ICT YT - 2021-05-17 - If I Had To Restart Again As A Trader at 20 Years Old - Part 2.srt

Last modified by Drunk Monkey on 2021-05-25 08:43
1 00:00:26,490 --> 00:00:37,170 ICT: Hello, folks, this is part two of how I would restart all over again, if I had to go back and do it all over again as a completely blank slate, no
2 00:00:37,170 --> 00:00:47,670 experience whatsoever and only having access to the YouTube level content that I put on my channel. Before I get into this one, just the book recommendation for
3 00:00:47,670 --> 00:00:59,160 you, is the mental edge in trading. This is Jason Williams, he is Larry Williamson. Now, this isn't really a technical trading book. It's more along the
4 00:00:59,160 --> 00:01:07,560 lines of the things I'm going to talk about here. Now, I'm not trying to reduce this book's effectiveness and covering the things I'm going to mention briefly
5 00:01:07,560 --> 00:01:19,020 here. But I will mention that Larry winds brought this up early on in my career, I was first exposed to the idea of matching personality to trading styles by
6 00:01:19,530 --> 00:01:33,420 Larry Williams courses discovered and purchased in 1995. So his son naturally carried on with that school of thought and becoming a doctor. And a psychiatrist
7 00:01:33,540 --> 00:01:44,010 ended up making a book with his father's experience in trading. And I guess growing up listening to his, his father talk about the ins and outs of the
8 00:01:44,550 --> 00:01:56,430 psychological aspects to trading, and how traders, many times fight to do something they're not really equipped mentally to relate to. And I'll give you
9 00:01:56,430 --> 00:02:03,450 my personal experience and how I think about things and how I am from a personality standpoint, and how that matches up with a specific trading style.
10 00:02:04,980 --> 00:02:14,430 So I would first obviously, consider my personality and I would try to match my personality to the appropriate trading style. Now, what does that mean? Well,
11 00:02:14,430 --> 00:02:26,220 there's lots of different ways to trading, there's scalping, day trading, short term trading, swing trading, position trading. My personality is on quick fused
12 00:02:26,310 --> 00:02:36,390 and unprimed changing my mind frequently. So while that means seeing like, in decisiveness on the part of someone that doesn't really understand what I mean
13 00:02:36,390 --> 00:02:49,350 by that, it just means that I can see lots of opportunities. And I can see micro market structure in price. And I can draw a relationship between that and
14 00:02:49,380 --> 00:03:00,510 opportunity for me to get in and get out so long as I can see a framework in lower timeframes rather quickly. And I can get in and get out rather quickly. So
15 00:03:02,190 --> 00:03:15,270 my personality, personally lines up with day trading in short term trading, because I like to take a lot of executions, I like to get in and out and parlay
16 00:03:15,270 --> 00:03:27,990 my equity up. That's the goal as a short term day trader is to get in, take your surgical strikes and get out. Try not to overstay Your welcome. I do not have
17 00:03:27,990 --> 00:03:39,930 patience to sit in long term swings. So with that, it helps me narrow down my focus. And I don't care how well someone else does trading, in catching 1500
18 00:03:39,930 --> 00:03:52,410 pips 2000 pips 3000 pips for a year, holding on to these long term trades, I just draw no affinity for that. Short term trading allows me to keep myself in
19 00:03:52,410 --> 00:04:01,710 my own lane. Try not to worry about putting on more stress than it's necessary.  And I really removed the whole aspect of performance anxiety, which will
20 00:04:01,740 --> 00:04:10,290 obviously be a thing for the males. In this career, when they first start, they feel like they have to do something else, in addition to what they may already
21 00:04:10,290 --> 00:04:19,410 see working early on. Now, I'm not saying everyone's going to find success early on, but those that do find success early on, they make the mistake of looking at
22 00:04:19,410 --> 00:04:29,550 other people and saying, Well, I'm not doing what they're doing. And that means I'm probably not doing as much or as well as I should. And you change lanes, and
23 00:04:29,550 --> 00:04:40,890 that changing of lanes many times, we'll take you out of what you're really prepared to do the best in. And that means, like, I'm not really good, holding
24 00:04:40,890 --> 00:04:50,190 long term positions, because I'm going to see 30 different position opportunities in a week. Well, that doesn't fit well with someone that is
25 00:04:50,190 --> 00:04:57,660 expected to get into a trade and hold it for months at a time because I'm going to be wrestling with my eyes an opportunity for me to go short here. And I'm
26 00:04:57,660 --> 00:05:09,240 long it's just it's problematic. So this book I think also helps match up your unique personality helps you discover what your unique personality is and how it
27 00:05:09,240 --> 00:05:20,760 might relate to a specific style or approach to trading. And I personally enjoy the frequency of trade setups and intraday charts.
