
00:38:40,380 --> 00:38:44,850
these vertical red and green lines are volume. Okay, we're
540
00:38:44,850 --> 00:38:47,100
not gonna really pay attention to the volume, but there's
541
00:38:47,100 --> 00:38:50,340
just no way for me to take the volume off and just leave the
542
00:38:50,340 --> 00:38:53,040
open interest. So we have to kind of look past these
543
00:38:53,040 --> 00:38:55,800
vertical lines and pay attention to the purple line in here.
544
00:38:55,860 --> 00:39:03,750
Okay. So let's go and scroll down. Little bit notice how we
545
00:39:03,990 --> 00:39:07,230
rode up in price here on the dollar and then we went into a
546
00:39:07,230 --> 00:39:09,780
consolidation after small retracement, okay? See this
547
00:39:09,780 --> 00:39:14,220
consolidation here, we have a range high here. And we have a
548
00:39:14,220 --> 00:39:18,750
range low in here. Note the time of the year, okay? March,
549
00:39:18,780 --> 00:39:22,680
April, May, March, April May, because that's springtime of
550
00:39:22,680 --> 00:39:27,330
this year. Note the low here and the high here in this low.
551
00:39:27,570 --> 00:39:30,810
This is optimal trade entry. pull that up on your platform
552
00:39:30,840 --> 00:39:32,850
both of across that and you'll see that we did trade right
553
00:39:32,850 --> 00:39:37,680
back down to this level here. Now utilizing this this
554
00:39:37,680 --> 00:39:43,770
concept of weekly ranges and seasonal tendencies, okay.
555
00:39:45,120 --> 00:39:48,870
Typically in the springtime, we see a weakness come into the
556
00:39:48,870 --> 00:39:52,380
marketplace in the form of British Pound usually making a
557
00:39:52,380 --> 00:39:55,590
seasonal high April May and trading down into the summer
558
00:39:55,590 --> 00:39:59,220
months. Well, that's going to be a mirror image or reverse.
559
00:39:59,550 --> 00:40:03,060
Okay? In the dollar, the dollar should rally up at that same
560
00:40:03,060 --> 00:40:06,570
timeframe and you see that unfolding here. Okay, now we're
561
00:40:06,570 --> 00:40:12,090
going to introduce the concept of open interest. Okay? And I
562
00:40:12,090 --> 00:40:16,260
want you to take a look at this drop, okay rather sharp drop
563
00:40:16,290 --> 00:40:19,920
in open interest right here during a timeframe when we're in
564
00:40:19,920 --> 00:40:23,520
a consolidation. This is the commercials tipping their hand
565
00:40:23,520 --> 00:40:28,710
that this is now no longer going to be staying within this
566
00:40:28,710 --> 00:40:32,490
small little timeframe of trading range, okay? They expect
567
00:40:33,030 --> 00:40:35,640
higher prices Why? Because open interest is declining. We've
568
00:40:35,640 --> 00:40:39,270
learned at open interest decline in a consolidation is
569
00:40:39,270 --> 00:40:43,230
commercials doing what lessening their shorts if they're
570
00:40:43,230 --> 00:40:46,530
lessening their short positions. They expect what higher
571
00:40:46,530 --> 00:40:51,030
prices and you can see that unfolding here. Okay, now, by
572
00:40:51,030 --> 00:40:54,660
itself, that's wonderful, but how do you confirm that how do
573
00:40:54,660 --> 00:40:58,950
you see the X ray view so to speak of this open interest
574
00:41:00,000 --> 00:41:03,030
indicator giving you the insight that we're supposing it's
575
00:41:03,030 --> 00:41:07,740
doing here. Well you scroll down to this little area on your
576
00:41:08,610 --> 00:41:13,020
page and says add study, click on this tab here. And you
577
00:41:13,020 --> 00:41:16,260
want to go to Commitment of Traders line chart, tap that,
578
00:41:16,860 --> 00:41:25,140
then draw a chart. Okay, now watch. See the open interest
579
00:41:25,140 --> 00:41:29,670
declining here. That's lessening of shorts. The red line
580
00:41:29,670 --> 00:41:33,720
down here is the commercials. Okay, they are below the zero
581
00:41:33,720 --> 00:41:36,570
line here. So because they are net short, but look what
582
00:41:36,570 --> 00:41:39,600
you're doing the same time here, middle of March going into
583
00:41:39,600 --> 00:41:43,980
April, they're really reducing their shorts, see how they're
584
00:41:43,980 --> 00:41:46,620
covering their shorts at the same timeframe. open interest
585
00:41:47,010 --> 00:41:50,850
is declining while prices in a consolidation while price is
586
00:41:50,850 --> 00:41:54,780
trading at a key support level 79 see that level over here
587
00:41:54,810 --> 00:41:59,310
79. So we can expect reasonably seasonally we're looking for
588
00:41:59,310 --> 00:42:03,360
higher prices and Dollar weaker into fiber and cable. Okay,
589
00:42:03,450 --> 00:42:07,710
so there should be a risk off scenario, risk off is going to
590
00:42:08,280 --> 00:42:12,960
draw participants into buying safe haven assets. Now one can
591
00:42:12,960 --> 00:42:17,070
argue that the dollar may or may not be a safe asset to most
592
00:42:17,130 --> 00:42:20,640
but for instance, you can see that still unfolding here with
593
00:42:20,640 --> 00:42:25,740
a higher dollar rally up from the April May timeframe into
594
00:42:26,280 --> 00:42:31,170
the summer months. So that we have this mindset that we're
595
00:42:31,170 --> 00:42:34,200
looking for bullish prices in here. Okay, we would be in a
596
00:42:34,200 --> 00:42:38,400
buy program all through here. Okay. So now, let's look and
597
00:42:38,400 --> 00:42:41,850
see if we have that same thing occurring in the British
598
00:42:41,850 --> 00:42:45,360
Pound at the same timeframe in this year in the spring. So
599
00:42:45,360 --> 00:42:46,440
let's go back over
600
00:42:48,810 --> 00:42:49,980
to the commodity tab.
601
00:42:51,300 --> 00:42:52,800
And we're going to the British pound
602
00:42:55,770 --> 00:42:57,240
and you use the nearby contract.
