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Version 1.1 by Drunk Monkey on 2020-11-20 16:24
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3 ICT: Okay, folks, welcome back. This is volume 15, and a
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7 continuing series of 20 videos for the optimal trade entry
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11 pattern recognition series for the inner circle trader
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15 YouTube channel. Alright, so our example today is going to
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19 be in the Australian versus the US dollar. And we have our
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23 charts already trained in the five minute timeframe. And I'm
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27 going to ask you to take a look at the chart, study it
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31 before I add the annotation. So pause your video now.
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35 Okay, I'm gonna add the annotations. Alright, so we can see
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39 our standard 830 in the morning to 11am New York Standard
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43 Time. Optimal trade entry right in here. This leg comes down
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47 exactly. At 8:30am the price leg is here to here and then
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51 down. Now there was a smaller retracement that was an
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55 absolutely an optimal trade entry. That's not to diminish
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59 that as the pattern, but we have to incorporate the elements
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63 of the time window. That's here. Okay so you can see on this
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67 particular candle 8:30am dead on it trades down your fill
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71 would have been on that candle, your fill 62% retracement
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75 level keeping with the models minimum rolls. Point 6619 is
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79 our entry. There's a four PIP drawdown from your entry and
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83 using a 10 PIP stop loss below this low here. We have an old
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87 high returning almost 10 pips, they're
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91 almost
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95 20 pips and you got one standard deviation offering a
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99 handsome Potential reward there. One and a half and finally,
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103 taking off at two standard deviations of the optimal trade
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107 entry range they're offering 39 pips just in this short
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111 little run here you know you have to whether this
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115 retracement and then ultimately gets to it there. So you if
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119 you use this one using the rules you'd be bailing out of the
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123 trade as a hit here, even though you could have taken
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127 partials at any one of these. Okay, so here is the secondary
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131 entry opportunity. And using this price legs low, the price
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135 laying high, the retracement down in your fill would be on
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139 this candle here. With the spread and your fill would be a
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143 hypothetical point 6639 entry you have only a three PIP
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147 drawdown and the run above the relative equal highs. We want
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151 to see expansion there and ultimately trades to one half of
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155 a standard deviation offering more than 25 pips. And this
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159 candle trades exactly to that high of 6667 and five PIP
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163 bets, which is right here, and doesn't go any higher than
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167 that consolidates and breaks down. This after trading down
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171 here would have eventually stopped you out even on the
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175 initial entry down here, you would have trailed your stop
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179 loss rate below these lows, you would have gotten stopped
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183 out at that point. So any partials that would have been left
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187 in the marketplace to try to get to the previous day's high,
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191 which is over here. That previous day's high coming in at
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195 6680. And two PIP bets is an undelivered target. And I
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199 mentioned this in my
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203 Twitter dialogue today basically, kind of like pushing and
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207 emphasizing what's more important, is it your target being
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211 hit or profiting because so many traders in this industry
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215 lose Money, and they've had open paper profit. And when I
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219 say paper profit, I'm not talking about just demo trading.
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223 I'm saying that. How many times have you traded with live
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227 funds, and then watched a potential profit completely turn
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231 around against you and go into a loss. Now, how many times
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235 Could you go back in time, hypothetically, and say if I just
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239 would have took something off when it was given me X amount
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243 of pips or X amount of dollars for return? And you did that,
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247 as a general rule of thumb, you always pay yourself. I made
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251 a remark yesterday on Twitter, along the lines that if you
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255 worked a partial week at your job, so you you work a normal
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259 Monday through Friday, and you worked Monday and Tuesday and
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263 became ill and didn't finish the rest of the week. Does your
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267 employer get to keep all of those earned income hours that
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271 you put in on Monday and Tuesday? Of course not. So when you
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275 put on a trade and the market offers you an opportunity to
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279 take something off, and scaling You have to do that.
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283 Otherwise you fall victim to something like this, where both
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287 patterns offered opportunity to book a profit,
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291 hypothetically. But if you don't execute those partials that
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295 are at logical levels, as we talked about in the fib, again,
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299 the fibs, not the magic, it's just logical levels for you to
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303 take off something you're not forced to. But this is what
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307 will happen. Invariably, if you keep doing this long enough,
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311 you're going to have a trade that will look good, it'll
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315 look, it'll look good, it'll look strong, it'll look like
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319 it's performing. And it may in fact, look like it's going to
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323 go and run up above that high, but it Peters out and loses
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327 momentum and goes the other direction. So you're either left
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331 with being upset and emotional about not taking partials and
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335 getting stopped out, or learning from that and saying, okay,
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339 I can take something off, and I'm not going to demand my
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343 best case scenario, exit or target. I'm going to take
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347 something off and there are a plethora of so called
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351 educators in this industry that will say partials is stupid
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355 partials is dumb partials is a rookie ploy or attempt to
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359 just satisfy the fear and greed tug award it's going on. And
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363 the last one I agree with, because it rewards your time and
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367 risk. And it doesn't matter that you're reducing the amount
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371 of potential profit, you're reducing the same thing on a
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375 relative basis that you had in terms of risk. You're
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379 reducing it as you take something off, you're paying the
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383 trader, you're rewarding, your risk, the initial risk, and
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387 take taking something out. Remember that workweek analogy.
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391 You have to find a way to grow comfortable taking something
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395 out of the marketplace when it offers it to you. If you come
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399 in As industry, or if you've been unable to find
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403 profitability, and you can't warm up to this idea, I
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407 guarantee you, if you try it, you'll love it. Because it
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411 manages all of that fear and greed, that tug of war that
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415 takes place. Once you put the trade on in a live setting,
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419 you want to get out of the trade, you wanted to get to your
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423 target right away, but you can't force that. But as it
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427 logically moves to levels where you could take partial
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431 profits and exit some of the position, thus reducing the
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435 exposure or risk, but rewarding and adding to your bottom
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439 line because these targets are not guaranteed. But guess
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443 what? If you're in a market, it's trading here, and you put
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447 your market order to get out. That's more likely to fill you
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451 in a profit than waiting for that undelivered target. So
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455 today, I kind of like pushed the envelope to try to get you
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459 thinking about this particular pair on Twitter. And it gave
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463 two opportunities both you yielded the potential to pay out
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467 but it did not hit the logical level of the previous day's
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471 high and it's not necessary to find profitability, getting
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475 your best case scenario targets. So if we found this
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479 insightful until next time, I wish you good luck and good
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483 trading