Understanding Inner Circle Trader Techniques

Okay folks, welcome. This is going to be the first video I do as a beginning or a point of origin, if you want to call it that, for my continuing series on the YouTube channel, Inner Circle Trader. So there's going to be a daily entry in terms of the YouTube channel will have a Monday through Friday video log, so there'll be something posted. And in October 2017, I'm going to be doing a New York session live commentary. So I'll be talking about one particular pair per day based on personal choice and selection. That doesn't mean there's going to be a setup that comes to fruition every single day. It just means I'm going to give you an example focusing on one particular pair and using that as a foundation. and understanding your in learning price action. So the first thing I want to kind of like bring the focus to is why everyone starts trading. Obviously they want to make money. Okay. Number one, I'm not promising you that. Okay. Cause no one can. The only thing I can tell you is this is a particular pattern that I first discovered in price action and it was very easy to spot. It was very easy to see and understood the mechanics. rather quickly and I think from everyone I've ever taught this is the one pattern that most gravitate towards. There's a lot of different trading patterns out there especially in my personal repertoire but truth be told I only have really two setups that I look at and I'm not going to give you those particular setups here but I'm going to be teaching you the generic optimal trade entry from a foundational standpoint or bare basics approach to it. Now Right away, much like everyone else that's already gone through my three tutorials, they either dismissed it as, well, you know, it's too easy, it's too simple, trading can't be that easy. And no, trading isn't technically easy, quote unquote. What makes it difficult is you have to measure the amount of risk involved for every setup, and then you have to stick to a trading plan that follows that setup. And even that... doesn't guarantee you're going to make money. So the only thing I'm guaranteeing you here is a solid understanding of what I see in terms of price action as it relates to optimal trade entry, or as it's deemed on the internet and in my own tutorials, OTE. Okay, just an abbreviation for optimal trade entry. All right, so the first idea is, number one, before we do anything, I kind of like want to remind you all that I did a lecture Years and years ago about how your trading plan, as many as some might feel that's necessary to have a 14-page treaty on what it is you're going to do. I think personally, once you understand the mechanics of it all and what you're doing conceptually, it only needs to be enough to fill the back of a business card. So you need a short little list of things that you know by heart. What's your risk model? How to frame that? What makes your entry? What gives you the conditions in the marketplace that makes you bullish or bearish? And how do you execute and how do you manage that trade? And then obviously, where do you take your profits at? So obviously, it's a very oversimplification on my part. Admittedly, I understand that. But my return back to online, I guess, tutelage and teaching is really kind of like… Bring it back in the scope of simplification because I have a lot of things that I've taught everyone about trading every asset class, specifically Forex. The common consensus is because everyone's tried to learn everything I taught, and they tried to apply it to every possible scenario and every particular trading day that they had time to sit in front of the charts. It doesn't promote a solid understanding. In fact, it... Creates kind of like a paralysis effect. So what happens is everyone quickly walks away from the material thinking, well, number one, he's just a demo guy because you can't do it or because I haven't showed a track record. And it's always been about you, not about me. So if you take this information, use it, I promise you, you will have a greater understanding about price action than you have right now. That's the only thing I can promise. Now, does that mean you're going to be making any money? No, I can't promise that. Okay, so everything I talk about is going to be referred to as a hypothetical scenario because I'm not trying to take ownership of the risk and rewards that you take in using this information. So just understand that it's for informational purposes only. I think if you look at it, you'll quickly see that there's something of worth in terms of studying. So the first thing we're going to look at is understanding what makes the market predisposed to go higher or lower. Now if you recall, for those that have had that benefit of going through my old tutorials, I had a teaching on selecting key support and resistance levels. And it's primarily just working from a higher time frame monthly down into the lower time frame. When I say lower time frame, that would be about the four hours, the lowest I'd go in terms of defining it as a key. Anything less than four hours is too short term to refine that on a large institutional basis. So what I like to look for is, and what I taught on the free tutorials, is that if you use the higher time frame monthly, weekly, daily, and four hour, we'll just leave the four hour off for right now. Just focus on the monthly, daily, and weekly. time frames. If you look for key levels where price has moved away from it, in other words, if prices moved up to a resistance level and repelled and went lower, we can reasonably assume that there was a large degree of institutions that had a interest in being short there. And if the market trades down to a level and bounces off of it and goes higher, we can reasonably assume that there is an institutional basis for that rally to ensue. Now, Without going into great detail and revisiting everything I've ever done and trying to compress it into a very short video, just know that that simple premise of using a higher time frame chart and use a monthly chart, there's plenty of high probability scenarios that you could find just using a monthly chart. Now, you don't get a whole lot of setups, but if you're watching a wide array of particular assets. There's always something trading at or near a monthly level. Okay, and what's a monthly level? An old high, an old low. Simple as that. Now, everything I'm going to be teaching and revisiting in the YouTube channel is all about simplification. Very simple processes, simple ideas, no indicators, no gimmicks, none of those types of things. You don't need all that stuff. A very simple understanding of price action. The premise behind what makes these things strong is... We're looking for the evidence that there's going to be a institutional sponsorship behind the price move. That means big entities, deep pockets, lots of orders coming in, large sizable orders are coming in. We're not looking at ladders. We're not looking at little tiny little fluctuations of intraday volatility. We're looking at big, massive telltale signs that these big boys have pushed price around. And you can see that on the higher time frame. I've said this so many times. If folks would just focus on these time frames. It will answer 80% of the problems you're having because you're too worried about what's going on in these lower timeframes because you're enamored by something maybe I've done with the intraday chart, 5-minute, 15-minute, something like that, or even one-minute charts you get on social media. Everybody's a wizard now. They're showing all kinds of things that they've either done or can do, and that's great. But one-minute charts are not going to decipher what smart money is doing. That's just very short-term volatility. Now, I'm not disparaging the ability to make money doing that because I can do it just like this. Well, the next guy can. But what I really want to focus my time on, and this is what I taught from 2010, is it really just a forex, but it really goes across all asset classes. If you use a higher time frames on any asset classes you're looking to speculate in or study, that is where the big money moves are. It's as simple as that. It doesn't get any plainer than that. OK, so we're going to assume for a moment that we assume that the market's bullish. OK. And we would be looking for the market to trade higher. Optimal trade entry is really based on buying retracements. Okay, as the market makes an impulse price move higher, that impulse price move has to be incorporating a break in market structure. And I'll show you what that looks like in the chart. And then what you're doing is you're trying to buy the retracements lower. And obviously, it's very cliche to hear in technical analysis, buy the dips, sell the rallies. If you're bullish, you're going to be buying the dips or any retracements lower after a price leg higher. And then the expectation is you're buying it when it retraces, and then you want to buy it as it does that and then capture the next leg higher. And everything's reversed for when it's bearish. We'd be looking for rallies in price, and we're looking to sell those rallies with the expectation that we're going to break to lower lows. And that's the optimal trade entry short and optimal trade entry long. in a bare definition, simple definition. So what it looks like is on a FIB, this is the basic model. There's been many approaches to having the Fibonacci show what I use for optimal trade entry, but this is the bare bones. This is how it started. This is how it is. And I'll show you what these settings are. Let's go over here and click on, and I'll let you see the settings. That way you can set your MT4 or equivalent to the same. The zero level is first profit and scaling. I'll explain these as