603
00:43:00,389 --> 00:43:04,349
to click on your customized chart tab, and we're going to do
604
00:43:04,349 --> 00:43:06,929
the same thing we did with the dollar, we're going to make
605
00:43:06,929 --> 00:43:12,059
sure we are on candlesticks. We're going to look at weekly
606
00:43:12,119 --> 00:43:17,759
nearest, we're going to scroll to a one year chart, making
607
00:43:17,759 --> 00:43:21,329
sure total volume is clicked. And we're going to draw the
608
00:43:21,329 --> 00:43:28,109
chart. Okay, now we have a weekly chart on the British
609
00:43:28,109 --> 00:43:34,409
pound, okay? And you can see that April May high, unfold
610
00:43:34,409 --> 00:43:39,899
here. So we saw price drop down. Okay, so let's add a little
611
00:43:39,899 --> 00:43:46,769
bit of time to this because it is a little. This is that
612
00:43:46,859 --> 00:43:51,239
area right here. Okay. Now, if one takes this high here,
613
00:43:51,719 --> 00:43:55,259
down to this low, you can see that this is an optimal trade
614
00:43:55,259 --> 00:43:58,919
entry. Okay, this is an area where we would expect implied
615
00:43:58,919 --> 00:44:02,399
resistance Also noting that we did take out this old high as
616
00:44:02,399 --> 00:44:07,829
well. So price was really in it, it was free to find lower
617
00:44:07,829 --> 00:44:11,249
prices because we were seeing higher prices poised in the
618
00:44:11,249 --> 00:44:16,289
dollar at the same timeframe. April May. Now also note that
619
00:44:16,289 --> 00:44:23,549
we were in a range between this, this low, okay, and this
620
00:44:23,549 --> 00:44:26,669
old high in here. Okay, now we did break out. Okay, we did
621
00:44:26,669 --> 00:44:30,269
break out there, but we saw a rapid increase in open
622
00:44:30,269 --> 00:44:34,229
interest. Okay, so what does that mean? That the open
623
00:44:34,229 --> 00:44:37,199
interest is increasing while within a larger trading range.
624
00:44:37,319 --> 00:44:39,749
Okay. And one could argue really, this is a large trading
625
00:44:39,749 --> 00:44:42,959
range here. We had a rapid increase of the open interest
626
00:44:42,959 --> 00:44:47,129
here, gave up just a little bit before this run off, but
627
00:44:47,129 --> 00:44:50,489
ultimately, we're at it right back above the previous open
628
00:44:50,489 --> 00:44:53,429
interest here with shorts, so they quickly added all those
629
00:44:53,429 --> 00:44:56,549
shorts back while we round rallied up until a new high
630
00:44:56,579 --> 00:44:59,279
higher than this one. But we did not get back to this old
631
00:44:59,279 --> 00:45:02,429
high as well. So we back into this range. Okay, so think
632
00:45:02,429 --> 00:45:05,189
about what we've covered in the webinar inside the range.
633
00:45:05,609 --> 00:45:10,259
And that concept is unfolding here. So now watch, we're
634
00:45:10,259 --> 00:45:12,989
going to be looking for this open interest or increasing
635
00:45:12,989 --> 00:45:15,959
shorts, okay to be confirmed with what in the net traders
636
00:45:15,959 --> 00:45:18,929
position? Well, if we pull that chart up, we should be
637
00:45:18,929 --> 00:45:23,549
seeing what we should be seeing. commodity, I'm sorry,
638
00:45:23,549 --> 00:45:30,089
commercial traders. Going net short or adding to net short
639
00:45:30,089 --> 00:45:34,499
positions. Okay, and we're going to do this by adding a
640
00:45:34,499 --> 00:45:35,129
chart here.
641
00:45:42,510 --> 00:45:45,540
Okay, so now if we see the open interest in current increase
642
00:45:45,540 --> 00:45:49,740
like this, okay, we would expect to see what in the net
643
00:45:49,740 --> 00:45:54,630
traders decision chart we want to see an increase of net
644
00:45:54,630 --> 00:45:58,650
short selling or net short position or rapid reduction in
645
00:45:58,650 --> 00:46:02,760
their net long position. That would confirm this okay as
646
00:46:02,790 --> 00:46:07,710
commercials themselves doing what? expecting lower prices.
647
00:46:08,820 --> 00:46:13,230
So we go down here to this add study tab, click on that go
648
00:46:13,230 --> 00:46:16,920
to commercial commitment traders line chart, add that and
649
00:46:16,920 --> 00:46:17,340
draw.
650
00:46:22,980 --> 00:46:30,510
Okay, and you can see here we have the chart noted as we see
651
00:46:30,510 --> 00:46:33,960
here and you can see the red line here. And we're going to
652
00:46:33,960 --> 00:46:36,030
change it to one year so you can see a little bit clearer.
653
00:46:37,980 --> 00:46:42,210
And if by clicking on the one year we'll see that this red
654
00:46:42,210 --> 00:46:44,880
line here delineates the commercial activity, okay, you can
655
00:46:44,880 --> 00:46:48,630
see how they rapidly drop down from net long and net short
656
00:46:48,630 --> 00:46:50,700
while the open interest was increasing. So that was a
657
00:46:50,700 --> 00:46:54,420
confirmation that we were seeing that short, commercial
658
00:46:54,450 --> 00:46:58,080
short selling, okay, so if we see both open interest
659
00:46:58,080 --> 00:47:01,620
increasing like this, and the red line here delineating
660
00:47:01,620 --> 00:47:04,830
commercial traders. Okay, they went from net long to net
661
00:47:04,830 --> 00:47:09,030
short going into May. Okay, so we saw this rally as a
662
00:47:09,030 --> 00:47:14,640
suspect false fake out type of move here and we just ran out
663
00:47:14,640 --> 00:47:18,330
this old high and then obviously rejected it very harshly.
664
00:47:18,810 --> 00:47:22,830
Now this was the net short position, okay held by the
665
00:47:22,860 --> 00:47:25,980
commercial traders expecting the top to form in that British
666
00:47:25,980 --> 00:47:30,030
Pound at a seasonal time frame when the dollar was poised to
667
00:47:30,030 --> 00:47:32,850
rally okay and seasonally when the British Pound was
668
00:47:32,850 --> 00:47:37,980
expected to go lower. Okay, so now we've confirmed two sides
669
00:47:38,040 --> 00:47:41,850
of the market, the dollar and the British pound. So let's
670
00:47:41,850 --> 00:47:44,820
see if we can see some support also in the euro.
671
00:47:48,000 --> 00:47:49,410
So I'm gonna go to this tab here.
