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1 -1
2 -00:00:11,010 ~-~-> 00:00:13,920
3 -ICT: Welcome back, folks, this is part four of the
4 -
5 -2
6 -00:00:13,920 ~-~-> 00:00:17,490
7 -continuing series of the ICT optimal trade entry pattern
8 -
9 -3
10 -00:00:17,490 ~-~-> 00:00:20,700
11 -recognition series. All right, so now we're going to look at
12 -
13 -4
14 -00:00:20,730 ~-~-> 00:00:25,020
15 -a forex pair, the British Pound versus the US dollar. And
16 -
17 -5
18 -00:00:25,020 ~-~-> 00:00:28,410
19 -this is going to be an example of a trend less market where
20 -
21 -6
22 -00:00:28,410 ~-~-> 00:00:33,360
23 -it's not really dependent upon a specific daily bias. And
24 -
25 -7
26 -00:00:33,360 ~-~-> 00:00:36,720
27 -we're just using intraday volatility to find an optimal
28 -
29 -8
30 -00:00:36,720 ~-~-> 00:00:39,180
31 -trade entry. But before I get into it, I want you to take a
32 -
33 -9
34 -00:00:39,180 ~-~-> 00:00:44,910
35 -look at this chart. And I want you to think about what the
36 -
37 -10
38 -00:00:44,940 ~-~-> 00:00:50,040
39 -neophyte or the new trader that's just being exposed to what
40 -
41 -11
42 -00:00:50,040 ~-~-> 00:00:52,920
43 -I teach, or someone that thinks they've been around the
44 -
45 -12
46 -00:00:52,920 ~-~-> 00:00:55,230
47 -block a few times and they think it's just something being
48 -
49 -13
50 -00:00:55,680 ~-~-> 00:01:00,000
51 -renamed rehashed, reinvented to try to take credit from some
52 -
53 -14
54 -00:01:00,000 ~-~-> 00:01:04,860
55 -guidance period and on long since been forgotten. Look at
56 -
57 -15
58 -00:01:04,860 ~-~-> 00:01:11,280
59 -this chart. Now, classically, people will say, well, it's
60 -
61 -16
62 -00:01:11,280 ~-~-> 00:01:14,820
63 -just support and resistance, and old highs and lows where
64 -
65 -17
66 -00:01:14,820 ~-~-> 00:01:17,850
67 -the markets turned before. That's all you need to do look
68 -
69 -18
70 -00:01:17,850 ~-~-> 00:01:22,170
71 -for those points. And when I first started, I read the same
72 -
73 -19
74 -00:01:22,170 ~-~-> 00:01:26,310
75 -books these people do too. And I can tell you that if it was
76 -
77 -20
78 -00:01:26,310 ~-~-> 00:01:32,820
79 -just that simple, everyone would be billionaires. Okay. It's
80 -
81 -21
82 -00:01:32,820 ~-~-> 00:01:39,330
83 -not support resistance that leads to forex riches. I needed
84 -
85 -22
86 -00:01:39,330 ~-~-> 00:01:44,160
87 -to find out what was really going on. And when I did, all
88 -
89 -23
90 -00:01:44,160 ~-~-> 00:01:48,180
91 -these ideas of support resistance levels faded away. And I
92 -
93 -24
94 -00:01:48,180 ~-~-> 00:01:52,320
95 -got to the real heart of what turns the market and why the
96 -
97 -25
98 -00:01:52,320 ~-~-> 00:01:54,990
99 -market should react to a specific price levels. So now I
100 -
101 -26
102 -00:01:54,990 ~-~-> 00:01:58,830
103 -want to kind of show you what it is. And it's something that
104 -
105 -27
106 -00:01:58,830 ~-~-> 00:02:00,510
107 -you guys are familiar with. If you've been Looking at my
108 -
109 -28
110 -00:02:00,510 ~-~-> 00:02:03,960
111 -content for any length of time, but let's go to another
112 -
113 -29
114 -00:02:04,020 ~-~-> 00:02:07,350
115 -chart. Now I'm going to add the perspective that I teach my
116 -
117 -30
118 -00:02:07,350 ~-~-> 00:02:12,870
