Position Trading Strategy and Management

Okay folks, welcome back. This is price action model number four, position trading trade plan, and it's targeting 500 plus pips per trade. Okay, so the ICT price action model number four, position trade plan, again targeting 500 pips per trade. As always, we start with our initial slide here that gives us an overview of the process. And you've seen this now three previous times and it will look like this every single time we do a trade plan. But it always starts with preparation and then the next stage is opportunity discovery, trade planning, trade execution, and finally trade management. Okay, for trade preparation, again, we are always referring to the economic calendar. for the coming week. We're going to be noting all medium and high impact events for the markets that you will be following. We're going to study the events on the week to come and consider how the current market structure and the calendar events may suggest a specific weekly profile for that week's range. Now since we're looking at position trading, we're focusing primarily on that monthly chart and looking for seasonal tendencies as we'll talk about later on in this trade plan but work. looking at how the independent daily economic drivers and volatility injections that the economic calendar will provide us that may be the smoke screen, if you will, to facilitate the manipulation that starts these longer-term trades. Every component you've seen so far in swing trading, short-term trading, and intraday trade plans, the smaller short-term timeframes, those trade plans can be plugged in to the higher timeframe trade plans. So it just makes it more convenient in terms of managing risk, and then we'll mention that when it comes to that time where the trade plans could be integrated for reducing risk. But for now, just know that everything starts the same way. So it's not like we're changing everything because it's a new model or a duration of trade plan. It's the same. protocols and procedures and it's refined to a specific process and what we look for for each independent model they will agree as a whole as a collective whole once you know all 12 models you'll be able to see how they can be interwoven to create a really complete overview of price action. Okay and next stage of preparation is really determining the IPTA. data range for the last 20, 40, and yes, for position trading, 60 days, trading days. We do not count Sundays and we're going to note the highest high and the lowest low in the past 20 and the 20s got a little asterisk there because again, you're going to do this for all three data ranges, the 20, 40, and up to 60 trading days. And this is going to be your current dealing range. So again, the date, whatever the day's date is. count that day and look back, 20 days, 40 days and 60 days and whatever that is, that's our IPTA data range. Again, 60 days is the furthest we'll go back and we'll be looking for setups within that range. Highest high and the lowest low will give us that dealing range and we will refer to it for our PD array matrix. Now inside this dealing range we will look for the next draw on liquidity, where is price likely to trade to next, an old high, low, fair value gap or liquidity pull. But the focus is a minimum of 500 pips. So many times you're going to find yourself reaching for that 60-day IPTA data range to get that 500 pips. We will look for a PD array in the direction of the monthly range bias, premium PD arrays. We will anticipate price to move to a PD array that would support our monthly bias on a day and economic event found on the economic calendar with the current or next trading week. This is what we wait for. This can either be a run on liquidity or rebalancing to inefficient price delivery. We identified the current seasonal tendencies for the time of your price action study. Now when we went through the core content I gave you a teaching on the commodity markets and I also introduced seasonal tendencies in month five. There's also a teaching where I did mega trades. Okay, so you want to go back through the core content and go through the mega trade portion. And I go through there and I pick out my personal choice of the best seasonal tendencies throughout the year. So what you need to be doing is, if you're using a model like this, that's a long term position model, if you go through all the markets and look for their strongest seasonal tendencies throughout the calendar year, And then when you start a brand new trading year in January, during Christmas break you can do this, or the first couple weeks of January when we don't generally trade because the markets have to work off that low volatility and holiday rut that it's typically seen. You want to be planning each month what market you anticipate, not that you demand it has to happen because seasonal tenders are just a road map, it's not a panacea. It's not going to always be there. It's just a general rule of principle in terms of direction or bias for a long-term expected roadmap, what generally happens more often than not. So I kind of gave you the longest-winded definition of a seasonal tendency that you probably ever heard, but I really want to press upon you the importance of just knowing that seasonal tendencies, while they're nice and they're great and they're very useful, they're not always. perfect or accurate. Okay, so there's going to be times where they're not going to pan out. That's where risk is incurred. That's why we have to have stops. That's why we don't over leverage. Otherwise, we could just go full hilt, go in there, no stops, and just expect it to pan out and everybody would be billionaires. Wouldn't that be fun? But it's not like that. So nonetheless, you want to go through those lessons I just outlined. The month five where I introduced seasonal tendencies. You want to look at the commodity section. where it goes over specific seasonal tendencies there, and then the Mega Trades. Mega Trades lesson gives you the choicest setups for seasonal tendencies. So between those three areas going into the core content, it'll help you really dig deeper into this trade plan. But we're looking for the seasonal tendencies for the month to come or the next quarter. Okay, so this... really is a quarterly shift model and trade plan. So it's really designed to trade for moves that are around two months or longer and that's really focusing on the quarterly shifts that we talked about during the core content. So focusing on the highest probability seasonals that suggest a strong chance of bullishness or bearishness at that current time that could offer 500 pips or more. Okay, so you're looking for a setup within a range that will allow or suggest that it could deliver as many as 500 pips or more. And that means that you're going to be looking at monthly and weekly charts to help frame out that 60-day IPTA data range. But you're going to be limiting your focus to the highest probability seasonal tendencies. You're going to identify the discounted raise under the IPTA data range of 20, 40, and 60. when the bias is bearish. And you're going to identify the premium arrays inside the 20, 40, and 60 day if the data range when the COT hedge program is bearish. Expect a monthly range expansion down. You're going to identify the premium arrays above the 20, 40, and 60 day if the data range when the bias is bullish. identifying the discounted raise inside of the 20, 40, and 60 day IPTA data range when the COT hedge program is bullish. Expect a monthly range expansion up. When the