ICT 2024 Mentorship \ Lecture #3 August 7, 2024

Name: ICT 2024 Mentorship \ Lecture #3 August 7, 2024
Uploaded: 2024-08-07T20:28:39.000Z
Duration: 4 h 44 min 58 s

Audio Issues and Introduction

Overview of the Session

The speaker addresses audio issues, indicating that YouTube has been problematic with sound settings.

Emphasizes the importance of keeping shared information confidential, hinting at secrets to be revealed during the session.

Mentions that today's discussion will be brief but focused on key points related to trading processes and protocols for the afternoon session.

Trading Sessions and Strategies

Morning vs. Afternoon Trading

The speaker discusses their son Caleb's potential involvement in morning trading sessions, highlighting a time frame from 7 AM to 11 AM New York local time.

Caleb is given autonomy over his trading schedule, which may start as early as 7 AM or wait until after the market opens at 9:30 AM.

The speaker asserts that strategies discussed will also apply to afternoon trading sessions despite being tailored for Caleb.

Economic Calendar Insights

Importance of Economic Events

Discusses how an absence of significant economic news can lead to lackluster market behavior during afternoon sessions.

Defines what constitutes impactful news events (e.g., speeches, market data releases like PMI and CPI).

Market Behavior Analysis

Anticipating Market Moves

Describes typical market conditions when there are no major news drivers—often resulting in false breakouts or reversals back into previous ranges.

Warns about potential pitfalls in interpreting chart signals without sufficient experience.

Homework Assignment and Upcoming Events

Practical Application

Assigning viewers homework by encouraging them to check today’s economic calendar on Forex Factory for upcoming events like bond options at 1 PM Eastern Time.

Volatility and Trading Opportunities

Trading Bond Options

Introduces bond options as a tradeable event that can provide volatility and momentum, although it is not highly volatile compared to other reports.

Community Engagement and Personal Philosophy

Speaker's Perspective on Influence

Comments on other YouTubers using his content for self-promotion while expressing discomfort with this practice.

Learning Environment and Expectations

Student Mindset

Exploring Trading Insights and Mentorship

The Concept of Breadcrumbs in Trading

The speaker reflects on the idea of leaving "breadcrumbs" for others to follow, questioning if they could replicate their trading results.

Despite having students, no one has successfully mirrored the speaker's conclusions about price movements.

Mentorship Approach and Focus Areas

The mentorship began with broad concepts and protocols, emphasizing key focus areas such as time of day (e.g., London session, New York open).

Specific trading instructions were embedded within extensive commentary to guide students effectively.

Importance of Setup and Patience in Trading

A critical takeaway is understanding the necessity of a setup before entering trades; waiting is essential.

Traders must recognize that market movement does not always align with their trading strategy or timeframe.

Customizing Trading Strategies

Trades may extend beyond short-term fluctuations; traders should adapt strategies to fit personal schedules and attitudes.

The content aims to empower students to develop their unique approaches within the framework provided by the speaker.

Mechanisms for Trade Entry

The speaker mentions 81 specific PDFs detailing entry mechanisms, partial mechanisms, and take profit strategies.

These mechanisms are based on price action rather than traditional teachings from books or courses.

Training Focus: Morning vs. Afternoon Sessions

Emphasis is placed on mastering morning sessions first before exploring afternoon trading characteristics.

The mentor-student dynamic is likened to rigorous training methods seen in films like "Kill Bill."

Resources for Learning Trading Techniques

For those seeking entry into trading, resources are available on the YouTube channel covering various aspects like day trading and scalping.

A structured playlist offers free mentorship divided by month, focusing on different trading styles.

Building a Foundation in Trading Knowledge

New traders should expect gradual understanding through foundational videos rather than instant mastery.

Understanding Market Dynamics and Trading Strategies

The Importance of Patience in Trading

It is unrealistic to expect immediate results in trading; traders must give themselves permission to learn and grow without pressure.

Success will come naturally as traders observe patterns repeating over time, reinforcing the importance of patience.

Recognizing that markets are not random but rather structured can help alleviate confusion about market behavior.

Key Concepts: Opening Gaps

The discussion introduces the concept of new day opening gaps, which are crucial for understanding market movements.

Traders should aim for intra-day objectives linked to these opening gaps, enhancing their trading strategies.

An explanation of terms like "new day opening gap" and "new week opening gap" is promised for clarity.

Observing Market Behavior

At specific times (7 AM, 8 AM, 9 AM), traders should anticipate opposing market directions based on prior price actions.

It's essential to identify relative equal highs or lows without forcing trades; observation is key to understanding market dynamics.

Traders are encouraged to relax and simply observe price movements rather than trying to control them.

Liquidity Engineering

Understanding liquidity involves recognizing smooth areas of price action after session changes, particularly at midnight New York time.