119 -students. This is the market efficiency paradigm. Okay? And
120 -
121 -31
122 -00:02:12,870 ~-~-> 00:02:17,610
123 -what is that? It's basically the narrative of why price
124 -
125 -32
126 -00:02:17,610 ~-~-> 00:02:21,180
127 -goes, where it does and why it reacts the way it does once
128 -
129 -33
130 -00:02:21,180 ~-~-> 00:02:25,110
131 -it gets there. And where is it reaching to next? Okay, so
132 -
133 -34
134 -00:02:26,010 ~-~-> 00:02:30,510
135 -this particular candle here cuts to the whole narrative
136 -
137 -35
138 -00:02:30,510 ~-~-> 00:02:33,300
139 -immediately. And the reason why is you want to look at price
140 -
141 -36
142 -00:02:34,200 ~-~-> 00:02:37,440
143 -and look for areas where they run an old high because old
144 -
145 -37
146 -00:02:37,440 ~-~-> 00:02:39,840
147 -highs right above that it's going to be by stops and so by
148 -
149 -38
150 -00:02:39,840 ~-~-> 00:02:42,810
151 -side liquidity is by liquidity could be in the form of buy
152 -
153 -39
154 -00:02:42,810 ~-~-> 00:02:46,020
155 -stops for new entries going long, or it could be by stops
156 -
157 -40
158 -00:02:46,230 ~-~-> 00:02:50,880
159 -protecting existing shorts. The market ramps through that.
160 -
161 -41
162 -00:02:51,630 ~-~-> 00:02:55,710
163 -And this action right here is what I teach is a Judas swing.
164 -
165 -42
166 -00:02:55,860 ~-~-> 00:02:59,580
167 -And it's it's a fake move. It's the low people into thinking
168 -
169 -43
170 -00:02:59,580 ~-~-> 00:03:01,500
171 -that the market is going to be bullish, it's going to go up.
172 -
173 -44
174 -00:03:02,010 ~-~-> 00:03:05,010
175 -But generally, when we see these sharp moves that run
176 -
177 -45
178 -00:03:05,010 ~-~-> 00:03:11,250
179 -previous highs, This to me is highly suspect. And if we get
180 -
181 -46
182 -00:03:11,250 ~-~-> 00:03:17,520
183 -back below the lowest down close candle once it breaks that,
184 -
185 -47
186 -00:03:17,820 ~-~-> 00:03:22,230
187 -which it does hear the narrative changes to bearish. So all
188 -
189 -48
190 -00:03:22,230 ~-~-> 00:03:25,170
191 -I need to do, and my students do is we go to this candle
192 -
193 -49
194 -00:03:25,170 ~-~-> 00:03:28,650
195 -here, draw it out in time, there's your turning point,
196 -
197 -50
198 -00:03:28,680 ~-~-> 00:03:31,440
199 -that's your real support and resistance level. Because it's
200 -
201 -51
202 -00:03:31,440 ~-~-> 00:03:34,920
203 -based on the market efficiency paradigm that is mine, you're
204 -
205 -52
206 -00:03:34,950 ~-~-> 00:03:37,110
207 -not going to find that in books, you're not gonna see any of
208 -
209 -53
210 -00:03:37,110 ~-~-> 00:03:40,710
211 -that anywhere outside of what I teach. And there's a lot of
212 -
213 -54
214 -00:03:40,710 ~-~-> 00:03:43,170
215 -things that go along with this pattern to me, people go on
216 -
217 -55
218 -00:03:43,170 ~-~-> 00:03:45,660
219 -YouTube now and talk about the ice breaker or they just
220 -
221 -56
222 -00:03:45,660 ~-~-> 00:03:49,260
223 -remove the ICT and they call it something else. A banker's
224 -
225 -57
226 -00:03:49,260 ~-~-> 00:03:51,930
227 -candle. You know, everybody's got a new twist on what I'm
228 -
229 -58
230 -00:03:51,930 ~-~-> 00:03:55,350
231 -teaching, and they don't know what they're talking about.
