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ICT-WENT-02.srt

Last modified by Drunk Monkey on 2021-06-10 09:20
1 00:00:18,390 --> 00:00:28,560 ICT: Okay, in the previous video, we discussed how 6% compounded over a year, would more than double your account. And you can see that depicted here if one
2 00:00:28,770 --> 00:00:40,260 hypothetically started with $5,000. And you were, in fact, consistently returning 6% per month, after one full year, January the following year 2015,
3 00:00:40,620 --> 00:00:52,650 you would have just a little bit over, doubling your money at 5000 would be 10,000. Again, you can see this a little bit $60.98. And again, as I promised,
4 00:00:52,650 --> 00:01:03,330 it's less than 25 pips per week. Now, I know, it sounds a little too good to be true. Being able to make just a little bit of pips like is for over a period of
5 00:01:03,330 --> 00:01:12,600 a week, and still doing such a dramatic increase in your equity. And again, if you guys aren't excited about 6% per month, and you don't think that is dramatic
6 00:01:12,600 --> 00:01:23,730 returns, and you obviously aren't really aware of what goes on in the investment world because this is a phenomenal return. Okay. But that's assuming you're
7 00:01:23,730 --> 00:01:34,110 using a 30 PIP stop, which is extensively what I like to see new traders do because it gives you a little bit of flexibility for you allowing in their price
8 00:01:34,110 --> 00:01:45,840 action, because most of us when we first start doing things, we're in a rush to do things or we are a little lethargic or apprehensive. So we may get in at most
9 00:01:45,840 --> 00:01:54,930 of opportune time, we'll probably end up missing that as we develop as new traders. So I allow a 30 PIP stop. And I actually encourage traders to use the
10 00:01:54,930 --> 00:02:05,160 30 PIP stop as an initial, if you're really really green to trading, you could use a 40 PIP stop, and that'll give you a lot more cushion as well. Now, don't
11 00:02:05,160 --> 00:02:16,320 be discouraged because it's will be considered a large stop in some people's eyes. It's all relative, really. But we're going to assume that 6% is understood
12 00:02:16,320 --> 00:02:31,440 here as a relatively achievable goal. Okay. And we're going to give you a case study to think about, I'm going to assume that the average person out there
13 00:02:31,890 --> 00:02:47,910 would require about 30 $500 per month, it's US currency. Okay. And we'll give you a hypothetical scenario, if one would have to require a income of 30 $500
14 00:02:47,910 --> 00:03:01,170 per month. My question to you is, if you're trading with just this goal in mind, 6% per month, in aiming for 23 pips for the week as a net, it's less than 100
15 00:03:01,170 --> 00:03:13,650 pips per month, allowing you a 30 PIP stop, you're only risking 2% of your equity. Okay, looking at that, as it relates to trading with a $5,000 account,
16 00:03:14,190 --> 00:03:27,720 even after three years, you still haven't reached that goal. Okay. Now, I'm doing this to show you realistically how you may encounter you may encounter
17 00:03:28,050 --> 00:03:39,990 some lag time in your goals, that's fine. As long as you're moving ahead in the direction of your larger, longer term goal, every small incremental movement
18 00:03:39,990 --> 00:03:48,450 towards that goal is a positive, okay? Again, it's not a race, it's not a sprint, this is a journey, you need to be enjoying it as you go through it.
19 00:03:48,720 --> 00:03:58,650 Otherwise, you're gonna make it an arguable task, it's gonna be just like the thing you're trying to escape now, that j ob. So let's look at what I promised
20 00:03:59,130 --> 00:04:11,220 you going forward that we would look at ways to make exponentially larger returns on our equity. And let's assume for a moment that you wanted to make a
21 00:04:11,220 --> 00:04:23,430 very respectable 10% per month and we're not changing the amount of risk percentage wise we're gonna keep it a 2% suddenly, just by expecting a larger
22 00:04:23,430 --> 00:04:36,660 10% return, we would need to net 38 pips Now again, this is rather reasonable there's nothing significantly new. You shocking about the level of pips that
23 00:04:36,660 --> 00:04:47,970 would be required to earn that. Okay, you're only risking $3.33 per Pip. Okay, that's the that's the gearing using the 30 PIP stop over the course of one year.
