ICT 2024 Mentorship \ Lecture #7 August 13, 2024

Name: ICT 2024 Mentorship \ Lecture #7 August 13, 2024
Uploaded: 2024-08-13T17:16:51.000Z
Duration: 7 h 38 min 1 s

Market Analysis and Trading Strategies

Overview of NASDAQ Weekly Chart

The speaker introduces the weekly chart of the NASDAQ for September delivery, indicating a focus on economic news that impacts trading decisions.

Emphasizes the importance of waiting for market openings after significant economic reports (e.g., PPI, CPI) to avoid trading on volatile days.

Suggests that traders should consider waiting until specific times (like "Silver Bullet" at 10:00 AM) before engaging in trades.

Key Levels and Price Action

Highlights a critical low at 18883.25 on the weekly chart, suggesting it may be tested due to sell-side and buy-side imbalances.

Discusses candle close dynamics, noting that price action from previous weeks indicates potential resistance around this level.

Recommends marking key levels (18883.25 and others like 854) on charts for future reference as they represent significant points of interest.

Daily Chart Insights

Observations about daily chart behavior indicate proximity to important candlestick lows, which could influence future price movements.

Mentions a "wonky" price action pattern observed in shorter time frames, hinting at possible bullish divergence signals.

Market Reaction Post-Economic News

After an economic report release at 8:30 AM, there was a rally challenging previous highs; this is crucial for understanding market sentiment.

The speaker notes the importance of observing how prices react to established levels post-news announcements without rushing into trades.

Trading Philosophy and Approach

Expresses satisfaction with audience engagement during live streams, emphasizing real-time analysis over market replay scenarios for educational purposes.

Understanding Market Reactions to Economic Indicators

The Impact of CPI and PPI on Trading Decisions

The speaker emphasizes the unpredictability of market reactions before the Consumer Price Index (CPI) and Producer Price Index (PPI) announcements, suggesting that attempting to predict outcomes can lead to inaccuracies.

They express a preference for waiting until after these economic indicators are released, indicating that trading decisions should be based on data rather than speculation.

The analogy of a hurricane is used to describe market volatility; traders should wait for the initial chaos to settle before making moves.

Analyzing Market Structure Post-Announcement

After the announcement, the speaker focuses on identifying key price levels, particularly relative equal lows, which serve as potential support or resistance points in future trades.

They discuss teaching their son about trading concepts like relative equal highs and lows, highlighting an educational approach to understanding market dynamics.

Building Context for Trade Entries

The speaker aims to build a context around potential trade entries by analyzing price action leading up to significant timeframes, such as 10:00 AM.

They stress the importance of reviewing past price movements rather than solely focusing on current news events when determining entry points.

Evaluating Trade Opportunities

A detailed analysis of various price levels is provided, including order blocks and fair value gaps that indicate where traders might find opportunities.

The speaker advises against chasing trades at the end of significant moves, advocating for patience and strategic entry points instead.

Managing Trading Psychology

Emphasis is placed on maintaining discipline in trading strategies and avoiding impulsive decisions driven by fear or greed after losses.

Trading Insights and Strategies

Managing Emotional Responses in Trading

Discusses the dangers of impulsive trading, emphasizing that chasing prices can lead to significant losses or account blowouts.

Mentions banning users who fail to engage meaningfully with content, highlighting the importance of constructive feedback over negativity.

Technical Analysis and Charting Techniques

Transitioning from a five-minute chart to a one-minute chart for more detailed analysis, noting the presence of relative equal lows.

Expresses concern about price movements slightly below established lows, indicating potential volatility ahead.

Anticipating Market Movements

Introduces the concept of using weekly ranges to anticipate retracements, particularly looking for 20% to 30% corrections based on previous week’s performance.

Explains how a predominantly bullish weekly candlestick can signal expectations for retracement and market behavior into the following week.

Utilizing Fibonacci Levels in Trading

Advises traders to measure Fibonacci levels from low to high while considering previous highs and lows for better decision-making.

Highlights convergence between new day opening gaps and Fibonacci levels as critical points for potential price action.

Navigating High Volatility Days

Warns against rushing into trades after major economic data releases (PPI/CPI), suggesting patience is key during volatile periods.

Market Analysis and Trading Strategies

Understanding Market Movements

The speaker discusses a preference for market movements that start high and gradually move lower, suggesting this creates a framework for analysis during trading hours.

Emphasizes the importance of waiting for the opening bell before making any trades, particularly on days with significant economic indicators like PPI and CPI.

Advises against analyzing price action before 7 AM to avoid complications from the London session's influence on market behavior.

Daily Trading Patterns

Introduces the concept of daily schematics or profiles as roadmaps for understanding how daily ranges are formed, noting that while patterns may repeat, they are not always predictable.

Highlights that after the opening bell, there was a run on buy-side liquidity without any sell-side activity yet observed.

Price Action Insights

Describes recent price action post-opening bell, indicating fluctuations but no clear trend direction established yet.

Stresses the importance of observing gaps in price movement to determine potential resistance levels rather than trying to predict tops or reversals prematurely.

Trading Psychology

The speaker emphasizes patience in trading, advocating for waiting until clear signals appear rather than impulsively entering trades based on fear of missing out (FOMO).

Discusses how understanding market dynamics can make watching price action enjoyable and meditative rather than stressful.

Risk Management and Strategy Execution

Mentions the need to assess whether current price actions will continue upward or disrupt existing trends; highlights caution in chasing prices.

Warns against chasing prices when they rise rapidly; stresses that successful trading involves identifying discounts rather than reacting impulsively to market movements.

Learning from Experience

Reflecting on past mistakes where chasing prices led to losses; emphasizes learning from these experiences to develop better trading strategies focused on liquidity pools and retracement patterns.

Encourages traders to wait for specific setups instead of reacting emotionally to rising prices, reinforcing discipline in trading practices.

Market Analysis and Trading Strategies

Opening Market Movements

The market opened higher after a rally, influenced by the 8:30 news driver. A retracement occurred before trading into inefficiencies between specific candles.

