ICT 2024 Mentorship \ Lecture #18 August 27, 2024

Name: ICT 2024 Mentorship \ Lecture #18 August 27, 2024
Uploaded: 2024-08-27T17:06:35.000Z
Duration: 7 h 6 min 29 s

Market Analysis and Trading Strategies

Introduction to Today's Session

The speaker greets the audience, indicating a focus on trend line breakouts and bull flags for today's trading session.

The previous settlement price is noted at approximately 568.75, which will be significant for today's analysis.

Opening Range Gap

The speaker discusses the importance of marking the opening range gap in advance, emphasizing its relevance for trading decisions.

A visual representation of the previous settlement price is created to assist in understanding market movements as trading begins.

Market Dynamics and Price Action

The speaker highlights that the current price is situated within a new day opening gap, suggesting potential trading opportunities based on this positioning.

Clarification is provided regarding pre-session trading hours, explaining that it encompasses any activity before the official market open at 9:30 AM.

Observations on Trading Behavior

The speaker notes an increase in market responsiveness to their live streaming sessions, indicating that viewers are becoming more aware of key levels to watch during trades.

An explanation of how gaps function within market dynamics is given; specifically, how they can influence price movement during initial trading hours.

Key Trading Concepts

Emphasis is placed on identifying significant gaps (greater than 20 or 30 handles), with mid-gap levels serving as critical thresholds for potential trades.

Live Trading Insights and Strategies

Initial Setup and Market Observations

The speaker confirms they are live, indicating a real-time trading session rather than a recorded one.

Discussion of the lower quadrant trade setup, noting potential movements towards a sell side or partial gap closure.

Emphasis on maintaining a neutral bias while observing market behavior without rushing into trades.

Analyzing Gaps and Price Action

Identification of minor sell-side liquidity in the market; preference for deeper price levels is expressed.

A desire to see price action tap certain gaps more effectively before making decisions; highlights the importance of specific candle interactions.

Mention of executing trades on ES (E-mini S&P 500 futures), responding to student requests for practical examples.

Economic Calendar Awareness

Reminder about consumer confidence data release at 10:00 AM, which could impact market movements.

The speaker captures a small scalp setup that builds trader confidence, emphasizing the need for understanding price action beyond mere execution.

Understanding Trader Psychology

Insight into building rapport with price action instead of blindly following trends; stresses patience in trading strategies.

Comparison between retail traders' herd mentality and livestock behavior, illustrating how momentum can drive trading decisions but may not always be logical.

Strategic Trade Positioning

Advocates for due diligence in determining market direction before entering trades, suggesting positioning against initial runs when appropriate.

Explanation of fair value gaps and their role in identifying support and resistance levels during trading sessions.

Practical Trading Techniques

Discusses using ranges to identify potential targets within the market; emphasizes quick methods for assessing trade opportunities.

Understanding Trading Gaps and Strategies

Observations on Market Behavior

The speaker notes that their trading strategies are being studied by others, as evidenced by longer market runs, which they aim to encourage among traders.

Emphasizes the importance of recognizing gaps in trading and encourages all traders, regardless of gender, to improve their skills.

Analyzing Opening Range Gaps

Discusses the significance of the opening range gap between previous closing prices and current opening prices, highlighting its role in determining market direction.

Points out that if the market does not return to a certain midpoint after breaking through a sell side, it may remain heavy throughout the day.

Fair Value Gaps and Trading Techniques

Clarifies confusion regarding charting techniques while discussing fair value gaps and their implications for trading decisions.

Identifies a specific low from last Friday as a potential point of interest for future trades.

Risk Management and Trading Education

Warns about potential price movements towards specific areas (e.g., 19105), advising caution when interpreting these signals on different time frames.

Addresses questions from new students regarding paper versus live trading examples, explaining why demonstrations often use simulated environments for safety.

Regulatory Considerations in Trading

Mentions the Commodity Futures Trading Commission (CFTC), emphasizing that they are not a licensed financial advisor and thus teach using paper trading to avoid legal issues.

Understanding Market Dynamics and Trading Strategies

The Role of Fair Value Gaps in Trading

The speaker emphasizes the importance of being responsible in trading relationships, particularly when dealing with market gaps. They note that observing initial Fair Value Gaps can provide insights into potential market movements.

A discussion on taking trades before live streaming highlights the significance of understanding market structures, such as full flag patterns and gap closures, which are essential for making informed trading decisions.

The speaker mentions that 70% of the time, significant gaps will close within a specific timeframe (9:30 to 10:00), indicating a high probability for traders to capitalize on these movements.

Analyzing Market Behavior

The remaining portion of the gap is identified as crucial for understanding market dynamics; recognizing how much has been closed can inform future trading strategies.

If traders are overly bearish and expect a sell-off, they may miss opportunities if they do not adjust their models based on real-time price action and gap behavior.

Price Action Insights

Observing price action reveals how markets react after hitting key levels; once above certain thresholds, prices tend to move towards smoother areas where previous disturbances have occurred.

The concept of "full Gap closure" is introduced as a method for studying price movement over time, allowing traders to identify both long and short opportunities within the same day.

Algorithmic Trading Discussion

The speaker refutes claims against algorithmic trading by asserting that understanding buying and selling pressure is essential for predicting market moves effectively.

They argue that without acknowledging algorithms' influence on price movements, one cannot fully grasp market dynamics or maintain confidence in their trading strategies.

Momentum vs. Randomness in Trading Decisions

A distinction is made between momentum trading—where traders follow price trends—and those who choose alternative paths based on personal beliefs about market direction.

Understanding Market Behavior and Algorithmic Trading

The Role of Algorithms in Price Movement

The speaker critiques the reliance on popular opinions from books and online sources, emphasizing that many do not engage with real-time price fluctuations or apply disciplined trading strategies.

They argue that traditional methods like supply and demand or Elliott Wave theory are ineffective in explaining why prices move, highlighting a disconnect between these theories and actual market behavior.

The speaker illustrates their point by discussing live market observations, noting how buying imbalances can halt price movements at specific levels, contrary to common beliefs about selling pressure.