24 00:04:48,480 --> 00:04:57,690 Okay, your $5,000 will return a net balance of $15,692 now
25 00:05:00,359 --> 00:05:13,739 Looking at that same model, that we would assume that 3500 hours would be one's expecting you return per month to live, okay, you'd have to have about $37,000
26 00:05:13,739 --> 00:05:24,419 in your account to draw that out. Okay, or at least to make that over the, over the course of a year. Now, my advice is not to think that once you get to these
27 00:05:24,419 --> 00:05:36,179 levels, you can start living off the account and start drawing out funds in the amount that's shown here. What I'm suggesting to you really is, that is, if
28 00:05:36,179 --> 00:05:44,459 that's what you're aiming for, for a monthly income, you have to have some money in your account. Okay, I'm referring to your savings account or your bank
29 00:05:44,459 --> 00:05:53,309 account to survive for the year and allow your money to build over the course of the 12 months. And then as long as you average around this same amount,
30 00:05:53,339 --> 00:06:02,309 obviously, you won't be able to meet that annual salary requirement to live as a as a full time trader. That's the way I teach it as the way I tried to groom
31 00:06:02,309 --> 00:06:17,669 traders, to leave the retail world of trading and just speculating for extra money, then moving into full time trading. The 10% return is it's pretty solid
32 00:06:17,669 --> 00:06:29,009 return, there's nothing I can say bad about it. It does get you rich over a period of time. It doesn't do it quickly. But it does significantly increase
33 00:06:29,009 --> 00:06:41,759 over a period of time. If you look at what transpires over the course of three years, your $5,000 obviously would grow to about $170,000. Now again, this is
34 00:06:41,759 --> 00:06:52,829 assuming that you're not paying any taxes on it. And you are in fact hitting 10% return consistently every single month. Now, as you start, obviously, you may
35 00:06:52,829 --> 00:07:02,129 not hit 10%. And then there may be other months where you do better than 10%.  Okay, but overall, it should average out. If you're doing things consistently,
36 00:07:02,309 --> 00:07:11,669 it should do staying around that 10% if you're looking at these returns here, less than 40 pips per week, and again, we haven't done anything to 30 pips stop.
37 00:07:13,079 --> 00:07:27,719 Now the question is this. assume for a moment that you can fine tune your entries a little bit more precise. And over the course of this presentation in
38 00:07:27,719 --> 00:07:39,239 series, where every new and or aspiring for our share, wants to know. We're going to teach specific applications, concepts and skill sets that will enable
39 00:07:39,239 --> 00:07:53,729 you to reduce the amount of initial stop loss that's required. We're going to assume for a moment that we can now reduce our stop loss initially, to 20 pips,
40 00:07:54,419 --> 00:08:12,449 okay. If we can take the same trades 2% per risk per trade rather, now we're trading with $5 per Pip. Notice it's still 2% $100 or 5000. equity. We're aiming
41 00:08:12,509 --> 00:08:26,009 to make $500 or 10% for the month. Notice the contrast here. We had moved from needing to require making 150 pips now only down to 100 pips. Remember it was 90
42 00:08:26,009 --> 00:08:38,039 pips before trying to make 6% return with 2% risk on 30 pips stops. Now watch what happens when we change it to 15 pips. Now many are thinking whoa 15 pips,
43 00:08:38,039 --> 00:08:46,619 that's a really small stop. Well, there's ways to do that. And we're going to teach you that in this course. But now look what happens. We're under 20 pips
44 00:08:46,619 --> 00:08:59,969 for the week, under 20 pips, only needing to make 75 pips for the entirety of the month, notice we didn't increase our risk, it's still 2% the risk would be a
45 00:08:59,969 --> 00:09:11,249 loss of $100, still 2% of our neck equity of 5000, our beginning beginning balance, again, aiming for 10% return. Now, this is where it gets interesting.
46 00:09:12,899 --> 00:09:23,189 Notice that these numbers and figures are not changing over here. The only thing I'm changing is the amount of initial stop loss that's required. Okay, we cut
47 00:09:24,029 --> 00:09:39,689 the total monthly PIP expectancy from 150 in half down to 75. Only by adjusting and spending more time on accuracy and reducing our amount of PIP on the stops.
48 00:09:40,379 --> 00:09:50,219 So in other words, we cut our 30 PIP stop loss in half to 15 pips. Now you're probably wondering, is it really possible to do that? Yes, it absolutely is. And
49 00:09:50,219 --> 00:09:56,969 we're going to give examples of that in this video. But for now, understand that it's going to take you a little bit of time to get there. So again, it's all
50 00:09:56,969 --> 00:09:59,969 about not rushing initially. You need to go
51 00:10:01,020 --> 00:10:02,010 To this model
52 00:10:08,940 --> 00:10:20,670 First, if you can't do this model 2323 pips per week, 90 pips for the month, using a 30 PIP Stop, don't think for a moment, you're gonna be able to do 15
53 00:10:20,670 --> 00:10:29,880 pips stop loss treats, okay? You got to be able to grow into it. And it doesn't take long to do that it only takes a couple months, or six months, this is the
54 00:10:29,880 --> 00:10:40,950 amount of time that you would require this whole six month bracket up here. If you can do 6%, consistently over six months, the only thing you're changing is
55 00:10:40,980 --> 00:10:51,330 the initial stop loss amount. Because if you can prove to yourself and be consistent about the way you apply the concepts that we're sharing, the only
56 00:10:51,330 --> 00:11:04,380 thing you're changing is the math. Okay, you're reducing the initial risk in half from 30 to 15. pips, nothing changes in percent risk, nothing changes in
57 00:11:04,380 --> 00:11:16,020 the dollar amounts over here, okay. But your work that's required to do the trades and returns drop, rather exponentially less, you actually build a lot