Personal Trading Philosophy

The speaker expresses reluctance to participate in trades unless certain levels are reached, emphasizing that their trading style does not align with impulsive buying.

Current Market Positioning

While others may have taken long positions, the speaker has no active trades and is waiting for more information, particularly how the market behaves at the 10:00 hour.

Anticipated Price Action

The speaker is interested in observing if the market can give up recent gains and disrupt a smooth price area but clarifies that this does not mean they will take a position.

Passive Trading Approach

In a passive trading mode, the speaker prefers to wait for confirmations before entering trades, indicating a cautious approach with limited leverage.

Influential Patterns and Indicators

Discussion of a gap that could influence market behavior; reference to a weekly objective previously mentioned during the live stream.

Social Media Clarification

The speaker clarifies their absence from social media platforms other than YouTube, warning against impersonators on various platforms.

Pattern Recognition in Trading

Introduction of the "three drives" pattern from Linda Raschke's book "Street Smarts," highlighting its significance in identifying potential market reversals.

Divergence Concepts Explained

Explanation of divergence using stochastic indicators; emphasis on recognizing when markets might retrace lower despite making higher highs.

Historical Context of Indicators

Understanding Short Selling and Market Patterns

The Concept of Short Selling

The speaker reflects on their initial experiences with short selling, noting that they faced challenges due to a natural inclination towards buying undervalued assets instead.

They mention the "three drives" pattern, where prices reach three successive highs before potentially reversing, which is a key observation in their trading strategy.

Measuring Price Movements

The speaker describes their method for measuring price movements from the lowest point to the highest swing high, aiming for half of that range as an initial target.

They emphasize that this measurement technique is not commonly found in traditional trading literature but has proven effective based on personal experience.

Market Behavior and Analysis

Discussion on how three drives patterns can indicate both long-term tops and intermediate retracements, highlighting the complexity of market behavior.

The speaker shares their current analytical approach focused on identifying immediate price movements rather than predicting long-term trends, which they find liberating.

Adapting to Market Conditions

They express a shift away from worrying about future market positions, advocating for a focus on easier setups that align with personal trading models.

Acknowledgment of increased market volatility and risk necessitating careful analysis rather than aggressive trading strategies.

Emotional Management in Trading

The importance of aligning trades with one's personality and comfort level is discussed; traders should avoid forcing themselves into uncomfortable situations.

The speaker notes ongoing market conditions where prices are trending higher without significant reversals, leading them to adopt a more relaxed attitude toward trading decisions.

Preferences in Trading Environments

They express dislike for days characterized by slow grinding movements in the market, preferring more dynamic price action that allows for clearer decision-making.

When faced with unproductive trading days, they choose to disengage from charts and pursue other activities instead of forcing trades under unfavorable conditions.

Managing Trade Psychology

As profits build up during trades, the speaker tends to take partial profits frequently as a way to manage emotional responses during uncertain market conditions.

Understanding Trading Psychology and Market Behavior

The Discomfort of Holding Trades

The speaker expresses discomfort when trades are moving in their favor, indicating a psychological struggle rather than a sense of ease.

Despite being unable to add new positions due to money management rules, the speaker seeks ways to scale out of trades for peace of mind.

Timing and Trade Management

The importance of timing is highlighted; waiting until 30 minutes before market close can lead to better decision-making regarding trade exits.

Acknowledges that personal trading psychology can conflict with profitable strategies, emphasizing the need for self-awareness in trading.

Personality Traits and Trading Styles

The speaker discusses how certain personality traits may not align with specific trading strategies, suggesting that traders should find what suits them best.

Even winning trades can feel uncomfortable if they don't align with the trader's psychological comfort zone.

Challenges in Intraday Trading

Reflecting on past experiences, the speaker notes missed opportunities due to discomfort with holding trades longer than desired.

Highlights a lack of ability to be nimble in intraday price action, which affects overall trading performance.

Ideal Trading Conditions

Describes an ideal trading day as one where both long and short positions can be taken advantage of, creating a dynamic environment for traders.

Expresses frustration with markets that trend continuously in one direction, leading to internal conflict about how to manage trades effectively.

Coping Mechanisms During Trades

Discusses coping strategies when feeling overwhelmed by trade decisions; suggests taking partial profits or adjusting positions based on market behavior.

Emphasizes the importance of monitoring emotional responses during trading and making adjustments accordingly.

Market Analysis and Decision-Making

Outlines criteria for continuing engagement with the market based on price movements; emphasizes clarity in decision-making processes.

Trading Mindset and Market Analysis

Understanding Trading Decisions

The speaker emphasizes a selective approach to trading, focusing on specific market indicators rather than engaging impulsively. They highlight the importance of having a clear strategy based on market expectations.

Acknowledging the complexity of trading, the speaker stresses that it’s not just about choosing assets but understanding what one is looking for in each trade.

The need for clarity in short-term trading strategies is discussed, particularly regarding what traders should anticipate during specific time intervals.

Market Dynamics and Price Action

The speaker discusses relative highs and lows in price action, indicating that significant movements below certain levels could signal potential market shifts.

They express a desire to see price action challenge certain inefficiencies before making further decisions, emphasizing patience and observation over impulsive actions.

Risk Management and Emotional Control

The importance of identifying resistance levels is highlighted as crucial for managing trades effectively. The speaker notes their intention to step back from trading if certain conditions are met.

A color-coding system is introduced to signify different market behaviors, aiding in visualizing expected outcomes based on past price actions.

Trader Psychology and Market Behavior

The discussion touches on how retail traders often get punished by the market when they attempt to short positions at inappropriate times, leading to liquidity building for larger players.

Days with significant economic reports (like PPI or CPI) can lead to erratic trading behavior; the speaker admits experiencing similar challenges during such volatile periods.

Self-Awareness in Trading

Emphasizing self-awareness, the speaker encourages new traders to recognize their weaknesses before risking real money. This foundational understanding is vital for long-term success.

