ICT W.E.N.T. Series - Part 1 of 5

Introduction

The speaker introduces himself and his experience in trading, and explains that he will be sharing his knowledge of technical analysis with the audience.

What to Expect as a Forex Trader

• The speaker believes that forex trading is the best asset class for small traders.

• Unlike other markets, forex trading allows traders to tailor their trades based on their risk adversity.

• Developing accurate methods and adopting a strong psychological profile are key to becoming a successful trader.

Understanding Different Perspectives

The speaker encourages viewers not to be locked into one particular person's perspective, including his own. He emphasizes the importance of doing further research and finding what works best for each individual trader.

Benefits of Forex Trading

• Forex trading is beneficial for small traders because they can trade with smaller amounts of money compared to other markets.

• Traders have more flexibility in terms of leveraging and risk management.

• There are no limitations on how much or how little you can trade.

Importance of Individual Research

• It's important not to blindly follow any one person's perspective, including the speaker's.

• Even if you deviate from the material presented, you can still benefit from it by giving it a thorough going through once or twice.

Advantages of Forex Trading Over Other Markets

The speaker discusses some advantages of forex trading over other markets such as stocks and commodities.

Limitations of Other Markets

• In stock markets, small traders cannot buy many shares due to high prices.

• Commodity markets have hefty initial margins on certain assets.

• Futures contracts limit traders' options in terms of contract specifications.

Flexibility in Forex Trading

• In forex trading, retail traders have more flexibility in terms of tailoring trades based on risk adversity.

• Traders can gear their leveraging down to very small risk if they are conservative.

• Forex trading allows traders to trade with smaller amounts of money compared to other markets.

Conclusion

The speaker concludes by emphasizing the importance of developing accurate methods and adopting a strong psychological profile in order to become a successful trader.

Becoming a Successful Trader

• Developing accurate methods and adopting a strong psychological profile are key to becoming a successful trader.

• Forex trading is an exciting adventure that can lead to exceptional living if done accurately.

• Traders should focus on building forex trading into their business.

Introduction

The speaker introduces himself and acknowledges that viewers are likely watching the video because they want to get out of the "rat race" and achieve financial independence. He cautions against expecting a quick fix or easy path to wealth.

• The speaker has worked in difficult jobs and understands the desire to escape the working class.

• He warns against expecting a magic solution or getting rich quickly.

• Developing trading skills will require work, patience, and practice.

Demo Accounts

The speaker discusses demo accounts and how they can be useful for learning trading skills but also warns against developing bad habits while using them.

• Demo accounts can be helpful for practicing specific skills.

• However, it's important to treat demo accounts seriously and not develop bad habits while using them.

• Don't open a demo account with an unrealistic amount of pretend money.

• Some trading skills require developing a pain threshold, which can be practiced in drills and exercises.

Trading Pairs

The speaker advises focusing on one particular currency pair rather than trying to trade many pairs at once. He also cautions against expecting quick riches from trading.

• Focus on one currency pair that you like and learn its characteristics well.

• Don't expect to get rich quickly from trading; most people who try fail.

• Trading is not just about Forex; many types of trading have similar challenges.

• Avoid thinking about trading as a way to quit your job quickly or make easy money.

Becoming a Professional Trader

In this section, the speaker emphasizes the importance of having a professional mindset when it comes to trading and avoiding the mentality of a gambler.

The Importance of Having a Professional Mindset

• Traders should aim to be self-sufficient, independent thinkers who consistently produce profits.

• 80% of businesses fail due to lack of planning, and traders who approach forex trading without a plan are likely to fail as well.

• It's important not to cherry-pick tools and concepts but instead find ones that resonate with you for each stage of analysis.

• Traders should avoid thinking about getting rich quick and instead focus on building a long-term business.

Trading as a Business

• Traders should think about how they can turn forex trading into a long-term business with no employees except for themselves.

• Building a successful trading business requires hard work, effort, and patience.

• Traders need to submit to adversity and time while relinquishing the need to always be right in order to anticipate market movements.

Emptying the Glass

• Those who want to learn from the speaker's material must be willing to empty their glass or forget what they know altogether.

The Truth About Trading Education

In this section, the speaker talks about his experience with trading education and how he had to unlearn a lot of what he was taught.