232 -
233 -59
234 -00:03:55,470 ~-~-> 00:03:59,160
235 -What I'm showing you here is the narrative behind finding
236 -
237 -60
238 -00:03:59,790 ~-~-> 00:04:03,390
239 -it. optimal trade entry with this structure in place, it's a
240 -
241 -61
242 -00:04:03,390 ~-~-> 00:04:06,150
243 -trend less market environment. It doesn't have to have a
244 -
245 -62
246 -00:04:06,150 ~-~-> 00:04:08,880
247 -bullish or bearish bias when the daily chart so you go into
248 -
249 -63
250 -00:04:08,880 ~-~-> 00:04:12,150
251 -lower timeframes, and this right in here is what we're going
252 -
253 -64
254 -00:04:12,150 ~-~-> 00:04:14,340
255 -to zoom in on. Okay, so we're going to look at the lower
256 -
257 -65
258 -00:04:14,340 ~-~-> 00:04:17,580
259 -timeframe five minute chart right here. Okay, but before we
260 -
261 -66
262 -00:04:17,580 ~-~-> 00:04:19,860
263 -go into it, since we're on an hourly chart, I want to
264 -
265 -67
266 -00:04:19,860 ~-~-> 00:04:27,870
267 -annotate the previous day's range. Okay, so we have this as
268 -
269 -68
270 -00:04:27,870 ~-~-> 00:04:30,540
271 -the beginning of the 11th and the 12th, which is the day of
272 -
273 -69
274 -00:04:30,540 ~-~-> 00:04:34,650
275 -this recording. And if this is going to be a breaker that's
276 -
277 -70
278 -00:04:34,650 ~-~-> 00:04:37,590
279 -bearish, we're gonna be looking at previous day's low.
280 -
281 -71
282 -00:04:38,340 ~-~-> 00:04:42,150
283 -That's where we're going to be targeting. So the liquidity
284 -
285 -72
286 -00:04:42,150 ~-~-> 00:04:44,580
287 -that would burst below that, that's what we're really aiming
288 -
289 -73
290 -00:04:44,580 ~-~-> 00:04:46,590
291 -for. So when it's dropped down to a five minute chart in
292 -
293 -74
294 -00:04:46,590 ~-~-> 00:04:50,610
295 -this box here, and get a closer look as where the OT forms.
296 -
297 -75
298 -00:04:51,720 ~-~-> 00:04:54,120
299 -Okay, so here's the five minute chart on the British Pound
300 -
301 -76
302 -00:04:54,300 ~-~-> 00:04:59,070
303 -versus US dollar and five minute chart for May 12 2020. And
304 -
305 -77
306 -00:04:59,070 ~-~-> 00:05:02,040
307 -here's trading up in to that area I outlined on the hourly
308 -
309 -78
310 -00:05:02,040 ~-~-> 00:05:05,910
311 -chart where we can see that breaker price trades up into it.
312 -
313 -79
314 -00:05:06,360 ~-~-> 00:05:10,350
315 -And this old high, returning to it here hits the same level.
316 -
317 -80
318 -00:05:10,590 ~-~-> 00:05:14,010
319 -Again, it's the breaker. It's not the classic support
320 -
321 -81
322 -00:05:14,010 ~-~-> 00:05:19,920
323 -resistance. It's not a supply zone. It's none of that stuff.
324 -
325 -82
326 -00:05:19,950 ~-~-> 00:05:23,520
327 -Okay? It's the optimal trade entry.
328 -
329 -83
330 -00:05:28,020 ~-~-> 00:05:29,340
331 -Okay, and
332 -
333 -84
334 -00:05:30,630 ~-~-> 00:05:32,250
335 -we'll project this out in time.