Coping mechanisms are essential for preventing emotional decision-making during trades. Recognizing personal triggers can help maintain discipline under pressure.

Understanding Emotional Responses in Trading

The Impact of Loss on Rational Thinking

Experiencing significant financial loss can create a "fog of war," leading to confusion and irrational decision-making. Traders may feel shell-shocked, losing their ability to think clearly.

This emotional turmoil often manifests in personal relationships, where individuals may become irritable or abusive due to the stress of their trading losses.

Externalizing Blame for Personal Failures

Traders frequently attribute their failures to external factors rather than recognizing their own role in the losses. This denial complicates recovery and learning from mistakes.

The Pressure of Live Streaming and Audience Expectations

Live streamers may feel compelled to act impulsively during trading sessions due to audience presence, which can lead to poor decision-making.

The speaker emphasizes that his primary goal is teaching rather than impressing viewers, highlighting a focus on value over popularity.

Recognizing Market Manipulation

High-impact news events can manipulate market conditions significantly. The speaker notes that reports like PPI and CPI are often influenced by political agendas, especially during election years.

There is a belief that stock prices are artificially inflated due to manipulation by powerful entities, suggesting that many stocks should have declined long ago without such intervention.

Navigating Highly Manipulated Markets

The analogy of a rigged casino illustrates how markets can be manipulated for profit. Understanding this dynamic is crucial for traders.

Acknowledging the potential for manipulation helps traders recognize when they might be at risk and informs their strategies accordingly.

Managing Risk and Personal Comfort Zones

On days characterized by market manipulation, traders must be cautious about entering trades. Recognizing personal limits is essential for maintaining psychological well-being.

It's important for traders to guard their edge—consistent strategies should not be pushed beyond comfort zones as it could lead to significant losses.

Responsibility in Trading Decisions

Understanding Trading Environments and Personal Weaknesses

Identifying Unfavorable Trading Conditions

The speaker emphasizes the importance of recognizing when one is in a challenging trading environment, describing it as feeling like "a fish out of water." They stress the need to identify these conditions early to mitigate losses.

Acknowledging that even small monetary losses can be magnified mentally, the speaker reflects on past experiences where failure to recognize unfavorable days led to significant account blowouts.

The speaker discusses the tendency for traders to externalize blame rather than taking personal responsibility for their decisions, highlighting that self-awareness is crucial in trading.

Embracing Personal Weaknesses

It’s important for traders to confront their weaknesses without shame. Recognizing one's limitations can prevent future failures and help in making better trading decisions.

The speaker encourages traders not to view their weaknesses as failures but as opportunities for growth. Identifying areas of discomfort is essential for developing a successful trading strategy.

Learning from Experience

Successful traders often share their vulnerabilities within community groups, which fosters an environment of openness and learning. This candid communication helps others recognize similar challenges.

The analogy of Superman and Kryptonite illustrates how every trader has specific weaknesses that can hinder performance if not acknowledged and managed properly.

Observational Learning Techniques

The speaker shares insights about teaching his son through observation rather than direct trading practice. Watching price action unfold in real-time helps develop understanding without the pressure of active trading.

There are mentions of delays in data feeds during live streams, emphasizing the importance of patience and observation over immediate execution in learning environments.

Navigating Market Conditions

Discussion includes strategies for identifying market spikes and thresholds, with a focus on understanding price movements rather than forcing trades under unfavorable conditions.

Insights on Trading and Market Behavior

Understanding Personal Experience in Trading

The speaker reflects on the importance of learning from personal experiences, emphasizing that hardships can reveal weaknesses in trading strategies.

An analogy is presented about a neighbor's dog that bites anyone who approaches too closely, illustrating the need to learn from adverse experiences rather than repeating mistakes.

The speaker questions how many times one would allow themselves to be bitten before changing their approach, highlighting the necessity of adapting based on past errors.

Identifying Market Conditions

The speaker discusses their early development as an analyst, focusing on identifying conditions that lead to errors in trading decisions.

They note fluctuations in price action and express a preference for clearer market conditions where expected movements are more predictable.

Confidence in Trading Strategies

A desire for predictable market behavior is expressed; the speaker prefers scenarios where price respects certain levels (PD arrays), which boosts confidence in directional trades.

The discussion includes potential market movements and how breaking certain highs could invalidate current trading strategies.

Real-Life Lessons and Teaching

The speaker shares their approach to teaching their son about trading through real-life experiences, including both losses and gains.

They emphasize the importance of dynamic lessons over static teachings found in books, advocating for learning through real-time market interactions.

Reflections on Early Trading Experiences

Reflecting on past mistakes, the speaker notes that understanding what truly matters in trading could have accelerated their development.

Market Analysis and Trading Insights

Current Market Conditions

The speaker expresses skepticism about the current market, describing it as "not clean" and lacking direction. They prefer to wait for clearer signals before making trading decisions.

Discussion on relative highs and liquidity; the speaker contemplates whether the market can push higher before potentially reversing, indicating a cautious approach to trading.

High Probability Trading

The concept of high probability trading is introduced, emphasizing that successful trades should have a clear rationale against opposing market movements.

Acknowledges the inherent risks in trading, including unexpected events that could cause significant price shifts, such as geopolitical incidents or economic announcements.

Market Dynamics and Historical Context

The speaker reflects on past market behaviors, noting that surprise rate changes are no longer common due to increased regulation by central banks.

Highlights how scripted market actions diminish its dynamism, suggesting that since leaving the gold standard, markets have become less free.

Personal Trading Philosophy

The speaker shares their personal trading philosophy, stating they do not find current market conditions appealing due to excessive volatility and lack of clarity.

Mentions observing other traders' performances but remains uninterested in participating in long positions under current circumstances.

Risk Management and Trade Execution

Discusses potential trade setups but emphasizes a preference for waiting until certain price levels are reached before considering any trades.

Expresses discomfort with one-sided market movements and prefers environments where prices fluctuate more dynamically.