Fair Value Gaps and Market Dynamics

A specific fair value gap is mentioned as crucial for understanding market behavior post-market opening; this gap should be monitored throughout the trading day.

The speaker clarifies their choice not to upload Twitter spaces to YouTube, indicating a desire to keep certain discussions exclusive while allowing others to monetize those sessions.

They express frustration over unauthorized use of their lectures on other platforms, particularly concerning translations into different languages without permission.

Market Mechanics Explained

The speaker emphasizes that market stops are dictated by inherent codes rather than mere buying or selling pressures, suggesting a more complex underlying mechanism at play.

They reflect on the importance of mathematical understanding in programming and its relevance to grasping market dynamics, advocating for better education in these areas.

Personal anecdotes about early programming experiences illustrate the speaker's deep-seated interest in how systems operate, drawing parallels between coding logic and market behavior.

Consistency in Market Operations

The concept of the market as a controlled environment is introduced; it behaves consistently unless manipulated through external interventions.

Observations regarding price delivery highlight that inefficiencies close to current prices dictate trading speed and opportunities within the marketplace.

A critical moment is described where no buyers or sellers showed interest below a certain price level, reinforcing the idea that algorithmic structures govern these interactions rather than human decision-making alone.

Challenging Conventional Trading Wisdom

The speaker challenges conventional wisdom by asserting there was no opportunity for traders to act below specific price points during key moments of trading activity.

Their confidence stems from daily demonstrations of algorithmic principles at work; they assert that skepticism towards algorithms often arises from misunderstanding rather than factual evidence.

Understanding Market Dynamics and Smart Money Strategies

The Importance of Study and Observation

The speaker encourages viewers to study market behaviors, asserting that if they find discrepancies in his claims, it would be evident. He emphasizes the uniqueness of his trading approach.

He expresses satisfaction with the knowledge shared during live streams, suggesting that even if he stopped streaming, viewers have enough information to recognize potential algorithms at play.

The speaker notes a lack of surprise in market movements for him; he has trained students to anticipate these patterns, indicating a systematic understanding of market behavior.

Perception of Market Manipulation

He discusses the concept of "rigged" markets as an advantage for informed traders. This perspective challenges common beliefs about market influences from social media or retail investors.

The speaker questions whether large entities will allow their profits to be swayed by retail buying pressure, implying skepticism towards popular narratives surrounding stock movements.

Liquidity and Smart Money Tactics

Using an analogy about shopping for shoes, he illustrates how liquidity draws buyers into the market while smart money manipulates price levels for profit.

He describes how smart money operates by absorbing sell orders below certain price points rather than allowing them to dictate market direction.

Mechanisms Behind Price Fluctuations

The speaker explains that price fluctuations are driven by mechanisms designed to engage with buy/sell orders strategically. This involves accumulating sell stops at key levels.

He elaborates on why smart money might push prices down: not to benefit sellers but to gather unfulfilled orders and create advantageous positions.

Accumulation and Market Language

Discussing accumulation strategies, he highlights how various trader classifications (momentum traders vs. long position protectors) contribute to overall market dynamics without affecting his analysis framework.

The speaker introduces a specific language around "relative equal lows" and "highs," which helps communicate complex trading concepts effectively among traders.

He asserts that relative equal lows/highs will always exist across timeframes, emphasizing their importance in understanding market behavior amidst high trading volumes.

Market Dynamics and Liquidity

Understanding Market Liquidity and Trading Strategies

The market absorbs sell stops, providing liquidity for large trades. This is crucial for traders needing to fulfill significant volume requirements to profit effectively.

Traders must execute their strategies when the market moves against them, as they cannot efficiently buy into rising prices due to ongoing delivery processes.

The initial opening range is critical; there's a 70% chance that half of any existing gap will fill within the first 30 minutes, which is an algorithmic behavior not commonly taught in traditional resources.

Emphasis on the importance of scrutinizing trading strategies live; if they don't hold up under real-time conditions, they may lack validity.

Encouragement for new traders to independently verify teachings rather than accepting them at face value; personal experience and observation are vital for understanding market mechanics.

Legal Awareness and Risk Management

The speaker reflects on past experiences with regulatory bodies, emphasizing the importance of understanding risk disclosures in trading practices.

Acknowledgment of past mistakes in not adequately communicating risks associated with trading, leading to a commitment to transparency in future communications.

Warning other content creators about potential legal issues if they fail to disclose necessary risk information; this highlights a broader concern regarding compliance within financial education.

Discussion on the complexity of laws governing trading activities and a commitment to operate within legal boundaries while educating others about these regulations.

Algorithmic Trading Insights

Continuous reinforcement of teaching algorithmic principles as essential knowledge for new students entering the trading space; it’s important for them to grasp how markets function beyond surface-level understanding.

Clarification that markets primarily serve institutional investors ("Deep Pockets") rather than individual retail traders, underscoring the need for strategic learning from experienced educators.

Critique of common misconceptions about market dynamics; emphasizes that successful trading requires understanding specific time elements and behaviors unique to each day’s market profile.

Understanding Market Dynamics and Smart Money Strategies

The Role of Emojis in Arguments

The speaker critiques the use of emojis in comments, suggesting that they undermine serious arguments and indicate a lack of maturity or understanding from the commenter.

Market Behavior and Sell Stops

Discussion on sell stops below relative equal lows, indicating how market drops can create opportunities for smart money to capitalize on inefficiencies.

Identifying Inefficiencies in the Marketplace

Emphasis on recognizing areas of inefficiency within the market, particularly around opening range gaps that have not been filled, which signal potential trading opportunities.

Accumulation vs. Distribution

Clarification on accumulation as a process where the market spends time at predetermined liquidity levels, contrasting it with distribution patterns that do not exhibit this behavior.

Trading Strategies Around Liquidity Pools

Insight into how traders should approach liquidity pools; markets should quickly move through inefficiencies rather than linger, which could indicate weak price action.

Momentum Delivery and Smart Money Buying Patterns

Explanation of how smart money operates by buying during downward momentum rather than breakouts; they seek discounted prices to maximize their positions.