market is primed, we want to look for convergence of both manipulation and price opposite to our trade bias at a time when the economic calendar suggests a volatility injection will likely unfold. We will short premium fair value gaps and buy discount fair value gap setups. When we are bearish, we will frame a short entry when price has moved up into a 4-hour premium fair value gap PDRA that converges with a standard deviation of no more than plus 3 standard deviation during London or New York Open. We can implement scalping protocols on this stage as well for further reduction in risk. What do I mean by that? You can go into the scalping trade plans and that model. and plug it in right here to help refine the risk down to the smallest possible one minute chart. When we're bullish, we will frame a long entry when price has moved down into a four hour discount fair value gap PDRY that converges with a standard deviation of no more than negative three standard deviation during London Open or New York Open. We can implement again, as I mentioned in the previous slide, the scalping protocols at this stage for further reduction in risk. When we are bearish, we will target the sell-side liquidity below any old daily or weekly low or discount fair value gap inside of the 20, 40, or 60-day IPTA data range. The next logical discount array at 500 pips will be the initial objective. There will likely be multiple old daily or weekly lows inside of the IPTA data range, but we use the one that frames the potential of at least 500 pips. When we are bullish, we will target the bullish liquidity above any old daily or weekly high or premium fair value gap inside of the 20-, 40-, or 60-day IPTA data range. The next logical premium array at 500 pips will be the initial objective. There will likely be multiple old daily or weekly highs inside of the data range, but we use the one that frames the potential of at least 500 pips. When we are bullish, we will note the European open price on Tuesday. Now, the Tuesday day here, this could be a Monday or it could be a Wednesday. We're focusing on that. weekly profile for bullish we're expecting the low to form between Monday and Wednesday's New York open so anywhere in there that's our typical window opportunity where the low can form but I'm sticking with this because Tuesday generally as I teach even from the free content there's a 70% chance that Tuesday creates a low of the week when the market is bullish so we're expecting a weekly profile to be bullish. and the higher prices to be delivered, generally the highest odds will be on Tuesday. It doesn't mean that it can't form on Monday, and you should be looking for it as well on Monday. But nonetheless, if you lose or get stopped out on Monday, you go right back in on Tuesday. And the same thing would be said if you lost or got stopped out on Tuesday and the trade still looks good based on all the things that we would outline in this model, then Wednesday could be used as well. Okay, but... We're using just as a general rule, but just replace Tuesday with Monday and or Wednesday. The European opening price on Tuesday and filter all longs at or below this price level, which overlap, and here's the key, which overlap in the four-hour discount fair value gap. So if the opening price, the European price, is filtering your entry and it overlaps with your four-hour discount fair value gap, you really have a beautiful setup right there. We will anticipate a 15-minute chart institutional order flow entry drill trade entry to form inside of a retracement lower during London Open and or New York Open kill zones or a sell stop rate. Either one could be used. When we are bearish, we will note the European opening price on Monday, Tuesday, or Wednesday. and filter all shorts at or above this price level, which again overlap in the 4-hour premium fair value gap. We will anticipate a 15-minute chart institutional order flow entry drill trade entry to form inside of a retracement higher during London Open and or New York Open kill zones for our standard buy stop rate. When we are entering a short, we will place a sell limit order on all positions we will execute with our demo account. We will use the standard deviations and PDA rate convergence minus 5 pips as our entry price. when using the sell limit order. If multiple orders are used, all use the same entry price in the sell limit orders. When we are entering a short, we will place a limit order to take 100 pips as our objective on one position. We will place a second limit order to take 250 pips as our second objective. We will use multiple orders to manage the trade idea. If you capture a 500 pip objective, make sure you close 80% of the trade. That means nothing from the total amount of trade position size that you have on all the orders that you have. 80% must be closed across all orders or total position when you get 500 pips. Then see if you have any more room to run in price. When we are entering a short, we will note the premium array and standard deviation convergence we aim to enter at. We will place our stop loss above this high plus 25 pips. We will re-enter if the trade stops out. We can monitor it for a secondary entry. Position trades may require multiple attempts to secure a solid entry. Do not fear this. When we are entering a long, we will place a buy limit order on all positions we will execute with our demo account. We will use the standard deviation and PD array convergence plus 5 pips as our entry price. when using the buy limit order. If multiple orders are used, all use the same entry price in the buy limit order. When we are entering a long, we will place a limit order to take 100 pips as our objective on one position. We will place a second limit order to take 250 pips as our second objective. We will use multiple orders to manage the trade idea. If you capture a 500 pip objective, close 80% of the trade and see if it has more room to run. Now, what's not being said here is obviously I'm mapping out using multiple orders, whether being long or short. And one of the orders you want to take out 100 pips. Make it simply just 100 pips that you get out. Regardless of how fast it's moving, put your limit order exit at 100 pips profit. Your second order, you're going to do the same thing but have it set to take 250 pips out. Your third, or if you have multiple orders beyond three, okay. If you have just three, then you have to consider that third one, taking 500 pips, take profit there, but make sure that whatever you turn as a scaling or whatever you're taking as a partial, okay, at that last order for 500 pips, make sure that 80% of that existing remaining balance of long or short, 80% of it's off. So that way you only have 20% of that last portion on in terms of risk. So you've captured 500 pips. You've got the lines portion of the move behind you. You've also taken 250 pips on one other order and 100 pips after another order. So you've really fed yourself a great deal of profit and pips. And you don't want to leave a lot to risk in terms of seeing it reverse on you. But you do want to see if you can have it run a little bit further. So if you had four orders, you could take one at 100 pips off, a second one off at 250 pips profit, a third one could come off at 500 pips and just let the other one run, but lock in, say, 400 pips and let it float for 100 pips in terms of potential risk of open profit. When we are entering a long, we will note the discount array and standard deviation convergence we aim to enter at. We will place our stop loss below