OTE Pattern Recognition Series - Vol 06.srt
Last modified by Drunk Monkey on 2021-06-10 10:05
| 1 | 00:00:11,040 --> 00:00:19,350 | ICT: Okay, folks, this is the volume number six in a continuing series of 20 | videos from the inner circle traders, optimal trade entry pattern recognition |
| 2 | 00:00:19,350 --> 00:00:29,010 | series. Yes, that's a mouthful. So looking at the daily chart of crude oil, we're gonna take a step outside of forex again and look at a commodity market. | |
| 3 | 00:00:29,040 --> 00:00:39,600 | This is a widely traded asset. And if you look at what we have here on the daily chart, I want to pose a question to you. And I want you to think about what | |
| 4 | 00:00:39,600 --> 00:00:54,390 | would be the most likely directional run above this candles high or below this candles low based on what you see here. This pattern here is pretty popular in | |
| 5 | 00:00:54,390 --> 00:01:04,350 | the retail universe, they like to see these doji candles, okay, or PIN bars. And they naturally assume that that's going to create a top in the marketplace and | |
| 6 | 00:01:04,350 --> 00:01:15,690 | then it should go lower. I love trading against this pattern here. So one of the things if you are a collector of of ICT, bullet point wisdom, if you look at the | |
| 7 | 00:01:15,690 --> 00:01:26,520 | dojis. Okay, or PIN bars, I like to see those purged, I like to see them run above that. And if you look at what has happened so far, I mean, we've been | |
| 8 | 00:01:26,520 --> 00:01:37,590 | running up correcting since it crashed in terms of the oil market. And if you look at this candle, which is yesterday's daily range, is it more likely to | |
| 9 | 00:01:37,590 --> 00:01:49,530 | break below and trade lower or trade higher? My argument would be it would likely run this candles high, not just this candles high. But this candle tie. | |
| 10 | 00:01:49,680 --> 00:01:59,790 | Because there's a lot of sentiment built into the crude oil market based on this pseudo pinbar or doji or whatever they want to classify Steve Nielsen's | |
| 11 | 00:02:00,060 --> 00:02:10,530 | patterns, I'm not here to try to kick dirt in his face, but there just simply isn't enough to warrant a financial decision based on some willy nilly pattern | |
| 12 | 00:02:10,980 --> 00:02:19,710 | in a candlestick formation. Okay, so there has to be online narrative and the narrative is everyone's bearish crude oil right now. So any retail idea that | |
| 13 | 00:02:19,710 --> 00:02:29,130 | would paint the sentiment as bearish or maybe it's likely to go lower, they're just going to move on that. So it's not just limited to running this candles | |
| 14 | 00:02:29,130 --> 00:02:42,060 | high. And high comes in at 26 point 45. So that's a near term objective. But we really be interested in seeing the high on this candle here at 2674. Okay, so | |
| 15 | 00:02:42,060 --> 00:02:51,270 | 2674 very, very likely scenario to make a run to that now doesn't mean the very next day or the 14th, which is the time of this recording, that we would run | |
| 16 | 00:02:51,270 --> 00:03:00,780 | through this high, it would just be a drop in liquidity, okay. And onwards, a means of determining bias. Okay, I get a lot of questions from people that are | |
| 17 | 00:03:00,780 --> 00:03:10,020 | in my mentorship just starting out, or outside of mentorship, they always ask me in the email, can you teach me how to determine the bias because if I could | |
| 18 | 00:03:10,020 --> 00:03:20,400 | learn how to do the bias, I could trade profitably. And I would argue that's probably not true. Because you have placed so much emphasis on whether or not | |
| 19 | 00:03:20,400 --> 00:03:29,640 | you can be right or wrong on a daily bias, the assumption will be led to you trying to day trade every single day. And while you may be profitable, few times | |
| 20 | 00:03:29,640 --> 00:03:38,880 | a week, there's few times if you aren't, you'll go into revenge mode. And you'll just parlay your losses into larger losses. Alright, here is our five minute | |
| 21 | 00:03:38,880 --> 00:03:50,730 | chart on accrual June delivery contract for 2020. And we're gonna put a little bit of lipstick on this. And we have the previous day's high here, the daily | |
| 22 | 00:03:50,730 --> 00:03:59,700 | delineations. So this is the 14th day of this recording. You can see that we did run previous day's high here, but it was done in a very shallow capacity. So | |
| 23 | 00:03:59,700 --> 00:04:08,160 | we're likely to see if we get a retracement down into New York session which you can start to see the beginning of the annotation of my chart here. I do want to | |
| 24 | 00:04:08,160 --> 00:04:37,050 | put on the 2674 level. And we'll just make that a black level just to delineate what I'm referring to. Alright, so again, back on this chart here, this pin bar | |
| 25 | 00:04:37,050 --> 00:04:54,360 | if you want to call it that retail idea is 2674 for the high and that's the level I have here 2674 we trade up into 2675. So we've got one point into that | |
| 26 | 00:04:55,050 --> 00:04:56,430 | and then we rejected that | |
| 27 | 00:04:58,440 --> 00:05:08,460 | liquidity would rest about here. And likely run a deeper run above the previous day's high. So that's what we're looking for. But the black line is specifically | |
| 28 | 00:05:08,460 --> 00:05:21,600 | related to that daily pin bar or doji candle that would be deemed bearish from a retail level trader. Alright, and let's take our fib and add it to the New York | |
| 29 | 00:05:21,600 --> 00:05:31,530 | session. Alright, so there's our fib and the low here to the high here, it retraces down into optimal trade entry 62% retracement level we're going to use | |
| 30 | 00:05:31,860 --> 00:05:46,650 | as our entry 25 point 90 would be our entry. And to start would have to be below below here. So we'll use 68 to 68 and 90, it's 32 points are about $320 per | |
| 31 | 00:05:46,650 --> 00:05:58,740 | contract risk and we will be reaching for previous day's high initially it does that here. And then we will be looking for one standard deviation up to 26.75. | |
| 32 | 00:05:59,130 --> 00:06:10,290 | And if we get to 27.28, we would completely collapse the trade and being okay with taking that as our daily objective. And we can see here as the market runs | |
| 33 | 00:06:10,980 --> 00:06:20,970 | forward. We do get our second standard deviation and we will be out there does run a little bit more but I'm not teaching you swing trading. I'm not teaching | |
| 34 | 00:06:20,970 --> 00:06:29,520 | you short term trading. I'm teaching you a bread and butter approach to going into looking for daily setups using specific criteria aiming for previous day's | |
| 35 | 00:06:29,520 --> 00:06:37,290 | highs or lows and using the new york session as your catalyst to do so. Hopefully you found this insightful until next time, I wish you good luck and | |
| 36 | 00:06:37,290 --> 00:06:37,800 | good trading |