Introduction to Trading Setup Essentials

Alright folks, well, we're here. So technically this is the first teaching. I gave you guys an introduction video obviously. If you haven't watched that one yet, go to the playlist on my YouTube channel. And please watch that one because it will help at least establish the, in my opinion... the proper expectations that way you understand what you're getting involved with here and at least it gives me a chance to kind of like break the ice and show you the contrast of what you may be expecting versus what I intend to deliver. All right so this first installment is going to be elements to a trade setup. All right so Coming out of the gate, I just want to let you know that this is predominantly going to be a futures index trading mentorship. The idea is going to be presented in the scope of paper trading. on tradingview.com. But what you're looking at here, this is Thinkorswim's live data. These are actual executions I made today. And I want you to compare and contrast with what you see on YouTube and other educators where they'll tell that they can do this and they can do that. But really, I want you to compare and contrast what you see here. All right. So we're looking at intraday price action for NASDAQ e-mini futures. And this is actually the main focus of this mentorship. Okay. I believe that this market is worth studying. I believe it. is not just limited to NASDAQ, but I believe it's useful to learn as a trader that views, obviously, the E-mini S&P, the E-mini Dow future, and the E-mini NASDAQ. Now, E-mini NASDAQ is a little bit faster, a little bit more aggressive. And even with that, you can still trade it. So I want you to think about what it means to watch price action and understand what it's likely to do before it does it now I'm not promising you're gonna be able to do that right out of the gate what I'm gonna show you is the compare and contrast to how I can trade versus what I'm promising to teach you in this mentorship how to find specific setups in your demo account okay or your paper trading account I'm not trying to entice you to trade with live funds okay so we know that's going in the teachings will be predominantly through the scope of trading view comms paper trading module or just hindsight data now I already know some of you are here we go the hindsight guy well what you're looking at here is actually live executions from today okay and I want you to think about if you were able to trade a micro account and you were trading the Nasdaq and you were able to capture Just one of these moves. Which one would you like to learn how to find? Obviously, you'd probably look at this and think, well, I'd like to do all of them. But I want you to think about which one really stands out off the entire chart. And this is a one-minute chart. Which one really stands out? And I'll give you a moment. You can pause the video and unpause it when you're ready. Some of you folks never ever pause it. All right, so obviously we can see how the market moves from here. Okay, two orders executed here. Whenever you see this, this is actually a reversal. So if there is a trade on long, it'll reverse and take you the other direction. OK, and then this one here, this is a reversal as well. Then another close. And then another long entry, the exit, a short entry, and then the cover. I'd like for you to consider what it would take for you to find consistency and how many handles, how many full handle moves in an index futures contract that would satisfy you. When I say a handle, that's essentially four ticks, the minimum fluctuation in these markets. An example would be if you were trading the... the E-mini S&P and you were trading obviously the 4,450 level and you went long, if it went to 4, four five one that's a full handle okay or four ticks or four times twelve dollars and fifty cents or fifty dollars per handle the nasdaq is twenty dollars per handle so it's slightly different but it's faster it moves a lot lot more. A lot more handles, a lot more aggression. Now, it doesn't always move faster. Sometimes we'll have a lethargic price action in this indice or another out of the three that would be the the S&P, the NASDAQ, and the Dow. I personally don't trade the Dow that much, but there's a lot of my students that love trading the YM. But YM is the symbol for the futures contract. And these three markets have the luxury for you that may not have the capability to put up to like $17,000 margin if you were going to trade one full contract of the NASDAQ futures. Most brokers, unless you're using a discount broker, they're going to require you to have deep pockets. It's insane. that you're going to have to have about $17,000. And about $12,000 and a half for an e-mini S&P full futures contract. You take basically a fraction of that, and you can trade a micro on each one of these markets. But obviously it reduces the number of the tick multiplier because you're trading with a lot less technically leverage. So I'm going to get into all... that but I'm something like want to begin the conversation informally but also that's kind of like show you what it is that I do versus what other people do okay so I'm not trying to You know, point my finger at anyone in particular, but if you look around on YouTube, there are people out there that try to make a big stink about themselves, and they'll try to show results that may or may not be real. I'm not here to dis- bearish that they could be actually trading a live account i don't personally care but anyone that trades on thinkorswim they can recognize this chart right away i posted a results and updated reflection on the thinkorswim or TD Ameritrade account and it's on my community tab. I promise I won't beat you up too much with the community tab, but that's my way of reaching out to you. So if you subscribe to the channel and then when you subscribe to the channel, you wanna toggle all notifications. You wanna click that little, I think it's like a bell icon, and then all notifications. That way, anytime I post on my community tab, it'll let you know. Otherwise, it won't let you know. So it's my replacement to Twitter, which in my opinion. sucks so if we look at the ebb and flow of all this here where the markets trading up and between here and here it's not a small number of handles it's a pretty respectful amount of handles it's not a couple with some handful and then up here it's a reversal and it comes back down and I buy it back here in Reverb So I'm selling short here, and I'm buying long here. 740 to 720, that's 20 handles. Going long here at 720, I'm abbreviating the number just for brevity's sake. Getting out at 732, 12 handles. Then going long here. $7.56 and then getting out at $7.84 and a half, then going short at $7.98 and covering at $6.75. So I'll ask you, which one of these trades do you think is the one that you want to learn? Again, putting all aside the idea that you probably want to do all of these, but I'm not promising you that. I'm going to take you into how to find this setup here. Notice the number of handles. I'm not promising you're gonna get this many handles, but the setups and the logic behind it will help you find these types of frameworks. Framework is the foundation to a trading model. So you have to have an understanding of what it is you're looking for. for. And that's really the only thing I'm introducing tonight is the idea of what it is I'm promising to educate you with so that way you can go in and find these setups on your own. You will not need to be a slave to some kind of black box system. You don't need to be a part of some kind of signal generating gimmick. You don't need to be a part of a signal service. You can find these on your own independent. That's exactly what I'm trying to frame in all of my students. I do that with my mentorship students that paid me for education. Now here you You are in my YouTube channel. I'm telling you the same thing. I'm teaching independence. That way you're not requiring any hand-holding by me. Once you understand the rules and you go through the processes and things I'm going to teach you how to practice with, you will not need any. anything except for the chart itself that's it and that's how in my opinion and you can argue with this if you want but i could care less if you could any of you would challenge the idea that independent thinking is not the best way of doing it you want to be able to be unshared unshackled okay and if you're part of a signal service or if you're part of a approach that requires you to use a black box system you're kind of held captive aren't you so if you look at this this chart is Clean except for these little bubbles actually show you the transactions. You don't really get any kind of well distortion from your reading of price action. I don't have a lot of graffiti on the chart, okay? But the main takeaway here is I want you to understand that I don't hunt for three to five handles and consider that legendary, okay? Now... can you be profitable if you take high frequency trades and you do these types of trades absolutely that's what algos do algorithms do that but I'm trying to show you by contrast that there is a way that you can can find setups