28 00:05:21,750 --> 00:05:31,050 So I don't spend a lot of time on monthly and weekly. Just once in a while, I'll get a long term perspective. And that usually stays in motion for a number of
29 00:05:31,110 --> 00:05:40,980 weeks. So I'm not trying to flip flop back and forth with my expectations. And I try to milk a specific bias that that higher timeframes already outlined.
30 00:05:49,380 --> 00:06:01,350 Now, obviously, when we get into trading, we're met with all kinds of flash, and Blitz, an image, and all that colorful thing tries to get your attention. The
31 00:06:01,350 --> 00:06:13,110 opposite side of that is the quants side. So you have Instagram traders, fakes.  And then you have the left side, where it's quants, they're highly, highly
32 00:06:13,350 --> 00:06:22,980 mathematically derived system based rule based ideas. And they're kind of like the nerdy crowd. So there's going to be two schools of thought for you. And I
33 00:06:22,980 --> 00:06:34,440 would really elect to go with the quants side. Because I'm analytical, I have computer science, background information systems, and computer programming, that
34 00:06:34,680 --> 00:06:44,760 side of things is more appealing to me. And I'm a numbers kind of guy. I've never been an image person. Even though I did do that kind of stuff. As a young
35 00:06:44,760 --> 00:06:57,780 man, it doesn't give me the satisfaction of just beating the socks off the marketplace with data. And you're gonna decide that early on to, but I would not
36 00:06:57,780 --> 00:07:11,310 go towards that Instagram crowd, like I mentioned in the first volume of this series, I would keep my focus only on one market and avoid switching markets
37 00:07:11,340 --> 00:07:23,430 sporadically. That means if I don't have a trade setup, or if I don't see something that is producing a condition in the marketplace that I could operate
38 00:07:23,430 --> 00:07:34,320 favorably in, it doesn't mean I'm going to abandon that market. It just means I'm going to learn patience and sit and wait. That part of your development is
39 00:07:34,320 --> 00:07:43,980 crucial. And this is the reason why I teach my students to focus on one or two markets that are closely correlated, and measure that against the benchmark like
40 00:07:43,980 --> 00:07:56,550 the dollar. If you don't have the patience to wait for your setup, you're going to rush to do things and gamble. And the only way that you form and forge
41 00:07:56,880 --> 00:08:07,770 patience is to develop it by sticking to one market and identifying when it's not trading in a condition that's favorable. And just being patient. It gives
42 00:08:07,770 --> 00:08:16,170 you clarity, you don't guess about whether or not you should be doing something or not. You don't abandon your market simply because it doesn't give you the
43 00:08:16,170 --> 00:08:23,850 opportunity that you usually take right now you simply wait because you know what you're looking for. So early on, when I first started trading commodities
44 00:08:23,880 --> 00:08:30,930 back in the early 90s. I would jump from one commodity to the next. If it didn't give me a setup. I knew that if I looked hard enough, I would find a reason to
45 00:08:30,930 --> 00:08:40,170 get into another market. And sometimes that was painful. I would lose a lot of money. And it would make me angry. It's okay, well, I'm not making any money in
46 00:08:40,170 --> 00:08:47,430 this green. I'm going to go into the meat market and I would trade feeder cattle or I would trade pork bellies or lean hogs something that effect and if I took a
47 00:08:47,430 --> 00:08:54,450 loss there now and say okay, well, I'm going to go and I'm gonna trade crude oil, or heating oil or unleaded gas. And then if I took a loss there, I'll jump
48 00:08:54,450 --> 00:09:05,040 into cocoa or sugar, you know, I would jump all over the place sporadically and that's a loser's cycle. And you don't want to start that and you want to enter