I go. 62 retracement level. I'm rounding it and then you have the 100 level which is one. here and then we have the percent sign dollar sign just allows the mt4 platform to plot the actual value you can see that over here and then it's 0.705 for the sweet spot for optimal trade entry that's the price level i'd like to see price trade to and 79 and we have our target levels which is zero negative 0.62, negative 0.27, and then negative 1 for a symmetrical price swing. And then the same as this done over here. I don't need to show you the property settings for that. It's the same thing that's shown in the scale of looking for downside objectives. So the premise is we would be looking for price to do something like this. We have an impulse price leg. And then we have another impulse price leg off that level and trading down into optimal trade entry. So what we're trying to do is get below halfway of that price leg higher down into 62, 70.5 to 79% trace level. I try to get my fill at 62. Just so everyone knows. right away it's for completeness sake i try to get at or very close to the 62 percent traceable level i allow up to a little small deviation below the 79 percent traceable to 80 okay i'll allow that for price now my stop will be exactly at this low not 10 pips or five pips below that it's gonna be right at that low okay so it's the easily defined if we were trying to get in at uh 62 percent traceable it'd be my fill would be one I'm sorry, 1234.3, we'll just call it. This is the gold market behind all this stuff. That's the price it's showing. I'd look to get the fill at basically 1235, we'll call it. Okay, just a little bit above 62. I'm not going to fancy dance around trying to get the actual level. I just want to be in at a level that makes sense. Okay, and in between that and where I think the low should be formed based on my analysis, where the price would be. In terms of the price swing, I'll show you what that looks like in the chart. This spot would be exactly right there. So between the two reference points, that would be the risk. The level up here, zero level, is when you take off first profit. Now, I like to go a little bit early because it can always fail getting back to this high. So at that high or just below it, that's where my first profit is. That's your first scaling. That's not your first target. First target is here. OK, so you got to expect price to want to eventually get to this level or maybe this level. If you're really extremely bullish, all the way up here to have a measured move. What's a measured move? The impulse leg low to high. That move is the same thing just added to the high up. OK, so that's a perfectly symmetrical price swing. It don't always happen to that degree. And that's why we have to be looking to take profit. Right before our old high because it could fail there. And if it goes above it at the 127 extension, basically is what this is. I'm going to be looking to take something off there. And if we get to 162 extension up here, that would be another portion for me to take profits. And then if I'm extremely bullish, I'll leave a small piece on for a measured move type effect. So the same thing is seen over here. For when the market's bearish, we look for an impulse leg lower in price. And then we expect to see price retrace higher back into optimal trade entry. And that's defined between 62 and 79 cent ratio. It could be anywhere in here. Now, the problem is, is I'm not teaching supply and demand. So supply and demand zones and stuff like that, I don't do those types of things. I look for specific price levels, and I'll teach you through the month of October how to refine that down to a specific price level and not just wonder where it is in that zone that you're going to be taking a trade at. Okay, so I'm going to do the actual price levels to look for. And the same thing, we would expect the price to show willingness to drop lower, limiting our risk to the actual high between our entry and the… high. That's our risk. So we would take that amount of risk, divide it by you know, the percent risk that we're willing to assume based on our account. We'll say it's a half a percent, whatever half a percent of your account is. You take that in terms of the pips and break that down, and that would give you your per pip leverage. And I know it's something I'm brushing over that rather quickly, and it's because I'm trying to just give you a foundation. And then obviously through the entire scope of October, we'll actually refine that so you can see how to do your risk, how to determine your risk, and figure out what you can earn on the position and what you're risking. And I'll teach you how to move all the stops when it's supposed to be done and all that. But ultimately, we would expect to see it then move down into some reasonable objective. First profit would be down here, but just above the old low. So we wouldn't take profit here. The thing is, and this is what... why most traders screw up and they don't make money and they're not profitable, either in demo or in live, is they don't do this practice right here, knowing where to get out at their first scale. You have to know what that is, and it has to be a reasonable amount of range to promote the idea of justification for the risk. So if I know I'm getting in here and my exit at a loss is up here with my stop, it has to be a reasonable, in my opinion, better than two. One okay, and that's about as good as I get in terms of trusting reward to risk ratios Okay, so what I'm looking for is everyone will look at this way. They'll say okay I'm I'm trading here at a short and my risk is here. So that's My risk okay, whatever that multiple is then they start doing this. It's okay So if I get short from that point, there's one are there's two artists three artists for our I think that's flawed Okay, and that's the reason why I make fun of folks when they want to talk about risk reward models It really should be done on first scaling. Okay, so if I'm getting here as an entry and my risk is here, it needs to be enough of the position coming off that promotes at least two to one. So this is one R in terms of the risk. Whatever that is, I have to be able to make two times that in my first profit. That's what I'm trying to shoot for. Now, sometimes I'll take trades that are just slightly underneath two. It might be like one and three quarters. Okay. If I'm really, really aggressive and I'm just in a fast market and we're not even a fast market, I should say it like this. If I'm in a market that is indecisive, but I'm already in a position, so I'm managing it, I'll look to take out one and a half percent. But I'm really looking for trades that will frame a model that will give me around two. Okay. So whatever my risk is from here to here, I want two times that. From my entry to first profit. And that's why I want to get as deep as I can into that 70.5 level. I'm not going to demand 79% tracing level. I'm going to be looking for the 70.5, preferably to give me my entry at 62. So that's what I'm looking for. So not all trade scenarios are going to give me this gearing. But the ones that do, they're the ones I'm going to take. And obviously it's not. As good if it's on like a one or five minute chart, because the range is going to be very, very small. The setups that are on like an hourly chart, they're good because it'll give me enough of a range to get close to that two to one reward the risk. And if I get that, everything past that first scaling out takes care of itself. And that's why it's I laugh when I hear folks saying it's stupid to take first profit or scaling out profits because your initial risk is X. And then. you've taken a small profit, yada, yada, yada. Well, that's because I'm looking for these objectives down here and it takes care of itself. Okay. And it ends up becoming, my last portion ends up being way more generally than what I did in my first scaling. So it's not an issue for me to be worrying about. And if you see examples of it going forward, you'll see quickly, there's no reason to be thinking it's a bad idea actually. So. Let's go over to the charts, and I'll give you some examples of how quickly and easily you can find these setups, and we'll give you all kinds of examples of it going forward in October. Okay, we're over here at tradingview.com, and admittedly, I'm a little clumsy when it comes to this platform. I've not been active in using it, but I've been practicing with it so that way I can use it as our medium for our teachings. So I want to kind of like draw your attention to how price on the euro dollar. This is a weekly time frame and price in recent weeks have pushed above these old highs over here. Okay, so if we did this on a monthly scale, and let's do it just for completeness sake. Okay, you can see this high here. Let me zoom in a little bit. So we have this high here, and this high comes in at 117.14. Okay, 117.14 for this particular month. So what I'm going to do is I'm going to drop a horizontal line right on it, and I'm going to ask you a question regarding pricing. So if we see price trade on this particular month right here, it trades above this high, right above it. Once we go above this old high, just think in terms of simple support resistance, folks. It's not complicated. When price is above it, whatever that price level is, and we're going to. We've already assumed not assumed, we've already figured it out that it was 1-17-14. The markets trade in an algorithmic format. There's price engines that generate runs on price and runs on stops, and there's accelerations in price and where delivery skips and jumps to specific areas in pricing. The easiest way to understand What that is, is if you look at a chart, you can do it like on an hourly chart or a 15-minute time frame. You can