that are outside that parameter of very small little handles and doing lots of contracts. So if you're looking at this here, and this was say you're trading, and you're trading a NASDAQ micro account, you're not making a lot of money on these swings. I'm not making a lot of money on these swings, but I'm able to find these swings. And it's not these small little increments. Okay. I'm going to teach you skills. sets that focus primarily on this okay you want to find a nice price leg intraday I'm not promising you how to buy sell short buy sell short buy sell short that's that's mine okay I'm not teaching that and then somebody like oh you're a jerk you're this you're that whatever I didn't promise that that's why I set the stage in the first introduction video so that way we know what it is I'm teaching you if any one of you here don't want to learn how to take this type type of trade you're welcome to not continue and turn this video off and go watch whoever okay but I think if you give it a chance you'll find some amazing things that bring clarity to reading price action All right, so we're looking at the NASDAQ futures March delivery contract, and this is a TradingView chart. And if you've never used TradingView.com, the way you would pull this symbol up is NQH2022. Okay, and this is a weekly chart. And I want you to think about each week before the new trading week begins, preferably on the weekend. Okay, the idea is you want to try to get a read on what you think that next weekly can be. candle is going to do. Is it going to go higher or is it going to go lower? You're not trying to predict the close of the weekly candle. That's important. You just want to see before this weekly candle opened up, all we had was this indecisive candle. Do you think that this candle that would have formed and opened here is more likely to go higher or lower? Obviously with the benefit of hindsight here, but I can tell you all of my students know we've been looking for lower prices And I'll just give you a quick short list as the reasons why Number one seasonality in case these own tendencies it tends to go down around this time. Anyway We also discussions about how the feds going to raise interest rates stock market does not like that we're also in earnings season there's a lot of volatility because of earnings and those factors plus the underlying tone of the marketplace which which I'll show you when we get into the daily chart. It's just, well, it's heavy. And this is where it was going to draw to. Okay. Did I expect this entire range to be delivered in one week? No, that's not important. The point is I'm expecting the weekly candle to expand on the lower end. Okay. Or go down and gravitate towards this low, which it hasn't broken yet. But I think that's what we're probably going to aim for on Sunday's opening, going into Monday's trading. So that's where I think it's drawing to. And that's the component I want you to focus on with your analysis. What is the market likely to draw to? When I say draw to, think of it as price. Being a paperclip, okay, and then you you have this magnetic impulse that specific price levels and Seasonality, okay will put on price It'll cause price to gravitate towards certain levels and the measure of speed and magnitude that it moves to get to these levels You learn that over experience. That's not something I can transfer It's something you have to practice and see and study and you get a rhythm for it. Okay Every educator knows what I mean by that, and every student that's been trained successfully by any other educator will not understand exactly what I mean by that. You just get a feel for it. It's experience. There's no way of defining outside of that. In the early stages of your development, you want to at least try to focus your attention on where that weekly candle is going to do. Now, here's the thing. It may start the first half of the week, or it may be just one day, expand lower. And if you get a setup in that, that's it. You're done. That's how you start working towards consistency. No student ever should try to trade every single session, every single day, because the only thing you're doing is building an expectation that you're going to be able to do this every single day profitably. And then if you do get a run of profitability, as soon as you get a losing trade, it's going to blow your mind and you're going to want to. Correct it quickly and you start making irrational decisions and then you enter that loser cycle. I've talked about many times in the YouTube channel. So the only thing you're looking for is a likely movement higher or lower based on the weekly candle. Okay, that's all you're doing. That sets your initial bias for the week. On the daily chart, you're looking for swing highs and swing lows to get your liquidity. And the majority of your trading and the draw on liquidity, what makes the market go higher or lower, it's predominantly found on this time frame. Okay. Okay. So majority of your analysis should really be linked to this timeframe right here. You have to have an assumption, whether you're going to be expecting that weekly candle to expand higher or lower, that's your weekly bias. But then you have to go into the daily chart. And figure out basically where you are in the grand scheme of things on that weekly range expanding higher or lower Because we're looking for lower prices and we're looking for weakness The expectation is we want to see every short-term low Like this would be a short-term low. This will be a short-term low and underneath those lows is going to be sell stops. Okay, that's liquidity When I say learn to start looking for where the market's going to draw to it's drawing to one of two things okay it's drawing two stops which is liquidity or it's running to an imbalance now what's that mean above old highs buy stops below old lows sell stops imbalances is something like this over here where you have one single candle pass higher and the previous candle's high is here and the next candle's low is here so it only went up one candle nothing moved down the overlap with that same delivery on that price candle there so in other words that's an imbalance it's only going higher and nothing else is here to offset that and efficiently deliver price on the opposite end now you probably heard of the theory auction theory theory okay and folks hear me try to communicate some of these things and they'll run away with all he says talking about auction theory and it's not just like when they see me do a rectangle or a box on a chart and you'll see one in this video it's not supply and demand okay it's just what it is you'll see it and you'll know right away after you've been with me for a couple weeks that this is entirely unique and there's nothing else like it and I'm certain majority of you're gonna fall in love with this model So we're looking for lower prices. We're looking for an expansion. I'm using the benefit of hindsight, but I can promise you again, this was discussed. We were looking for lower prices in my paid group. And if I did not say that, I had a lot of students that are making YouTube channels. They are welcome to come out and say I'm a liar. So we're looking at the daily chart. We're going to drop down into the hourly chart. OK, now what I have here is a framework for looking at the weekly range on an hourly chart. So it was beginning on mid Midnight, New York time, Monday's candle. And then Friday's close. And then the beginning of Friday's trading at midnight. Now, what I'm delineating here is the fact that we had a nice sell-off on Thursday. And the market went into consolidation overnight. Notice what happens here on Friday. This is that old low on the daily chart. That's what we're thinking or assuming that it's going to draw to. Because that deal... chart there's lots of liquidity and large fund traders large institutional traders institutional mindset investors will be looking at these old lows and old highs and Liquidity providers will be looking to take business in around these same levels. So if we know that this level down here is the old daily low, and again, let me take it back up to the chart on the daily chart. That's this low right here, okay? By dropping down into the hourly chart, that level is here. All I'm doing is transposing those daily levels right to this hourly chart. The entire week has been bearish. It's been going lower since the beginning. Then we had consolidation in here. The market creates this short-term high and this short-term low. What rests above that short-term high? If you've taken notes and been paying attention, it's buy stops. What's resting below this low here? Sell stops. Watch closely. The market trades down initially and takes out the sell stops. Why would it do that first? This is inducing shorts. Okay? So it engineers liquidity. Even if... The idea is that they want to take the market down to this level. If it's been consolidating, I like to see them do this type of move here, where it drops down first. It's kind of like a sucker play. Anybody that has a sell stop below here, they want to sell on weakness. They're going to get tripped into the marketplace. So now they're triggered in short, and then they