58 00:11:16,020 --> 00:11:28,860 more flexibility over here on this end, okay, in terms of monthly returns, and still never changing the total risk per trade. Now, let's go back and assume for
59 00:11:28,860 --> 00:11:42,300 a moment that you want to make a 20% return now we're entering levels that are very, very phenomenal. Again, with a 30 PIP stop loss, you would need to make 75
60 00:11:42,300 --> 00:11:56,280 pips. Now, if you've been a follower of mine, for any number of years, in 2010, I came up with the idea that if we're aiming for 50 to 75 pips, this was the
61 00:11:56,280 --> 00:12:06,780 model I was teaching. Okay. But now we're going through the entire ICT library again. Now we're going to give you the Amplified view to make 20% return. Okay,
62 00:12:07,110 --> 00:12:18,840 we're going to use the same model here. assume for a moment that we could go down to reducing our initial stop loss to 20 pips. We moved from needing to make
63 00:12:18,840 --> 00:12:33,270 75 pips a week to 50 pips per week, notice we have not increased our risk per trade at all. 20% is still the expected goal. And using $5,000 as an equity base
64 00:12:33,390 --> 00:12:48,240 example, after one year, it's $44,580 in two years is $397,000. Now, at month seven, you're already at the level where you're making that hypothetical 30 $500
65 00:12:48,240 --> 00:12:56,310 to sustain yourself on a monthly basis. And again, I'm not arguing the fact that everyone can live on 3500 hours, I'm just using it as a case study. So please
66 00:12:56,310 --> 00:13:05,250 don't send me emails saying, I really can't afford to live on 30 $500 I'm just using an example guys, so don't don't make more of it than it really is. Now for
67 00:13:05,250 --> 00:13:16,290 a moment, let's assume that we are able to again, trim our stop loss order initial entries and reducing the overall risk to 15 pips. Now again, we're gonna
68 00:13:16,290 --> 00:13:24,930 be using a day traders model for entry. Okay, but still using a 30 PIP stop, it was still respectable, and you can do 25 pips. But for now, assuming that we can
69 00:13:24,930 --> 00:13:33,510 get very, very close to the marketplace and allow a 15 PIP stop loss. What will happen is
70 00:13:38,640 --> 00:13:52,140 you reduced your total monthly PIP expectancy to half again, so now we need to only make 150 pips and we only need to make 38 pips for the week 38 pips for the
71 00:13:52,140 --> 00:14:05,040 week, with an initial stop loss of 15 pips that's less than three to one. Think about that's less than three to one, one trade with a setup of less than three
72 00:14:05,040 --> 00:14:21,930 to one would accomplish more than this. Okay, so now let's assume for a moment, going back to our original settings, we want to make 30% return. Now we're
73 00:14:21,930 --> 00:14:35,250 absolutely in error areas where it's just unheard of for folks to make this.  Again, looking at this, we would need to make 113 pips for the week or 450 pips
74 00:14:35,250 --> 00:14:45,180 per month. Now, I know most of you are saying well, I can't make 450 pips per month. Well, you're probably right right now as a new trading or developing
75 00:14:45,180 --> 00:15:02,310 trader, you probably can't do that. But using 2% risk and a 30 PIP stop, you would need to make 113 pips per week. Now looking at our example of trimming 20
76 00:15:02,490 --> 00:15:14,190 PIP stop loss, we would need to only make 75 pips for the week, or 300 pips for the month. Now this is doable, you can still do 75 pips over a week, even with
77 00:15:14,190 --> 00:15:22,410 the low volatility we have right now, currently in 2014. At the time of this recording, this is still doable, it's going to require some work, but still yet
78 00:15:22,410 --> 00:15:34,260 it can be done. If you go back over to our example again, assume for a moment that we could reduce our risk to again 15 pips, we only need to make 56 pips for
79 00:15:34,260 --> 00:15:48,900 the week, or 225 pips for the month, notice that we're not increasing the 2% risk per trade, it still stays locked at 2%. But it's allowing us a larger
80 00:15:49,020 --> 00:16:03,300 dollar per PIP risk, and still maintain the 2% total risk per trade on the $5,000. Again, these numbers are not changing as we adjust the PIP amount in
81 00:16:03,300 --> 00:16:16,500 terms of the initial stop loss, it just changes the expectancy on what you need to make to acquire 30% per month. Now a 30% per month, your $5,000 will grow to
82 00:16:16,500 --> 00:16:29,220 $116,000. Now again, going back to our 30 $500 example of case study needing to make 35,000 hours to sustain oneself, you get into that region around the fourth
83 00:16:29,220 --> 00:16:43,380 month if you're able to do 30% return now again, this is assuming that one can consistently month over month over month, do 30% returns my question to us this
84 00:16:44,760 --> 00:16:58,470 if you can make 56 pips for the entire week. Okay, you'll hit this number every single month you'll do it the only thing it's gonna change is your dollar per
85 00:16:58,470 --> 00:17:32,430 risk initially on on your your trades. Now let's go and look at assuming that we had a 20 PIP stop. Okay 20 PIP stop and you run this across the entire 36 months
86 00:17:33,180 --> 00:17:51,030 example. Okay, you would need five hours per Pip, which 2% $100 of the total equity used for that month. Returning with 30% it's 15 $100 you only need to
87 00:17:51,030 --> 00:18:03,930 make 75 pips. Here's the question. We have a 20 PIP stop loss. Again. Don't be confused but this is a notation. If you look at what we have here this is
88 00:18:05,220 --> 00:18:21,030 denoting that the stop loss will be requiring 20 pips Okay, so now 20 pips stop loss if one word to make a trade with one to one reward to risk ratio, that
89 00:18:21,030 --> 00:18:32,940 means you would expect to make what you're risking 20 you're hoping to make what 20 PIP gain. Okay, so now what if you were looking for a two to one trade?
