Okay folks, welcome back. This is price action model number two, short-term trading plan, 50 to 100 pips per trade. Alright, so ICT price action model number two, short-term trading model. And again, the objective is 50 to 100 pips per trade. As I warned in the first price action model, majority of the slides you see in these trade plans are going to be repetitive.
So please avoid sending me emails. There are differences. You just have to pay attention to the logic that's being. submitted in each one.
The process obviously for every trade plan is we go through a preparation stage, an opportunity discovery, the trade planning, trade execution, and trade management. In the preparation we always refer to the economic calendar for the coming week noting all medium and high impact events for the markets that we intend to follow. We 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.
In a simplest way of describing this process, what we're doing is we're looking for in a collection out of the weekly templates that I outlined that are bullish when we're anticipating the market to go higher and by comparing the bullish templates with that of the calendar you can match up what the likely weekly profile is going to be now it's not going to be 100 based on just that because there's always a variable but that's what i do i go in and look at if i see a high impact news event that's really centered on tuesday london open then i'm going to be looking at the tuesday low of the week weekly profile and or wednesday low Alright, so we're going to be looking at the preparation. We're going to be determining the IPTA data range for the last 20 days. We do not count Sundays. We note the highest high and the lowest low of the past 20 days.
And this is going to be your current dealing range. So if today is whatever date it is, we're going to look back 20 days from today. And whatever that trading day is, that is your 20 day ago look back.
we're determining the highest high and the lowest low and that is our dealing range now you're going sometimes encounter periods where you may require looking back 40 days or 60 days when you have really no PDA arrays to choose from in the last 20 days. In other words, if we've already worked inside of the last 20 days dealing range, both up and down. Then you would use the look back of 40 days.
And if the same thing, if we have nothing in there, we work both directions, we go back to 60. If you can't find anything in the 60-day look back that's clear and logical, then you're going to have to choose another market to trade or sit on your hands. Inside this dealing range, we look for the next draw on liquidity. Where is price likely to trade to next?
and old high, low, fair value gap, or liquidity pool. We look for a PD array in the direction of the weekly range bias, premium PD arrays when bullish, and discount arrays when bearish. We anticipate price to move to a PD array that would support our weekly bias on a day and economic calendar event found on the economic calendar with the current or next trading week. This is what we're waiting for every time we sit down in front of the charts. We have that in mind.
We're not looking for something to magically pop up. We're going in looking for something that would fit that narrative. If it doesn't present itself, then we have no trade.
Now, this can either be a run on liquidity or rebalancing of inefficiency in price. Opportunity Discovery identifying the discount arrays under Tuesday's European opening price inside the 20-day IPTA data range when the bias is bullish. We identify the premium arrays of a Tuesday's European open inside the 20-day IPTA data range when the bias is bearish. Identify the discounted raise under the Wednesday's European opening price. Inside the 20 day if the data range when the bias is bullish.
And we identify the premium a raise above the Wednesday's European opening price inside the 20 day if the data range when the bias is bearish. Now what am I stating here? If the signal or setup doesn't form on a Tuesday, we still would consider it.
on wednesday trade planning market is primed we want to look for a convergence of both Manipulation in price opposite to our trade bias at a time that the economic calendar suggests a volatility injection will likely unfold. What we're looking for is some snappy, sharp price movement that would be in the opposite direction, trading into our predetermined level of entry. Basically a Judas swing. Okay, so we're going through a period of market protraction that's opposed to our trade direction moving in profit. So in other words, we want to see it shoot up when we're looking to go short and we want to see it shoot down when we want to go long.
We're not chasing price. We will short above the European opening price and buy below the European opening price. When we are bearish, we will frame a short entry when the price has moved up. into a 15 minute premium PDRY that converges with a standard deviation of no more than three standard deviations. Now the plus three there indicates that if you're using the Asian range, if you're using the Central Bank Dealers range, or if you're using Flout, you're only going up three standard deviations, nothing higher than that for your entry.
During London Open or New York Open, the setup will typically form. The market will likely create the weekly low on the Thursday New York session. For time filter and targeting purposes, we will anticipate the trade to pan out until that time.
When we are bullish, we will frame a long entry when price has moved down into a 15-minute discount PD array that can be used to trade. Diverges with a standard deviation of no more than three standard deviations lower. In other words, we would look at nothing lower than three Asian range standard deviations projected lower, or three central bank dealers range projected lower, or three flout levels lower during the London Open or New York Open.