49 00:09:05,040 --> 00:09:18,300 this whole process with a professional mindset and perspective. That means think of a an Olympic contestant, for an athlete, okay? You don't see an Olympic
50 00:09:18,360 --> 00:09:33,240 athlete going from the swimming pool to the shotput. Okay, or trying to throw the discus, or to do the relay race. They specialize in on one thing, and
51 00:09:33,240 --> 00:09:43,890 they're only going after the gold on that one specific event and really focusing and narrowing our focus on one specific process that they believe will lead to
52 00:09:43,890 --> 00:09:54,630 their superior result above everyone else. And the gold that's what they're after. They're not trying to be the master of every Olympic event. Same thing
53 00:09:54,630 --> 00:10:06,060 with these markets. A professional trader is going to be focused on one specific market, narrowing their focus and knowing what it is they're looking for. And
54 00:10:06,060 --> 00:10:14,250 I'll cover a little bit of what that would be and how I could use the YouTube channel to formulate that idea. But keeping your focus on one market, it's
55 00:10:14,250 --> 00:10:25,170 important because you'll learn when not to do something, and you'll know when to do something. You won't feel the tug of war of emotional psychological effects
56 00:10:25,200 --> 00:10:33,810 of not doing something because the gambling aspect of trading won't be an enticement for you, because you know what you're waiting for? If it's not there,
57 00:10:33,870 --> 00:10:44,940 you simply wait, because, you know, give it enough time, that specific market will give you a set up. I would those study Journal of back testing that single
58 00:10:44,940 --> 00:10:46,710 market or asset class.
59 00:10:50,850 --> 00:11:00,270 And I would start with the euro dollar. Now, what do I mean by study, Jerome?  And what is back testing? What would I be doing? What Young into the charts. And
60 00:11:00,300 --> 00:11:12,120 since my preferred outlook on the marketplace is short term to intraday, I would have an hourly chart of the entire week. And what that hourly chart showing
61 00:11:12,120 --> 00:11:21,030 Monday through Friday, I would look for old highs and old lows where the market traded above an old high rejected and go the other direction. Or I would watch
62 00:11:21,210 --> 00:11:29,130 where the old low was taken out by a lower low and then reversed and went the other direction. And I would study that market structure in those two reference
63 00:11:29,130 --> 00:11:37,740 points. Now, initially, I would not be trying to pick the weekly range or the direction. That's not what I'd be trying to do in the beginning. Because it's
64 00:11:37,740 --> 00:11:48,210 easy to trick yourself into thinking you know what you're doing, and then being discouraged when you don't. When you find out later on, you don't know what
65 00:11:48,210 --> 00:11:58,620 you're looking for. So to do things at a very modular pace, and slow pace and realistic pace and development, I would focus in on optimal trade entries, and
66 00:11:58,620 --> 00:12:13,200 how that would be easily determined, looking at the marketplace, as I'm going to show you in this volume. And this would be done at least six months. So for six
67 00:12:13,200 --> 00:12:25,890 months, I would expect myself to submit to back testing and logging in a study journal, the way I'm going to show you in this. So what does it look like when
68 00:12:25,890 --> 00:12:39,180 you're back testing and filling up a journal with six months of back data? Well, as I mentioned, I would have an hourly chart. And this is exactly how I started
69 00:12:39,660 --> 00:12:52,380 as an SMP and bond trader. When I stripped away all the retail stuff, I used the s&p market and the bond market. Why those two markets you said one market might
70 00:12:52,380 --> 00:13:03,330 go well, it's essentially one market that I was following, which was bonds. But because bonds and s&p are inversely related to non words, bonds go up, s&p goes