start doing it. run against those traders and against those that were already short from this high so what are they doing the markets being driven higher and the algorithms are going to attack that buy stock liquidity pool why would they want to do that number one it's going to punish those individuals here that went short When it drives above this high here, it sends all those buy stops into market orders, flooding the marketplace. That gives a huge influx of willing buyers at a high price. which is the perfect counterparty to smart money that wants to sell at a high price. Remember, the market wants to go down here. So when it drives up to here, those buy stops are the counterparty or the other side of a smart money. money trader that's wanting to go short because they're gonna sell short they got to sell it to somebody wants to buy the high price that's why the market does this okay in your notes you want to record any time a significant price move lower is expected always anticipate some measure of a stop hunt on buy stops or short-term high being taken out obviously it's reversed when you're looking for higher prices generally you'll see a short-term low taken out and so sell stops taken before you see a very pronounced rally higher. Don't take my word for it. Go through to your charts and you'll see it's actually occurring almost on a daily basis. So we're going to drop down into a 15 minute time frame. So that same old low level down here and that high I just mentioned on the hourly chart and the low on the hourly chart has now been defined with a small little line segment. Okay. So we have a trend line here and a trend line here. That's the extent of it. trend line that's it I only use them to highlight to my students these levels are not on my chart I'm watching a naked chart okay you while you're developing you should have these levels drawn out on your chart because it helps you build and ingrain the idea that this is where liquidity is it keeps you focused on that because it's easy to look at all these candles forming if you have the luxury of watching it in life and you can lose sight of where you are I mean once you lose your bearings it's really confusing And this helps you keep those bearings in mind. And what do I mean by that? Well, I mentioned how the market dropped down initially, and that takes the sell stops out. So sell side liquidity has been attacked. Traders are now tripped in going short if they sold on a break, trying to be a breakout artist. And then the algorithms go right back up to an area where it's been cleanly delivered relative equal highs. See how this high here, right before it dropped, is basically the same high here. Notice that? So retail traders see this and they trust it as what? Resistance. So the books always say, put your buy stop if you're going to go short right above a clear level of resistance. Well, these levels work for a short period of time. But majority of the time, you see this event right here. And this is how I teach my students to go in and look for those types of events. Because what did I just tell you moments ago about looking for significant price moves? Before there's a significant price move of any kind, any real magnitude or importance, generally there's going to be a stop hunt that takes place right before that price delivery occurs. So what does it look like? You have relative equal highs, this high and this high. The market goes up when we're what? We're expecting lower prices on that weekly chart. We're on the last day of the week. It's already been heavy. It's weak. And the only thing it's been doing is consolidate. And the first thing it did was broke out to the downside, tripping what? Traders in a breakout to go short. so now they have traders caught on the wrong side offside and now they want to take the market up here where those buy stops are gonna be resting for those that were smart enough to sell short here or here and didn't get out below here So the larger pool of liquidity is going to be resting here because it's in sync with the downtrend. And everybody that was short the day before, they seen this high form. And once it broke below this low here, they all rushed and trailed their stop loss right above that. And I understand if you're new and you think, well, this is easy to explain in hindsight. But I want to remind you, go back and look at the first slide I showed you. Those were actual entries. That's a live account through Thinkorswim. Charles Schwab. That was the clearing firm that did the broker's side of the business. So I'm not showing you a demo account. I'm not showing you paper trading. Those were real entries. They were real reversals, the whole business. But the main thing was I showed you that larger trade. This is going to be the framework that I'm teaching you how to find it. But this pool of liquidity, once this occurs, you want to drop down to your lower time frames and start looking for something specific. And let's go into those lower time frames and find out what that is. Okay, here's a two-minute chart. Why a two-minute chart? Well, two-minute, one-minute, or three-minute, or five. Five minutes still has a lot of room for imbalances to occur underneath that time frame. And what do I mean by that? The one-minute, two-minute, three-minute chart tends to be... the best for finding the imbalances for indices. Okay, don't take my word for that. Okay, if you're looking for high frequency setups intraday, the one, two or three minute chart are just beautiful. They just offer a real good clarity. The reason... The reason why, because the high frequency trading algorithms are operating on nothing really higher than three minutes. The majority of the time, they're like seconds. 15 second, 30 second, 45 second, 60 second intervals. And what they're looking for, are these small little imbalances. And what does that look like? Well, we have that run on the buy stops here, okay? Remember that old high here, the old high here, old high here, it runs right on through that. Once this occurs on that higher timeframe, 15-minute timeframe, you wanna drop down to the lower timeframe. And I'm using the two-minute chart because this is exactly what I was using to find that imbalance and trade off of it, okay? The market creates a short-term low here and then it breaks below that. This is key. This is called a break in market structure. Now the foundations and underlying framework is we're in a market that's what? Weekly bearish. We're expecting that weekly candle to expand lower. It's been expanding all week. So we have momentum on our side. We have a consolidation that's occurred and we had a pool of liquidity engineered with these relative equal highs and the market broke out to the downside first and then they ran on the highs. So once it went here, we don't rush in there and just go short because it went above old highs. We're looking for some specific signature that tips its hand to you. Okay. And I promise you, when you start going through your charts and it's going to be homework for you, you're going to see this occurring almost every single day. And if it's not doing it this way, it's doing it the opposite. direction as a buy. Again, don't take my word for it. You're going to be flabbergasted. You're like, flabbergasted when you see how many times this thing forms every single week. It's many times throughout the intraday charts that creates this type of move, but it runs the stops. Then we have a short-term low and then it breaks below it. So now we have a break in market structure. Okay. Once this low is broken, you're going to look for this little area here. That's that imbalance I mentioned in the beginning, right? So what's happening is, is the market's going to go right up. that area there and that's where you want to sell now if you don't sell there you can drop down to a lower time frame one minute chart if this is a three minute chart you can go down to a minute chart and look for that to occur on that time frame as well and it many times will form, if you're looking at a lower timeframe, like say this was a five minute chart and you looked at a one minute chart, you'd find one down in here. It's a matter of scaling down in your timeframes because once you have an underlying premise to the market now likely to go lower, it becomes an easy thing to look for these types of things. So in your chart, once you're developing this idea and learning it, you're going to highlight this candle's low, this candle's high, and this right here is what I teach my students as a fair value. gap. You don't have that in books. You don't have any of that kind of stuff out there. It's something I introduced back in 2016. And obviously, a lot of people discovered how good it is and they try to make courses with it. But I'm going to not touch that right here. But the idea is once it go up into that imbalance there, and once it does that, as soon as it enters that area, the algorithm that delivers price. Now, some of you may not know what that means, and some of you may not even agree with it. You may think that this is made up or it's contrived. I promise you, if you spend time with this, you're going to quickly come to the conclusion that there