This midnight mark signifies the start of a new trading day where algorithms reference past data for liquidity analysis.

Practical Application: Charting Techniques

New day and week opening gaps play a significant role in chart analysis; they provide insights into potential future price movements.

The process involves waiting for specific times (like 6 PM after a pause at 5 PM), marking important prices on charts accurately.

Understanding New Day Opening Gaps in Trading

Concept of New Day Opening Gaps

The new day opening gap is defined by a five-day look back for new day openings, with the concept extending to five weeks for weekly gaps.

This gap is specifically referred to as the "new day opening gap high," which forms at 7 AM on Wednesday, although it technically originates from Tuesday evening.

These gaps represent inefficiencies that should be utilized as reference points for trading on Wednesdays.

Analyzing Gaps and Inefficiencies

The first level encountered after identifying the new day opening gap high serves as a critical reference point; subsequent levels can include lower gaps formed during trading.

A segment of inefficiency exists when there is a lack of sell-side delivery, indicating that price movements may return to fill these gaps.

These annotated gaps remain relevant for up to five days but can also be significant weeks later due to their algorithmic nature.

Practical Application and Importance

Understanding these gaps requires careful consideration; simply filling them does not capture their full significance in trading strategies.

New day opening gaps have a life cycle of about five days, but traders may choose to monitor them longer based on personal strategy.

The concept was initially introduced via Twitter spaces and has since been integrated into educational content on YouTube.

Tracking and Documenting Gaps

Traders often view these levels as magnets that draw prices back due to their inherent value stemming from previous trading inactivity.

Utilizing Fibonacci retracement tools can help visualize the relationship between closing prices and gap openings, aiding in strategic planning.

Personal Trading Strategies

Keeping an organized journal with dates helps prioritize the importance of various new day opening gaps over time.

Understanding New Week Opening Gaps in Trading

Reference Points for Trading Days

The reference point for trading is established based on the day it forms, specifically for Wednesday's trading, not Tuesday's.

This reference will be used for the next five trading days, which does not equate to five calendar days. If a holiday occurs, an additional day should be added.

Life Cycle of Opening Gaps

New week opening gaps (WOG) are significant and can be referenced up to five weeks back; however, their relevance may extend beyond that timeframe due to market inefficiencies.

A new week opening gap is defined as the price difference between where trading stopped on Friday at 5 PM and where it resumes on Sunday at 6 PM.

Chart Layout and Information Management

Traders are encouraged to create specific layouts in their charting software that focus solely on new week opening gaps or new day opening gaps relevant to their markets. This helps streamline information during trading sessions.

Using a single device like a laptop can help manage information effectively without cluttering charts with unnecessary data.

Consequent Encroachment vs Equilibrium

When analyzing gaps, traders should differentiate between consequent encroachment (the midpoint of a gap) and equilibrium (a range of prices). Consequent encroachment indicates areas lacking buying/selling activity until the market opens again.

The absence of trades before the market opens creates real gaps that signify missing levels of buying and selling pressure. This understanding is crucial for identifying potential price movements post-opening.

Trading Strategies Based on Gaps

Market Insights and Trading Strategies

Understanding Market Dynamics

The speaker emphasizes the importance of recognizing market opportunities, suggesting that 2024 is a pivotal year for making profits.

Observations on market sensitivity indicate that price movements are closely tied to specific quadrants, highlighting the significance of trading patterns.

The concept of inefficiency in price action is introduced; areas with no trading activity can become crucial reference points for future movements.

The relevance of historical price levels is discussed, asserting their importance over a five-day trading period.

New day opening gaps are classified as valid for up to five days, providing traders with critical insights into potential market behavior.

Utilizing Price Levels Effectively

Sensitivity around new day opening gaps remains significant; they can influence trading decisions well beyond their initial formation.

The speaker shares personal experiences using these gaps as reference points for up to nine months when aligned with market narratives.

A detailed analysis of time intervals (7 AM, 8 AM, 9 AM) reveals how markets behave relative to these established lines.

Emphasizing the importance of tracking multiple new day opening gaps from recent trading days enhances strategic decision-making.

Clusters of new day opening gaps above current market prices signal potential upward movement due to existing inefficiencies.

Market Behavior and Trading Psychology

The speaker describes clusters of new day opening gaps as "gold dust," indicating their high value in predicting market direction.

Traders should anticipate that markets will gravitate towards areas with multiple inefficiencies, which can lead to profitable trades.

There’s an acknowledgment that some traders possess insider knowledge about these dynamics, influencing overall market behavior significantly.

Misconceptions about buying and selling pressure are addressed; true market movements rely more on hidden factors than conventional wisdom suggests.

Understanding Market Gaps and Trading Strategies

The Concept of Market Gaps

The speaker questions the logic behind market gaps, suggesting that if everyone believes a gap fills means it's over, then why do traders continue to work with them repeatedly?