90 00:18:35,010 --> 00:18:48,600 That's two rewarded for one wrist, you would need to make a 40 PIP net gain on that trade. you're risking 20 pips, you're hoping to make 40 Now watch this. If
91 00:18:48,600 --> 00:19:04,620 you were doing a three to one trade, risking 20 pips, you would expect to make what 60 pips risking 20 aiming for 60 that's a three to one trade. Now, here's
92 00:19:04,620 --> 00:19:18,960 another example. If you're trying to make a four to one trade, you're risking 20 pips to make 80 pips 80 pips made on trade that's only risking 20 pips is
93 00:19:18,960 --> 00:19:30,060 absolutely doable. It's gonna take some time and study to find them. Okay, but they're there. They're there every single month or every single week, and
94 00:19:30,060 --> 00:19:40,350 sometimes, okay, you can catch them simply in a day trading scenario. Many times you'll have to require your trade to hold on to it for a few days to do that,
95 00:19:40,380 --> 00:19:52,530 but you can still do it. Okay. But my question is this. If you're focused on doing these types of trades here where I'm trying to make my 20 pips per day or
96 00:19:52,530 --> 00:20:02,790 I'm trying to make my 15 pips per day, okay, this right here gets most people in trouble because they're Trying to get in there every single day and try to make
97 00:20:02,790 --> 00:20:14,760 those trades to make these pips. Okay? I give these examples here as as models to choose from because there's several scenarios that specific traders will find
98 00:20:14,760 --> 00:20:22,830 themselves comfortable in position trading, swing trading, or day trading or scalping. And that's what this is designed for. This is the scalpers mentality
99 00:20:22,830 --> 00:20:36,420 here or day traders column. This is what you would need to make as a short term trader, okay, or a swing trader here twice a week. And then for the weekly is
100 00:20:36,420 --> 00:20:45,960 like a position trader you hold for the weekly range. And obviously, a long term trader would be looking for the monthly moves. Okay. So this is all broken down
101 00:20:45,960 --> 00:20:55,680 with that mindset. You choose where you're going to be most appropriate in terms of what you're allowing your, your, your psyche to absorb. And most traders
102 00:20:55,680 --> 00:21:07,890 can't do day trading most traders, you can't get in front of the charts because of jobs because of other things that are an obstacle for them. But there's other
103 00:21:07,890 --> 00:21:20,370 ways to do this. Okay. And let's use the example that if you're looking for this scenario, right here, okay, we have the gearing is a 20 PIP stop, that's what
104 00:21:20,370 --> 00:21:31,800 we're going to use. And we're only risking 2% and we're aiming for 30% return for the month. That means we have to do essentially what we have to find a trade
105 00:21:31,800 --> 00:21:43,860 that's four to one reward the risk that will give us better than this. Okay, I'm just gonna move this a little bit just to show you something cuz right now it's
106 00:21:43,860 --> 00:21:58,290 saying we need to make 75 pips per week to get 30% return. If my Oh yeah, it would be a wonderful return. To get 32% return, you got an 80 pips and that
107 00:21:58,290 --> 00:22:08,610 would be that four to one scenario where you're risking 20 pips. Okay, let me just change this right now, as we're talking about to make, you know, a 20 PIP
108 00:22:08,610 --> 00:22:20,340 stop loss, you're risking $5 per point, or PIP 2% risk total is $100, you're aiming for 32% that would equate to that for one scenario. Okay. So if you do
109 00:22:20,340 --> 00:22:35,340 for one reward to risk setups, every single time you do a trade you will be in the realm that's required. okay to do one shot one kill setups per week, and he
110 00:22:35,340 --> 00:22:45,060 would hit 32% return. Okay, so now let's look at a chart and see what that looks like and how those types of trades setup and how we can find four to one three
111 00:22:45,060 --> 00:22:58,980 to one reward risk scenarios and keep our our stop losses really relatively tight. But before we do, let me go let me do this. Let's go back and do our
112 00:22:58,980 --> 00:23:14,130 gearing for a 15 pips. And we'll use the same scenario of breaking it down what was required. Okay, so we're using a 15 PIP stop. You would need to make 56 pips
113 00:23:14,130 --> 00:23:30,480 for the week. Okay. So 15 pips, right reward the risk of one to one you would need to make 15 pips net and two to one reward, the risk would be 30 pips for 15
114 00:23:30,480 --> 00:23:31,200 pips risk
115 00:23:33,089 --> 00:23:45,239 free one would be a 45 PIP to 15 Pip. ratio numbers you're looking to make 45 pips gain for 45 I'm sorry for 15 pips risk, you're trying to aim and make 45
116 00:23:45,239 --> 00:23:56,759 pips four to one would give you 60 pips. Okay, you would need to make 60 pips for the 15 pips risk to make four to one. And again, that will be better than
117 00:23:56,759 --> 00:24:09,599 this sets probably very close to this, so that we have here, so you would need to make 60 pips per week, risking 15 initially, with a four to one ratio, reward
118 00:24:09,599 --> 00:24:20,549 to risk, and you would hit 30%. Now, again, this is all we're dealing with just this is just math, okay? And this is how easy it is, it's not hard to come up
