OTE Pattern Recognition Series - Vol 14.srt
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ICT: Hello, folks, this is episode number 14 in a continuing
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series of videos for the optimal trade entry pattern
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recognition series, the inner circle trader YouTube channel.
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Alright, so our example for today is the British pound. We
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already have our chart trained in on the five minute chart,
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you know the drill, pause your video, study it before I show
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the annotations.
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Okay, here we go. We have our New York session again, always
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830 to 11am, New York time. And this is our optimal trade
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entry. Now I'm going to go over a couple in here briefly,
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but this is the one that I would use. This is how I teach it
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and my mentor As well, the selection of this particular
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swing is, again, it's a little bit of a finesse type thing.
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But I want you to know that you see this here, I'm going to
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take it off for a moment, just so you can see, when you're
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looking at your chart, it's going to look like this unless
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you have other things that were top of it. And that's why
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you don't want to have indicators. You don't want to have
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trend lines, moving averages, none of that stuff, okay?
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Because it's going to be a distraction. You want to be
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looking at the time of 830 to 11 when the markets showing a
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strong willingness to go lower. Now, this is obvious a
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reversal. And if you look at my Twitter account today,
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actually show a recording of me highlighting this turning
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point here on the British Pound at this order block and
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running up above a level which it does here. I was given
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that as an indication to study that and it was highlighting
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this movement here, creating just swing and then ultimate
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break down. When we entered the 830 to 11am, New York time,
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that's our New York session, time of day for this model of
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creative for YouTube. And what you're looking for is a, a
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price swing, that's very clear, that has a clear indication
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that it's trying to drive lower. Okay, in other words,
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there's a very quick, like underlying pressure for the price
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to go lower. It's a lot of back and forth in price action
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and creates that little trading range here, little square
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block area here. This, notice the difference between all
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these down close candles versus this in here. It's a little
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muddy. Okay, in other words, it's not as clear yes, it does
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decline, but it just seems like it's a lot more uncertain in
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this area. Whereas if we have this swing high, we have this
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lower high, lower high to the right in this one single
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candle here. That to me, With this real clear indication, I
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want to move lower. That's the price leg that I'm going to
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elect to use. And if you go back and look at all the
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examples we've been doing in this series, they all have very
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similar characteristics to this very thing here. So it's not
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a matter of going back in and cherry picking, which one
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looks better, which one looks perfect, whatever. After you
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do this for months, you're gonna see it. It's the same
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signature all the time. And now what is a signature, a
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signature is something or a characteristic, okay, that the
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markets give us as price action traders that we're looking
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for, to repeat over and over and over again. So if there's
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something to a market that creates a certain phenomenon, it
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should have a lot of reoccurring
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instances of a guest. So what I'm teaching in this series is
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the repeated nature of this particular pattern. All you need
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to do is determine what Whether you're gonna be trading a
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run below yesterday's low or above yesterday's high and I've
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already shown you a continuation pattern using the same
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thing with a market it's already gone beyond the previous
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day's high or low and you can still use this this model to
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practice in and grow in your understanding with price
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action. So with that said, all of this in here is the price
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leg that I would use and how I teach it so it's very clear
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it's showing a displacement. Okay, very clear, obvious
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movement lower. The market comes back up trades into this
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high but not all up into it. So we're at the fed back to it
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again. And again, the fib is not the magic. It's not trust
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me. It's has nothing to do with why price is going up there.
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The Fed is just allowing me to frame a market that is really
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overbought without having to use any overbought or
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indicator, because I'm showing you the range of this high to
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this low. So when price traded back up to here, if we look
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back inside that range, we are really near this high. So
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technically that would be a short term overbought market.
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That's all the fibs helping me illustrate and then the
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Fibonacci projections. Okay, all these levels on here are
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just rough ideas how far the market could go. But again,
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we're linking that with the previous day's low in this case
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here. And then you see the previous day's low. We do trade
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down into it. Now. The details are we always look for the
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60% retracement level that in this instance would be
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hypothetical entry of 1.2268 with one PIP that using a 20
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PIP stop loss that would take us above this high. No real
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Jeopardy in terms of being stopped out. You do have seven
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pips draw down. Again, we're always using a 62% retracement
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level, you can finesse your entry and try to use the 70.5
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level or 79 cent trace level but as I mentioned in previous
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recordings in this series, you're likely to miss the trade
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and or the dealer spread may not be covered for your entry
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to fill. So again, we're using the low hanging fruit
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approach as I like to teach in my mentorship where it's
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really really easy to get to 62% retracement level, and not
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always the 79 everybody wants to sell at the highest levels
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that way their stop loss can be smaller, but you don't need
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to do that. And especially when you're learning how to use
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the pattern so the market starts to show a willingness to
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drop lower. Right down here we have about 20 pips or so at
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just the old low. So right away, you can bank something
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there. And at one half of a standard deviation, you have
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about 40 pips that you could potentially bank there
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hypothetically, and then ultimately down to 60 pips, which
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runs the previous day's low. So all in all, we have a three
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to one reward to risk if you'd like to look at those types
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of things. I think it's really not necessary because if you
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have a high strike rate method or model, and I know some of
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you that are learning or maybe some of you that really like
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to look at these types of things and say this is what has to
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happen for me to take a trade. You know, you can make an
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amazing career trading one to one if you have a very solid
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strike rate. And clearly, as I'm indicating in these
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examples here, this pattern works every single day. It's
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there every single day. And the problem that's gonna plague
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you is determining whether you want to be a buyer or seller.
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And I know what you want to ask me if we were in a chat room
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together, okay? Or if you were talking to me directly
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through Twitter, or, or if you emailed me, so I get this
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email a lot. Can you just tell me how determined to bias and
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I'm telling you again, it's always the same response. Number
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one, it takes a lot of other supporting lessons to get good
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at the bias. Now I could tell you things, and I've done a
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lot of that even in free tutorials. That's on this YouTube
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channel. But it takes you getting in here and studying every
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single day screen, capturing your charts and doing
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annotations yourself and getting used to what the pattern
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looks like. And it sounds like it should be just tell me how
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to do it one time and it works all the time. It's not like
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that because if it was just that easy, believe me,
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everybody, we're out here doing it and they just don't do
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it. So this is one more example in the continuing series.
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Hopefully you found it insightful. Until next time, wish you
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good luck and good trading.