672
00:47:50,730 --> 00:47:54,540
We're gonna go into the Euro FX tab and we're going to use
673
00:47:54,540 --> 00:48:04,020
the first contract month over to customize Scroll down, and
674
00:48:04,050 --> 00:48:07,860
we're going to do is make sure we're on candlesticks, we're
675
00:48:07,860 --> 00:48:09,600
going to use the weekly nearest
676
00:48:11,340 --> 00:48:12,090
one year
677
00:48:14,070 --> 00:48:17,340
making sure total volume is clicked, and we're going to draw
678
00:48:17,340 --> 00:48:26,310
the chart and we will arrive at the euro. Okay, we have the
679
00:48:26,340 --> 00:48:31,230
march april timeframe in here, notice that the fiber was
680
00:48:31,290 --> 00:48:34,800
unwilling to make a higher high here. Okay, so we have that
681
00:48:34,800 --> 00:48:38,340
divergence, okay between the pairs. So we have SMT
682
00:48:38,340 --> 00:48:42,690
divergence during a seasonal time when we expect the fiber
683
00:48:42,690 --> 00:48:47,100
and cable to decline. We also expect to see the dollar to
684
00:48:47,100 --> 00:48:54,360
rally. Okay, so by seeing that we also know that we have a
685
00:48:54,360 --> 00:48:57,570
trading range in here. Okay, the price is trading in a
686
00:48:57,570 --> 00:49:01,470
trading range. Okay, so same thing Just inverse relationship
687
00:49:01,470 --> 00:49:04,260
between the dollar and the euro. Remember, we had the same
688
00:49:04,290 --> 00:49:07,080
thing happening in the dollar. During the spring of this
689
00:49:07,080 --> 00:49:10,800
year in 2012. We saw the dollar ranging and then expected to
690
00:49:10,800 --> 00:49:13,680
see higher prices because open interest declined. And
691
00:49:13,710 --> 00:49:18,570
commercial short selling was rapidly reduced. Okay, in the
692
00:49:18,570 --> 00:49:21,510
dollar, so that's bullish. So we see the same thing,
693
00:49:21,510 --> 00:49:24,690
hopefully in a mirror image on the fiber. We're in
694
00:49:24,840 --> 00:49:28,590
consolidation. Okay, April May time period. So between this
695
00:49:28,590 --> 00:49:31,140
vertical line and this vertical line right in here, okay,
696
00:49:31,140 --> 00:49:35,490
we're in a range. Notice we saw open interest increasing.
697
00:49:36,060 --> 00:49:39,660
Okay, that's a nice increase of open interest during a
698
00:49:39,660 --> 00:49:42,420
timeframe in the year when we would expect to see weaker
699
00:49:42,420 --> 00:49:45,810
prices. Also, we have optimal trade entry from this high to
700
00:49:45,810 --> 00:49:48,120
this low trade right up into that the beginning of April.
701
00:49:48,510 --> 00:49:51,720
Okay, so we now have optimal trade entry during a time when
702
00:49:51,720 --> 00:49:55,080
we're seasonally weak, and we're expecting firmness in the
703
00:49:55,080 --> 00:50:01,620
dollar. Okay, and now let's go and add to commercials By co
704
00:50:01,620 --> 00:50:05,580
T, and Commitment of Traders in line chart, add that click
705
00:50:05,580 --> 00:50:10,680
draw. Okay, and you can see here
706
00:50:12,449 --> 00:50:17,759
we had the reduction. Okay, in other words we had
707
00:50:19,980 --> 00:50:21,510
open interest increasing here.
708
00:50:22,770 --> 00:50:28,830
Wow, we also saw the commercials in this case actually
709
00:50:28,830 --> 00:50:33,060
adding a little bit of their net longs in here. Okay. They
710
00:50:33,060 --> 00:50:36,540
were already net long above the zero line here. So they were
711
00:50:37,290 --> 00:50:42,720
all along here, basically trying to catch this low here. So
712
00:50:42,720 --> 00:50:45,870
they're buying all this decline from this high down lower.
713
00:50:46,500 --> 00:50:52,620
So when price started to whip lower below this low here at
714
00:50:52,620 --> 00:50:55,980
that very moment between April and May, there was really no
715
00:50:56,610 --> 00:51:00,600
increase of selling. In fact, they're actually buying more
716
00:51:00,600 --> 00:51:05,310
of it in here. Okay, so it's in this example, it acts much
717
00:51:05,310 --> 00:51:10,410
like the SMT, where we have the information in the cable and
718
00:51:10,410 --> 00:51:14,190
the dollar, but don't see it. We don't really see it here.
719
00:51:14,490 --> 00:51:20,190
Okay. We've been maintaining a very large network long
720
00:51:20,190 --> 00:51:23,730
position on commercials. Let's go and pull up three years
721
00:51:23,730 --> 00:51:24,840
ago, and you'll see what I mean.
722
00:51:30,389 --> 00:51:33,269
You can see that we've had a net long position by the
723
00:51:33,269 --> 00:51:38,879
commercials for a very long time. And while we did drop down
724
00:51:38,939 --> 00:51:42,689
in here, there was no real indication that there was
725
00:51:42,719 --> 00:51:48,629
additional short selling here. Okay, they were lessening
726
00:51:48,629 --> 00:51:52,379
their Long's here going into April. So that's the insight
727
00:51:52,379 --> 00:51:55,919
legally, not necessarily this one here. So we did lose some
728
00:51:55,919 --> 00:51:58,619
net longs here. So we have confirmation in that regard, but
729
00:51:58,619 --> 00:52:03,749
between April May There was nothing to indicate the movement
730
00:52:04,589 --> 00:52:07,619
was confirmed between commercials and open interest at that
731
00:52:07,619 --> 00:52:12,329
particular moment. But if you look at this scale that we
732
00:52:12,329 --> 00:52:18,479
have here on the three year, you see how we had open
733
00:52:18,479 --> 00:52:21,779
interest increasing and here we had open interest increasing
734
00:52:21,779 --> 00:52:26,549
in here. While we saw a reduction on the long side, it's
735
00:52:26,549 --> 00:52:29,489
more or less essentially the same thing. They're lessening
736
00:52:29,489 --> 00:52:33,389
their Long's. Okay, which is increasing their short
737
00:52:33,389 --> 00:52:37,529
positions, while open interest increased in here while we're
738
00:52:37,529 --> 00:52:42,359
in this range. Okay, so that was the catalyst for
739
00:52:42,689 --> 00:52:45,269
confirmation on the higher timeframe. So while they didn't
740
00:52:45,269 --> 00:52:49,079
exactly line up between cable and fiber, the both of them
741