see it on all time frames, but really 15 in one minute. If you do it over the course of a week, you'll see how price gravitates from a full figure. Okay, and that would be an example of like 11700 to 1800. That would be a full penny move in a year dollar. That one penny move is... broken down algorithmically to the $117.80 level, $117.50 level or mid-figure, $117.20 level, and then we have $117.00 big figure. Okay, so my question to you is this. If price trace is above it, this old high back here, because we broke through that, this high is $117.14. So from an algorithmic standpoint, what... What price level would it want to reach back down into if it's going to go down for support? $117.20 because it's just above the $117.14, right? So if this high would have been $117.65, what would the level be that you'd expect to see it reach down into for an algorithmic support level? $117.50 mid-figure. So think in terms of that, and what this does is it eliminates all this distraction, looking at ladders and depth of market and all those types of things. You can probably swear by it and tell me you've done really, really well, and that's great. Just like anybody else using crossovers and MACD, they can tell me they've done really well with that too. I'm not telling you that you can't make money doing that kind of stuff. I'm just simply suggesting to you there's a much… easier approach to doing this than everyone's doing. So we're using an old high here, and while the level is 117.14 and a specific high, from an algorithmic standpoint, we would look for sensitivity or support to form around or at 117.20. Okay, so we're going to leave the level here, and we're going to drop down into a daily. Okay, so we have the 117.14 level on our charts, and Now I'm going to ask you to consider what is going on in reference to the institutional level from an algorithmic standpoint. In other words, we looked at our pricing model. It's full figure above it, the 20 level above that, mid-figure 50 above that, the 80 level institutional. And then we have the next full figure, OK, or 118. So if we're above price, when it trades above it here. We expect to see price find support when it comes back down into the 20 level. OK, so now we can adjust this level here and show at 117.20. OK, so 117.20 is the institutional price level. From an algorithmic standpoint, price is going to want to trade back down to that level. The reason why it does that is it allows the market to pick up orders at just below or above that level. OK, there's limit orders there. There's there's stops there. but generally it's coming down to run stops to pair the orders with smart money's limit orders okay Every time you see my chart below the market, I'm always referring to it as running sell stops. Above the market, I'm always referring to it as running buy stops. Those that are not in the know, they will question whether or not I'm using the right definition. I am using the right definition because I'm looking at things from an institutional standpoint. Those sell stops that are below the marketplace, smart money will have their buy limits. To pair up with those sell stops. Okay, so my perspective is not retail. So I'm looking at it from an institutional standpoint. From where I'm from, I don't look at retail. So if we understand that the market is above this 20 level, when it trades down into it, we should see the market trade into a support level. That support level is going to be defined. Find some pricing model. And I just gave you one. It's very simple. We use the old monthly high and we're finding support. We want to see price trade off of that and give us a pattern. So now we have a level. It's been rounded to an institutional level 20, 1720. And now we can drop down into lower time frame charts and we'll just look at a 15 minute time frame. OK, and then we'll. Okay, there we are. All right, so we have price trading down on the 27th and hitting the 20 level. Notice what it does. It hits it and it rallies away. That rally, this is what you're looking for. You want to see it take out a short-term high. That is seen here. It was short-term high. It trades through it. Once it does that, this break above that short-term high is a market structure break. Okay, so now from an algorithmic standpoint, the price will want to retrace back down. Once it retraces, okay, it's going to pick up more orders and then rally again. Okay. We have another break above this short-term high here. And I'm quite certain you guys that are more proficient with TradingView, you're probably smiling and saying, he could have done this or that and just made a copy. I don't know all that yet. So this is giving me some time. So we have another break here. Okay, so we have short-term high broken and another high broken. Now watch. This high. being higher than this one from a market structure standpoint, short-term high, intermediate-term high. So now when this breaks here, we have a much more solid setup for a potential run and price higher. Now we have to enter the optimal trade entry because we already have a consolidation in here. Price trades away, came back to the consolidation. Distribution, redistribution, smart money reversal, low risk. buy. And here we're looking for another area to buy or another area of accumulation or reaccumulation to take us above this consolidation. Now what I just described to you is a market maker buy model. It's simple as that. Some of you will say, well, that's Wyckoff. Well, I kind of got the idea from looking at price action alone. And then when I saw Wyckoff describing that scenario, it made me feel better that I've seen something that someone years and years before me was able to see that same price structure. But his definitions and things, I don't use that. There's a different approach and folks that went through my mentorship know right away. And I've challenged them as well to go through Wyckoff and see if what I was teaching was Wyckoff. It's not. It's very similar in terms of the general market profile itself because it's a very generic process. Markup and discount. It's as simple as that. But the long and short is the run above here. Right there, that impulse leg is all that's necessary because now we have a buy profile or model that would take us above this consolidation. So we would look for this whole price action right in here to be traded above because that's where the buy stops are sitting. So smart money buys down here at the 20 level, and we would know this level beforehand. And it's basically the one 1820. Because above this high, this high would be $118.10.2. And obviously above $118.10, the institutional level would be what? $118.20. And that would be where smart money would want to exit running those buy stops. Why do they want to run buy stops? Because the orders they picked up down here going long and then bought more down here, they're long. So they have to have people that want to buy it from them at a higher price. So buy stops, it would be above here. Why would there be buy stops there, Michael? Because folks that are being short, this is the last intermediate term high for anyone that has not trailed their stop loss lower and got stopped out. They're going to make a run on that liquidity right there, which is the reason why the market maker buy model is so, well, good. All right. So we're going to look at this little area right in here. OK. This is going to be the optimal trade entry that we're going to talk about just for tonight And it's make us a little bit bigger Okay, so this impulse leg rallying away and then coming back down picking up more orders. That's optimal trade entry That's what it looks like in price. That's the the executable Price level you can trade on now I'm going to ask you to let me go back to MT4 just for the pattern sake. But I wanted you to see how it can be shown on TradingView. It's not just simply an MT4 trick pony. It's there as well. But I want to go over to MT4 because I'm a little bit more efficient with that charting platform. And then we'll go into looking at the example. Okay, so we're over at MT4. It's kind of like redefine what we've already discussed. This is the old monthly high, okay, 117.14, and price was coming down away from higher levels. And we had a short-term low here, and we had a little bit of a rally in there. And folks would try to capture old lows or try to capture any advancement higher. If they're lucky enough to get in and see a little bit of a profit, they obviously fall in love with it. They marry the vein, the expression is. And obviously their stock would be resting below that. So the market trades down into that 20 level, institutional level, picks up orders right in here. Okay. Runs, hits that, and then rallies through, breaking this short-term structure high. When it does that, we have a market structure break. We wait for a retracement lower. Okay. Now the first time it does this, you're going to know. maybe lose the low risk buy for a market maker buy model. The consolidation here, the runaway, come back to the consolidation, distribution, smart money reversal, low risk buy, reaccumulation. That's what we're looking for the next area of accumulation. So this short-term high being broken here, we mentioned that this is a higher high than this one. So this is an intermediate term high. Okay, my old tutorials brought out a concept I picked up from Larry Williams, which is my mentor back in the 90s. He taught market structure and a high that has two lower highs on either side of it. It makes that high in the middle a significant high. And as it nests out, it gives us a market structure model. Here, this high being broken right there is much more convincing than this short term here. Without understanding everything I'm giving you here as an outline, or understanding