2016

ICT Mentorship
Core Content

Month 2
 one
Growing Small Accounts

welcome back folks this is month two of the ict

mentorship this is teaching one of eight of the
second month of 12 and we're dealing
specifically with growing small accounts
without high risk now before we start obviously
we need to know what it is that we need to avoid
the first thing you need to do is do not try to rush
to make massive gains in either pips or percent
returns i can tell you i fell victim to this as my as
a new trader i went in thinking i can get rich
really really quick as a trader after i started
seeing how fast profits can come uh it kind of
makes you think that it's like the lottery every
single time you sit in front of your computer and
it's not the case okay so as a new trader the first
thing you want to do is kind of suppress that
desire to try to chase massive gains and it's
either in a total number of pips because it seems
like it's a trophy thing to tout that on the
internet or on forum or mediums like twitter or
or instagram and facebook it's not important
how many pips you have and it's not important
how much money you make it's the percent
returns to actually make uh consistent wealth
building and it don't chase high percentages
you don't even really need high percentages to
build wealth do not open yourself to large risk in
hopes of equally large returns or profits it's not
necessary for you to have very much risk on your
trades to make a lot of money it's rather myopic
and it's a misnomer for new traders when they
come into this industry they think they have to
have a lot of money and they have to put a lot of
risk to make money well that's not true and the
only reason why they think that is because
they're trying to make money quick lots of
money real quick do not assume taking small
risk defined trades will not grow your account
this is one of the lessons it took a while for me to
learn early on in my career i thought i had to
have a lot of risk on the trades and otherwise i
wouldn't see my account grow and that's not
entirely true once i understood the compound
interest factor it doesn't take much time at all for
your money to grow and it doesn't matter how
much you start with you can start on a
shoestring budget even as little as a hundred
dollars a hundred dollars can grow
exponentially over time if you submit to it and
now think if everyone would start with a
hundred dollars number one you would never
be broke if you made mistakes initially secondly
who says that you can't add more money to it
once you become more confident see that's the
part everyone jumps ahead they want to take
everything they're willing to risk and lose but
not really lose it and they put it in their account
and they put it all in one or two trades and
hopefully they get a lottery win you don't need
to do that you don't need to do that at all you
can actually define your trades with very very
low risk in terms of total equity and then watch
it compound over time that's how you grow an
account do not sacrifice trading equity for poor
planning or lack thereof like i just mentioned in
point number three it's very important that you
understand that there is not a necessity for large
risk to build wealth you need to have consistent
parameters though that'll allow you good risk
models for each trade with well-defined low risk
parameters the setups need to have well-
defined risk two percent ideally if you're a new
trader but no more than two percent on an
average you don't need to have any more risk
than that to build wealth what do you need to
aim for what specific things should you be
focusing on going forward if you have a small
account and how to start building it up well you
need to determine how realistically you can
anticipate a favorable reward to risk model what
does it look like we're going to talk a little bit
about that in this specific teaching you're gonna
have to learn to respect the risk side of the trade
setups more over the reward it's too many times
and i did this to as a new trader we don't we
don't think about losing money you know
because after all we're always to be right the fact
that we think about the profits solely and we
don't really concern ourselves or respect the fact
that we could lose on every single trade how
many times have you started a trade as a new
trader now maybe you were nervous when you
when you first got in it but when you first put the
trade on greed puts you into that trade greed
puts you into that position where you're trying
to make money but once that transaction starts
and you're in the marketplace that greed
transfers into fear i hope i make money what if i
don't make money see when we first put the
trade on we're not necessarily fearful unless
we're fearful of missing the move it's greed that
puts you into the trade as a new trader but you
need to learn to respect the risk side before you
take that trade and execute on it because if you
don't focus on that side that's the part that hurts
you nobody gets broke by taking profits but
they all go broke by taking too much risk
identify trade setups that permit three reward
multiples to one risk or higher it's very important
and we're going to talk about specific numbers
and how it's actually measurable in terms of
odds but you want to look for trade setups that
have three to one payouts and for every one
dollar you're risking you hope to make three
dollars frame good rewards risk setups to have
little impact if unprofitable again that gets back
to having very small risk if you have very small
risk well-defined trade setups you're never
going to worry about well you might get a loser
here and there you might get a string of losses
but it's not going to take you out of the business
it's not going to take you out of your career of
choice you came into this industry to make
money you want to obviously change the course
of your life in terms of financial fluency and even
if you're not trying to get rich if you're just trying
to have a passive income maybe you're trying to
supplement some of your uh your uh your bills
your monthly costs of living you know you came
in here with a monetary desire so keep that in
mind you want to do this for a long time not just
get lucky for a short period of time and make a
lot of money because that doesn't happen no
one does that 4x is not the lottery all right the
reality of reward to risk ratios okay what will you
need to see in performance for profitability now
everyone thinks they're gonna never have a loss
when they first start out everyone's superman
they can't go wrong their system is going to be
the best thing since slight spread don't worry
about it you'll never have a loser kid no one
starts in this industry with that as a hit the
ground running you never have any losing
trades you're going to encounter that so when
we talk about accuracy accuracy is not even
necessary in terms of high end accuracy to
make money you don't even need high accuracy
to build wealth but you do need time time is the
missing element and that's the secret that's the
holy grail to allow compound interest to do its
magic so my question to you is this do you think
that you're a 75 percent win right trader in other
words every trade you get in is 75 percent of
those trades winners if that's the case your win
at 75 percent that is actually very high and your
ratio terms of what you're hoping to make in
terms of your risk it's really low you don't need
to have very much in terms of risk to make one
dollar if you had 60 percent you have even still
you have less in terms of what you have to take
on as risk to make one dollar but when we get
to 50 50 you got to start risking a dollar for a
dollar then at forty percent you the ideal ratio
would be you're trying to make a dollar fifty for
every one dollar be profitable when you're only
33 accurate ideally the minimum is you want to
be looking for trades that pay you two dollars for
every one dollar risk at 25 accuracy now folks
think about this if 75 of the trades that you take
are losing trades the minimum ratio for
profitability is you have to look for trades that
pay out three to one now think about this for a
moment if we look at the low end objective in
terms of accuracy that means 25 accurate we're
looking for trades that are gonna pan out
hopefully three dollars reward for one dollar risk
so if we have that scenario and we are able to
take a trade and risk one dollar and make three
dollars in return we can be wrong 75 percent of
the time and still be net profitable now think
about that if you grow in your understanding of
the things i'm teaching you say you become
profitable to the degree where half of your
trades are profitable that means the ability for
you to find three to one trades more than
doubles it more than doubles so that means
your accuracy grows but your reward to risk
ratio if it just stays three to one you're gonna
have more trades that pay out three to one
therefore your equity is going to increase
exponentially now what happens when your
win rate goes up above 50 percent what
happens if you have a 65 to 70 percent accuracy
and you're looking still for three to one trades
your money grows exponentially what happens
when you start looking for reward to risk ratios
of five dollars paid out for one dollar risk and you
have a seventy percent accuracy suddenly
wealth is not that far out of region now looking
at an example of trading with statistics behind it
i think everyone would agree that to make a
percentage increase of 50 inside of one month
is actually a pretty good feat now i'm not
advocating that everyone's going to be able to
make 50 return in one month it's not going to
happen um that if we have an account that
would be relatively small and i'm going to say for
the benefit of an example that we're going to
say 5 000 is something that everyone's uh able
to do once they understand how to trade we're
gonna say that everyone is willing to put five
thousand dollars into a trading account and
you'll determine when you're gonna do that i'll
never tell you when that's gonna happen you
make the decision on your own but let's say for
instance you put 5000 in account and you use
some some of the ideas that we teach here and
you you're able to find big payouts big reward to
risk ratio trade setups to make a 50 return on
your account in one month it doesn't take many
trades to do that but it does take highly selective
setups and you have to do certain things to
make this um pan out and here's the thing once
you get one or two of them in your month in
terms of trades you can now start lowering your
risk to reward ratio trade setups if you want to
stay busy you can still do very well by adding
more percentage-wise on your account but you
don't need to go out there every single time
looking for big payout trades you can get bread
and butter scenarios whether it's two to one
three to one scenarios where it's easy to get
these uh payouts so if you started with five
thousand dollars and you're able to find setups
to do these things and that's what i did in my
effects book for this mentorship i show over 50
percent return and i didn't do many trades at all
it wasn't many trades at all they actually
brought this type of return the profit actually
grows over twenty five hundred dollars and
that's not bad for for an account that would start
with five thousand dollars not a whole lot of
trading in the first month that is what is possible
but not a standard do not expect this as a
normal every single month type thing but think
about this if you could show a 50 return just for
the year how amazing would that be if you were
able to take your money and compound it
where you had a return of 50 per year that blows
away every money manager's goals out there uh
it certainly blows away any kind of uh stock
return you know ira or anything like that it it you
would be outperforming every asset class that's
available to you and you think about what you're
able to do you can do that in a month if you
could do that in one month looking for high
payout low risk imagine what's available to you
this is the one that you want to pay the most
attention to and i said you have to respect this
side of it because the draw down is what will
hurt you it'll hurt you psychologically and it will
hurt you monetarily so as you can see what
we're going our goal is is to have little to no
drawdown now you're going to have drawdown
this account will have drawdown you will see it
uh it's not my goal to show you massive
drawdown so you can see how it comes back
from it the idea in this mentorship is to avoid
large drawdown and obviously in one month
taking 10 trades i tell everybody my average goal
for the week is 50 to 75 pips a week and you can
see here the average win is 51.80 pips and with
10 trades a total haul of 518 pips for the month
and i think that's uh pretty consistent for what
i'm able to do on a month-to-month basis i don't
try to do anything more than this this is like my
sweet spot for my performance and i try not to
do anything above this every time i try to do that
i get a king kong feeling and you know having
king kong and the movie he fell off the empire
state building and didn't live too much longer
after that so i learned that lesson as well in my
trading all right so what should you focus on
initially that's right six percent six percent of
what six percent of your equity compounding
per month now it doesn't sound like much it
doesn't sound sexy it doesn't give you the willies
well guess what it only takes you 20 pips per
week to do it and it only requires one and a half
percent risk and it only requires one to one ratio
to do it that means if you find a trade that pays
out potentially 20 pips and you can frame the
trade where you're only taking 20 pips risk guess
what that's all that's necessary and they happen
every single day now i'm not advocating looking
for one-to-one ratio trades but i'm going to show
you by example how easy it is to get that once
your accuracy increases and you're
understanding a price action these setups are
there every single trading day now again i am
not i preface it again i am not trying to instill an
action warrior hero where you go in there and
you're trying to prove to the world that you can
trade every single day and get your 20 pips 40
pips or whatever you're trying to do every single
day i don't think it's something that can be done
consistently every single day um if you do you're
inviting losses and there isn't a trading day that
doesn't look good initially and goes sour quickly
you want to be trading in highly selective
conditions and when you do that even with low
reward to risk ratios to one you can still find one
and a half percent return payouts per week one
trade that's all you need and you're actually
gonna have a little bit more than six percent but
what does six percent do compounded every
single month it doubles your money every single
year and i don't care what your equity size is that
you start with now account with a thousand
dollars your risk for trade is gonna be one and a
half percent or fifteen dollars that's it you're only
risking fifteen bucks now if you lost fifteen
dollars and you had a thousand dollar account
are you gonna go home and take it out on your
family no most people wouldn't do that and if
you would then you're probably not meant for
trading so what you'd be risking is 20 pips from
your entry price and your profit will be taken at
20 pips for a one and a half percent return but
here's the thing it's easy to say this in number
form but how does how do we find it where did
where do these setups occur well the six percent
per month setups they form specifically and the
easiest ones to find are looking at your daily
chart and they make it easy to do was it what is
it specifically you're looking for well you're going
to be looking for the things that i've talked about
in the very first month of this mentorship one
specific is an order block where there's a price
point at which a move quickly moves away from
a level if in this case it's movement up we find
that down candle right before the move goes
higher when price goes back down into that
down candle we have a really good probability
especially off of a daily chart that you're going to
get a 20 pip or more price swing now magnified
and zoomed in we can see that that order block
is noted with the two arrows drawing your
attention to it we're looking at the body of the
candle which is the opening on the down candle
up to the high of that candle okay and that's a
fair value gap price you can see trades right back
down into that level right here as price hits that
on that particular day that's when you'd be
looking for a trade you'd be looking to go along
there okay but not just simply as it hits that level
we're gonna wait for something to give us
confirmation obviously the same thing occurs
on a lower time frame we look for the order
block we're just going to scale down because
everything in price is fractal so we're
highlighting specifically the 0.7512 level okay so
we have a one hour chart we're zoomed in and
you see price shows an old low right here and
below old lows we know there's going to be cell
stops resting below there and the price drives
down below that taking out an area of cell stops
or running into a liquidity pool but it goes
specifically down into that one level that we
identified on the daily chart being 0.7512 price
trades down into that level and slams right into
it now we are in turtle soup conditions that
means a break below an old low we could
potentially expect this market to run higher
when it hits this level on an hourly chart we can
simply wait we're going to wait for
confirmations the market wants to go higher
from that level in other words we're going to
wait to see if the bank sponsors that level if they
do we already know by looking at what we've
learned in the first month there are buy stops
above these equal highs right above here
there's equal highs and i'm going to ask you
before i show you again where else would you
expect buy stops above the market place to be
residing in this chart that's right right there so
buy stops are above us so we can map out areas
at which we can look to take our profits before
we even put the trade on that's important you
need to know where you're at in terms of risking
and rewarding where are you going to take your
profits where do you think the market's going to
be drawn to and why should the market react at
these specific levels by looking at that 0.7512
level that's important because we know our our
traders our trade is being framed on the daily
chart it's not a five-minute setup it's based on a
institutional level on a daily chart now here we
have the market trade up through the down
candle right in here that's the bullish order block
price trades through it here once it happens we
identify the opening and the high on that candle
that's where the buy would occur okay so in this
area if we use the opening on that candle we're
going to add our five pips spread to it okay and
build that in you can see our order would be
around point seven five four two that would be
our limit order so we would be long there when
this candle drops down into it we would
reasonably expect to see our entry to be uh filled
at that price point now obviously if we're going
to be long there the the parameters for trading
with six percent setups because our aim is to
first get ourselves in sync with trying to double
our money over the year not this week not this
month we're trying to double our money over
the year that's low hanging fruit that's easy for a
new aspiring trader to grow into it doesn't give
you the pip drunk mentality you're not trying to
force a million dollars into your account right
away it's gradually adding a fluency so you're
going to define your risk by saying okay i want
to take a stop at 20 pips okay and guess what
that does it puts your stop below the middle of
that down candle so you have a good risk model
here and also it's framing it really well because
we don't want to see price go down below the
midpoint of that down candle again it's already
shown a willingness to drop below here and
take the stop so it wants to obviously want to go
higher if it's going to go higher it won't come
back down below the middle of that down
candle or bullish order block so our stops at 75
22 our entries at 75 42 we have a 20 pip stop loss
and obviously as soon as we get to this level here
we're already at one to one so at this point we
could be long here right here we're already at
guess what one and a half percent profit now
once we get to one and a half percent profit
does that mean we collapse the trade we can
absolutely we can that's a one to one gearing
and we would make our one and a half percent
return and it's that quick you're over in a couple
hours you're done for the week but what did we
first start this trade with we framed it with the
buy stops up here and the buy stops up here so
when price goes to our first profit we can start
taking our risk and reducing it taking some of it
off in fact we could probably do this we could
take half the position off and guess what we'll do
we'll make point seven five percent return on
the trade once it gets to this level here right up
here that's first objective so now we've already
banked .75 or three quarters of one percent and
we are allowing the price to expand up to
another level so now guess what as soon as we
get to this level here we're back at one and a half
percent we made another profit objective here
at a multiple of two so now we're at one and a
half percent again but we've already banked
three quarters of one percent now mind you the
100 is open profit it's paper still hasn't been
realized yet but have we reached into the buy
stops yet no we have not seen anything in terms
of these buy stops over here being reached into
or swept guess what happens multiple three
comes in here now we've added another 20 pips
of profit and we cleared out the stops we can
take another portion of our position off we can
take a quarter of it off we can take a uh uh a half
of it off whatever it is that you want to do i'm not
giving you any structure yet but i want you to
think about paying yourself right here okay and
you would have done well over what would be
necessary to make 1.5 return and you graduated
your exits based on logical areas where price
should reach at this point here after your second
multiple is reached your stop needs to be at
breakeven so you'd be down here at your entry
so now you would have right now no way for
that to take you out below your entry point okay
and you've already banked a position in the
position that you've scaled out some and
obviously multiple four is hit gets real close to
where our buy stops are so we would reasonably
expect this to do what maybe consolidate
maybe retrace a little bit but still reach for
another area of liquidity above these equal
highs over here and then ultimately we get a
multiple of five it clears out the buy stops over
here and guess what i'll leave you to study this
in terms of how many opportunities you could
have done in terms of scaling if you would have
kept took off half the position at multiple of one
in other words if you made 20 pips if you've
taken half of it off and you let the remaining half
run all the way up to get these uh stops how
much money would that be how much
percentage would that be what would that do
for your account what if you took off what if you
took off one quarter of it here at 20 and let the
remaining balance run what if you took off three
quarters of it off here and left one quarter of the
position on to run all of these things are for your
study and it's important that you do this
because i want you to think about what is
available to you this is only one setup framed on
a daily chart and it was aiming for what buy
stops we've already identified those buy stops
were reached into right there everything that
was shown to you in month one was used here
in the illustrative purpose so now you can see
how easy it is to get that one half percent return
a week and you don't need to get it in the full
shot where you get in and you get out all full in
all full out in terms of entry and exit full position
on full position off you can graduate your your
position profits and scale them out logical levels
and still allow your little bit of a portion of the
position to pay out amazingly think about this
let's say you took off half the position here okay
so you have point seven five or three quarters of
a percent so now here you got three quarters of
one percent again you have one and a half
percent here's three percent return just on the
second half now think about that you made
three and a half percent on the second half plus
three quarters of one percent so you're over four
percent just in that trade with graduating it and
just scaling it out now what if you did that every
single week now how about this what if you did
it twice a week what happens if you do it three
times a week how much does your money grow
if you trade like this everything is organized
everything is specifically designed you only
execute with one specific task in mind you buy
at specific levels you sell at specific levels you
trail your stop only when specific levels are
reached for we're going to give you all these
things but think about this this is a five to one
setup this is what a one shot one kill looks like
and it's framed on a daily level it's gonna give
you institutional sponsorship there should be a
willingness to see price rally down here why
because it's off of a daily order block the banks
trade off the daily levels so i hope you enjoyed
this teaching um this the next two will be
actually giving you more detail about trade
ideas and scenarios like this so that way you can
you build your understanding about how you
can build your uh equity and grow it from even
a small account and again if we started with a
thousand dollars okay a thousand dollars
becomes over two thousand dollars after 12
months and i know some of you don't think
that's great but guess what that does in 10 years
if you stick to it never add another penny out of
your pocket it's over a million dollars and my
question is where are you going to be ten years
from now if you have a thousand dollars in your
hands right now will you have a million dollars
10 years from now you got no excuse not to now
until next time wish you good luck and good
trading
 two
Framing Low Risk Trade Setups