119 00:24:20,549 --> 00:24:28,019 with a strategy to get these ridiculous amounts of return. What makes it difficult is you got to be able to see how to do that in the charts. So let's go
120 00:24:28,019 --> 00:24:42,209 over to the market and take a look at how that's done. Alright, we're looking at the British Pound USD pair. Okay, and I have some lines on here that we're gonna
121 00:24:42,419 --> 00:24:59,849 utilize. And I want to show you what we have. We're going to assume for a moment that you thought that this 170 60 level down here would be an important support
122 00:24:59,849 --> 00:25:09,479 level. Now I know you're probably thinking all right, Michael, you're already starting off with cherry picking scenario. Trust me, I am not. Let's go out to a
123 00:25:09,479 --> 00:25:26,879 daily chart and I'll show you where that 170 60 comes from. Okay, we are looking at the levels on a daily chart. And you see this old high back here. The high on
124 00:25:26,879 --> 00:25:43,499 this day comes in at 170 63. My concepts teach that we like to round our numbers to whole numbers, or if it's very, very, very tight volatility, you know, it's,
125 00:25:43,739 --> 00:25:52,379 the rains are very tight, you're looking at and current price action, we'll use the five numbers, not all words will go between 20 and 30, we may use 25. Okay,
126 00:25:52,379 --> 00:26:03,989 between 30 and 40, we may use 35. So we'd like to round the round numbers, or round two fives, okay. So if you're looking at a high on this day,
127 00:26:09,539 --> 00:26:24,869 here it is the high of 170 63. That's essentially 170 60 or 170 65, I elected to go with 160, simply because that's one of the what I wanted to go with. If you
128 00:26:24,869 --> 00:26:34,889 wanted to use 160 75 as your support level, it would be nothing wrong with that at all. Okay, but that's where the 170 60 comes from. And simple support
129 00:26:34,889 --> 00:26:43,919 resistance teaches us that once this resistance level is broken to the upside, once price comes back down to it, we would reasonably expect a bounce or
130 00:26:43,919 --> 00:27:02,519 reaction at that price point. And it just so happens that we happen to get that today on Tuesday. And let's go back down to a 15 minute timeframe. Okay, and
131 00:27:02,519 --> 00:27:13,529 what we're looking at is the start of a new day here, this is where Tuesday began. Okay, we had some some consolidation in the market drifted lower and
132 00:27:13,529 --> 00:27:25,769 traded right into that level right there, bang right into the low on this. This candle here, if I can get things to work with me, okay, we got the low of
133 00:27:25,769 --> 00:27:36,149 170 60. Beautiful, okay. You may notice this little blue line here. Okay. And you may know this, this green line. And this red line, we're going to talk later
134 00:27:36,149 --> 00:27:46,619 on in this series about this red line. And this line here. And this height line here, basically are the times that I asked you in the previous video to mark out
135 00:27:46,649 --> 00:27:59,939 on your charts and study what takes place around those times of the day. Okay, price trades down into this level here. Okay, we're going to assume that you
136 00:27:59,939 --> 00:28:19,979 believed that this was a bullish area to expect a bounce. Right, increase this so we can see it. Okay, so the level was 170 60 you always have to factor in the
137 00:28:19,979 --> 00:28:28,649 spread. Okay, and we're just going to add five pips just for slippage and traditional retail spreads on the British Pound USD pair, okay, and that means
138 00:28:28,679 --> 00:28:44,309 your limit order would come in around 170 65. So your your entry would be around here. Okay, we're gonna look at a scenario where you're buying want to limit
139 00:28:44,489 --> 00:28:54,089 once price drops down on this candle here. You're gonna be buying that level.  Okay, and what I just did, I just put a little tiny little rectangle here. Now
140 00:28:54,089 --> 00:29:05,609 watch what happens it'll, it'll show up over here. Little numbers will pop up.  See that? See the eight now it's in nine. There's 10 Okay, the range of the
141 00:29:05,609 --> 00:29:21,299 rectangles height is now 10 pips. Here's 11 1213. And I lost it because we went into the little indicator box here. See if I can gain some more ground not doing
142 00:29:21,299 --> 00:29:43,529 that. Okay, so there's 15 pips. So your entry would be at 170 65 and your, your your stop loss would rest 15 pips below your entry. And that's right here. Okay,
143 00:29:43,709 --> 00:29:55,589 at 170 50 price has to trade down to that 170 50 level to stop you out. Okay, so that would be your the selling price because we're looking at data. That's the
144 00:29:55,589 --> 00:30:06,569 sell price. So if as long as price stays above that one 7050 level, you would be in the trade. Now, this is where it gets interesting. We're going to zoom in.
145 00:30:09,329 --> 00:30:19,619 Okay, and now we're going to take this take this range, okay? And what I'm going to do is I'm going to just move it over a little bit like that. Just to
146 00:30:19,619 --> 00:30:24,389 differentiate. I'm going to show you
147 00:30:29,760 --> 00:30:42,870 this would be from your entry. If you got out right up here at the top of the rectangle. That is a risk reward of one to one. Okay? We're gonna take a step
148 00:30:42,870 --> 00:30:49,500 out farther. Okay, and that would be an exit point here.