the expectation of how orders are stacking around higher time frame key levels, and understanding algorithmic price models, because that's what I'm teaching here tonight from a very basic approach. This is all stuff I taught in my free tutorials, Sniper and Precision Trading Concepts, and all the other stuff in between. But this rally right in here, this impulse leg right there is all that we would be looking for. So this move up, when price trades up and creates that high, what it's doing is it's making a more convincing run above this high. So it's a market structure break on an intermediate term high. So it's much, much more reliable. So the retracement on that is going to be much more significant. So when we look at price moves, we want to look at the price move on the bodies of the candles. I've taught this in my tutorials. The wicks are always going to be the thinnest price action. And if you look at everyone's price across all different platforms and brokers, the part that's always different that throws everyone off is the WIX because the broker is allowed to have some measure of flexibility. I'm just going to say it. That's the polite way of saying it, where they can spread price a little bit more. So you're already getting a derivative of price from an interbank feed anyway, but the discrepancy between that and… What you see at your broker is many times way off. Okay. And you sign your agreement to that when you set up your account. You're allowing that to occur. Okay. So you can cry about it. They did this to me. They did that to me. But you really gave them permission. So it is what it is. All right. So this rally up, we're looking at, we're going to put on the bodies of candles up here. This is the highest body right there. This candle right there. And we're going to look at that as the open. So the open is $117.99. So that's where our Fib will be dropped right there. Okay. And we'll let it go. So now what happens is price rallies through impulse leg up and it drops back down. Look how nicely it gets another little bounce right there. Trades back up higher and it spends all this time on a 15 minute time frame. This is going to chop traders with no patience up. They're going to get scared every time it comes down. Or when it starts to rally like this, they jam their stop loss right underneath this low here. And then look what it does. Eventually comes back, hits it. You have to give the price freedom to trade from where you're trying to get in at to your stop. Let it go to the full stop. It's there for a reason, to protect you. But if you don't give it room to breathe, you're never going to give these markets the ample room that it needs to gyrate and then expand towards your targets. So the same Fibonacci settings. OK, nothing's different here. When trades up to this price level right there or just below it, there's your first profit. Okay, so if you're trying to get in at 70.5 or 62% trace on level, this movement here, you got to see at least two of that. One, two. Okay, first profit scale off, put your stop to break even, let it go. Price trades up to the first target, you can scale something off there, trades to this level here, you can scale something off there, and trades up to symmetrical price swing. Boom, hits that. Okay. And then look at the reaction after that, all the way back down. You think that's by happenstance, coincidence? No. It's going to an area of liquidity. We have a bearish order block here. It overlaps with target two. Really nice move there. But look at this short-term high here. What do you think is resting above that? Buy stops. Now, there's going to be some out there that don't understand what I'm teaching because they don't see things from an institutional standpoint. They have no idea how to look at it like this. But there it is. Trailed buy stops that don't get trailed down here. Not everyone carries that model where they got to jam it up seven tips above the recent high when they're bearish. That's what retail does. Longer term trending models, they have their stops farther back. OK, and this is one that would have been targeted. And here's another one as well. OK, and it overlaps with the symmetrical price swing that we have on our fit. OK, which is a 100 percent measured move of whatever the impulse swing is. This low to this body's high is the same thing from that body's high all the way up to this level. It's 100% the same in terms of pips and range. It's the same thing from this price point to here added to this, and you get that. Very, very precise, very, very precision-based trading. It reaches for the 20 level. Okay, and you can see how much work there was around it. Near the 20, a lot of 20, 20, 20. So, yeah. The market will gyrate and work around these levels here. Okay, this is one penny move in the euro. So look at the sensitivity around the 20 level. It trades up to and consolidates a little bit and gets another optimal trade entry right in here. From this impulse lake up, rallies again. What's it doing at near? The 50 level. Well, it's not exactly at 50, Michael. Exactly. Because at these levels, at 50, there's orders that are just above it. Or just below it, or at the 50 level, just like we have at the 20 level. It can be at the level 20, above the 20 a little bit, or below it. Everyone's going to have orders that are going to be close proximity to these specific levels. That's why the algorithm reaches for them. Now, institutions like these levels from a generic standpoint because it makes it easy for them to price their models in. We had the old high at 117.14. That's an odd number. Look for the manipulation here, a stop run, then a break in Mark Structure Rally. When we have that, anticipate some measure of buying. And then wait for the intermediate term high to be broken here. You're going to lose all this. There's nothing wrong with that. But if you want high probability and you want confirmation, and I'm holding my fingers up in quotations, you want confirmation, this is what it looks like. You've got to have an intermediate term high broken with market structure. And then do everything I just did here, and you have a complete trading model. Targets, how to know when to do it, using a higher time frame level, what to reach for. Well, you're going to have to look for an old high to run through. Okay, so if you're buying low, you want to sell high. Where do you sell high at? Just find an old high somewhere, okay, and do it and scope it as we outlined here. This is just one example. You've seen many other examples of these going forward, but this is just one that is available to you, and you can see it in your own charts, and study it and seek it in other pairs throughout this week that we've had and find similar examples of this, even looking for it for shorts as well. But this is going to complete this first introduction to optimal trade entries. This is your first time here. This is what it looks like coming back down into it here. That's the buy. Okay. You can buy here or here and look at the dynamic reaction. Now, with this, like it is on the chart, I'm going to drop down into an hourly chart, and you'll see why I like the hourly setups because they're much cleaner. A lot of noise on these lower time frames, but same impulse leg here, and it comes right down. It hits. Beautifully here, the body's respecting the candle. I'm sorry, the body's respecting the FIB level. Not that the FIB level is giving them there's no magic in the FIB. It's just giving a specific framework for us from the best perspective we can have, not being on an interbank level institution where you can actually see because you're not seeing these orders, folks. You're not that's why I laugh when folks will say I'm looking at Yeah. Well, I said I wasn't going to do those types of things. I'm not going to belittle anybody else because if you're making money doing what you're doing, God bless you. That's why I like Forex because I understand the animal and the things that everyone hopes they can see in their little gimmicks and their indicators. That's what makes the opportunity because it's there for us to take because it's giving a sentiment. It's providing and molding a trader's mind or a trader's sentiment about a market. And what are they going to do? Instinctively, they're going to react. And I don't react. I anticipate. And that's what we're going to teach using just one simple pattern, optimal trade entry. And you'll see that that's all you really need. You've never needed anything more than that. But I asked back then, I think it was 2012, if you wanted to go deeper, and 660 some of you went really deep. They know everything I know. And I'm not teaching it on the mentorship. So please don't ask me. People are still asking. That's going to be the first introduction to it. Obviously, it'll be much more refined and structured as we go forward, but this is certainly good enough. And it really gives you an encapsulated view of an entire breakdown from an institutional price move, how institutions work inside the model of how price is being delivered, and why it should go where it's going and what the setups look like and where they occur. But you have to understand how the algorithm. that makes the price engines drive up and down, they drop down to allow traders to pick up orders at very, very, very low pricing. And then it rallies up to allow traders to get out at very high, high prices. So in between there, there's opportunities to trade. You don't see them because you're not trained or taught from any retail perspective. What I just gave you here is exactly how bank level traders trade. And anybody that says different. simply doesn't know anything or what they're talking about. So until next time, wish good luck, good trading, and I'll catch up with you next week.