71 00:13:03,330 --> 00:13:13,530 down, and vice versa. If one goes up, the other one goes down. So it doesn't make a difference. Which market was giving me the setup, I knew if I could
72 00:13:13,920 --> 00:13:21,630 relate it to the other, it would support the opposite view. So since I'm still working with one market, it's the same thing as if I was using the euro dollar
73 00:13:21,810 --> 00:13:33,270 against the dollar. I want to make sure that what I am anticipating in the euro dollar is the opposite in the price action in the dollar. So on an hourly chart,
74 00:13:33,750 --> 00:13:45,270 I'd take the entire week and break it up from Monday to Friday. This would all be done after the fact. Okay, because the whole pantomine here is on developing
75 00:13:45,330 --> 00:13:53,280 and how would I teach myself to go through the process of developing with a steady learning curve and not waste a lot of time. You start with an hourly
76 00:13:53,280 --> 00:14:03,660 chart. Also, let me preface it by saying this is my approach. This is where I would have gone back if I could do this very thing because I would have learned
77 00:14:03,690 --> 00:14:12,810 at a quicker pace. Not that I'm speeding you along. But because if I would have figured out early on what my personality is and how it would relate to trading,
78 00:14:14,250 --> 00:14:21,390 day trading and intraday trading, you only need an hourly chart. You don't even need a daily chart. You don't need a weekly chart. You don't need a four hour
79 00:14:21,390 --> 00:14:30,300 chart. You don't need a monthly chart, you don't need any of that kind of stuff.  You just need to look for market structure at turning points. Okay, and at key
80 00:14:30,300 --> 00:14:46,830 intermediate term highs and lows. That's all you need to focus on. What are they? Well, if you look at this chart here I have a high here and this is a
81 00:14:46,830 --> 00:14:52,680 Monday. trades up on Tuesday, runs that previous high and breaks down.
82 00:14:54,660 --> 00:15:04,530 trades lower. The next day on Wednesday trades higher than this high here then trades lower We have a low here, it trades down below that, and starts and turns
83 00:15:04,530 --> 00:15:14,940 the other direction as well, after also this low taking out that so all I'm looking for is intermediate term highs and lows and are they traded through? And
84 00:15:15,240 --> 00:15:24,420 is there a possibility there's going to be a rejection because I don't need the market to trade 300 pips in my favor. I don't need to trade 200 pips in my
85 00:15:24,420 --> 00:15:37,170 favor. All I need is 50 pips 50 pips and I can do as much as I want, taking that same 50 pips and repeating it every single week. So what I'm focusing on is
86 00:15:37,170 --> 00:15:48,690 learning how to find one setup, or multiple setups that would net me a 50 PIP net result for the week, because that's the first thing you got to set a target
87 00:15:48,930 --> 00:15:57,840 for what it is that you believe that you could do consistently on a weekly basis. Do not set the target for 50 pips a day, because you're not going to hit
88 00:15:57,840 --> 00:16:06,840 that guy, you're not going to hit that period. You want to have something spread out over the course of the entire week. And 50 pips is only one half of a penny
89 00:16:06,840 --> 00:16:19,650 move in forex. So if I'm only trying to get 50 pips, even if I don't get my full targets, and I just get 10 pips each day trying to do this procedure. In theory,
90 00:16:19,680 --> 00:16:29,730 I could get 50 pips that way, and still never hit my ultimate targets. So even in failure, reaching my milestone each week, this is crucial, because I put too
91 00:16:29,730 --> 00:16:38,460 much emphasis on being right in the beginning of my development. And every single time I had small little modular wins on paper.