00:52:49,109 --> 00:52:53,279
more or less had the indication going in so fiber was giving
742
00:52:53,279 --> 00:52:57,359
it up here early. And as you can see, it's also supported
743
00:52:57,359 --> 00:52:59,279
with the fact that they were unable to make a higher high
744
00:52:59,279 --> 00:53:05,459
here. In April wind cable was able to do that. Alright. So
745
00:53:05,459 --> 00:53:09,689
that's one way of applying open interest looking for the
746
00:53:09,689 --> 00:53:15,029
reduction and increasing of open interest for measuring
747
00:53:15,269 --> 00:53:17,699
smart money in the form of commercial traders and using the
748
00:53:17,699 --> 00:53:22,679
co2 graph. And now we had this stage set for weaker prices
749
00:53:23,249 --> 00:53:27,899
in the spring of 2012. So, now we have more or less the
750
00:53:27,899 --> 00:53:32,609
large macro view Okay, couple that with the interest rate
751
00:53:32,609 --> 00:53:37,799
market now, because now we have the CBOT open interest
752
00:53:38,099 --> 00:53:41,939
supporting the notion that the seasonal tendency for weaker
753
00:53:41,939 --> 00:53:46,859
Cabling and Fiber and higher dollar in the spring, we see
754
00:53:46,859 --> 00:53:54,119
that also supporting the interest rate insights that we've
755
00:53:54,119 --> 00:53:58,709
already looked at, and now we have a sell program. Okay in
756
00:53:58,709 --> 00:54:03,539
place now we can look for sure We can start selling, okay,
757
00:54:04,319 --> 00:54:11,639
for short position going into the summer months. Okay, we're
758
00:54:11,639 --> 00:54:14,789
looking at the Dollar Index. This is a daily chart, and
759
00:54:14,789 --> 00:54:19,679
we're zoomed in to the April month of 2012. And we're
760
00:54:19,679 --> 00:54:25,619
looking at this, again, seasonal tendency for the market to
761
00:54:26,429 --> 00:54:29,999
decline on the British pound and usually be a risk off
762
00:54:29,999 --> 00:54:35,069
scenario. And obviously, we'd be looking for a reverse
763
00:54:35,069 --> 00:54:39,389
scenario which would be bullish for the US dollar. And we
764
00:54:39,779 --> 00:54:45,179
know that already this swing here. This is optimal trade
765
00:54:45,179 --> 00:54:48,029
entry in here where price would have been rallying from
766
00:54:48,119 --> 00:54:50,609
where we would expect to see it rally from and sweetspot
767
00:54:50,609 --> 00:54:57,449
comes in at 178 85. So this would be a catalyst for upside,
768
00:54:57,929 --> 00:55:03,149
momentum for the dollar. Looking for this old high and this
769
00:55:03,149 --> 00:55:08,369
old high as upside objectives. At the same time that this is
770
00:55:08,729 --> 00:55:14,579
occurring, we expect to see weakness in the stock indices to
771
00:55:14,579 --> 00:55:19,679
end participate a risk off scenario. We saw the Dow this
772
00:55:19,679 --> 00:55:24,989
year in April make a very modestly higher high here. And
773
00:55:24,989 --> 00:55:27,689
this little rectangle is delineating the month of April as
774
00:55:27,689 --> 00:55:32,039
well. So we see a modestly higher high here, but let's look
775
00:55:32,039 --> 00:55:37,019
at the daily on the s&p the same timeframe. We have a lower
776
00:55:37,049 --> 00:55:40,259
high okay see that now we already have SMT divergence
777
00:55:40,259 --> 00:55:44,159
between the stock indices and obviously the NASDAQ Composite
778
00:55:44,159 --> 00:55:49,949
Index also, that same month was a built to post a lower high
779
00:55:50,129 --> 00:55:54,179
Okay, so we have SMT divergence indicating that we have
780
00:55:54,449 --> 00:55:58,109
underlying weakness. Okay, in other words, is this rally up
781
00:55:58,109 --> 00:56:02,729
into April May time period Stock averages we're not able to
782
00:56:02,729 --> 00:56:05,549
confirm one another. So Dow theory suggests that there's
783
00:56:05,549 --> 00:56:10,649
probably waning momentum and don't be so aggressive in terms
784
00:56:10,649 --> 00:56:12,899
of mine because you may be seeing a withdraw or a
785
00:56:12,899 --> 00:56:19,499
retracement lower. Let's go back to the dollar. Okay, and
786
00:56:19,799 --> 00:56:25,049
let's look at what happened from that point. Okay, you see,
787
00:56:25,079 --> 00:56:32,669
obviously the dollars have rallied or not from this high
788
00:56:34,620 --> 00:56:38,970
in this low here, this range, okay, if we look at just that
789
00:56:42,240 --> 00:56:48,570
we can get some upside objectives for the dollar. Okay, and
790
00:56:48,570 --> 00:56:51,840
what we're doing is we're looking for obviously, objectives,
791
00:56:52,470 --> 00:56:56,430
looking for potential areas where price may shoot to, here's
792
00:56:56,430 --> 00:57:01,680
the 162 extension and a 200 extension here. Okay, now once
793
00:57:01,680 --> 00:57:06,870
price broke above this high this swing okay is fine you can
794
00:57:06,870 --> 00:57:08,970
still use those targets but we got to go to the left side of
795
00:57:08,970 --> 00:57:12,150
the chart and look at the larger magnitude price swing that
796
00:57:12,150 --> 00:57:15,540
we're working with instead it's this high to this low so we
797
00:57:15,540 --> 00:57:21,540
will use our fib tool from that high and pull it down to the
798
00:57:21,540 --> 00:57:27,660
lowest low in that fractal Okay, so we have this high down
799
00:57:27,660 --> 00:57:31,230
to this low and we will be looking for the 127 extension for
800
00:57:31,230 --> 00:57:35,310
upside objectives here and 162 extension which nails the
801
00:57:35,310 --> 00:57:38,790
high here and moving forward you can see the dollar had
802
00:57:39,090 --> 00:57:42,990
slipped off precipitously from that point. Now we can see
803
00:57:42,990 --> 00:57:46,890
hopefully here the value of using a higher macro view
804
00:57:47,310 --> 00:57:51,720
analysis approach to your trading. And if you see this type
805
00:57:51,720 --> 00:57:54,960
of event unfolding in the dollar, the same thing should be
806
00:57:54,960 --> 00:57:59,040
happening in the reverse okay on the downside on your other
807
00:57:59,040 --> 00:58:03,360
asset classes and Let's look at the daily on the Dow Jones.