Importance of Price Action Experience

Acknowledgment that understanding price action takes time and experience; traders must learn to recognize patterns and behaviors in live markets to make informed decisions.

Recognizing Changes in Market Behavior

Warning against over-leveraging when market behavior deviates from expected patterns; such deviations may signal underlying issues requiring caution before entering trades.

Understanding Fair Value Gaps and Market Behavior

The Formation of Fair Value Gaps

A small, close candle appears at a fair value gap, indicating potential market behavior between 9:30 and 10:00 AM. Observing how price interacts with this range is crucial.

The concept of "changing character" is introduced; the market may revert to previous behaviors, suggesting that prior levels can act as reclaimed bullish fair value gaps.

Misconceptions About Fair Value Gaps

The speaker emphasizes that not all fair value gaps are treated equally; their effectiveness depends on context and market narrative.

Criticism is directed towards those who claim to understand fair value gaps without grasping their nuanced applications in trading strategies.

Learning from Experience

The speaker asserts that true understanding comes from experience rather than surface-level familiarity with concepts like fair value gaps.

Encouragement for viewers to challenge the speaker's insights through video responses, highlighting confidence in the presented knowledge.

Market Dynamics and Buyer-Seller Imbalance

Discussion on buyer-seller dynamics reveals an imbalance where buyers outnumber sellers, questioning how this affects market movement.

Emphasis on understanding depth of market (DOM), which presents a facade of order flow that may not reflect actual trading conditions.

Analyzing Market Orders

Large entities can manipulate order placements, creating misleading impressions about market interest at certain price levels.

Understanding the underlying mechanics of order flow is essential for interpreting price movements accurately rather than relying solely on visible order quantities.

Navigating Price Movements

As prices move up through established ranges, identifying footholds becomes critical for predicting future movements and establishing support/resistance levels.

The metaphorical representation of price as a climber illustrates the need to recognize key levels that facilitate upward movement in the market.

Understanding Live Trading and Market Structure

The Importance of Logic in Live Trading

The speaker emphasizes the necessity of explaining the logic behind trading decisions when trading live to avoid perceptions of being "shady."

Observing price movements without financial pressure allows traders to become comfortable with market behavior, focusing on learning rather than performance.

Market Structure and Price Behavior

The concept of market structure is introduced, highlighting the need for price to break above previous highs quickly as a sign of bullish momentum.

Reference points from past price action are crucial; they can change roles in supporting or rejecting current prices based on market dynamics.

Fair Value Gaps and Their Implications

A fair value gap (PD array) can shift from bullish to bearish depending on how it interacts with price movements, affecting future trading strategies.

When reclaiming a previously bullish fair value gap, it should act as genuine support rather than traditional supply and demand concepts.

Trading Strategies Around Gaps

Specific timeframes (e.g., 9:31 to 10:00 AM) are critical for identifying fair value gaps that cannot form during initial market openings.

Traders must recognize that not all orders will be executed due to liquidity constraints, impacting their ability to capitalize on market movements.

Algorithms and Market Dynamics

Algorithms utilize historical reference points (arrays), which serve as data points for decision-making in trading strategies.

The analogy of cooking illustrates how traders follow systematic processes using available data to achieve desired outcomes in the market.

Challenges in Execution and Learning

Traders may face challenges when conditions aren't ideal; however, they still have opportunities for profit even if outcomes vary.

Smaller entities can effectively place orders within specific candlesticks despite larger players having more significant positions due to timing constraints.

Visibility of Market Opportunities

Understanding key gaps is essential; traders must remain vigilant as these opportunities cannot be hidden unless technical issues arise.

Understanding Market Dynamics and Trading Strategies

The Nature of Knowledge Sharing

The speaker reflects on the reluctance to share certain knowledge, suggesting that if it could be easily altered by others, they would not have taught it.

A challenge is posed to the audience about whether they would share this information honestly; the implication is that most would not due to selfishness.

The Gift of Insight

The speaker emphasizes that the knowledge shared is a gift, urging gratitude rather than worship.

They critique the randomness in buying and selling pressure, likening it to playing the lottery and highlighting its irrationality.

Analyzing Market Structure

Discussion on market levels indicates that breaking above short-term highs can lead to predictable price movements.

Explanation of liquidity dynamics shows how market structure changes when long positions are eliminated.

Accumulation Patterns

The concept of accumulation is introduced, emphasizing that it does not happen quickly but requires time for price delivery.

A bullish breaker candlestick pattern is identified as a significant indicator for future price movements.

Candlestick Analysis

Detailed analysis of candlestick formations highlights how wicks can indicate market sentiment and potential reversals.

Comparison between different markets (NASDAQ vs. ES), noting their behavioral differences in terms of volatility and trading strategies.

Rules of Engagement with Price Delivery Arrays

Emphasis on focusing on the body of candlesticks rather than wicks when determining bullish or bearish trends.

Understanding Price Action and Market Behavior

Sensitivity of Price Action

The upper half of the price range indicates a level where sensitivity for price action is optimal, particularly when the breaker is utilized.

Observations show that as price approaches this upper quadrant, it tends to accumulate positions rather than moving significantly, indicating market indecision.

Accumulation and Algorithmic Trading

The algorithm appears to hold positions during accumulation phases, allowing smart money to capitalize on bullish breakouts around significant levels like the previous day's settlement price.

During sideways movement, there is a lack of buying interest, suggesting that traders are waiting for clearer signals before entering the market.

Importance of Opening Gaps

Clustering of new day and week opening gaps should be monitored; they remain relevant even if not actively traded.

A distinction is made between trading days versus calendar days; 60 trading days are emphasized as a critical look-back period for analysis.

Analyzing Price Delivery Arrays (PDAs)

The speaker prefers using PDAs from the last 60 trading days as reference points due to their relevance in current market conditions.

Younger PDAs (e.g., 20 or 40 days old) are deemed more sensitive to price movements compared to older ones.

Anticipating Market Movements

Understanding past moves allows traders to anticipate future behavior without overcomplicating their strategies.