149 00:30:54,720 --> 00:31:05,250 He got out there. That will be a two to one. Okay, you're gaining two for every $1 you risk. Okay. We're going to move that out farther. Now. This is a three to
150 00:31:05,250 --> 00:31:16,260 one. See, you're using that same amount of pips. Okay. 15 pips now three times.  For one risk, this is a three to one reward risk ratio. We're gonna go out one
151 00:31:16,260 --> 00:31:27,180 more step 1234. Gain to one risk, okay, so it's a four to one risk reward ratio.
152 00:31:36,299 --> 00:31:51,539 We have 12345 ranges of 15 pips each, okay, so that's five reward to risk of one to five to one reward risk, okay. And to get five, the one you would have to get
153 00:31:51,539 --> 00:32:01,499 out at around 171 40. Okay, now, we could go all the way up to the absolute high.
154 00:32:09,180 --> 00:32:22,440 Like that, and that would be 12345678 to one, reward the risk ratio. And I know, you probably are thinking man, that's, that's incredible. Well, you'd be
155 00:32:22,440 --> 00:32:31,080 surprised if you'd learned the concepts that we're going to be teaching in this series. And for those of you that watch the initial presentation over the last
156 00:32:31,140 --> 00:32:44,940 four years or so, from 2010 on, you're going to get the amplification of that, which is what we're getting here. This is, this is real, really where I want you
157 00:32:44,940 --> 00:32:58,410 to focus. Right here, you want this type of setup right there. You want that?  Okay, you want four to one, and that's wealth building. Okay, four to one builds
158 00:32:58,410 --> 00:33:17,970 millionaires. Notice also that inside inside of this day, just in Tuesday, okay, this is not a week. This is not a course of several days, this is just one day,
159 00:33:18,630 --> 00:33:30,510 price came off that 170 60 level, and trade velvia with a range of 132 pips.  Now, that's a nice, that's a nice range. It's, this is what you've probably been
160 00:33:30,510 --> 00:33:40,230 used to, if you've been looking at forex, for a number of years. This, that's about the standard, a little bit more than a standard daily range for the cable.
161 00:33:40,500 --> 00:33:51,150 Recently, we've entered into a small little volatility squeeze where nothing's really going on in the markets, unless, you know, one or two moves a week
162 00:33:51,450 --> 00:34:04,590 creates a significant move and they haven't really been this significant many times. But this is an area where you can use that mindset of looking for a four
163 00:34:04,590 --> 00:34:18,330 to one reward to risk. Okay, now, I'm going to give you another drill, we talked about looking at the swing points and the each candles high and low, and the
164 00:34:18,330 --> 00:34:26,640 opening closing of those three candles on a swing point and drawing them out in time and looking at how the future reactions would occur around those particular
165 00:34:26,640 --> 00:34:44,520 price points. The levels I have on this chart here, okay are rather important.  We're gonna go out to a weekly Okay, and a weekly chart. Let's do this. Okay,
166 00:34:44,820 --> 00:34:59,700 what I've shown here is just in the recent times, recent days, I delineated the red line is a weekly high, which is here. Okay, this swing high and all the
167 00:34:59,700 --> 00:35:14,940 green levels, with the exception of this one here, this one's really should be read. Because it's changed. That is a weekly level. Okay and the green are
168 00:35:14,940 --> 00:35:27,180 simply going to be based on daily highs. Okay, what you're looking at is daily highs and weekly highs and lows on both. Okay, and by doing that this is the
169 00:35:27,180 --> 00:35:41,310 exercise. And you guys may remember this from the initial installment of excellent of execution, by international fair. When I was giving those initial
170 00:35:41,730 --> 00:35:53,220 videos back in 2010, I did them silent. Now, this is amplification of the things that you were missing. By having the this low here, this is a high here, it
171 00:35:53,220 --> 00:36:09,630 lines up. We have a high here, we have a high here. Okay, we have a high here, the exercise I gave was that you want to buy support levels or daily lows or
172 00:36:09,660 --> 00:36:19,620 weekly lows, and use a 20 PIP stop with a 20 PIP profit objective. So you're you're trying to find reward risk of one to one, okay, and you want to sell
173 00:36:19,860 --> 00:36:34,770 weekly highs and daily highs with a 20 PIP stop and looking to make 20 pips gain, okay. And we're gonna look at just simply the month of June to the present
174 00:36:34,770 --> 00:36:47,310 time of this recording, which is the 15th of July 2014. Okay, and we're going to highlight that, just so we know where we're at, in reference to what's typically
175 00:36:47,310 --> 00:37:01,950 shown in data, I just want to focus on just this little area, and I'm gonna go off white with it or change the background a little bit. Now I'm going to go
176 00:37:01,950 --> 00:37:05,730 down to a 15 minute time frame.