Market will likely create the weekly high during the Thursday New York session. For time filter and targeting purposes, we will anticipate the trade to pan out until that time. When we are bearish, we will target the sell-side liquidity below an old daily low or fair value gap inside the 20-day IPTA data range, converging with a negative or projected lower standard deviation.
What am I saying there? If we're short or if we're getting ready to take a short, what is our targets? We're trying to predict the Thursday or sooner range that would offer 50 to 100 pips. Our target has to be in the form of a discount array if we're bearish. And we're looking for a standard deviation lower that converges both with standard deviation level and the discount array.
in a 5 pip variance. The immediate or next logical discount array will be the initial objective. There will likely be multiple old daily lows inside the IPTA data range, but we will use the one that frames the potential for at least 50 to 100 pips.
When we are bullish, we will target the buy side liquidity above an old daily high or fair value gap inside of the 20 day IPTA data range, converging with a standard deviation above in other words we're looking for a premium standard deviation the immediate or next logical premium array will be the initial objective there will likely be multiple daily highs inside of the updated range but we will use the one that frames the potential for at least 50 to 100 pips trade executions when we are bullish We will note the European opening price on Tuesday and filter all longs at or below this price level. We will anticipate a 15-minute optimal trade entry to form inside of a retracement lower during the London Open. and or New York open kill zones or a sell stop rate.
When we are bullish, we will note the Asian range high on Tuesday and place a buy stop at this level plus one pip after 2 a.m. Eastern Standard Time. Now, this is an alternative trade execution. This is... basically buying strength so in essence you aren't technically chasing price because what we're doing is after two o'clock in the morning the assumption is that we've already seen price drop down Instead of waiting for price to Potentially go lower and give us a loss by trying to catch the low we can just simply use the Asian range high put a buy stop there and Let it go.
Let it buy us into the move with strength. But it has to be done after 2 a.m. So at 2 a.m.
when price starts to drop down, if you're still learning how to project below the down. day you can get your order in in the event once it turns around starts to go higher the market you'll let the market seek its own low and then you'll buy the breakout of the Asian range high we went to the price to have made the low of the day after price starts its decline under the Asian range low and or European opening price. When we are bearish, we will note the European opening price on Tuesday and filter all shorts at or above this price level. We will anticipate a 15-minute chart optimal trade entry to form inside of the retracement higher during London Open and or New York Open kill zones or a buy stop rate.
Okay, the alternative trade execution for Mormon Bearish. We will note the Asian range low on Tuesday and place a sell stop at this level minus one pip after 2 a.m. Eastern Standard Time.
We will anticipate a price. to have made a high of the day after price starts its ascent above the Asian range high and or European opening price now if we do not get a set up on Tuesday The things that I've mentioned here for alternative trade executions for both bullish and in this slide here bearish would be the same thing for Wednesday. So we would be using Wednesday's European opening price. So everything we would see here that says Tuesday, we would just replace Tuesday with Wednesday and just repeat the same process.
Short Trade Management. When we are entering a short, we will place a sell limit order on all positions we will execute on with our demo account. We will use the standard deviation and PD array 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 50 pips as our objective on one position. We will place a second limit order to take 75 pips as our second objective. We will use multiple orders to manage the trade idea.
If you capture a 100 pip objective, close the trade and be content. 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 not re-enter if the trade stops out. We can monitor it for experience, but no re-entry is taken. One and done. Long Trade Management. When we are entering a long, we will place a buy limit order on all positions we will execute on a demo account.
We will use 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 50 pips out as our objective on one position.
We will place a second limit order to take 75 pips out as our second objective. We will use multiple orders to manage the trade idea. If you capture a 100 pip objective, collapse the trade and be content.
When we are entering a long, we will note the discount array and standard deviation convergence we aim to enter at. We will place a stop loss below this low, minus 25 pips. We will not re-enter if the trade stops out.
We can monitor it for experience, but no re-entry is taken. One and done. 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, The stop must be at break-even or above. Money Management.
Position Size Calculation Formula. now to determine your position size it's the account equity times r percent divided by stop loss and pips now position size is the amount of leverage your trade assumes account equity is the total amount in your trading account r percent is the percentage of risk you're willing to take one per trade and the difference between the entry price and your stop loss is the number of pips you'll use to divide for the result of the equity times r percent Okay, as an example, account equity, $20,000. Risk per trade, 1.5%, or $20,000 times 1.5% equals $300. The stock required for the trade in this case would be 20 pips. In micro lots, 1K each is 10 cents per pip.