Consolidation periods indicate potential upward movements; recognizing these patterns can help predict short-term retracements without assuming reversals.

Lunch Hour Dynamics

Between 11:30 AM and 1:30 PM, known as the lunch hour, specific market behaviors occur that may lead to deeper retracements.

Understanding Market Dynamics and Trading Logic

The Nature of Price Movements

The speaker emphasizes the absurdity of trying to rationalize why prices fluctuate precisely at certain levels, suggesting that market behavior is more predictable than commonly believed.

He argues that if price movements were solely based on buying and selling pressure, the levels would not be as accurate or consistent as they are in practice.

The presence of resting orders below candle lows contradicts the notion that price should drop lower due to selling pressure, indicating a deeper logic at play.

Critique of Common Trading Beliefs

The speaker expresses frustration with traders who blindly accept conventional wisdom without questioning its validity, likening this mindset to propaganda.

He asserts that he can predict price movements accurately before they happen, challenging the idea that trading is purely random.

Building Confidence Through Experience

By observing market patterns over decades, traders can develop confidence in their understanding and predictions, which enhances their trading performance.

New traders often overestimate their knowledge due to superficial learning experiences, leading them to fail in actual trading scenarios.

The Importance of Critical Thinking

The speaker criticizes those who profit by misleading others rather than through genuine trading success; he positions himself as a transparent educator without ulterior motives.

He promotes an educational approach where participants learn freely without financial obligations or hidden agendas.

Practical Trading Insights

When analyzing potential trades (PD arrays), focus on the upper half for bullish signals while being cautious about the lower half's responsiveness.

If a trade does not perform as expected upon reaching critical levels, it may be wise to exit rather than hold onto losing positions out of hope or social media influence.

Addressing Specific Markets: Gold

The speaker dismisses inquiries about gold trading due to its perceived manipulation and volatility; he advises against engaging with this market despite owning physical gold himself.

Final Thoughts on Learning and Application

Mentorship and Learning in Trading

The Role of the Mentor

The speaker emphasizes that their goal is to empower students to learn trading effectively, stating they won't be hurt if students no longer need their guidance after mastering the skills.

They express a desire for students to rely on their own knowledge rather than seeking inspiration from other YouTubers or social media influencers.

Learning Proper Techniques

The importance of developing personal charts based on the mentor's teachings is highlighted, as it fosters independent learning and understanding.

Students are encouraged to observe price action closely, taking notes during live streams and analyzing candlestick behavior without commentary for deeper comprehension.

Understanding Market Dynamics

The speaker discusses how traders utilize specific levels in the market, questioning why these levels are significant and how they relate to buying/selling pressure.

They explain that recognizing high-probability turning points requires understanding market logic and concepts taught by them.

Conceptual Teaching Approach

The mentor shares insights into teaching complex concepts visually through charts, aiming to bridge gaps in understanding without revealing proprietary algorithms.

They assert that while some aspects of trading may remain elusive, their ability to predict market movements stems from experience and knowledge.

Building Confidence Through Knowledge

Acknowledging the challenges of randomness in trading, the speaker encourages students not to feel discouraged but instead recognize their advantage when using algorithmic principles.

They highlight successful students who have learned from free resources available on their YouTube channel, reinforcing that valuable education can be accessible without paid mentorship.

Practical Application of Concepts

The mentor stresses the importance of engaging with live charts during lessons for immediate application of concepts discussed.

Observing real-time dynamics helps students understand accumulation phases and prepares them for longer-term trades.

Community Engagement and Support

The speaker acknowledges interactions with fellow YouTubers while asserting confidence in their unique approach and proven results among students.

They encourage all listeners—especially aspiring traders—to embrace this learning opportunity as part of a supportive community focused on success.

Moving Beyond Basic Strategies

Emphasizing depth over gimmicks, the mentor advises against superficial strategies aimed at quick profits; instead, they advocate for a thorough understanding of market logic.

Trading Psychology and Strategy

Understanding Market Connection

Emphasizes the importance of maintaining a strong connection to market movements; expressing hope in trades indicates a loss of this connection.

Advises traders to close trades if they feel uncertain, suggesting that taking profits early can be beneficial for beginners until they develop stronger conviction.

Gradual Learning Process

Discusses the gradual process of learning trading strategies, comparing it to riding a bike with training wheels, where initial small wins build confidence.

Encourages observing market behavior after making trades to understand price action better and improve future decision-making.

Backtesting and Analysis

Highlights the significance of backtesting trades by analyzing past price movements, which helps identify potential opportunities in future trading scenarios.

Suggests focusing on one foundational aspect of trading at a time to build understanding before expanding into more complex strategies.

Emotional Reflection on Trading Decisions

Reflects on common feelings among traders when reviewing missed opportunities, emphasizing the need for thorough analysis and documentation of past trades.

Recommends using self-talk as a tool for positive reinforcement during backtesting, helping traders visualize successful outcomes based on historical data.

Observational Learning Techniques

Compares learning from market patterns to recognizing animal tracks in nature, stressing the importance of observation in developing trading skills.

Encourages identifying specific patterns or "tracks" in price action that align with personal trading goals (e.g., order blocks or fair value gaps).

Reinforcing Positive Trading Mindset

Stresses the necessity of documenting trade behaviors and outcomes positively to enhance psychological resilience and reinforce effective strategies.

Understanding the Psychology of Trading and Self-Reflection

The Impact of External Comparisons on Self-Perception

Discusses how individuals often compare themselves to others, particularly in contexts like owning vehicles or attending events, which can diminish feelings of exclusivity.

Illustrates the phenomenon where seeing similar items (like cars) can lead to a loss of uniqueness, akin to noticing a green apple among red ones.

Activating Interest Through Personal Connection

Explains how personal interest activates focus; using the analogy of a green apple to highlight selective attention based on personal relevance.

Emphasizes that when reflecting on past experiences (like trading), one engages their reticular activating system, enhancing awareness and learning.