this low, minus 25 pips. We will re-enter if the trade stops out. We can monitor it for secondary entry. Swing trades may require multiple attempts to secure a solid entry. Do not fear this. When we are in profit, 25% of our expected objective stop loss can be reduced by 25%. When we are in profit, 50% of our expected objective stop loss can be reduced by 50%. When the position is at 75% of the expected profit objective, stop must be at break-even. Again, we do not choke the trade. We don't strangle it, and that's the reason why we take partials. We pay ourselves as the market makes it available, and we put our stop loss in there to manage the worst-case scenario so we don't take a great deal of loss in theory. But again, the markets can gap beyond your stop loss. and at that point really nothing can really save you okay and obviously these slides are always included in the trade plans so i'm just going to go through them rather quickly and you can pause them. Using a 20 pip stop loss, now obviously you have to change the math here because we're using a 25 pip stop loss and everything that's been shown here for executing the math to get to your per pip per setup using a 25 pip stop loss and using 1.5%. I personally think 1.5% is a little too high, especially if you're long-term position trading, because you're trying to capture big moves, and you don't want to be wrong multiple times at 1.5%. So you want to start with, in my opinion, 1%. Okay, and the next slide here, if we're using a standard lot, you can see the math as well. And if your demo account takes a loss, this is again very, very important, on any trade at the full R%, you assumed, drop the R% by 50%, and when the loss is recovered by 50%, you are permitted to return to the maximum R% for trade. If the reduced R% trade assumes a loss, reduce the R% by 50% until the previous trade loss is recovered by 50%. If you take a series of five winning trades in a row, drop your R% by 50%. You're likely to assume a loss eventually and this will build in equity leveling and reduce the likelihood of a large drawdown. You want a smooth equity curve that slopes or stair steps higher, not a jagged roller coaster with deep declines. Alright, you're going to collect multiple sample sets with this trade plan. If you're unclear about some of the process, rewatch the lessons. on this price action model and the ones I suggested inside of the teaching here. Dig into your charts and study what was provided here. This is going to be the algorithmic theory for price action model number four. And for this discussion, we'll be using the Eurodollar. This is a chart from barchart.com, the interactive chart. I've uploaded the chart showing the commitment of traders report, shown just commercials. And I did the hedging program based on this model. It looks back six months and you can see markets been going lower. And we want to key off of the trend of this data and we have been what? Bearish foreign currency, bullish dollar. Now I'm going to counsel you to go back into model number four and think about where I was discussing, I think it was British pound versus US dollar for. the teaching but go into month number five in the seasonal tendencies portion and you can go into the pdf file actually just scroll through and get to the seasonal tendency for euro dollar and you will see that you have been holding in your hot little hands all this time all this time you've been holding it ict's been holding out here doing these algorithmic theory videos he's uh You're kicking the can down the road. No, actually what I'm doing is I'm waiting for everybody to get done and now you're all charter members. So look at what I have given you already. I discussed how the seasonal tendencies are very strong. They repeat generally year in and year out. There are some subtle deviations from it, but by far and large, you'll see that they're pretty much. roadmaps. Turn to the Eurodollar and if I will counsel you to pause this video, go get that study PDF from month 5. Scrub through that PDF file until you get to Eurodollar seasonal tendency. And you'll see that in April it tends to make a high and trade down into May. For those that have paused the video, you're now hearing me say, see, I told you so. And for those that didn't go look, you didn't do yourself any service there because it's exactly what I've been teaching you all this time. And here we have all the patterns and things that are underlyingly driven with price moving higher or lower. Obviously, with the season tendency with dollar index moving higher as we've been expecting. The CETL 10-C for Eurodollar in April should be expected to come to pass where it goes where? lower okay and here's that monthly chart for euro dollar this is the month prior to this is march 2022 and we're looking for this old low down here if you go back and listen to the commentaries thus far in 2022 we're in may of 2022 now but if you listen to what i was outlining and suggesting that we were going to see in euro dollar we were looking for lower prices And gravitating towards what? Eventually that low. Okay. Now, what we're trying to do with this model, similar to what we've done in the price action model number three, is we're anticipating the monthly range to expand one direction or the other. Okay, so what direction are we expecting the next candle on the monthly chart to expand higher or lower? Lower. It doesn't need to touch this level here yet, but we're just looking for an opportunity to see if it will give us that. As you can see, here we have the month of April delivering exactly as you would expect with the tools I've given you and runs to sell some liquidity. So let's take a deeper dive. Here is the daily chart. Okay. Now, again, what I'm doing is what I've counseled you all to do with the core content and the lessons. Take it, make it yours, simplify it. Don't try to do every possible thing in the world. and apply every single tool or concept or idea to your model. You want to have something very simple, okay? Model number four, again, I've already taught it. You can go back through all the fine details, and you can streamline it to something as simple as this, okay? I'm using the approach I used with the YouTube model, which is our model number 13. You're looking for model number 13 on the forum now. It's not there yet. We've got to get through these algorithmic theories. principles and then I'll revisit this YouTube model with the perspective that you would expect in mentorship. All right, so we have the old high here and I mentioned how we have three dries higher, okay, or three Indians pattern as it's taught in the Street Smarts book by Linda Rashka and Larry Connors. It's just basically a stop run here and then one more stop run and then gives up the goes and goes lower. Go back and listen to the commentaries. We're looking for lower prices. It is what it is. So what we're looking for in this model is we want to see an old high violated if we're bearish, which we were. We were bearish euro, bullish dollar. So as soon as that candle goes through old high, your eye goes to the order block opening price. You put a sell stop right there. You don't need to be in front of the charts, folks. I know some of you still constantly email me, and, yes, I'm frustrated. OK, because I've already taught this stuff and it's like you want me to take you right to a specific video in a minute marker. I have too many videos. Obviously, you've seen that. I have too many minutes in all those videos to be able to remember exactly where I said what. I