20 pips times 10 cents is $2. And $300 total risk divided by $2 per pip would give us the ability to trade 150 micro lots per trade or 1.5% of the account equity. Always round down.
Okay, same equity size, $20,000 in the risk per trade, 1.5% or 20,000 times 1.5%, $300. The stock required for this is 20 pips. In many lots, it's 10K each or $1. per pip so our 20 pip stop times one dollar per pip it means 20 is our total risk exposure using 20 pips with one dollar per leverage so if our total risk assumption is $300, we're dividing that $20, which would give us 15 mini lots per trade or 1.5% risk of the account equity.
Always round down. In standard lots, 100K each is $10 per pip. So if we have a 20 pip stop loss in expectation, we would have 20 pips at $10 or $200 total risk.
if we had total of two hours per risk divided by three hundred dollars we can only do one and a half standard lots or one lot per trade always round down many lots are more flexible now right away you can see with the model that i've outlined here in the trade plan we're using a stop loss suggestion of 25 pips so you would change the stop required to 25 pips and all of the math here would change. It's not complicated math, you're changing 20 in this example here to 25 and everything will work out for your math to determine what your exposure would be. If your demo account takes a loss on a trade and it is a full R% that you assumed, drop the R% by 50% and when the loss is recovered by 50%, you are permitted to return to the maximum R% per trade.
If the reduced R% trade assumes a loss, reduce the R% by 50% again 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 are 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 and or stair steps higher, not a jagged roller coaster with deep declines. all right so what you're going to be doing is same thing you did in model number one going to be collecting a month or two of sample sets with this trade plan it's not hard to go through your price action and see where these price moves have occurred and if you're on clear about some of the process here rewatch the lessons on this price action model and supportive lessons in the core content all right folks welcome back this is model number two algorithmic theory and i'm going to be changing gears a little bit uh obviously i've removed a lot of people over the years and in recent months because of either selling being disruptive or breaking down terms of use So naturally their way of trying to get back at me is leaking my content.
But that's okay. It's not going to hurt me. The change to gears that I'm going to be doing is instead of spending all my time typing out slides and making it easy for everybody just to go out and share that or sell it or whatever they do.
Or put them in books and they try to sell them on Amazon. And I've already taken down five or six of those books. It's unbelievable the blatant disregard for copyright infringement and intellectual property rights and things.
But hey, I understand things around the world right now are rough. But I'm going to be teaching basically. like a college professor.
So I'm going to be speaking, and it's your job to write it all down. I'm going to show you visually in the chart, walking you through the steps, and these steps can be reduced down to the back of a business card. Okay? The logic that goes into these models when it's spelled out obviously, every minute detail wouldn't fit on the back of a business card. But the processes and procedures that get you to the main points of focus, application, and where you utilize certain things and what you're looking for, those are obviously understood because of your experience and understanding with the teachings and the core content.
But I'm literally going to go into this Eurodollar chart and walk you through something I outlined beforehand, so that way it's not me going back and form-fitting it, so that way it sounds and looks pretty for you. It is the very basis of what I was utilizing. for the analysis that I gave in the commentary this past Monday.
Okay, so that way you know what I'm looking at in regards to the tools because I'm going to spell it out for you. I'm using the algorithm that's outlined for model number two, and I'm going to incorporate the alternative approaches as well that I outlined in the trading plan version. Okay, so you're going to see how looking at it from the video production and typing it out, it's real easy to get lost in all those details.
And I know it's hard, okay? But I think you'll like this approach better because it's literally me going in using what was already described. And you get to see whether or not this stuff really works because I've had people, you know, shake their fist at me and say, these models don't work.
They absolutely work. But unfortunately, I think laziness plagues a lot of individuals that have that mindset. Okay, so I'm going to dispel all that today and, again, bring you more evidence to the fact that these things absolutely do work. All right, so right away, this model really hinges.
is on, what the majority of the models do, is what is the weekly range going to do? So the first thing we're doing is looking at a weekly chart. So we're just going to zoom in here in the most.
Recent time frame here of candles. Scrub back here. Now, obviously, this is the week that just closed. And today is the 9th of April, 2022. So it's a Saturday. I'm producing this video.