Positive Reinforcement in Self-Evaluation

Highlights the importance of self-congratulation during reflection periods, encouraging traders to recognize their successes rather than focusing solely on failures.

Suggests framing mistakes as opportunities for growth instead of reasons for self-doubt, promoting a healthier mindset towards learning.

The Role of Self-Talk in Confidence Building

Discusses how negative self-talk can undermine confidence and reinforce feelings of inadequacy; emphasizes the need for positive affirmations.

Stresses that being one's own harshest critic can lead to self-sabotage; encourages maintaining a strong internal dialogue.

Creating a Supportive Learning Environment

Advocates for using journals as tools for positive reinforcement through self-talk, helping manage emotions and stress related to trading.

Reflection and Journaling in Trading

The Importance of Journaling

Engaging with your trading journal on weekends is crucial for reinforcing positive memories and experiences related to trading, akin to reminiscing about joyful childhood moments.

Positive reflections help create a warm emotional connection to past successful trades, contrasting with negative experiences that can lead to aversion or avoidance.

Filtering Negative Experiences

It's essential to filter out toxic memories from your journaling process; focus on nurturing a positive mindset towards future trading opportunities.

By reviewing past charts with hindsight, traders can affirm their successful predictions and reinforce their confidence in their analytical skills.

Building a Positive Mindset

Regularly reflecting on positive trading experiences fortifies the mind against self-doubt and discouragement, which are common challenges in trading.

Emphasizing growth opportunities rather than failures fosters a supportive internal dialogue, encouraging traders to view setbacks as learning experiences rather than personal shortcomings.

Nurturing Your Future Self

Treating your future trading self as a developing child encourages nurturing thoughts instead of criticism; this approach promotes resilience and growth in one's trading journey.

Acknowledging the need for protection from negativity allows traders to cultivate an environment conducive to learning and improvement without fear of judgment.

Reflective Practices for Improvement

When feeling disconnected from the market, revisiting your journal can provide comfort and clarity by reminding you of past successes and strategies that worked well.

Recognizing that bad days are part of the process helps maintain perspective; it's important not to dwell on one poor performance but rather learn from it constructively.

Managing expectations during challenging times involves understanding personal limits—knowing when to step back or adjust leverage can prevent further stress or losses.

Encouragement Through Self-Talk

Using journaling as a tool for positive reinforcement allows traders to romanticize their potential success, creating excitement about future opportunities in the market.

Journaling for Self-Improvement and Trading Success

The Purpose of Journaling

Journaling serves as a way to connect with your future self, fostering pride in personal achievements and growth.

It acts as a form of self-coddling, reinforcing your worth and the value of time invested in personal development despite fears and anxieties about success.

Benefits Over Time

The benefits of journaling may not be immediately apparent; however, after two to three months, individuals often notice significant changes in their mindset.

Journals create positive memories that reinforce learning. By documenting experiences, you can recall them positively later on.

Emotional Connection to Learning

Just like acquiring a new car creates excitement and attachment, engaging with trading charts can evoke similar feelings when you recognize patterns or opportunities.

Your brain's recognition system becomes attuned to what you've learned through journaling, enhancing your ability to identify valuable trading signals.

Developing a Trading Lifestyle

Embracing the lifestyle of consistent traders involves managing emotions such as fear and greed while accepting losses as part of the journey.

Successful trading requires adopting habits that align with long-term goals rather than seeking immediate results.

Overcoming Personal Challenges

Insights gained from overcoming anxiety can be applied to trading; many have found improved routines and reduced panic attacks through this approach.

Stress is universal; how one responds determines overall well-being. Wealth does not equate to happiness if anxiety persists.

Building Self-Worth Through Action

Engaging in activities that challenge low self-esteem can lead to increased confidence and motivation for personal care.

Acknowledging small victories helps combat feelings of depression or loneliness by reinforcing a sense of accomplishment.

The Power of Positive Self-Talk

Self-talk is crucial for building resilience; recognizing daily successes fosters courage and encourages continued effort even when faced with challenges.

Understanding Psychological Barriers in Trading

Managing Expectations and Emotions

The importance of managing expectations and emotions is emphasized, highlighting how stress can be transformed into a positive mindset through self-encouragement.

A shift in perspective can lead to excitement about learning from failures rather than viewing them negatively, fostering resilience in trading.

Overcoming Challenges

The speaker addresses the common tendency for traders to give up when faced with difficulties, stressing that persistence is key to mastering trading concepts.

Successful traders often journal their experiences and do not seek immediate success; they understand that profitability takes time and effort.

The Role of Humility

The speaker discusses the importance of humility in trading, contrasting the persona he adopts online with his true character, which is more reserved and thoughtful.

He likens his online persona to a wrestling character designed to attract attention but emphasizes that this does not reflect his genuine personality.

Personal Growth Through Journaling

Journaling is presented as a crucial tool for overcoming psychological barriers such as fear and low self-esteem, providing data that supports continued effort in trading.

The speaker reflects on personal experiences with his son, illustrating how easy it is to abandon learning when faced with challenges without proper support or encouragement.

Learning from Success Stories

Criticism from unsuccessful individuals should be disregarded; instead, focus on those who have successfully applied the teachings and achieved profitability.

Evidence of successful students serves as validation for the methods taught; their achievements counter claims of fraudulence against the speaker's teachings.

Encouragement and Community Feedback

The community's positive feedback reinforces the effectiveness of the teaching methods; many students express excitement about their progress.

Engagement through likes on videos indicates interest and acceptance among viewers despite some dissenting opinions.

Understanding Trading Mindset and Execution

The Importance of Perspective in Trading

The speaker emphasizes the importance of gratitude for both sides of a trade, indicating a balanced mindset is crucial for traders.

Mentions that newer students often struggle with completing mentorship programs due to external influences, highlighting the need for commitment and focus among learners.

Discusses the finality of his mentorship groups, stating that once a student leaves, they cannot rejoin, reinforcing the value of dedication and engagement.

Teaching Methodology and Student Engagement

The speaker shares trades post-execution rather than live to encourage students to analyze and learn from them instead of passively following.