absolutely is an algorithm, and it's manipulating the markets every single day, every single tick. It's completely controlled, period. You're led to believe it's buying and selling pressure. Now, if I go back and use that analogy where it went down here first, then go up here, some of you may argue, see, that's the buying and selling pressure. No, it's not. It's liquidity. Now, you may argue and say, well, we're arguing semantics. No, I'm telling you what's going on. This is the logic. This is how these markets book. Once you see these patterns over and over and over again, it's very easy to execute on them. But the impulse to want to do it the first time you see it, because you watch this video, that is going to be problematic for you. So you're going to have to do a certain number of weeks and months of backtesting. There's no escaping that. You have to do it. Any skill set, any teacher, educator, system, whatever, okay, whatever they're going to give you, there's going to be some kind of growing period where you have to trial and error, fix the problems that you have about yourself. And I've literally taken your attention to a very specific framework and setup. Notice that? Some of you may think I'm still talking too much, but I'm taking you right into the heart of the matter. This is what it looks like. This is what you're looking for. Okay. These are the fingerprints of that setup. These repeat. So if you know what they are and what those components are that make up this setup, you'll be able to find them. But focus on the imbalance after the market structure breaks. So this big candle here, it breaks down. Look at the next candle opens and trades higher and stops right there So from this candles low and this candles high when this candle starts trading Soon as it opens and it runs right up into that. That's a short. You can go right in there sell short be done Now, where's your stock gonna be? well You can put it above this high here, or you can put it above this candle's high, whichever your risk parameters allow for. Okay. If you're trading the micro, which is, again, it's not a lot of money per tick. So the multiplier for that is very, very small. small. If you trade the larger full futures contract and if it moves 100 points and they can do it real quick, it can bring you pretty bad. So you may have the leverage to trade with a discount broker. You may have the initial margin to trade with a discount broker, but you may not have the wherewithal and the skill set to navigate this market. And that's the only thing I'm trying to provide here as an alternative, because there's a lot of individuals out there that will promote the idea that you can go out there. with a discount broker and just clean up. Yeah, if you know what you're doing, but you don't need a discount broker to be profitable. Okay. Looking at this further, we're going to look at the logic in here. And I want you to think about after this forms and you see that as your choice setup or entry, if it starts to move lower. you can still get in it. There's no reason not to think that you can't get in it here or in here. It's close to or in close proximity to where that area is as an entry. Once we take out a low though, Once that occurs, then it becomes a matter of your chasing price. And if you try to get in, especially if you use a market order, you may see it trade right to this low and say, okay, now I believe it's going to go down. You put a market order in a sell short and then slippage gets you down here. That creates a. larger area of risk that you have to assume. And it's just, it's problematic. You want to learn to trust going short when the market's going higher. And that feels scary at first, but once you start seeing this pattern form, it becomes easy to trust it. And in fact, you want to be doing that. You want to be selling short, expecting lower prices right when the candle's going up. And retail traders can't grasp that many times. It's just like it goes against the logic because they think I got to have confirmation. All the books say I have to have confirmation. And that's somebody that's coming in late. That's someone that doesn't have read price. They can't really follow it. And usually they're the people that will trade short with additional sell stops. They'll put sell stops below the marketplace, and then that's the momentum entry for them. And it's kind of like a no-brainer. In fast markets, yeah, it works. But if you don't know what you're doing, you try to do that in a market. the market is consolidating or about the reverse, it hands you your backside. Okay, so if you're looking at this framework here and we've taken the buy stops, we have our entry pattern here, what would you be looking for as a downside objective? Well I'm gonna teach you the liquidity matrix, okay, and sounds pretty cool, sounds neat and all that, but watch what it is. This here is your range. This is the low of the day and this is the high of the day thus far. So if we take that range and split it from the low to the high to get the midpoint, all this can be determined by a simple 50 level on a Fibonacci. So you drag your fib from this high down to that lower vice versa and have your 50 level highlighted. Then anything above that 50 level, this is referred to from an algorithmic stance as a premium market. It means it's expensive. Now markets can stay in a premium for a while and not go to a discount, which would be below the 50 point. Okay. 50% anything down here is a discount. If you're bearish, if you're ever going short, you want to look at the previous range. Where are you at inside that range? So when this formed here, that little fair value gap, once that formed, you're thinking, okay, we are in a premium. So algorithms will want to go to a discount. That's the opposing side of the marketplace. So if it's going short here, it's driving the market lower. What does that mean? The algorithm is going to start pricing lower. You can have all the buyers in the world come in. If the algorithm is in a sell program and it's going lower, it does not matter. It's going to reprice lower and lower, lower. And then what will happen is those buyers that may come in with a huge influx of volume, they're going to get crushed and they get squeezed. You ever hear that term? Oh, this is a bear squeeze. This is a bull squeeze. All that is an excuse for them not to know why the algorithm is doing what it's doing. That's it. That's all it is. It's an out. I'm telling you, this is what's really going on. So the market's moving from this premium high, this specific entry point, to a level below the 50 of this range, this low and this high. Now, I want you to, again, go back and rewind the video once we're done and look at that execution. page where I showed you my entries going back and forth, up and down, up and down, and where I got out at, where I got in at. Okay. I want you to think about what below this level here, the 50 level, what is resting below here? Sell stops. So now think about the idea of someone like you and I that would see this ideal entry as a short. We have to sell to get in that short. How do we get out of that short? We've got to buy it back or cover it by buying. Well, we're going to find willing sellers at a low price relative to this point here. They're willing already sitting down there with their sell stocks right below that low. Now look closely. What else resides right near that low? Do you see it? Pause the video before I show it to you because it kind of ruins the experience because if you find it and I don't tell it, it feels good. Right there is that imbalance I mentioned. Okay. It's only one single candle passing up and the previous candle is high and the next candle is low. That area right there is an imbalance. From this area here, it went down below the 50 level and attacked these sell stops and completely closed in this imbalance. So every point of this candle's high to this candle's low, that range with the candle only going up, that's a buy side imbalance. It has to have an equal delivery to be efficiently priced and booked by the algorithm. It goes down and completely closes it back in with down movement. Notice the candle on this here. It opens and then trades down. So it fulfills its role of balancing the buy side offering, now the sell side offering. So that is an efficiently delivered price move. Precision elements from the entry here down to here. Everything else after that for the rest of the day, I didn't care about. Even though I had an objective of that old daily low, I wasn't expecting it to run into this particular day. and that's why I didn't participate anymore the rest of the day. In hindsight, I wish I would have left a small position on it and just let it go, but you're going to have that. You're never going to be right about everything all the time, every single day. You're going to leave things on the table. You're going to get in too early. You're going to gonna hold too long you're not gonna buy enough you're not gonna sell enough there's always gonna be some reasons why you didn't do something right so don't beat yourself up without it okay but if you can find elements like this repeating in the price action can you agree