The speaker shares personal experiences using gap information to predict market movements in front of family and friends, demonstrating confidence in their predictions.

They emphasize having mental levels for trading without needing strong indicators, showcasing an intuitive understanding of market behavior.

Identifying and Analyzing Gaps

The speaker asserts that gaps cannot be hidden from traders; they highlight the importance of recognizing when a market opens higher than it closed.

Key levels to identify include concentration (midpoint), highest high, and lowest level. Understanding these levels is crucial for effective trading strategies.

Acknowledges the complexity of tracking numerous gaps throughout the year but suggests focusing on recent data for clarity.

Anticipating Market Movements

Traders are encouraged to focus on recent gaps rather than overwhelming themselves with too much data; identifying clusters can provide clearer insights.

Emphasizes anticipating liquidity engineering during specific times (7 o'clock, 8 o'clock, 9 o'clock), which can influence price movements significantly.

If there are multiple new day opening gaps above current prices, traders should consider this when planning short trades.

Effective Trading Techniques

Suggestion to allow initial movement towards old new day opening gaps before looking for breakdown signals or market structure changes.

Highlights the importance of patience in waiting for powerful setups that can lead to significant trading opportunities.

Repetition and Predictability in Trading

Compares successful trades to memorable experiences (like a first kiss), emphasizing the beauty and consistency found in effective trading patterns.

Stresses that traders need movement prediction skills—understanding both directionality and timing is essential for success.

Distinguishing Between Gap Types

Clarifies differences between new week opening gaps versus new day opening gaps; emphasizes greater impact from weekly openings due to their broader implications on swing trades.

Control Over Market Dynamics

Discusses who controls marketplace dynamics—suggesting it's not just retail or large funds but other factors influencing price movements significantly.

Encourages deeper investigation into these concepts as they reveal consistent patterns within market behavior.

Understanding Market Dynamics and Trading Insights

Addressing Common Fears in Trading

The speaker emphasizes the importance of addressing fears, uncertainties, and doubts that traders commonly experience. They share personal experiences to validate these feelings.

Feedback from millions of students is utilized to refine future discussions, indicating a continuous learning process based on real-world trading experiences.

Anticipating Trader Questions

The speaker claims to anticipate trader questions during discussions by drawing from past interactions and common inquiries received from students.

Acknowledges the complexity of market behavior, particularly regarding price action and new week opening gaps, which serve as indicators for potential trading decisions.

Price Action and Gaps

Clarifies that while observing price movements towards new week or day opening gaps, it does not strictly dictate a short position; rather it's a consideration for long positions as well.

Emphasizes that not all price movements must reach these gaps but serves as a filtering mechanism for mentorship discussions.

Sensitivity of Opening Gaps

Discusses the significance of touching new week or day opening gaps only once, suggesting they are sensitive points likely to attract price movement back towards them.

Asserts that there are few guarantees in trading; however, returning to these gaps is highly probable based on historical patterns observed in market behavior.

Market Rigging and Reference Points

Challenges the notion that markets aren't rigged by questioning why prices would revisit old gaps unless coded references exist within market algorithms.

Highlights the importance of time reference in understanding market behavior—how past prices influence current trading strategies through established patterns.

Predictive Trading Techniques

Reassures traders about the reliability of taught concepts despite skepticism about their longevity in effectiveness over time.

Encourages traders to embrace these insights as they provide consistent advantages within market dynamics, fostering excitement for deeper exploration into trading strategies.

Engineering Liquidity Predictions

Introduces the concept of predicting relative equal highs and lows before they form—a key aspect of engineering liquidity within trading contexts.

Explains how recognizing gravitational pulls towards specific price points can inform traders' decisions regarding potential market movements throughout different times of day.

Observations on Market Behavior

Notes volatility associated with shortness in trades while also identifying relative equal highs and lows as critical indicators for decision-making processes among traders.

Market Dynamics and Trading Strategies

Understanding Market Gaps

The speaker discusses the importance of recognizing market gaps, emphasizing that one should not chase a market drop immediately. Instead, traders should anticipate where the price is likely to gravitate, particularly towards new day or week opening gaps.

The potential for price movement in different trading sessions (e.g., London session) is highlighted. The speaker suggests that traders need to be patient and wait for optimal trade setups rather than impulsively entering trades.

Liquidity and Price Action

An ideal scenario involves running out highs as part of a strategy to understand market liquidity. This requires awareness of larger draws on liquidity beyond just relative equal highs or lows.

Traders are encouraged to develop tools or strategies that increase their probability of predicting price movements effectively, focusing on specific ranges in price action.

New Day Opening Gaps as Key Indicators

New day opening gaps are described as significant indicators that can draw prices toward them, acting like a "black hole" in the market. This does not imply a direct path but indicates an overarching influence on market direction.