He stresses that students should adopt a mature perspective by studying shared trades rather than expecting real-time guidance during execution.

Clarifies that he uses a demo account for teaching purposes as he is not a licensed financial adviser, ensuring legal protection while providing educational content.

Real Market Conditions vs. Demo Trading

Highlights the necessity for students to understand that lessons learned in demo trading must be applicable in live market conditions; otherwise, they are ineffective.

Explains how using market replay features can mislead learners about actual trading scenarios, emphasizing authenticity in learning experiences.

Reiterates that all teachings are based on real data executions to ensure reliability and accuracy in what is being taught.

Commitment to Quality Education

The speaker expresses frustration over students who do not appreciate the effort put into teaching them valuable trading skills without charging exorbitant fees.

He asserts his capability as an educator by contrasting his detailed explanations with those who may lack precision or depth in their teachings.

Encourages self-study among students by analyzing provided examples instead of relying solely on direct instructions.

Engaging with Market Dynamics

Urges students to actively engage with market dynamics rather than just observing; this hands-on approach fosters deeper understanding and skill development.

Warned against negative comments from viewers which could lead to exclusion from future discussions; promotes constructive feedback instead.

Shares insights on monitoring specific market levels (like Monday's low), encouraging early engagement when opportunities arise.

Understanding Live Trading and Community Feedback

The Purpose of Live Streaming

The speaker emphasizes transparency in their live streaming, stating they are not trying to hide anything and aim to provide valuable content for viewers to study.

They express openness to community feedback, indicating that if the majority finds certain examples unhelpful, they will reconsider their approach.

Addressing Criticism and Learning Environment

The speaker notes that criticism often comes from a small number of individuals who may not understand the learning process involved in trading.

They share personal success stories, including doubling an account within five weeks while managing drawdowns, showcasing real-world application of their strategies.

Claims and Accountability

The speaker clarifies that they cannot guarantee financial success for others but believes strongly in the effectiveness of their teaching methods.

They assert confidence in their ability to predict market movements accurately during live sessions, challenging skeptics with evidence from student successes.

Mindset and Process

A strong mindset is highlighted as essential for learning; those unwilling to engage deeply will likely remain stagnant in their careers.

The importance of fortifying one's subconscious with positive influences is discussed as a means to encourage perseverance in trading.

Practical Application and Teaching Philosophy

The speaker insists on executing trades in real-time rather than relying solely on replays or simulations, believing this method provides authenticity.

New Day Opening Gaps and Learning Strategies

Importance of Focused Learning

Emphasizes the need for beginners to focus on new day opening gaps that are within the last five days or weeks, suggesting this as a foundational approach for effective learning.

Critiques viewers who ask questions already addressed in previous videos, labeling such behavior as laziness and indicating a lack of commitment to learning.

Engagement with Audience

Discusses the practice of hiding users from the channel who demonstrate laziness in their engagement, reinforcing a standard for active participation among students.

Expresses frustration over repetitive questions but acknowledges them as opportunities to address common misunderstandings in future content.

Teaching Methodology

Highlights the importance of real-time price action in teaching, asserting that it provides an engaging and practical way to understand market dynamics.

Stresses that while rules may not change, understanding their application through real-time examples is crucial for student comprehension.

Clarifying Concepts

Addresses misconceptions about fair value gaps and market behavior, emphasizing the importance of accurate classification and understanding of price action characteristics.

Differentiates between various trading concepts (e.g., "madus" vs. "Reaper"), warning against oversimplification by those unwilling to engage deeply with the material.

Practical Application and Analysis

Encourages backtesting strategies to deepen understanding, advocating for a thorough analysis of charts during specific timeframes.

Describes observing market behavior around volume imbalances and how subtle movements can still align with expected price actions without indicating failure.

Addressing Student Needs

Uses analogies (like children coloring outside lines) to explain acceptable deviations in market behavior while maintaining overall expectations.

Understanding Price Action and Order Blocks

Paper Trading and Consistency

The speaker emphasizes the importance of paper trading for accuracy and consistency in analysis, suggesting that critics should also engage in this practice to validate their claims.

Analyzing Market Inefficiencies

The concept of a "mohawk" is introduced, referring to specific price movements on charts that indicate inefficiencies. This term is crucial for annotating and backtesting strategies.

A mohawk represents price behavior outside expected norms, particularly when there are volume imbalances. Analysts must consider these imbalances rather than just relying on wick lows.

Volume Imbalance and Price Action

The discussion highlights the significance of volume imbalances as indicators of market behavior, emphasizing that two PD arrays can confirm price action context.

The speaker notes how order blocks form within inefficiencies, indicating potential future price movements based on previous candle behaviors.

Order Block Dynamics

An order block's characteristics are discussed; specifically, if a candle's body does not breach half of an order block, it suggests strong conviction for downward movement.

Reference is made to past teachings about propulsion blocks from 2016 content available on YouTube, illustrating the evolution of concepts over time.

Execution Strategy and Market Behavior

The speaker describes their entry strategy using an order block during live trading sessions while noting the importance of recognizing gaps left by candles.

They express confidence in entering trades despite potential upward movements due to identified inefficiencies transitioning into inversions.

Psychological Aspects of Trading

Emphasis is placed on maintaining composure during volatile market conditions; traders should log observations to build familiarity with price actions over time.

The speaker reflects on personal experiences with fear during bullish trends but stresses that understanding market dynamics leads to more confident decision-making.

Propulsion Blocks Explained

A propulsion block is defined by its inability to close above certain levels; this reinforces expectations regarding future price behavior based on historical patterns.

Understanding Fair Value Gaps and Rejection Blocks in Trading

Introduction to Fair Value Gaps

The speaker emphasizes the simplicity of understanding price movements, suggesting that initial confusion stems from a lack of logging and familiarity with trading concepts.

The concept of fair value gaps is introduced, highlighting how traders often misinterpret these gaps due to their inexperience.

Role Reversal in Fair Value Gaps

The speaker explains that when a fair value gap is identified, its role can reverse; what was expected to drop may instead rise, indicating a shift in market dynamics.