folks welcome back this is module 2 of month

two of the ICT toship we're going to be
specifically teaching on how to frame lowrisk
trade setups now before we actually consider
doing this we have to consider what makes a
setup worth taking and ideally selecting trade
setups on higher time frame charts is ideal that's
the primary function of a high odds probability
trade you have to look at a higher time frame
chart to give you the directional bias to give you
the institutional order flow the the support or
resistance ideas that would be framing the buy
or sell idea that you're looking to do and the
reason why we do that is because large
institutions and Banks analyze markets on daily
weekly and month monthly basis now when we
do these things we're locating price levels that
align with institutional order flow this is key
because if you don't have the understanding of
institutional order flow on a monthly weekly and
daily time frame it's going to limit your exposure
to high probability setups higher time frame
setups form slow and provide ample time to
plan accordingly folks that can't day trade uh
folks that can't be inside of the short-term
intervals uh in terms of uh charts they have
businesses they have jobs they have life uh you
barriers that keep them from being able to be a
intraday Trader uh you don't necessarily need to
be a day trader you can be using these higher
time frame charts and they'll be a frame out
really lowrisk high-end probability setups it
doesn't require being intraday what can we do
to lower the risk in a trade the higher time frame
has more influence on price so we focus there
the conditions that lend to a trade setup on a
higher time frame can be refined to a lower time
frame transposing the higher time frame levels
to lower time frame charts is important because
that way we can start to reduce the overall
exposure in terms of Pips for our stops and then
finally refining higher time frame levels to lower
time frame charts allows for smaller stop-loss
placement and by default lower risk okay
sticking to our model uh we used the Aussie
dollar daily chart the last time um we're going to
look at this same set up and we're going to look
at it in terms of refining it with lower risk now I
want you to look at this chart carefully because
this is exactly the same chart you saw in the
previous teaching now I'm going to amplify on
this but it's important you understand the way
the framework is here you're going to see it's
exactly the same thing just brought down to a
lower time frame chart and we're actually going
to do it in two scales lower I want you to look at
the fact we have the higher time frame 75 uh
7512 level relative to the daily chart that's what
this line is here delineating the daily bullish
order block notice we have a old low here and
price goes through that down into that higher
time frame level it's really important you see
that because not only is it just because we're
going below old lows not enough to expect a
reversal okay we're not looking for that just
because that's the case we're looking for a
higher time frame premise why should we
expect there to be buying down below an old
low because this daily chart level 7512 is an old
bullish order block because banks have bought
there before so if we trade into that level again
okay look at the framework here we have a
hourly chart with a low being violated down into
a key support level relative to a daily time frame
we've noted obviously the buy stops above here
just like we did in the first teaching and
obviously the second area of buy stops so we
have upper level objectives framed on this trade
it's not a scalp it's not a uh day trade it's
something that's going to give us a little bit
more magnitude okay for uh objectives for
hauling in Pips now obviously we framed in the
first teaching in this uh month's delivery of
content uh we looked at this down candle as the
bullish order block and we were looking at 7542
as a long entry and obviously by doing that we
framed what a 20 stop this is where our stop loss
would be which would be below the main
threshold of this down candle which is a bullish
orderer block so what if you want to get a
smaller stop in relative terms to uh 20 Pips and
here's a more important thing what if you want
to be buying lower and offering yourself a lot
less in terms of risk exposure well that's going to
require us going down into a 15-minute time
frame everything here look very closely this is
very close to what you saw on an hourly chart
we have an old low price trades down below
that o l right into that key level 7512 level now
this up here is the buy order that would be
needed on an hourly chart way up here but what
if we focus our attention down in this area here
what can we do with this information well
obviously the same thing there we have sell
stops below an old low where buy orders can be
paired up on the smart money side and you see
the market trades down into that level 7512 so
we do have a turtle soup long setup but we don't
require the price to come all the way up here
before we start buying so how can we do this
and reduce risk well we can take the bullish
order block here the down candle right off of
that level and why is this a bullish order block
that's it's valuable and it's worth taking because
this candle trades through it right here and now
we can focus on the midpoint of that candle up
to its high in that area we could be a buyer so
could be a buyer down here at 7520 okay and
have a stop loss down here at 757 it should not
go down to 757 if it's going to go higher it should
go up higher from where it's at now by doing so
now we have a 17 pip stop loss and look how
much lower we are in relative terms to what we
saw on the setup on the hourly chart way closer
to this key level of 7512 and we're using a
15minute time frame to do it so looking at it in
terms of even further reducing the risk we can
take this small little area in here and refine that
same sample size of data okay and we're going
to take a closer look into it okay so we're zoomed
in now on a f minute chart all we're doing is
looking at that same 7512 level okay and we're
refining the entry from 7520 what what can we
do differently here well let's take a look at what's
going on inside this yellow area okay we have
price with another down candle as it hits that
bullish order block 7512 on the daily chart this
down candle gets violated right here so now we
can start looking at this down candle from its
open or high down to the midpoint and we can
be a buyer there or we can just simply say okay
well that's basically the 7512 level we'll just add
the spread to it in terms of buying that puts us
in around 7515 our stop loss could still be down
here at 757 that's less than 10 Pips less than 10
Pips on a buy now you can refine this where your
risk is eight Pips here and in first profit of eight
Pips above here second and thir so we have a
multiple of three R before we even take out the
buy stops above this old high on a 5 minute
chart now Noti this is not even the buy stocks
that was framed on an hourly chart all we're
doing is using the price action on the time frame
we've executed on and looking at where price is
going to be reaching for it so if we have a
multiple of three r or other words we've made
three for every $1 we risked so the price has
already moved 24 Pips up from our entry in here
and our stop is only 8 Pips below where we
would enter at at this old low here notice also by
refining our risk like this we're actually getting
multiple of three R reward for our $1 risk as we
hit the entry that would be assumed on the
hourly chart at that n at 7542 level we're hitting
that level here with lower risk and we're getting
a 3 to1 reward ratio think about that the risk to
reward is $1 for $3 to be made or in terms of
reward the risk we're looking at $3 made for
every $1 risk so it's amazing how you can take
this and refine it down to smaller time frames
you don't have to have big super wide stops but
it does require you to understand what you're
doing and why you're doing it you just can't get
in there with these Ultra short stop- loss what if
you don't understand price action and why it
should be responding on these levels
 three
How Traders Make 10% Per Month

looking at how Traders make 10 per month and

we're going to stick with our theme Here using
our case study on the Aussie dollar Now quickly
obviously going through everything we've gone
through in the previous two sessions we've
identified the 75 12 level on a daily chart we've
brought that down into a hourly chart we
noticed that there was buy stops above us so we
know that there's liquidity pools resting above
very specific highs so the market should be
reaching up there as much as 100 Pips from the
level we're identifying 7512 so very easily get up
to 76 12. um looking at the 15 minute time frame
as we've shown earlier in this series we've shown
that there was a buy set up at 7512 on the daily
chart we had a old low everything that we
referred to and what to focus on in September
everything is being identified in this specific
case study we don't really require the market to
give us an hourly set up to get in and use that
risk we can use a 15 minute time frame and used
the the framework that price gives us on that
specific time frame relative to what you see on a
15-minute time frame uh obviously the risk can
be reduced from what would be seen on an
hourly chart and then just as well the 15-minute
chart can be reduced down into a five minute
chart and we identified where the stock could
be in relative terms to the bullish order block
and we also framed out where three to one
reward to risk ratios would unfold and it
happened to be right below our first area of buy
stops or the five minute liquidity pool now this is
nowhere near the level of the objectives we
identified just framing the trade on an hourly
chart I'm just giving you the context what if we
were to look at the market like this and say we
traded this particular pair and we had a two
percent risk on the trade foreign if we had two
percent on the trade and the market trades up
to this high where the buy stops are that's a
liquidity pool the market should respond off of
that 7512 level because the daily chart reference
point or bullish order block if we take our two
percent position and take half of that position
off as we get three to one notice it doesn't have
to even blow out the buy stops here these buy
stops don't even have to get blown out this is
three to one reward the risk so we can take first
profit and Bank a one percent times three R so
we can make three percent on this one trade
here and still leave the second portion of the
trade on aiming for what those liquidity pools
referenced on the hourly chart now as price
explodes and goes through those buy stops
obviously you can see going up to a 15 minute
time frame now we can go and look at higher
liquidity pools reaching into higher and higher
grade liquidity pools until we get to that hourly
chart but for right now just simply look at what's
already happened the framework we used for
the five minute chart that we've outlined in the
second session that model on risk allows us to
have one two three four five six seven eight nine
r in other words we made nine dollars for every
one dollar risk just reaching into the 15-minute
buy stop liquidity pool the liquidity pools that
we saw in our chart that's what's being
identified for our objectives but now here we
have a we have a uh a Crossroads you know can
we take some of the position off here or do we
leave the second balance of the original position
of two percent we only have one percent
remaining on we could take a portion of that off
or we can leave it to go higher and reach those
higher objectives the choice is going to be yours
preferably I think I would like to take something
off because we're in a really nice liquidity pool
relative to the 15 minute time frame and we
might get some consolidation or could be
wrong could even reverse here we don't ever
know that but we are trading with higher level
institutional overflow relative to that daily order
block from 7512 we have seen expansion on the
upside it's now taken by stops in the form of a
liquidity pool in the five-minute chart we just
shown then now we've see the 15-minute
liquidity pool in the buy stops over here that's
been violated so we've already seen nine to one
payout which is astonishing by any measure
and in letting the price go a little bit further once
we clear this buy stop the area over here would
be reached into as well and we'd have 15r as well
now this is the liquidity pool that we're resting
around that same hourly basis I'm just viewing it
in terms of the 15 minute chart you can see the
expansion is available to you when you look at
the market framing it with very low risk very low
risk now notice also we took first profit at a
multiple of three to one so we made three
dollars for our one dollar risk as soon as we did
that we've already made three percent on the
trade with ultra short-term risk less than 10 Pips
that was it less than 10 Pips but let's just say we
we framed the trade with a little bit more than
that say we used a little bit more comfortable
stop say it was a 20 pip stop could that still pay
out in handsome Rewards why wouldn't it
obviously the market reaches above the stops
we know that the market reaches for 10 and 20
pip grades for stop sweeping we have the old
high back here and price just gets real close to it
but expands right above where we would
expect to see price reach for here's what I want
you to focus the potential range was about 100
Pips from where we were looking at buying and
where we thought the price is going to go we
don't need the absolute high and we don't need
the absolute low we're looking at the lines
portion of the move about nine about 100 Pips
let me ask you a question do you think you'll get
every pip of every potential range you identify as
potential profit if you're insisting on it you're
going to be frustrated but you don't need that
what happens if you just had half of the range
would you be disappointed if you say yes he
would be disappointed my question is why
would you be disappointed is that better than
what you're doing now as a new Trader it's
probably going to be very easy for you to say
well that would be better than I'm I'm currently
doing now let's look at some numbers assume
for a minute we had a 1 000 trading account and
we set the trade up originally as we did with the
five minute chart less than 10 Pips we're going
to say we rounded it to a 10 pip stop loss and the
market came up and allowed us to get our three
to one multiple in this trade we would already
have three percent paid to us now we're going
to assume that you've gone through the
mentorship you've learned how to do this and
you've gone to the point where you are
comfortable trading with live funds or maybe
you're still in the demo account if that choice is
yours you have to make the decision in timing
for your own sake I can't do that for you but say
for instance you're looking at the trade and it's
praying just like we were outlining it here and it
allows you to get a two percent position on in
other words the trade is two percent risk if you
have the opportunity to get three to one paid
out and you take that off your position now you
have one percent remaining the first one
percent taken off with a multiple of three to one
you'd be taking profits at 30 Pips you've already
banged three percent look what that does in a
month by itself it's over 10 percent so even if
that's all you get is the first profit objective of
three to one so if you frame your trades with
really small risk it's easy to get multiples of three
to one or more for your reward so your R levels
are easy to get to when you start refining your
risk see it's not having big risk that makes the
money it's having this small risk that makes the
money that's the real secret the fact that you
need to be able to frame your trades on levels
that should see institutional sponsorship that
means should the bank's Propel price higher or
lower because it's off a daily chart or weekly
chart on monthly chart those levels are going to
be highly impactful in terms of price action
they're going to drive price higher and lower
relative to those levels because that's where the
real orders are it has nothing to do with your
indicators has nothing to do with your supply
and demand or your theory on price has nothing
to do with that it's where the orders are and the
order is going to be around monthly weekly and
daily levels now what if you let the portion of
that second half go and you only got half of that
100 pit range remember we were looking at that
setup it was potentially 100 Pips available to you
but say you only let it go 50 Pips and you just
couldn't bear to hold on to it that's all you could
do or you did something that got you stopped
out early okay you tried to stop up too
aggressively and you only managed to make 50
Pips out of that now this is assuming you've
already taken that first one percent off this is the
second one percent that's remaining on the
trade by itself if you collapse at 50 of the uh 100
range we were looking at you're tacking on
another 21 plus percent for the month if that's all
you're doing week after week if you're getting
scenarios like this one trade you're focusing in
tightly watching One setup and you're milking
it for everything that it's worth keeping the risk
small and looking for higher time frame
objectives if you do that you're looking at 21 plus
percent what it's going to cost 21 plus your
original three percent on the first half of that
trade so really what are you making and you
didn't even get the entire 100 pit range now
think about that we used the same scenario
where we use the 10 pip stop and we let the
second portion run after three to one was taken
off at 30 Pips then we let the Marine portion run
and say we only managed to get half that 100 pit
range who would be upset would you be upset
with that I don't think you should if you are it's
greed you can't allow greed to do this to you
now what happens if you get the entire 100 pip
range say you get your 100 takedown another
one shot one kill you get it for the entire week
the second portion of that trade net you over 46
percent that's in one month okay if you let this
continuously pain out and you do this every
single week and you're looking for one shot one
kill Seven Arrows and you get 100 pip objectives
taken down on the second portion of your trade
remember you're already taking partials off at
three to one so you're taking one percent off if
every trade you take is two percent once you
know what you're doing you scale off one
percent at three to one and you wait for the
second portion to reach for these higher higher
time frame objectives that's how you make a lot
of money you pay yourself initially get paid pay
the trader take partials don't listen to people
that don't make money you have to pay yourself
because you don't know if your trade's gonna
pay now but once you get three to one you've
already are you're already living in an
environment that pays exceedingly well think
about that if that's all you manage to do is get
first objective at three to one it's all you ever did
nothing ever panned out beyond that who
would be complaining about that only folks that
are demanding Precision beyond your personal
efficiency right now you can't do it you don't
have that level of uh efficiency yet you can grow
into that over time but you have to allow that
time to take place but if you get these one shot
one kills where you're looking for a nice weekly
trade of a 100 pit range you don't need the 100
pit range to pay you out handsomely but if you
go in aiming for it once in a while you'll hit it and
we'll just play devil's advocate for a moment and
again we're going to assume for a moment you
did you're able to take down 100 Pips a week it
may require you to do another trade to pan out
to get to that 100 Pips I'm not telling you to force
yourself to get 100 Pips every week but it may
require you to do a second trade or a third trade
or you may take another trade and it reduces
you down to just this you can lose you're going
to have it you're going to have an uh
encountered uh uh barriers like everyone else
does in trading but if you're making your second
portion of your trade pan out and you're
reaching for higher time frame objectives like
we just framed up this trade a low risk trade
that's been framed on a higher time frame
premise with the things that I taught you to
focus on on the month of September's content
the second portion of the trade will always make
more than the first obviously you're getting out
early with a portion but the partial is not a
weakness it's not an impediment to you making
more money when when when Traders or
Educators or other folks say that you're taking
off some of the trade before it gets to a a profit
objective that you've had in mind beforehand
that's coming from someone that does not
make money consistently and I'm telling you
because they're forcing themselves to hold on
for their ultimate objective and their two black
and white in profit taking you you have to pay
yourself when it's available if you're binary It's All
or Nothing you're never going to be as good as
you think you are believe me I'm very proficient
with price action but I don't demand everything
all off at my profit objective my higher end profit
objective I've learned to pay myself because as
many times I've seen I've had really handsome
uh profits sitting in a trade but I did not allow
myself to take something off and I watched it
come all the way back and turn into a loser or
come back and take me out with a A minus stop
loss and then run in my favorite which is very
frustrating and you've probably encountered
that yourself but let's say for instance you
couldn't manage to do that trade with 10 Pips
and you were just stuck to that one hour setup
no problem no problem there's no reason to be
upset about that if you allow that 20 pip setup
to give you a 50 pip run okay think about this if
you take the first portion of that trade off and
you only get 50 more Pips Beyond in other
words you've you've placed your trade on and
you paid yourself a modest 30 Pips move to the
sidelines and then you only managed to get
another 50 Pips well you made over ten percent
right there on the second portion of the trade
think about that it's not about how many perfect
exits and entries you get this is after your first
profit you pay yourself something and then let
the partial run the balance has to run and that
will always pay you more and here's the thing
the psychological effects of it not being uh a
trade that's already paid you you've taken some
skin off of it and that's good because you have
one pound of Flesh now okay for your time your
energy and your focus in that Marketplace when
you focus on trading like that 10 in one month
on the back end of your trade that's not just
we've already factored in counting the first
portion of your trade that goes without saying
that that leads to 12 by itself but if you can't do
this Ultra short-term trades you can still do
trades like this and that's still handsome ten
percent compounded over the year is over 300
percent for the for the year and that's amazing
where else are you going to get 300 return
there's no money manager out there going to
raise his hand say I'll do that for you there's no
fund manager is going to say hey look you know
I'll double your money in a year and I can
consistently do that I'm going to work hard to do
that they're not working hard for your money
okay they're doing very little they're very lazy
and you're going to watch your money better
than anybody else so when you see things like
this it's real important you focus on that number
is an astonishing number you can do very very
well with tripling your money every single year
10 a month compounded does that
 four
No Fear Of Losing