336 -
337 -85
338 -00:05:38,340 ~-~-> 00:05:42,960
339 -Okay, so we have high to the low returns back to optimal
340 -
341 -86
342 -00:05:42,960 ~-~-> 00:05:46,020
343 -trade entry. Seven AMS retracement level lays right on top
344 -
345 -87
346 -00:05:46,020 ~-~-> 00:05:49,800
347 -of that level here. Your stop will be above here. And market
348 -
349 -88
350 -00:05:49,800 ~-~-> 00:05:57,360
351 -reads an old low here and the fib levels here, so you could
352 -
353 -89
354 -00:05:57,390 ~-~-> 00:06:03,150
355 -use 123 big figures As your level not reaching for the fib
356 -
357 -90
358 -00:06:03,150 ~-~-> 00:06:06,390
359 -and because the magic is not the fib but reaching below this
360 -
361 -91
362 -00:06:06,390 ~-~-> 00:06:09,690
363 -low for the liquid that resides below here. Now this is the
364 -
365 -92
366 -00:06:09,690 ~-~-> 00:06:15,300
367 -previous day's range okay to the 11th we also have more time
368 -
369 -93
370 -00:06:16,350 ~-~-> 00:06:19,500
371 -here in our New York session to look for another trade if it
372 -
373 -94
374 -00:06:19,500 ~-~-> 00:06:25,140
375 -forms has it taken out previous days Whoa, not here. It
376 -
377 -95
378 -00:06:25,140 ~-~-> 00:06:27,360
379 -starts to retrace on this candle here. what time of day is
380 -
381 -96
382 -00:06:27,360 ~-~-> 00:06:31,260
383 -that? 11 o'clock in the morning. That is still time to take
384 -
385 -97
386 -00:06:31,260 ~-~-> 00:06:34,260
387 -another trade if it's still there if it's valid, alright.
388 -
389 -98
390 -00:06:34,260 ~-~-> 00:06:39,810
391 -So, we can see the optimal trade entry here. low and high
392 -
393 -99
394 -00:06:39,900 ~-~-> 00:06:45,240
395 -retrace back into the New York session and previous day or
396 -
397 -100
398 -00:06:45,240 ~-~-> 00:06:49,470
399 -the 11th of Mays low we will be targeting that next stop
400 -
401 -101
402 -00:06:49,470 ~-~-> 00:06:52,230
403 -will be above here your short would be in here at the 62%
404 -
405 -102
406 -00:06:52,230 ~-~-> 00:06:56,760
407 -retracement level and again below the level of the previous
408 -
409 -103
410 -00:06:56,760 ~-~-> 00:07:04,440
411 -day's range low at Was that 122 83 in one pet, and then the
412 -
413 -104
414 -00:07:04,440 ~-~-> 00:07:10,470
415 -next fib level would be 122 and 65 and five pets. So we will
416 -
417 -105
418 -00:07:10,470 ~-~-> 00:07:13,500
419 -be looking for this as a potential objective, but we can
420 -
421 -106
422 -00:07:13,500 ~-~-> 00:07:18,090
423 -just simply use the 122 70 level, it will be below the 11th
424 -
425 -107
426 -00:07:18,570 ~-~-> 00:07:24,390
427 -low and not demand the full fib. Now you can do that. But in
428 -
429 -108
430 -00:07:24,390 ~-~-> 00:07:27,450
431 -this example, we're sticking to the rules, rounding down and
432 -
433 -109
434 -00:07:27,450 ~-~-> 00:07:36,030
435 -being content. And the result of this is here. Market trades
436 -
437 -110
438 -00:07:36,030 ~-~-> 00:07:43,110
439 -down to the standard deviation of one on the range. And we
440 -
441 -111
442 -00:07:43,110 ~-~-> 00:07:47,670
443 -blow below the 11th love sweet bit here, work on it here and
444 -
445 -112
446 -00:07:47,670 ~-~-> 00:07:51,810
447 -then expand down. So again, this is another example of the
448 -
449 -113
450 -00:07:51,810 ~-~-> 00:07:55,350
451 -optimal trade entry and this is video number four in a
452 -
453 -114
454 -00:07:55,350 ~-~-> 00:07:57,900
455 -continuing series of 20. And hope you found it insightful
456 -
457 -115
458 -00:07:57,900 ~-~-> 00:07:59,790
459 -until next time, wish you good luck and good trading.