don't have a script. OK, I'm going through notes that keeps me on point, but I don't have a transcript where I said what at what time in a marker, what video, what year. I don't know. OK, but I do know you have this information. OK. So when we have the market rally through an old high, you want to be able to trade this short because you're what? A position trader. You can't be in front of charts. ICT, I'm not able to be awake or I can't be away from my job. I just can't do it. Okay, but I want to participate. How can I do it without day trading, without getting into these intraday charts? Okay, and still get handsome reward to risk. Okay, well, you can do that. But just know that you're not going to get a lot of these trades a year. But you can do very well over a long career, or at least until you get to the point where you can day trade or do short-term trading and use the intraday charts. But for those individuals that can't do it, this is what I taught in the core content. This is how I taught it to you for this model. The sell stop goes right at the opening price. The next candle here. It's opening up here, rallies, and then eventually comes down and hits the opening price of the up candle that took out the previous high. That selling on a stop, you're selling weakness, and your stop goes right at that candle's high plus one. Okay? So right away, you're using weakness to get you in, and your stop loss goes right here. Don't worry about it. If it stops you out, oh, well, it's a losing trade. Just like anybody else would be taking your trade in intraday date trading or scalping. It's a loss. You're going to get them sometimes. Okay? Don't. be afraid of it. But the expectations you want to be entering here on shore It's on autopilot. Your stop's sitting there waiting to get triggered in. So when the market drops down, instead of stopping you out of a long position, which you don't have, it's stopping you into a short position that you have yet to enter. And as soon as that fills, your stop becomes active up here. So you would put a sell stop here with a protective buy stop at this candle's high. Once this breaks down, you're going to have to have an alert. to fill you. Well, not fill you, but to bring you up to speed that you were filled. And your stop has to be maintained at that high, and you wait for price to break down. And you're aiming for this low. That's that old monthly low. But this model refers to SMT divergence and also uses offset distribution for your targeting. So with that, we're ringing in correlated pair SMT, which is we're trading euro. Its sister is pound. Is pound making a higher high like it does here in Euro? No. So that's a bearish SMT divergence. So we have SMP behind us, which is what this model calls for. So back into the daily chart on Eurodollar. Our stop loss here is 1.11850 pipettes. The entry is 1.10865 pipettes. So there's your risk. Now some of you are going to say, man, that's huge. Well, you scale it to that way. If you're risking 2%, okay, your 2% would be divided up based on your equity and then how many pips that is. And that tells you how much leverage you use when you're going short for a hypothetical paper trade. Okay? So what you're doing then is you're looking for price to trade down below this low and waiting for a short-term low after it takes out that low. which is what we get right here. What is offset distribution? Offset distribution is finding that low and then waiting for the price to go down below once more. OK, so what you're doing is you're running down equity. You're getting more juice out of this lemon. It breaks that short term low because people are going to see this as a low and try to buy it and sell stops will accumulate under there. So the algorithm does this pausing or slight retracement, then attack. those sell stops that were not there prior. Okay, they cleared out the lows here, but then they engineered new sell stops below this low with this consolidation and small-riddle retracement. Then when it drops down one more time, you're gonna be targeting that short-term price low because that's your offset distribution low here. So below this level, you want to be targeting your cover. You don't know when this low forms until it starts to break below that low and you wait. and you observe. Now you can use the four hour chart for your offset distribution as well. You don't necessarily have to have the daily chart, but the daily chart is going to give you the best bang for buck. So using this entire model in theory, using it algorithmically, it's bullish dollar, bearish foreign currency, using seasonal intensity, April, look at your seasonal intensity for your dollar. It's exactly what you're seeing here, folks, right out of that page that I gave you. Those are treasure maps, folks, okay? They're treasure maps. These things are so uncanny how they can pan out, but you have to wait for them, okay? It's like Christmas time. Everybody wants to get that gift, but can you get that gift in March? No. Can you get it in October? No. You have to wait. For what? You got to wait for the season of giving. It's Christmas. So these seasonal tendencies are just like that. These are seasons when you anticipate a certain gift by the market. If you limit yourself to trading in these times of the year where the seasonal tendencies are so overwhelmingly obvious, you could do yourself such a huge service and avoid driving yourself mad because There's lots of times when it's going to look like there's something there, and seasonally, it's probably not likely to do what you think is going to happen. But we can see, obviously, we've been bullish on dollar, so that's bearish on euro. Euro starts April, creates that one more little higher high, then drops, takes out the old monthly low. You can take a partial there. You can take a partial as it's running down in here. And then as it creates that short-term low, you anticipate that run. right below that. So what's below that? 1.04 big figure. So, we could target that big figure, which would be offset distribution, likely to draw to 1.04 level anyway. And if that's the case, what you're looking at here is 7 to 1 R-multiple. So, for every $1 you risked, you made 7. And it only took about a month or so, a month and a half or thereabouts, to get it. So, If you're not taking partials and you're aiming just for your target. So using this idea, you could be taking basically 14% out of this move if you're risking 2%. So one trade, you're risking 2% and made 14%. Folks, that's like half of a fund manager's year. All you need to do is find one more just like that and you beat most of the fund managers on the planet. If you're aiming for that type of career where you want to be a fund manager and you want to have a really easy life, not do a whole lot, trade with these seasonal tendencies. OK, and look for these types of ideas to build your own model. And you'll see that these things repeat a lot. They're not exactly perfect. They're not going to be always the case. If that's the case, we would all be billionaires. But obviously, you've known about this. You've had it in your hands. It's in your possession. I tell you all the time, spring and fall. Those two seasons of the year is where you really want to work hard. Don't work so hard in January. Don't work so hard in December. And in the middle of the year, around July and August, scale back how much you try to trade. Because that's the doldrums of summer. And it's between the both. peak seasons of spring and fall where the markets are really really easy