92 00:16:39,090 --> 00:16:46,860 Now, these were allied trades back when I was trading, but when I say I, paper profits, they were unrealized, they were only showing that if I would close the
93 00:16:46,860 --> 00:16:55,500 trade, I would have this much money in real dollars in my account. But I would hold on to it for my targets, and never understood the concept of taking
94 00:16:55,500 --> 00:17:05,580 partials along the way and paying myself. So before I would learn that, I would teach myself and conditioned myself to do what I'm going to show you here. So
95 00:17:05,580 --> 00:17:13,980 each day, you split the hourly chart with vertical lines, they may or may not be that visible here. But there's one here, here, here, and here is Friday's
96 00:17:14,640 --> 00:17:23,220 trading. And in the end, the Friday's trading is there. So all I'm looking for is intermediate term highs and lows where the market trades above it. And then
97 00:17:23,250 --> 00:17:31,680 once it does that, does it break down and I'm going to go into these areas and study on a lower timeframe, 15 minute time frames all that's necessary. And the
98 00:17:31,680 --> 00:17:41,490 same thing in here. Same thing with this low there. Okay, and same thing with this low being taken there, and you study it and you'd look for these specific
99 00:17:41,490 --> 00:17:50,730 characteristics. Now on Monday, we can see that the market trades above this short term high here and above the short term high there. So we're only going to
100 00:17:50,730 --> 00:18:01,410 look for the sake of brevity in this volume, because I could obviously talk for six hours and then bore you to sleep. But I could dig really deep with this just
101 00:18:01,410 --> 00:18:09,330 in this one whole chart here on the hourly chart, but we're just gonna look at just one specific day on that Monday. And the whole framework is this short term
102 00:18:09,330 --> 00:18:20,490 high is being violated there. And we're gonna look at this fractal right there.  Alright, so here's the 15 minute timeframe on May 10 2021. And here is the naked
103 00:18:20,490 --> 00:18:31,050 price action. And what you want to do is in your study journal, you want to take the chart, and have it set up where you have it naked, no annotations, nothing.
104 00:18:31,740 --> 00:18:40,800 And you want to have the access to areas in your chart where you can write out your own annotations, after the fact, because you're going to dress this up. But
105 00:18:40,800 --> 00:18:48,570 you're going to learn later on a week later, a month later, three months later, when you come back to it, you're going to see what the market has done since
106 00:18:48,570 --> 00:18:59,790 these specific days. And this is how you teach yourself by repetition, seeing how they all nest together each individual day's price actions, basically, a
107 00:18:59,790 --> 00:19:09,900 small component, or a cog in the greater scheme of how these markets move and book. So you want to start with a very simplistic approach and a good 15 minute
108 00:19:09,900 --> 00:19:19,500 timeframe and hourly chart for the whole weekly range. And you do this every single week and you do it for six months. You don't try to demo trade. You don't
109 00:19:19,500 --> 00:19:26,820 try to go in with a small Live account to see what it feels like and feel the psychological tug of war, like everybody that doesn't know how to make money
110 00:19:26,850 --> 00:19:34,980 tells you to do. That's nonsense. You're going to start with the wrong foot first dealing that the way you go into these markets and you learn how to do it
111 00:19:35,070 --> 00:19:44,280 without any emotion without any fear of losing is to simply desensitize yourself to that whole aspect of it needs to be right. Because it doesn't need to be
112 00:19:44,280 --> 00:19:54,810 right. You don't need to be right. I didn't need to be right in the beginning but I felt that I had to be right all times 24 seven every single trade and that
113 00:19:54,810 --> 00:20:04,680 is problematic. It conditions you to have unrealistic expectations. So we have to just strip this thing down into a simple pattern recognition approach to
114 00:20:04,680 --> 00:20:14,040 seeing something that repeats over and over and over again. Well, let's take a closer look with this specific day. When you annotate your chart for your study
115 00:20:14,040 --> 00:20:23,430 journal, you want to find the optimal trade entry that occurs between 830 in the morning and 11 o'clock, New York local time. That's what you're gonna annotate
116 00:20:23,430 --> 00:20:35,940 here. Okay. Here's the high, it trades down below a short term low here. So that's a shift in market structure. It rallies back up inside of this shaded
117 00:20:35,940 --> 00:20:46,560 area here. That's optimal trade entry. Seven amset retracement level 62% retracement level there. The idea is you're going to use the 62% retracement
118 00:20:46,560 --> 00:20:56,430 level as your hypothetical entry. Now this is all hypothetical, you're not attempting to do these trades, all you're doing is building a study journal,
119 00:20:56,670 --> 00:21:09,330 which is back testing old data. So what this does, it helps condition you to see specific elements to these ideas, and then watching it flesh out and build up as
120 00:21:09,330 --> 00:21:20,910 time goes on. If you look at how this market goes from this high, down to this low, shifted market structure, rallies back up, you go short right there, this
121 00:21:20,910 --> 00:21:33,420 is the first time the candle touches. This price level, the stock goes just above this short term high. So your stop losses there. 10 pips, nothing less.
