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Version 1.1 by Drunk Monkey on 2020-11-20 16:24
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3 ICT: Hello, folks, this is episode number 14 in a continuing
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7 series of videos for the optimal trade entry pattern
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11 recognition series, the inner circle trader YouTube channel.
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15 Alright, so our example for today is the British pound. We
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19 already have our chart trained in on the five minute chart,
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23 you know the drill, pause your video, study it before I show
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27 the annotations.
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31 Okay, here we go. We have our New York session again, always
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35 830 to 11am, New York time. And this is our optimal trade
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39 entry. Now I'm going to go over a couple in here briefly,
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43 but this is the one that I would use. This is how I teach it
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47 and my mentor As well, the selection of this particular
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51 swing is, again, it's a little bit of a finesse type thing.
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55 But I want you to know that you see this here, I'm going to
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59 take it off for a moment, just so you can see, when you're
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63 looking at your chart, it's going to look like this unless
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67 you have other things that were top of it. And that's why
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71 you don't want to have indicators. You don't want to have
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75 trend lines, moving averages, none of that stuff, okay?
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79 Because it's going to be a distraction. You want to be
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83 looking at the time of 830 to 11 when the markets showing a
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87 strong willingness to go lower. Now, this is obvious a
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91 reversal. And if you look at my Twitter account today,
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95 actually show a recording of me highlighting this turning
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99 point here on the British Pound at this order block and
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103 running up above a level which it does here. I was given
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107 that as an indication to study that and it was highlighting
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111 this movement here, creating just swing and then ultimate
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115 break down. When we entered the 830 to 11am, New York time,
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119 that's our New York session, time of day for this model of
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123 creative for YouTube. And what you're looking for is a, a
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127 price swing, that's very clear, that has a clear indication
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131 that it's trying to drive lower. Okay, in other words,
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135 there's a very quick, like underlying pressure for the price
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139 to go lower. It's a lot of back and forth in price action
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143 and creates that little trading range here, little square
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147 block area here. This, notice the difference between all
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151 these down close candles versus this in here. It's a little
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155 muddy. Okay, in other words, it's not as clear yes, it does
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159 decline, but it just seems like it's a lot more uncertain in
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163 this area. Whereas if we have this swing high, we have this
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167 lower high, lower high to the right in this one single
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171 candle here. That to me, With this real clear indication, I
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175 want to move lower. That's the price leg that I'm going to
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179 elect to use. And if you go back and look at all the
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183 examples we've been doing in this series, they all have very
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187 similar characteristics to this very thing here. So it's not
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191 a matter of going back in and cherry picking, which one
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195 looks better, which one looks perfect, whatever. After you
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199 do this for months, you're gonna see it. It's the same
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203 signature all the time. And now what is a signature, a
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207 signature is something or a characteristic, okay, that the
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211 markets give us as price action traders that we're looking
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215 for, to repeat over and over and over again. So if there's
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219 something to a market that creates a certain phenomenon, it
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223 should have a lot of reoccurring
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227 instances of a guest. So what I'm teaching in this series is
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231 the repeated nature of this particular pattern. All you need
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235 to do is determine what Whether you're gonna be trading a
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239 run below yesterday's low or above yesterday's high and I've
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243 already shown you a continuation pattern using the same
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247 thing with a market it's already gone beyond the previous
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251 day's high or low and you can still use this this model to
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255 practice in and grow in your understanding with price
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259 action. So with that said, all of this in here is the price
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263 leg that I would use and how I teach it so it's very clear
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267 it's showing a displacement. Okay, very clear, obvious
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271 movement lower. The market comes back up trades into this
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275 high but not all up into it. So we're at the fed back to it
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279 again. And again, the fib is not the magic. It's not trust
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283 me. It's has nothing to do with why price is going up there.
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287 The Fed is just allowing me to frame a market that is really
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291 overbought without having to use any overbought or
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295 indicator, because I'm showing you the range of this high to
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299 this low. So when price traded back up to here, if we look
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303 back inside that range, we are really near this high. So
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307 technically that would be a short term overbought market.
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311 That's all the fibs helping me illustrate and then the
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315 Fibonacci projections. Okay, all these levels on here are
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319 just rough ideas how far the market could go. But again,
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323 we're linking that with the previous day's low in this case
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327 here. And then you see the previous day's low. We do trade
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331 down into it. Now. The details are we always look for the
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335 60% retracement level that in this instance would be
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339 hypothetical entry of 1.2268 with one PIP that using a 20
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343 PIP stop loss that would take us above this high. No real
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347 Jeopardy in terms of being stopped out. You do have seven
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351 pips draw down. Again, we're always using a 62% retracement
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355 level, you can finesse your entry and try to use the 70.5
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359 level or 79 cent trace level but as I mentioned in previous
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363 recordings in this series, you're likely to miss the trade
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367 and or the dealer spread may not be covered for your entry
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371 to fill. So again, we're using the low hanging fruit
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375 approach as I like to teach in my mentorship where it's
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379 really really easy to get to 62% retracement level, and not
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383 always the 79 everybody wants to sell at the highest levels
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387 that way their stop loss can be smaller, but you don't need
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391 to do that. And especially when you're learning how to use
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395 the pattern so the market starts to show a willingness to
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399 drop lower. Right down here we have about 20 pips or so at
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403 just the old low. So right away, you can bank something
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407 there. And at one half of a standard deviation, you have
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411 about 40 pips that you could potentially bank there
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415 hypothetically, and then ultimately down to 60 pips, which
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419 runs the previous day's low. So all in all, we have a three
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423 to one reward to risk if you'd like to look at those types
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427 of things. I think it's really not necessary because if you
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431 have a high strike rate method or model, and I know some of
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435 you that are learning or maybe some of you that really like
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439 to look at these types of things and say this is what has to
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443 happen for me to take a trade. You know, you can make an
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447 amazing career trading one to one if you have a very solid
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451 strike rate. And clearly, as I'm indicating in these
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455 examples here, this pattern works every single day. It's
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459 there every single day. And the problem that's gonna plague
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463 you is determining whether you want to be a buyer or seller.
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467 And I know what you want to ask me if we were in a chat room
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471 together, okay? Or if you were talking to me directly
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475 through Twitter, or, or if you emailed me, so I get this
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479 email a lot. Can you just tell me how determined to bias and
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483 I'm telling you again, it's always the same response. Number
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487 one, it takes a lot of other supporting lessons to get good
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491 at the bias. Now I could tell you things, and I've done a
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495 lot of that even in free tutorials. That's on this YouTube
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499 channel. But it takes you getting in here and studying every
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503 single day screen, capturing your charts and doing
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507 annotations yourself and getting used to what the pattern
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511 looks like. And it sounds like it should be just tell me how
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515 to do it one time and it works all the time. It's not like
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519 that because if it was just that easy, believe me,
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523 everybody, we're out here doing it and they just don't do
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527 it. So this is one more example in the continuing series.
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531 Hopefully you found it insightful. Until next time, wish you
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535 good luck and good trading.