with me that that isn't amazing precision and this is the logic I used to do that trade the very trade that I showed you that was the largest one in the example of saying which one would you rather learn how to do I basically just handed you an ATM machine. Okay. This repeats every single week. Every single week. Now, I want you to count the number of the handles in this move. Let's say you got in at, well, let's say you got in at 800, 14,800. It started to go down. You trust it. Okay, we're going to go short. Ideally, you want to enter as it goes into that, but it's going to take time for you to trust that. But let's say you got in at 14,800. If you got out down here like I did, I exited as it went right to the top of that range right here. This range here, that's the top of it. Once it went below that, That was it for me. That closed the trade. Is that five handles? Is that 10 handles? Is that 20 handles? Is that 30 handles? Is that 50 handles? No, it's over a hundred and some. Now let's assume for a moment. that you get good at this or I get the inclination that I want to go to some kind of a deep discount broker and I go in and I do trades like this and I'm putting on 15 to 25 full futures contracts what do you think the results are going to be yep so not everything is going to be easy right away and you're not going to see these things happen just because you sit in front of the charts you have to study and you have to practice and by experience of looking at old moves and watching real price action as best as you can if you can't watch it live trading view has a replay button where you can watch the candles kind of form but they're they're little stilted because it's not completely painting the candle okay and you can't practice with entering like that you can only just study how price moved and gravitated towards certain levels. It's the best thing you can have if you at least consider doing that much, that's good. But if you really want to take it to the next level and say you're running a business or if you're going to school or you have a job and you can't watch the timeframe around the opening of the index futures. And I like watching it around 8.30 in the morning, New York local time to 11 o'clock. There's usually a setup in there that I'm going to be able to find. Obviously you've seen I did multiple setups. executions today but the point is this that's like that sweet little spot in the morning that I focus on I teach that in this YouTube channel I teach it in my paid mentorship group so you're getting real stuff here it's not something that was contrived I didn't just make it up because this day worked out in my favor my students recognize these things also and these are simple elements that repeat What you're looking for is a run on liquidity, buy stops or sell stops. If you're bearish, you're looking for buy stops to be ran. Then a break in market structure, lower, a short-term low being broken. That's what it looks like right here. Short-term swing low. We have a candle high. I'm sorry, a candle higher to the left with its low here. Then you have the low of this candle and the next candle is higher low than this one. So you have a swing low formed. If you have that and then you have a break below that, if it happens, that creates a... gap like this, that's what you're looking for. When it trades up into that, you can go short. Or if you want to use sell stops, you can use a sell stop in this candle here and let it trip you in and then use the high of that candle as your stop. That may be too wide for you, but I mentioned the logic around this is you're using a micro. Micros aren't that big of a deal. It's not a lot of money. You're not risking a full futures leverage. It's very, very small. So if you're looking at... these types of setups. And you can find them forming repeatedly over and over and over again. And you study them. You're going to see that you don't need to get these little five handle moves, these little ten handle moves. You can make a living doing that. Don't get me wrong. I'm not trying to say that people cannot be profitable and wildly profitable. But when you learn how to do something like this, and you're able to pull down this number of handles. And then you have sound money management. Nothing compares to it, folks. These are the things that I use. When you watched when I was on Twitter and I ran up the demo accounts really high, these are the types of setups I was using. These types of setups. And as the account grew, it was more demo account leverage. Well, I'm not using a demo account right now. I'm showing you with a thinkorswim. And anybody that knows thinkorswim, when I'm showing you those screenshots, the paper trading shows as orange. Everything on that page is orange. When it's a live account, it's green. Okay? Also, here's the rub. With a demo account, it's just demo, demo, demo, demo. Okay? I'm not trying to promote the idea. That you're going to get rich. Notice that account hasn't gone bonkers. It hasn't ran up to a million dollars. Because this mentorship is to hopefully inspire you to pick up a skill that if you deem it useful. And you decide at your own discretion and your own timing. And you assume that risk on your own. Because I'm not going to tell you to do this. If you decide to get really good at this. And you put money behind it. That's a skill set that could. I'm not promising, but it could alleviate some of the problems with what I believe is coming in terms of financial hardship, not just in America, but everywhere. Jobs are getting harder and harder to have. The economy is a mess. So how do we answer that? How do we get another income stream coming in? This is, in my opinion, this is one of the ways that you can at least investigate the idea of doing it. All right, so I'm going to give you some homework in closing. I want you to go through. All of the E-mini futures contract charts, okay, just like I showed you here, these timeframes, go back and look at the presentation and see what the timeframes I gave you. Listen to what I gave you in terms of audio commentary. That is enough. In fact, I gave you a ton. and it may have your head spinning if you're brand new to me, or if you're brand new to technical analysis or trading, you may feel like, man, this is too fast. Do not send me an email. I promise you the lessons I have planned will help eliminate and answer majority of the things you're going to ask. Just try to study and keep up with the pace that I'm going to put you through, which isn't going to be all that bad. But... As we progress deeper into the teachings, many of the questions are going to come up. Or when you start going into the homework assignment, where you're looking at old data, an intraday chart is anything less than a daily chart. So like a four-hour chart, that's intraday. One-hour chart, that's intraday. minute three minute two minute one minute all those time frames are intraday what you're going to be looking for are breaks in market structure after a pool of liquidity okay buy stops or sell stops have been taken in an opposing direction of your weekly expected range. In other words, are you expecting higher prices or lower prices on the weekly range? So if you're looking for lower prices, your focus is on a run above an old high. Once that forms, then you're looking for a break in market structure on a lower timeframe. Once that occurs and you have an imbalance, that's your trigger. Okay? And then you split that range that was created, find out where the 50% is. And then if you're selling short, you want to find something like an old low or an imbalance to aim for as your target. And you want to get the closest target. Don't try to get fancy and say, okay, well, I think it's going to go down to that lowest low and try to use that for your exit. Because sometimes these markets can deny you that. So low-hanging fruit is how I do it. how I teach. You want to have the easiest target and then allow the market to go farther and you just not be a part of it. It's okay. Is 125, 130 handles in an index not good enough? I think it's good enough, but I'm probably just biased. But the homework assignment is, again, you're going through the charts using the logic I framed in this introduction lesson, looking for breaking market structure. I also have lessons in this YouTube channel that talks about market structure breaks and things like that. And then you're going to look for the imbalance in price, which is that fair value cap. Then you're going to determine where an opposing high or low resides, then log and backtest the number of handles you see in hindsight examples. In other words, how much did it offer? and you're going to get a collection of doing that. The next lesson, I'm actually going to show you how to go back into the charts and look for them, how to log them in your journal, and give you more insights about how you can find these setups that repeat every single week. So again, I'm going to build on this foundation in the next episode. The next episode will be next Tuesday, and the time upload will be 10 o'clock New York local time. Hopefully you've enjoyed this one. Until I talk to you next time, I wish you good luck and good trading.