122 00:21:34,050 --> 00:21:46,530 Every single example. You're going to backlog and show in the examples. A 10 PIP minimum, that's the least of a stoploss you can use. That way you're not trying
123 00:21:46,530 --> 00:21:55,560 to convince yourself that you can go into pips stop losses, okay? avoid all that stuff for right now. 10 pips is reasonable. If you're using a 15 minute
124 00:21:55,560 --> 00:22:01,110 timeframe, that's reasonable doesn't mean that you won't get stopped out. It doesn't mean that it's going to work like that in the future all the time. It
125 00:22:01,110 --> 00:22:09,900 just means that as a rule based idea going in studying back testing data, everything that's already happened hindsight, you're looking at examples to
126 00:22:09,900 --> 00:22:22,440 frame out something that can build a respectable risk reward model, not that I have that as a dependence in my trades, because I don't look at it as I have to
127 00:22:22,440 --> 00:22:30,510 have this, I have to have that in terms of what a risk if you don't know what the markets going to give you. Just because you have your trade framed out with
128 00:22:30,510 --> 00:22:41,250 10 to one, you're risking $1 to make $10, you have no idea and no assurity that it's going to move $10 in your favor, no one knows that. I don't know that there
129 00:22:41,250 --> 00:22:47,340 isn't a trader alive, that's going to be able to tell you, that's going to absolutely happen, because that was the case we'd all be billionaires. But you
130 00:22:47,340 --> 00:22:56,520 have to have some kind of idea that you're going to submit to, okay, so as a suggestion, this is all this is, all of your framework, you want to try to set
131 00:22:56,520 --> 00:23:07,200 it up with three to one, that means you're trying to risk $1 to make $3. If you do that, you have a really good chance of overtime, the losers, being overtaken
132 00:23:07,200 --> 00:23:19,230 by your winners. And you don't need to have a high strike rate to be profitable theoretically. So right here we have 10 pips defined as our risk. And the market
133 00:23:19,320 --> 00:23:28,590 comes back up one more time. Note this. Okay, so anywhere over here in your annotations, you want to record how much time it took, when it started the trade
134 00:23:28,590 --> 00:23:38,760 here, how much time did it take before it started really moving in your favor. I like to see one and a half of what I have risked before I would consider moving
135 00:23:38,760 --> 00:23:49,230 a stop. That was one of the original ideas I had from my trading is, whatever I'm risking, it has to move one and a half times that before I even move my
136 00:23:49,230 --> 00:23:59,160 stop. Now, if you have that rule based idea, this return back into the general area where you got in would not stop you out. Many times traders wouldn't hurt
137 00:23:59,160 --> 00:24:07,080 and rushed or stop down in here and it comes back knocks them out. And then it moves in their favor, because they're so afraid to take a loss. Do not be afraid
138 00:24:07,080 --> 00:24:16,230 to take a loss and submit yourself to the initial risk that you put on and leave that there until it least moves one and a half times what you've risked. What
139 00:24:16,230 --> 00:24:24,960 does that mean? Well, it has to move 15 pips in your favor before you move your stop loss in any degree. And at that point, I'm only moving it to half the
140 00:24:24,960 --> 00:24:33,750 initial risk. Once it does two times what I've opened up myself for initial risk. In other words, it's moved 20 pips on my favor, then I go to breakeven,
141 00:24:34,230 --> 00:24:44,430 and you want to have that annotated here, how much time does it take for you to be able to do that, and you love that and you simply do this every single day.