okay folks welcome back this is the fourth

installment of month two of the ict mentorship
we'll be specifically talking about why losing on
trades won't affect your profitability what
trading with fear of taking losses actually does
to your trading while staying concerned about
taking a loss promotes fear-based decision-
making equity that is managed by traders that
cannot take a loss can't profit long-term losing
is inevitable fear-based decision-making keeps
focus on the adverse finally fear-based decision-
making fosters trade paralysis or inability to
execute efficiently now why profits are
achievable despite taking reasonable losses the
professional equity manager understands that
losses are costs of doing business using sound
equity management and high probability
setups yield handsome percent returns trading
scenarios that encourage potential three to one
reward ratios provide initial foundation and
finally defining trade setups that frame five to
one reward to risk or more efficiently cover
losses okay folks we're going to give a brief
overview on framing a trade just for the context
of this discussion looking at this sample size of
data as it relates to price action we'll be referring
to a specific concept note as market setup and
framing the risk to reward multiples obviously
we're going to use a standard in my repertoire
the bullish order block as we see here the
market returns to a previous institutional area of
buying noted by the down candle prior to the
previous rally higher by noting the down candle
or the bullish order block high to open price
defines the fair value gap or most probable
support now specifically inside of that
retracement into the order block there's a mean
threshold and a hypothetical long entry on the
secondary bullish order block what i'm going to
refer to is this down candle here the middle of
that candle we're going to be using that as a
mean threshold in other words we don't want to
see that violated on the closing basis now using
20 pips as the trade stop loss easily frames
reward multiples of three to one reward the risk
and five to one reward the risk or even higher
nearly an old high 20 pips above it gives us a nice
objective above where price would be retreating
to now having a simple trade idea based on the
things that we taught in september on what to
focus on or what you should be focusing on right
now in price action let's take a look at some
things regarding those setups and how we can
frame good reward multiples how we can frame
the ideas and justify why taking losing trades
doesn't really or shouldn't have that much of a
impact on your long-term profitability going to
assume that we're using a hypothetical account
size of five thousand dollars and we're going to
start with a low accuracy rate of 30 percent that
means that you're losing 70 percent of the time
we'll be looking for trades that are reward to risk
ratio of three to one that means we're hoping to
make or willing to hold on to a trade to pay out
three dollars gained for every one dollar that we
risk we're risking on each trade one percent of
our five thousand dollar account because we're
risking uh one percent and we're looking for a
yield of three to one reward to risk our average
wind wind trade it should be 150 and our
average loss should be 50 or 1 we'll be focusing
on a sample set of 10 trades and we're going to
say that 30 of those 10 trades are winners and
obviously 70 percent would be losing trades out
of those ten trades we are assuming that three
wins in ten trades and seven losses in ten trades
the average profit again is 150 and the average
loss again is 50 the subtotal for the three wins at
an average profit of 150 would bring us to a 450
winning basis on the three trades out of 10 that
were winners and the subtotal for the losses
would equate to 350 or 7 times 50 of an average
loss even in this low accuracy rate with a
multiple of three to one you still can marginally
eke out a net positive profit it's not much and to
look at that it doesn't seem like anyone would
would be terribly excited about that but if you
were doing 10 trades over the course of a month
and you netted two percent return i can tell you
that is an absolutely amazing return for
managed funds so if you're not going to be
trading your own capital or if you're aspiring to
be a trader that manages other people's money
so again two percent while that's not terribly
impressive on the grand scheme of things two
percent compounded over the course of a
calendar year two percent per month that it's an
astronomical return for managed funds let's
assume for a moment now we're going to start
focusing on reward to risk multiples of five to
one that means we're trying to make five dollars
for every one dollar that we risk and we're
keeping the same sample set of looking at 10
trades and we're still looking at the accuracy
rate of 30 percent the only thing that's changed
now is we're framing trades that have a multiple
of five to one reward risk suddenly our three
winning trades out of 10 sample set the average
profit becomes 250 or 3 wins at 250 average
brings us a subtotal of 750 the 7 losses in the
sample set of 10 trades average loss is 50 that
still leaves us at a sub total of three hundred and
fifty dollars seven hundred fifty dollars minus
three hundred fifty dollars gives us a net profit
of four hundred dollars or a eight percent return
now again if we're looking at 10 trades over the
course of one calendar month to see results like
this with a very very low accuracy rate of 30
percent still brings us an 8 return that's a
wonderful return for a monthly rate now we're
going to take a look at having a low accuracy
rate of thirty percent with the reward to risk
multiple of five to one and now we're going to
be risking two percent of our account so now
the average win jumps to five hundred dollars
and the average loss jumps to one hundred
dollars again keeping accuracy at a low thirty
percent accuracy that means we're losing 70 of
our trades out of a sample set of 10 trades over
the course of a calendar month three wins at
two percent risk per trade multiple of five to one
range three i'm sorry reward the risk our
average profit jumps to five hundred dollars if
our three winning trades at five hundred dollars
average profit gives us a subtotal of fifteen
hundred dollars are seven losing trades at an
average loss of one hundred dollars or two
percent of our equity the subtotal would
obviously be at 700 now the average loss in
average profit would increase as the equity
increases or drops but for these examples we're
looking at the sample size of data and a sample
set of 10 trades so the details are you know being
shown here with a very hypothetical basis but
with subtotal on three wins of 1500 and this
seven losses subtotal of 700 that would give us
a net gain of 750 or 15 return again crazy returns
with just a very low accuracy now think about
this for a moment when you first got into
trading you were wanting to get 90 accuracy or
100 accuracy or 98 accuracy you can still make
ridiculous returns with having very low accuracy
okay you don't need high accuracy you need the
framing of the reward to risk multiples in your
favor and we didn't really go crazy with our
rescue that we're only doing two percent
maximum portrayed all right so now we're
going to look at an accuracy increase to 40
nothing's changed outside the previous
example here so now we're going to say 40 of a
sample set of 10 trades four of the 10 trades or
winning trades average profit per trade still at
five hundred dollars our four trades at five
hundred dollars average profit brings us a
subtotal of two thousand dollars our six losing
trades out of the ten average losses still remains
at a hundred dollars per loss six of them would
give us a subtotal of six hundred dollars that
would give us a net profit of fourteen hundred
dollars which would be again that's a twenty
eight percent return with just a ten percent
increase in accuracy a factor of two percent per
risk and reward the risk ratio again framing on a
model of five to one now we're going to look at
an increase in our accuracy to say we've been
trading for a while we know our trading model a
little bit more intimately we know what we're
trading we know how to frame our trades we've
learned patience uh we've been able to stick to
our rules and our parameters about our reward
to risk framing we know how to reduce our risk
while we're in a trade and our accuracy
increases by default we're going to say we jump
to a 50 50 basis in other words half our trades are
winners and half our trades are losers on a
sample set of 10 trades the average win stays at
500 the average loss stays at 100 dollars five wins
at an average profit of five hundred dollars
brings us to a sub total of twenty five hundred
dollars while five losses of the ten simple set
trades average loss is a hundred dollars or a
subtotal of five hundred dollars so twenty five
hundred dollars minus five hundred dollars loss
on five losing trades gives us a net profit of two
thousand dollars or a forty percent return on ten
trades the factor of just increasing a fifty fifty hit
rate will reward the risk five to one with a risk
per trade two percent the only thing we're doing
is framing our trade around a little bit more
success in other words our ability to read price
action look how fast our multiples jump up and
we haven't increased the number of trades we
haven't increased the risk per trade either
accuracy rate of fifty percent our reward to risk
model stays at five to one but we're going to
lower our risk per trade to one percent that
means the average win drops back down to 250
per win and the average loss is down to 50
dollars per win our hit rate we're going to say is
50 50 still that means five winning trades out of
ten average profit is twenty two hundred fifty
dollars and five wins at two hundred fifty dollars
brings us a subtotal of twelve hundred and fifty
dollars and in five losing trades out of the
sample set of ten trades average loss being one
percent of the five thousand dollar account or
fifty dollars in this case five losing trades with an
average loss of fifty dollars gives us a subtotal of
twenty two hundred fifty dollars so twelve
hundred and fifty dollars of the five wins minus
the subtotal of 250 on the five losing trades gives
us a net profit of one thousand dollars now i
want you to take a look at this for a minute okay
think about this for a minute you only have to be
right half time or another way of saying it is you
can afford to be wrong half the time you're
looking for trades that pan out five to one and
you're risking one percent of your account now
think back to the moment when you first started
learning about trading and you felt that you had
to put big risk on we're not talking about two
percent which is the industry standard here
we're talking about one percent one percent
makes millionaires if you look at the one percent
risk per trade and the accuracy rate of only 50
percent this by itself is exactly what everyone
would dream of as a rate of return 20 per month
if you could get 10 trades per month half of them
be wrong but framed all of them on five to one
reward risk with one percent risk only your rate
of return is 20 percent with only one percent at
risk this is optimal trading goals this is exactly
what you should be aspiring to do you're not
trading a lot you're not demanding a high rate
of success or accuracy you're not pushing the
limits on your risk you're keeping it at a low
you're doing half the industry standard in terms
of uh risk for per trade usually it's two percent
maximum okay well we're doing one percent let
me ask you a question what if you were to drop
that risk per trade down to a half a percent
would you be upset with 10 return per month
my question would be why would you be upset
with that now imagine if we were to consider
what was two percent per month with thirty
percent accuracy one percent risk per trade
with three to one rewards risk model on our first
example that's exactly what large funds look to
do for their clients over the calendar year they're
looking for one to two percent per month and if
they can compound that over the course of a
year they can give their investors a 20 25 to 28
return on the year and believe me there are
millions and millions of dollars sitting out there
that would love for someone to be able to do
that for them so you don't need to have these
astronomical rates of return per month to
manage other people's money believe me they
would go crazy if you give them one percent one
and a half percent two percent per month and
you only need to do three to one reward risk to
do that with one percent if you do one percent
here and you have a 50 chance of being
accurate and you frame your trades around five
to one look how easy it is to get into a really end
yield for the month 20 percent you don't have to
trade every single month if you're managing
your money or other people's money see this is
an optimal goal because it gives you the cushion
to do basically half the year of trading there are
some months in the year that you don't really
want to be trading so if you can do a multiple of
five to one and yield really handsome results and
i'm not saying that everyone's going to get 20
returns or higher every single month but this
should be a good trading goal for you to frame
your trades around we're expecting only half
your trades to be accurate framing on five to one
rewards the risk keeping your risk low one
percent by doing this it gives you the optimal
objectives it gives you low hanging fruit it
doesn't force performance and it gives you an
opportunity to relax and actually enjoy the
process of trading there is no fear that's justified
in taking losses they are all part of this business
it's all part of the game it's all part of your job as
an equity manager you're going to weather
losses you're going to so you're going to assume
losing trades that's all cost of doing business no
one goes through their career without taking
losses you're going to have lots of them if you
trade for a long time if you had a column of all
your wins and all your losses your losses are
going to be very very long in the list but it does
not dampen or does not remove the profitability
factor that's still available to traders that know
how to frame their trades with good multiples of
reward to risk keeping risk managed and
defined and thinking about how they're going
to trade with these parameters if we use the
example we've shown in the beginning of this
video with a 20 pip stop all you have to do is take
well what's one percent of 5 000 it's 50 so if you
have 25 stop you divide that by 50 dollars and it'll
give you your dollar per pip leverage and that's
what you would use for your trade and that
would give you all of these numbers that you see
here now again we can only speak in terms of
hypothetical but it's a rule or general uh
principle that you're going to build on as a trader
highlighting the fact that you don't need high
accuracy i did not show 60 accuracy i didn't
show 70 accuracy i didn't show 80 or 90. none of
that's necessary but as time goes on and you
grow in your proficiency and you're in your
understanding about price action and you as
the trader by default your accuracy rate will
increase and you'll never demand or need for it
to be higher than 50 50. so until the next
discussion and next teaching i wish you good
luck and good trading
 five
How To Mitigate Losing Trades Effectively