808
00:58:04,830 --> 00:58:08,430
We saw price obviously slip lower as well, okay, confirming
809
00:58:08,430 --> 00:58:13,740
that upward momentum in the dollar. The s&p 500 also broke
810
00:58:13,740 --> 00:58:18,660
down and slipped lower and the NASDAQ composite, not
811
00:58:18,660 --> 00:58:23,880
surprising, slipped lower as well. Now let's look at the
812
00:58:23,910 --> 00:58:27,420
fiber. Okay, and what I have here is the April month
813
00:58:27,420 --> 00:58:30,000
delineate between the two red vertical lines, okay, and
814
00:58:30,000 --> 00:58:33,090
we're looking at the fact that we were unable to make a
815
00:58:33,090 --> 00:58:36,600
higher high here. Okay, and just for a second, let's shoot
816
00:58:36,600 --> 00:58:40,440
over to the cable. You can see how in that same time frame
817
00:58:40,440 --> 00:58:43,680
in the month of April, the cable was willing and able to
818
00:58:43,680 --> 00:58:47,790
make a higher high. Okay, so let's go back to the fiber for
819
00:58:47,790 --> 00:58:54,360
a second. This is market absolutely posted weaker technicals
820
00:58:54,570 --> 00:58:56,790
across the board. In other words, between the two pairs,
821
00:58:57,090 --> 00:58:59,340
fiber and cable because they're so closely correlated, they
822
00:58:59,340 --> 00:59:03,390
usually trade and To the but as you can see here, the SMP
823
00:59:03,390 --> 00:59:07,800
divergence correlated pair s&p divergence was showing that
824
00:59:07,800 --> 00:59:11,580
there was absolutely no interest whatsoever going along in
825
00:59:11,580 --> 00:59:15,810
the fiber. And if you recall back in when I was doing
826
00:59:15,810 --> 00:59:18,810
reviews, we were talking about this market being the weaker
827
00:59:18,840 --> 00:59:22,110
of the sisters all during this particular timeframe and this
828
00:59:22,110 --> 00:59:26,280
is really the catalyst from my my viewpoints while I was
829
00:59:26,280 --> 00:59:29,580
saying it real time in advance for the markets were trading.
830
00:59:30,060 --> 00:59:34,230
We were looking for this old low to be traded to back in
831
00:59:34,230 --> 00:59:40,110
here. Okay, so and also back here as well. Now, this high in
832
00:59:40,110 --> 00:59:43,470
this high here, notice that we were lower here. Okay, so we
833
00:59:43,470 --> 00:59:49,020
have February's high and April's high lower in the fiber.
834
00:59:49,380 --> 00:59:53,070
Let's go over to the cable. Notice we were going higher in
835
00:59:53,070 --> 00:59:56,580
the cable. Here's February is high in April's high so we
836
00:59:56,580 --> 00:59:59,190
were posting higher highs in the cable. This was the
837
00:59:59,190 --> 01:00:02,550
relatively ronger of the two pairs. So when there was a
838
01:00:02,550 --> 01:00:06,090
buying opportunity, we could be buying in here. Okay, and be
839
01:00:06,090 --> 01:00:09,870
more confident that the market is going to be more favorable
840
01:00:09,870 --> 01:00:13,470
for us as a bowl if we're short term trader, but we're
841
01:00:13,470 --> 01:00:16,770
focusing on the higher timeframe, intermediate term basis.
842
01:00:16,770 --> 01:00:21,030
So we're looking for what the sell scenario and that being
843
01:00:21,030 --> 01:00:25,380
the case with the fiber, okay, so you could look to sell
844
01:00:25,380 --> 01:00:29,100
this market here, going into the seasonal timeframe
845
01:00:30,600 --> 01:00:31,500
from this high
846
01:00:33,239 --> 01:00:36,509
and the low you can see we have optimal trade entry in here.
847
01:00:37,079 --> 01:00:39,959
And price did slide off the
848
01:00:42,570 --> 01:00:45,000
cable at that same timeframe.
849
01:00:46,860 --> 01:00:54,120
We had a larger price swing from this high down to this low
850
01:00:54,270 --> 01:00:56,460
that the cable was retracing in.
851
01:00:58,650 --> 01:00:59,910
Okay, so let's pull that up.
852
01:01:02,429 --> 01:01:06,389
You can see here's the sweet spot. Okay, here's a 70.5 fib
853
01:01:06,389 --> 01:01:10,379
level price went right to that level exactly to that level.
854
01:01:10,559 --> 01:01:15,329
Okay. And I posted market review and a daily review
855
01:01:15,359 --> 01:01:19,499
suggesting that I would be shorting at 163 a break above
856
01:01:19,499 --> 01:01:25,709
163. Figure. Okay, so if you go back to that timeframe, and
857
01:01:25,709 --> 01:01:28,289
look at the videos, you'll actually see me talk about being
858
01:01:28,289 --> 01:01:31,469
short here. And this is the reason why we're within that
859
01:01:31,469 --> 01:01:35,939
April time period for seasonally expecting a decline. Okay,
860
01:01:36,389 --> 01:01:41,249
we went up into a higher timeframe. implied resistance
861
01:01:41,249 --> 01:01:45,239
level, we're at a figure 163 Okay, so even though we were
862
01:01:45,239 --> 01:01:49,739
bullish compared to the fiber comparably, we are still
863
01:01:49,739 --> 01:01:53,129
within a timeframe when the price itself should be running
864
01:01:53,129 --> 01:01:55,979
out of steam. And when we get to these levels like this, so
865
01:01:55,979 --> 01:01:59,489
far, deep into a retracement of these price swings, you got
866
01:01:59,489 --> 01:02:02,279
to expect weakness. So now let's look at what's happening
867
01:02:02,279 --> 01:02:07,019
here. Also, we have the high APR and the high it may tire in
868
01:02:07,019 --> 01:02:09,659
the cable. Let's go back to the dollar.
869
01:02:13,139 --> 01:02:14,159
Look what's happening here.
870
01:02:15,750 --> 01:02:22,350
We have lower, albeit not by much, we have a lower low here
871
01:02:22,560 --> 01:02:29,070
than here. Okay, so the dollar was lower. The cable confirms
872
01:02:29,070 --> 01:02:34,470
it higher. But let's go back to fiber. See this?
873
01:02:35,790 --> 01:02:36,690
There's a USD
874
01:02:38,400 --> 01:02:43,350
USD x SMT diversions. Okay. So this tells you that you have
875
01:02:43,350 --> 01:02:48,690
a very, very large price swing, possibly unfolding going
876
01:02:48,690 --> 01:02:52,080
forward. This tells you that it's going to be bearish for
877
01:02:52,080 --> 01:02:56,940
the fiber. Okay, and since tandem trading occurs in cable
878
01:02:56,940 --> 01:03:00,000
and fiber generally and you're looking for higher prices.