As always, we start with our initial slide here that gives us an overview of the process. And you've seen this now three previous times and it will look like this every single time we do a trade plan. But it always starts with preparation and then the next stage is opportunity discovery, trade planning, trade execution, and finally trade management. Okay, for trade preparation, again, we are always referring to the economic calendar.

for the coming week. We're going to be noting all medium and high impact events for the markets that you will be following. We're going to study the events on the week to come and consider how the current market structure and the calendar events may suggest a specific weekly profile for that week's range. Now since we're looking at position trading, we're focusing primarily on that monthly chart and looking for seasonal tendencies as we'll talk about later on in this trade plan but work. looking at how the independent daily economic drivers and volatility injections that the economic calendar will provide us that may be the smoke screen, if you will, to facilitate the manipulation that starts these longer-term trades.

Every component you've seen so far in swing trading, short-term trading, and intraday trade plans, the smaller short-term timeframes, those trade plans can be plugged in to the higher timeframe trade plans. So it just makes it more convenient in terms of managing risk, and then we'll mention that when it comes to that time where the trade plans could be integrated for reducing risk. But for now, just know that everything starts the same way. So it's not like we're changing everything because it's a new model or a duration of trade plan.

It's the same. protocols and procedures and it's refined to a specific process and what we look for for each independent model they will agree as a whole as a collective whole once you know all 12 models you'll be able to see how they can be interwoven to create a really complete overview of price action. Okay and next stage of preparation is really determining the IPTA.

data range for the last 20, 40, and yes, for position trading, 60 days, trading days. We do not count Sundays and we're going to note the highest high and the lowest low in the past 20 and the 20s got a little asterisk there because again, you're going to do this for all three data ranges, the 20, 40, and up to 60 trading days. And this is going to be your current dealing range. So again, the date, whatever the day's date is. count that day and look back, 20 days, 40 days and 60 days and whatever that is, that's our IPTA data range. Again, 60 days is the furthest we'll go back and we'll be looking for setups within that range.

Highest high and the lowest low will give us that dealing range and we will refer to it for our PD array matrix. Now inside this dealing range we will look for the next draw on liquidity, where is price likely to trade to next, an old high, low, fair value gap or liquidity pull. But the focus is a minimum of 500 pips.

So many times you're going to find yourself reaching for that 60-day IPTA data range to get that 500 pips. We will look for a PD array in the direction of the monthly range bias, premium PD arrays. We will anticipate price to move to a PD array that would support our monthly bias on a day and economic event found on the economic calendar with the current or next trading week. This is what we wait for.

This can either be a run on liquidity or rebalancing to inefficient price delivery. We identified the current seasonal tendencies for the time of your price action study. Now when we went through the core content I gave you a teaching on the commodity markets and I also introduced seasonal tendencies in month five. There's also a teaching where I did mega trades.

Okay, so you want to go back through the core content and go through the mega trade portion. And I go through there and I pick out my personal choice of the best seasonal tendencies throughout the year. So what you need to be doing is, if you're using a model like this, that's a long term position model, if you go through all the markets and look for their strongest seasonal tendencies throughout the calendar year, And then when you start a brand new trading year in January, during Christmas break you can do this, or the first couple weeks of January when we don't generally trade because the markets have to work off that low volatility and holiday rut that it's typically seen.

You want to be planning each month what market you anticipate, not that you demand it has to happen because seasonal tenders are just a road map, it's not a panacea. It's not going to always be there. It's just a general rule of principle in terms of direction or bias for a long-term expected roadmap, what generally happens more often than not.

So I kind of gave you the longest-winded definition of a seasonal tendency that you probably ever heard, but I really want to press upon you the importance of just knowing that seasonal tendencies, while they're nice and they're great and they're very useful, they're not always. perfect or accurate. Okay, so there's going to be times where they're not going to pan out.

That's where risk is incurred. That's why we have to have stops. That's why we don't over leverage.

Otherwise, we could just go full hilt, go in there, no stops, and just expect it to pan out and everybody would be billionaires. Wouldn't that be fun? But it's not like that. So nonetheless, you want to go through those lessons I just outlined. The month five where I introduced seasonal tendencies.

You want to look at the commodity section. where it goes over specific seasonal tendencies there, and then the Mega Trades. Mega Trades lesson gives you the choicest setups for seasonal tendencies.

So between those three areas going into the core content, it'll help you really dig deeper into this trade plan. But we're looking for the seasonal tendencies for the month to come or the next quarter. Okay, so this... really is a quarterly shift model and trade plan.

So it's really designed to trade for moves that are around two months or longer and that's really focusing on the quarterly shifts that we talked about during the core content. So focusing on the highest probability seasonals that suggest a strong chance of bullishness or bearishness at that current time that could offer 500 pips or more. Okay, so you're looking for a setup within a range that will allow or suggest that it could deliver as many as 500 pips or more. And that means that you're going to be looking at monthly and weekly charts to help frame out that 60-day IPTA data range. But you're going to be limiting your focus to the highest probability seasonal tendencies.

You're going to identify the discounted raise under the IPTA data range of 20, 40, and 60. when the bias is bearish. And you're going to identify the premium arrays inside the 20, 40, and 60 day if the data range when the COT hedge program is bearish. Expect a monthly range expansion down. You're going to identify the premium arrays above the 20, 40, and 60 day if the data range when the bias is bullish.

identifying the discounted raise inside of the 20, 40, and 60 day IPTA data range when the COT hedge program is bullish. Expect a monthly range expansion up. When the market is primed, we want to look for convergence of both manipulation and price opposite to our trade bias at a time when the economic calendar suggests a volatility injection will likely unfold. We will short premium fair value gaps and buy discount fair value gap setups. When we are bearish, we will frame a short entry when price has moved up into a 4-hour premium fair value gap PDRA that converges with a standard deviation of no more than plus 3 standard deviation during London or New York Open.