Despite fluctuations in price action, the expectation is that ultimately prices will align with these key gaps, reinforcing the concept of engineering liquidity within trading strategies.

Trading Psychology and Market Perception

The speaker warns against common pitfalls where traders might chase after immediate profits based on moving averages or stochastic indicators without understanding underlying market dynamics.

Observing levels above certain highs can provide insights into potential liquidity traps. Recognizing patterns such as relative equal highs can inform better trading decisions.

Long-term Strategy and Chart Management

Emphasis is placed on mapping out new day opening gaps and maintaining awareness of their lifecycle on charts for effective long-term trading strategies.

Traders are advised to create additional layouts in their charting software to track these indicators over time, enhancing their ability to manage trades effectively.

Emotional Awareness in Trading

Acknowledgment is made regarding the effort required to master these concepts; many may shy away from rigorous study despite its potential profitability.

As traders become more adept at recognizing patterns and trends through diligent practice, they may find themselves gaining confidence while others around them struggle with emotional responses during trades.

Enhanced Market Insight Through Experience

The speaker likens gaining insight into market behavior to characters from popular culture who achieve heightened awareness—suggesting that experienced traders see beyond mere candlestick patterns into deeper market mechanics.

This newfound perspective allows traders to perceive markets almost like binary code—understanding underlying forces driving price movements rather than just surface-level data points.

Understanding Market Gaps and Trading Strategies

The Significance of Market Gaps

Market gaps are widely recognized in trading, particularly when they occur at the start of a trading day or week. These gaps are crucial as they represent areas of price that traders should always be aware of.

Gaps maintain their effectiveness in trading strategies, serving as efficient components that significantly influence successful price reading.

Systematic Trading Approaches

A systematic approach to entries, grounded in sound logic and minimal risk, is essential for potential profitability in trading.

Adhering strictly to established routines and protocols without deviation enhances the likelihood of success.

Herd Mentality and Its Impact on Trading

Observations from social media reveal a herd mentality among traders; when many express bullish or bearish sentiments, it can indicate market reversals.

Engaging contrary to popular opinion—such as buying when others predict a crash—can increase odds favorably based on experience.

Smart Money vs. Street Money

Successful trading relies on understanding the distinction between 'smart money' (informed investors) and 'street money' (uninformed retail investors).

Personal anecdotes illustrate how public sentiment often aligns with poor investment decisions, highlighting the importance of independent analysis over crowd behavior.

Legacy and Teaching in Trading

The speaker emphasizes their commitment to teaching effective trading strategies while acknowledging criticism from those who misinterpret their teachings for personal gain.

The motivation behind sharing knowledge stems from a desire to ensure financial security for future generations within their family.

Understanding Market Dynamics Through Analogies

Understanding Market Algorithms and Trading Dynamics

The Reality of Trading Beliefs

The speaker asserts that many retail traders do not believe in the existence or effectiveness of trading algorithms, which leads to a lack of hope for their success.

The speaker suggests that some listeners may find their discussions entertaining rather than informative, indicating a disconnect between belief and understanding.

It is emphasized that one does not need to believe in an algorithm for it to be practical; the focus should be on effective trading strategies.

Algorithmic Trading Mechanics

Algorithms operate based on fixed codes and logic, consistently following established patterns derived from historical data.

Just like a recipe requires specific ingredients, algorithms rely on past price points and market conditions to make decisions.

The importance of historical reference points is highlighted; algorithms must refer back to previous prices based on various timeframes (day, month, quarter).

Misconceptions About Market Movements

The speaker challenges common beliefs about market dynamics, stating that price movements are not solely driven by buyer/seller exhaustion but by liquidity engineering.

Many financial commentators propagate misleading narratives about market behavior that do not accurately reflect underlying realities.

Anticipating Market Events

Traders are advised to be cautious during anticipated breakout moves as they may face challenges if positioned incorrectly.

A focus on economic calendars is recommended; understanding when high-impact news will be released can inform trading strategies.

Practical Application in Trading

The speaker discusses using economic events like bond auctions as setups for trades when there’s no conflicting morning data.

A demo trade example is shared where the speaker illustrates how to execute trades effectively while teaching his son about market behaviors.

Trading Strategies and Mindset for Success

Importance of Consistency in Trading

Emphasizes that without the ability to consistently make small gains (e.g., five handles in S&P or ten handles in NASDAQ), traders are unlikely to succeed in holding onto larger trades.

Many traders mistakenly believe they can hold for larger trades without mastering smaller, consistent trades first.

Understanding Trade Size and Expectations

Traders often think that having a protocol for longer trade holds will compensate for their inability to achieve smaller gains, which is a flawed mindset.

Defines significant price runs: 50 handles or more for NASDAQ as substantial, while anything less is considered minor.

Developing Skills Over Time

The speaker plans to teach methods that require time and practice to master; understanding liquidity and market behavior is crucial.