Alright folks, well, we're here. So technically this is the first teaching. I gave you guys an introduction video obviously.

If you haven't watched that one yet, go to the playlist on my YouTube channel. And please watch that one because it will help at least establish the, in my opinion... the proper expectations that way you understand what you're getting involved with here and at least it gives me a chance to kind of like break the ice and show you the contrast of what you may be expecting versus what I intend to deliver.

All right so this first installment is going to be elements to a trade setup. All right so Coming out of the gate, I just want to let you know that this is predominantly going to be a futures index trading mentorship. The idea is going to be presented in the scope of paper trading.

on tradingview.com. But what you're looking at here, this is Thinkorswim's live data. These are actual executions I made today.

And I want you to compare and contrast with what you see on YouTube and other educators where they'll tell that they can do this and they can do that. But really, I want you to compare and contrast what you see here. All right. So we're looking at intraday price action for NASDAQ e-mini futures. And this is actually the main focus of this mentorship.

Okay. I believe that this market is worth studying. I believe it. is not just limited to NASDAQ, but I believe it's useful to learn as a trader that views, obviously, the E-mini S&P, the E-mini Dow future, and the E-mini NASDAQ. Now, E-mini NASDAQ is a little bit faster, a little bit more aggressive.

And even with that, you can still trade it. So I want you to think about what it means to watch price action and understand what it's likely to do before it does it now I'm not promising you're gonna be able to do that right out of the gate what I'm gonna show you is the compare and contrast to how I can trade versus what I'm promising to teach you in this mentorship how to find specific setups in your demo account okay or your paper trading account I'm not trying to entice you to trade with live funds okay so we know that's going in the teachings will be predominantly through the scope of trading view comms paper trading module or just hindsight data now I already know some of you are here we go the hindsight guy well what you're looking at here is actually live executions from today okay and I want you to think about if you were able to trade a micro account and you were trading the Nasdaq and you were able to capture Just one of these moves. Which one would you like to learn how to find? Obviously, you'd probably look at this and think, well, I'd like to do all of them.

But I want you to think about which one really stands out off the entire chart. And this is a one-minute chart. Which one really stands out?

And I'll give you a moment. You can pause the video and unpause it when you're ready. Some of you folks never ever pause it. All right, so obviously we can see how the market moves from here. Okay, two orders executed here.

Whenever you see this, this is actually a reversal. So if there is a trade on long, it'll reverse and take you the other direction. OK, and then this one here, this is a reversal as well.

Then another close. And then another long entry, the exit, a short entry, and then the cover. I'd like for you to consider what it would take for you to find consistency and how many handles, how many full handle moves in an index futures contract that would satisfy you.

When I say a handle, that's essentially four ticks, the minimum fluctuation in these markets. An example would be if you were trading the... the E-mini S&P and you were trading obviously the 4,450 level and you went long, if it went to 4, four five one that's a full handle okay or four ticks or four times twelve dollars and fifty cents or fifty dollars per handle the nasdaq is twenty dollars per handle so it's slightly different but it's faster it moves a lot lot more. A lot more handles, a lot more aggression. Now, it doesn't always move faster.

Sometimes we'll have a lethargic price action in this indice or another out of the three that would be the the S&P, the NASDAQ, and the Dow. I personally don't trade the Dow that much, but there's a lot of my students that love trading the YM. But YM is the symbol for the futures contract. And these three markets have the luxury for you that may not have the capability to put up to like $17,000 margin if you were going to trade one full contract of the NASDAQ futures. Most brokers, unless you're using a discount broker, they're going to require you to have deep pockets.