Learning from Price Action

Encourages traders to recognize when they might be fighting against unfavorable conditions in the market.

Uses an analogy of salmon swimming upstream to illustrate the challenges of forcing trades in difficult conditions.

Observations on Market Behavior

Emphasizes identifying specific characteristics in price action as crucial learning moments for traders.

Understanding Trading Psychology and Market Dynamics

The Challenge of Learning to Trade

New traders often become fixated on finding the perfect indicators or patterns, which distracts them from understanding price action. This fixation can hinder their overall learning process.

Developing a consistent trading approach is challenging; many traders struggle with sticking to their chosen model amidst market fluctuations, leading to costly mistakes.

The journey of learning to trade is fraught with sleepless nights and discomfort as traders confront their limitations and the complexities of the market.

Analyzing Market Gaps and Price Action

Observing daily charts for volume imbalances is crucial; identifying gaps can provide insights into potential market movements.

Traders should elongate price charts to better visualize inefficiencies in the market, aiding in decision-making during trades.

Embracing Missed Opportunities

It's important for new traders to accept that missing moves is part of the learning process. They should focus on developing patience rather than feeling pressured to catch every opportunity.

Identifying personal strengths and weaknesses within one's trading model is essential for growth. Acknowledging these aspects helps remove barriers to progress.

Navigating Personal Barriers in Trading

Many traders initially focus solely on making money without recognizing that understanding problematic price actions is key to successful trading.

Not all trading environments suit every trader; some may thrive under certain conditions while others may struggle, highlighting the importance of self-awareness in trading strategies.

Finding Your Unique Path as a Trader

Just like various professions have different paths, each trader must carve out their own unique approach based on personal experiences and preferences.

Avoiding barriers or speed bumps in development requires acknowledging that uncertainty is inherent in trading; embracing this reality can lead to more effective strategies.

The Illusion of Perfection in Trading

Attempting to avoid losses entirely or only seeking perfect entry points leads many traders down an unproductive path. Accepting that mistakes are part of the journey fosters resilience and adaptability.

Navigating Trading Challenges

Understanding Market Behavior

The speaker discusses the difficulty of trading during uncertain market conditions, likening it to a sailboat without a rudder, which leads to aimless and choppy movements.

They reflect on personal experiences where chasing sudden market runs resulted in losses, emphasizing the importance of recognizing problematic trading days early.

Ignoring these warning signs can lead to significant emotional and psychological distress, affecting overall health and future trading performance.

The Importance of Self-Permission in Trading

The speaker encourages traders to give themselves permission not to trade every day or achieve constant winning trades, promoting gradual improvement instead.

Emphasizing growth over immediate success allows for better understanding of personal trading models and comfort zones.

Identifying Strengths and Weaknesses

Acknowledging both strengths and weaknesses in one's trading model is crucial; honesty about challenges can lead to better strategies.

The industry often hides weaknesses for marketing purposes, but transparency is essential for genuine learning and improvement.

Long-Term vs. Short-Term Mindset

The speaker warns against short-term approaches in trading that may lead to failure; they advocate for a long-term mindset focused on consistent growth.

Teaching younger generations about patience and understanding in trading is highlighted as an important lesson.

Articulating Trading Strategies

Traders should be able to visually represent their strategies simply; if one cannot draw out their approach clearly, it indicates a lack of understanding.

Understanding Trader Mindsets and Social Media Influence

The Importance of Self-Awareness in Trading

The speaker emphasizes that making money in trading is not about impressing others or conforming to social media expectations; it's about understanding market dynamics.

Successful traders do not belittle others; they respect those who acknowledge their weaknesses and strive for improvement.

Acknowledging one's weaknesses as a trader allows for better management of risks and avoidance of unfavorable conditions.

Critique of Social Media Culture

Many individuals on social media claim to be successful traders but fail to provide evidence, often hiding behind opinions rather than facts.

The speaker criticizes the toxic environment fostered by social media, where negativity can undermine a trader's confidence and growth.

Those who engage in trolling or negative commentary are often unsuccessful themselves, projecting their failures onto others.

Navigating Adversity as a Trader

Traders may feel vulnerable when confronted with criticism, especially from those who lack credibility or experience.

It's important for traders to focus on their own progress rather than being swayed by the opinions of others who are not credible.

Maintaining Focus on Personal Growth

Traders should prioritize their own learning journey over external validation; the goal is financial success through informed decision-making.

The speaker warns against inviting distractions into one’s trading process, emphasizing the need for personal accountability and focus.

Learning from Experience

The speaker encourages viewers to learn from his live streams without getting distracted by outside commentary or competition.

Arrogance among less skilled individuals can hinder genuine learning; humility is essential for growth in trading skills.

Setting Realistic Expectations

Comments sections are disabled during live streams to prevent distractions from unconstructive feedback while focusing on educational content.

Traders should view challenges as opportunities for growth rather than setbacks; adopting a proactive mindset can lead to improved performance.

Strategies for Effective Trading

Understanding price action is crucial; traders must learn when to act and when to remain patient based on market signals.

Market Analysis and Trading Insights

Trading Strategy Considerations

The speaker discusses the importance of market movement, indicating that a close above a certain level could signal a need to exit short trades.

Emphasizes the significance of price closing above specific levels as an indicator for potential support, suggesting caution in trading decisions.

Mentions the necessity of considering gaps in price action and how they can influence future movements, particularly regarding volume imbalances.

Observations on Price Action

Highlights the behavior of price around gaps and volume imbalances, noting that these areas are critical for understanding market dynamics.

Shares personal anecdotes about observing market reactions and mentions feedback from viewers who have benefited from his teachings.

Community Engagement and Support

Acknowledges positive feedback from a viewer who has made progress in trading since following his guidance, illustrating the impact of his educational approach.

Expresses appreciation for community members' support, especially women traders, emphasizing their unique perspectives and contributions to trading.

Gender Perspectives in Trading

Discusses societal perceptions surrounding female traders versus male traders, arguing that women often approach trading with more caution and purpose.