Acknowledges that failure is part of the learning process; emotional resilience is necessary when facing setbacks.

Learning from Mistakes

Encourages viewing mistakes as learning opportunities rather than failures; self-reflection on what went wrong is essential.

Warns against relying on external sources like live streamers or signal services, which may not have the trader's best interests at heart.

Building Self-Reliance in Trading

Critiques those who depend on others instead of developing their own trading skills, labeling it as laziness.

Highlights the importance of trusting oneself over following potentially exploitative figures in trading communities.

Faith in Personal Ability

Urges traders to place faith in their abilities rather than relying on untrustworthy mentors; emphasizes successful outcomes from self-taught strategies.

Reinforces belief that anyone can succeed if they commit to learning and practicing diligently.

Overcoming Internal Barriers

Advises against letting negative internal dialogue hinder progress; acknowledges challenges but encourages perseverance through adversity.

Warns against deviating from established procedures, emphasizing adherence to rules for long-term success.

Commitment to Process and Practice

Stresses the importance of following rules consistently rather than seeking shortcuts; true mastery comes with time and effort.

Outlines a progression: process leads to practice, which then leads to proficiency—no shortcuts exist.

Embracing Challenges as Growth Opportunities

Encourages removing time pressure from learning; each individual's journey varies significantly based on personal circumstances.

Understanding Trading Psychology and Strategy

The Importance of Anticipation in Trading

The speaker expresses satisfaction in recognizing market movements, emphasizing that understanding price direction is a crucial learning moment for traders.

The speaker asserts that the most challenging aspect of trading isn't about entries or stop losses, which they consider straightforward; rather, it's about developing patience and anticipation.

They mention having 81 specific strategies (PDF race) to identify trade opportunities, highlighting the importance of being able to anticipate price movements without relying solely on traditional indicators.

Simplifying Trade Analysis

The speaker argues against the necessity of moving averages or trend lines, suggesting that traders can rely on interday volatility and liquidity instead.

They stress the significance of understanding why prices should move based on economic factors rather than just technical analysis.

Timing and Market Conditions

A personal anecdote reveals how a lack of significant morning data influenced their decision to schedule an eye appointment instead of trading during that time.

The speaker advises traders to focus on afternoon sessions when there’s no impactful data in the morning, as this often leads to cleaner price action post-lunch.

Strategies for Holding Trades Longer

Transitioning into a discussion about holding trades longer, the speaker acknowledges interest from viewers regarding this topic and plans to address it thoroughly.

They share experiences with another trader (Matt), discussing entry points and encouraging him to hold onto trades longer by identifying larger price objectives beyond short-term charts.

Developing a Broader Perspective

Emphasizing the need for broader market context, the speaker insists that traders must have reasons justifying their trades extending beyond immediate time frames like one minute charts.

How to Hold a Trade Longer?

Understanding Trade Duration

The question of how long to hold a trade is complex, especially when considering entry models on smaller time frames during potential long-term market movements.

The speaker acknowledges their own difficulty in holding trades for extended periods due to a hyperactive mindset and the constant influx of new setups.

They can identify multiple trading opportunities within an hour, suggesting that short-term trading may be more suitable for them than longer holds.

A generic response to holding trades emphasizes the importance of understanding potential targets before entering a trade, with an assumption of aiming for significant moves (e.g., 100 handles).

Setting Realistic Expectations

Most strategies discussed focus on smaller gains (20-50 handles), but larger targets require careful analysis and planning.

For trades exceeding 100 handles, traders must utilize analyses that support such ranges effectively.

Timing and Market Dynamics

The speaker stresses the need for patience and timing in trading, particularly waiting for specific sessions (like the afternoon session starting at 1:30 PM).

They highlight that even if no immediate opportunities arise at 1:30 PM, there are often profitable moves post 2 PM.

Emphasis is placed on avoiding morning sessions due to lack of news and potential manipulation; instead, focus should shift towards key events like bond auctions.

Analyzing Market Conditions

The bond auction at 1 PM serves as a critical point for anticipating market movement; traders should look for signals indicating fuel for price runs.

Understanding previous market sessions (e.g., London session lows) is crucial in identifying relative equal lows which can guide future trades.

Building Confidence in Trading Decisions

New traders may struggle with confidence when holding onto profitable trades due to fear of losing gains; this anxiety can hinder decision-making processes.

Understanding Trading Mindset and Strategies

Importance of Market Behavior

Traders should focus on market behavior rather than worrying about potential losses, ensuring they are attentive to price movements that support their trading strategies.

Holding Trades Longer

To successfully hold trades for longer durations, traders need indicators or signals that suggest price movement beyond typical ranges.

Risk Management and Experience

Transitioning from smaller trades (25, 30, 50 handles) requires a solid understanding of market dynamics that indicate larger price movements.