And this was last week's trading. All right. So the question is going to be, is the very next candle, which is obviously right here. Now, before we go any further, OK, just remember what I have been stating.
In live commentaries, before it happens, we have been bullish dollar and bearish euro dollar. Now, I do not take you into the weekly charts in the commentaries. That's your job.
Okay, I'm not going to do everything for you. I'm not going to lay it in your lap. I'm not going to spoon feed you because that builds codependency. But I want you to understand.
what the backdrop was behind the scenes, why I'm calling these moves and opinions, if you will, in the commentary. On Monday, in the commentary for Eurodollar, I gave a very specific expectation. and we were bearish. We'll revisit that as we get to that point in this lecture, but I want you to watch what I'm doing and listen.
Take notes. All right, so the very next candle here, obviously with the benefit of hindsight, it was bearish, which is what we were looking for. Why was this candle so beautiful? In my mind, and proof with the commentaries, expected to be a lower candle or expand lower.
Well, dollar's been bullish, obviously. We've been looking forward to go through the full 100 level. But look what we have here.
Volume imbalance. See that? We have all of this range here is just on a tail of that candle, and all of this here is the wick of this candle. So there's really no bodies up there.
So we trade it up into it once more here, when bearish, one euro, when bullish, one dollar. And I've been trying to take everyone's attention down into that short-term low right there. So this is where we've been focusing.
So now the way you use Model 2. is you start by going back to look at the 20-day IPTA data range look back period of 20 days to find your discount arrays. Alright, so this is the candle that you would be doing the analysis because this is the week that hasn't really formed yet. So, we're using a hypothetical, but it was really didn't actually need calling it before it happened so let's make sure we understand that but you would be looking at everything on this calendar week before the new week begins on Sunday so in other words we're imagining if you will the candle hasn't formed yet so it would look like that so you would go back obviously this is five days ten fifteen twenty so what's the lowest low in the last twenty days right here So that's why I'm focusing your attention there.
It's why I've been talking about it in the commentaries. And I mentioned that we were looking for lower prices. Now, we traded up into this volume imbalance. It's a premium array. From this range high to this range low, why am I referring to that?
Because this is the most recent decline. This is where it stopped and started retracing. We're bearish.
So it's retracing back up into this range. Where is it retracing to? It's retracing back up into the volume imbalance. Hit your head up into it, and we're expecting higher prices in dollar, and we're expecting lower prices in foreign currency, euro, cable, respectively. So we're expecting lower prices, and the next weekly candle to expand lower.
Work towards this low. Now. There are several discount arrays that we're going to be looking for. So we have to look for, with this model, it's engineered for capturing 50 to 100 pips.
Once you get 100 pips, you're done. Okay? You're absolutely done.
It also has time elements to a specific day of the week, and we'll talk about that when we get to it. But we're looking at this swing low down here. So right away, we're going to go through.
And the mark off there is the rejection block here. And we're going to get a measurement on the consequent encroachment of that tail. And what I'm doing is I'm measuring the 50 level between the open of that handle and the low. Alright, and I'll change this to be a slightly different color. And obviously the very low.
I'll use that down here and we'll make that just dark blue. And the rejection block we'll make that dashed line With that much Wheat to the level so that'd be before I drop down to the daily chart I want you to take a second look at what these levels are okay? These are our Discount arrays, it's the old low rejection block It is the consequent encroachment of the lowest candles tail that little line that makes the you know, these are called tails and their wicks above the candle, but it's tails underneath them, so That price level at the open to the low we're measuring that range and get 50% of that. That's the gap And this is the old low here. So there's our three discount arrays that we're aiming for or utilizing with the weekly range.
Where could it expand down to? This is what we're looking for. Okay. So now we're going to drop into a daily chart.
Now obviously it's going to take me more time to talk about everything I'm doing than it would be for you to actually just go through the process of actually doing all these things. So there's rejection block, consequent encouragement of the weekly candle tail, and then the old low, which is what we're aiming for. That's always what? Best case scenario.
But do we need best case scenario to be profitable? No. OK, so now what we're looking for is the logic behind all these moves.
Lower here. So here's Friday's trading, Thursday's trading, Wednesday, Tuesday and Monday. OK, so April 4th, 2022, Tuesday, Wednesday, Thursday and then Friday. Right.
So there were several things that I looked at and outlined for you. But before we get into this, this is Thursday. Just remember that Thursday is the day of the week that we have to close based on time.