Suggests that women may excel in trading due to their focus on providing for families rather than ego-driven competition common among men.

Personal Reflections on Teaching Style

Reflects on his teaching style and acknowledges moments where he may come off too harsh or informal but aims to maintain respect within the community.

Understanding Communication and Language in Trading

The Importance of Language Around Children

The speaker emphasizes the need to be cautious with language when live streaming, especially around children, acknowledging that they may use inappropriate language during discussions.

They mention their personal experience of having a young niece living with them, which influences their awareness of language use.

Emotional Connection to Trading

The speaker reflects on how trading discussions tap into primal emotions tied to past struggles and hardships faced in their journey towards understanding trading.

They note that women in their community often resonate more deeply with these emotional aspects, openly discussing weaknesses and seeking ways to cope or overcome challenges.

Technical vs. Emotional Understanding

The speaker stresses the importance of not just pointing out technical aspects on charts but also addressing emotional responses when trades do not go as planned.

They highlight the necessity for traders to have strategies for dealing with frustration and emotional turmoil resulting from unsuccessful trades.

Community Feedback and Engagement

Acknowledging feedback from viewers, the speaker notes that most comments are positive, expressing gratitude for insights shared during lectures.

They address inquiries about Forex trading, clarifying that while they will discuss it later, their teachings apply universally across asset classes.

Universal Principles in Trading

The speaker asserts that principles discussed are applicable beyond specific asset classes; they emphasize time and price as universal concepts in trading.

There is skepticism regarding whether cryptocurrency operates under the same principles as traditional markets.

Institutional Order Flow Entry Drills

The concept of an "Institutional order flow entry drill" is introduced; it involves recognizing fair value gaps where price action can indicate potential trade entries.

Emphasis is placed on monitoring price action closely to ensure certain levels remain unfilled or open for effective trading strategies.

Inefficiencies as Support/Resistance Levels

The speaker explains how inefficiencies that stay open can act like real support or resistance levels within market dynamics.

Understanding Price Action and Trading Strategies

Analyzing Market Movements

The speaker discusses the importance of discernment in trading, emphasizing the need to observe price levels before making a trade decision.

They mention using different time frames (like 15-second charts) to analyze price delivery and identify potential entry points during market movements.

The concept of "price delivery Continuum Theory" is introduced, which involves understanding how one time frame's movement can inform decisions on lower time frames.

Consolidation and Breakout Patterns

The speaker expresses caution about trading on days with stagnant price action, preferring to wait for clearer signals before entering trades.

They highlight the significance of trading above consolidation levels and how stop hunts can indicate potential breakout opportunities.

A fair value gap is discussed as an important factor that often remains open after a breakout, suggesting it could be used for future trades.

Trade Execution Techniques

The speaker advises placing limit orders at specific candlestick lows when anticipating price movements towards a target level.

They emphasize the importance of having well-organized charts that display complete ranges for better analysis and annotation capabilities.

Institutional order entry drills are mentioned as a method for partial entries into anticipated fair value gaps that may not completely fill.

Anticipating Market Behavior

The speaker stresses the need to recognize setups where fair value gaps are likely to remain unfilled, indicating strong market behavior behind price actions.

They reference past experiences in live trading sessions where they noted specific candles remaining open as indicators of market strength or weakness.

Personal Trading Philosophy

The speaker contrasts their observational approach during uncertain market conditions with more decisive strategies once clear patterns emerge.

Understanding Price Action and Learning Opportunities in Trading

The Importance of Repetition in Learning

Recognizing that price action patterns repeat can alleviate the pressure of thinking each moment is unique; traders often feel they need explicit buy/sell signals.

Acknowledging that if a trader stops engaging with learning resources, it indicates a lack of readiness to learn; consistent participation is crucial for growth.

Challenges in Learning and Teaching

Initial groups of students often quit when expecting a signal service instead of understanding price action characteristics; this highlights the importance of setting realistic expectations.

Students should identify personal interests within price action principles, filtering out less relevant information to focus on what resonates with them.

Building a Personal Trading Model

The first model developed by a trader may not be perfect but serves as a foundational starting point for future strategies.

Emphasizing specific concepts like fair value gaps helps streamline learning; instructors may guide students based on their preferences while maintaining structure.

Finding Individual Focus Areas

Students are encouraged to find which technical aspects resonate most with them, allowing for personalized learning paths without diminishing other methods' effectiveness.

Instructors aim to provide comprehensive insights into chart analysis while encouraging students to engage actively rather than passively consuming information.

Practical Application and Attention Management

As instructors discuss price action, students should remain attentive to various elements that might catch their interest, even if not directly highlighted by the instructor.

Observing multiple examples during discussions aids in establishing baseline knowledge and encourages active engagement with the material being taught.

Navigating Fair Value Gaps

Students should avoid forcing themselves into specific trading models just because an instructor emphasizes them; individual exploration is key.

When discussing price movements, attention should be directed towards identifying personal areas of interest within the broader context provided by instructors.

Key Insights on Fair Value Gaps

Understanding how fair value gaps function involves recognizing sensitive areas such as midpoints between candle highs and lows for potential trade entries.

Market Entry Strategies and Limit Orders

Understanding Low Resistance Barriers to Entry

The speaker emphasizes the importance of targeting low resistance opportunities for market entry, avoiding frustration from spreads that can prevent order fills.

A belief in the persistence of a gap influences entry strategies; the midpoint between a candle's high and low is identified as a significant point for potential trades.

The concept of "consequent encroachment" suggests placing limit orders just above key price levels to increase chances of execution while managing risk effectively.

Managing Risk with Limit Orders

The speaker shares personal experiences where limit orders were not filled due to market spread, highlighting the unpredictability of order execution.

Traders must decide whether to place limit orders at specific lows or slightly above them, balancing comfort with potential drawdowns during trades.

Institutional Order Flow and Market Behavior

The discussion introduces institutional order flow concepts, suggesting that understanding these dynamics can lead to better trading decisions despite their complexity.