A specific shaded area is mentioned as an inefficiency that should not be traded into, emphasizing the importance of recognizing valid trading zones.

Confirmation and Market Positioning

Confirmation through price action is crucial; if the market rallies but stays below certain levels (like rejection blocks), it indicates being on the right side of the trade.

The speaker discusses using stop losses effectively by placing them above rejection blocks, which are defined as significant closing prices within swings.

Practical Application of Rejection Blocks

An example illustrates how rejection blocks work: if price tags a specific level without exceeding it again, it validates the logic behind using this strategy.

The speaker stresses consistency in applying trading logic across different scenarios rather than reinventing strategies for each situation.

Teaching Methodology and Trader Mindset

There’s a critique of superficial trading education; true understanding requires depth rather than quick fixes or clickbait content.

Trading Insights and Market Dynamics

Understanding Trade Execution and Market Behavior

The speaker expresses eagerness for more trading opportunities, indicating a desire for profitable setups as they prepare to analyze market movements.

A mention of setting up partial trades highlights the unpredictability of market behavior, where sudden price movements can lead to unexpected gains.

The speaker emphasizes the importance of using their trading framework, suggesting that successful trades are characterized by quick execution and responsiveness to market conditions.

A reference to the movie "Gone in 60 Seconds" illustrates how the speaker mentally prepares for trades, likening it to a cinematic experience that energizes their trading mindset.

The dialogue in the speaker's mind before executing a trade is compared to a pivotal movie scene, showcasing how personal experiences influence their trading psychology.

Analyzing Market Rejections and Price Levels

The speaker discusses real-time market reactions, emphasizing that certain price levels act as rejection blocks which traders should monitor closely.

They highlight specific candlestick patterns and price points (e.g., 19592.75), questioning how these levels consistently align with buying and selling pressures in seemingly random markets.

The discussion touches on historical logic from past lectures (since 1996), raising questions about why certain market behaviors remain consistent despite randomness in buying/selling pressure.

Mentorship is framed as essential for understanding complex trading concepts; the speaker stresses that learning requires integrating multiple supportive elements rather than relying on isolated strategies.

A warning against oversimplified teaching methods is given; true mastery involves understanding interconnected components within technical analysis rather than just surface-level indicators.

Mastery of Technical Analysis

The audience is encouraged to grasp advanced concepts in price action analysis, suggesting that this knowledge sets them apart from typical traders.

Despite interest from prestigious firms like Goldman Sachs for consulting roles, the speaker remains committed to sharing knowledge freely through their platform without compromising their teaching style.

Understanding Market Dynamics and Trading Strategies

Confidence in Trading Decisions

The speaker expresses confidence in their trading strategy, emphasizing that they do not need to worry about market fluctuations affecting their stock.

They highlight the importance of recognizing premium levels within price dynamics, asserting that certain areas should not be revisited once breached.

Execution Techniques

The speaker describes a specific execution technique using a "propulsion block," detailing how they place trades as prices hit these key levels.

They illustrate the process of monitoring price movements and adjusting orders accordingly, aiming for optimal entry points.

Trade Management

A focus on managing contracts is discussed, with an example of taking partial profits from a larger position to secure gains while minimizing risk.

The speaker emphasizes teaching effective trading strategies to others, particularly highlighting the importance of capturing easy opportunities without overcomplicating decisions.

Order Placement Insights

Detailed instructions are provided on placing limit orders effectively, including considerations for slippage during fast market conditions.

The speaker clarifies that their demonstrations are based on live data rather than market replay, reinforcing the authenticity of their trading approach.

Addressing Criticism and Building Confidence

The speaker addresses potential criticism from viewers regarding their methods and stresses the importance of learning independently rather than relying solely on live account demonstrations.

Understanding Trading Psychology and Market Dynamics

The Importance of Personal Verification in Trading

Emphasizes the necessity for traders to independently verify information rather than relying solely on the speaker's insights. This approach fosters a deeper understanding of market behavior.

Highlights the significance of live price action observation, where real-time analysis can reinforce learning and comprehension of trading patterns.

Distinction Between Live Trading and Financial Advising

Clarifies that the speaker does not engage in financial advising; instead, they focus on demonstrating demo trades to educate others without enticing them into risky investments.

Expresses confidence in outperforming other live streamers by showcasing effective trading strategies, aiming to inspire viewers to realize their potential.

Acknowledging Challenges in Learning to Trade

The speaker expresses a desire for fellow traders, including those who may be less skilled, to improve their trading abilities for the benefit of their audience.

Critiques common misconceptions about market dynamics, asserting that many individuals lack understanding and rely on outdated or incorrect data interpretations.

Personal Growth Through Trading Experience

Reflects on personal growth from early trading experiences, acknowledging past ignorance despite initial success as a young trader.

Discusses the importance of developing short-selling skills after recognizing weaknesses during market downturns.

Market Characteristics: Bull vs. Bear Trends

Describes bear markets as rapid and dramatic due to inherent market characteristics designed to attract new investors at lower prices.

Contrasts bull markets with longer durations, emphasizing how they encourage buy-and-hold strategies among investors.

The Value of Community Learning

Expresses a wish for having access to supportive resources while learning about trading, highlighting the value of community engagement in education.

Encourages viewers to embrace learning opportunities without fear of judgment or trolling when seeking knowledge from experienced traders.

Technical Analysis Tools Discussion

Mentions an ongoing discussion about technical analysis tools like TradingView and their utility in identifying market highs and lows effectively.

Trading Insights: The Importance of Manual Analysis

Preference for Traditional Methods

The speaker expresses a preference for manual chart analysis over automated indicators, emphasizing the value of personally identifying key levels like the low of the day.

Criticism is directed at reliance on technology, which the speaker views as lazy; they prefer using physical journals to document trading insights rather than electronic formats.

Trust Issues with Technology

Personal experiences with lost data on Apple devices contribute to a distrust in technology for storing important information.

The speaker values having physical records of their journaling, indicating that tangible materials hold more significance than digital alternatives.

