Transcript for:
Butterfly Effect L39: Trigger Points Q&A 1

my problem is i did exactly the wrong thing i entered on train break so but it makes sense right yes it does you never never buy trend breaks that's something that people get very confused that's something people have very very backwards trend breaks are great they feel moves but they aren't entries they're trigger points trigger points are not entries entries are hold levels and hold levels continue to hold until a trigger point is met on either side so if you simply enter a hold level like even look if you simply enter a whole level right can you share again please i think i click the wrong button here see you you'll see a one hour you'll see a one hour up trend that i uh start breaking and i exited that but it was crazy yeah so you simply have a whole level right it creates your trend you've entered the whole level the whole level does hold that creates your trend because that's going to be the swing low right like that's the thing about a hold level a whole level if it holds will always be a trend creation okay so when you have this whole level here if this holds the move if this is an untested whole level it'll always create a trend okay so so that's like the one of the important pieces to understand here you hit a whole level that's untested it creates your trigger point so a whole level creates the actual trigger for the move that gives you your next whole level your polarization blah blah blah all that stuff we talk about fine your your whole level creates that trigger point you're in the trade you can never be unprofitable because until this breaks you'll never be losing money so you either simply hit a target up top now that's that comes back to defining profit caps properly so you either hit a whole level up top okay or you trigger out of the trade below but to buy this trend break is silly because you should have already been in the trade from here right like do you see do you see where your your red text is around 6 a.m where it begins so gilbert's muted he can't tell you yeah around 6 a.m you see you see that where the whole level is touched around six am on yours yeah you see the way there's it does it there's an uptrend that starts off that and i i entered on the break of that little uptrend one second here let me fix delbert here i'm going to do it like this one second i'm going to mute everybody and allow everybody to mute themselves so if anybody wants to talk they may just unmute themselves because i think there you go so so pat here what you've done is you have some kind of uptrend that you entered i'm going to delete my axis here and that becomes a local trigger point right like if you're in that moment let's see the replayer tool you're yeah it's not like that like one day yeah that was it you're in this moment and you're saying oh my whole level is hit i'm going to exit based on this but this is a scalp trigger like this is this is a scalp trade and you'd probably want to find a higher time frame although there was a warning it was it was on the one hour that i uh that i entered yeah but but then simply your your target would have been this right here anyways so your target is hit or if you're going for a longer trade you're using your trigger point here right like you're using your trend because this whole level gets hit it creates your trend which gives you kind of your polarity in the move right like it says okay hold bubble here this then moves to here don't exit the trade until my trend is hard closed or broken we're just going to say broken don't enter it until it's broken right so you have polarity here which is now going to be moved to here right and then once that breaks it's just going to go to the higher target right so so you're just polarizing pieces of the move to the move so so you're you're like your trigger point there your trigger point there was a scalp right like just just like i said like it should look very low the most low as local as it gets it's just a scalp trade you either hit a target on one side or you exit on your trigger on the other side if you do this you can never lose money because you hit a whole level a whole level holds and you're in that trade in profits until one of two scenarios happen like theoretically if you're buying hold levels okay if that hold level holds you should always exit with profits no matter what you should always be exiting with profits because from that moment on you've got a trend that's created right so like here i suppose what concerns me is that i shorted the break of that small uptrend rather than lemon and it's it's how i'm how i got it completely backwards is it bothers me right there that's it right here in this moment right so that's this guy right here right so so that's the low of the move on the higher time frame your hold level is right here your hold level is hit your trend is created you are polarized if you lose this which moves to here which is now here so so you're going back to the beginning of this trade if you if you have and we're going to delete this guy here that's fine if this whole level holds right like this you create trend which means you always will exit in profits you've created trend once that trend closes you take your profits now profits could be two percent 20 40 60 80 100 as time goes on and this trigger point doesn't release you're making more and more and more that is more of a position or a swing trade you and like i said you have targets on the other side so you have to give yourself your profit cap of where this thing can possibly go right so you know first it's here right so you know depending on what you want out of this trade like this is personal decision always going to be better to take more trades because you could simply go right there your first trade is executed re-buy right here so what we're going to do is we're just going to take this and move this to here and move this one to here so now you have another trade that you could execute right and you could continuously