Insights on Day Trading Model 5

Oct 12, 2024

Lecture Notes: Day Trading Model - Model 5

Overview

  • Focus on Model 5: A day trading model.
  • Upcoming detailed trading plans starting Jan 2020.
  • Initial lesson review for new members; 2016-2017 members have access to all 12 models.
  • Objectives: Understand inception of a move and its target.

Key Concepts

  • Point of Origin: Establish criteria using fair value gaps (FVGs).

    • Fair Value Gaps are clear and easy to spot, similar to order blocks.
  • Establishing Bias: Use higher time frame charts (weekly charts) to determine market bias.

    • Example: Weekly range expansion for high probability setups.
  • Market Analysis Example: Dollar-CAD analysis.

    • Predicted a bearish market for Dollar-CAD: Look for liquidity draw at an old low.

Trading Strategy

  • Bias Determination: Use higher time frame (weekly chart) to anticipate direction.

    • For Dollar-CAD, bias was bearish based on weekly range.
  • Fair Value Gaps & Order Blocks: Central to Model 5 setups.

    • Consult fair value gaps after establishing bias.
  • Entry Points: Use institutional order flow entry drill.

    • Focus on fair value gaps during kill zones (London, New York).
  • Kill Zones: Different times can be used for trade entries.

    • London Kill Zone, New York Kill Zone, London Close, Asian Kill Zone.

Practical Examples

  • Weekly Analysis: Dollar-CAD expected to reach old low.

    • Liquidity draw on old low, bearish momentum, looking for fair value gaps in lower half of the previous day's range.
  • Daily Chart Analysis: Anticipate daily range expansion towards target.

    • Example: Dollar-CAD reaching for old low at 130.68.
  • Standard Deviations: Use flout, standard deviations, and confluence areas for precise analysis.

Trading Setups

  • Model 5 Goals: Target 40-50 pips per setup.

    • Can graduate to larger moves by leaving a portion of trade active.
  • Refinement of Entries: Use confluence of intraday standard deviations for precise entries.

    • Example: Fair value gaps align with standard deviation levels.

Important Notes

  • Understanding Price Action: Requires time and practice.

    • Aim to understand all models for complete price action understanding.
  • Learning Approach: Gradual understanding and mastery over time.

    • Core content foundational; advanced understanding builds upon it.
  • Market Analysis Example: Recent Dollar-CAD success based on Model 5 principles.

    • Precision in reaching anticipated lows, calibration, and liquidity sweeps.

Advanced Considerations

  • Calibration Techniques: Align price levels for high probability targets.

    • Example: Seeking liquidity sweeps below set levels.
  • Learning Environment: Continuous lessons and progressive learning.

    • Focus on core mentorship material and gradual introduction of advanced concepts.
  • Professional Development: Not required to learn everything at once.

    • Encouragement to use core lessons for finding profitability.
  • Feedback and Reflection: Continuous learning and adaptation.

    • Avoid overwhelming self with advanced concepts too quickly.
  • Community and Growth: Mentorship is ongoing with a focus on long-term growth.

    • Goal is to understand and apply models effectively over time.