We can implement scalping protocols on this stage as well for further reduction in risk. What do I mean by that? You can go into the scalping trade plans and that model.

and plug it in right here to help refine the risk down to the smallest possible one minute chart. When we're bullish, we will frame a long entry when price has moved down into a four hour discount fair value gap PDRY that converges with a standard deviation of no more than negative three standard deviation during London Open or New York Open. We can implement again, as I mentioned in the previous slide, the scalping protocols at this stage for further reduction in risk. When we are bearish, we will target the sell-side liquidity below any old daily or weekly low or discount fair value gap inside of the 20, 40, or 60-day IPTA data range. The next logical discount array at 500 pips will be the initial objective.

There will likely be multiple old daily or weekly lows inside of the IPTA data range, but we use the one that frames the potential of at least 500 pips. When we are bullish, we will target the bullish liquidity above any old daily or weekly high or premium fair value gap inside of the 20-, 40-, or 60-day IPTA data range. The next logical premium array at 500 pips will be the initial objective. There will likely be multiple old daily or weekly highs inside of the data range, but we use the one that frames the potential of at least 500 pips. When we are bullish, we will note the European open price on Tuesday.

Now, the Tuesday day here, this could be a Monday or it could be a Wednesday. We're focusing on that. weekly profile for bullish we're expecting the low to form between Monday and Wednesday's New York open so anywhere in there that's our typical window opportunity where the low can form but I'm sticking with this because Tuesday generally as I teach even from the free content there's a 70% chance that Tuesday creates a low of the week when the market is bullish so we're expecting a weekly profile to be bullish.

and the higher prices to be delivered, generally the highest odds will be on Tuesday. It doesn't mean that it can't form on Monday, and you should be looking for it as well on Monday. But nonetheless, if you lose or get stopped out on Monday, you go right back in on Tuesday.

And the same thing would be said if you lost or got stopped out on Tuesday and the trade still looks good based on all the things that we would outline in this model, then Wednesday could be used as well. Okay, but... We're using just as a general rule, but just replace Tuesday with Monday and or Wednesday. The European opening price on Tuesday and filter all longs at or below this price level, which overlap, and here's the key, which overlap in the four-hour discount fair value gap. So if the opening price, the European price, is filtering your entry and it overlaps with your four-hour discount fair value gap, you really have a beautiful setup right there.

We will anticipate a 15-minute chart institutional order flow entry drill trade entry to form inside of a retracement lower during London Open and or New York Open kill zones or a sell stop rate. Either one could be used. When we are bearish, we will note the European opening price on Monday, Tuesday, or Wednesday.

and filter all shorts at or above this price level, which again overlap in the 4-hour premium fair value gap. We will anticipate a 15-minute chart institutional order flow entry drill trade entry to form inside of a retracement higher during London Open and or New York Open kill zones for our standard buy stop rate. When we are entering a short, we will place a sell limit order on all positions we will execute with our demo account. We will use the standard deviations and PDA rate convergence minus 5 pips as our entry price.

when using the sell limit order. If multiple orders are used, all use the same entry price in the sell limit orders. When we are entering a short, we will place a limit order to take 100 pips as our objective on one position.

We will place a second limit order to take 250 pips as our second objective. We will use multiple orders to manage the trade idea. If you capture a 500 pip objective, make sure you close 80% of the trade.

That means nothing from the total amount of trade position size that you have on all the orders that you have. 80% must be closed across all orders or total position when you get 500 pips. Then see if you have any more room to run in price. When we are entering a short, we will note the premium array and standard deviation convergence we aim to enter at. We will place our stop loss above this high plus 25 pips.

We will re-enter if the trade stops out. We can monitor it for a secondary entry. Position trades may require multiple attempts to secure a solid entry. Do not fear this. When we are entering a long, we will place a buy limit order on all positions we will execute with our demo account.

We will use the standard deviation and PD array convergence plus 5 pips as our entry price. when using the buy limit order. If multiple orders are used, all use the same entry price in the buy limit order. When we are entering a long, we will place a limit order to take 100 pips as our objective on one position. We will place a second limit order to take 250 pips as our second objective.

We will use multiple orders to manage the trade idea. If you capture a 500 pip objective, close 80% of the trade and see if it has more room to run. Now, what's not being said here is obviously I'm mapping out using multiple orders, whether being long or short.

And one of the orders you want to take out 100 pips. Make it simply just 100 pips that you get out. Regardless of how fast it's moving, put your limit order exit at 100 pips profit. Your second order, you're going to do the same thing but have it set to take 250 pips out.

Your third, or if you have multiple orders beyond three, okay. If you have just three, then you have to consider that third one, taking 500 pips, take profit there, but make sure that whatever you turn as a scaling or whatever you're taking as a partial, okay, at that last order for 500 pips, make sure that 80% of that existing remaining balance of long or short, 80% of it's off. So that way you only have 20% of that last portion on in terms of risk.

So you've captured 500 pips. You've got the lines portion of the move behind you. You've also taken 250 pips on one other order and 100 pips after another order.

So you've really fed yourself a great deal of profit and pips. And you don't want to leave a lot to risk in terms of seeing it reverse on you. But you do want to see if you can have it run a little bit further. So if you had four orders, you could take one at 100 pips off, a second one off at 250 pips profit, a third one could come off at 500 pips and just let the other one run, but lock in, say, 400 pips and let it float for 100 pips in terms of potential risk of open profit. When we are entering a long, we will note the discount array and standard deviation convergence we aim to enter at.

We will place our stop loss below this low, minus 25 pips. We will re-enter if the trade stops out. We can monitor it for secondary entry.

Swing trades may require multiple attempts to secure a solid entry. Do not fear this. When we are in profit, 25% of our expected objective stop loss can be reduced by 25%.

