OTE Pattern Recognition Series - Vol 04.srt

Last modified by Drunk Monkey on 2021-06-10 10:04
1 00:00:10,980 --> 00:00:20,370 ICT: Welcome back, folks, this is part four of the continuing series of the ICT optimal trade entry pattern recognition series. Alright, so now we're gonna look
2 00:00:20,400 --> 00:00:31,110 at a forex pair, the British Pound versus the US dollar. And this is going to be an example of a trendless market where it's not really dependent upon a specific
3 00:00:31,470 --> 00:00:41,490 daily bias. And we're just using intraday volatility, to find that optimal trade entry. But before I get into it, I want you to take a look at this chart. And I
4 00:00:41,490 --> 00:00:53,220 want you to think about what the neophyte or the new trader, that's just being exposed to what I teach, or someone that thinks they've been around the block a
5 00:00:53,220 --> 00:01:02,580 few times, and they think it's just something being renamed rehashed reinvented, to try to take credit from some old guy that's buried in a long since been
6 00:01:02,580 --> 00:01:15,600 forgotten. Look at this chart. Now, classically, people will say, well, it's just support and resistance, and old highs and old lows where the markets turn
7 00:01:15,600 --> 00:01:26,070 before. That's all you need to do look for those points. And when I first started, I read the same books, these people do, too. And I can tell you that if
8 00:01:26,070 --> 00:01:40,410 it was just that simple, everyone would be billionaires. Okay. It's not support and resistance that leads to forex riches, I needed to find out what was really
9 00:01:40,410 --> 00:01:52,620 going on. And when I did, all these ideas of support, resistance levels faded away. And I got to the real heart of what turns the market, and why the market
10 00:01:52,620 --> 00:02:00,510 should react at specific price levels. So now I want to show you what it is. And it's something that you guys are familiar with, if you've been looking at my
11 00:02:00,510 --> 00:02:11,550 content for any length of time. But let's go to another chart. Now I'm going to add the perspective that I teach my students. This is the market efficiency
12 00:02:11,550 --> 00:02:22,530 paradigm. Okay. And what is that? It's basically the narrative of why price goes, where it does, and why it reacts the way it does once it gets there. And
13 00:02:22,530 --> 00:02:33,300 where is it reaching to next? Okay, so this particular candle here cuts to the whole narrative immediately. And the reason why is you want to look at price.
14 00:02:34,200 --> 00:02:41,850 And look for areas where they run an old high, because old highs right above that, it's going to be by stops. And so by side liquidity is, by sell liquidity
15 00:02:41,850 --> 00:02:52,830 could be in the form of buy stops for new entries going long, or it could be by stops protecting existing shorts. The market ramps through that. And this action
16 00:02:52,830 --> 00:03:00,780 right here is what I teach as a Judas swing and onwards, it's a fake move. It's the low people in the thinking that the market is going to be bullish, it's
17 00:03:00,780 --> 00:03:13,320 going to go up. But generally, when we see these sharp moves that run previous highs, This to me is highly suspect. And if we get back below, the lowest down
18 00:03:13,320 --> 00:03:25,170 close candle, once it breaks that, which it does hear the narrative changes to bearish. So all I need to do, and my students do as we go through this candle
19 00:03:25,170 --> 00:03:34,290 here, draw it out in time, there's your turning point, that's your real support and resistance level, because it's based on the market efficiency paradigm that
20 00:03:34,290 --> 00:03:41,880 is mine, you're not gonna find that in books, you're not gonna see any of that anywhere outside of what I teach. And there's a lot of things that go along with
21 00:03:41,880 --> 00:03:49,950 this pattern to me, people go on YouTube now and talk about the ICT breaker or they just remove the ICT and they call it something else, a banker's candle, you
22 00:03:49,950 --> 00:03:59,160 know, everybody's got a new twist on what I'm teaching, and they don't know what they're talking about. What I'm showing you here is the narrative behind finding
23 00:03:59,790 --> 00:04:07,710 in optimal trade entry with this structure in place. It's a trendless market environment, it doesn't have to have a bullish or bearish bias on the daily
24 00:04:07,710 --> 00:04:15,030 chart. So you go into lower timeframes, and this right in here is what we're going to zoom in on. Okay, so we're gonna look at the lower timeframe, five
25 00:04:15,030 --> 00:04:26,730 minute chart right here. Okay, but before we go into it, since we're on the hourly chart, I want to annotate the previous day's range. Okay, so we have this
26 00:04:27,690 --> 00:04:36,300 is the beginning of the 11th and the 12th, which is the date of this recording.  And if this is going to be a breaker that's bearish, we're gonna be looking at
27 00:04:36,300 --> 00:04:45,450 previous day's low. That's where we're gonna be targeting. So the liquidity that would burst below that, that's what we're really aiming for. So when it's
28 00:04:45,450 --> 00:04:54,120 dropped down to a five minute chart in this box here, and get a closer look as where the IoT forums. Okay, so here's the five minute chart on the British Pound
29 00:04:54,300 --> 00:05:04,770 versus US dollar and five minute chart for May 12 2020. And here's trading up in to that area I outlined on the hourly chart where we can see that breaker price
30 00:05:04,770 --> 00:05:05,880 trades up into it.
31 00:05:06,360 --> 00:05:19,140 And this old high returned to it here it hits the same level. Again, it's the breaker. It's not the classic support resistance, it's not supply zone. It's
32 00:05:19,140 --> 00:05:32,250 none of that stuff. Okay? It's the optimal trade entry. Okay, and projected out in time.
33 00:05:38,339 --> 00:05:47,729 Okay, so we have high to the low returns back to optimal trade entry. Seven retracement level lays right on top of that level here, your stop will be above
34 00:05:47,729 --> 00:06:04,229 here, and market raids, and old low here. And the fib levels here. So you could use 123 big figure as your level not reaching for the fib. Because the magic is
35 00:06:04,229 --> 00:06:15,299 not the fib but reaching below this low for the liquid that resides below here.  Now, this is the previous day's range. Okay to the 11th. We also have more time
36 00:06:16,349 --> 00:06:26,789 here in our New York session to look for another trade if it forms has it taken out previous days Whoa, not here, it starts to retrace on this candle here. what
37 00:06:26,789 --> 00:06:35,249 time of day is that? 11 o'clock in the morning, that is still time to take another trade if it's still there if it's valid, alright, so we can see the
38 00:06:35,249 --> 00:06:49,499 optimal trade entry here. low and high retreats back into the New York session and previous day or the 11th of Mays low, we will be targeting that next stop
39 00:06:49,499 --> 00:07:02,759 would be above here your short would be in here at the 60% retracement level.  And again below the level of the previous day's range low at was at 122 83. And
40 00:07:02,759 --> 00:07:13,919 one bit bet. And then the next fib level would be 122 and 65 and five pipettes.  So we will be looking for this as a potential objective. But we can just simply
41 00:07:13,919 --> 00:07:27,029 use the 122 70 level, it will be below the 11th low and not demand the full fib and you can do that. But in this example, we're sticking to the rules, rounding
42 00:07:27,029 --> 00:07:45,659 down and being content. And the result of this is here. Mica trades down to the standard deviation of one on the range. And we blow below the 11th love you
43 00:07:45,659 --> 00:07:55,349 sweep it here work on it here and then expand down. So again, this is another example of the optimal trade entry and this is video number four and a
44 00:07:55,349 --> 00:07:59,819 continuing series of 20 and I hope you found it insightful until next time, wish good luck and good trading