177 00:37:07,980 --> 00:37:19,980 Okay. And I want you to notice when we trade down to these levels here, okay, when we trade down into that level, okay, we're looking for reaction, and you
178 00:37:19,980 --> 00:37:33,060 would be trading this reaction with the expectation of looking for a move of 20 pips. Okay, so when price trades down into that level, you would use that
179 00:37:33,300 --> 00:37:43,620 specific price point, that would be 167 30. And the low and it's zoom in a little
180 00:37:43,620 --> 00:38:02,520 bit. Price trades down into that level, which is identified by the exercise we just did, showing you how to how to arrive at them. The low
181 00:38:08,340 --> 00:38:28,530 is 167 20. So you're buying at 167 30. The lowest of the low it went was just 10 pips below it. So your stop was never hit using a 20 PIP stop and looking at 20
182 00:38:28,530 --> 00:38:29,280 pips gain,
183 00:38:42,060 --> 00:38:52,560 you'd be buying here and getting out right there. Okay. That's the exercise.  That's all there is to it. Now, again, the reason why is you're not trying to
184 00:38:52,800 --> 00:39:02,190 find profits. That's not what you're trying to do. What you're doing is you're trying to follow a consistent plan of action. And it's to show you how your,
185 00:39:02,400 --> 00:39:13,740 your mind is going to be trying to resist following the rules of being in a trading plan, okay? But it's also going to teach you that you can find a lot of
186 00:39:13,740 --> 00:39:21,990 opportunities where things will line up for you, but you're also going to encounter days and opportunities where it doesn't work out for you. You will get
187 00:39:21,990 --> 00:39:30,750 stopped out for 20 pips, and you beat you would do this and a demo account, okay? It's also going to teach you that you're not going to trade every single
188 00:39:30,750 --> 00:39:41,910 day, but it will give you one trading setup per week. Notice the double lines here, see that that's a Sunday. So this whole day here is one day or Monday.
189 00:39:41,970 --> 00:39:52,380 This is Tuesdays acting between vertical lines here and here, between this vertical line here, and here is Wednesday's trading. This is Thursday's trading.
190 00:39:52,740 --> 00:40:06,150 This is Monday's trading, okay. Using this example, here, this is a resistance level, okay delineated from the weekly chart, you would sell at this price level
191 00:40:06,900 --> 00:40:20,970 at 168 25 168 25. Right there, and your stop loss
192 00:40:27,210 --> 00:40:46,740 would be up here. So, if you're selling at once exceed 25 price traded with the high if I can get my I'll do Hickey here to work with me. Let's get a little bit
193 00:40:46,740 --> 00:41:05,790 tighter. The range high on that is 168 44. So in here 168 44 minutes close, you may depend upon what data feed you were using, and what broker you could have
194 00:41:05,790 --> 00:41:19,170 got tagged down, it could have very well taken you out. So that would have been an opportunity, even though it did pan out and move from that level 20 pips and
195 00:41:19,170 --> 00:41:26,580 would have paid on that one they you've could have, you could have very easily been stopped out. Okay. And that's it. That's the thing. That's an exercise for
196 00:41:26,580 --> 00:41:35,010 you to see what it's like to go through that adversity. Okay, and still see it still moving right in the right direction. So here we have another example, just
197 00:41:35,010 --> 00:41:52,410 doing the same thing. You will be selling at 168 25 as price trades right up to it. your stop loss again. You never touched. Okay? So here's where your stop
198 00:41:52,410 --> 00:42:03,810 loss would be. 20 PIP take profit. Right down here on this candle, you'd be filled. That's it, you'd be out. Okay. And you would simply move to the
199 00:42:03,810 --> 00:42:14,670 sidelines. Again, the other part of the trading exercises, you're taking specific surgical strikes and taking out pips, controlled risk, controlled
200 00:42:14,700 --> 00:42:22,110 execution, you know, where you're getting in out, you know, when you're getting out at, you know exactly what you're doing, when you're doing it, why you're
201 00:42:22,110 --> 00:42:33,060 doing it based on a specific price level that was delineated from a daily and weekly chart, which are the two highest important and institutional levels to be
202 00:42:33,060 --> 00:42:45,720 paying attention to, again, that being the weekly and daily. So we had an example of a buy during that week. And we had an example of sell here for that
203 00:42:45,720 --> 00:42:55,170 week, that would have panned out as an as a losing opportunity. We have a new week here starting on Sunday, right on Monday, we have that first opportunity to
204 00:42:55,170 --> 00:43:07,080 trade boom, sell into that resistance and get your 20 pips done. Okay. Now, you can now also fine tune this a little bit, we discussed how to make 6%. Right?