Awareness of upcoming news events (like bond auctions) can influence risk tolerance; some traders may embrace risk more readily during these times.

Learning from Mistakes

Acknowledging mistakes in trading is crucial; just as one could fix a pizza dough error, traders must learn to manage and mitigate their trading errors effectively.

The concept of a "dough repair kit" serves as an analogy for recognizing that there are no quick fixes in trading—mistakes must be addressed through experience and learning.

Developing Patience in Trading

New traders often struggle with premature exits due to lack of trust in the market's direction; patience is essential for holding positions through fluctuations.

Gaining experience over time helps traders recognize patterns like new day/week opening gaps, which strengthens their ability to remain patient during trades.

Market Analysis Techniques

Identifying Market Trends

In analyzing market trends, look for higher lows in close proximity as indicators for potential short positions when anticipating downward movement around significant news releases.

Timing News Releases

Understanding the timing of news releases (e.g., bond auction numbers at 1 PM) is critical; it influences trader behavior and subsequent price movements.

Pre-News Trading Strategies

Traders often react based on anticipated buying/selling pressure following news releases; however, it's important to recognize pre-existing market trends before such events occur.

Addressing Common Questions

Many common questions arise regarding trading strategies ahead of news events; clarity on how to approach these situations can enhance decision-making processes.

Understanding Market Dynamics and Liquidity

The Impact of Scheduled Events on Trading

The speaker discusses the significance of knowing when key market events, like bond auctions, occur. They emphasize that traders should be aware of these timings to anticipate market movements.

A rudimentary understanding of liquidity suggests that prices are likely to explore lower levels, especially after a downward trend has been established throughout the day.

The presence of short-term lows indicates a reason to take short positions. This is compounded by larger market dynamics pulling prices toward significant gaps or lows.

Analyzing Market Behavior

Traders should not be overly concerned about equal highs in the market; instead, they should focus on the overall downward movement and potential for further declines.

The speaker notes that relative equal highs can remain relevant without causing panic among traders as long as the market continues its downward trajectory.

Recognizing Patterns and Entry Points

Observing multiple lows from different sessions (e.g., London session) provides insight into potential price draws. There are no complex indicators needed—just an understanding of liquidity dynamics.

The discussion highlights how markets can manipulate traders by creating false signals before breaking downwards, emphasizing patience and awareness during trading hours.

Strategies for Managing Trades

The speaker shares personal anecdotes about timing trades around economic events, likening it to anticipating a favorite TV show’s airing time.

While bond auctions are medium-impact events, they still warrant attention as they can influence market behavior significantly.

Emotional Management in Trading

For those struggling with holding trades longer, strategies include taking partial profits while journaling emotional responses to trades for future reflection and learning.

Keeping track of impulsive feelings during trading helps reinforce positive behaviors over time and reduces anxiety related to being right or wrong in trade decisions.

Building Experience Over Time

Developing the ability to hold onto profitable trades takes time; traders often miss out on significant gains due to premature exits driven by fear or impatience.

Many traders experience regret over not holding longer positions. This toxic thinking can hinder growth unless addressed through self-reflection and learning from past experiences.

Market Analysis and Trading Strategy Insights

Anticipating Market Movements

The speaker expresses confidence in a market drop following the one o'clock news release, indicating a strong likelihood of price movement below current levels.

Observing Price Action

After the news release, the market drops. The speaker analyzes whether the price will reach a specific fair value area and its consequent correction midpoint.

Identifying Key Trading Signals

A bearish order block is identified when the price approaches but does not touch a significant level, suggesting potential for short trades after subsequent candles.

Trade Execution Considerations

The speaker discusses conditions under which they would enter short trades, emphasizing that if certain levels are not reached, they would wait for better opportunities.

Understanding Market Dynamics

The importance of measuring strength and weakness through price action is highlighted; failure to touch key levels signals potential trading opportunities.

Risk Management Strategies

The speaker mentions placing limit orders based on anticipated market movements while being prepared to adjust positions if necessary.

Experience in Trading Decisions

Emphasizes that experience plays a crucial role in making informed trading decisions and managing risks effectively during volatile market conditions.

Learning from Past Trades

The speaker shares personal experiences of getting stopped out but quickly re-entering trades successfully, illustrating resilience in trading strategies.

Importance of Documentation

Stresses the necessity of keeping detailed notes and journals to track learning progress and reinforce understanding of trading concepts taught previously.

Analyzing Immediate Market Reactions

Understanding Trade Dynamics

Entry Strategies and Drawdown Management

The speaker questions the mechanics of trade entry, noting that entering short does not result in negative drawdown due to a larger trade entry with six contracts.

A model is introduced where the speaker uses six contracts at a higher price when shorting, while four contracts allow for trading above that entry point.

Market Behavior and Price Action

The market can revisit fair value areas without filling orders; the speaker expresses a desire to avoid this scenario despite some initial heat in trades.

