OTE Pattern Recognition Series - Vol 04.srt

1
00:00:11,010 --> 00:00:13,920
ICT: Welcome back, folks, this is part four of the

2
00:00:13,920 --> 00:00:17,490
continuing series of the ICT optimal trade entry pattern

3
00:00:17,490 --> 00:00:20,700
recognition series. All right, so now we're going to look at

4
00:00:20,730 --> 00:00:25,020
a forex pair, the British Pound versus the US dollar. And

5
00:00:25,020 --> 00:00:28,410
this is going to be an example of a trend less market where

6
00:00:28,410 --> 00:00:33,360
it's not really dependent upon a specific daily bias. And

7
00:00:33,360 --> 00:00:36,720
we're just using intraday volatility to find an optimal

8
00:00:36,720 --> 00:00:39,180
trade entry. But before I get into it, I want you to take a

9
00:00:39,180 --> 00:00:44,910
look at this chart. And I want you to think about what the

10
00:00:44,940 --> 00:00:50,040
neophyte or the new trader that's just being exposed to what

11
00:00:50,040 --> 00:00:52,920
I teach, or someone that thinks they've been around the

12
00:00:52,920 --> 00:00:55,230
block a few times and they think it's just something being

13
00:00:55,680 --> 00:01:00,000
renamed rehashed, reinvented to try to take credit from some

14
00:01:00,000 --> 00:01:04,860
guidance period and on long since been forgotten. Look at

15
00:01:04,860 --> 00:01:11,280
this chart. Now, classically, people will say, well, it's

16
00:01:11,280 --> 00:01:14,820
just support and resistance, and old highs and lows where

17
00:01:14,820 --> 00:01:17,850
the markets turned before. That's all you need to do look

18
00:01:17,850 --> 00:01:22,170
for those points. And when I first started, I read the same

19
00:01:22,170 --> 00:01:26,310
books these people do too. And I can tell you that if it was

20
00:01:26,310 --> 00:01:32,820
just that simple, everyone would be billionaires. Okay. It's

21
00:01:32,820 --> 00:01:39,330
not support resistance that leads to forex riches. I needed

22
00:01:39,330 --> 00:01:44,160
to find out what was really going on. And when I did, all

23
00:01:44,160 --> 00:01:48,180
these ideas of support resistance levels faded away. And I

24
00:01:48,180 --> 00:01:52,320
got to the real heart of what turns the market and why the

25
00:01:52,320 --> 00:01:54,990
market should react to a specific price levels. So now I

26
00:01:54,990 --> 00:01:58,830
want to kind of show you what it is. And it's something that

27
00:01:58,830 --> 00:02:00,510
you guys are familiar with. If you've been Looking at my

28
00:02:00,510 --> 00:02:03,960
content for any length of time, but let's go to another

29
00:02:04,020 --> 00:02:07,350
chart. Now I'm going to add the perspective that I teach my

30
00:02:07,350 --> 00:02:12,870
students. This is the market efficiency paradigm. Okay? And

31
00:02:12,870 --> 00:02:17,610
what is that? It's basically the narrative of why price

32
00:02:17,610 --> 00:02:21,180
goes, where it does and why it reacts the way it does once

33
00:02:21,180 --> 00:02:25,110
it gets there. And where is it reaching to next? Okay, so

34
00:02:26,010 --> 00:02:30,510
this particular candle here cuts to the whole narrative

35
00:02:30,510 --> 00:02:33,300
immediately. And the reason why is you want to look at price

36
00:02:34,200 --> 00:02:37,440
and look for areas where they run an old high because old

37
00:02:37,440 --> 00:02:39,840
highs right above that it's going to be by stops and so by

38
00:02:39,840 --> 00:02:42,810
side liquidity is by liquidity could be in the form of buy

39
00:02:42,810 --> 00:02:46,020
stops for new entries going long, or it could be by stops

40
00:02:46,230 --> 00:02:50,880
protecting existing shorts. The market ramps through that.

41
00:02:51,630 --> 00:02:55,710
And this action right here is what I teach is a Judas swing.

42
00:02:55,860 --> 00:02:59,580
And it's it's a fake move. It's the low people into thinking

43
00:02:59,580 --> 00:03:01,500
that the market is going to be bullish, it's going to go up.

44
00:03:02,010 --> 00:03:05,010
But generally, when we see these sharp moves that run

45
00:03:05,010 --> 00:03:11,250
previous highs, This to me is highly suspect. And if we get

46
00:03:11,250 --> 00:03:17,520
back below the lowest down close candle once it breaks that,

47
00:03:17,820 --> 00:03:22,230
which it does hear the narrative changes to bearish. So all

48
00:03:22,230 --> 00:03:25,170
I need to do, and my students do is we go to this candle

49
00:03:25,170 --> 00:03:28,650
here, draw it out in time, there's your turning point,

50
00:03:28,680 --> 00:03:31,440
that's your real support and resistance level. Because it's

51
00:03:31,440 --> 00:03:34,920
based on the market efficiency paradigm that is mine, you're

52
00:03:34,950 --> 00:03:37,110
not going to find that in books, you're not gonna see any of

53
00:03:37,110 --> 00:03:40,710
that anywhere outside of what I teach. And there's a lot of

54
00:03:40,710 --> 00:03:43,170
things that go along with this pattern to me, people go on

55
00:03:43,170 --> 00:03:45,660
YouTube now and talk about the ice breaker or they just

56
00:03:45,660 --> 00:03:49,260
remove the ICT and they call it something else. A banker's

57
00:03:49,260 --> 00:03:51,930
candle. You know, everybody's got a new twist on what I'm

58
00:03:51,930 --> 00:03:55,350
teaching, and they don't know what they're talking about.