879
01:03:00,000 --> 01:03:03,720
The dollar, you can get yourself in sync with a very, very
880
01:03:03,720 --> 01:03:08,490
handsome enemy it turns short. And looking at this high
881
01:03:08,490 --> 01:03:15,240
here, down to this low in here is a sweet spot and price
882
01:03:15,240 --> 01:03:17,970
went way up to that point by the PIP and then fell out of
883
01:03:17,970 --> 01:03:21,930
bed. And let's look at what happened here. Price does in
884
01:03:21,930 --> 01:03:25,590
fact trade down but below this low in fact, small little
885
01:03:25,590 --> 01:03:30,030
minor bounce in here and then finally broke through. Okay,
886
01:03:30,480 --> 01:03:35,610
and eventually even traded even lower than that. If you'll
887
01:03:35,610 --> 01:03:41,280
use the Fibonacci concept we talked about for this plan, we
888
01:03:41,280 --> 01:03:49,140
look for on 27 extensions, 162 extensions and the 200
889
01:03:49,140 --> 01:03:53,640
extension. This price swing is what we're going to use going
890
01:03:53,640 --> 01:03:58,140
lower. Okay, so if you use this low, up to this high once
891
01:03:58,170 --> 01:04:01,410
price structure, I'm sorry, my Structure breaks this low
892
01:04:01,410 --> 01:04:04,200
here, you're gonna be looking for the 127 extension, which
893
01:04:04,200 --> 01:04:07,230
it finds here handsome land bounces, and looking even gives
894
01:04:07,230 --> 01:04:10,050
you another optimal trade entry to get short. Okay? This is
895
01:04:10,500 --> 01:04:14,010
we're jumping ahead really so the short term trading part of
896
01:04:14,010 --> 01:04:18,300
the series but price does give it a correction here trades
897
01:04:18,300 --> 01:04:22,560
right up into old support broken now resistance falls out of
898
01:04:22,560 --> 01:04:27,900
bed and goes what 162 extension and obviously, price had
899
01:04:27,900 --> 01:04:32,640
snapped away from that rather handsomely. So, getting short
900
01:04:32,640 --> 01:04:35,490
here on the notion that we are entering into the seasonal
901
01:04:35,760 --> 01:04:40,590
time period and looking for SNP divergence is one avenue
902
01:04:40,590 --> 01:04:43,110
here that you could have got short. If you miss this one.
903
01:04:43,110 --> 01:04:46,800
This was the other opportunity to get short. Okay and right
904
01:04:46,800 --> 01:04:50,970
at lower, that rather handsome price swing if you look at
905
01:04:50,970 --> 01:04:55,260
what transpired just from the original high here in April
906
01:04:56,940 --> 01:05:04,170
down to the 162 extension That's 1200 and 30 pips. Okay? And
907
01:05:04,170 --> 01:05:10,530
if you got the second entry in here using the first of May
908
01:05:10,530 --> 01:05:19,530
area, it's 11 51,150 pips. Okay, so not bad in terms of, you
909
01:05:19,530 --> 01:05:22,830
know, pitfalls takes a little bit of time to get these guys
910
01:05:22,860 --> 01:05:25,830
it doesn't happen overnight but you got to really hold on to
911
01:05:25,830 --> 01:05:28,410
it and just have a lot of patience with them unfolding. If
912
01:05:28,410 --> 01:05:33,420
you look at the cable once price gets up into this inside
913
01:05:33,420 --> 01:05:40,500
the range concept, the sweet spot 163 is a big figure as
914
01:05:40,500 --> 01:05:44,250
well. We are still within that April seasonal decline time
915
01:05:44,250 --> 01:05:49,140
period. We have us dx SMT we have correlated pair SMT weaker
916
01:05:49,290 --> 01:05:53,220
highs comparable to the higher high in the cable here. So
917
01:05:53,220 --> 01:05:58,260
now what's what's going on in the lower timeframe? Okay,
918
01:05:58,260 --> 01:06:04,920
let's let's let's use A hourly chart. Okay, here's what's
919
01:06:04,920 --> 01:06:11,010
happening price trades up into that 163 figure trades off,
920
01:06:11,430 --> 01:06:15,870
okay? Now as price trades lower like that, okay comes down
921
01:06:15,870 --> 01:06:21,090
into that one that 62% level here on a higher timeframe
922
01:06:21,090 --> 01:06:24,240
pricing finds a little bit short term support level
923
01:06:26,400 --> 01:06:29,100
eventually breaks down below and looking comes right back up
924
01:06:29,100 --> 01:06:35,280
to that same level here again, see what it does here runs
925
01:06:35,280 --> 01:06:38,280
into it as resistance and in slides away.
926
01:06:40,739 --> 01:06:48,389
Again, aggressive move lower. Okay, now let's add to this
927
01:06:50,850 --> 01:06:56,160
the day separators. Okay. Now, if you missed the shorting
928
01:06:56,160 --> 01:07:01,560
straight up into the 163 figure, okay. You have a Short term
929
01:07:02,160 --> 01:07:08,280
high here, we have a higher high here, lower high here and a
930
01:07:08,280 --> 01:07:10,770
lower high here. So this is a daily swing point this high,
931
01:07:10,800 --> 01:07:14,010
this lower low, I'm sorry, lower high and lower high here,
932
01:07:14,190 --> 01:07:16,980
okay, so we do have swing point here. So now we could be
933
01:07:16,980 --> 01:07:21,810
looking to get short beyond that point in here. Okay, you
934
01:07:21,810 --> 01:07:27,210
can use optimal trade entries. You can use reflections,
935
01:07:27,240 --> 01:07:31,350
anything that you use to trade on your pattern, that's you
936
01:07:31,350 --> 01:07:38,340
start hunting, okay, and we also have a higher price swing
937
01:07:38,340 --> 01:07:41,910
point on a weekly basis. Okay, see these double lines here
938
01:07:42,840 --> 01:07:43,650
and here.
939
01:07:45,690 --> 01:07:46,200
And here.
940
01:07:47,790 --> 01:07:52,350
We have the high of that week. So between this double set
941
01:07:52,350 --> 01:07:54,810
and this double set, the highest here, then we have the
942
01:07:54,810 --> 01:07:58,110
higher here, between these two, and then we have the high
943
01:07:58,110 --> 01:08:02,700
here between this set In this set, so what is that? That is
944
01:08:02,700 --> 01:08:08,790
a weekly swing high. So we have the high, lower high and
945
01:08:08,790 --> 01:08:12,480
lower high. pull that up on your own weekly chart, you'll
946
01:08:12,480 --> 01:08:16,980
see what I'm referring to. Now when you have that, also,
947
01:08:17,190 --> 01:08:21,660
okay, that's when you have the acceleration in the price
948
01:08:21,660 --> 01:08:25,470
movement much, much more aggressively moving lower. Okay.
949
01:08:25,830 --> 01:08:31,830
And when we see the high, low, lower high here on the new
950
01:08:31,830 --> 01:08:36,180
week, okay going into Monday and Tuesday, using the how to
951
01:08:36,180 --> 01:08:40,260
catch explosive profits in the Forex concept we used in that
952
01:08:40,410 --> 01:08:46,080
video. You're looking for Monday to Tuesday's London open to
953
01:08:46,110 --> 01:08:49,380
four different not present you the high of The Week. This is
954
01:08:49,380 --> 01:08:53,730
where this takes place we have Sunday trading Monday runs up
955
01:08:53,760 --> 01:08:57,270
okay and it makes the high on Monday and then trades off now
956
01:08:57,270 --> 01:09:00,780
if you miss that that's fine. Don't Don't Case price you
957
01:09:00,780 --> 01:09:03,690
don't need you don't need to worry about rushing into it.