okay folks welcome back this is teaching

number five in the second month of the ICT
mentorship we're talking specifically about how
to mitigate losing trades effectively we're gonna
look about look back at the same sample size of
price action and we're going to go through it a
little bit differently and we're going to assume
that we were studying this particular asset class
or Market if you will and we go through our
standard markup of the market setup and
framing the risk and reward multiples and we
noted the little shoulder block and we identified
where the market should come back down into
it and we identified the mean threshold and
hypothetical long entry on the secondary bullish
order block now assuming for a moment that uh
we saw this down candle here okay it's all
supporting the idea of we should see uh some
buying or or recapitalization of this down candle
we see that happening here now we don't know
for sure that's going to happen but let's assume
for a moment that we went in and we took
Along on this position okay and understanding
the mean threshold we don't like to see the
middle of the down candle on a bullish order
block be violated because some of you are all
new and there are chances that you'll probably
take the trade and want to have a stop loss just
a little bit below this means threshold and
there's nothing wrong with that normally but
let's just say for instance you did that and you
got stopped out okay what would you do let's
assume you you did that and you got stopped
out what would you do obviously I'm going to
throw you a plot twist you can say yeah you got
a stop out here and you took a full two percent
loss or if you're a hot shot and you think you're
really you an elite Trader if you will you risk more
than two percent you probably would have
been burned pretty bad and if you're a gambler
and you risk a lot of money on your trades like
that and you don't feel any pain that's a problem
but we don't need to take huge risks we don't
need to take a lot of Trades but we will
encounter losing trades so I'm going to give you
a scenario and assume for a moment we saw
this panning out we saw the idea that there
should be some upside but we put our stop loss
A Little Too Close to the market and say we took
a full stop now assuming that we took that long
position and our stop was below the mean
threshold and it hit our stop let's assume for a
moment that our maximum leverage and risk
on the trade would be at a full two percent well
that means we'd have to take another look at
the same trade and reevaluate whether or not
it's something we can still trade obviously we
had our mindset on this potential setup initially
but if the trade hasn't completely unraveled just
because it swept us out below the mean
threshold on our initial try going long it doesn't
mean the trades completely no longer viable it
just means that we probably were just
inaccurate in terms of where our stop loss was
placed and we had to take another basically
stab at it so now we can take a look at that new
order block that forms with this down candle
price trades away through it on this candle right
here it trades above that down candle so when
it does that that authorizes any new return to
this down candle as a buying opportunity Mark
comes down into it here okay we can take a long
position here okay and now this time we're
going to allow a little bit more movement
against us okay because we still would have a
strong conviction or hypothetically a strong
conviction that the market should move higher
difference is is we're going to go about our
leverage a little bit differently and we're going to
allow ourselves a little bit more movement
against us we're not going to be so high strung
about getting an ultra tight stop loss this time
our stop loss is going to actually be below the
order block that we're framing our trade around
so the market has created a down candle we
showed and Williams to run away off support of
a previous down candle which is a bullish order
block we saw a willingness to capitalize buying
with the movement away from this here came
back down we want to be a buyer right in here
at the top of that candle okay so if we did that
and we use the bottom of the candle as our stop
loss what are we going to do differently with this
well we're going to go long with one half of the
position size we used on the initial loss so for
instance if we took a initial loss of two percent
on the first trade we have to go down to one
percent if we were trading with one percent and
we took a full loss on the initial trade we would
have to drop down to one half of one percent of
our total Equity base now if the initial loss was
two percent of the equity base this trade again
would be one percent of the equity base in total
risk so we're defining the trade by entering at
the top of this body's uh or this down candle we
get the opening so we'll be getting long in here
okay if we were to elect to use this down candle
as an entry we could see the return back down
into this down candle as well using that either
way we're going to use this range defined by the
opening of this down candle or the top of this
down candle as our entry either instance on this
movement down or this movement down in
here would have given the fill this is our total risk
stop below the order block main thing is is we're
using half of the leverage and and position size
that we used on the initial loss so we're defining
our trade with this in terms of the risk now all
we're going to do is refer back to the original
idea of that trade where we first took a loss
hypothetically and we're going to frame out the
idea that the same thing would be seen
hopefully if we're right in our directional premise
with one movement up that would be a multiple
of R1 so if we have one percent at risk defined by
the entry in here and stop below here once we
get to this price point here we're already at one
percent return so we got half of our initial loss
back in open profit once we get one more
standard deviation from what our risk is defined
by we're already at two percent mitigated in
other words our losing trade that we just had
using half of the initial risk is already mitigated
now at this point here this is one of those
instances of your new Trader this is where you
want to consider taking the trade off and I can't
stress this enough sometimes it's just good to
get back to even and relax and then regroup
especially if you're late in the week for instance
say you've been trading all week and you took a
loss and it's a Thursday or Friday now and you
get the opportunity to get that two percent full
stop out and back take it off close the week flat
do not go into the weekend with a net loss if the
market presents the opportunity to give you
that loss back and you're late in the week or
you're late in the trading session take it off the
table move to the sidelines and be glad that you
did there's nothing saying this is going to
continue going higher so that's why once the
market gives us an opportunity to erase our
errors do so notice that at mitigating two
percent of the initial trades loss or the initial
trades uh um total loss of two percent of our
Equity base we don't even require the market
trading above the old highs in here where the
buy stocks will be residing so notice that we're
already able to mitigate the initial loss of a total
two percent a hit on our equity and it hasn't
even really fully moved to our objectives
obviously with some multiple of 3r we are now
in New Territory so now we've made a new Net
game if you're going to allow the position and
not listen to it just suggested this is where you
want to Trail the stop loss up to where you can
no longer lose back Below open profit of the two
percent loss once it's been mitigated you're
going to lock that in so your trailing stops also
be placed right there and you would not permit
the market to come back against you and if it
stops you out it stops you out bottom line is is
you're not willing to go back down below if it
gives an opportunity to recoup the drawdown
take it or lock it in so it cannot take you back
down below um your Equity uh uh reference
point before the drawdown ensued once we get
a multiple of R3 okay in my opinion that's about
where you want to take your profits and square
it off so either you take it off once you mitigate
your loss entirely when you get R2 okay because
that's going to basically pay you back whatever
your your loss was percentage-wise even if you
cut that trade leverage in half regardless of what
it is you only need a multiple of R2 to get that
trade paid back to you okay and how many
times have we talked about opportunities how
there are so many opportunities of the frame
three to one or five to one or even more
throughout the week you don't need very much
to get that losing trade back and that's why it's
something that's not requiring you to spend a
lot of time fearful of or obsessing about when
you take a loss they're easy to get back you just
got to allow your mindset to stay focused once
the market provides you R2 or the mitigation of
your initial loss you want to lock that in and then
give the market room if you're going to not take
the the two percent back off or whatever that
initial loss was if you don't take it off and repay
your drawdown and bring you back to the
equity base Equity High rather prior to the
drawdown you and so uh you want to at least
lock that in initially as your developing Trader
you want to just take it off the table and just be
thankful that you got it back as you grow into
the next stage of the development you want it
to start locking in your stop loss after you get
your loss mitigated and then see if it has any
more room to go but initially you want to not do
that you want to train yourself to say okay I fixed
my error I've corrected the drawdown I'm going
to move to the sidelines and start fresh okay the
next stage would be would be to lock that in and
don't allow your your drawdown to return and
see if the market has room to run again in this
case if you allow the market to run and you
mitigate your two percent loss after seeing an
R2 multiple with the one percent risk now you
have one percent gain so now you have a new
Equity High all in the same trade all this has
been done in the scope of just looking at one
setup that you may have messed it up you may
have got in and you got too aggressive about
where your stop loss should be or sometimes
you're just a little early and it's going to run and
go to a level that would make perfect sense after
you see it do it but because some of us are very
emotional very rushed to get in to make a
decision there's no reason to fear going back in
and taking a look at that trade um how many
times have you uh incurred a loss and you knew
that there was still a probability or possibly
seeing that trade pan out in the direction you
thought it was going to go initially but you were
too afraid to go back in and lose money if you
drop down your amount of Leverage and your
total risk cut it in half okay let's get uh let's play
Devil's Advocate just for a moment say we
bought this one here okay we bought this one
here and then we used the mean threshold as a
stop and it stopped us out here and then we
used this down candle when price ran back
down into it okay we went long and say for
instance um you know we did the same thing
we were using this middle of this candle here
and we want to have Ultra short-term stop loss
and it came down against us and squeezed us
out or maybe it scared us okay and the market
runs again when it comes back down into this
order block here that would be another
opportunity so if you started with what if you
started with two percent here on this trade here
and you got knocked out and you had a full stop
the likelihood of you having that probably next
to the impossible but we're gonna say you took
a full stop at two two percent here on this on the
stop say you took a one percent full hit here on
this being aggressive trying to place your stop
way too short at the mean threshold okay and
you get stopped out again you would have to go
down to one half one percent right here right
here okay so again with that same mindset if we
were using an entry on this basis and the stock
would have to go be below this load now look at
the range between this candle's opening right
here and this low think about that in terms of
the range that would be your risk okay Watch
What Happens there's one half of one percent
one percent one and a half percent two percent
you still would have made back your two
percent just on that run here so your your initial
large hit of two percent even with one half of
one percent would have been mitigated so then
you would only be down what one percent and
you can actually let the market run or take
another setup it doesn't have to come back from
it doesn't have to come back in all one trade in
other words one trade doesn't have to erase all
of your your losses but don't think that you can't
make the money back or mitigate the losses
okay without increasing more risk you can
actually do it by reducing risk and I I taught this
principal years ago online and folks that saw it
they were like uh this is stupid why would I want
to cut my risk or my leverage down after a losing
trade uh well it's because Equity preservation is
the number one rule in this game and we don't
know with any Absolution that our trade's going
to be profitable so why would any Trader think
like a and not dial back their leverage if they take
a losing trade that means you're doing
something wrong the likelihood of you going in
and making a winning trade on the next trade
as a new Trader highly unlikely because you're
going to be rushed to get back to square one
you want to get that loss back right away
emotionally psychologically that's what you're
thinking but it's not necessary to get it back on
the next trade but in this example it's very
important we can see that getting to that R3 you
can get back your full two percent if that was the
case you don't need to have increased leverage
you don't have to increase your risk but you do
have to have patience to allow that loss to be
mitigated and you don't need to do it by scaling
up your risk you actually do it by scaling back
your risk because if say for instance that your
first hit at two percent you took a two percent
loss how do you know that's not a beginning of
a 10 string losing in other words what's to say
you don't get nine more losing trades in a row it
can happen to you it can happen to me it can
happen to anyone so if you do that and you keep
going at two percent or worse you increase your
risk you're throwing good money after bad
you're You're Building toxic thinking you're
allowing yourself to be beaten down
emotionally you're going to spend a lot of
mental capital and you're going to grow into
fear-based trading and we already spoke about
fear-based trading what that does in the
previous uh lesson and we don't trade with that
we want to avoid that mindset
 six
The Secrets To Selecting
High Reward Setups