142 00:24:46,350 --> 00:24:57,150 Old lows is what you'd be aiming for. So there's liquidity resting below that it's cell stops. Using your fib, you have an extension of negative one. And I've
143 00:24:57,150 --> 00:25:04,260 already showed this on my optimal trade entry pad. A recognition series which you're welcome to look at on my YouTube channel. It's in the playlist section on
144 00:25:04,260 --> 00:25:14,280 my YouTube. So this is the target, but we're going to be trying to get deeper into this sell side liquidity pool. So this is our target. To get this, we're
145 00:25:14,280 --> 00:25:22,380 going to assume that the market needs to go at least a good five pips below that. Now why five pips, some brokers have really tight spreads would not get me
146 00:25:22,380 --> 00:25:31,500 out. No, as a rule based idea, you want to anticipate a fire pit run below where you think it might go. So frame all your trades that way. So that way, once the
147 00:25:31,500 --> 00:25:39,450 market does, in fact, trade to that point, five pips below it, no matter what broker you have, you have about a 90% likelihood that they'll fail you. That's
148 00:25:39,450 --> 00:25:47,790 why I have that rule based idea. And you can see the market does in fact, trade down to that level. So five pips below this target below this liquidity pool.
149 00:25:48,780 --> 00:25:55,380 That's where you'd have it marked. Now, when you have it marked up like this, then you want to start adding all the annotations. But the main thing is, is
150 00:25:55,410 --> 00:26:02,850 knowing when that shift in market structure occurs, that's what sets up your pattern. And then once you have it all fleshed out with all the annotations, it
151 00:26:02,850 --> 00:26:09,630 doesn't take long to do this, it literally only took me less than 10 minutes to mark this chart up just like this. So even if you have a job, you have children,
152 00:26:09,870 --> 00:26:18,360 you have a family to take care of whatever, okay, you still don't have to spend a whole lot of time doing this, and you only don't have one market. And once
153 00:26:18,360 --> 00:26:24,570 it's all marked up, obviously, you want to fill in the details. You know, what time did the short hype hypothetically fill?
154 00:26:25,650 --> 00:26:33,330 And what time did the target fill. So you essentially got in at 10 o'clock in the morning, here on this candle. And hypothetically, you would have got out at
155 00:26:33,330 --> 00:26:46,200 around 8:45pm time in the market is 10 hours and 45 minutes, the drawdown was 3.2 pips, that means this highest candle right here went 3.2 pips away from
156 00:26:46,200 --> 00:26:56,820 where your entry was on this candle. That's why I'm teaching you to use a 10 PIP stop loss, because it gives you a forgiving range where you don't have to be so
157 00:26:56,820 --> 00:27:08,280 precise. And you're linking it to the old high. And if you start doing this for six months, you're going to have a backlog of historical data that is fleshed
158 00:27:08,280 --> 00:27:20,580 out in such a way where you can go back and see how these individual unique days are part of the weekly range. And then also how it is part of the monthly range.