And in October 2017, I'm going to be doing a New York session live commentary. So I'll be talking about one particular pair per day based on personal choice and selection. That doesn't mean there's going to be a setup that comes to fruition every single day. It just means I'm going to give you an example focusing on one particular pair and using that as a foundation.

and understanding your in learning price action. So the first thing I want to kind of like bring the focus to is why everyone starts trading. Obviously they want to make money. Okay. Number one, I'm not promising you that.

Okay. Cause no one can. The only thing I can tell you is this is a particular pattern that I first discovered in price action and it was very easy to spot. It was very easy to see and understood the mechanics.

rather quickly and I think from everyone I've ever taught this is the one pattern that most gravitate towards. There's a lot of different trading patterns out there especially in my personal repertoire but truth be told I only have really two setups that I look at and I'm not going to give you those particular setups here but I'm going to be teaching you the generic optimal trade entry from a foundational standpoint or bare basics approach to it. Now Right away, much like everyone else that's already gone through my three tutorials, they either dismissed it as, well, you know, it's too easy, it's too simple, trading can't be that easy.

And no, trading isn't technically easy, quote unquote. What makes it difficult is you have to measure the amount of risk involved for every setup, and then you have to stick to a trading plan that follows that setup. And even that...

doesn't guarantee you're going to make money. So the only thing I'm guaranteeing you here is a solid understanding of what I see in terms of price action as it relates to optimal trade entry, or as it's deemed on the internet and in my own tutorials, OTE. Okay, just an abbreviation for optimal trade entry.

All right, so the first idea is, number one, before we do anything, I kind of like want to remind you all that I did a lecture Years and years ago about how your trading plan, as many as some might feel that's necessary to have a 14-page treaty on what it is you're going to do. I think personally, once you understand the mechanics of it all and what you're doing conceptually, it only needs to be enough to fill the back of a business card. So you need a short little list of things that you know by heart.

What's your risk model? How to frame that? What makes your entry? What gives you the conditions in the marketplace that makes you bullish or bearish? And how do you execute and how do you manage that trade?

And then obviously, where do you take your profits at? So obviously, it's a very oversimplification on my part. Admittedly, I understand that. But my return back to online, I guess, tutelage and teaching is really kind of like… Bring it back in the scope of simplification because I have a lot of things that I've taught everyone about trading every asset class, specifically Forex. The common consensus is because everyone's tried to learn everything I taught, and they tried to apply it to every possible scenario and every particular trading day that they had time to sit in front of the charts.

It doesn't promote a solid understanding. In fact, it... Creates kind of like a paralysis effect.

So what happens is everyone quickly walks away from the material thinking, well, number one, he's just a demo guy because you can't do it or because I haven't showed a track record. And it's always been about you, not about me. So if you take this information, use it, I promise you, you will have a greater understanding about price action than you have right now. That's the only thing I can promise. Now, does that mean you're going to be making any money?

No, I can't promise that. Okay, so everything I talk about is going to be referred to as a hypothetical scenario because I'm not trying to take ownership of the risk and rewards that you take in using this information. So just understand that it's for informational purposes only.

I think if you look at it, you'll quickly see that there's something of worth in terms of studying. So the first thing we're going to look at is understanding what makes the market predisposed to go higher or lower. Now if you recall, for those that have had that benefit of going through my old tutorials, I had a teaching on selecting key support and resistance levels. And it's primarily just working from a higher time frame monthly down into the lower time frame. When I say lower time frame, that would be about the four hours, the lowest I'd go in terms of defining it as a key.

Anything less than four hours is too short term to refine that on a large institutional basis. So what I like to look for is, and what I taught on the free tutorials, is that if you use the higher time frame monthly, weekly, daily, and four hour, we'll just leave the four hour off for right now. Just focus on the monthly, daily, and weekly.

time frames. If you look for key levels where price has moved away from it, in other words, if prices moved up to a resistance level and repelled and went lower, we can reasonably assume that there was a large degree of institutions that had a interest in being short there. And if the market trades down to a level and bounces off of it and goes higher, we can reasonably assume that there is an institutional basis for that rally to ensue.

Now, Without going into great detail and revisiting everything I've ever done and trying to compress it into a very short video, just know that that simple premise of using a higher time frame chart and use a monthly chart, there's plenty of high probability scenarios that you could find just using a monthly chart. Now, you don't get a whole lot of setups, but if you're watching a wide array of particular assets. There's always something trading at or near a monthly level. Okay, and what's a monthly level? An old high, an old low.

Simple as that. Now, everything I'm going to be teaching and revisiting in the YouTube channel is all about simplification. Very simple processes, simple ideas, no indicators, no gimmicks, none of those types of things. You don't need all that stuff. A very simple understanding of price action.

The premise behind what makes these things strong is... We're looking for the evidence that there's going to be a institutional sponsorship behind the price move. That means big entities, deep pockets, lots of orders coming in, large sizable orders are coming in. We're not looking at ladders.

We're not looking at little tiny little fluctuations of intraday volatility. We're looking at big, massive telltale signs that these big boys have pushed price around. And you can see that on the higher time frame. I've said this so many times.

If folks would just focus on these time frames. It will answer 80% of the problems you're having because you're too worried about what's going on in these lower timeframes because you're enamored by something maybe I've done with the intraday chart, 5-minute, 15-minute, something like that, or even one-minute charts you get on social media. Everybody's a wizard now. They're showing all kinds of things that they've either done or can do, and that's great.

But one-minute charts are not going to decipher what smart money is doing. That's just very short-term volatility. Now, I'm not disparaging the ability to make money doing that because I can do it just like this. Well, the next guy can. But what I really want to focus my time on, and this is what I taught from 2010, is it really just a forex, but it really goes across all asset classes.

If you use a higher time frames on any asset classes you're looking to speculate in or study, that is where the big money moves are. It's as simple as that. It doesn't get any plainer than that. OK, so we're going to assume for a moment that we assume that the market's bullish. OK.

And we would be looking for the market to trade higher. Optimal trade entry is really based on buying retracements. Okay, as the market makes an impulse price move higher, that impulse price move has to be incorporating a break in market structure.

And I'll show you what that looks like in the chart. And then what you're doing is you're trying to buy the retracements lower. And obviously, it's very cliche to hear in technical analysis, buy the dips, sell the rallies.

If you're bullish, you're going to be buying the dips or any retracements lower after a price leg higher. And then the expectation is you're buying it when it retraces, and then you want to buy it as it does that and then capture the next leg higher. And everything's reversed for when it's bearish. We'd be looking for rallies in price, and we're looking to sell those rallies with the expectation that we're going to break to lower lows. And that's the optimal trade entry short and optimal trade entry long.

in a bare definition, simple definition. So what it looks like is on a FIB, this is the basic model. There's been many approaches to having the Fibonacci show what I use for optimal trade entry, but this is the bare bones. This is how it started.

This is how it is. And I'll show you what these settings are. Let's go over here and click on, and I'll let you see the settings. That way you can set your MT4 or equivalent to the same.

The zero level is first profit and scaling. I'll explain these as I go. 62 retracement level. I'm rounding it and then you have the 100 level which is one.

here and then we have the percent sign dollar sign just allows the mt4 platform to plot the actual value you can see that over here and then it's 0.705 for the sweet spot for optimal trade entry that's the price level i'd like to see price trade to and 79 and we have our target levels which is zero negative 0.62, negative 0.27, and then negative 1 for a symmetrical price swing. And then the same as this done over here. I don't need to show you the property settings for that.