execute these scalps until this trend breaks so then you just oh okay we got perfect entry there we're going to go to our next point which is up there and it just reached that there right so so then you're you're either trend or level and then so you've got a new trade that happened and you can consistently you can either take your profits on your on your target right you might even want to hold up to this or you could simply just exit this trade if if you lose polarity it would be the first spot to exit this trade or you lose your trigger point that would be your second but you can if you hit a hold level and a hold of a hold you should 100 there should be no reason you ever don't make profits on that move so so it just becomes a very fine process of pick the right hold level that holds understand the architecture going forward right so part of the architecture of learning chart architecture is is using a lot of these different kind of combined theories together that we'll be doing over the next little while right like today was kind of the first time we've ever done like um procedural mixed with technical right it's it's a technical the whole level there's a technical trend and then there's a procedural way that this works so this this is very simple you can never you never lose money on the straight if a whole level holds and if we know to always buy untested hole levels then we can kind of in a way never lose money on any trade buy untested hold levels starting with the largest ones and working down to your comfort levels right so if you have to use only four hour hold levels because that's all you're comfortable with then you only make money on the four-hour whole levels means you never lose money in any trade if you get more comfortable with it you can work your way down and get more accurate with one-hour hold levels and understanding which one-hour hold levels will be respected and touched and then you've just entered more trades right you've started to expose yourself to more trades based on your ability to technically understand the finer time frames which is the one hour and then and then fourth and fourth and fourth and fourth you know all the way down to five minute or three minute levels or you know one minute levels if you're really good one and three minute levels and you can enter even 10 and 20 times the amount of trades on on these smaller hole levels but you know the finer and hold levels you get the finer in time frames or the smaller the time frame the harder it becomes because if you work with a one minute you have to consider the 3 5 15 1 4 6 12 everything on your bar if you work with one in it you have to consider it all if you work with a three minute what you don't have to consider is the one minute so every time you move up in a time frame you have less work to do because you're not considering the lower time frames right so if you're working on an hourly chart you simply say where's an hourly hold level well there's one right there look perfect but it means you can't work with anything lower if you're not at that level yet so so the higher the level you get the more experience you get the lower the time frame it's kind of like a good gauge of how good or bad of a trader you are is that the lower the time frame you can accurately go makes you a better trader maybe you're not good enough to do the one hour maybe you have to stick to the four hour oh where's the four hour levels well this one isn't really working so you'd be down here you wouldn't have been in any trades yet because you'd be you know waiting for your trade but maybe you're good enough to do one hour trades you know one hour whole level so you know then you'd be here and that one got hit so there's a trade there there's two there this one possibly looks like it broke okay back side right there sorry there's three there back side front side but you know with the understanding and realization that you know once a range is tested it's tested range so you know if this is going to test twice i'm not sure maybe it does on a lower time frame so that would have been the back side and the front side of the range would have been right here so the front side of the back is so the range did test twice it backs up front side or maybe tested twice right here so it did test twice right here so this is the second test which brings you to your untested whole level which would have been right here right but you wouldn't have seen that if you're only on the hourly charts because you're not at that level because the smaller the time frame you use you have to be a better trader and and the smaller the time frame means you have to consider all the above pieces so if you can only do four hour hold levels you only have a handful of things to worry about which become very easy because like a 4 to a 12 for example is is like a big jump in time frames like though you're not gonna have a lot of trades happening very often if you're using four and 12 hour candles right like [Music] whatever this is here is is the same as this here so we can just move it to there even you know whatever this is how often is this going to get hit once once every three or four days maybe on on either which side once every three to four days how often does an hourly gonna get hit a couple times a day how often is a 15 minute gonna get hit a couple times every four hours maybe one or two times on either which side and so forth and so forth so you see what i mean about measurement of how good of a trader you are is how how further down in time frames you can work and accurately pick the right levels but if you were to simply understand that like hey here's a 15 minute hold right here yeah i can enter that great perfect i can create my trigger point and to the 15-minute hold if it holds create a trigger point i'm always in profits there's never a scenario that should exist if this whole level holds that you don't have profits and that doesn't open the door for you to start trading multiple pieces on multiple time frames