okay folks welcome to the sixth teaching of

month two of the ict mentorship we're
specifically dealing with the secrets to high
reward trading setups now some of you may
have already went through my trading plan
development series it was a long video series it
has a lot of information it was really aimed for
those individuals that have never really had
exposure to the marketplace giving them ideas
on what direction to go and what to focus on
primarily and while it is a great deal of
information for a neophyte it is necessary to go
through those things because it has to give you
well not it doesn't have to but when you're first
starting out it's important that you have a
mentor or you have a framework or a foundation
to build upon to give your your trading career a
direction one of the most recurring themes in
my role as a mentor is you know where do i
begin what should i do first you know where
should i be focusing my attention at now what
should i be studying okay and while the trading
plan development series is still good it's still
valuable in my opinion um not because i made
it but because it's again it's useful some of you
majority of you actually are actually really
exposed to my content and my material as it
relates to trading specifically to foreign
exchange but i think that if if one were to look at
what i actually do on a day-by-day basis what is
the procedure what are the things that i do to
elect a specific stance on the marketplace what
makes me bullish what makes me bearish why
do i focus on one currency pair over another all
those things are decisions and processes and
while we will have specifics in relationship to
how i arrive at individual specific views or uh
decision points as relates to how everything fits
together on in my decision process it's
important that we start with kind of like a a
micro version of the trading plan development
series in this teaching that's what this is while
it's not going to be comprehensive as the
trading plan development series was this one's
going to be a little bit more specific it's going to
be more salient to the things that i do as a
specific forex trader i don't look at all the things
that the trading plan development series video
course spoke about um they do occasionally
come up in my thought processes but they're
not all required to come to a trade decision okay
so we're going to go through a lot of the things
that i believe that if you've been exposed to at
least all my free tutorials uh we're gonna be able
to get down to a little bit more process and uh
decision based parameters in this teaching now
it's important also that we go into this with the
proper mindset okay i don't want anybody
thinking we're going into trade signals we're not
talking about trading patterns we're not talking
about uh stop-loss placement or or trade
management none of those things are uh
important here this is the the last primer for us
before we start going into the the specifics of
breaking down individual decisions um each
process which as a collective whole as we'll
discuss in this teaching will you'll see that that's
how the ict mindset is you know what we do on
a day-by-day basis what frames our opinion
about certain things and when do we change
those opinions and when we move to the
sideline all those things come by way of process
thinking okay and it's important that you
understand that while entry signals and and
stop placement and patterns and order blocks
and overflow and all the ict you know jargon and
the things that get really uh exciting there's got
to be a little bit of dry information uh presented
to you and it's important so i don't want you to
look at this video and go through it and walk
away with well you know this isn't really
teaching me anything it really is teaching you
it's going to teach you how number one to think
in terms of foundations because we have to
understand where we're building on to elect a
decision relative to whether we're going to be a
buyer or seller or where we're going to stay in on
the sidelines okay because that's the real secret
to trading understanding what makes the
process arrive at a decision okay you know what
is the process what you know what are the
components that help you arrive at whether you
should be a trader uh buying or selling or
staying on the sidelines and what asset class
should you be trading and what specific pair if
we're going to be dealing with foreign exchange
as we are in this teaching all those things will be
a little bit more clear a lot more clear i should say
by having the thought processes that i'm going
to introduce here now obviously there has to be
a specific order okay there's got to be an
hierarchy to what it is that we do as a trader
what makes our decisions you know
incremental what what do we do first what do
we focus on first and obviously i've i've been a a
strong supporter of the notion that every trader
needs to have patience obviously and you know
after patience then we have to understand
obviously what defines trade environments you
know are the environments conducive for
trading right now uh that's a topic that
obviously goes um largely on uh taught by
majority of everyone that's teaching and has
courses or whatever they do in terms of uh
teaching the populace and i do a lot of work with
that in this mentorship and it's going to be a lot
more spread across the entire mentorship so i
don't really have one specific teaching that talks
about when you shouldn't trade there's going to
be a lot of things that you'll come by experience
and learning that define those environments
okay uh the next stage is obviously to determine
a trade parameter you know what makes your
trading um you know a buy or sell you know
what gives you um those notions to even take
action obviously it's not simply you know well it's
been going up for last 60 minutes so i'm going
to buy or it's going to be going lower because of
an interest rate announcement i believe that's
going to happen so therefore i'm going to you
know trade on that it has to be very defined okay
it has to be specific it has to be binary you do this
or you don't do this okay uh do x or do y okay it
has to be a a very black or white decision process
if you don't have your trading plan or your
perspective or process you know in determining
whether you want to be a trader buying or
selling right now or staying on sidelines it will
create a huge vacuum where lots of emotional
psychological and impulsive trading will creep
in and if you don't have these binary thought
processes and where you're specifically dealing
with in terms of decision making you won't have
any structure and without structure without
having a refined clear trading model what
defines your trading what makes your trading
model uniquely yours you're going to struggle
and it doesn't matter who teaches you doesn't
matter what principle or discipline you trade
with it's going to be an impossible endeavor if
you do not become highly organized so you
have to after a long period of time spending in
front of charts and and work with individuals
and myself as a as a trader because i'm always a
student i'm always learning something about
myself as a trader uh not so much about the
market anymore and it does i don't mean to
sound arrogant but most of my learning comes
by way of my individual experience as a trader
and you'll learn uh that actually helps you refine
your your trade parameters and next obviously
you need to know what makes your executable
criteria what it is what makes you be the buyer
or the seller and you know having those those
parameters defined it's not just simply i'm
bullish right now okay well if you're bullish what
would you do to be a buyer and what would
make that buying scenario uh you know
negated what would what would change the
the tone in the marketplace for you to either
move to the sidelines or if you have a stop-loss
hit do you still consider that being a buying
condition and these things have to be specific
they have to be highly refined it's got to be like
a flow chart format it's gotta you have to go from
one step to the next and if it's not like that again
you're gonna be very emotional you're gonna be
very psychologically uh influenced by the things
that you see in the price action and worse by
online media forums twitter facebook people
talking to you and your at work and your friends
that maybe you know there are traders all those
things are going to be influential to you and it's
going to be detrimental to your performance as
a trader so we don't care what anybody else's
opinion is we don't care about what uh their
opinion of our trading model is in fact we're not
really trying to share our trading model to
anybody it's a unique trading plan and trading
model for for you okay and you're going to
define that refine it to yourself and that's going
to be your graduation when you know exactly
what's going to be framing your trading model
and you'll have a lot of help along the way
through the remaining months of this
mentorship but they have to be defined by you i
can't force you to be a day trader i can't afford
you to be a short-term trader i can't force you to
be a swing trader you'll know which one that is
for you by the end of this mentorship and then
more importantly you have to understand why
the trade should pan out understand what
makes the trade viable okay it's not just simply i
see a trading pattern here or i'm i believe i'm
bullish or i believe i'm bearish in the
marketplace there has to be a real
understanding of why that scenario should take
place and largely this is going to come by
experience okay and obviously that experience
comes by taking action in a demo account and
when you do that experience should be logged
and kept for future reference that's the only way
you're really going to learn obviously if you just
go into a demo account you click on buy and sell
and you're just waiting to see the outcome and
you want to attribute the winning trades as
you're a good trader and the losing trades well
that really didn't happen so therefore it doesn't
make a difference to me that doesn't help you
as a developing trader so the real secrets to um
finding high reward trade setups is number one
you have to know what it is specifically you're
looking for and where to find that information
so before we get into all those things i want you
to understand that it's crucial to understand
that efficiency and trading comes by way of
process oriented thinking and it doesn't come
by way of reactionary or impulsive thinking
which also leads to rushing ahead and trade
signals prematurely i could tell you if we were all
going to sit over top my email box and look at
some of the things that i got and by way of
feedback um it's the reoccurring thing is i want
to see trades i want to see entries i want to see
get me in and get me out that type of
perspective and i understand that i get that
okay but i can tell you being from where you are
right now and where i am now in my
understanding as a trader i can tell you that's
not what you need to know right now and it
doesn't feel good to hear that it feels like i'm
leading you down the primrose lane it feels like
i'm just you know you know deferring you know
something that you think you need to have right
now and that's not true what it is is you have to
develop a process oriented thinking and that
means i can show you order blocks you know i
can show you uh breakers i can show you
institutional order flow uh returning back to a
mitigation block okay i can show you examples
of that but until you understand the process
behind why these things should be doing what
they're going to do it's going to be really of no
help to you it's going to feel like i'm
demonstrating toys it's going to feel like i'm you
know showing you well this is what i can do and
that's not what this is all about it's to show you
with an intimate uh experience on a day by day
basis a weekly basis a teaching tutorial basis a
theme generalized over the month okay that
builds on your total understanding the folks that
are struggling right now are the folks that are
really trying to be reactionary or impulsively
thinking about what they want to do right now
and that's the hardest thing for traders to do
when they first get involved with learning they
have this insatiable desire they have to be
trading right now they want to get in they want
to take signals okay and i spent the entire first
month september on a day-by-day basis
showing you that there are a plethora of trading
signals all the time we were laser guided
precision there's no reason for you to be feeling
rushed october didn't change okay the weight
prices being delivered none of these concepts
fell out of fad okay it still works but i needed to
show you the first month that there's nothing
that's going to hinder your ability to find signals
because there's always a lot of them the
problem is going to be is you don't know what
defines the setups for you as a trader and you're
not going to have a process organ thinking that
leads you to high reward trade setups and it's it
comes by experience it comes by showing you
conceptual ideas and a broad brush idea of
breaking down what it is that we look for in the
marketplace and where does that information
reside so it's real important before we get into
this that this is important that you focus on the
fact that what i'm showing you in this teaching
while it doesn't give you technicals it doesn't
give you trade scenarios it doesn't give you
specific get in get out type things i'm i'm of the
mindset that this is exactly what i needed to be
told when i first started as a trader but no one
was around to tell me these things no one had
the experience around me or i had the uh the
avenue of reaching them like you have with me
you have a very intimate relationship with me as
a mentor because i'm spending a great deal
time and i'm investing a lot of my time by way of
my experience and it takes a lot of time to
communicate that because we're talking about
someone that's been doing this for two decades
or more and there's a lot of lessons i learned and
there's a lot of lessons that i resisted initially and
some of those are the same things i'm warning
those individuals that are feeling it right now
and you know who you are because right now
you're squirming you're wanting to get on get
on with it get on with it michael if you're feeling
that you're in that reactionary impulsive
thinking okay you need to change that suppress
that it's hard i know it's hard but you're not
going to get to high reward trading scenarios
okay that you can find very quickly in the
marketplace that you can find consistently
efficiently all those things are going to evade
you because you're looking to do something
right now and professional traders are not in a
rush to put money at work they want to sit back
and wait for a scenario that makes sense so if if
we were all in a room and everyone had a
chance to ask me something i can tell you the
number one reoccurring question if we were all
to to write it down on a piece of paper ahead of
time not just vocally say it that way no one
would basically reple repeat it the uh the
question would come by way of what makes me
think this order block's gonna do what or what
makes me think that this level is gonna keep
price from going higher what why do i think the
judas swing should go up after midnight and
then sell off you know what are all those things
and i understand why you're asking those
questions and they're the same types of
questions that i had about the marketplace but
again i didn't have anybody to direct those
questions to but it's important that you
understand that there's no way i can actually
answer that question to you now because we
haven't gone through all the things that are
necessary for me to adequately answer that it
would it's almost like i'm creating an additional
language on top of what you've already arrived
at by going through my free tutorials and it
that's why i require 12 months with me because
it's going to basically beat it in your brains by
hearing it over and over again specifically
dealing with it i'm going to trade by trade base
as a daily uh involvement the the application of
it and that's going to be you know the big
takeaway you're going to have experience
whereas if i just wrote a book or if i made some
dvds or cds and you watched them that would
be it it would be rather stilted you would come
away with well that's cool i can see how it works
sometimes or i can see how it works in the past
but you don't have the intimate relationship of
sitting down and going through the process
okay and explain why it should take place we did
some of that on a micro scale in september but
we need to go through a process of outlining
you know what the beginning foundations are
going to be because as we go into the fourth
fifth and sixth month they're going to be greatly
uh focused on the the the components that
make up the trade templates okay in other
words at the end of their mentorship you're
actually going to get a flow chart for when to be
a buyer for swing trades when to be a seller for
swing trades every specific decision point that
goes through my head as a trader and what
tools you use for each decision point and what's
the response that you should have everything
that we use everything that i go through in my
tools uh for short-term trading the same way
what makes me a big buyer what makes me be
a seller you know what makes the trade no
longer good where does my stop go when do i
move my stop all those decisions that go
through my pro new my mental process okay
because whatever everything i do is process
oriented thinking and it comes across as well
you it you're just really good at this and it's not
that i'm good at it it says i'm experienced at it
and i know what decision i need to make right
now and sometimes it's sit on the sidelines and
because i've done it so long that experience
gives me reference to go to mentally and it only
takes a few seconds sometimes to arrive at
where i think the market's going to go based on
these processes now while it seems like it's a
great deal of information and i'm job owning
here it's important that you really really listen so
if you're if this is one of those videos because
there's no charts here you need to sit down and
listen don't be watching tv don't you know don't
be having your kids in the sidelines okay
distracting you you need to be paying attention
to this one because it's important okay so let's
take a look at how we go about this using the
tools and all the the processes along the lines of
ict related information obviously again we're not
talking about the trade plan development series
okay this is like a micro scale version of all that
stuff so we're going to go right into where the
information is going to reside and what you're
going to be looking for in these specific areas of
study before we get into any high reward
trading setup we have to understand obviously
there's going to be a big picture perspective
okay and when i say big picture perspective it's
primarily four areas of reference it's going to be
macro market analysis it's going to be enter i'm
sorry interest rate analysis inter market analysis
and seasonal influences the next area of study is
going to be for an intermediate perspective we'll
be looking at top-down analysis cot data which
is commitment of traders and market sentiment
and for our short-term perspective we're going
to be looking at correlation analysis time and
price theory and ifta which is the interbank price
delivery algorithm now looking closer at the big
picture perspective we're going to take a look at
what makes up our big picture perspective
obviously there's four areas of study and again
my macro market analysis interest rate analysis
inter market analysis and seasonal influences a
little bit of tongue twister there folks when we
look at the big picture perspective okay while
there's four areas of study we're going to need
to primarily focus on at least two of these that
have to come into agreement okay what i mean
by that is our macro analysis our interest rate
analysis our inter market analysis and seasonal
influences uh all four of these do not have to
agree okay but you do need to have two of these
components to arrive at your big picture
perspective okay in other words our our grand
scheme of things our our our big picture
perspective okay is going to be defined by at
least two of these areas of study they have to
come into agreement it doesn't matter which of
these four that you elect to subscribe to but they
have to come in an agreement so let's take a
look at a little bit more information about each
one of these four okay so again focusing on the
big picture perspective the first thing we're
going to be looking at is the macro market
analysis now this is really simply described as
are we in an inflationary market are we in a
deflationary market when the markets or a
currency or country is in a inflationary condition
it's going to have a direct relationship on the
currency obviously when they're in a
deflationary market condition that's going to
have a relationship or a response to their
currency it also in terms of equities it's going to
have a direct relationship to that so when we
talk about commodities and we talk about stock
prices later on in this mentorship inflationary
and deflationary market conditions are going to
have a large impact on that as well the next area
is interest rate analysis and obviously when
we're looking at interest rates we have to
consider are we looking at higher interest rates
have we seen a trend in interest rates have they
been climbing are we looking at lower interest
rates um have we just had uh rates uh uh
decrease or have we seen a trend in in lower
interest rates or did we have an unexpected
change did something come out with uh you
know fomc that uh you know did a currency
come out and intervene in their currency by
having an unexpected interest rate change uh
did they hike interest rates or did they do an
unexpected rate cut and also by looking interest
rates which is not noted here we look at
differentials between two interest rate markets
so between a currency that has a high interest
rate and another currency that has a low
interest rate many times that creates what's
called a carrying carrying charge market where
you can actually have a very easy way of finding
trades directional when it has that but again you
know what we're looking at if we were just
looking at these two primary areas of focus for
the big picture perspective we could have the
macro market analysis in other words we could
see an inflationary market and uh interest rates
alignment with that perspective and that would
give us our big picture analysis in other words
that would frame on the grand scale are we a
buyer or seller and we want to focus primarily on
that the next area studies inter market analysis
and it's going to come by way of the crb index or
we're focusing primarily on the commodity
market and we're looking at the relationship
between the commodities and the us dollar
index you're going to see many times the
markets between commodities and the dollar
index are inversely related in other words if the
dollar index is going up usually commodity
prices are going down and when commodity
prices are going up usually the dollar is going
higher and vice versa in other words um again
looking at these three areas of study uh we need
two of these areas of study to come an
agreement to arrive at our big picture
perspective okay we could see a interest rate uh
market indicating that there are lower rates on
the horizon or or higher interest rates on the
horizon and that's gonna you know blend well
to a directional bias on a currency and if we see
that same time happening where the
commodity market wants to go higher and the
dollar index wants to go lower that gives us a
framework for a high reward trading scenario
relative to the big picture so the only thing we're
doing now is framing three areas of study okay
and if i haven't said it already what makes a high
reward trade setup is if your big picture
perspective your intermediate perspective and
your short term perspective is all in agreement
okay and directional wise if you want to be a
buyer seller relative to those three perspectives
on the marketplace if those three are in
alignment and you trade on that side of the
marketplace that is high reward trading
scenarios or setups and the last and the four is
seasonal influences and that is obviously you
know speaking on terms of are we in a bullish
seasonal tendency for that asset class or pair or
currency or for the dollar for that matter or or
commodities if you know if we're studying
commodities there's a large seasonal influence
that has an effect on commodities and if we see
that obviously that's going to be mirrored in
what we see in the dollar index okay if the crb
index is entering a time when commodities as a
whole usually go higher that's going to put
downward pressure on the dollar so if there's
going to be downward pressure on the dollar
that means that we can see easy buy signals in
currencies that have interest rates that are
going higher and that that chasing of yield okay
with the currency makes a high reward trade
setup and obviously there's bears seasonal
tendencies as well but when we go forward in
the mentorship we're actually breaking down
what specifically frames a inflation and i'm sorry
inflationary market and a deflationary market
and how to go and look at interest rates
specifically and how to use the interest rate
market for timing so it gives us a stage on when
this criteria is in place what we do with it you
know what when should we be buying or selling
relative to the interest rate analysis that we see
and the same thing with inter market analysis
and seasonal tendencies the next area of focus
is obviously the intermediate perspective and
that is by way of looking at a top-down analysis
traders data and market sentiment and for
intermediate perspective there's only really
three things that you're looking for okay but at
least two of these things have to come in an
agreement so that means by looking at these
three specific components okay top down
analysis is simply just looking at higher time
frames down to a lower time frame and cot
again if you're not familiar with that is it's
commitment of traders data what we do is we
look at the cftc report that comes out every
week and it gives us a reportable level uh report
on large commercial traders large speculators
and obviously the small specs we're not really so
concerned about small specs small specs would
be somebody like ourselves you know when
we're trading in in unreportable uh levels in
other words we don't trade at a level where we
have to report our trade size which is mandated
by the cftc at least in the states it is and market
sentiment is simply i use market vein okay
which is a measure of brokerage firms actually
calling around and getting a consensus on
whether they believe a a particular market is
bullish or bearish and it's basically it's an opinion
you can you can use other things like there's
certain websites out there that have a bullish or
bearish an opinion like if you go to barchart.com
and you pull up a specific commodity you can
actually see what the community at large in that
forum has for that particular uh that view i think
there's a pretty much just about every form out
there has a way of measuring sentiment and i
do a lot of research on saturdays with that
perspective alone i go through a lot of resources
and actually show you where i go and get all my
sentiment numbers but it's again this teaching
is not going to teach you everything about every
individual component but the components that
we're talking about specifically we're laying
down the foundation because it's important
that we know where our study is going to be
focused going through this mentorship and
why it's not a lot of information but it's a little bit
of homework that's needed for you to get to the
decision making processes that i go through as
a trader so again intermediate perspective let's
take a closer look at these three things okay so
intermediate perspective on the marketplace
framing high reward trading scenarios or setups
okay top-down analysis is obviously just going
through a monthly chart and we do monthly
chart analysis and what what specifically are we
looking for in a monthly chart um you know
obviously without going into great detail
because i'm not trying to teach it all here uh the
monthly chart is we're looking at key levels
we're looking at uh intermediate and long term
highs and lows we're looking at specific order
blocks and we're looking at you know levels that
show a clear indication of wanting to repel price
higher or lower and the same thing is said for
the weekly chart when we look at the weekly
charts we're looking at again a higher time
frame perspective so it gives us a great deal
framework for high reward trading scenarios
simply because of the weekly chart being again
a weekly chart large funds okay large managed
funds do a great deal of analysis on weekly
charts okay most of their work really comes by
way of monthly and weekly and they usually
execute on daily charts okay so it's important
that you understand that that's the reason why
the markets move around like they do most
folks that have youtube channels and and
facebook uh you know accounts and they're out
there trying to pretend that they're some kind of
analysis or i'm sorry analyst or or teacher um
they'll be teaching with a one minute chart or
five minute chart and they're they lead
individuals to believe that these intraday charts
have some influence over price and they don't
all they're doing is reflecting okay what is going
to be arrived at by looking at a monthly weekly
and a daily chart because those three time
frames are really what makes the markets move