It doesn't matter where you are with the trade. If it's more than 50 pips, you close it. If you ever get to 100 pips, even if you do not have time to hold until Thursday, New York opens where you close the trade for this model. So it will leave pips on the table.
It will. You know, unfortunately, sometimes get you out before a bigger move that takes place on Thursday and maybe into Friday. But the point of this model is for you to have a short term trading approach to build on because you can obviously. tweak this and work with that Thursday time element and remove it if it works for you to hold on to it until Friday, New York Open.
Something to that effect. It's something for you to figure out on your own. So there's that flexibility that makes it unique for you. But I don't want to talk about the fact that we mentioned that it could trade up into that area here and then sell off again.
I mentioned that and it delivered. What I'm showing you here is this model, which is framed on Tuesday and Wednesday. OK, so we're going to be using Tuesday and Wednesday's approach.
So we'll drop down into an hourly chart. All right. And here is. the Monday, April 4th, 2022, right here.
And I mentioned in the recording Monday night's commentary. Go back and watch the commentary for April 4th, 2022. You'll hear me talk about how it's likely to go up into disembalance here and then sell off. And we're looking for it to run towards that old daily low. Now, your objective.
is when I give you these commentaries, is to go through and do what I'm about to do right here. And if you haven't been doing it like this, hopefully this will inspire you to do it, because you'll see what you've been missing all this time. All right, so let's stretch this out a little bit.
All right, so we have on the hourly chart going top down, there is our imbalance. I'll shade this. That right there and didn't get dark enough for my liking. So there you go. And that is Tuesday's trading April 5th.
OK, so right away we have an imbalance here. So now we got to drop down into 15 minute time frame. I'm not going to edit any of this out. You're going to have to suffer through it. If I got to suffer to get this thing lined up, you're going to suffer watching me do it because this is what you got to go through.
All right. So we have the imbalance here. Now, as it was outlined on Monday night before it happened, before it runs up into that. OK, once it starts having its market protraction on the upside.
On the fifth You're gonna be looking at the dealing range between that high here. Why that high? Why not something higher back there because this is the one Just before the imbalance. This is the one that starts to decline and This is the lowest low prior to it running back up into that Imbalance okay, so the fair value gets outside and balance by sign of efficiency that's being shown on the hourly chart here the dealing range.
That's Parent to that is this high to that low. Okay, so we have optimal trade entry levels in here. I'm not sure why I don't have the 60 level on that. I'm going to change that 70 level right here. There you go.
So 62, 79% traceable level. There's your optimal trade entry. So here, We have another element of price.
This one drives me nuts. Okay, that'll be good enough for government work. Right there and we'll shade that. I'm only doing this so that way you can visually see.
That's probably not the best way to do it. That's good. All right. So this is optimal trade entry in terms of price range and inside of that hourly imbalance. So overlapping elements of price.
But now we have to go into the most important factor, which is time. So we're going to drop down into the five minute chart. Okay, so here is the midnight candle at April 5th transition from Monday into Tuesday's trading We're going to delineate make this Different color here and then drop this back to 8 o'clock Okay, so there is our Asian range and with this model Obviously we're bearish.
We are looking at a selling opportunity on Tuesday and or Wednesday If we get a trade on Tuesday, we don't trade on Wednesday. But if we don't get a trade on Tuesday, we look to do it on Wednesday. But it has to be consolidation on Tuesday, and it hasn't yet moved lower for that to be considered. So we have some filtering there as well.
But we have the Asian range here, and I'm going to show you standard deviation. here, and do both on the wicks and tails. Wicks and tails, that's the largest range that's been utilized for Asian range.
And I know it looks busy right now, but I promise it'll make a whole lot more sense in a second. Once you do this a few times, you'll know what you're looking for, and it's not that big of a deal. All right, so this model has a filter that you cannot take anything as a short greater than three standard deviations. above if you're going short. Okay, so Asian range, we're using that as our basis for standard deviation projections.
So this is one standard deviation, two, and three. So right away, we have this level here. I know it's one pip off. That's going to be enough for me, though, because it's going to drive me crazy. So we're looking for a premium array no higher than that if we're using the Asian range using the tails to wicks.