It's the same thing that's shown in the scale of looking for downside objectives. So the premise is we would be looking for price to do something like this. We have an impulse price leg. And then we have another impulse price leg off that level and trading down into optimal trade entry.

So what we're trying to do is get below halfway of that price leg higher down into 62, 70.5 to 79% trace level. I try to get my fill at 62. Just so everyone knows. right away it's for completeness sake i try to get at or very close to the 62 percent traceable level i allow up to a little small deviation below the 79 percent traceable to 80 okay i'll allow that for price now my stop will be exactly at this low not 10 pips or five pips below that it's gonna be right at that low okay so it's the easily defined if we were trying to get in at uh 62 percent traceable it'd be my fill would be one I'm sorry, 1234.3, we'll just call it.

This is the gold market behind all this stuff. That's the price it's showing. I'd look to get the fill at basically 1235, we'll call it.

Okay, just a little bit above 62. I'm not going to fancy dance around trying to get the actual level. I just want to be in at a level that makes sense. Okay, and in between that and where I think the low should be formed based on my analysis, where the price would be. In terms of the price swing, I'll show you what that looks like in the chart.

This spot would be exactly right there. So between the two reference points, that would be the risk. The level up here, zero level, is when you take off first profit. Now, I like to go a little bit early because it can always fail getting back to this high. So at that high or just below it, that's where my first profit is.

That's your first scaling. That's not your first target. First target is here.

OK, so you got to expect price to want to eventually get to this level or maybe this level. If you're really extremely bullish, all the way up here to have a measured move. What's a measured move? The impulse leg low to high.

That move is the same thing just added to the high up. OK, so that's a perfectly symmetrical price swing. It don't always happen to that degree. And that's why we have to be looking to take profit. Right before our old high because it could fail there.

And if it goes above it at the 127 extension, basically is what this is. I'm going to be looking to take something off there. And if we get to 162 extension up here, that would be another portion for me to take profits. And then if I'm extremely bullish, I'll leave a small piece on for a measured move type effect.

So the same thing is seen over here. For when the market's bearish, we look for an impulse leg lower in price. And then we expect to see price retrace higher back into optimal trade entry.

And that's defined between 62 and 79 cent ratio. It could be anywhere in here. Now, the problem is, is I'm not teaching supply and demand. So supply and demand zones and stuff like that, I don't do those types of things. I look for specific price levels, and I'll teach you through the month of October how to refine that down to a specific price level and not just wonder where it is in that zone that you're going to be taking a trade at.

Okay, so I'm going to do the actual price levels to look for. And the same thing, we would expect the price to show willingness to drop lower, limiting our risk to the actual high between our entry and the… high. That's our risk. So we would take that amount of risk, divide it by you know, the percent risk that we're willing to assume based on our account. We'll say it's a half a percent, whatever half a percent of your account is.

You take that in terms of the pips and break that down, and that would give you your per pip leverage. And I know it's something I'm brushing over that rather quickly, and it's because I'm trying to just give you a foundation. And then obviously through the entire scope of October, we'll actually refine that so you can see how to do your risk, how to determine your risk, and figure out what you can earn on the position and what you're risking. And I'll teach you how to move all the stops when it's supposed to be done and all that.

But ultimately, we would expect to see it then move down into some reasonable objective. First profit would be down here, but just above the old low. So we wouldn't take profit here.

The thing is, and this is what... why most traders screw up and they don't make money and they're not profitable, either in demo or in live, is they don't do this practice right here, knowing where to get out at their first scale. You have to know what that is, and it has to be a reasonable amount of range to promote the idea of justification for the risk.

So if I know I'm getting in here and my exit at a loss is up here with my stop, it has to be a reasonable, in my opinion, better than two. One okay, and that's about as good as I get in terms of trusting reward to risk ratios Okay, so what I'm looking for is everyone will look at this way. They'll say okay I'm I'm trading here at a short and my risk is here. So that's My risk okay, whatever that multiple is then they start doing this. It's okay So if I get short from that point, there's one are there's two artists three artists for our I think that's flawed Okay, and that's the reason why I make fun of folks when they want to talk about risk reward models It really should be done on first scaling.

Okay, so if I'm getting here as an entry and my risk is here, it needs to be enough of the position coming off that promotes at least two to one. So this is one R in terms of the risk. Whatever that is, I have to be able to make two times that in my first profit. That's what I'm trying to shoot for.

Now, sometimes I'll take trades that are just slightly underneath two. It might be like one and three quarters. Okay.

If I'm really, really aggressive and I'm just in a fast market and we're not even a fast market, I should say it like this. If I'm in a market that is indecisive, but I'm already in a position, so I'm managing it, I'll look to take out one and a half percent. But I'm really looking for trades that will frame a model that will give me around two.

Okay. So whatever my risk is from here to here, I want two times that. From my entry to first profit. And that's why I want to get as deep as I can into that 70.5 level.

I'm not going to demand 79% tracing level. I'm going to be looking for the 70.5, preferably to give me my entry at 62. So that's what I'm looking for. So not all trade scenarios are going to give me this gearing. But the ones that do, they're the ones I'm going to take. And obviously it's not.

As good if it's on like a one or five minute chart, because the range is going to be very, very small. The setups that are on like an hourly chart, they're good because it'll give me enough of a range to get close to that two to one reward the risk. And if I get that, everything past that first scaling out takes care of itself. And that's why it's I laugh when I hear folks saying it's stupid to take first profit or scaling out profits because your initial risk is X. And then.

you've taken a small profit, yada, yada, yada. Well, that's because I'm looking for these objectives down here and it takes care of itself. Okay. And it ends up becoming, my last portion ends up being way more generally than what I did in my first scaling.

So it's not an issue for me to be worrying about. And if you see examples of it going forward, you'll see quickly, there's no reason to be thinking it's a bad idea actually. So.

Let's go over to the charts, and I'll give you some examples of how quickly and easily you can find these setups, and we'll give you all kinds of examples of it going forward in October. Okay, we're over here at tradingview.com, and admittedly, I'm a little clumsy when it comes to this platform. I've not been active in using it, but I've been practicing with it so that way I can use it as our medium for our teachings. So I want to kind of like draw your attention to how price on the euro dollar. This is a weekly time frame and price in recent weeks have pushed above these old highs over here.

Okay, so if we did this on a monthly scale, and let's do it just for completeness sake. Okay, you can see this high here. Let me zoom in a little bit. So we have this high here, and this high comes in at 117.14. Okay, 117.14 for this particular month.

So what I'm going to do is I'm going to drop a horizontal line right on it, and I'm going to ask you a question regarding pricing. So if we see price trade on this particular month right here, it trades above this high, right above it. Once we go above this old high, just think in terms of simple support resistance, folks. It's not complicated. When price is above it, whatever that price level is, and we're going to.

We've already assumed not assumed, we've already figured it out that it was 1-17-14. The markets trade in an algorithmic format. There's price engines that generate runs on price and runs on stops, and there's accelerations in price and where delivery skips and jumps to specific areas in pricing.

The easiest way to understand What that is, is if you look at a chart, you can do it like on an hourly chart or a 15-minute time frame. You can see it on all time frames, but really 15 in one minute. If you do it over the course of a week, you'll see how price gravitates from a full figure.

