OTE Pattern Recognition Series - Vol 15.srt

Last modified by Drunk Monkey on 2021-06-10 10:04
1 00:00:10,860 --> 00:00:19,470 ICT: Okay, folks, welcome back. This is volume 15 in a continuing series of 20 videos for the optimal trade entry pattern recognition series for the industrial
2 00:00:19,470 --> 00:00:29,040 trader YouTube channel. Alright, so our example today is going to be in the Australian versus the US dollar. And we have our charts already trained in the
3 00:00:29,040 --> 00:00:36,930 five minute time frame. And I'm going to ask you to take a look at the chart, study it before I add the annotation. So pause your video now.
4 00:00:42,390 --> 00:00:57,810 Okay, I'm gonna add the annotations. Alright, so we can see our standard 830 in the morning to 11am New York Standard Time. Optimal trade entry right in here.
5 00:00:57,840 --> 00:01:12,330 This leg comes down exactly at 8:30am the price leg is here to here and then down. Now there was a smaller retracement that was an absolutely an optimal
6 00:01:12,330 --> 00:01:22,650 trade entry. That's not to diminish that as the pattern but we have to incorporate the elements of the time window. That's here. Okay. As you can see
7 00:01:22,650 --> 00:01:33,840 on this particular candle 8:30am dead on it. trades down your fill would have been on that candle, your fill 62% retracement level keeping with the models
8 00:01:33,870 --> 00:01:47,730 minimum rules, point 6619 as our entry as a four PIP drawdown from your entry and using a 10 PIP stop loss below this low here. We have an old high returning
9 00:01:47,760 --> 00:02:03,960 almost 10 pips, they're almost 20 pips. Then you got one standard deviation, offering a handsome potential reward there, one and a half. And then finally,
10 00:02:04,290 --> 00:02:16,890 taking off that two standard deviations of the optimal trade entry range they're offering 39 pips just in this short little run. Here you have to whether this
11 00:02:16,890 --> 00:02:25,740 retracement and then ultimately gets to it there. So you if you use this one using the rules, you'd be bailing out of the trade as a hit here, even though
12 00:02:25,740 --> 00:02:33,840 you could have taken partials at any one of these. Okay, so here is the secondary entry opportunity. And using this price legs low, the price laying
13 00:02:33,840 --> 00:02:46,170 high, the retracement down in your fill would be on this candle here. With the spread, and your fill would be a hypothetical point 6639 entry, you have only a
14 00:02:46,170 --> 00:02:57,570 three PIP drawdown. And the run above the relative equal highs, we want to see expansion there, and ultimately trades to one half of a standard deviation
15 00:02:58,380 --> 00:03:11,340 offering more than 25 pips. And this candle trades exactly to that high of 6667 and five PIP bets, which is right here and doesn't go any higher than that
16 00:03:11,580 --> 00:03:21,780 consolidates and breaks down. This after trading down here would have eventually stopped you out even on the initial entry down here, you would have trailed your
17 00:03:21,780 --> 00:03:30,870 stop loss right below these lows, you would have gotten stopped out at that point. So any partials that would have been left in the marketplace to try to
18 00:03:30,870 --> 00:03:34,530 get to the previous day's high, which is over here.
19 00:03:35,819 --> 00:03:47,309 That previous day's high coming in at 6680. And to pit bets is an undelivered target. And I mentioned this in my Twitter dialogue today basically, kind of
20 00:03:47,309 --> 00:04:02,189 pushing and emphasizing what more important, is it your target being hit or profiting? Because so many traders in this industry lose money. And they've had
21 00:04:02,219 --> 00:04:10,859 open paper profit. And when I say people profit, I'm not talking about just demo trading. I'm saying that. How many times have you traded with live funds, and
22 00:04:10,859 --> 00:04:21,479 then watched a potential profit completely turn around against you and go into a loss? Now, how many times Could you go back in time hypothetically, and say if I
23 00:04:21,479 --> 00:04:31,799 just would have took something off when it was given me X amount of pips or X amount of dollars for return? And you did that? As a general rule of thumb, you
24 00:04:31,799 --> 00:04:42,599 always pay yourself. I made a remark yesterday on Twitter, on the minds that if you worked a partial week at your job, so you work normal Monday through Friday,
25 00:04:43,199 --> 00:04:51,929 and you worked Monday and Tuesday and became ill and didn't finish dress to eat does your employer get to keep all of those earned income hours that you put in
26 00:04:51,929 --> 00:05:01,529 on Monday and Tuesday? Of course not. So when you put on a trade and the market offers you an opportunity to take something off and scaling You have to do that.