205 00:43:07,320 --> 00:43:16,860 You can test this theory of making 6% with one trade per week by saying okay, well I'm not going to use a 20 PIP stop loss and take profit at 20 pips, I'm
206 00:43:16,860 --> 00:43:31,080 going to use a 30 PIP stop loss and aim to make 25 pips for the weekly goal.  Yes, you're making less than your risk. But you're also aiming with the mindset
207 00:43:31,080 --> 00:43:40,530 that slowly developing to where you could potentially look to make that 30 pips for the 30 pips risk, okay. And then you take this exercise one step further by
208 00:43:40,530 --> 00:43:53,400 saying, Okay, well, if I can see these levels like this, why can't I take my stop loss and reduce it to a 15 PIP stop. So now if you're selling on that
209 00:43:53,400 --> 00:44:07,890 level, here, your stop losses now. See that. So that's how we will use these exercises going forward. Okay, to groom you into doing the things that you need
210 00:44:07,890 --> 00:44:19,050 to be doing. Again, this is one week starting here. Again, you're going to let other trades pass by you don't care about what the other market setups are
211 00:44:19,050 --> 00:44:33,180 dealing you don't care about that. Where are we at here? We I did one trade before Yeah, that was the Monday so you'd be done for the week if you're doing
212 00:44:33,180 --> 00:44:46,650 once once that one kill mentality in developing that. Here we have another area here where we're looking for 20 pips stop it sell that level at the figure at
213 00:44:46,650 --> 00:45:01,470 170 even 20 PIP stop, never hit you. Does it pay you to 20 pips? Sure does.  Boom. There's your one shot one kill set up. Drill for that. And it does give
214 00:45:01,470 --> 00:45:12,540 you another one right here that would have paid you again to 20 pips. But once you get it you move to the sideline and you don't worry about it again. Here's
215 00:45:12,540 --> 00:45:26,790 two scenarios right here where it does it again. Your stop is obviously never hit selling it at 160 I'm sorry 170 60
216 00:45:29,430 --> 00:45:42,900 and looking at your 20 target taken right there you would have got filled same scenario here for another opportunity. Obviously stop never hit song at the big
217 00:45:42,900 --> 00:45:58,980 figure on sorry 170 60 paying you your 20 pips right there. wonderful opportunity. Going into a new week. We have this Sunday here. All right, we have
218 00:46:00,540 --> 00:46:14,040 price trading down to this level here. buying the level. Okay, we're at a resistance and support level based on dealing weekly, that red lines weekly. You
219 00:46:14,040 --> 00:46:22,650 would be buying here with a stop loss 20 pips below, this is where you would absolutely be taken out of the trade rather quickly if you took it at all. Okay,
220 00:46:22,650 --> 00:46:32,640 so that'd be a losing trade for you to actually feel and feel what it's like to go through that. Here's an area where you'd be selling that same level because
221 00:46:32,640 --> 00:46:45,330 we traded right back up to it. your stop loss 20 pips away. So you'd sell right at that 170 figure stop loss would be up here. never hit? does it pay to 20
222 00:46:45,330 --> 00:47:01,830 pips? Yes, it does. Okay. So you would be you would recoup the loss you took here, you would immediately right now be back to even for the week. Okay. And if
223 00:47:01,830 --> 00:47:11,430 you were looking to sell, again, that level here, you would take a loss with this exercise. If you were taking again, it's assuming you take multiple
224 00:47:12,570 --> 00:47:23,340 entries. So you would if you sold this level here, you'd be stopped out for your 20 PIP loss. Okay, and price comes back back down. This is a same level again,
225 00:47:23,730 --> 00:47:33,180 you would be buying it now. Again for the exercise. Price comes down to that level. You buy it at 170 big figure stop loss is 20 pips below it never trades
226 00:47:33,180 --> 00:47:46,980 there. does it pay your 20 pips? Yes. So now you took a loss here recouped it here. You took a loss here recouped here, your net even on the week and you go
227 00:47:46,980 --> 00:47:59,850 out the week, not even that's a good exercise. That's a good learning experience for you that week. We go into a new week here up to a level Okay, you have a
228 00:47:59,850 --> 00:48:11,370 stoploss above that level selling short blows you out 20 pips stop loss done.  Okay, you're out a loss. So you start the week, again as a net loser. We got to
229 00:48:11,370 --> 00:48:23,700 another level. Notice it doesn't get to it right here fell short of a little bit. You sell short on that level of stop losses above 171 80. Sell at that
230 00:48:23,700 --> 00:48:35,400 price level and does it pay your 20 pips? Yes, it pays you. Okay, so you recoup the loss you took here. Now you're even for this week. There's two weeks, you
231 00:48:35,400 --> 00:48:40,740 had no gains, but you're able to recoup the losses. Very, very important lesson.
232 00:48:46,140 --> 00:48:56,520 Price comes down to this example we showed earlier in the video explaining how to get the four to one scenarios. So this is where we're at right now.
233 00:48:56,520 --> 00:49:13,380 Presently. We traded up that same level here intraday. selling this level at 171 80. Using a 20. Pip stop never got tagged. Did it pay your 20 pips? Yes,
234 00:49:13,380 --> 00:49:24,540 indeed. Okay, so you're able to capture this one here and capture this one here, using the trading exercises. And it's again, it's meant to develop your
235 00:49:25,410 --> 00:49:33,660 consistency of following a plan, regardless of whatever that makes money every single time or not. You don't care whether or not if you get a trade every
236 00:49:33,660 --> 00:49:44,100 single day, you're looking for weekly and daily highs and lows. Once they trade there, boom, you just go back over your charts of recent price action, you two,
237 00:49:44,100 --> 00:49:52,380 three months at tops and go through those levels. Have them on your charts.  Okay, delineate them and then color, you know, fashion you like I use red for
238 00:49:52,380 --> 00:50:01,380 the weekly and green for the daily. It could be whatever, whatever you like. It doesn't have to be exactly how I'm showing it to you in turn. Colors and
239 00:50:01,410 --> 00:50:09,480 thicknesses and all that. It's a matter of preference what you want to differentiate those levels based on whether the weekly or daily and don't think
240 00:50:09,480 --> 00:50:18,600 too much about setting precedents over weekly being better than a daily for now just use the swing points and highs and lows that we discussed earlier in the
241 00:50:18,600 --> 00:50:31,410 video to build the basis for the the initial steps and finding your excellence in execution. And until the next edition, I wish you good luck and good trading.