Learning from Books

• The speaker initially thought that buying books written by successful traders would teach him everything he needed to know.

• However, he realized that many of these authors were not actually successful traders themselves.

• He spent a lot of money on his education but found that most of it was a waste.

Unique Perspective

• The speaker eventually gained unique insights into the market by looking at things differently.

• He learned from mentors and spent time observing the market on a daily basis.

• He discovered that there is nothing new under the sun when it comes to trading strategies.

Sheep for Slaughter

• The speaker warns against thinking that trading was created for individuals to make money.

• He believes that the banks and other institutions are the ones who profit from trading, while individual traders are like sheep being led to slaughter.

• To be successful in trading, one needs more information than just what can be learned from books or courses.

Understanding How Banks Operate in Trading

In this section, the speaker discusses how banks operate in trading and how understanding their methods can help individual traders succeed.

Programming Traders to Lose Money

• The speaker believes that traders are being programmed to lose money through traditional trading education methods.

• He warns against blindly following advice on where to place stop losses or when to buy and sell because everyone else is doing it too.

Riding on Coattails

• By understanding how banks operate in trading, individual traders can ride on their coattails instead of being led like sheep to slaughter.

Unique Insights

• The speaker claims to have unique insights into the market that he has developed through his own experiences and observations.

• He has developed concepts that explain how individual components of the market unfold step by step, which can help traders make more informed decisions.

The Importance of Precision in Trading

In this section, the speaker emphasizes the importance of precision in trading and how it is acquired through skill sets. He also highlights that new traders often underestimate the difficulty of making money in the market.

Acquiring Precision in Trading

• Precision in trading is impressive to both neophytes and experienced traders.

• New traders often think making money in the market is easy, but it requires a high level of precision.

• It's hard for traders to pull money out of the market without acquiring specific skill sets.

Moving from a Sheep to a Predator

• The speaker encourages listeners to understand where they are on the food chain and how they can move from being a sheep to a predator.

• This marks a new beginning for listeners as they learn ground rules for trading.

Ground Rules for Trading

• Listeners are encouraged to leave their ego at the door and not judge others or material until going through it themselves.

• The speaker is not interested in hearing about people's trading methods or experience; he wants an exchange of experiences with his audience.

• The speaker shares his real email address with listeners because he wants their success stories and hopes that they will help someone else with what they have learned.

Helping Others

• The speaker does not want any monetary exchange but rather an exchange of relationships for future rewards.

• He encourages listeners to share their success stories with him so that he can be inspired by them.

• The speaker believes that we are placed on this earth to help our neighbors and treat everyone like family.

Understanding Your Trading Profile

In this section, the speaker emphasizes the importance of understanding your trading profile and how it can help you determine which type of trader you are.

Types of Traders

• The speaker describes different types of traders based on their decision-making skills and personality traits.

• Procrastinating traders

• Quick decision-making traders

• Irritable traders

• Slow decision-making traders

• Balanced traders

• The speaker explains that a balanced trader is the best type of trader because they can trade all timeframes.

Personal Study

• The speaker encourages listeners to spend time studying themselves for a week to understand their decision-making process in daily life.

• This personal study will help them determine what type of trader they are and which trading style suits them best.

Demo Account Trading

In this section, the speaker discusses demo account trading and its purpose.

Purpose of Demo Account Trading

• The demo account is not for sharing results with others but rather for personal use only.

• It is important to only trade with the leverage that you would be able to trade with using the operating expectancy that you would have in a live account.

• Bad habits can form with demo account trading, so it's important to use it wisely.

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The Winning Trades Mentality

In this section, the speaker discusses how traders should focus on winning trades and develop a winning mentality.

Focus on Winning Trades

• Traders should focus on the good trades and aim to have a winning experience.

• Even though most people lose money in casinos, they still go because they want to be that one winner.

• As soon as a trader clicks to execute a trade, they are already a losing trader.

Treat Demo Account Like Business Equity

• Traders should treat their demo account like it's their business equity.

• Overtrading and using leverage just for emotional charges is not how traders develop.

• Traders should remove emotion by keeping leverage low and aiming for consistent returns over time.