Now, if we do it with the bodies of the candles, which is generally what I like to prefer over the wicks and tails because it's a little bit truer in terms of the volume, Right away, we can see that there's three standard deviations right there. Now, you can do this two ways. The way I just did it, which is generally how I usually do it, or you can do it the opposite way. You can go in and do the standard deviations on the Asian range, or you can use FLOUT, or you can use the... Since you make dealer's range, whichever one you prefer, whichever one you adopt as your model, these standard deviations, you don't want to go anything higher than three standard deviations to look for your premium array because we're bearish.
Okay, so this is your filter in terms of price. You can't go any higher than this. So right away, now I've done the wicks, the tails, and I've done the bodies, highest open or close to lowest open or close. That's what's being represented here. So I can take this off, get some of this busyness off the chart.
And right away, you can see that the optimal trade entry here relative to the dealing range high and low that I outlined, that does not violate. either the wick to tail or highest open or close to lowest open or close standard deviation of 3. So notice that. So this is in agreement with the rules. It's inside the dealing range from here to here.
It runs above this short-term high where buy-side liquidity will be resting. So it runs up into that. Now, because we have the elements of price and we… ferreted out what we're looking for in terms of the range.
Where should we be scanning or stalking for this very specific price range that we're going to be trying to trade on? We've already done that here. So now I can take this off and clean the chart up even more here. And now it's just a matter of moving this to the kill zone, which is 2 o'clock in the morning.
Now, obviously, this would all be done before the market starts trading and creating all these candles in here. This is what you would have beforehand. And then you project it at the 5 o'clock in the morning.
And, again, this is rooted on the 62% retracement level, and this is 79% retracement level. 79 is outside of the imbalance. Notice that?
See that? So, what we could do is go over inside this range. What PD array, it's a premium array, is in agreement with this optimal trade entry price range and inside that time window of the London Open. What's this?
You have a city in the form of a fair value gap right there. It breaks lower after running a short-term high. It breaks lower. We have an imbalance near the upper end of the hourly imbalance, which is that pink-shaded area.
So we can take that off. That's been incorporated here. And we know that...
the market's drawing higher into a optimal trade entry here and also the lowest band or level of that optimal trade entry 62 percent traceable level what agrees with that lower end So we have the optimal trade entry, a run above a short-term high. This candle's high here comes in at 98,888. The high on this candle comes in at 98,87.
Okay, so it's one pipette below. You're going to be doing... 5 pips below because you have to factor in the spread. If you're looking for this level to get in, ideally, that's the lowest easy objective for a premium array, you would be 5 pips below that price level. So it would be 83.8.
So let's do that. I know I could just as easily just type that out, right? 83.8. So that would be your entry.
I want to limit. Okay. Now, using this, once you have the range you're looking for for optimal trade entry, your entry for limit purposes.
because you want to sell a little bit early because the spread has to be incorporated. We're using 5 pip spread and we're allowing for this much movement here. Now if you're entering with the premium array when bearish after it's ran up into all the factors that I went through from top down, you're going to use a 25 pip stop loss.
It'll be a 50 pip stop loss if you use the alternative entry, which I'll show you again in a second. So 25 pips plus 83, so 10 would be 93, 103, so 108.9. All right, so that would be your risk on the trade there. So we can take this off.
We have framed the idea here. And that is the risk during the London Open Kill Zone entry. And what we're going to do now.
And again, this would all be done before the price even trades up here while it's all doing this. Okay. Now you're going to take the Asian range and do standard deviations to the downside. You're going to get both measurements.
You're going to get the wick to tail. And you're also going to do 100 pips. So this is your entry at.
that level there. So 83.8. 83.8, and it should be... 100 pips, OK, and that's the range that we're looking for for best case scenario on this model. OK, so 100 pips from entry.
This is the rejection block. Remember that dashed line from the weekly? And notice how it reaches into that old rejection block with 100 pips right there.
That by itself, my friends and neighbors, is very, very tight in terms of clustering. If we look at the price level here, 86 even, and it's 83.8 down here. That's the low. Is that less than 5 pips? Yes, it is, friends and neighbors.
So now we're going to go into this measurement. on the bodies of the candle, the highest up close or opening to the lowest open or close. OK, this one, double check.
The close on that candle, 679. Open here, 679. Open, 679. Close, 679. OK, so that's the actual range. Now we can go back out and see if there's any standard deviation that lines up. closest to that 100% projection in terms of the model and a standard deviation within 5 pips. Alright, so we have 1.0891 That one is just in my mind a little not it's not that good because it's over five pips We have the rejection block which by nature is what we look for to trade through that So what are we doing? We're expecting it to trade down below the rejection block So what would be the next stand deviation below the rejection block?