It's insane. that you're going to have to have about $17,000. And about $12,000 and a half for an e-mini S&P full futures contract. You take basically a fraction of that, and you can trade a micro on each one of these markets. But obviously it reduces the number of the tick multiplier because you're trading with a lot less technically leverage.

So I'm going to get into all... that but I'm something like want to begin the conversation informally but also that's kind of like show you what it is that I do versus what other people do okay so I'm not trying to You know, point my finger at anyone in particular, but if you look around on YouTube, there are people out there that try to make a big stink about themselves, and they'll try to show results that may or may not be real. I'm not here to dis- bearish that they could be actually trading a live account i don't personally care but anyone that trades on thinkorswim they can recognize this chart right away i posted a results and updated reflection on the thinkorswim or TD Ameritrade account and it's on my community tab. I promise I won't beat you up too much with the community tab, but that's my way of reaching out to you.

So if you subscribe to the channel and then when you subscribe to the channel, you wanna toggle all notifications. You wanna click that little, I think it's like a bell icon, and then all notifications. That way, anytime I post on my community tab, it'll let you know.

Otherwise, it won't let you know. So it's my replacement to Twitter, which in my opinion. sucks so if we look at the ebb and flow of all this here where the markets trading up and between here and here it's not a small number of handles it's a pretty respectful amount of handles it's not a couple with some handful and then up here it's a reversal and it comes back down and I buy it back here in Reverb So I'm selling short here, and I'm buying long here.

740 to 720, that's 20 handles. Going long here at 720, I'm abbreviating the number just for brevity's sake. Getting out at 732, 12 handles.

Then going long here. $7.56 and then getting out at $7.84 and a half, then going short at $7.98 and covering at $6.75. So I'll ask you, which one of these trades do you think is the one that you want to learn?

Again, putting all aside the idea that you probably want to do all of these, but I'm not promising you that. I'm going to take you into how to find this setup here. Notice the number of handles. I'm not promising you're gonna get this many handles, but the setups and the logic behind it will help you find these types of frameworks.

Framework is the foundation to a trading model. So you have to have an understanding of what it is you're looking for. for. And that's really the only thing I'm introducing tonight is the idea of what it is I'm promising to educate you with so that way you can go in and find these setups on your own. You will not need to be a slave to some kind of black box system.

You don't need to be a part of some kind of signal generating gimmick. You don't need to be a part of a signal service. You can find these on your own independent. That's exactly what I'm trying to frame in all of my students. I do that with my mentorship students that paid me for education.

Now here you You are in my YouTube channel. I'm telling you the same thing. I'm teaching independence.

That way you're not requiring any hand-holding by me. Once you understand the rules and you go through the processes and things I'm going to teach you how to practice with, you will not need any. anything except for the chart itself that's it and that's how in my opinion and you can argue with this if you want but i could care less if you could any of you would challenge the idea that independent thinking is not the best way of doing it you want to be able to be unshared unshackled okay and if you're part of a signal service or if you're part of a approach that requires you to use a black box system you're kind of held captive aren't you so if you look at this this chart is Clean except for these little bubbles actually show you the transactions. You don't really get any kind of well distortion from your reading of price action. I don't have a lot of graffiti on the chart, okay?

But the main takeaway here is I want you to understand that I don't hunt for three to five handles and consider that legendary, okay? Now... can you be profitable if you take high frequency trades and you do these types of trades absolutely that's what algos do algorithms do that but I'm trying to show you by contrast that there is a way that you can can find setups that are outside that parameter of very small little handles and doing lots of contracts.

So if you're looking at this here, and this was say you're trading, and you're trading a NASDAQ micro account, you're not making a lot of money on these swings. I'm not making a lot of money on these swings, but I'm able to find these swings. And it's not these small little increments. Okay. I'm going to teach you skills.

sets that focus primarily on this okay you want to find a nice price leg intraday I'm not promising you how to buy sell short buy sell short buy sell short that's that's mine okay I'm not teaching that and then somebody like oh you're a jerk you're this you're that whatever I didn't promise that that's why I set the stage in the first introduction video so that way we know what it is I'm teaching you if any one of you here don't want to learn how to take this type type of trade you're welcome to not continue and turn this video off and go watch whoever okay but I think if you give it a chance you'll find some amazing things that bring clarity to reading price action All right, so we're looking at the NASDAQ futures March delivery contract, and this is a TradingView chart. And if you've never used TradingView.com, the way you would pull this symbol up is NQH2022. Okay, and this is a weekly chart. And I want you to think about each week before the new trading week begins, preferably on the weekend. Okay, the idea is you want to try to get a read on what you think that next weekly can be.

candle is going to do. Is it going to go higher or is it going to go lower? You're not trying to predict the close of the weekly candle. That's important.

You just want to see before this weekly candle opened up, all we had was this indecisive candle. Do you think that this candle that would have formed and opened here is more likely to go higher or lower? Obviously with the benefit of hindsight here, but I can tell you all of my students know we've been looking for lower prices And I'll just give you a quick short list as the reasons why Number one seasonality in case these own tendencies it tends to go down around this time.

Anyway We also discussions about how the feds going to raise interest rates stock market does not like that we're also in earnings season there's a lot of volatility because of earnings and those factors plus the underlying tone of the marketplace which which I'll show you when we get into the daily chart. It's just, well, it's heavy. And this is where it was going to draw to.

Okay. Did I expect this entire range to be delivered in one week? No, that's not important. The point is I'm expecting the weekly candle to expand on the lower end. Okay.

Or go down and gravitate towards this low, which it hasn't broken yet. But I think that's what we're probably going to aim for on Sunday's opening, going into Monday's trading. So that's where I think it's drawing to.

And that's the component I want you to focus on with your analysis. What is the market likely to draw to? When I say draw to, think of it as price.

Being a paperclip, okay, and then you you have this magnetic impulse that specific price levels and Seasonality, okay will put on price It'll cause price to gravitate towards certain levels and the measure of speed and magnitude that it moves to get to these levels You learn that over experience. That's not something I can transfer It's something you have to practice and see and study and you get a rhythm for it. Okay Every educator knows what I mean by that, and every student that's been trained successfully by any other educator will not understand exactly what I mean by that. You just get a feel for it.