When we are in profit, 50% of our expected objective stop loss can be reduced by 50%. When the position is at 75% of the expected profit objective, stop must be at break-even. Again, we do not choke the trade. We don't strangle it, and that's the reason why we take partials.

We pay ourselves as the market makes it available, and we put our stop loss in there to manage the worst-case scenario so we don't take a great deal of loss in theory. But again, the markets can gap beyond your stop loss. and at that point really nothing can really save you okay and obviously these slides are always included in the trade plans so i'm just going to go through them rather quickly and you can pause them.

Using a 20 pip stop loss, now obviously you have to change the math here because we're using a 25 pip stop loss and everything that's been shown here for executing the math to get to your per pip per setup using a 25 pip stop loss and using 1.5%. I personally think 1.5% is a little too high, especially if you're long-term position trading, because you're trying to capture big moves, and you don't want to be wrong multiple times at 1.5%. So you want to start with, in my opinion, 1%.

Okay, and the next slide here, if we're using a standard lot, you can see the math as well. And if your demo account takes a loss, this is again very, very important, on any trade at the full R%, you assumed, drop the R% by 50%, and when the loss is recovered by 50%, you are permitted to return to the maximum R% for trade. If the reduced R% trade assumes a loss, reduce the R% by 50% until the previous trade loss is recovered by 50%.

If you take a series of five winning trades in a row, drop your R% by 50%. You're likely to assume a loss eventually and this will build in equity leveling and reduce the likelihood of a large drawdown. You want a smooth equity curve that slopes or stair steps higher, not a jagged roller coaster with deep declines.

Alright, you're going to collect multiple sample sets with this trade plan. If you're unclear about some of the process, rewatch the lessons. on this price action model and the ones I suggested inside of the teaching here.

Dig into your charts and study what was provided here. This is going to be the algorithmic theory for price action model number four. And for this discussion, we'll be using the Eurodollar. This is a chart from barchart.com, the interactive chart.

I've uploaded the chart showing the commitment of traders report, shown just commercials. And I did the hedging program based on this model. It looks back six months and you can see markets been going lower.

And we want to key off of the trend of this data and we have been what? Bearish foreign currency, bullish dollar. Now I'm going to counsel you to go back into model number four and think about where I was discussing, I think it was British pound versus US dollar for.

the teaching but go into month number five in the seasonal tendencies portion and you can go into the pdf file actually just scroll through and get to the seasonal tendency for euro dollar and you will see that you have been holding in your hot little hands all this time all this time you've been holding it ict's been holding out here doing these algorithmic theory videos he's uh You're kicking the can down the road. No, actually what I'm doing is I'm waiting for everybody to get done and now you're all charter members. So look at what I have given you already.

I discussed how the seasonal tendencies are very strong. They repeat generally year in and year out. There are some subtle deviations from it, but by far and large, you'll see that they're pretty much. roadmaps.

Turn to the Eurodollar and if I will counsel you to pause this video, go get that study PDF from month 5. Scrub through that PDF file until you get to Eurodollar seasonal tendency. And you'll see that in April it tends to make a high and trade down into May. For those that have paused the video, you're now hearing me say, see, I told you so. And for those that didn't go look, you didn't do yourself any service there because it's exactly what I've been teaching you all this time.

And here we have all the patterns and things that are underlyingly driven with price moving higher or lower. Obviously, with the season tendency with dollar index moving higher as we've been expecting. The CETL 10-C for Eurodollar in April should be expected to come to pass where it goes where?

lower okay and here's that monthly chart for euro dollar this is the month prior to this is march 2022 and we're looking for this old low down here if you go back and listen to the commentaries thus far in 2022 we're in may of 2022 now but if you listen to what i was outlining and suggesting that we were going to see in euro dollar we were looking for lower prices And gravitating towards what? Eventually that low. Okay.

Now, what we're trying to do with this model, similar to what we've done in the price action model number three, is we're anticipating the monthly range to expand one direction or the other. Okay, so what direction are we expecting the next candle on the monthly chart to expand higher or lower? Lower. It doesn't need to touch this level here yet, but we're just looking for an opportunity to see if it will give us that.

As you can see, here we have the month of April delivering exactly as you would expect with the tools I've given you and runs to sell some liquidity. So let's take a deeper dive. Here is the daily chart.

Okay. Now, again, what I'm doing is what I've counseled you all to do with the core content and the lessons. Take it, make it yours, simplify it. Don't try to do every possible thing in the world. and apply every single tool or concept or idea to your model.

You want to have something very simple, okay? Model number four, again, I've already taught it. You can go back through all the fine details, and you can streamline it to something as simple as this, okay? I'm using the approach I used with the YouTube model, which is our model number 13. You're looking for model number 13 on the forum now. It's not there yet.

We've got to get through these algorithmic theories. principles and then I'll revisit this YouTube model with the perspective that you would expect in mentorship. All right, so we have the old high here and I mentioned how we have three dries higher, okay, or three Indians pattern as it's taught in the Street Smarts book by Linda Rashka and Larry Connors.

It's just basically a stop run here and then one more stop run and then gives up the goes and goes lower. Go back and listen to the commentaries. We're looking for lower prices. It is what it is.

So what we're looking for in this model is we want to see an old high violated if we're bearish, which we were. We were bearish euro, bullish dollar. So as soon as that candle goes through old high, your eye goes to the order block opening price.

You put a sell stop right there. You don't need to be in front of the charts, folks. I know some of you still constantly email me, and, yes, I'm frustrated. OK, because I've already taught this stuff and it's like you want me to take you right to a specific video in a minute marker. I have too many videos.

Obviously, you've seen that. I have too many minutes in all those videos to be able to remember exactly where I said what. I don't have a script.

OK, I'm going through notes that keeps me on point, but I don't have a transcript where I said what at what time in a marker, what video, what year. I don't know. OK, but I do know you have this information. OK.