by having these intermediate perspectives okay
again you have to have at least two of these uh
the areas of focus in agreement so in other
words you could have a an idea on a monthly
chart that frames one of the two things that lead
to your intermediate term perspective okay and
it could be obviously it can be off the weekly
chart or could be the daily chart okay but that
would be one of the two that's necessary to
frame your intermediate perspective the next
area of study would be a co2 data okay that's
obviously looking at the bullish hedging by
smart money or the commercial traders or the
bearish hedging by the smart money and again
if you haven't watched any of my free tutorials
there's teachings on commitment traders it's
important to know that you'll learn everything
you need to know about cot data in this
mentorship so even if you haven't watched the
videos okay or familiar with commitment of
traders just settle down relax please don't send
me a twitter storm of questions or emails
because everything i'm talking about here i'm
laying down a foundation okay these are the
things that you need to be starting to write
down in your notebook because there's going to
be areas in your notebook that you need to have
specific notes relative to these things okay and i
will give you everything you need to know and
more trust me but i'm just giving you the
foundation of where our study is going forward
okay going into this mentorship and obviously
with the cot data we look at extreme levels
historically in the last 12 months and the last four
years when the commercials on the
commitment traders report get to a 12-month
extreme higher or low in other words if they
have a real extreme high reading or low reading
relative to the net sum zero line that's used for
the cot net traded physician chart which you'll
learn all about that usually sometimes indicates
a change in their hedging program and it gives
you a a real clear indication of there's probably
an enemy in terms of long-term high forming
and the last is market sentiment obviously we're
looking at extreme market bullishness or
extreme market bearishness and again that's
one of the things that come by way of my
saturday studies i go through all of the things
that lead to my uh opinion or my own individual
market sentiment readings based on a number
of areas i go and look for readings and then i get
an average of that reading and come away with
the consensus whether or not we're either at a
bullish or bearish uh sentiment now again out of
these three you need to have at least two of
them in agreement the least of significance is
obvious the market sentiment but the main
thing is uh you know the top-down analysis you
have to have a level or an idea relative to the
monthly the weekly or the daily it does not
require two of those time frames it just needs
one okay you can trade really without the uh
monthly weekly and daily chart and trade on a
idea relative to the commitment of traders and
sentiment now think about that you're probably
thinking wait a minute michael when you say
we gotta use a daily chart we gotta use a weekly
chart we gotta use a monthly chart yeah you can
but you can still use the commitment traders
data information i'm gonna provide to you and
market sentiment to frame your intermediate
perspective now obviously we're not executing
on an intermediate basis but it frames your
trade idea you need one of two out of these
three to come in agreement with your
intermediate term perspective now i know what
some of you are thinking well what if i look at a
monthly chart and it tells me that this is bullish
and the weekly chart says it's bearish and the
daily chart is bearish but the commitment
trader says it's bullish and market sentiment is
extremely bullish okay what do i do with all the
information how do i arrive at that that's all
going to be taught to you in the mentorship but
the main thing is this criteria is what we'll be
using going forward so that way when we look
at the market in these views you'll understand
why i'm doing what i'm doing because it's based
on the things that you're seeing here okay so
again just know that to have the intermediate
perspective outlined you have to come to an
agreement that at least two of these areas of
study or focus for the intermediate term
perspective you have to come in an agreement
with two of them in other words you either have
to be a buyer based on two specific areas of
study here out of the three okay so again as an
example you know the weekly chart indicates
higher prices and commemorators suggesting
that there's bullishness on the stance of the
commercials that would be enough to frame a
intermediate term perspective that means
you're going to simply wait around for a short
term perspective that lines up with buying and
that's really you know all we do here that's all
we're doing okay so we're gonna frame a macro
big perspective okay and then an intermediate
term perspective and a short-term perspective
that's what we'll look at next okay so for short-
term perspectives we're going to be looking at
the correlation analysis time and price theory
and ipta which is again interbank price delivery
algorithm so take a closer look at this short term
perspective okay so right away there should be
something staring at you that now also we have
to look at three things to arrive at our short-term
perspective and the reason why is because most
people just look at a one-minute chart or a five-
minute chart and says okay well this is what it all
i need and that's what gets them in trouble okay
so when we look at short-term perspectives
okay we're going to be looking at the correlation
analysis and again that is going to be linked to
your understanding of the u.s dollar index smt
analysis and i know that probably went way over
your head if you're new if you never went
through my free tutorials that probably sounds
like uh you know something you hear from nasa
but the the dollar index smt analysis is basically
just looking at the relationship between the
dollar making higher highs a relationship
between a currency to the dollar like the british
pound for instance if the dollar's making higher
highs if the british pound versus the dollar fails
to make lower lows that's a cracking correlation
and we we view that with a specific idea in mind
and the other correlation analysis concept that i
use is correlated pair smt analysis where we look
at closely correlated pairs like for instance the
euro dollar and the british pound dollar because
usually they move in general same direction not
always obviously you can see with the brexit
issue generally when there's a symmetrical
market which we learned about in this
mentorship already correlated pairs move in
tandem when they do not move in tandem that
obviously gives us a lot of insight in terms of how
we should be trading the marketplace if it is not
moving in uh tandem then obviously that's
indication that we do not have what
asymmetrical market so that means we have to
be very selective with our trades because now
there is the lack of symmetry in the marketplace
that means the dollar is very clearly moving
higher all foreign currencies are moving lower in
sympathy next area of study is time and price
theory okay and so in time and price theory
we're looking specifically at uh the quarterly
effect that means every every three months or
so uh there is a new price shift in in the higher
time frames in other words if the market's been
going higher uh generally you'll probably see
the market going to a consolidation over the
next three months uh not for the next entire
three months but over the course of three
months if the market's been going higher uh
you'll probably see the mark going to
consolidation or reverse okay and if the market's
been going lower okay over the next three
months uh we may see a consolidation and go
into a range or it could reverse and go higher
then we just we're watching the the market over
it's usually a three to four months so i'll allow a
little bit of uh overlap in terms of calendar
months it's not specific daily uh you know so i'm
sorry it's not specific to the first of every month
to the end of uh you know the last day of the
third month it's not that clear-cut so we look at
the market with a quarterly perspective and
allow the next shift and market structure to
unfold there's a monthly effect where we look at
the monthly ranges and we look at specific
points of reference relative to the monthly chart
and then obviously the weekly range most of
you know about that because i teach a lot in my
free tutorials about one shot one kill setups
which i think is like that's like my bread and
butter go to that's how i that's how i define my
own trading i am a weekly range trader uh by far
and large that's usually how i'm trading the
marketplace i'm looking for capitalizing uh at
least the lions portion of what i interpret as the
weekly range that may unfold for the week
ahead and then obviously the daily range daily
range is the time and price theory that we use
for engineering the daily range of that the
power three the open high low and close how
that transforms into the actual daily candle uh
you know those theories and ideas and
concepts will will teach a great deal about that
uh and then obviously time and a time of day
um we'll build on what's already been shared in
the free tutorials and you'll actually have really
precision based concepts uh as it relates to that
and finally ipta which is the interbank price
delivery algorithm will be nailing down
institutional overflow we'll understand
obviously by looking at liquidity we'll be looking
at how the market seeks liquidity and we'll be
finishing up our perspective on market
efficiency paradigm so when we are looking at a
short-term perspective we require three things
okay three things must come by way of these
three areas of study correlation analysis time
and price theory and the ipta preferably you
have to have at least one from each okay so in
other words you have to have uh your dollar
index has given you an indication that it's
showing you a cracking correlation or correlated
pair smt is giving you insight okay so that would
be uh one way of determining correlation
analysis the next area is crucial time and price
you have to have something from the time price
theory to indicate where you're at relative to uh
the short-term perspective now you're probably
thinking okay well how is the quarterly effect in
a monthly effect or a weekly range a short term
perspective because short term is what you're
actually going to execute on okay it doesn't
mean this is your five minute or 15 minute uh
setup it's just this is your short term perspective
so we're looking at framing the ideas of trading
around a big picture perspective intermediate
term perspective and a short term perspective
when we get things in alignment that lead to us
being a buyer all across those three perspectives
being a big picture perspective an intern
perspective and a short term perspective we are
highly prepared to find high reward setups to be
a buyer in those conditions it doesn't mean
you're going to have uh you know new losses
and you're going to have all winners it doesn't
mean that okay but we have a context that we
frame our ideas of trades with that model or at
least that's how i do it so that's why you're here
you're going to learn how i do it so this is how i
do it we can have the correlated analysis give us
a indication that we're going to be bullish on
dollar which would be bearish on foreign
currencies and time and price theory okay
quarterly effect um maybe we've seen the
market moving higher okay in recent months
and we're probably getting ready to go into a
down cycle okay and that would uh lend well to
um you being short on foreign currencies uh
maybe the uh the weekly range okay maybe we
have uh initially at the beginning of the week
we've rallied up from sunday into monday and
now we're primarily looking for what lower
prices and if we see that weakness on the part
of foreign currencies relative to what the dollar
index is suggesting okay these are all scenarios
i'm giving you just an idea because some of you
probably think this is too big is it not helpful
okay believe me this is this is what really trading
is all about you're doing all these things behind
the scene the very little bit of time that's used to
execute trades okay that's so tiny the most of
your uh time is going to be in the process of
deciding whether or not you should be a buyer
seller and what frames that criteria and
obviously time of day you know are we at a time
of day where it's conducive for the trade the
setup okay we may not have anything
immediately off the quarterly effect or monthly
effect or weekly range of the daily range okay
but the time of day may indicate that now
suddenly there's something that we could do
okay and obviously ipta is always going to be
essential understanding institutional order flow
and understanding where liquidity is and why
the market will seek that liquidity and our
perspective is always with the market efficiency
paradigm we look at the marketplace in terms
of where are the orders and it's not the orders of
the smart money okay like supply and demand
tries to teach they teach you that this is where
smart money orders are this is where smart
money uh uh wants to go back to they're not
always doing that they're sometimes seeking
where existing orders are that would allow them
to engineer counterparties to their execution
okay so in other words they'll run old highs for
the buy stops they'll run old lows for the cell
stops because that will be a forced injection of
liquidity to be counterparty to their bookmaking
so we're going to go forward in our studies in
this mentorship with a great deal of refinement
on all of these things and i know some of you
probably looked at this and said well this is a lot
of just boring information but i have to give you
a context of where our area of study is going to
be so in the grand scheme of things we're going
to be breaking the market down in these
specific perspectives and then what we do in
these respective uh areas of study that give us
what we're specifically doing on a day-by-day
basis now it looks like and i've been talking for a
long time it looks like a lot of information and a
lot of things to do before you come away with
okay i want to be a buyer seller you'll see
obviously the big picture perspective you
usually have that at the beginning of the week
and the intermediate term perspective you
usually have that at the beginning of the week
too it could happen or change gears in the
middle of the week relative to tuesday and
wednesday but usually the short-term
perspective that's the one that usually changes
on a day-by-day basis okay so understand that
while we're doing a lot of our homework and the
big picture perspective in an enemy term
perspective and we can do that on the
weekends uh your nightly or daily procedures
will be largely in this list that you see right here
so when we do like um live sessions okay i'm
operating from this scale right here i'm looking
for three things that come in agreement and
that's why when i call a specific move in the
marketplace they usually go there and i'm using
this right here they are all linked to my
understanding of what i arrived at for my
intermediate term perspective and my big
picture perspective okay but once you
understand price action extremely well and you
operate as a scalper okay and i'm not trying to
induce the notion of scalping as a as a an ideal
way of trading but i know some of you can take
my information and do that invariably you can
just use what you see here and you could be a
very efficient scalper if you understand what is
being shown here and what specifically that we
do with this information you know
understanding what the quarterly effect is what
the monthly effect is weekly range daily range
and time of day understanding what smt
divergence is and correlated smt divergence
understand what that cracking correlation
means for you as a trader and then obviously
understanding institutional ortho where's the
stops and why those stops would be necessarily
up for grabs why would the market go there
that's what the market efficiency paradigm is so
again this is the only thing that you need to be
worrying about in terms of trade plan
development for the ict mentorship all these
things come by way of very very short amount
of time looking at price and you'll come away
with what you want to do right away and initially
you're going to write down these things okay i
believe that the big picture perspective is i
believe that it's going to be this this and this and
then you're going to go into enemy term
perspective you know you come away with your
analysis on what you believe there and when
you see the short-term perspective you go
through the same processes here basically what
you saw me doing with the exception of not
bringing out the smt diversions uh studies in
september because i was looking at but you just
didn't see it the uh i was operating on this this
short term perspective that's how that's this is
my model okay so as a day trader as a short-
term trader and as a one-shot one kill trader this
is all the information i need i don't need
anything else outside of this page you're looking
at right here i just need three things to come in
agreement with that and then i'll understand
where the short-term perspective is and where
the market's going to go and that's why i'm like
90-plus percent accurate in the month of
september we we pretty much had 100 hit rate
when everything i asked the market to show us
in terms of where it was going to go why it
would go there it's not always going to be that
easy there's going to be transitions obviously on
an intermediate term basis and even a long-
term basis and that will cause you to have
hiccups okay or speed bumps if you will or
barriers okay on these short-term perspectives
and that's where the losses are going to be
you're going to find that your losses are not
incurred so much by way of trading in the
intermediate and long-term perspective the big
picture when you're trading in those higher time
frames those trades generally will serve you very
well you will still have losses but you're going to
find that all of your trades that have the majority
of the losing side it's going to be because you're
in this short term perspective and you either
force something or the market's in transition
and you have to allow for that okay so if you're
focusing on a higher time frame uh perspective
in your trades that is an advantage so while we
see me operating a lot with the 15 minute time
frame in the four hour and one hour chart the
things that we talk about are largely on the
weekly in the daily chart and if we do that
primarily in all of our trade setups requiring a big
picture perspective an immediate term
perspective and a short-term perspective in
alignment and agreement that means all three
uh we we come away with a reason for
expecting that outcome in other words higher
prices or lower prices um think about what we
have here we have to have seven things in
agreement to make a high reward trade
scenario okay for a high reward trading setup it
has to be four things in agreement that means
you have to have two things in agreement from
the big picture perspective you have to have
two things in agreement with the intermediate
term perspective then you have to have all three
that's listed here okay you have to have one
from each one of these three to come in
agreement with all three perspectives the big
picture enemy in term perspective and the
short-term perspective and if you frame your
trades with this mindset what that does is it
number one it gives you clarity number one it
gives you the understanding what it is that you
should be expecting to see the marketplace and
why which is important okay it's not important
to understand every dynamic behind what's
being shown here for each perspective of the
marketplace of study that's going to be taught
to you but understanding that you need to have
seven things okay seven things that build high
reward trade setups this is not execution this is
not entry it just gives you the framework what
makes that trade high probability or basically
high reward you still have to wait for a entry
signal and again that's the least of your concern
right now so that's what i'm saying by looking at
this information like this even without going
into great detail about each individual
component you can see clearly that there is a a
method behind what i do okay folks that are on
the outside they look at what i do and they say
well it's there's no real structure here there's no
real um a plan of action now there's no way of
knowing what it is that i should be doing from
the beginning to the end and that is because
they have not been exposed to what you're
being exposed to now there is a method there is
a rhythm there's a routine that you go through
but they have to come by way of a process
oriented thinking and this is how i break the
market down this is how i internalize it and i go
through the process of going through these
three perspectives and by doing that it gives me
everything that i need in terms of arriving at a
decision and once you have that same process
of of thinking okay you'll have no problem going
through the marketplace finding scenarios and
setups and picking out what gives you your
unique trade setup that you like to trade that
you find very easy and the the clarity will be
exactly as you imagined it would be and when
you get in front of the chart it just jumps off at
you okay that's how it'll be for you as a new
trader you don't get exposed to these types of
thinking you don't get exposed to these process
uh you know uh procedures where you have to
look at things conceptually because number
one it doesn't sell courses it doesn't make you
want to watch that youtube video you don't
want to listen to this one okay but this is where
the real meat is okay you have to know why
these things make a difference and why it's
important that you understand what you need
to be doing for individual perspectives of study
and then once you go through it you
understand it it's like anything else no one
wants to read the driver's manual to learn how
to drive no one wants to look at the instruction
manual on how to put that tv stand together
that you had to buy because your wife said you
had to have it okay you just want to look at the
parts and fit it together so you can quickly get
through it you can't do that with trading okay
you have to go through this boring stuff and it
means a great deal trust me if i would have been
told this initially i would have ignored it too i
would have just pushed it aside and i've been
looking for give me the buy signals give me the
sell signals because that's how i thought too
once i felt the pain of not knowing what i was
doing then i suddenly got interested in what
makes traders think the way they do and then
what's the process of why they think the way
they think and why why do they build their
trading plans around that you think about it
what do you not see in the marketplace when
people sell things and they sell course and stuff
what is it they don't sell they never sell you an
actual trading plan they never sell you a step by
step this is what you're going to do and this is
the reason why it should do this no one does
that that was my goal for this mentorship i want
to show you what specifically i do as a trader
now i'm going to give you all kinds of ideas on
how you can refine that and make it uniquely
yours and you can define your own trading
model around that because i believe just like
chris laurie has said and i was in agreement with
him when he said it you can't copy someone else
you can't do it and some of you want to be just
like me as a trader and do this and do that you're
only really asking to be able to call moves and
trade to the levels like i call in advance so it's not
that you want to trade like me you want to have
the ability to read and interpret price action the
same way i do and that's what you bought and
paid for and that's what you're going to get as a
delivery by the end of this mentorship you're
going to have everything that i do why i do what
i do and how i arrive at that understanding is
what has been shown here there's no secret
sauce there's nothing outside of what's been
shown here the theory behind why they all bled
together okay that's what we'll be building on
and at the end once we understand intimately
what each one of these perspectives we're
looking for and what criteria blends well for the
decision-making process for each individual
perspective and individual respective
component once we have that then we have the
building blocks for what the flow chart for every
model of trading that there can be day trading
scalping swing trading one shot one kill you
know position trading all those things it's easy
for me to have a flow chart and say okay xyz do
this or do that you'll know what i mean by that
and that's what i said if i if i put the flowchart up
on the website right now you wouldn't be able
to do anything with it it would be no use to you
you couldn't do anything with it but by breaking
down these individual components intimately
you'll know what i mean when i say okay do this
or do that okay okay well i understand what that
means and then i know how to arrive at the
decision relative to those specific points of
reference and then by doing that you'll you'll
work through the flow chart and you'll either
come to the decision point where you take
action or you stand and you wait for more
information or you go back to the previous stage
and you wait for more information there and it
makes it very binary you need your trading to be
just like that it's boring and that's exactly what
you want you do not want high excitement in
your trading only do that on the weekends
when you had a really good smashing week
when you just killed it that's when emotions are
allowed but throughout the week when their
markets are still trading you cannot allow your
emotions to get ahead of yourself you can't get
crazy and you want your trade to be boring you
want it to be monotonous you want to be
mundane and and routine and nothing exciting
about it that's when you know that you're not
gonna be forced by emotion you're not being
drawn in by fear and greed it's just business as
usual it's the same thing all the time and you
hear it sometimes when i'm talking uh you know
i'll talk about a specific level the market starts
screaming for it i'm still talking you know i'm not
worrying about it because i've seen it so many
times and the whole time the the room is lit up
they're like i can't believe this is happening look
how it's moving look it went right to the pip
you're all experiencing that for the first time
especially in december everyone that was
watching on a date up day by basis that's not
something i get excited about unless you know
i see a real new trader when they get in there
and they start looking at it and their response is
then i can get to relive that moment but when
we go through the process of breaking down
the markets and we're looking for high reward
trading scenarios you have to suppress that
desire don't be in a rush to get to that feeling of
you were right and look at the market don't do
that and by having a process oriented thinking
you're thinking binary it's x or it's o it's on or it's
off it's black or it's white that's how your trading
has to be and if you can work your trading
model into that area of study and execution you
will have no problem with fear and greed you
won't rush you won't have any issues at all and
just like we mentioned in the previous teaching
if you have a loss there's no reason to worry
about it it's very easy to get it back and even if
you have a string of losses it doesn't take long to
recoup that but if you lose your mind okay
thinking all of a sudden the markets are you
know are now going to work like this again and
there's no reason to think that way you'll see by
the end of this mentorship you'll know
everything you need to know and how to
operate and execute and engage the
marketplace on a day by day basis and you'll
know what exactly you're going to do and why
but it comes by what we just described here in
all the frameworks that's been shown here
nothing outside of this no secret stuff okay
everything refined to great detail my new detail
and then what that'll allow us to do is to have
specific processes that will lend well to specific
conditions that we'll talk about and then all that
will give us our trade scenarios and setups but
the ingredient behind it all is what's been shown
here in this tutorial and it's important you
understand that this is exactly what you would
be wanting to know but you just didn't know it
and it doesn't sound sexy it doesn't make a good
course it doesn't make a good video youtube
um if if you were to just explain this if someone
was to show just a pdf file on this on this video
they'd be like this is telling me nothing but it
really is when we're going to build on this it's
exactly the the framework or the backbone of
how i trade how i'm able to call the markets and
why they go where they go beforehand how i
showed 59 in one month you know with an ifx
book for october so far all that is because of
what's just been shown here in my
implementation of all that information so i want
you to understand that we're going to build on
this individually conceptually and then once we
flesh it all out it'll be easy to be able to provide a
pdf file and you'll know exactly what that means
when you look at the pdf file why these
information reference points are influential in
terms of decision making and once you have
that you'll be exactly what you signed up for an
independent thinking efficient trading
 seven
Market Maker Trap False Flag