958
01:09:04,590 --> 01:09:09,240
Once you have now a daily and weekly swing high, you can use
959
01:09:09,240 --> 01:09:14,310
the high down to this low here. And look what you have. You
960
01:09:14,310 --> 01:09:19,260
have the 79 seven treatment level laying directly on top of
961
01:09:19,650 --> 01:09:24,840
this higher timeframe fib level that we just drew off the
962
01:09:24,840 --> 01:09:29,670
daily. Okay, that's the 62% retracement level on the daily
963
01:09:31,199 --> 01:09:32,939
and now we have overlapping fibs.
964
01:09:38,670 --> 01:09:43,110
One, a one hour chart conversion rates here for a optimal
965
01:09:43,110 --> 01:09:47,340
trade entry. This is a nice sucker rally. It gets everybody
966
01:09:47,340 --> 01:09:52,560
excited chasing it but this time of day is New York open so
967
01:09:52,560 --> 01:09:55,020
you could be selling in New York open to get in sync with
968
01:09:55,020 --> 01:09:58,350
the higher timeframe and then ride it lower. Okay and
969
01:09:58,380 --> 01:10:04,260
positioned there. You can see rather handsome declines. And
970
01:10:07,980 --> 01:10:10,620
these are the moves that you want to hold on to dooring
971
01:10:11,070 --> 01:10:16,380
enemy term price swing for our chart, and this is that
972
01:10:16,410 --> 01:10:20,940
opportunity for seasonal decline in April here. And this is
973
01:10:20,940 --> 01:10:24,330
that lower high going into the beginning of April. If you
974
01:10:24,330 --> 01:10:29,940
use the high here and price trades down. If you look at the
975
01:10:29,940 --> 01:10:34,920
high here, pull it down to that low. You see how price goes
976
01:10:34,920 --> 01:10:38,010
we have to set nitration level and stays there for a little
977
01:10:38,010 --> 01:10:43,170
bit and it finally breaks down. Okay. Notice also that we
978
01:10:43,170 --> 01:10:48,030
have smaller optimal trade entries in that same area. And
979
01:10:48,030 --> 01:10:51,270
you have a here as well here this high, low in here and it
980
01:10:51,270 --> 01:10:54,240
breaks down. See, this is why you have to understand how
981
01:10:54,240 --> 01:10:59,520
price can be fractal. Okay? It's not it's not a hard
982
01:10:59,520 --> 01:11:01,590
concept. To learn if you spend some time with it but you
983
01:11:01,590 --> 01:11:04,080
have to definitely go through high timeframe charts and
984
01:11:04,080 --> 01:11:06,210
start breaking them down and looking at specific turning
985
01:11:06,210 --> 01:11:13,050
points. The actual seasonal month that we're we're
986
01:11:13,290 --> 01:11:19,500
highlighting here is if if you look at the high here to this
987
01:11:19,500 --> 01:11:22,110
low, okay and the reason why I'm pulling is because these
988
01:11:22,110 --> 01:11:25,050
are the highest high amongst all these candles, and this is
989
01:11:25,050 --> 01:11:28,170
the lowest low amongst all these candles, okay, and price
990
01:11:28,170 --> 01:11:31,560
goes right back up to the sweet spot, which is an
991
01:11:31,560 --> 01:11:36,720
overlapping of this higher timeframe fib level in here.
992
01:11:37,350 --> 01:11:40,020
Okay, so you can see how that converges. So you can get
993
01:11:40,020 --> 01:11:44,580
short in here, one, even the 132 50 level would have been a
994
01:11:44,580 --> 01:11:49,560
nice opportunity to get short here and go much lower. So
995
01:11:49,650 --> 01:11:53,340
again, much in the same vein that we showed with the cable.
996
01:11:54,120 --> 01:11:57,450
You can see how price did fall rather handsomely
997
01:11:58,710 --> 01:11:59,910
in the fiber
998
01:12:01,230 --> 01:12:04,620
Again, here's that bounce at an old low, came up and gave
999
01:12:04,620 --> 01:12:06,120
you the optimal trade entry in here.
1000
01:12:07,710 --> 01:12:08,640
And we'll just do that.
1001
01:12:11,010 --> 01:12:13,500
draw that in here real quick, just for sake of completion,
1002
01:12:14,040 --> 01:12:17,430
and say nice, decent level in here. And you're down to our
1003
01:12:17,490 --> 01:12:20,940
five minute chart, you can actually see, I'll trade entry in
1004
01:12:20,940 --> 01:12:23,490
here on this smaller minor price swing. So again, another
1005
01:12:23,520 --> 01:12:26,910
fractal pattern, within higher timeframe fractal that's
1006
01:12:26,910 --> 01:12:29,430
broken down to a smaller factor, which is, you know, what
1007
01:12:29,430 --> 01:12:35,130
we're showing here. So even even looking at how price breaks
1008
01:12:35,130 --> 01:12:38,490
down from these larger enemies from price swings, and then
1009
01:12:38,490 --> 01:12:41,670
162 extension, lookout doesn't give you much in terms of
1010
01:12:41,700 --> 01:12:45,930
movement below that before it snaps away. Okay. Now, if you
1011
01:12:45,930 --> 01:12:50,310
held on to it and it breaks this high here, once price runs
1012
01:12:50,310 --> 01:12:54,240
above that, you have now break or market structure shift.
1013
01:12:54,630 --> 01:12:56,910
Okay? So you don't want to just collapse the trade there.
