OTE Pattern Recognition Series - Vol 14.srt

Last modified by Drunk Monkey on 2021-06-10 10:03
1 00:00:11,280 --> 00:00:21,090 ICT: Hello, folks, this is episode number 14 in a continuing series of 20 videos for the optimal trade entry pattern recognition series for the inner circle
2 00:00:21,090 --> 00:00:28,590 trader YouTube channel. Alright, so our example for today is the British pound, we already have our chart trained in on the five minute chart and you know the
3 00:00:28,590 --> 00:00:33,480 drill, pause your video, study it before I share the annotations.
4 00:00:38,760 --> 00:00:53,070 Okay, here we go. We have our New York session again, always 830 to 11am, New York time. And this is our optimal trade entry. Now, I'm going to go over a
5 00:00:53,070 --> 00:01:07,170 couple in here briefly. But this is the one that I would use. This is how I teach it in my mentorship as well. The selection of this particular swing is,
6 00:01:07,740 --> 00:01:17,130 again, it's a little bit of a finesse type thing. But I want you to know that you see this here, I'm going to take it off for a moment. As you can see, when
7 00:01:17,130 --> 00:01:22,710 you're looking at your chart, it's going to look like this unless you have other things over top of it. And that's why you don't want to have indicators. You
8 00:01:22,710 --> 00:01:31,410 don't want to have trend lines, moving averages, none of that stuff, okay, because it's going to be a distraction. You want to be looking at the time of
9 00:01:31,440 --> 00:01:43,140 830 to 11 when the market showing a strong willingness to go lower. Now this is obvious a reverse on if you look at my Twitter account today, I actually show a
10 00:01:43,140 --> 00:01:54,690 recording of me highlighting this turning point here on the British Pound at this order block and running up above a level which it does here. I was given
11 00:01:54,690 --> 00:02:05,220 that as an indication to study that. And it was highlighting this movement here creating a Judas swing, and then ultimate break down. When we entered the 830 to
12 00:02:05,250 --> 00:02:17,190 11am, New York time, that's our New York session, time of day for this model, a creative for YouTube. And what you're looking for is a a price swing, that's
13 00:02:17,220 --> 00:02:32,670 very clear, that has a clear indication that it's trying to drive lower. Okay, in other words, there's a very quick, like underlying pressure for the price to
14 00:02:32,670 --> 00:02:42,030 go lower, it's a lot of back and forth in price action that creates that little trading range here, little square block area here. This, notice the difference
15 00:02:42,030 --> 00:02:50,520 between all these down close candles versus this in here. It's a little muddy.  Okay, no words, it's not as clear. Yes, it does decline. But it just seems like
16 00:02:50,550 --> 00:02:58,560 it's a lot more uncertain in this area. Whereas if we had this swing high, we had this lower high, lower high to the right, and this one single candle here,
17 00:02:59,310 --> 00:03:07,770 that to me, with this real clear indication, I want to move lower, that's the price leg that I'm going to elect to use. And if you go back and look at all the
18 00:03:07,770 --> 00:03:15,450 examples we've been doing in this series, they all have very similar characteristics to this very thing here. So it's not a matter of going back in
19 00:03:15,450 --> 00:03:24,720 and cherry picking, which one looks better, which one looks perfect, whatever.  After you do this for months, you're gonna see it, it's the same signature all
20 00:03:24,720 --> 00:03:34,920 the time. And now what is a signature, a signature is something or a characteristic, okay, that the markets give us as price action traders that
21 00:03:34,920 --> 00:03:47,850 we're looking for, to repeat over and over again. So if there's something to a market that creates a certain phenomenon, it should have a lot of reoccurring
22 00:03:49,800 --> 00:04:00,330 instances of a guest. So what I'm teaching in this series is the repeated nature of this particular pattern, all you need to do is determine whether you're gonna
23 00:04:00,330 --> 00:04:12,900 be trading a run below yesterday's low or above yesterday's high. And I've already shown you a continuation pattern using the same thing with a market it's
24 00:04:12,900 --> 00:04:22,380 already gone beyond the previous day's high or low. And you can still use this this model to practice in in growing your understanding with price action. So
25 00:04:22,440 --> 00:04:34,710 with that said, all of this in here is the price leg that I would use and how I teach it so it's very clear it's showing a displacement. Okay, very clear,
26 00:04:34,740 --> 00:04:45,570 obvious movement lower. The market comes back up trades into this high but not all up into it. So we're at the fed back to it again. And again, the fib is not
27 00:04:45,600 --> 00:04:58,530 the magic. It's not trust me. It's has nothing to do with why price is going up there. The Fed is just allowing me to frame a market that is really overbought
28 00:04:58,530 --> 00:05:07,650 without having to use any overbought or Russell indicator, because I'm showing you the range of this high to this low. So when price traded back up to here, if
29 00:05:07,650 --> 00:05:16,260 we look back inside that range, we are really near this high. So technically that would be a short term overbought market. That's all the fibs helping me
30 00:05:16,260 --> 00:05:25,440 illustrate. And then the Fibonacci projections, they all these levels on here are just rough ideas how far the market could go. But again, we're linking that
31 00:05:25,440 --> 00:05:33,420 with the previous day's low in this case here. And then you see the previous day's low. We do trade down into it. Now. The details are we always look for the
32 00:05:33,420 --> 00:05:43,740 60% retracement level, that in this instance would be a hypothetical entry of 1.226811. Pit that using a 20 PIP stop loss that would take us above this high.
