Inner Circle Trader Lecture Notes

Introduction to Video Series

• Platform: YouTube channel Inner Circle Trader
• Content: Daily video logs Monday through Friday
• Session: New York session live commentary starting October 2017
• Focus: One currency pair per day
• Goal: Teach price action analysis, not guaranteed setups

Why People Start Trading

• Primary motivation for trading: Make money
• Disclaimer: No guarantees of profit
• Aim: Provide understanding of price action and optimal trade entry (OTE)

Patterns and Setups

• Pattern: Easy to spot, quick understanding of mechanics
• Gravitation towards simple patterns
• Personal setups: Two main setups (not disclosed)
• Teaching: Generic optimal trade entry (OTE)

Trading Plan Essentials

• Misconception: Trading plan needs to be extensive
• Reality: Should be concise; back of a business card
• Components:
  • Risk model
  • Conditions for entry
  • Execution strategy
  • Profit-taking strategy
• Simplification: Focus of teaching

Market Predisposition

• Higher time frame importance: Monthly, weekly, daily
• Key levels:
  • Old highs and lows
  • Institutional buying/selling at these levels
• Price action simplicity: No indicators or gimmicks
• Institutional sponsorship: Large players influencing price movement
• Focus: Higher time frames reflect big moves, solve 80% of trading problems
• Mantra: Buy the dips, sell the rallies

Optimal Trade Entry (OTE)

• Definition: Based on buying retracements in a bullish trend and selling rallies in a bearish trend
• Key levels: 62%, 70.5%, 79% on Fibonacci retracement
• Target levels: Set by Fibonacci extensions
• Execution details:
  • Entry at 62% retracement
  • Stop loss at the low of the leg
  • Profit levels: old high level, extensions

Risk Management

• Risk measurement: Defined by entry and stop loss
• First profit level: Crucial for securing profit
• Reward to risk ratio: Aim for better than 2:1

Practical Application

• Example: EUR/USD weekly chart
• Use of algorithmic levels: Based on historical highs/lows
• Price structure: Identifying breaks in market structure
• Entry strategy: Based on optimal trade entry areas between 62% to 79% retracement levels
• Example execution: Detailed explanation on MT4 and TradingView platforms

Conclusion

• Purpose: Enhance understanding of price action, not promising profits
• Future content: More examples and in-depth analysis in October
• Encouragement: Shift focus to higher time frames for better results