27 00:05:01,679 --> 00:05:13,619 Otherwise, you fall victim to something like this, where both patterns offered opportunity to book a profit, hypothetically. But if you don't execute those
28 00:05:13,679 --> 00:05:22,829 partials that are at logical levels, as we talked about in the fib, again, the fibs, not the magic, it's just logical levels for you to take off something
29 00:05:23,099 --> 00:05:30,929 you're not forced to. But this is what will happen. Invariably, if you keep doing this long enough, you're going to have a trade that will look good, it'll
30 00:05:30,929 --> 00:05:38,189 look, it'll look good, it'll look strong, it'll look like it's performing. And it may, in fact, look like it's gonna go and run up above that high. But it
31 00:05:38,189 --> 00:05:48,779 Peters out and loses momentum and goes the other direction. So you're either left with being upset and emotional about not taking partials and getting
32 00:05:48,779 --> 00:06:00,569 stopped out, or learning from that, and saying, okay, I can take something off.  And I'm not going to demand my best case scenario, exit or target. And I'm going
33 00:06:00,569 --> 00:06:12,359 to take something off. And there are a plethora of so called educators in this industry that will say partials, is stupid partials is dumb. partials is a
34 00:06:12,359 --> 00:06:28,979 rookie ploy, or attempt to just satisfy the fear and greed, tug of war that's going on. And the last one I agree with, because it rewards your time, and risk.
35 00:06:29,609 --> 00:06:39,929 And it doesn't matter that you're reducing the amount of potential profit, you're reducing the same thing on a relative basis that you had in terms of
36 00:06:39,929 --> 00:06:49,829 risk. You're reducing it as you take something off, you're paying the trader, you're rewarding, your risk, the initial risk, and take thing, taking something
37 00:06:49,829 --> 00:06:59,759 out. Remember that workweek analogy. You have to find a way to groke come through taking something at the marketplace when it offers it to you. If you
38 00:06:59,759 --> 00:07:09,989 come into this industry, or if you've been unable to find profitability, and you can't warm up to this idea, I guarantee you, if you try it, you'll love it.
39 00:07:10,169 --> 00:07:17,849 Because it manages all of that fear and greed, that tug of war that takes place once you put the trade on in a live setting, you want to get out of the trade,
40 00:07:17,879 --> 00:07:25,829 you want it to get to your target right away, but you can't force that. But as it logically moves to levels where you could take partial profits and exit some
41 00:07:25,829 --> 00:07:38,729 of the position, thus reducing the exposure or risk, but rewarding and adding to your bottom line because these targets are not guaranteed. But guess what? If
42 00:07:38,729 --> 00:07:48,359 you're in a market, it's trading here, and you put your market order to get out.  That's more likely to fill you in a profit than waiting for that undelivered
43 00:07:48,359 --> 00:07:59,819 target. So today, I kind of like pushed the envelope to try to get you thinking about this particular pair on Twitter. And it gave two opportunities both
44 00:07:59,849 --> 00:08:11,489 yielded the potential to pay out but it did not hit the logical level of the previous day's high and it's not necessary to find profitability, getting your
45 00:08:11,489 --> 00:08:17,159 best case scenario targets. So if we found this insightful until next time, I wish you good luck and good trading.