44. Live-stream

Forex Trading Insights and Strategies

Introduction to the Session

• The speaker welcomes participants, expressing hope for a productive trading week and plans to analyze charts.

• Emphasizes starting with Forex Factory to assess market news, noting that Monday has no significant news events.

Understanding Market Concepts

• Introduces the concept of "cracking correlation," encouraging participants to familiarize themselves with key terms like SMT fill, premium/discount, fair value gaps, and breakers.

• Stresses the importance of understanding these concepts thoroughly as they will be foundational in upcoming discussions.

Upcoming System Implementation

• Mentions that a new trading system will be introduced next month, which has been rigorously tested.

• Clarifies that analysis provided will align with this new model and emphasizes following rules precisely without seeking unnecessary precision.

Trading Psychology and Strategy

• Advises against overwhelming oneself with information from charts; highlights the importance of knowing when to trade or abstain from trading.

• Discusses the significance of backtesting strategies diligently while recognizing periods where market activity may be minimal.

Economic Calendar Insights

• Explains how different cycles (monthly vs. weekly) affect trading decisions; introduces Dublin theory related to price gaps.

• Reiterates that only specific conditions (like cracking correlations within daily cycles) warrant action on Mondays.

Practical Trading Guidelines

• Outlines basic principles: if bearish, operate in premium; if bullish, operate in discount—acknowledging that winning every trade is unrealistic but aiming for a majority win rate is essential.

• Highlights success stories among participants who have excelled in competitions by applying learned strategies effectively.

Weekly News Impact on Trading

• Notes important news events scheduled for Tuesday at 8:30 AM and 10 AM during non-farm payroll week; stresses high probability days for trades early in the week.

Understanding Market Mechanics and Risk Management

Overview of Market Conditions

• The speaker discusses the importance of understanding market mechanics, particularly during high-impact news events. On Wednesdays, there are four red news folders related to USD, indicating significant volatility expected during the New York session.

Managing Fear in Trading

• Emphasizes that traders should not fear major news events like non-farm payroll (NFP). As long as they have a bearish position with proper risk management and correlations, they can navigate these situations confidently.

Importance of Risk Management

• Highlights that knowing the high and low of the week often requires observing price action over several days. Traders should focus on managing their risks rather than fearing losses.

• Acknowledges that trading conditions can be challenging but encourages traders to manage their risk effectively. Learning occurs in volatile environments.

Emotional Intelligence in Trading

• Successful traders often experience multiple losses but remain unfazed because they trust their systems. This emotional resilience is crucial for long-term success.

• The speaker stresses that developing emotional intelligence will help traders become better individuals overall, reducing reactivity to external pressures or criticisms.

Key Principles for Success

• Accepting that losses are part of trading is essential. Proper risk management strategies are vital for success in trading.

• Professional traders prioritize risk management above all else, focusing on maintaining an emotionless approach to both wins and losses.

Weekly Market Insights

• Discusses upcoming market events: Wednesday's volatility due to USD news, Thursday's US news at 8:30 AM, and Friday's NFP report.

• Notes that this week does not align with monthly cycles; it’s blank according to indicators used by the speaker. Next week will begin Q1, which typically has lower probability trades.

Correlation Analysis in Trading

• Introduces correlation analysis between treasury futures and forex pairs as a method for predicting market movements based on interest rates.

Analysis of Market Conditions and Price Action

Understanding Current Market Dynamics

• The speaker discusses the lack of a clear correlation in price action, indicating potential consolidation without bullish signals.

• Emphasizes that recent candle movements do not alter the market outlook; further analysis is needed before making decisions.

• Highlights the importance of lower time frame correlations to inform trading strategies, suggesting patience until clearer signals emerge.

Market Conditions and NFP Week Insights

• The current market condition is described as "unprobable," with high probability scenarios expected around Non-Farm Payroll (NFP) weeks.

• Mentions T-bond futures' behavior in relation to Forex cycles, stressing the significance of understanding these relationships for better predictions.

• Notes that price action may appear noisy but is fundamentally driven by underlying market dynamics.

Price Action Before Key Economic Events

• Observes that typical price actions occur before significant events like NFP or Consumer Price Index (CPI), which can lead to symmetrical market conditions.

• Discusses unexpected downward trends in the US dollar despite prior expectations for upward movement, highlighting volatility and uncertainty.

Liquidity Draw and Market Strategy

• Points out that low probability price actions are evident, advising caution when engaging with such markets where liquidity draws are present.

• Reiterates the need for a bullish correlation in dollar movements before committing capital, emphasizing risk management.

Anticipating Future Movements

• Suggests waiting for a bullish correlation to confirm potential upward movements towards identified liquidity highs.

• Indicates that even if immediate upward movement does not occur, these highs remain critical targets based on future correlations.

Navigating Confusion in Current Trends

• Acknowledges widespread confusion among traders regarding current price actions, asserting that clarity will come from observing key indicators.

• Identifies specific liquidity draws within the Dow's lower time frames as crucial points for analysis moving forward.

Fair Value Gaps and Expected Retracement

• Discusses fair value gaps as areas likely to attract price retracement if sufficient volatility occurs this week.

• Concludes that while some upside seems probable, confirmation through cracking correlations remains essential for strategic positioning.

Weekly Cycle Considerations

• Explains how this week deviates from traditional quarterly cycles due to its unique timing within the calendar year.

Market Analysis and Risk Management Strategies

Current Market Conditions

• The speaker discusses the current market cycle, indicating a period of low probability for significant price movements.

• Price may be reluctant to move in anticipated directions; however, if it moves above certain levels, a return to previous ranges is expected.

• Reference to equal highs in the Forex market suggests potential liquidity draws and future price action analysis.

Technical Analysis Insights

• Focus on the Great British Pound's price movement relative to previous highs and lows indicates an expectation of upward movement.

• The significance of previous day’s high and low is emphasized as critical points for potential price reversals.

• A breach of established highs or lows could indicate a reversal, highlighting the importance of waiting for clear signals before trading.

Importance of Risk Management

• Emphasis on risk management as essential for profitability; survival in trading allows capturing more opportunities over time.

• Learning from losses is crucial; focusing solely on positive outcomes can hinder growth and understanding in trading practices.

• Personal anecdote about losing $70,000 underscores the necessity of managing risk effectively before entering trades.

Trading Strategy Recommendations

• Traders should calculate stop-loss levels prior to taking trades to ensure proper risk management practices are followed.

• The speaker plans to monitor market conditions closely throughout the week, ready to act when clear setups arise.

Future Engagement Plans

• The speaker will provide updates during the week when significant market movements are observed, emphasizing active engagement with followers.

• Anticipation for returning live streams on Saturdays while maintaining regular updates during weekdays based on market clarity.