OTE Pattern Recognition Series - Vol 18.srt

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ICT: Okay folks, welcome back. This is volume 18 and

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continuing series of 20 videos for the initial traders,

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optimal trade entry pattern recognition series. Alright, so

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our example today is from the treasury bond futures contract

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and the delivery contract month is September 2020. This at

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the time of this recording June 2 2020. The open interest is

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the highest in September contract, even though the nearby

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contract is June. So we're electing to follow this month for

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treasury bonds. And once you take a look at the daily chart,

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notice that we have this high to this low and we had a

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retracement in here and on the first of June we had a nice

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reaction in here. So is it more likely to take out this

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candles high or this candles low? Notice that we have a

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turning point here, a lower turning point here. And now we

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had a reaction within optimal trade entry. So is it likely

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to take the low out or the high out? Not the high, the low.

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And we have relative equal lows here as well. So that could

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be a potential target. So I'm going to take this off, and

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we're going to draw out the low here so when we drop down

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into the lower five minute chart, we'll be able to see the

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delineation of this particular day's low and it comes in at

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177 and 230 seconds. So let's drop down to a five minute

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chart. Okay, so here is the five minute chart on the

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September contract for the treasury bond market. And you

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drill pause your video, study what you think you see here.

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Okay, so let's take the annotations in add them to the

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chart, New York session. And we have our high to low and

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retracement back into optimal trade entry. And this requires

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a 62% retracement level entry at 177 and 2030 seconds. So

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the entry is our hypothetical 177 and 2030 seconds, it

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suffers a draw down now I'm having annotations here not

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saying that you would be filled here you will be filled here

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on this candle right there, that particular candle and you

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have one candle here that goes a little bit against you. But

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this all these candles here these it's two ticks, which is

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$31 and 25 cents, each contract, or in this case would be

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$62 and 50 cents drawl down and using a six tick stop. So

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it's six times $31 and 25 cents per contract that you're

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trading. And we have relative equal lows here as well and

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this heavy line here is the period previous day's low, so

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June 1 daily low, you can see that we did create an optimal

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trade entry, looking for it to trade down below that. And

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ultimately, two standard deviations. That's our day trade

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for this model is a total of 29 ticks or $906 and 25 cents.

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Now if you'd like to leader in something to see if it's

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going to catch a runner, it does in fact go down here and it

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actually trades to a point at which for one contract, it was

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over 1600 and $50 per contract. So not bad. Really hard to

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beat the bond market. It's been tough recently because of

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all the consolidation and such but when this market does

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move, there is no better market out there. It beats forex,

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it beats, index futures, it beats crypto and beats

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everything. It's so perfect. It allows very ultra short term

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trades to have very tight stops as you can see here in this

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case have actually been done with a four tick stop loss and

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it would have been fine. So hopefully you found this example

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insightful. Until next time, I wish you good luck and good

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trading.