okay folks welcome back this is lesson seven of

eight of the second month of the mentorship
we're going to be specifically dealing with the
market maker trap of false flags now a false flag
okay is basically a a pattern that classic chartists
and pure chart pattern traders will fall victim to
a lot earlier on my career i fell victim to this
particular pattern a lot as well because as a new
trader being introduced to the markets and the
commodity market or asset class i started with
was the commodities market my way of
introduction came by way of kent roberts and
one of the patterns that he taught in his uh
manual world most powerful money manual i
wouldn't go so far as to say that but uh it did
introduce me to technical analysis and one of
the patterns that studying classic chart patterns
is a continuation pattern and one of the simplest
to see in price action is a bull flag but
unfortunately not all sudden price rallies that
move into a short-term consolidation are bull
flags and if you don't know what a bull flag is
don't worry i'm going to give you an example
what they are but for now for the points of uh of
concern we have to understand that in a mature
bull trend or in higher time frame distribution
levels price will post or create or print if you will
in your in our charts a false bull flag now retail
traders and i'm referring to myself when i first
started as a commodity trader i saw this as a
classic continuation by pattern but it many
times resulted in a reversal as time went on in
my understanding grew i discerned that
understanding higher time frame charts and
what you know now as a premium market they
assist me in understanding and identifying
potentially bearish bull flags in other words a
typical bull flag would indicate a pause or
midway point and another leg higher or
basically a traditional abcd pattern and it's a
measured move type phenomenon in price
action but i found that i would fall victim to this
simply because i was only looking for patterns
for the sake of patterns price does not move
based on any kind of pattern whether it be a
order block or mitigation block or breaker or
even classic char patterns like a head and
shoulders or in this case a bull flag now
obviously the opposite side of the spectrum and
when we're bearish in a continuation pattern in
a nice strong trend you'll see a quick sudden
move lower a small little consolidation and then
another equal leg lower prior to the small little
consolidation and again i'll give you some
examples when we get past this boring part but
not all sudden price declines that move into a
short-term consolidation are bare flags and
obviously in mature bear trends or in higher
time frame accumulation levels price will post
false bear flags and obviously retail traders will
see this as a classic continuation cell pattern but
many times it will reverse and again to take
away is understanding higher time frame charts
and understanding the discount markets will
assist in identifying when these are potentially
false bear flags or when not to expect another
leg lower but in fact a bye okay so for those that
are unaware of what a bear flag or bull flag is this
is basically a graphic depiction i just simply did
a google on bull flag and this is one that came
up um that i agree with in terms of what it
explains on how the price action should be
viewed generally you'll see a price leg up and
then it'll be a small little consolidation that
consolidation can go sideways or in this case it
could be slightly slanted lower and then all of a
sudden there will be another impulse swing
higher that would be equal to the first impulse
swing higher so you have a measured move the
reason why they call these patterns bull flags is
the first leg up in price that would be viewed as
a the flagpole okay which is the reason why i got
its name that way and then the the flag portion
is that small little consolidation slanting lower
and then then you would measure that flagpole
on the first leg up and then add that to the the
move out of the consolidation and that would
give you your measured move and while when i
first started i can admit to you that some of my
grain trades and some of my live cattle and live
hog trades when i was trading commodities um
they came by way of trading this simple pattern
right here um it happened to occur when i had
uh one hour stochastics divergence and when it
was in agreement it was great the problem is i
never really considered the higher time frame
charts or what i understand now as a premium
or discount market obviously the same thing
can be said just in reverse for for bear flags
generally you'll see a market drop off have a
sudden decline then consolidation sideways or
in this case it could be a consolidation that
slopes up diagonally and then another leg equal
to the first price swing or impulse swing lower
that measurement on that first leg lower if you
add it to i'm sorry if you subtract it to rather uh
the breakout high and the consolidation that
will give your projected low now again when
markets are in a nice strong trend and they're
not mature and they still have more legs to go
lower okay this pattern is pretty pretty
consistent the problem is when you're not
aware when the trend is mature or where you're
in areas of accumulation in other words the
market's really coming under aggressive buying
by smart money these patterns will materialize
near the low and you'll see a lot of folks see this
as a continuation pattern you'll see it on twitter
you'll see it on social media that there will be a
particular expectation to see new leg uh lower
in price but many times it won't go down or if it
does it'll just go down just a smaller bit and then
reverse abruptly go higher now looking at
another google example okay just give you a
little bit more framework these are not my
charts i'll just simply grab them off of google and
you can actually do google searches on your
own and get a little bit more um examples of
what a bull flag and a bear flag look like in price
action but i liked this one here just for a quick uh
an idea of what we would be looking for in other
words what the flagpole measurement would
be and adding it to or subtracting it from that
consolidation to give us a price target and that's
great well i'm not trying to teach you the
continuation pattern here because it's obviously
pretty general knowledge i want to teach on
how the markets can actually give us these false
patterns and we can take advantage of that so
here we have a classic up where the market has
moved up aggressively suddenly moved up
higher and we have what we have a small little
consolidation after that immediate rally up
higher when you see that obviously the first
thing comes to mind if you know a bull flag
pattern is uh well this is obviously a bull flag and
then you would measure the the flag pole or the
impulse price swing up and then you would add
that to the consolidation area and it would give
you a projected high so we would expect
recently if we were just pre pattern trading or
looking for continuation classic patterns if you
will we would be looking for higher prices the
problem is if we're just looking at one time
frame and just only focusing there that's a
problem you have to have a certain measure of
top-down analysis and using higher time frame
charts monthly weekly daily and at least a four-
hour but preferably a daily chart that will give us
the indications that there's going to be a little bit
more information that needs to be considered
so when we see that clearly it's viewed as a
classic bull flag okay and if we were going back
in time in a time machine if someone would
have given me this chart my first six to eight
months of trading i clearly would have expected
this market to go higher based on just this
simple pattern alone and unfortunately like i
said in the past when i first started trading
everything was in a bull market and i can only
understand buying low and selling high i never
understood rather the the concept of selling
short my you know my first year just couldn't
grasp it so i would only be a buyer but i could tell
you as a new trader my first year i would have
looked at this and considered this as a bull flag
problem is is that's what would generally end up
happening so clearly we see that this spool flag
was the opposite it gave us no advancement
higher the only thing it did was just breached
above a previous area of consolidation so let's
take a look about this specific area and what
was behind the scenes that led to this overall
price reversal okay folks let's take a closer look
at this particular false flag okay we have price
showing a clear classic bull pattern in here
bullish flag but what would cause this market to
break down like that why did it not continue and
make its equal leg up here added to the move
up why we why didn't we get a measured move
higher and again why did the bullseye fail well
let's take a look at things a little bit closer and
let's focus primarily on the bodies of the candles
and the price action first forget this wick for a
second okay i'm gonna look primarily at the
body to the candle right in here as price
dropped lower we rallied up tried to go a little
bit lower again and finally ran through
everybody that trades bull flags would have
been excited about this move here breaking out
the only thing it did was trade just above this old
high okay if we were going to use this area right
in here we're going to note that and shade it
with an area to highlight it and we're going to
go out to a daily chart okay so we have the daily
chart here and what i want you to look at is we
have a price swing from this high down and
then we have a retracement up so as price was
running up into that blue shaded area we had
on a 15 minute time frame we're inside of this big
up candle which is a bearish order block and we
also have if we take our fib and we draw it from
the high down to the low right here which is
right before this price swing up we can clearly
see that we are in an area of distribution and
what that means is we are in an area of premium
so all through here the market is in a premium
market relatives of a range we have this old high
this old low so now what we know about the
market now we're going to drop down into a
four hour chart so we're focusing primarily here
and when we look at this down move in here we
have a rally up creating a liquidity void and then
we have another liquidity void going down
midway through that is going to be the
equivalent of what would be viewed as a bearish
order block so since we're in a premium market
where we should be seeing distribution we have
two areas at which the market created liquidity
voids running up then running down this entire
range okay is going to be viewed in the scope of
a bearish order block so we'll be looking at like a
mean threshold if we drop down into a one hour
chart okay so we have price coming down and
right in here we're going to look at a little bit
more detail by dropping down into a 15-minute
time frame okay we have the gap between the
opening of this candle and the close of this
candle right in here okay so we're gonna focus
primarily on that we're gonna zoom in on a five
minute chart to refine and you can see there's
one up candle prior to the down move here now
there's two candles going up right before the to
move lower and this up move here with these
up candles one and two that only trades right
back up into the institutional order flow of this
low here and this low here the low in this candle
comes in at 77 14 the high comes in at 77 14. so
it closed in the liquidity void in here relative to
what was offered the market was posting
bullish prices or offering higher for the buy side
when it gapped down through it they offered it
one more time up here to be sold filling in that
range so from this low over here cut through
this candle and you'll see that actually uh ipta
filled in that range so we have one two candles
if you take those two candles and you measure
that range from the body low to the body high
between the two candles you get equilibrium
right here which is that level i have highlighted
which is also the bottom of that last up candle
on a five minute time frame so that's why that
level's here okay so by having that level and also
i'm framing this swing high here so we have a
little bit of a fair value gap right there you can
see price creating this potential bull flag here
and it starts to come up but what is it really
doing it's only clearing out the bodies of the
candles over here and this big wick that we saw
on a 15 minute time frame is not being
considered at all but when price starts to break
down all we have to do is go back in and look at
price action here look at the up candles okay the
up can they'll start with their bodies and their
wicks on the low end that's where all the
sensitivity on selling short will be so when we
get into areas of heavy distribution like this and
we see a quick rally up in a consolidation or
slight dropping lower which would look like a
bull flag we don't see that as a bullish scenario
what we're doing is we're looking for it to create
a false move and break lower now one or two
scenarios can happen one you can get a turtle
soup scenario where it'll start to come up okay
and then start to break down that's the easiest
one to trade because you'll actually see it go up
get people tripped up thinking it's going to go
higher then it rolls over once that happens you
want to sell the first return back to a bearish
order block that comes in way of the opening
comes in 76.97 the high comes in at 76.97 that's
where your short would be okay once you get
that you put your stop above what would be
considered the bull flags high that wick that
would be that would be your your risk so in
terms of uh risking a lot of pips it's not much at
all and you would just simply wait for it to come
back down to trade and close in first objective
would be to close the quality void that the volt
flag creates or the false flag that it creates rather
if we go up to a 15 minute time frame you can
see even on this time frame we have the last up
candle right before it starts trading lower the
opening on that candle is 76.97 against the low
as well and obviously we've already shown that
the high is 76.97 here on this candle here so
price breaks down closes in its void goes right to
the bearish order block and then we can see
that as a sell-off okay so what am i showing you
here i'm showing you that there's going to be
times when we break our market down from a
top-down perspective by defining the market in
terms of discount or premium okay and
understand the higher time frame as we've
shown with the daily chart here and walking our
way down to a lower time frame that we can
execute on we can use the premise that other
traders are going to see this as a bullish scenario
so it's really a sentiment play in addition to
institutional order flow in a higher time frame so
we're able to see what everyone else with a retail
minded uh perspective would see here in terms
of continuation on the upside but when we start
to see it to break down we know we can get
right back in there and sell it short rate at that
moment there and then quickly price moves
away aggressively and then closes in it's void
right here and then ultimately trades up one
more time closing in this small little liquidity
void here and ultimately moving lower so let's
take a look at an example of a bear flag that
would be a false flag and how that would
translate into higher prices okay we have one
more example here price has a sudden decline
we're an existing downtrend here okay price
goes into a small consolidation and look we're
having that saw consolidation sloping higher
okay by all intensive purposes this would be
deemed as a classic bear pattern okay or bear
flag continuations so one would reasonably
expect to see a move from this high down to this
low from this high projected lower so we could
potentially see a move to about 73 55 if we were
looking at pure chart patterns in the form of
classic patterns the problem is the market's
traded down into 7442 so what's significant
about that okay well i'm going to show you by
having our higher time frame perspective we're
going to highlight this little area okay that's
where our bear flag is or our pseudo bear flag
and i want you to see what's actually happening
here when the market trades into that level
we're going to high time frame but i want you to
see what happens right from the price at this
point here suddenly that bear flag doesn't look
so bearish okay so by having this let's go in here
and take a look at the daily chart okay here's that
area where that bear flag would appear like we
were just showing on the uh one hour chart look
at the bodies of the candles over here okay all
these wicks trading down here again all the
heaviest volumes inside of the wicks so if we
take our area we just highlighted keep it where
it's anchored at for the one hour setup we're
identifying as a false bear flag i'm actually
identifying all the price action below these lows
okay now i'm not using the wicks i'm using the
bodies of the candles okay and the expectation
is this movement here because we're now
coming back down into this area for the first
time in a couple months or months and a half
here on the aussie so we're going one more time
back into this area below the lows in terms of
their bodies of the candles not the wicks okay so
we ignore all these wicks we know that the bulk
of the volume is seen in the bodies so this run
down below here was really just making a run
one more time for the stops below these candles
so if we're seeing that on a daily chart we have
to consider that when we go back into the
hourly chart so when the market starts creating
that pseudo bear flag in here we don't see that
as a bear flag we actually start going in and
looking for reasons to expect higher prices now
we don't just simply go buy it as the market
starts to rally we want to wait for a swing high to
be created and violated on the upside okay we
get that here we have a swing high market
trades up through it here comes back down to
the last bearish candle right here so we can take
that idea and not look at it as a bear flag but look
at it as a buying opportunity so we could be a
buyer right here with a stop below the flag's low
so we could be doing this your stop moving
below there you're getting long at 74.70 we'll
call it 7470 and the expectation would be we
would be looking for a range fill-in of all these
down candles so we'd look for upside objective
here last up candles body and then we'll be
looking for the stops above these equal highs
that clean level here plus we have another
bearish order block here and then one more
right in here then we have equal highs again so
we could be looking for that for a liquidity pool
and we can we can look up here for another
objective if we want to look for a really long term
type scenario okay so going forward price
responds off that level rather handsomely
comes back a little bit retracement just to
populate more buying in here price comes up
sweeps out these equal highs right here so
these highs in here were cleared out the high on
this candle comes in at 75.68 the high on this
candle here comes in at 75.73 so we cleared
those stops out here that's why we saw a little
bit of a rejection here and ultimately we see
price rally up into closing this range here and
then blowing through its high and then the next
area of liquidity will be this liquidity pool here it
trades through that here small little
consolidation again then ultimately seeing that
run up into that rejection here so there's that
bearish order block we finally looked at and it
swept through that as well and ultimately just
for good measure cleared out the old highs over
here okay so it's not the fact that we're looking
for chart patterns okay and especially if the idea
of looking for a continuation well actually if i just
scrolled over didn't even realize but we had one
more here okay price trades down creates a
small little consolidation slightly higher that
would be viewed as what a bear flag okay what
we're actually going to do is we're going to wait
for a swing high to be violated okay and we have
a swing high here even though it creates a lower
low it would have been looking like os is going
to keep going lower all of a sudden they put the
brakes on it goes higher and we have a swing
high violated there so we go down to the last
down candle right here draw that out in time
there it is there's your buy and it should run up
higher prior to the down move we just identified
verified that was a suspect okay it's a false bear
flag so when i look at price action this is what i'm
going to give you as a take away when i'm
looking at price action i'm looking for reasons
why other traders will view the opposite side of
the marketplace so i'm not always just looking
for what would make me take the trade i'm also
looking for the marketplace to suggest to me
how retail-minded traders are going to view
things in the form of classic chart patterns in the
form of indicators okay we'll talk a lot about that
later on in this mentorship but for now i want
you to take away the the study of going back
through old data go through your charts and
find areas where blair flags and bull flags were
basically looking as if it would call for lower
prices for a bear flag and it reversed and went
long and look for opportunities where the
market showed a clear example what would be
viewed as a bull flag but it creates a high and
what happens is actually is this the market goes
into a period of after it rallies up or it moves
down for a period of time if we have to market
create a run-up okay say it just creates a quick
rally up then in that after that rally the market
will go into another consolidation okay think
about ipda now price delivery has been rapid on
one side of the marketplace so the market's
going to go into consolidation it's going to
pause for a couple uh periods now period is
going to be relative to what it needs to do and
you never know exactly how long that time
period is which again i've already proven we
don't care we're just going to wait for the
indications the market's going to want to reach
for a specific level of liquidity above the
marketplace or below the marketplace so if we
get that big run up and it starts consolidating
and it can consolidate going slightly lower in a
diagonal pattern like a classic bull flag would be
what's actually happening is they rallied price
up to get traders thinking what it's going to
keep going higher then they pause it what
many times you'll see is the market will just do
this just make a short slightly short term higher
high and then collapse this is the basis of turtle
soup and you see that here okay we have a
consolidation here price rallies up and then it
falls through okay the scenario is seen here price
drops down consolidates it drops lower so this
would be like this okay the pattern would be a
decline consolidation then an initial leg lower
just by a little bit just short term low violating
these lows right here so when we see that it's
going to look like it's been validated for this bear
flag to go lower and have a projected measured
move lower but in fact all it's doing is taking out
the short term lows here and then reversing and
running the other way which is again the basis
of turtle soup by and you see that taking place
right here
 eight
Market Maker Trap False Breakouts