Okay, and that would be an example of like 11700 to 1800. That would be a full penny move in a year dollar. That one penny move is... broken down algorithmically to the $117.80 level, $117.50 level or mid-figure, $117.20 level, and then we have $117.00 big figure. Okay, so my question to you is this.

If price trace is above it, this old high back here, because we broke through that, this high is $117.14. So from an algorithmic standpoint, what... What price level would it want to reach back down into if it's going to go down for support? $117.20 because it's just above the $117.14, right? So if this high would have been $117.65, what would the level be that you'd expect to see it reach down into for an algorithmic support level?

$117.50 mid-figure. So think in terms of that, and what this does is it eliminates all this distraction, looking at ladders and depth of market and all those types of things. You can probably swear by it and tell me you've done really, really well, and that's great.

Just like anybody else using crossovers and MACD, they can tell me they've done really well with that too. I'm not telling you that you can't make money doing that kind of stuff. I'm just simply suggesting to you there's a much… easier approach to doing this than everyone's doing.

So we're using an old high here, and while the level is 117.14 and a specific high, from an algorithmic standpoint, we would look for sensitivity or support to form around or at 117.20. Okay, so we're going to leave the level here, and we're going to drop down into a daily. Okay, so we have the 117.14 level on our charts, and Now I'm going to ask you to consider what is going on in reference to the institutional level from an algorithmic standpoint.

In other words, we looked at our pricing model. It's full figure above it, the 20 level above that, mid-figure 50 above that, the 80 level institutional. And then we have the next full figure, OK, or 118. So if we're above price, when it trades above it here.

We expect to see price find support when it comes back down into the 20 level. OK, so now we can adjust this level here and show at 117.20. OK, so 117.20 is the institutional price level. From an algorithmic standpoint, price is going to want to trade back down to that level. The reason why it does that is it allows the market to pick up orders at just below or above that level.

OK, there's limit orders there. There's there's stops there. but generally it's coming down to run stops to pair the orders with smart money's limit orders okay Every time you see my chart below the market, I'm always referring to it as running sell stops.

Above the market, I'm always referring to it as running buy stops. Those that are not in the know, they will question whether or not I'm using the right definition. I am using the right definition because I'm looking at things from an institutional standpoint.

Those sell stops that are below the marketplace, smart money will have their buy limits. To pair up with those sell stops. Okay, so my perspective is not retail. So I'm looking at it from an institutional standpoint. From where I'm from, I don't look at retail.

So if we understand that the market is above this 20 level, when it trades down into it, we should see the market trade into a support level. That support level is going to be defined. Find some pricing model.

And I just gave you one. It's very simple. We use the old monthly high and we're finding support.

We want to see price trade off of that and give us a pattern. So now we have a level. It's been rounded to an institutional level 20, 1720. And now we can drop down into lower time frame charts and we'll just look at a 15 minute time frame.

OK, and then we'll. Okay, there we are. All right, so we have price trading down on the 27th and hitting the 20 level. Notice what it does.

It hits it and it rallies away. That rally, this is what you're looking for. You want to see it take out a short-term high. That is seen here. It was short-term high.

It trades through it. Once it does that, this break above that short-term high is a market structure break. Okay, so now from an algorithmic standpoint, the price will want to retrace back down. Once it retraces, okay, it's going to pick up more orders and then rally again. Okay.

We have another break above this short-term high here. And I'm quite certain you guys that are more proficient with TradingView, you're probably smiling and saying, he could have done this or that and just made a copy. I don't know all that yet. So this is giving me some time. So we have another break here.

Okay, so we have short-term high broken and another high broken. Now watch. This high. being higher than this one from a market structure standpoint, short-term high, intermediate-term high.

So now when this breaks here, we have a much more solid setup for a potential run and price higher. Now we have to enter the optimal trade entry because we already have a consolidation in here. Price trades away, came back to the consolidation.

Distribution, redistribution, smart money reversal, low risk. buy. And here we're looking for another area to buy or another area of accumulation or reaccumulation to take us above this consolidation. Now what I just described to you is a market maker buy model.

It's simple as that. Some of you will say, well, that's Wyckoff. Well, I kind of got the idea from looking at price action alone. And then when I saw Wyckoff describing that scenario, it made me feel better that I've seen something that someone years and years before me was able to see that same price structure.

But his definitions and things, I don't use that. There's a different approach and folks that went through my mentorship know right away. And I've challenged them as well to go through Wyckoff and see if what I was teaching was Wyckoff. It's not. It's very similar in terms of the general market profile itself because it's a very generic process.

Markup and discount. It's as simple as that. But the long and short is the run above here. Right there, that impulse leg is all that's necessary because now we have a buy profile or model that would take us above this consolidation.

So we would look for this whole price action right in here to be traded above because that's where the buy stops are sitting. So smart money buys down here at the 20 level, and we would know this level beforehand. And it's basically the one 1820. Because above this high, this high would be $118.10.2.

And obviously above $118.10, the institutional level would be what? $118.20. And that would be where smart money would want to exit running those buy stops.

Why do they want to run buy stops? Because the orders they picked up down here going long and then bought more down here, they're long. So they have to have people that want to buy it from them at a higher price. So buy stops, it would be above here. Why would there be buy stops there, Michael?

Because folks that are being short, this is the last intermediate term high for anyone that has not trailed their stop loss lower and got stopped out. They're going to make a run on that liquidity right there, which is the reason why the market maker buy model is so, well, good. All right.

So we're going to look at this little area right in here. OK. This is going to be the optimal trade entry that we're going to talk about just for tonight And it's make us a little bit bigger Okay, so this impulse leg rallying away and then coming back down picking up more orders. That's optimal trade entry That's what it looks like in price.

That's the the executable Price level you can trade on now I'm going to ask you to let me go back to MT4 just for the pattern sake. But I wanted you to see how it can be shown on TradingView. It's not just simply an MT4 trick pony.

It's there as well. But I want to go over to MT4 because I'm a little bit more efficient with that charting platform. And then we'll go into looking at the example. Okay, so we're over at MT4. It's kind of like redefine what we've already discussed.

This is the old monthly high, okay, 117.14, and price was coming down away from higher levels. And we had a short-term low here, and we had a little bit of a rally in there. And folks would try to capture old lows or try to capture any advancement higher. If they're lucky enough to get in and see a little bit of a profit, they obviously fall in love with it. They marry the vein, the expression is.

And obviously their stock would be resting below that. So the market trades down into that 20 level, institutional level, picks up orders right in here. Okay.

Runs, hits that, and then rallies through, breaking this short-term structure high. When it does that, we have a market structure break. We wait for a retracement lower.

Okay. Now the first time it does this, you're going to know. maybe lose the low risk buy for a market maker buy model. The consolidation here, the runaway, come back to the consolidation, distribution, smart money reversal, low risk buy, reaccumulation. That's what we're looking for the next area of accumulation.

So this short-term high being broken here, we mentioned that this is a higher high than this one. So this is an intermediate term high. Okay, my old tutorials brought out a concept I picked up from Larry Williams, which is my mentor back in the 90s.

He taught market structure and a high that has two lower highs on either side of it. It makes that high in the middle a significant high. And as it nests out, it gives us a market structure model.

Here, this high being broken right there is much more convincing than this short term here. Without understanding everything I'm giving you here as an outline, or understanding the expectation of how orders are stacking around higher time frame key levels, and understanding algorithmic price models, because that's what I'm teaching here tonight from a very basic approach. This is all stuff I taught in my free tutorials, Sniper and Precision Trading Concepts, and all the other stuff in between. But this rally right in here, this impulse leg right there is all that we would be looking for. So this move up, when price trades up and creates that high, what it's doing is it's making a more convincing run above this high.