right because then again going back to the beginning of the lesson this is that splitting of okay we have triggers and targets so enter here for example once again you enter here exit right there enter back right here right that's the whole level simple enter there exit here here this trend or this trend but they all have a different meaning if this trend breaks know that this isn't going to be a valid target if this trend breaks you're moving up in range but this doesn't mean you should enter the trade you should already be in this trade from from down down back here because look if i was in this trade and let's just delete all these and then go back to here where where trade executes if this whole level holds we should always make profits right and it did and we know we no longer have a whole level here we have this up here and we have that up there so so then you should only exit if you either hit this target which is another 100 only ever hit that target 100 break and hard close this trend because it's collapsing down to this part of the range which means you're going to get liquidated so that's key once this trend goes you're liquidated to here right i actually don't know if you'd get liquidated but i sure as hell weren't saying i wouldn't give up profits to see what happens on about you know risk losing 60 because i'm just stubborn like this it just doesn't make sense this whole level holds you should make money no matter what right that just like if this whole level right here holds make money no matter what because either target gets hit or your trend is triggered and you're still in the trigger point so now you just simply have a decision do i want to take my target exit right here do i want to see if this whole level spikes up do i want to see if this trigger gets released and so so we kind of move forward into this and you're right here in this moment actually your target gets it pretty good so so you could be in this trade and you could say even like this okay where is my trigger point that is even more interior right here i'd really like to see distribution distribution to be honest with you distribution distribution so something like this would kind of be like my max tolerance i've kind of frayed this out so you know what if i lose this i would just get out because i'm most likely coming back down to here like you're you're gapping between two different pieces right like you're you're just gapping between two different pieces but you're you enter the whole level you have your targets either your target gets hit or you willingly stay into in this and and you say okay my target was hit now you should hit your target and look for re-entry because there's going to be a whole level that gets hit there however you can you can hit targets and you can just stay in this perpetually until this breaks but even if you stain it perpetually until this breaks you're still in profits you're just forfeiting some of the profits but that's fine there's a line you you either get max profits before collapse or you split the difference and say i'm in this trade until this breaks you know half of the time this breaks and i just take my exit with lower profits the other the other half this breaks and i take higher profits right but again the point being is that trend you have trade you have triggers and targets they're both trigger points again a trigger is just something that exits a trade you know where where your trigger where's your trigger point you have targets and you have trends and and if again if a whole level holds you should always be in profits there should be no exception to that right you can you can see this is compressing it right now so you could you again you could simply stay in this and if you're staying in this trade because this trend is a trigger what you are saying is this trend is my trigger point to get out and i am trying to break this trend up right and you would you justify this trend break based on some other big moment there's no polarity left all the whole levels have been hit we're breaking polarization which means you know maybe this is the final moment of polarization so that when you get on top of this you're soaring up here right like there's a bigger justification to that you don't need to see like even right now you're just you're just giving up profits your target was hit you should be out of this trade or again it's not wrong to stay in it but realize that you're you're giving up profits to see if this trend can break right so it gives it gives clarity to the move so then you could just you know trail this back and say well where's my polarity look this has already been tested here whatever this has been tested this hasn't so this needs to hold so so if i lose this then that would be like another kind of trigger point where it's like okay oh i should exit the trade because there's nothing left below that's untested so we're probably collapsing down to this down here right so it gives a lot of clarity on the trade it gives a great amount of clarity but by not taking targets we we forfeit profits it's fine sometimes it pays off realize that you you're saying i don't want this to be a scale trade i'm in this first swing trade so if you're not if you're not going to take this great if you're not going to take this as profits you might as well stay in this trade until this breaks until this trend breaks now you might forfeit all your profits you might end up with only 25 profits you might end up with 30 look like right here what was this this was a full percent i believe yeah you've got you know 100 or 110 percent here let's call it 100 you got 100 here or if your trend breaks you've got 20 you gave up 80 percent of your profits but if you're not going to take this exit that's the trade you're in you you might as well either take this exit if that's what you're doing or you stay in it longer you stay in it longer because of the strength of the trigger point and the strength of the trigger point is dictated on the bigger time frames