1014
01:12:57,030 --> 01:12:59,970
You want to wait for the chart to retest and get back down
1015
01:13:00,000 --> 01:13:04,650
These lows and by using another optimal trade entry, okay,
1016
01:13:04,680 --> 01:13:08,160
you can see a better place to cover your short instead of
1017
01:13:08,190 --> 01:13:10,860
getting out here and panicking, you can get out down here at
1018
01:13:10,860 --> 01:13:15,450
the 162 extension and then obviously price starts to move
1019
01:13:15,450 --> 01:13:17,430
away from that. Okay, so
1020
01:13:19,980 --> 01:13:21,150
that's what looked
1021
01:13:23,100 --> 01:13:27,720
at you in April staring you right in the mug, okay for for
1022
01:13:27,720 --> 01:13:31,500
long term intermediate term price swings. And if you look at
1023
01:13:31,500 --> 01:13:37,050
how the tools or macro view really help you get in sync with
1024
01:13:37,050 --> 01:13:40,770
these trends is going to use a simple short term analysis
1025
01:13:40,770 --> 01:13:44,430
concepts to get you in the trades, Judas swings, intraday
1026
01:13:44,460 --> 01:13:47,790
optimal trade entries using the weekly concept of looking
1027
01:13:47,790 --> 01:13:51,930
for the weekly high Monday to Tuesday's long and open an
1028
01:13:51,930 --> 01:13:55,890
hour the very latest Wednesday's London open. And if you're
1029
01:13:55,890 --> 01:14:00,840
in bullish environments, you would use the weekly Monday,
1030
01:14:00,840 --> 01:14:04,980
Tuesday London open for the low the week to form and or the
1031
01:14:04,980 --> 01:14:08,370
latest Wednesdays London open to capture the weekly low, and
1032
01:14:08,370 --> 01:14:10,470
then get in sync with that and try to hold on to these
1033
01:14:10,470 --> 01:14:13,800
things as long as you possibly can. It's very difficult if
1034
01:14:13,800 --> 01:14:17,760
you're always just looking every minor price swing in the
1035
01:14:17,760 --> 01:14:20,550
market while you're in these. That's why it's much better if
1036
01:14:20,550 --> 01:14:22,830
you're going to have this concept in trading and still do
1037
01:14:22,830 --> 01:14:24,660
short term trading, you need to have separate accounts
1038
01:14:24,690 --> 01:14:29,880
obviously. But you just put the trade on and let the stops
1039
01:14:30,270 --> 01:14:35,640
stay outside of, you know, potential striking distance. And
1040
01:14:35,670 --> 01:14:39,660
by that I mean if you get short in here, you let it run down
1041
01:14:39,660 --> 01:14:43,320
for a while before you do anything with trailing stop losses
1042
01:14:43,320 --> 01:14:46,260
inside of the because price can come back and tag you and
1043
01:14:46,260 --> 01:14:49,380
then you'll miss all this. Okay, so you want to look for
1044
01:14:49,560 --> 01:14:52,920
support levels to be broken like it does here and then comes
1045
01:14:52,920 --> 01:14:56,490
back and retest it and trades lower. Then Then move your
1046
01:14:56,490 --> 01:14:59,700
stop into a profitable area where you can lock in a very
1047
01:14:59,700 --> 01:15:03,330
small portion of the profit. And then don't chase it. Don't
1048
01:15:03,330 --> 01:15:06,960
trail down too tight. Learn to scale out profits going down
1049
01:15:07,260 --> 01:15:12,480
at the reasonable predetermined 127 162 and 200 extensions,
1050
01:15:23,430 --> 01:15:30,570
the fib levels for the cable again from this high up here,
1051
01:15:31,260 --> 01:15:36,570
this price swing here, okay, this price swing here is the
1052
01:15:36,570 --> 01:15:42,030
second leg of this move here. So we have to use this price
1053
01:15:42,030 --> 01:15:45,990
swing before we would ever use this one or this one. Okay.
1054
01:15:46,620 --> 01:15:51,870
So with that concept, let's take a look at the lowest low
1055
01:15:51,870 --> 01:16:01,590
candle here and do that Hi. Okay, and here is the 127
1056
01:16:02,160 --> 01:16:06,930
extension, and here's the 162 extension. And then here's the
1057
01:16:06,930 --> 01:16:10,350
200 extension here. Okay, you can see how price came down,
1058
01:16:10,920 --> 01:16:14,460
didn't get to this old low, but they get to 200. So you
1059
01:16:14,460 --> 01:16:17,760
could have scaled off, obviously, you know 50% of the
1060
01:16:17,760 --> 01:16:24,180
position. Once you get half profit, I'm sorry 3030 pips move
1061
01:16:24,180 --> 01:16:28,410
to break even. And then look for 127 extension now you could
1062
01:16:28,410 --> 01:16:35,700
take 30% off of the total position, okay, or you could take
1063
01:16:36,990 --> 01:16:39,750
1020
1064
01:16:39,780 --> 01:16:43,470
at 62 and then leave the remaining portion that you reach
1065
01:16:43,470 --> 01:16:48,660
for 200 or you could just take the remaining 50% divided by
1066
01:16:48,660 --> 01:16:53,910
30 of the original position, take it off at 127 and then the
1067
01:16:53,910 --> 01:16:58,260
remaining 20% would be off at 162 extension and not reach
1068
01:16:58,260 --> 01:17:02,310
for the 200 or You could just, you know, go for broke and
1069
01:17:02,310 --> 01:17:06,900
once it takes 127 out and starts reaching for 162, show your
1070
01:17:06,900 --> 01:17:10,290
stop down to the 127 for the remaining portion, so you can,
1071
01:17:10,350 --> 01:17:11,970
you know, if it comes back up at least you're going to get
1072
01:17:11,970 --> 01:17:15,510
out with your remaining half at, you know, a nice logical
1073
01:17:15,510 --> 01:17:19,320
area to take profits. And if it gets down to 160 to take
1074
01:17:19,320 --> 01:17:23,100
half of it there off and then the remaining 25% reach for
1075
01:17:23,100 --> 01:17:27,150
the 200 and and show your stop just above the 162 extension,
1076
01:17:27,180 --> 01:17:30,300
okay, but there's a lot of different ways and I'm trying not
1077
01:17:30,300 --> 01:17:34,680
to give you a very clear black and white way of doing it
1078
01:17:34,680 --> 01:17:37,860
because I want you to have some input on your own. There's a
1079
01:17:37,860 --> 01:17:41,100
lot of freestyling you can do with these using analysis
1080
01:17:41,100 --> 01:17:43,890
concepts. And again, hopefully this has just been providing
1081
01:17:43,890 --> 01:17:49,050
you a an example on how to intermediate term swing trade,
1082
01:17:49,410 --> 01:17:52,200
and using the higher timeframe macro views to get in sync
1083
01:17:52,200 --> 01:17:56,040
with with the market and expect learn to anticipate price
1084
01:17:56,040 --> 01:17:58,710
moves, and then using the smaller timeframe concepts we've
1085
01:17:58,710 --> 01:18:02,370
used in the other video. To help you with your timing and
1086
01:18:02,370 --> 01:18:06,330
such, and those being the optimal trade entry video, high
1087
01:18:06,330 --> 01:18:10,560
probability price patterns video and obviously you need to
1088
01:18:10,560 --> 01:18:14,520
be cognizant of the risk and equity management so, so those
1089
01:18:14,520 --> 01:18:18,810
videos in there very insightful and applicable obviously for
1090
01:18:18,810 --> 01:18:22,650
this, this tutorial so I'm gonna close it here. And
1091
01:18:22,650 --> 01:18:24,870
hopefully this has been insightful to you guys. And if you
1092
01:18:24,870 --> 01:18:27,510
have any questions, obviously just post them on the forums
1093
01:18:27,510 --> 01:18:31,020
at baby pips calm and until then I wish you good luck and
1094
01:18:31,020 --> 01:18:31,560
good trading.