Don't Sprint, Learn to Walk First

In this section, the speaker emphasizes the importance of taking things slow when starting out as a trader.

Start Slowly

• Traders should start by learning to crawl before trying to run or sprint.

• Sprinting often leads to quickly losing all of one's money.

• Consistently carving out a specific return with appropriate risk management can lead to building equity over time.

Discard Certain Mentalities

• Traders don't need a lot of pips or trades every day to do well in their career.

• It's important for traders to stay rooted in reality and not get ahead of themselves before seeing consistency.

Attitude and Mindset

In this section, the speaker talks about the importance of having the right attitude and mindset when trading in Forex.

Measuring Yourself Against Others

• Don't measure yourself against others in forums.

• Bragging about your success is detrimental to your development.

• It inflates your ego and invites fear, greed, and emotions that can lead to downfall.

Relaxation

• Relaxation is key to successful trading.

• Avoid falling into the trap of getting rich quick.

• Making less than 25 pips per week while risking no more than 2% can double your account every year.

Consistency

• Consistency is important for long-term success in Forex trading.

• Slowly building up profits over time can lead to significant gains.

• Even making just 5 pips profit per month is better than losing money.

Consistency and Time

The speaker discusses the importance of consistency and time in trading, emphasizing that doubling your account requires realistic returns and low expectations. Overtrading and overleveraging can lead to huge losses, so it's important to keep risk low.

Doubling Your Account

• Doubling your account requires consistent returns comparable to what the speaker is discussing.

• Realistic returns with low expectations are necessary for success.

• Avoid overtrading and overleveraging, which can lead to huge losses.

Importance of Time

• It takes time to grow as a trader, just like it takes time for doctors to build their practice.

• Don't rush into trading every day or trying to make a million pips quickly.

• Only a few hours per day are needed for successful trading if you're leveraging properly.

Over Trading and Over Leveraging

The speaker shares his experience with overtrading and overleveraging as a futures trader. He emphasizes the importance of keeping risk low, avoiding over leveraging your account, and not making shortcuts.

Speaker's Experience

• As a futures trader, the speaker has gone through multiple accounts due to overtrading and overleveraging.

• Even with a winning system, over leveraging undermined it by causing him to exit trades too soon or hold onto losing trades too long.

Keep Risk Low

• Keeping risk low is crucial in trading.

• Don't over leverage your account; instead, use proper trade selection and risk management techniques.

No Shortcuts

• There are no shortcuts in trading; avoid trying to get rich quick.

• Overtrading and overleveraging never work out well in the end.

Time Management

The speaker discusses the importance of time management in trading, emphasizing that it doesn't require long hours in front of your charts. He suggests bracketing out specific times on your charts to study daily.

Study Your Charts

• Bracket out specific times on your charts to study daily.

• Mark out 7:00 AM - 10:00 AM and 2:00 AM - 4:00 AM New York time.

• Determine how much movement takes place during those times each day.

Only a Few Hours Needed

• Only a few hours per day are needed for successful trading if you're leveraging properly.

• You only need one of those time brackets per day, week, or month to make a six percent return if you're using proper risk management and trade selection techniques.

Chart Analysis

The speaker discusses the importance of chart analysis in trading and introduces a pattern that will be referred to frequently throughout his material.

Candlestick Patterns

• Candlestick patterns provide valuable information about price action movements within each swing.

• A specific pattern will be introduced that is important for understanding price action analysis going forward.

Understanding Swing High and Swing Low

In this section, the speaker explains what a swing high and swing low are in technical analysis. He also discusses how to identify them on a chart and why they are important.

Definition of Swing High and Swing Low

• A swing high is defined as a lower high on the left and right with a higher candle in the middle.

• A swing low is defined as a low with two higher lows surrounding it.

Identifying Swing Points

• The speaker emphasizes that swing points can be identified by looking at where price moves aggressively up or down.

• To identify swing points, look for lower highs on the left and right for a swing high, or higher lows on the left and right for a swing low.

Using Charts to Identify Swing Points

• The speaker recommends using charts to identify swing points, particularly those that show four hours worth of time per candle.

• When identifying swing points, focus on the total range between the highest high and lowest low of each candle in the pattern.