Anticipating market behavior requires accepting possible drawdowns; experience helps traders remain calm when prices fluctuate around their entries.

Faith in Trading Models

Every trader operates on some level of faith regarding their strategies; however, the speaker relies on data-driven insights developed over 30 years.

Statistical probabilities guide trading decisions, reinforcing confidence in patterns observed through extensive experience.

Gaps and Market Dynamics

The speaker argues against traditional supply and demand theories in stock markets, asserting that they are often algorithmically controlled rather than driven by real-world factors.

The Role of Wealth in the Last Days

The Coming Changes in Wealth

Discussion on the impending return of the Lord and its implications for wealth, suggesting that material riches like silver and gold will lose their value.

Emphasis on the discomfort of wealthy individuals in the last days, indicating a shift away from traditional financial security.

Trading Concepts Explained

Clarification that market movements are not solely based on support and resistance but rather on inefficiencies within the market.

Introduction to "Breakaway gaps" as significant indicators for trading strategies, particularly regarding institutional order flow.

Entry Techniques in Trading

Explanation of using institutional order flow entry drills as a primary method for entering trades, especially when dealing with larger gaps.

Description of building positions through averaging down, highlighting how traders can add contracts at different price levels to manage risk.

Practical Application of Trading Strategies

Insight into specific trading scenarios where adding contracts is beneficial despite being underwater on initial trades.

Mention of limitations imposed by certain funded account companies regarding position management and entry techniques.

Understanding Order Blocks

Definition of order blocks and their significance in identifying potential price movements based on previous candle formations.

Discussion about validating order blocks through price action and how they relate to fair value gaps.

Market Dynamics and Price Action

Analysis of how market algorithms respond to specific candle formations, emphasizing the importance of understanding these dynamics for successful trading.

Understanding Price Action and Order Blocks in Trading

The Concept of Supply and Demand

The speaker emphasizes that the current price action does not align with traditional supply and demand concepts, suggesting a need for a different analytical approach.

Criticism is directed towards younger traders who promote incomplete ideas about order blocks without fully understanding the underlying principles.

Analyzing Candle Bodies and Wicks

The importance of extending the opening price to analyze how price interacts with it is highlighted, noting that candle bodies provide critical narrative insights.

A lesson on identifying order blocks is introduced, indicating that this knowledge is essential for effective trading strategies.

Range Analysis and Narrative Formation

The speaker discusses defining ranges based on candle bodies, which are crucial for recognizing potential order blocks in market movements.

Observations are made about how wicks can penetrate lower prices while bodies remain within specific ranges, reinforcing the significance of body placement in analysis.

Market Behavior Around Key Prices

The discussion focuses on how candle bodies tend to stay within upper halves during downtrends, suggesting less concern over pinpointing exact entry points if one understands order block dynamics.

Insights into writing a book about these concepts reveal challenges faced when trying to convey complex trading strategies effectively.

Timeframes and Liquidity Considerations

The speaker stresses the necessity of considering higher time frame analyses (like daily charts), as they provide context for smaller time frames' movements.

A specific example at 11:10 AM illustrates algorithmic behavior around sensitive price points, emphasizing their role in market shifts.

Inefficiencies and Market Dynamics

Discussion revolves around how algorithms seek inefficiencies or liquidity gaps in the market, particularly focusing on timing related to macro criteria.

Understanding Market Dynamics and Liquidity

Key Reference Points in Trading

The speaker emphasizes that classic support and resistance levels are not the only reference points; algorithms will consistently return to specific liquidity points across various markets, including Forex, bonds, gold, and indices.

A macro timeframe is introduced, indicating that every 60 minutes (top of the hour), the market tends to move towards either short-term lows or highs to tap into liquidity.

Market Behavior at Hourly Intervals

At each hourly interval, the market may either seek sell-side liquidity (short-term low) or buy-side liquidity (short-term high), which introduces liquidity into the marketplace.

The speaker discusses identifying inefficiencies in the market as they form. Recognizing these can provide a solid basis for trading decisions without excessive analysis.

Navigating Challenging Trading Days

On difficult trading days where readings are hard to interpret, even experienced traders should focus on securing small victories rather than forcing trades.

It’s advised to take a win when identified and then step back from further engagement with the market for that day to avoid frustration.

Analyzing Trade Opportunities

The discussion includes analyzing price movements relative to previous highs and lows while considering volume imbalances as potential trade setups.

Specific price ranges are discussed where traders could potentially enter trades based on identified volume imbalances, emphasizing confidence in executing trades within those parameters.

Confidence vs. Arrogance in Trading

The speaker reflects on how confidence in trading can be perceived as arrogance by others who struggle with their own trading experiences.

There’s an acknowledgment of emotional responses from less successful traders when confronted with confident individuals sharing their successes.

Timing and Strategy Implementation

Emphasis is placed on understanding macro timeframes for effective trading strategies. Not all macros yield equal results; some require patience while waiting for optimal conditions.

Understanding Market Manipulation and Algorithmic Trading

The Role of Algorithms in Price Control

The algorithm exists to control market prices, with manual interventions causing abrupt price movements that leave traders with little opportunity to react.

Federal Open Market Committee (FOMC) announcements are highlighted as examples of manual intervention, leading to significant market disruptions rather than organic trading activity.

Such interventions create a chaotic environment, described metaphorically as "rape," indicating the destructive nature of these price manipulations.

Identifying Market Inefficiencies

Markets often seek inefficiencies or liquidity gaps; if no gap exists, traders should look for down closed candles that indicate potential retracement opportunities.

It is emphasized that not all conditions (gaps, order blocks, short-term lows) can coexist simultaneously on a chart; typically only one or two will be present at any given time.

New traders may struggle with this concept but must understand that it’s physically impossible for all three conditions to exist at the same price point in the same timeframe.

Analyzing Fair Value Gaps and Support Levels

A fair value gap forms after breaking away from consolidation; it serves as a potential support level even if not directly touched by price action.