Market Analysis Techniques

Discussion about an indicator from Lux Algo highlights skepticism regarding its accuracy and effectiveness in providing reliable market signals.

Emphasis is placed on tracking daily highs and lows, as well as liquidity levels from previous days to inform trading decisions across various markets (excluding crypto).

Key Trading Metrics

The importance of noting the highest high and lowest low from the last three trading days is stressed; this data serves as critical reference points for market behavior.

Clarification that Sunday’s market data is less relevant except for identifying opening gaps at the start of a new week.

Understanding Liquidity and Setups

The speaker explains how understanding weekly opening gaps can provide valuable insights into future market movements, aiding traders in recognizing potential setups.

Understanding Price Action and Order Flow

Introduction to Trading Concepts

The speaker reflects on their early experiences in trading, emphasizing the importance of community engagement during discussions on trading threads.

They introduce the concept of price action, noting that observing price movements can indicate potential future trends.

Analyzing Market Behavior

The speaker discusses how traders should assess their feelings and logic when observing price drops, particularly focusing on previous day's lows where significant orders may exist.

They explain the significance of candlestick patterns, specifically identifying an "order block" as a key indicator for predicting market movement.

Order Flow Dynamics

The speaker critiques reliance on level two data for trading decisions, arguing that true order flow analysis does not require such tools.

They describe how to identify whether a candlestick has reached a critical threshold within an order block, which is essential for understanding market dynamics.

Volume Imbalances and Market Movements

The discussion shifts to volume imbalances created by indecisive candles, suggesting these are indicators of future market behavior.

The speaker introduces the term "Patchwork," referring to how algorithms fill inefficiencies in the market.

Identifying Bearish Signals

A reclaimed bearish order block is defined as a crucial area where traders should expect immediate responses from the market.

The speaker emphasizes recognizing heavy market conditions that suggest an impending drop in prices.

Practical Trading Insights

They encourage traders to pause before entering trades to reflect on their strategies and insights gained from this lesson.

Key teachings include stock placement management and reading order flow effectively without fear or hesitation.

Trading Insights and Strategies

Understanding Entry Points in Trading

The speaker emphasizes that certain advanced strategies were not intended for paid mentorship students, suggesting they should focus on simpler entry models like the lowest point of a candlestick.

Acknowledgment is given to Caleb for providing valuable insights, indicating that the speaker's trading decisions are based on previous market behavior rather than speculative movements.

The speaker expresses confidence that the price will not reach the upper half of a specified range, highlighting their belief in market heaviness based on prior indicators.

Market Behavior and Previous Day's Low

The discussion revolves around the significance of the previous day's low as a critical reference point, likening it to a "honey pot" where traders often gravitate.

It’s noted that when opening in the lower half of the previous day's range, traders should anticipate a return to this low as part of standard market behavior.

The speaker criticizes reliance on complex indicators from other traders, advocating instead for focusing on straightforward price action analysis.

Execution Strategy and Market Dynamics

As prices move within specific ranges, the speaker aims to enter trades at strategic points before anticipated upward movements occur.

Observations are made about how candles behave after opening; specifically, there’s an expectation for prices to retrace into earlier candle ranges before making significant moves.

A successful trade execution is highlighted where entry was made just one tick above a significant level (previous day's low), showcasing precision in trading strategy.

Engaging with Other Traders

The speaker reflects on interactions with fellow traders like Patrick Wheeling and discusses differing trading philosophies regarding bull flags and trend line breakouts.

There’s an acknowledgment of playful banter among traders which adds enjoyment to trading discussions without taking criticisms personally.

Emphasis is placed on maintaining camaraderie within trading communities while also demonstrating expertise through precise trade executions.

Anticipating Market Movements

Understanding Market Dynamics and Liquidity Pools

The Role of Stop Losses in Trading

Traders often hesitate to execute stop losses, fearing they might miss out on potential gains. This hesitation can lead to rapid price movements as traders scramble to adjust their positions.

The expectation of speed in market movements is crucial; liquidity pools are targeted quickly by algorithms, which aim to capitalize on these orders without allowing traders to withdraw them.

Price Action and Algorithmic Behavior

Price action does not solely depend on the number of buyers or sellers; rather, it reflects algorithmic behavior that drives prices down rapidly when approaching significant lows.

Observing minute-by-minute price changes reveals erratic movements rather than smooth transitions, indicating a need for algorithms to reach lower price levels swiftly.

Misconceptions About Market Pressure

Common misconceptions about buying and selling pressure influencing price movement are challenged; instead, it's the algorithm's mechanics that dictate rapid price drops.

A single contract can trigger significant price changes, emphasizing the importance of understanding how minimal actions can impact overall market dynamics.

Analyzing Vulnerabilities in Market Positions

Identifying vulnerable positions within the market allows traders to understand who is profiting and how they can disrupt those profits for strategic advantage.

Recognizing patterns such as running below previous lows while targeting higher highs provides insight into potential trading opportunities.

Developing Precision in Trading Strategies

Successful trading involves recognizing "low-hanging fruit" setups that occur infrequently but offer high reward potential.

As traders improve their skills, they can apply learned strategies from larger trades to smaller ones with greater precision, enhancing their effectiveness in various market conditions.

Embracing Live Trading Experiences

Engaging with live trading experiences fosters a deeper understanding of market behaviors. Observing others' strategies can provide valuable insights into different trading philosophies.

Discussion on Personal Expression and Content Creation

The Right to Express Opinions

The speaker emphasizes confidence in their content, asserting that they do not need to criticize others' trading methods as they believe their own approach is superior.

They express frustration with guests who attempt to dictate how they should communicate, reinforcing the idea that one should be free to express themselves in their own space.

Engagement with Audience

The speaker encourages viewers who appreciate the content to give feedback through thumbs up, indicating a desire for engagement despite acknowledging technical limitations of visibility.

Upcoming Schedule and Plans

A schedule update is provided, noting a potential Wednesday afternoon session due to prior commitments on Thursday.

The speaker mentions needing to conclude early on Thursday for family time, highlighting the importance of personal relationships alongside professional obligations.

Future Streaming Intentions