159 00:27:20,760 --> 00:27:32,940 Like how does this particular day the 10th of may 21? How does it relate to the entire trading of the month of May? And how does it relate to the first quarters
160 00:27:32,940 --> 00:27:41,850 trading going into the second quarter of 2021? Where is it in relationship to all that. And the only way you're going to understand how these markets are
161 00:27:41,850 --> 00:27:51,450 fractal and how they fit together is by doing these types of exercises. And teaching yourself by repetition, what the pattern looks like, how to frame it
162 00:27:51,780 --> 00:28:01,440 over and over and over again, even though it's hindsight and you can't trade it.  It's teach, it's teaching you how to recognize it, and how to frame it. And
163 00:28:01,440 --> 00:28:08,880 you'll see that there are repeating phenomenon and characteristics to these specific, very simple approaches to trading that's taught for free on this
164 00:28:08,880 --> 00:28:21,060 YouTube channel that are consistent, they occur every single week. But all you need to find is one candle or high that's pierced. And if it breaks, and it has
165 00:28:21,060 --> 00:28:30,030 a shift in market structure, which is a short term low right before it creates the runner higher high, then you anticipate a optimal trade entry. The fact that
166 00:28:30,030 --> 00:28:38,190 it's hindsight you you're not going to have any fear of being stopped out because it's already happened. And that's perfect, because you can't lose, you
167 00:28:38,190 --> 00:28:48,750 can't make money, you're only focusing on identifying the structure and pattern.  And by knowing what that looks like, comprehensive approach to learning from
168 00:28:48,900 --> 00:28:58,530 back data, historical data, where nothing can influence you, from a greed standpoint or fear standpoint, you are taking all the psychological elements out
169 00:28:58,530 --> 00:29:06,720 of it, and you're taking the money out of it. And you're teaching pattern recognition. When you were in grade school, and you were learning the alphabet,
170 00:29:06,810 --> 00:29:14,820 was it going to make you any money or take any money out of your pocket, if you didn't know how to draw or write or recognize the third or fourth letter in the
171 00:29:14,820 --> 00:29:22,770 alphabet. Now, you were being conditioned to do what the same thing over and over again, you'd have a little ditto paper, okay, and they would give you an
172 00:29:22,770 --> 00:29:29,850 example of a capital A, and you'd have to fill the whole page out with a capital A over and over and over and over again. as boring as that was, your hand would
173 00:29:29,850 --> 00:29:36,390 hurt at the end of doing it. But you were expected to do that. And the next day, what letter would you be working on the letter B? And what are you doing each
174 00:29:36,390 --> 00:29:46,290 day pattern recognition? Was it profitable for you, not at the time, but now you can write letters, you can send text messages, it's useful information to you
175 00:29:46,290 --> 00:29:59,160 but you started that way. Pattern recognition. You have to strip trading down to that elementary state where you're not influenced by anything monetary or
176 00:29:59,160 --> 00:30:08,040 psychological. You're not elevating yourself up with ego, because you called something right? Or you're not deflated, because you got it wrong, because it's
177 00:30:08,040 --> 00:30:18,480 already happened. And you're conditioning your subconscious to see this pattern over and over and over again. And as you go through and annotate it not limited
178 00:30:18,480 --> 00:30:25,890 to this, you can put more details in there as much as you want. How much time did it take before it moved one and a half times your initial risk? How much
179 00:30:25,890 --> 00:30:33,300 time did it take before that would happen? And these are things that you would build up, and you're going to see these reoccurring characteristics are in the
180 00:30:33,300 --> 00:30:43,320 majority of the setups. And you're also going to relate to what day of the week these patterns are forming, and how that relates to the weekly range. Which days
181 00:30:43,470 --> 00:30:55,200 produce the best setups for shorts, which days produce the best Long's when it's bullish. And keeping that log going. You're the rest of your career, that's what
182 00:30:55,200 --> 00:31:01,050 you're going to do. You're going to be doing this the rest of your life charting and annotating charts. But in the beginning, you have no idea what you're
183 00:31:01,050 --> 00:31:10,980 looking at on the heart rate edge of that chart. So to eliminate all that fear and performance anxiety. Just don't worry about that. Teach Yourself pattern
184 00:31:10,980 --> 00:31:19,080 recognition. And using this as an approach to initially started, this is how I would do it. If I was 20 starting all over again, just using what's on this
185 00:31:19,080 --> 00:31:25,710 YouTube channel. This is exactly what I would do until I talk to you again in part three. E safe