Traders should monitor subsequent touches of the fair value gap high for immediate responses and potential buying opportunities.

Time Frames and Trading Strategies

Higher time frame references are crucial for identifying buy-side liquidity; traders need to analyze daily charts for volume imbalances above current highs.

Opportunities arise within specific time windows where buyers can enter at discount arrays without filling certain gaps due to breakaway dynamics.

The Importance of Price Action Analysis

Down closed candles validate market movements when they trade above their opening prices, indicating algorithmic behavior in price delivery.

Understanding Market Entry Timing

Importance of Timing in Trading

The speaker emphasizes the significance of focusing on specific entry times, particularly the first 10 minutes and the last hour of trading sessions, to achieve better fills and immediate market responses.

Acknowledges that recognizing when the market moves away from an entry point without hitting a stop loss is crucial for successful trading.

Highlights the necessity of understanding order blocks and their formation through down close candles to identify potential trade setups effectively.

Analyzing Market Behavior

Discusses how algorithms determine price movements based on inefficiencies in the market rather than collective buyer or seller decisions.

Critiques common misconceptions about market influences, such as astrology or personal beliefs affecting trading outcomes, asserting they have no real impact on price action.

Setting Up for Success

The speaker dismisses superstitions related to lunar cycles and emphasizes that effective trading should rely on concrete analysis rather than anecdotal evidence or myths.

Advises traders to set alarms based on time intervals (e.g., every hour), which can help them stay aware of significant market changes and opportunities.

Identifying Liquidity and Inefficiencies

Explains how vertical lines can be used to mark macro points at each top of the hour, guiding traders in identifying gaps or inefficiencies in liquidity.

Describes how analyzing price movements around these macro points can reveal buy-side liquidity opportunities while also indicating areas where sell-side pressure may exist.

Conclusion: Navigating Price Action Effectively

Understanding Price Action and Market Dynamics

The Concept of Trading as Climbing a Mountain

Trading is likened to rock climbing, where traders must identify footholds (areas of inefficiency) that allow for upward movement in price.

Recognizing these inefficiencies helps traders anticipate price movements, similar to how climbers assess their next steps on a mountain.

Importance of Time Frames in Trading

The speaker emphasizes the significance of hourly candlestick patterns for framing directional trades, asserting that consistent analysis can lead to successful trading strategies.

A critique is made against the concept of 90-minute cycles in trading; the speaker argues that shorter time frames do not provide adequate context for making informed decisions.

Analyzing Market Behavior and Liquidity

Understanding market behavior involves recognizing key price points and liquidity pools, which are essential for predicting future price actions.

Incorporating higher time frames (weekly and daily charts) into analysis provides a more comprehensive view, enhancing decision-making processes.

Personal Journey in Understanding Price Dynamics

The speaker shares their dedication to studying price action, driven by a desire to understand recurring phenomena within market behaviors.

They reflect on past challenges with traditional technical analysis methods, highlighting the need for deeper insights beyond standard support and resistance levels.

Insights on Market Disruptions and Algorithmic Trading

The discussion touches upon how disruptions in expected market behavior signal potential trading opportunities or caution against entering trades.

Market Analysis and Trading Strategies

Observing Market Movements

The speaker emphasizes the importance of studying charts, even on less favorable days, to identify market movements within specific time windows.

Encourages sharing charting tools with friends who can utilize 15-second charts for better analysis, highlighting collaboration in trading.

Understanding Macros in Trading

Critiques courses that misuse terminology related to macros, asserting that many do not understand the concepts they teach.

Identifies key trading macros: midnight to 1 AM and the final hour of the day, explaining their significance in intraday trading strategies.

Key Lessons on Market Direction

The speaker believes they have provided substantial insights into market directionality, likening it to having a powerful tool for traders.

Stresses that understanding where the market is likely to move is crucial; without this knowledge, traders will struggle and become frustrated.

Range and Trade Confidence

Defines "range" as needing at least a 20-handle movement for confidence in trades; emphasizes timing and anticipation in trading decisions.

Advises against taking trades if one does not see clear price movements or trends, regardless of how others perceive ongoing market activity.

Learning from Hindsight

Discusses the value of hindsight in learning trading strategies; asserts that all professionals learn from past experiences.

Critiques impatience among new traders who rush into making money without understanding foundational concepts; warns against scams targeting eager individuals.

Ethical Considerations in Trading Education

Reflects on potential exploitation within the industry by those selling misleading courses promising quick profits.

Shares personal experiences with mentorship programs and highlights the importance of genuine education over profit-driven motives.

Understanding Market Dynamics and Trading Strategies

The Importance of Candlestick Patterns

Candlesticks, particularly down closed candles, can indicate bullish order flow. Recognizing this helps traders understand market intentions.

Focusing on specific time intervals (1050 to 1110 and 1150 to 1210) is crucial for effective trading; it prevents overextending one's skill set.

Traders must identify where price is being drawn to; failing to do so may lead to unsuccessful trades and a lack of confidence in decision-making.

Price Action Analysis

Ugly retracements in price action can signal potential failures in trade ideas; clean price movements are preferred for better trading outcomes.

Efficient reading of price action involves identifying gaps and imbalances, which simplifies the trading process for experienced traders.

Market Conditions and Trading Environment

Comparing candlesticks to vehicles on a highway illustrates how congestion affects market movement; clear conditions allow for smoother trading experiences.

Congestion during certain times (like rush hour) leads to frustration among traders, making it difficult to execute trades effectively.

Timing and Strategy Adaptation

Clean market conditions with obvious inefficiencies provide better opportunities for swing trading compared to congested environments.

A trader's ability to adapt strategies based on market conditions is essential; if the environment isn't conducive, it's wise to refrain from trading.

Personal Trading Philosophy

The speaker emphasizes practicing what they preach by avoiding unfavorable trading conditions, reinforcing the importance of discipline in trading practices.

Understanding the Balance of Teaching and Learning

The Role of Experience in Teaching

The speaker reflects on their past mistakes in teaching, emphasizing the importance of using personal experiences as a canvas for growth and understanding.