So it's a market structure break on an intermediate term high. So it's much, much more reliable. So the retracement on that is going to be much more significant. So when we look at price moves, we want to look at the price move on the bodies of the candles. I've taught this in my tutorials.

The wicks are always going to be the thinnest price action. And if you look at everyone's price across all different platforms and brokers, the part that's always different that throws everyone off is the WIX because the broker is allowed to have some measure of flexibility. I'm just going to say it.

That's the polite way of saying it, where they can spread price a little bit more. So you're already getting a derivative of price from an interbank feed anyway, but the discrepancy between that and… What you see at your broker is many times way off. Okay.

And you sign your agreement to that when you set up your account. You're allowing that to occur. Okay.

So you can cry about it. They did this to me. They did that to me. But you really gave them permission.

So it is what it is. All right. So this rally up, we're looking at, we're going to put on the bodies of candles up here. This is the highest body right there. This candle right there.

And we're going to look at that as the open. So the open is $117.99. So that's where our Fib will be dropped right there. Okay. And we'll let it go.

So now what happens is price rallies through impulse leg up and it drops back down. Look how nicely it gets another little bounce right there. Trades back up higher and it spends all this time on a 15 minute time frame.

This is going to chop traders with no patience up. They're going to get scared every time it comes down. Or when it starts to rally like this, they jam their stop loss right underneath this low here. And then look what it does.

Eventually comes back, hits it. You have to give the price freedom to trade from where you're trying to get in at to your stop. Let it go to the full stop.

It's there for a reason, to protect you. But if you don't give it room to breathe, you're never going to give these markets the ample room that it needs to gyrate and then expand towards your targets. So the same Fibonacci settings.

OK, nothing's different here. When trades up to this price level right there or just below it, there's your first profit. Okay, so if you're trying to get in at 70.5 or 62% trace on level, this movement here, you got to see at least two of that. One, two.

Okay, first profit scale off, put your stop to break even, let it go. Price trades up to the first target, you can scale something off there, trades to this level here, you can scale something off there, and trades up to symmetrical price swing. Boom, hits that.

Okay. And then look at the reaction after that, all the way back down. You think that's by happenstance, coincidence? No.

It's going to an area of liquidity. We have a bearish order block here. It overlaps with target two.

Really nice move there. But look at this short-term high here. What do you think is resting above that?

Buy stops. Now, there's going to be some out there that don't understand what I'm teaching because they don't see things from an institutional standpoint. They have no idea how to look at it like this. But there it is. Trailed buy stops that don't get trailed down here.

Not everyone carries that model where they got to jam it up seven tips above the recent high when they're bearish. That's what retail does. Longer term trending models, they have their stops farther back.

OK, and this is one that would have been targeted. And here's another one as well. OK, and it overlaps with the symmetrical price swing that we have on our fit. OK, which is a 100 percent measured move of whatever the impulse swing is. This low to this body's high is the same thing from that body's high all the way up to this level.

It's 100% the same in terms of pips and range. It's the same thing from this price point to here added to this, and you get that. Very, very precise, very, very precision-based trading.

It reaches for the 20 level. Okay, and you can see how much work there was around it. Near the 20, a lot of 20, 20, 20. So, yeah.

The market will gyrate and work around these levels here. Okay, this is one penny move in the euro. So look at the sensitivity around the 20 level. It trades up to and consolidates a little bit and gets another optimal trade entry right in here.

From this impulse lake up, rallies again. What's it doing at near? The 50 level.

Well, it's not exactly at 50, Michael. Exactly. Because at these levels, at 50, there's orders that are just above it.

Or just below it, or at the 50 level, just like we have at the 20 level. It can be at the level 20, above the 20 a little bit, or below it. Everyone's going to have orders that are going to be close proximity to these specific levels. That's why the algorithm reaches for them.

Now, institutions like these levels from a generic standpoint because it makes it easy for them to price their models in. We had the old high at 117.14. That's an odd number. Look for the manipulation here, a stop run, then a break in Mark Structure Rally. When we have that, anticipate some measure of buying.

And then wait for the intermediate term high to be broken here. You're going to lose all this. There's nothing wrong with that.

But if you want high probability and you want confirmation, and I'm holding my fingers up in quotations, you want confirmation, this is what it looks like. You've got to have an intermediate term high broken with market structure. And then do everything I just did here, and you have a complete trading model. Targets, how to know when to do it, using a higher time frame level, what to reach for.

Well, you're going to have to look for an old high to run through. Okay, so if you're buying low, you want to sell high. Where do you sell high at? Just find an old high somewhere, okay, and do it and scope it as we outlined here. This is just one example.

You've seen many other examples of these going forward, but this is just one that is available to you, and you can see it in your own charts, and study it and seek it in other pairs throughout this week that we've had and find similar examples of this, even looking for it for shorts as well. But this is going to complete this first introduction to optimal trade entries. This is your first time here. This is what it looks like coming back down into it here.

That's the buy. Okay. You can buy here or here and look at the dynamic reaction. Now, with this, like it is on the chart, I'm going to drop down into an hourly chart, and you'll see why I like the hourly setups because they're much cleaner.

A lot of noise on these lower time frames, but same impulse leg here, and it comes right down. It hits. Beautifully here, the body's respecting the candle. I'm sorry, the body's respecting the FIB level.

Not that the FIB level is giving them there's no magic in the FIB. It's just giving a specific framework for us from the best perspective we can have, not being on an interbank level institution where you can actually see because you're not seeing these orders, folks. You're not that's why I laugh when folks will say I'm looking at Yeah.

Well, I said I wasn't going to do those types of things. I'm not going to belittle anybody else because if you're making money doing what you're doing, God bless you. That's why I like Forex because I understand the animal and the things that everyone hopes they can see in their little gimmicks and their indicators.

That's what makes the opportunity because it's there for us to take because it's giving a sentiment. It's providing and molding a trader's mind or a trader's sentiment about a market. And what are they going to do?

Instinctively, they're going to react. And I don't react. I anticipate.

And that's what we're going to teach using just one simple pattern, optimal trade entry. And you'll see that that's all you really need. You've never needed anything more than that. But I asked back then, I think it was 2012, if you wanted to go deeper, and 660 some of you went really deep.

They know everything I know. And I'm not teaching it on the mentorship. So please don't ask me.

People are still asking. That's going to be the first introduction to it. Obviously, it'll be much more refined and structured as we go forward, but this is certainly good enough.

And it really gives you an encapsulated view of an entire breakdown from an institutional price move, how institutions work inside the model of how price is being delivered, and why it should go where it's going and what the setups look like and where they occur. But you have to understand how the algorithm. that makes the price engines drive up and down, they drop down to allow traders to pick up orders at very, very, very low pricing. And then it rallies up to allow traders to get out at very high, high prices. So in between there, there's opportunities to trade.

You don't see them because you're not trained or taught from any retail perspective. What I just gave you here is exactly how bank level traders trade. And anybody that says different. simply doesn't know anything or what they're talking about. So until next time, wish good luck, good trading, and I'll catch up with you next week.

Transcript for:Understanding Inner Circle Trader Techniques

Transcript for:
Understanding Inner Circle Trader Techniques