With volatility being what it should be in the direction of our weekly expansion, we're looking for it to trade lower. We're not trying to limit the weekly range to 100 pips. We're anticipating a target that all these things that I've taught you align with. The next objective would be 1.0881.5. So that level there.
We'll use that as our objective, and we'll change that to a dashed line. Okay, and I'll thicken it up because I want it to be much more pronounced versus this rejection block. Now, let's go back out to a 15-minute time frame. So we have...
price trading into that level here on the 6th. So Tuesday's trading, Wednesday's trading, it trades into it there. And then the rest of the week, we consolidate it.
And then once more down in there. So we have 100 pips from entry here. Clustered with a standard deviation, negative 9. So this particular day, right there, you're getting your 100 pips on that move.
Now, you're going to aim for this, obviously, but your target fills sooner because the model says once you get 100 pips, you're out. You're done. Does it move much more than 100 pips from your entry up here? No. So you're going to lose sleep over that?
I wouldn't. Now, if we look at that in terms of the day of the week, here's Tuesday, Wednesday, and you'd have to be out of the market on Thursday at New York Open. It went a little bit lower there that day, and they had this reversal. And that was before. New York Open.
See that? So, let's go back over here and let's assume for a moment that you either missed this entry up here or you want to use this model I'm showing you here, which is the European Open. So there's midnight. So now we're going to use 2 o'clock in the morning.
There's two o'clock in the morning the opening price Yeah, I'll just use this one because we're already done with it opening price there So two o'clock in the morning opening price you want to be a seller above that opening price but you have to be a Short seller I want to stop one pip below the Asian range. Like that sound effects? All right, so we have, what is this in here? Let me get that here. So midnight, midnight.
I'm sorry, midnight to 8 o'clock. Asian range low. Right there.
Okay at 2 o'clock in the morning right there Your order cannot go in to sell on a stop Until after 2 o'clock in the morning, so after 2 o'clock in the morning You're looking for the market to create a short term rally which we're getting here. So once it starts to rally and it trades above, the Asian range high over here. Once that occurs, we're having what?
Market protraction or Judas swing. So, you may be fearful. How far can it go? I don't want to get into it and it stops me out.
OK, like if you don't trust this part of it, which is in my mind, a better way of doing it. But I understand some of you want confirmation. So after two o'clock in the morning, you're waiting for a rally to take out the Asian range high.
Once it does that after two o'clock, this is the time window element. So time is important here. You're looking at.
At 2 o'clock, you're going to wait. Does it start to rally above the Asian range high? I don't have the Asian range high in here, but you obviously know it's above the Asian range low. So it starts to rally. So right away, we can then put a sell stop one pip below the Asian range low.
Now, if you're going to use this as your entry technique, There's nothing wrong with it because you're actually selling weakness once the move has already established the intraday high. So we're going to say that's 64.5. That would be your entry on a stop right there, so below the Asian range, low.
So you are not trying to guess how far it's going to go up. You don't care. But should your stop be filled, you have to use a 50-pip stop loss.
So you'd get in on there, and then you would. 10, 20, 30, 40, 50, it should be 5 right there. So here's your 50-pip stop loss. So you're selling short. I'm just going to just let you get a visual of what's actually occurring here.
I hope that I haven't lost you. It's rallying at 2 o'clock in the morning. You're waiting for it to rally.
Once it takes off the agent range high, And let me just put that in now because it'll make better sense now that I have it dressed up like this. Once you do this on your own charts, it'll be much more meaningful to you because you'll be able to put the price action axis and time. You'll put the charts the way it looks nicer to you.
Instead of how I have it. I know what I'm looking for, but this might not be so aesthetically pleasing to you. At the moment, but I promise in a second it will be nice.
And then the Asian range high here after 2 o'clock right here, you're waiting for it to rally above the Asian range high. Once it does that, you're putting a sell stop as the entry. So you're not really buying anything and putting a sell stop below to protect anything. You're placing a sell stop at that price level once this Asian range high is taken out.
Once it trades above it, it's it. So you have to wait post 2 o'clock in the morning here. Asian range high is taken out. You can put a sell stop down here. And that way you don't have to guess how far it's going to go up.