okay folks welcome back this is the eighth and

final teaching for the second month of the ict
mentorship this is month october we're dealing
specifically with market maker traps of false
breakouts and we'll talk about specifically uh in
this teaching uh one side of the marketplace
just for the sake of saving time everything that
we show you will be just a reverse everything
that's been shown so false breakout above price
consolidation this condition generally manifests
in primary bearish markets in other words if the
market's in a downtrend or for presently trading
lower or expected to trade lower a false
breakout above the consolidations is reasonably
expected and generally what you see manifest
itself at some measure of equilibrium in price
the market will move into a trading range
neophyte traders or breakout traders will
bracket the trading range in price with orders
that means they're going to have buy stops to
break out on a buy above the old highs or sell
stops below the old lows to sell short a break
below the old lows in other words they're trying
to capture a trend and they're going to put a buy
order above the marketplace and a seller below
the marketplace because they absolutely have
no idea what's going on or breakout traders they
just want to bracket the marketplace like long-
term trend followers they don't mind taking a lot
of losses with the hopes of eventually catching a
large trade but market makers will typically
send price above the range to neutralize buy
stops so they're going to focus primarily on one
side of the marketplace and again assuming
that the market is primarily bearish that's what
the market makers mo is going to be okay their
playbook is to run the buy stops above the
marketplace now false breakout below price
consolidations is obviously the opposite this
condition generally manifests itself primarily in
bullish markets and at some measure of
equilibrium and price the market will move into
a trading range neo fight traders and or
breakout traders again we'll bracket the trading
range in price with orders again looking to focus
on buying on a breakout or selling short on the
breakout that you're not privy or astute enough
to know what direction they just simply want to
react to whatever the market gives them in
terms of breaking out above or below but the
market makers will typically send price below
the range to neutralize the cell stops so
graphically what i'll show you here is a breakout
trader or a neophyte trader's perspective on a
market that goes into a trading range above the
old high or recent high they will have buy stops
for long breakout traders and anyone that
would be short obviously their buy stop would
be resting above that high and below the lows
there would be sell stops for long traders and
sell stops for short breakout traders in other
words they want to capture a move that would
hopefully continue going for a long period of
time lower uh they would like to get short on
weakness and obviously bulls would like to be
when their breakout traders they want to be
buying on strength they think by breaking out
above an old high their buy stop would trip
them into a long position and their belief is that
they're going to hopefully capture a long-term
trend up now from a market maker's
perspective we look below the marketplace
when we have lows in the form of sell stops now
i'm going to focus primarily on a buying
environment okay focusing on you in the
market is underlyingly bullish everything that i
show you here would just be reversed for when
the market's bearish okay just to save save time
when the market breaks below the
consolidation those sell stops are used to pair
long orders now who's buying those sell stops
it's smart money but what types of orders rest
above here if we know below the marketplace
itself stops what's resting above the highs buy
stops so naturally as the market moves away
from those cell stops being ran out below the
consolidation they're going to expand price
think of ipta now they're going to expand the
price up to the liquidity above the old high so
those buy stops are going to be used to pair long
selling in other words they're going to scale out
their long positions or take some profits
eventually the market will go into another area
of consolidation or another trading range the
market drops below that trading range to take
out the cell stops below consolidation now as
soon as this happens the thought process
should internally be going on inside your mind
with okay they've already shown a willingness to
take the sell stops below 108.55 now they've
rallied price above the 109 big figure we've
retraced a little bit okay so if they are taking the
market below this short-term consolidation
they're probably going to run the price higher so
where would those uh objectives be what's
resting above that old high buy stops so after
taking the market below a consolidation and
our understanding our expectations is the
market is bullish they're taking the market
below the consolidations the run cell stops out
the only reason why they're going to want to do
that is to absorb those cell stops to be
counterparties for their longs when they are
long when smart money is long how do they
look to exit their positions and book a profit or
hedge they have to get out in a place where
there's willing participants to buy buyers are
always above the highs either in the form of a
buying breakout or buy stops on shore positions
that's where the liquidity is remember that
market paradigm shift that's been spoke about
in this mentorship well we're talking about it
here again just using in terms where you can see
how it's applicable in price price runs above that
old high and now we have two areas at which
the market makers have booked long positions
so now they're pricing in a buy model so as the
market moves higher okay they're going to
liquidate some of their positions to hedge and
they're also going to liquidate positions that
those traders on the bank level are actually
speculating for profit so this is how they actually
take their their trades and put them on and how
they scale them off where they're placing their
entries and where they're placing their limit
orders to get out with a profit but what's over
here what rests above that remember i showed
you in the first month of this mentorship in
september specific things to look for clean highs
and clean lows well there's an area right over
here that clean highs above from where we're
showing right now after that 109 15 levels been
hit there really isn't much in way of liquidity
voids or pools that would be much of interest
except for those stops right above those equal
highs as you can see price expands i think now
in the interbank price delivery algorithm it's
going to expand up and it's going to seek
liquidity that's what we see here then what
happens price invariably will go will go back into
a consolidation now what's the underlying
condition of the marketplace it's bullish why
because they keep taking price below and then
rejecting that absorbing the sell stops and
expanding price higher is there any reason to
suspect that price could go higher look at the
price action you see here you see anything that
jumps off at you if it doesn't we'll come to it as
we move forward in this example but we have a
consolidation in here our reasonable
expectation would be to see price seek the cell
stops below the consolidation price does in fact
go below the consolidation what's above this old
high liquidity now do we always look at the old
high or would we look for do we consider the
wicks we can but primarily all the volume is seen
in what the wicks or the bodies the bodies of the
candles so the body of the candles has the most
volume so the liquidity is going to rest above it
so if they took the stops out below the 108.95
they're going to look to run price higher in the
form of 40 or or higher but initially we had that
short term consolidation the buy stops resting
above that they could scale off a position right
there and the next objective would be 109 40. as
you can see 10940 is swept moving just above
the bodies of the candles note the way that the
orders are stacking higher each time when they
buy they're buying a little bit higher each time
and they're working their orders in and still
offering opportunities to scale off and profit so
the hedgers can work this model the
speculators at the bank level can work this
model and they're also providing liquidity for
those individuals that want sell stops to be
activated if the market goes down to those
positions and those individuals that want buy
stops above the old highs they're happy
because their liquidity is being provided as well
so think remember that market efficiency
paradigm you have to think like a market maker
now we have a larger trading range now i've
kept that area which old buying was done at
109.95 i'm sorry 108.95 but now we've moved into
a larger range nothing's changed here the
model is still bullish so we see market action
trade below that consolidation it trades down
into 108.85 so with that movement down into
that level where is the liquidity at above the old
high at 109 45 or so that's what you have up here
so what is it specifically buy stops so we have
willing buyers that are waiting up there for price
once it gets there they're buying smart money's
buying at 108.90 or 108 85 in that area and they
know that there's going to be willing
participants to be buying it from them when
they want to sell it for a profit at 109.45 to 109.50
so 109.45 to 109.50 is hit so the buy stops are
used to pair long exits so now we look what we
have here we have a wonderful example of how
using consolidations with the expectation of
viewing the market with that market efficiency
paradigm i spoke about where we think like a
liquidity provider we can still speculate we can
still hedge we can still make a profit using the
same model it answers all of the the problems
as it relates to trading but specifically it offers
the answer to liquidity providing buy stops are
activated and they're actually uh um given the
ability to to be effective and sell stops are the
same way so what the market makers do we can
vilify them we can say all those rascals they did
this to me they did that to me okay but what
they're doing is their job they're providing
liquidity the absence or lack of understanding
that traders have they attribute that as these
those guys they they did it to me they usually
misappropriate that to their broker but what it
is is the market maker is providing liquidity and
if you understand how the market seeks
liquidity that's the number one driver in price
action the market will always seek liquidity and
where is the most recent area of liquidity that's
been untapped with the least of resistance
getting to it and that will give you the directional
bias when you're a trader but when you see
markets go into consolidation and you have an
underlying directional premise or you arrive at
one based on studying the market like this you
can quickly ascertain trade setups and signals
will jump off the chart at you by way of looking
at like this again we have to look at price with
that market efficiency paradigm we do not look
at it as give me a buy and a sell okay think like
the market maker if you had complete control
of price where would you drive price at to allow
other traders to get in and at least facilitate their
trades at least whether they're right or wrong
that's not the the problem here where's the
buyers and where's the sellers at and if we look
at the market in this scope in in this perspective
we'll know that we'll always have buyers above
old highs and we'll always have sellers below old
lows so if we know that that's where liquidity
rests all we have to do is discern whether or not
does the market want to seek the buyers or does
it want to seek the sellers and the way you get
that indication is by studying when they go into
consolidation what side of the market they
reaching for and then where is the market going
after it happens and here you can clearly see
every time there's a consolidation the market
seeks the liquidity below the marketplace and
once it absorbs it it quickly runs the other
direction why is that happening because the
market makers are facilitating their long
positions and building a buy model in the price
or in this asset so we can expect to see every
time the market goes below these
consolidations these movements below it are
always going to be viewed in our eyes as a false
breakout so the false breakout that would trip
up traders otherwise or knock them out of
profitable positions if they would have been
remaining long we can view the marketplace
with the market efficiency paradigm seeing it as
a provider of liquidity see it in just in the same
scope or perspective as a market maker does
and then we're suddenly in line with the market
maker we're not beating the market maker
we're not trying to outsmart the market maker
all we're trying to do is get in line with what their
motive would be what's their mo how how are
they going to book the market for this particular
day or for this month or this week okay how are
they going to do that and by looking at the
models that were shown here with looking at
ranges and when they break below the ranges
and we see willingness to rally after that it gives
you your first telltale clue every time the market
goes into consolidation expect every drop down
below an old area of consolidation expect that
to be a false breakout and then anticipate
accumulation of long positions and in the
market once they can accumulate their long
positions then they will reprice the market
higher running for the buy stops above old
highs but what else do you see here i mean if
you're looking at this what else if you were to
study this for a moment and i'm going to ask you
to pause the video study this for a few minutes
and see if there's anything else that jumps off
the chart at you and don't be discouraged if
once i show you what it is if it wasn't apparent
this first price swing from the first initial false
breakout below the old lows and consolidation
once that rallied up and we gave another area
where we can buy again at that 108.75 level that
that red area if you will i guess it's red it's a
measured move from that same buy and it gives
you an approximation over here where the
algorithm will reach for to offer price and we see
it reach up into that 109 25 level from 108.75
which is the measured move from the initial low
that it ran up and created that first red box and
then first that impulse price swing uh the
second leg in price higher is equal to that first
one also the larger price swing from that first
initial buy all the up to the intermediate term
high or the midpoint of the overall price swing
once we had that larger consolidation and it
went down and traded into 108 85 when that
happened that same measured move from
108.50 up to 109 45 or thereabouts that same
measured move from the the stop run at 108.85
that gives us a projected run up to that 109 80
level and you can see that was handsomely hit
and ultimately that 109.90 as we spoke in real
time at the time of this recording in the
mentorship which we spoke about that 109.90
level being directly linked to the bearish order
block on the daily chart and all these things
coalesce they start to come together they
dovetail beautifully but understanding each
individual component will help us bridge that
that vast chasm if you will of what goes on past
the right edge of your chart you see a lot of
times where i'll talk about things and and i'll give
you uh scenarios of what i think is going to
happen but specific levels that i think is going to
go and be hit the reason i'm able to do that is
because i'm looking at the market just like i'm
showing you here i'm looking at how the market
maker is booking how is the market maker
manipulating price what side of the
marketplace are they working on where are
they punishing those that are less informed
okay and if they're seeking one side of the
marketplace over and over and over again and
they keep expanding price away from it in this
case it's been the cell stops being ran every time
the sell stocks would be ran below a
consolidation it runs higher and it goes through
the buy stops it just that's the easiest way to see
if we're really in a bullish market or bullish
market profile it's not as easy as everyone says
with the textbooks where you draw a trendline
it's sloping up and just every time it touches the
trend line you buy now you got to look at where
the orders are going to be residing and against
back to that market efficiency paradigm by
having that model in in focus when you look at
price and when you see market consolidations
when it breaks below that and you start seeing
the market trade higher every time the market
goes in consolidation they're priming the
marketplace to allow sell stops to below build
up below those consolidations and obviously
what we shown here was just for a buy side if
everything was reversed and we were seeing
consolidations in the market rally up taking the
buy stops out and then quickly running lower
and then moving into a new consolidation and
then market running higher running the buy
stops and accelerating going lower again
everything would just reverse itself in terms of
everything we've explained here so i hope this
has been insightful to you i look forward to our
third month in the mentorship so get your
notebooks ready because there's going to be a
lot more information by way of price action and
we're going to be focusing in on detailed
concepts that has been shown in the free
mentorship free members area on my website
and on the videos but all the gaps that i left in
that free area of uh teaching i'm gonna i'm
gonna fill that in as we go forward so with that
guys i wish you good luck and good trading