94. TPD PART 2

Understanding TPD and Narrative Alignment

Introduction to TPD Series

• The speaker introduces the second part of the TPD series, emphasizing that past performances do not guarantee future results.

• Viewers are encouraged to take notes on what they observe at the beginning versus the end of the presentation, highlighting its importance.

Key Concepts in Price Action

• The concept of "Precision Swing Point" (PSP) is introduced; it indicates where price action shows significant movement.

• Discussion on how candle bodies and wicks represent market behavior: wicks indicate volatility while bodies reflect closing prices.

• Emphasis on trading stronger assets rather than weaker ones, as weaker assets present higher resistance when targeting trades.

Understanding Narrative Alignment

• Explanation of narrative alignment with higher time frame institutional order flow; it's crucial for determining trade direction.

• Importance of using a combination of time frames (daily TPD with weekly SMT or monthly cycle SMT for confirmation).

Identifying Market Conditions

• Clarification on how to identify correct market conditions through various time frame analyses.

• The relationship between different cycles (monthly, daily, weekly) and their impact on trade decisions is discussed.

Analyzing Candle Patterns

Candle Analysis Techniques

• Insight into recognizing when a candle will not create an SMT based on previous price actions.

• Definition of buy programs versus buy models; buy programs indicate rapid price movements in one direction.

Entry Strategies Using PDRA Matrix

• Introduction to PDRA Matrix for identifying entry points based on premium and discount levels relative to candle formations.

Practical Application in Trading

• Example provided regarding catching weekly expansions using higher time frame candles combined with lower time frame entry patterns.

Comparative Asset Strength

Evaluating Asset Performance

• Discussion about how different assets react during market movements; typically, weaker assets retrace deeper while stronger ones move quickly.

Conclusion on Trade Selection

Market Analysis and Trading Strategies

Understanding Asset Performance

• The Dow typically shows the weakest performance, while the NASDAQ demonstrates the strongest. The S&P usually remains in the middle, reflecting its stable nature compared to the more volatile NASDAQ.

• There are multiple candles to consider in trading strategies; specifically, when candle number three is a TPD (Turning Point Day), it often indicates a continuation from candle number two.

Liquidity Dispersal Theory

• Price movements below the 50% point of candle number three's wick can signal rapid price increases, except for weaker assets like the Dow.

• If another PSP (Price Swing Point) appears after an original TPD, liquidity shifts towards the closing price of candle number three.

Trade Review Insights

• A review of trades taken on E-Mini S&P and Dow highlights how both reached higher time frame levels that suggested potential for higher prices.

• The creation of SMT (Smart Money Technique) at these higher time frame levels provided confirmation for anticipated price increases.

Entry Confirmation Techniques

• Break of structure on hourly time frames signals readiness to enter buy positions; this was confirmed by observing a breaker and liquidity void.

• After identifying a PSP on Tuesday, entry was confirmed with stop losses set below previous day's low to maximize profit potential until NFP Friday.

High Probability Setups

• Aligning hourly TPD with 90-minute cycles during specific market hours enhances setup probabilities significantly.

• Emphasis on focusing on critical candles such as those at 6:00 AM is crucial for achieving high probability setups.

Advanced Trading Models

• Combining four-hour TPD with one-hour TPD creates reliable models that yield high probability outcomes if executed correctly.

• Utilizing intermarket SMT alongside normal SMT provides comprehensive insights into market behavior across different asset classes.

Example Analysis

• Analyzing specific timestamps reveals how different assets behave; for instance, the Dow indicated deeper retracement while S&P remained stagnant during certain periods.

Understanding Trading Strategies and Emotional Management

Key Trading Concepts

• The importance of focusing on the 6:00 opening for the 4-hour candle alongside the 10:00 opening, emphasizing trading strategies based on these timeframes.

• Visual representations are limited due to concerns about potential leaks; understanding requires prior knowledge from previous videos in the mentorship series.

• Introduction of NASDAQ into analysis, highlighting a daily cycle with S&P and Dow, transitioning to a lower timeframe perspective (90-minute cycle).

• Description of a two-stage setup observed in backtesting, including an opening gap where S&P made a "turtle soup," indicating higher probability setups.

• Discussion of combining various setups (two-stage setup, 4-hour TPD, high timeframe narrative) for effective trading strategies.

Psychological Aspects of Trading

• Emphasis on how emotions influence trading decisions; common emotions include greed (desire for pleasure) and fear (avoidance of pain).

• Understanding emotional triggers like impulsiveness and FOMO is crucial for rational decision-making in trading.

• Advocating for an emotionless thought process during trading to maintain sharp decision-making skills and avoid negative impacts on results.

• Warning against allowing emotions to manifest in trading practices as it can lead to decreased performance and poor decision-making.

Conclusion and Future Insights