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Version 2.1 by Drunk Monkey on 2020-11-20 16:22
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Drunk Monkey 2.1 1 1
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3 ICT: Welcome back, folks, this is part four of the
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7 continuing series of the ICT optimal trade entry pattern
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11 recognition series. All right, so now we're going to look at
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15 a forex pair, the British Pound versus the US dollar. And
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19 this is going to be an example of a trend less market where
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23 it's not really dependent upon a specific daily bias. And
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27 we're just using intraday volatility to find an optimal
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31 trade entry. But before I get into it, I want you to take a
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35 look at this chart. And I want you to think about what the
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39 neophyte or the new trader that's just being exposed to what
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43 I teach, or someone that thinks they've been around the
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47 block a few times and they think it's just something being
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51 renamed rehashed, reinvented to try to take credit from some
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55 guidance period and on long since been forgotten. Look at
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59 this chart. Now, classically, people will say, well, it's
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63 just support and resistance, and old highs and lows where
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67 the markets turned before. That's all you need to do look
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71 for those points. And when I first started, I read the same
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75 books these people do too. And I can tell you that if it was
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79 just that simple, everyone would be billionaires. Okay. It's
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83 not support resistance that leads to forex riches. I needed
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87 to find out what was really going on. And when I did, all
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91 these ideas of support resistance levels faded away. And I
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95 got to the real heart of what turns the market and why the
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99 market should react to a specific price levels. So now I
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103 want to kind of show you what it is. And it's something that
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107 you guys are familiar with. If you've been Looking at my
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111 content for any length of time, but let's go to another
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115 chart. Now I'm going to add the perspective that I teach my
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119 students. This is the market efficiency paradigm. Okay? And
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123 what is that? It's basically the narrative of why price
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127 goes, where it does and why it reacts the way it does once
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131 it gets there. And where is it reaching to next? Okay, so
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135 this particular candle here cuts to the whole narrative
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139 immediately. And the reason why is you want to look at price
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143 and look for areas where they run an old high because old
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147 highs right above that it's going to be by stops and so by
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151 side liquidity is by liquidity could be in the form of buy
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155 stops for new entries going long, or it could be by stops
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159 protecting existing shorts. The market ramps through that.
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163 And this action right here is what I teach is a Judas swing.
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167 And it's it's a fake move. It's the low people into thinking
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171 that the market is going to be bullish, it's going to go up.
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175 But generally, when we see these sharp moves that run
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179 previous highs, This to me is highly suspect. And if we get
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183 back below the lowest down close candle once it breaks that,
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187 which it does hear the narrative changes to bearish. So all
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191 I need to do, and my students do is we go to this candle
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195 here, draw it out in time, there's your turning point,
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199 that's your real support and resistance level. Because it's
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203 based on the market efficiency paradigm that is mine, you're
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207 not going to find that in books, you're not gonna see any of
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211 that anywhere outside of what I teach. And there's a lot of
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215 things that go along with this pattern to me, people go on
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219 YouTube now and talk about the ice breaker or they just
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223 remove the ICT and they call it something else. A banker's
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227 candle. You know, everybody's got a new twist on what I'm
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231 teaching, and they don't know what they're talking about.
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235 What I'm showing you here is the narrative behind finding
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239 it. optimal trade entry with this structure in place, it's a
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243 trend less market environment. It doesn't have to have a
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247 bullish or bearish bias when the daily chart so you go into
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251 lower timeframes, and this right in here is what we're going
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255 to zoom in on. Okay, so we're going to look at the lower
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259 timeframe five minute chart right here. Okay, but before we
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263 go into it, since we're on an hourly chart, I want to
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267 annotate the previous day's range. Okay, so we have this as
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271 the beginning of the 11th and the 12th, which is the day of
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275 this recording. And if this is going to be a breaker that's
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279 bearish, we're gonna be looking at previous day's low.
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283 That's where we're going to be targeting. So the liquidity
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287 that would burst below that, that's what we're really aiming
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291 for. So when it's dropped down to a five minute chart in
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295 this box here, and get a closer look as where the OT forms.
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299 Okay, so here's the five minute chart on the British Pound
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303 versus US dollar and five minute chart for May 12 2020. And
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307 here's trading up in to that area I outlined on the hourly
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311 chart where we can see that breaker price trades up into it.
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315 And this old high, returning to it here hits the same level.
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319 Again, it's the breaker. It's not the classic support
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323 resistance. It's not a supply zone. It's none of that stuff.
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327 Okay? It's the optimal trade entry.
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331 Okay, and
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335 we'll project this out in time.
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339 Okay, so we have high to the low returns back to optimal
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343 trade entry. Seven AMS retracement level lays right on top
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347 of that level here. Your stop will be above here. And market
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351 reads an old low here and the fib levels here, so you could
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355 use 123 big figures As your level not reaching for the fib
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359 and because the magic is not the fib but reaching below this
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363 low for the liquid that resides below here. Now this is the
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367 previous day's range okay to the 11th we also have more time
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371 here in our New York session to look for another trade if it
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375 forms has it taken out previous days Whoa, not here. It
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379 starts to retrace on this candle here. what time of day is
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383 that? 11 o'clock in the morning. That is still time to take
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387 another trade if it's still there if it's valid, alright.
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391 So, we can see the optimal trade entry here. low and high
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395 retrace back into the New York session and previous day or
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399 the 11th of Mays low we will be targeting that next stop
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403 will be above here your short would be in here at the 62%
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407 retracement level and again below the level of the previous
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411 day's range low at Was that 122 83 in one pet, and then the
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415 next fib level would be 122 and 65 and five pets. So we will
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419 be looking for this as a potential objective, but we can
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423 just simply use the 122 70 level, it will be below the 11th
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427 low and not demand the full fib. Now you can do that. But in
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431 this example, we're sticking to the rules, rounding down and
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435 being content. And the result of this is here. Market trades
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439 down to the standard deviation of one on the range. And we
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443 blow below the 11th love sweet bit here, work on it here and
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447 then expand down. So again, this is another example of the
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451 optimal trade entry and this is video number four in a
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455 continuing series of 20. And hope you found it insightful
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459 until next time, wish you good luck and good trading.