59
00:03:55,470 --> 00:03:59,160
What I'm showing you here is the narrative behind finding

60
00:03:59,790 --> 00:04:03,390
it. optimal trade entry with this structure in place, it's a

61
00:04:03,390 --> 00:04:06,150
trend less market environment. It doesn't have to have a

62
00:04:06,150 --> 00:04:08,880
bullish or bearish bias when the daily chart so you go into

63
00:04:08,880 --> 00:04:12,150
lower timeframes, and this right in here is what we're going

64
00:04:12,150 --> 00:04:14,340
to zoom in on. Okay, so we're going to look at the lower

65
00:04:14,340 --> 00:04:17,580
timeframe five minute chart right here. Okay, but before we

66
00:04:17,580 --> 00:04:19,860
go into it, since we're on an hourly chart, I want to

67
00:04:19,860 --> 00:04:27,870
annotate the previous day's range. Okay, so we have this as

68
00:04:27,870 --> 00:04:30,540
the beginning of the 11th and the 12th, which is the day of

69
00:04:30,540 --> 00:04:34,650
this recording. And if this is going to be a breaker that's

70
00:04:34,650 --> 00:04:37,590
bearish, we're gonna be looking at previous day's low.

71
00:04:38,340 --> 00:04:42,150
That's where we're going to be targeting. So the liquidity

72
00:04:42,150 --> 00:04:44,580
that would burst below that, that's what we're really aiming

73
00:04:44,580 --> 00:04:46,590
for. So when it's dropped down to a five minute chart in

74
00:04:46,590 --> 00:04:50,610
this box here, and get a closer look as where the OT forms.

75
00:04:51,720 --> 00:04:54,120
Okay, so here's the five minute chart on the British Pound

76
00:04:54,300 --> 00:04:59,070
versus US dollar and five minute chart for May 12 2020. And

77
00:04:59,070 --> 00:05:02,040
here's trading up in to that area I outlined on the hourly

78
00:05:02,040 --> 00:05:05,910
chart where we can see that breaker price trades up into it.

79
00:05:06,360 --> 00:05:10,350
And this old high, returning to it here hits the same level.

80
00:05:10,590 --> 00:05:14,010
Again, it's the breaker. It's not the classic support

81
00:05:14,010 --> 00:05:19,920
resistance. It's not a supply zone. It's none of that stuff.

82
00:05:19,950 --> 00:05:23,520
Okay? It's the optimal trade entry.

83
00:05:28,020 --> 00:05:29,340
Okay, and

84
00:05:30,630 --> 00:05:32,250
we'll project this out in time.

85
00:05:38,340 --> 00:05:42,960
Okay, so we have high to the low returns back to optimal

86
00:05:42,960 --> 00:05:46,020
trade entry. Seven AMS retracement level lays right on top

87
00:05:46,020 --> 00:05:49,800
of that level here. Your stop will be above here. And market

88
00:05:49,800 --> 00:05:57,360
reads an old low here and the fib levels here, so you could

89
00:05:57,390 --> 00:06:03,150
use 123 big figures As your level not reaching for the fib

90
00:06:03,150 --> 00:06:06,390
and because the magic is not the fib but reaching below this

91
00:06:06,390 --> 00:06:09,690
low for the liquid that resides below here. Now this is the

92
00:06:09,690 --> 00:06:15,300
previous day's range okay to the 11th we also have more time

93
00:06:16,350 --> 00:06:19,500
here in our New York session to look for another trade if it

94
00:06:19,500 --> 00:06:25,140
forms has it taken out previous days Whoa, not here. It

95
00:06:25,140 --> 00:06:27,360
starts to retrace on this candle here. what time of day is

96
00:06:27,360 --> 00:06:31,260
that? 11 o'clock in the morning. That is still time to take

97
00:06:31,260 --> 00:06:34,260
another trade if it's still there if it's valid, alright.

98
00:06:34,260 --> 00:06:39,810
So, we can see the optimal trade entry here. low and high

99
00:06:39,900 --> 00:06:45,240
retrace back into the New York session and previous day or

100
00:06:45,240 --> 00:06:49,470
the 11th of Mays low we will be targeting that next stop

101
00:06:49,470 --> 00:06:52,230
will be above here your short would be in here at the 62%

102
00:06:52,230 --> 00:06:56,760
retracement level and again below the level of the previous

103
00:06:56,760 --> 00:07:04,440
day's range low at Was that 122 83 in one pet, and then the

104
00:07:04,440 --> 00:07:10,470
next fib level would be 122 and 65 and five pets. So we will

105
00:07:10,470 --> 00:07:13,500
be looking for this as a potential objective, but we can

106
00:07:13,500 --> 00:07:18,090
just simply use the 122 70 level, it will be below the 11th

107
00:07:18,570 --> 00:07:24,390
low and not demand the full fib. Now you can do that. But in

108
00:07:24,390 --> 00:07:27,450
this example, we're sticking to the rules, rounding down and

109
00:07:27,450 --> 00:07:36,030
being content. And the result of this is here. Market trades

110
00:07:36,030 --> 00:07:43,110
down to the standard deviation of one on the range. And we

111
00:07:43,110 --> 00:07:47,670
blow below the 11th love sweet bit here, work on it here and

112
00:07:47,670 --> 00:07:51,810
then expand down. So again, this is another example of the

113
00:07:51,810 --> 00:07:55,350
optimal trade entry and this is video number four in a

114
00:07:55,350 --> 00:07:57,900
continuing series of 20. And hope you found it insightful

115
00:07:57,900 --> 00:07:59,790
until next time, wish you good luck and good trading.