At one o'clock, there’s a notable market movement characterized by pumping and dumping, leading to the identification of a fair value gap.

Analyzing Market Sentiment

The analysis focuses on how price behaves at each significant level (Siby), emphasizing the importance of understanding market narratives.

The concept of sell-side efficiency is discussed, highlighting how imbalances are defined by specific candle ranges.

Understanding Imbalances and Market Signals

A "no hawk" signal indicates minor fluctuations outside established boundaries without altering overall trends or highs.

Specific candle highs are referenced as critical points for assessing selling pressure within fair value gaps.

Liquidity and Market Orders

The speaker challenges the notion that sellers alone dictate market movements, asserting that real orders drive price action rather than mere inefficiencies.

Emphasizing aggressive trading post-one o'clock, the speaker discusses models guiding traders through various market conditions based on time and price delivery factors.

Importance of Inefficiencies in Trading Strategy

Inefficiencies are deemed less important than relative equal highs/lows or new day/week opening gaps due to their lesser influence on price movements.

Trust in established trading principles is encouraged; understanding complex mechanisms isn't necessary for effective trading execution.

Delivery Mechanisms in Trading Context

Sell-side delivery is described as one-sided movement lower; liquidity rests below key lows indicating real pending orders essential for market dynamics.

Understanding Trading Success

The Importance of Teaching and Learning in Trading

The speaker emphasizes their role in teaching effective trading strategies, claiming to provide more valuable insights than others.

They discuss the natural flow of trades and how certain market behaviors indicate inefficiencies that traders should recognize.

A distinction is made between different trading philosophies, criticizing Chris Laurie’s approach as filling a void rather than achieving balance in trades.

Market Dynamics and Candle Analysis

The speaker explains the concept of balanced price ranges, asserting that true balance requires movement away from specific price points.

They highlight the significance of observing one-minute candles, noting how traders react to upward movements even if they are short-lived.

The discussion includes the pitfalls of focusing too narrowly on minor price movements while ignoring broader market trends.

Practical Application and Mentorship

The speaker shares personal experiences with mentorship, illustrating how practical application leads to immediate feedback and success for students.

They defend their teaching methods by stating that demo trading is essential for learning logic before risking real money.

Mindset and Attitude Towards Trading

A strong emphasis is placed on active participation in learning; passive observation leads to failure in trading endeavors.

The speaker warns against relying on others for success, sharing their own struggles with this mindset over the years.

Future Economic Challenges

There’s a forewarning about impending economic difficulties globally, stressing the need for financial independence beyond traditional employment income.

Effort and Mindset in Trading

The Importance of Effort

Success requires effort; a "tick-tock mentality" leads to stagnation in both trading and life.

The speaker emphasizes that even his children desire an easy path, but he insists on the necessity of hard work.

Availability of Resources

Resources for learning are freely available on the speaker's YouTube channel, which will remain accessible indefinitely.

Despite criticism from others, the speaker continues to teach without charging for mentorship, highlighting the effectiveness of his methods.

Anti-Guru Philosophy

The speaker identifies as an "anti-guru," contrasting with traditional gurus who profit from their teachings.

He could easily monetize his knowledge but chooses not to, focusing instead on creating successful traders without financial gain.

Personal Motivation and Family Influence

The speaker expresses reluctance to continue teaching unless motivated by personal reasons, particularly for his son.

He aims to instill a strong work ethic in his son, emphasizing that success is not handed out easily.

Learning Through Experience

Once individuals grasp market concepts through experience, this knowledge becomes ingrained and unshakeable.

Critics may disparage him or his methods, but their lack of success highlights their irrelevance compared to those who apply what they learn effectively.

Community Impact and Student Success

Silent Learners

Many viewers benefit quietly from the content without leaving comments or feedback; they implement strategies successfully.

Testimonials of Success

The speaker receives numerous emails monthly from students celebrating their achievements after applying learned strategies.

Unique Teaching Reach

He claims no other educator has such extensive reach or impact in teaching trading effectively without charging fees.

Trustworthiness Compared to Others

Viewers must choose between paying for information or trusting someone who provides valuable insights freely.

Financial Perspective on Content Creation

Although he earns ad revenue from YouTube, it pales compared to potential earnings through direct sales or services.

Learning to Trade: The Importance of Demo Trading

The Risks of Real Money Trading

Engaging in trading with real money can lead to negative thoughts and anxiety, especially for beginners. This mental state can hinder decision-making right before executing trades.

Utilizing demo accounts or paper trading is highly recommended for new traders. It allows practice without the pressure of real financial loss, providing a safe environment to learn.

Benefits of Paper Trading

Paper trading eliminates concerns about realized losses and taxes, allowing traders to focus solely on price movements without distractions from external pressures.