They express a desire for their son to avoid distractions that are merely attention-grabbing, advocating for a learning environment free from fear and greed.

The speaker acknowledges their lack of preparedness when they began teaching at 20, attributing initial success to luck rather than skill or knowledge.

They share personal struggles with market dynamics during their 20s, highlighting the importance of learning from painful experiences to benefit future generations.

Emphasizing that self-awareness is crucial, they note that many mistakes stem from individual actions rather than external factors like poor information.

Learning from Mistakes

The speaker stresses that productivity and profitability in trading require adherence to established rules and concepts; deviating can lead to failure.

A preview is given about discussing "Turtle Soup" and reversal patterns in trading strategies, indicating an upcoming focus on practical methodologies.

They describe "Turtle Soup" as a simple yet effective reversal pattern methodology aimed at capturing market reversals.

The speaker shares insights into their comfort level with current market conditions while acknowledging past successes without letting one day define their entire career.

They mention interactions with other traders online, fostering community support by sharing experiences and advice regarding trading outcomes.

Building Rapport and Flexibility

The speaker values open communication with fellow traders, offering congratulations or constructive feedback based on shared experiences in trading performance.

They emphasize the importance of flexibility in reflecting on one's trading decisions without self-blame or harsh criticism.

Acknowledging personal vulnerabilities, the speaker encourages acceptance of imperfections within oneself as part of the learning process in trading.

Trading Mindset and Discipline

The Importance of Self-Reflection Before Trading

Emphasizes the liberating mindset of recognizing when to refrain from trading. Traders should write reminders to avoid impulsive decisions if something feels off or unrecognizable.

The Impact of Audience Pressure on Live Streamers

Discusses how live streamers may feel pressured to trade due to audience expectations, leading to unnecessary losses. Acknowledges that losing is part of trading but stresses the importance of discipline.

Recognizing Personal Limits in Trading

Highlights the discomfort traders feel when they haven't executed trades, often driven by audience impatience. Stresses that it's crucial for traders not to waste their time or others' by acting without a clear strategy.

Learning from Painful Experiences

Shares personal experiences about learning through painful mistakes in trading. Advocates for focusing on favorable conditions rather than trying to prove oneself in challenging situations.

Developing a Consistent Trading Model

Encourages traders to follow a structured model with specific criteria for trades, rather than engaging in daily gambling-like behavior. This approach fosters maturity and principled investing.

Setting Realistic Expectations for New Traders

Warns against the misconception that every day is a profitable trading day. New traders should focus on learning and developing their models instead of expecting constant success.

The Dangers of Impatience and Greed

Discusses how impatience and greed can lead to poor decision-making in trading. Encourages giving oneself permission not to trade every day, emphasizing long-term visibility over short-term gains.

Critique of Pseudo Mentorship in Trading Education

Trading Insights and Personal Reflections

The Motivation Behind Trading Education

The speaker discusses the potential for profit through affiliate links with brokerage firms, emphasizing a reluctance to exploit this opportunity despite its financial allure.

Reflecting on personal influence, the speaker notes that they could earn millions by promoting trading but chooses not to, highlighting a commitment to genuine education over profit.

Personal Connection and Audience Engagement

A young listener expresses appreciation for the speaker's long discussions, likening it to a father-son relationship; this connection drives the speaker's motivation in sharing knowledge.

The speaker clarifies their financial independence as a millionaire, stating they do not need to trade or monetize their content but choose to engage out of passion.

Financial Realities and Lifestyle Choices

Despite enjoying teaching, the speaker acknowledges significant expenses related to maintaining their lifestyle, including recent home improvements costing over $100,000.

They emphasize that while they don't require money from trading or streaming, they are dedicated to providing valuable insights for their audience.

Commitment to Comprehensive Education

The speaker addresses criticism about talking too much by asserting that thorough explanations are essential for understanding complex topics like trading.

They express disdain for superficial learning methods prevalent in trading communities and stress the importance of deep comprehension over quick profits.

Legacy and Knowledge Transfer

The desire to impart knowledge is driven by concerns about mortality; the speaker wants their children (especially their son) to grasp intricate market concepts before it's too late.

They acknowledge that while recorded materials exist, true understanding requires personal growth and cannot be easily transferred without context.

Critique of Paid Mentorship Models

The speaker criticizes those who charge for mentorship when free resources are available online, arguing that paying for such information is unwise.

How to Analyze Daily Bias in Trading

Overview of Daily Chart Analysis

The speaker discusses the importance of analyzing daily bias, emphasizing that this has been a primary teaching focus.

A volume imbalance is highlighted, indicating a potential target level at 19255, which may suggest upward movement if the market continues to rise.

Key Levels and Market Sentiment

The previous week's opening gap is identified as a significant trading level; traders should monitor this area for potential price action.

The speaker notes a substantial gap between closing and opening prices, suggesting that if the market moves above 255, it could lead to further upward momentum.

Economic Context and Predictions

The discussion includes speculation about market behavior during an election year, with expectations of upward pressure unless significant geopolitical events occur.

The speaker expresses skepticism about stock market valuations reflecting true economic health, stressing that external factors can influence market trends.

Liquidity and Volume Imbalances

Liquidity levels are discussed alongside volume imbalances; these factors are crucial for understanding potential price movements in longer-term trading strategies.

Personal Reflections on Teaching Approach

The speaker addresses feedback from viewers regarding video length and content delivery, explaining that the comprehensive nature of discussions serves a broader educational purpose beyond individual preferences.

Understanding Patience and Experience

The Importance of Taking Things Slowly

The speaker emphasizes the need for patience, advising to take things "bite-sized" to gradually build experience.

There is a promise made to the son that with time and practice, he will become more proficient in his tasks.

The speaker notes that as the son gains experience, finishing sentences during discussions (like those about the Bible) will become second nature.

Acknowledges that when tasks feel routine and unhurried, it indicates significant progress towards mastery.