So when we have the market rally through an old high, you want to be able to trade this short because you're what? A position trader. You can't be in front of charts.

ICT, I'm not able to be awake or I can't be away from my job. I just can't do it. Okay, but I want to participate. How can I do it without day trading, without getting into these intraday charts?

Okay, and still get handsome reward to risk. Okay, well, you can do that. But just know that you're not going to get a lot of these trades a year. But you can do very well over a long career, or at least until you get to the point where you can day trade or do short-term trading and use the intraday charts.

But for those individuals that can't do it, this is what I taught in the core content. This is how I taught it to you for this model. The sell stop goes right at the opening price.

The next candle here. It's opening up here, rallies, and then eventually comes down and hits the opening price of the up candle that took out the previous high. That selling on a stop, you're selling weakness, and your stop goes right at that candle's high plus one. Okay? So right away, you're using weakness to get you in, and your stop loss goes right here.

Don't worry about it. If it stops you out, oh, well, it's a losing trade. Just like anybody else would be taking your trade in intraday date trading or scalping.

It's a loss. You're going to get them sometimes. Okay?

Don't. be afraid of it. But the expectations you want to be entering here on shore It's on autopilot. Your stop's sitting there waiting to get triggered in. So when the market drops down, instead of stopping you out of a long position, which you don't have, it's stopping you into a short position that you have yet to enter.

And as soon as that fills, your stop becomes active up here. So you would put a sell stop here with a protective buy stop at this candle's high. Once this breaks down, you're going to have to have an alert. to fill you. Well, not fill you, but to bring you up to speed that you were filled.

And your stop has to be maintained at that high, and you wait for price to break down. And you're aiming for this low. That's that old monthly low. But this model refers to SMT divergence and also uses offset distribution for your targeting.

So with that, we're ringing in correlated pair SMT, which is we're trading euro. Its sister is pound. Is pound making a higher high like it does here in Euro? No. So that's a bearish SMT divergence.

So we have SMP behind us, which is what this model calls for. So back into the daily chart on Eurodollar. Our stop loss here is 1.11850 pipettes.

The entry is 1.10865 pipettes. So there's your risk. Now some of you are going to say, man, that's huge.

Well, you scale it to that way. If you're risking 2%, okay, your 2% would be divided up based on your equity and then how many pips that is. And that tells you how much leverage you use when you're going short for a hypothetical paper trade. Okay? So what you're doing then is you're looking for price to trade down below this low and waiting for a short-term low after it takes out that low.

which is what we get right here. What is offset distribution? Offset distribution is finding that low and then waiting for the price to go down below once more.

OK, so what you're doing is you're running down equity. You're getting more juice out of this lemon. It breaks that short term low because people are going to see this as a low and try to buy it and sell stops will accumulate under there. So the algorithm does this pausing or slight retracement, then attack. those sell stops that were not there prior.

Okay, they cleared out the lows here, but then they engineered new sell stops below this low with this consolidation and small-riddle retracement. Then when it drops down one more time, you're gonna be targeting that short-term price low because that's your offset distribution low here. So below this level, you want to be targeting your cover.

You don't know when this low forms until it starts to break below that low and you wait. and you observe. Now you can use the four hour chart for your offset distribution as well. You don't necessarily have to have the daily chart, but the daily chart is going to give you the best bang for buck. So using this entire model in theory, using it algorithmically, it's bullish dollar, bearish foreign currency, using seasonal intensity, April, look at your seasonal intensity for your dollar.

It's exactly what you're seeing here, folks, right out of that page that I gave you. Those are treasure maps, folks, okay? They're treasure maps. These things are so uncanny how they can pan out, but you have to wait for them, okay? It's like Christmas time.

Everybody wants to get that gift, but can you get that gift in March? No. Can you get it in October?

No. You have to wait. For what?

You got to wait for the season of giving. It's Christmas. So these seasonal tendencies are just like that. These are seasons when you anticipate a certain gift by the market. If you limit yourself to trading in these times of the year where the seasonal tendencies are so overwhelmingly obvious, you could do yourself such a huge service and avoid driving yourself mad because There's lots of times when it's going to look like there's something there, and seasonally, it's probably not likely to do what you think is going to happen.

But we can see, obviously, we've been bullish on dollar, so that's bearish on euro. Euro starts April, creates that one more little higher high, then drops, takes out the old monthly low. You can take a partial there.

You can take a partial as it's running down in here. And then as it creates that short-term low, you anticipate that run. right below that.

So what's below that? 1.04 big figure. So, we could target that big figure, which would be offset distribution, likely to draw to 1.04 level anyway. And if that's the case, what you're looking at here is 7 to 1 R-multiple.

So, for every $1 you risked, you made 7. And it only took about a month or so, a month and a half or thereabouts, to get it. So, If you're not taking partials and you're aiming just for your target. So using this idea, you could be taking basically 14% out of this move if you're risking 2%. So one trade, you're risking 2% and made 14%. Folks, that's like half of a fund manager's year.

All you need to do is find one more just like that and you beat most of the fund managers on the planet. If you're aiming for that type of career where you want to be a fund manager and you want to have a really easy life, not do a whole lot, trade with these seasonal tendencies. OK, and look for these types of ideas to build your own model.

And you'll see that these things repeat a lot. They're not exactly perfect. They're not going to be always the case. If that's the case, we would all be billionaires. But obviously, you've known about this.

You've had it in your hands. It's in your possession. I tell you all the time, spring and fall. Those two seasons of the year is where you really want to work hard. Don't work so hard in January.

Don't work so hard in December. And in the middle of the year, around July and August, scale back how much you try to trade. Because that's the doldrums of summer. And it's between the both. peak seasons of spring and fall where the markets are really really easy

Transcript for:Position Trading Strategy and Management

Transcript for:
Position Trading Strategy and Management