33 00:05:44,100 --> 00:05:52,410 No real Jeopardy in terms of being stopped out. You do have seven pips draw down. Again, we're always using a 62% retracement level, you can finesse your
34 00:05:52,410 --> 00:06:01,830 entry and try to use the 70.5 level or the 79% tracing level. But as I mentioned in previous recordings in this series, you're likely to miss the trade and or
35 00:06:01,830 --> 00:06:11,580 the dealer spread may not be covered for your entry to fill. So again, we're using the low hanging fruit approach as I like to teach in my mentorship where
36 00:06:11,580 --> 00:06:19,950 it's really easy to get the 62% retracement level, and not always the 79.  Everybody wants to sell at the highest levels that way their stop loss can be
37 00:06:19,950 --> 00:06:28,050 smaller. But you don't need to do that. And especially when you're learning how to use the pattern, so the market starts to show a willingness to drop lower.
38 00:06:28,500 --> 00:06:38,550 Right down here we have about 20 pips or so at just the old low. So right away, you can bank something there. And at one half of a standard deviation, you have
39 00:06:38,550 --> 00:06:47,700 about 40 pips that you could potentially bank there, hypothetically. And then ultimately down to 60 pips, which runs the previous day's low. So all in all, we
40 00:06:47,700 --> 00:06:54,690 have a three to one reward to risk. If you'd like to look at those types of things, I think it's really not necessary. Because if you have a high strike
41 00:06:54,690 --> 00:07:02,460 rate, method or model, and I know some of you that are learning, or maybe some of you that really like to look at these types of things and say this is what
42 00:07:02,460 --> 00:07:11,250 has to happen for me to take a trade, you know, you can make an amazing career trading one to one if you have a very solid strike rate. And clearly, as I'm
43 00:07:11,250 --> 00:07:21,570 indicating in these examples here, this pattern works every single day. It's there every single day. And the problem that's going to plague you is
44 00:07:21,690 --> 00:07:29,640 determining whether you want to be a buyer or seller. And I know what you want to ask me if we were in a chat room together, okay? Or if you were talking to me
45 00:07:29,640 --> 00:07:39,630 directly through Twitter, or, or if you emailed me, so I get this email a lot.  Can you just tell me how determine the bias. And I'm telling you again, it's
46 00:07:39,660 --> 00:07:51,330 always the same response. Number one, it takes a lot of other supporting lessons to get good at the bias. Now I can tell you things. And I've done a lot of that
47 00:07:51,330 --> 00:08:01,260 even in free tutorials. That's on this YouTube channel. But it takes you getting in here and studying every single day screen capturing your charts and doing
48 00:08:01,260 --> 00:08:09,510 annotations yourself and getting used to what the pattern looks like. And it sounds like it should be just tell me how to do it one time and it works all the
49 00:08:09,510 --> 00:08:20,100 time. It's not like that because if it was just that easy. Believe me, everybody out here doing it and they just don't do it. So this is one more example in the
50 00:08:20,130 --> 00:08:24,060 containing series. Hopefully you found it insightful. Until next time, wish you good luck and good trading.