And it will only put you in once it starts to go down. Once it breaks the Asian range low, which it does here, you have a 50 pip stop loss. You're filled right on that candle right here, or you should be. Let's see what the low is on that. 62.3.
Yeah, you should. I mean, depending on what your broker is. If they're fickle, they may not fill you there.
But you get filled here for sure. And once that fill is done, even if you got filled here, you're not even getting half of the stop exposure with this retracement higher. You spend some time in here, but you're sleeping. Once you put your order in, you put your stop in, and your limit order in. Down here at 100 pips, you're done.
You just let it do what it's going to do. It's either going to stop you out or it's going to hit your objective down here. Now, you can put two orders in. You can put one short on a stop selling at 109.654 with a stop loss up to...
1, 10, 14, 4. So that would be your 50 pip stop loss. And then... That one contract or lot, standard lot, whatever you're trading, mini, micro, whatever, would come off at 100 pips.
And then the second order, so you would place two orders because that's what this model is calling for. Your second order, you're getting out at 50 pips. So you're going to take 50 pips off on one of the standard lot, micro lot, mini lot, whatever it is you. you're using and then you're holding the second one until it gets down to hopefully 100 pips. So both of them would have been filled and you can see this was the result.
So it fills you here. You never even make it to Thursday. But had it not filled it on this drop down, it would have happened here.
If it wouldn't have happened at all, say it consolidated longer, you would have been filled here on Thursday, early morning before New York opened, and you never would have suffered any of that drawdown back into and maybe even stopping you out. Now, once you move. 25, the way you do your stop loss is real easy to remember this, by the way.
My stop loss protocol managing the trailing stop loss is 25, 50, 75. It's 25% of what you expect to see in profit. If it starts to see that, like right here, your stop loss can drop 25%. If it drops down in your favor and you're making 50%, of your expected profit objective, your stop loss drops 50%.
And then once it drops to 75% of what you're expected to make in your profit, your stop has to be a break even. It never, ever, ever comes close to break even. But that's the protocol for stop loss management.
Okay. So I've literally taken you through model number two. I broke down how you could have applied it to this actual event. We called Euro lower. I gave you a very specific element of entering on the fifth based on the fourth's commentary.
This movement up in here, that was that hourly imbalance. Let's go back up to the hourly. And this one will be done. All right.
right here. Go back and listen to the commentary on the fourth and you'll see me refer to how on the 15 minute time frame, I believe it's what I was looking at. I said that we were likely to go up into that and it's based on the hourly. So one of the things that I know some of you want me to do is be highly, highly, highly detailed about everything and why I'm outlining it. The reason why I'm not doing so much of.
that when I'm giving the commentary. Number one, the videos will be very, very long. And two, there are some of you in here that are just basically parroting what I'm saying because you're selling my analysis as your own.
So I'm not not providing you all of that stuff to make you look even better. And I know some of you might not like that, that you aren't doing that, but you're like, oh, but you're keeping it from us. I'm not keeping anything from you. These are the things you're supposed to be doing anyway. I promised in the commentaries that I was going to point to where the market's likely to go.
I hinted where it likely could draw up into or down into to set up another setup to go where I'm pointing to. So I'm already doing all the legwork for you. It's your job to go in.
and do the things like I just did here using model number two. Okay? So hopefully this has been insightful to you. And until I talk to you in model number three, I can't really say that.
I mean, think about it. I'm going to be doing each one of these once a month. So the next one we'll do, we'll do it the second Saturday of May.
Okay? So the second Saturday of May. Let's look at what that would be here.
May, Saturday, the 14th of May. That will be when I do model number 3's algorithm. Lecture okay, so I literally walked you through the components What you're doing what it looks like why you're why are you doing it this way? What are you looking for step by step taking you right into the chart it absolutely works. It's very very precise.
It's Right out of what I explained, and it was explained years ago. So there's been some delay. Notice that?
It ain't like, oh, well, you know, we're going to find something that works. No, I just told you something this Monday. And if this would have been your approach, if you would be a short-term trader, you don't have to be in front of the charts the whole time monitoring and babysitting it.
You can apply something like this. And it doesn't have to be just this. You can.
tweak it and fine tune it with other things that you have grown accustomed to liking and drawn an affinity for with other tools and other approaches and what you're looking for for targets and such. And basically make it your own. So this was my submission for model number two for algorithmic theory and actually taking you into the chart and that's what we'll do when we do model number three.