Beginners often become overwhelmed by various strategies and advice when using real money, which detracts from their ability to observe market prices effectively.

Managing Emotions in Trading

Price fluctuations are normal; traders should expect ups and downs in their account balance as part of the learning process.

New traders may feel compelled to exit profitable trades prematurely due to fear or lack of experience. It's crucial to understand the reasons behind holding onto a trade rather than succumbing to emotional responses.

Building Trust Through Practice

A lack of confidence often stems from insufficient practice in demo environments. Regularly observing market patterns helps build trust in one's trading strategy over time.

Consistent opportunities exist within the markets daily, reinforcing that successful strategies will continue to yield results if practiced diligently.

Learning from Experience

Documenting experiences through journaling helps traders recognize patterns and outcomes over time, serving as a reference point during challenging trades.

Accepting personal responsibility for losses fosters resilience. Understanding that mistakes are part of the learning process allows traders to move past failures more easily.

Avoiding External Validation

Seeking validation from others regarding trading successes or failures can lead to unnecessary stress. Traders should focus on their own performance rather than external opinions.

True success is reflected in tangible results rather than public acknowledgment. Confidence comes from knowing one’s abilities rather than seeking approval online.

The Importance of Preparation

Successful trading involves consistent preparation and understanding one's capabilities without needing external affirmation or recognition.

Understanding Market Movements and Trading Psychology

The Nature of Trading Experience

The speaker emphasizes the lack of reliable experience in trading without a solid understanding, equating it to gambling. They stress the importance of recognizing market movements rather than relying on hope or emotional responses.

Specific times are highlighted for observing market signatures, indicating when traders should be alert to potential movements. This includes identifying patterns at 7 o'clock and 8 o'clock.

Retail traders often lack insight into underlying market mechanics, leading to significant losses without understanding why they occur. The speaker positions themselves as someone who understands these dynamics.

Expectations in Trading

A calm approach is advocated; traders should not worry about future outcomes but instead focus on established market behaviors.

The analogy of starting a car is used to illustrate reasonable expectations in trading—traders should expect consistent results from their strategies without unnecessary surprises.

Learning and Skill Development

The speaker encourages focusing on previously taught concepts rather than getting distracted by new ideas. They emphasize that foundational knowledge is crucial for success.

Backtesting and journaling past data are recommended as essential tasks for developing an understanding of price action before engaging with live markets.

A structured learning process is outlined: first analyzing historical data, then transitioning to live observation during streams, followed by practical execution in trades.

Overcoming Fear in Trading

Many traders experience fear when entering trades; the speaker shares personal experiences of overcoming this fear through repeated practice and execution.

Emphasis is placed on the necessity of pushing through initial fears associated with trading decisions, drawing from personal anecdotes about early challenges faced by the speaker.

Strategies for Entry and Market Understanding

Traders often seek perfect entries with no risk; however, this mindset can hinder progress. The speaker reflects on their own journey toward accepting imperfection in trade entries.

With 81 different entry mechanisms available, the speaker illustrates their adaptability in approaching trades while acknowledging that not all methods yield equal results.

Historical Context and Market Consistency

Insights into how price behavior has remained consistent over decades are shared, reinforcing that current market actions mirror those from years past despite technological advancements.

The continuity of market behavior since before the speaker's birth highlights a fundamental truth about trading: core principles remain unchanged over time.

Advantages of Modern Markets

Today's markets offer clearer insights due to continuous trading hours compared to historical contexts where information was less accessible or timely.

Concerns regarding changes like eliminating opening gaps are dismissed; the speaker asserts confidence in existing strategies regardless of potential shifts in market structure.

14 Years of Waiting: Is It Worth It?

The Importance of Action Over Inaction

The speaker questions the rationale behind waiting 14 years to see if a strategy will stop working, suggesting that taking action is more beneficial for personal and family improvement.

Observations on Global Events

The speaker highlights ongoing global crises, referencing turmoil in the UK, Bangladesh, and potential issues in the Middle East, indicating that these events will impact everyone’s lives.

Preparing for Economic Challenges

Emphasizing proactive measures, the speaker encourages listeners to learn skills rather than rely on government aid, stating that teaching self-sufficiency is more valuable than simply distributing money.

Helping Others as a Core Value

The speaker expresses hope that individuals can improve their situations and then assist others who are struggling financially or unable to meet their basic needs.

Shifting Perspectives on Wealth

Aiming to change mindsets about money, the speaker wants people to view it as a tool for empowerment rather than an end goal focused on material possessions like luxury cars.

The Reality of Materialism

Critique of Material Wealth

The speaker dismisses the value of material possessions such as Lamborghinis and McLarens, arguing they ultimately do not bring happiness or fulfillment.

Community Support During Hard Times

Highlighting societal struggles, the speaker points out that many people face challenges like job loss or inability to pay rent due to economic downturns.

Class Disparities in Financial Stability