Importance of Swing Points

• The speaker notes that identifying swing points is important because they can help traders determine potential reaction points where price may move aggressively up or down.

Understanding Swing Points

In this section, the speaker explains how to identify swing points and why they are important in understanding price action.

Identifying Swing Points

• A swing low is a candle with a low that has a higher low on either side of it.

• When there are small candles (typical of a Sunday), they are not factored in when identifying swing points.

• Swing highs and lows are identified by mapping out the highest point and lowest point of a range.

Importance of Swing Points

• Swing points that occur inside an established range are less influential than those occurring outside the range.

• Mapping out swing highs and lows helps anticipate future price sensitivity to those levels.

• Anticipating price rejections at these levels is a powerful concept in understanding price action.

Swing High and Swing Low Patterns

In this section, the speaker explains how to identify swing high and swing low patterns in price action charts.

Identifying Swing High and Swing Low Patterns

• A swing high is created when a price level reaches a sensitive level and then creates another higher swing high.

• The lowest low between two price points represents future sensitivity for that range.

• To identify a swing low, look for the open, high, low, and close of three candles that make up the pattern.

• The highest high inside the swing low pattern represents future sensitivity for that range.

Future Sensitivity Inside Price Ranges

In this section, the speaker discusses how to identify future sensitivity inside price ranges using swing highs and lows.

Identifying Future Sensitivity Inside Price Ranges

• Look for future sensitivity inside the range between the highest high and lowest low of a swing low pattern.

• When a new swing low is formed within an existing range, there is no need to draw a new line as it has already been pre-determined with the previous range.

• A new swing high can be identified by looking at three candles with one higher candle in between two lower candles.

Trading Range Consolidation

In this section, the speaker explains how to interpret trading range consolidation in price action charts.

Interpreting Trading Range Consolidation

• Look for future sensitivity inside the range between the highest high and lowest low of a three-bar pattern low.

• When price creates a muddy little swing point, look at the overall consolidation to determine future price action.

• Assume that price will still respect the swing low when there is a small trading range.

Understanding Swing Points and Price Action

In this section, the speaker explains how to identify swing points and how price action can be used to predict future market movements.

Identifying Swing Points

• Swing points are created by ranges that create swing highs and lows.

• The sensitivity of future price action is determined by the specific open/close high and low of each three-bar pattern.

Using Price Action to Predict Future Market Movements

• Previous levels of price action can be used to predict future market movements.

• The opening, highs, lows, and close of all three candles in a swing point are sensitive key price points.

• When looking at charts, traders should study how price has traded in the past to gain information about future market movements.

Balancing Trading with Life

In this section, the speaker emphasizes the importance of balancing trading with other aspects of life.

Balancing Trading with Life

• It's important to keep a balance between trading and other aspects of life. Don't become overly compulsive about trading or spend too much time on it.

• Spending at least 30 minutes a day studying charts is recommended for developing skills over time.

• Don't try to skip ahead or become overly focused on finding shortcuts; learning takes time and effort.

You Are Your Biggest Enemy

• If you've been trying different trading systems without success, remember that you are your biggest enemy; focus on improving yourself rather than constantly changing systems.

Sink the Ship

In this section, the speaker emphasizes that decision-making is crucial in trading and that traders need to have a consistent system to carve out expected returns. The goal is to achieve consistent profitability and eventually move towards a self-sufficient lifestyle.

Importance of Decision Making

• Sink or sail smoothly based on your decision-making.

• Don't aim for a perfect system, but rather something that consistently carves out expected returns.

• Maximize your edge or return to achieve the desired outcome.

Learning Objectives

• Learn from the speaker's 20+ years of experience in trading.

• Understand commodity information as it complements foreign exchange markets.

• Manage risk and trades while targeting consistency.

• Determine which pair to trade specifically.

• Time low-risk and high-reward entry points through exercises, drills, and skill sets.

Trading Strategies

• Project high odds profit objectives in advance.

• Identify where to make profits and how to take them.

• Track Smart Money traders like banks and follow them closely.

• Build your Forex business with unique tips from the speaker's material.

Success Stories

• Aim for success by putting time into learning these strategies.

• Share your story with the speaker after achieving success by blessing others with what you've learned.