It's experience. There's no way of defining outside of that. In the early stages of your development, you want to at least try to focus your attention on where that weekly candle is going to do. Now, here's the thing. It may start the first half of the week, or it may be just one day, expand lower.

And if you get a setup in that, that's it. You're done. That's how you start working towards consistency. No student ever should try to trade every single session, every single day, because the only thing you're doing is building an expectation that you're going to be able to do this every single day profitably. And then if you do get a run of profitability, as soon as you get a losing trade, it's going to blow your mind and you're going to want to.

Correct it quickly and you start making irrational decisions and then you enter that loser cycle. I've talked about many times in the YouTube channel. So the only thing you're looking for is a likely movement higher or lower based on the weekly candle.

Okay, that's all you're doing. That sets your initial bias for the week. On the daily chart, you're looking for swing highs and swing lows to get your liquidity. And the majority of your trading and the draw on liquidity, what makes the market go higher or lower, it's predominantly found on this time frame.

Okay. Okay. So majority of your analysis should really be linked to this timeframe right here.

You have to have an assumption, whether you're going to be expecting that weekly candle to expand higher or lower, that's your weekly bias. But then you have to go into the daily chart. And figure out basically where you are in the grand scheme of things on that weekly range expanding higher or lower Because we're looking for lower prices and we're looking for weakness The expectation is we want to see every short-term low Like this would be a short-term low. This will be a short-term low and underneath those lows is going to be sell stops.

Okay, that's liquidity When I say learn to start looking for where the market's going to draw to it's drawing to one of two things okay it's drawing two stops which is liquidity or it's running to an imbalance now what's that mean above old highs buy stops below old lows sell stops imbalances is something like this over here where you have one single candle pass higher and the previous candle's high is here and the next candle's low is here so it only went up one candle nothing moved down the overlap with that same delivery on that price candle there so in other words that's an imbalance it's only going higher and nothing else is here to offset that and efficiently deliver price on the opposite end now you probably heard of the theory auction theory theory okay and folks hear me try to communicate some of these things and they'll run away with all he says talking about auction theory and it's not just like when they see me do a rectangle or a box on a chart and you'll see one in this video it's not supply and demand okay it's just what it is you'll see it and you'll know right away after you've been with me for a couple weeks that this is entirely unique and there's nothing else like it and I'm certain majority of you're gonna fall in love with this model So we're looking for lower prices. We're looking for an expansion. I'm using the benefit of hindsight, but I can promise you again, this was discussed.

We were looking for lower prices in my paid group. And if I did not say that, I had a lot of students that are making YouTube channels. They are welcome to come out and say I'm a liar.

So we're looking at the daily chart. We're going to drop down into the hourly chart. OK, now what I have here is a framework for looking at the weekly range on an hourly chart. So it was beginning on mid Midnight, New York time, Monday's candle.

And then Friday's close. And then the beginning of Friday's trading at midnight. Now, what I'm delineating here is the fact that we had a nice sell-off on Thursday.

And the market went into consolidation overnight. Notice what happens here on Friday. This is that old low on the daily chart.

That's what we're thinking or assuming that it's going to draw to. Because that deal... chart there's lots of liquidity and large fund traders large institutional traders institutional mindset investors will be looking at these old lows and old highs and Liquidity providers will be looking to take business in around these same levels.

So if we know that this level down here is the old daily low, and again, let me take it back up to the chart on the daily chart. That's this low right here, okay? By dropping down into the hourly chart, that level is here. All I'm doing is transposing those daily levels right to this hourly chart. The entire week has been bearish.

It's been going lower since the beginning. Then we had consolidation in here. The market creates this short-term high and this short-term low. What rests above that short-term high? If you've taken notes and been paying attention, it's buy stops.

What's resting below this low here? Sell stops. Watch closely.

The market trades down initially and takes out the sell stops. Why would it do that first? This is inducing shorts. Okay?

So it engineers liquidity. Even if... The idea is that they want to take the market down to this level.

If it's been consolidating, I like to see them do this type of move here, where it drops down first. It's kind of like a sucker play. Anybody that has a sell stop below here, they want to sell on weakness.

They're going to get tripped into the marketplace. So now they're triggered in short, and then they start doing it. run against those traders and against those that were already short from this high so what are they doing the markets being driven higher and the algorithms are going to attack that buy stock liquidity pool why would they want to do that number one it's going to punish those individuals here that went short When it drives above this high here, it sends all those buy stops into market orders, flooding the marketplace.

That gives a huge influx of willing buyers at a high price. which is the perfect counterparty to smart money that wants to sell at a high price. Remember, the market wants to go down here.

So when it drives up to here, those buy stops are the counterparty or the other side of a smart money. money trader that's wanting to go short because they're gonna sell short they got to sell it to somebody wants to buy the high price that's why the market does this okay in your notes you want to record any time a significant price move lower is expected always anticipate some measure of a stop hunt on buy stops or short-term high being taken out obviously it's reversed when you're looking for higher prices generally you'll see a short-term low taken out and so sell stops taken before you see a very pronounced rally higher. Don't take my word for it.

Go through to your charts and you'll see it's actually occurring almost on a daily basis. So we're going to drop down into a 15 minute time frame. So that same old low level down here and that high I just mentioned on the hourly chart and the low on the hourly chart has now been defined with a small little line segment.

Okay. So we have a trend line here and a trend line here. That's the extent of it.

trend line that's it I only use them to highlight to my students these levels are not on my chart I'm watching a naked chart okay you while you're developing you should have these levels drawn out on your chart because it helps you build and ingrain the idea that this is where liquidity is it keeps you focused on that because it's easy to look at all these candles forming if you have the luxury of watching it in life and you can lose sight of where you are I mean once you lose your bearings it's really confusing And this helps you keep those bearings in mind. And what do I mean by that? Well, I mentioned how the market dropped down initially, and that takes the sell stops out.

So sell side liquidity has been attacked. Traders are now tripped in going short if they sold on a break, trying to be a breakout artist. And then the algorithms go right back up to an area where it's been cleanly delivered relative equal highs.

See how this high here, right before it dropped, is basically the same high here. Notice that? So retail traders see this and they trust it as what?

Resistance. So the books always say, put your buy stop if you're going to go short right above a clear level of resistance. Well, these levels work for a short period of time.

But majority of the time, you see this event right here. And this is how I teach my students to go in and look for those types of events. Because what did I just tell you moments ago about looking for significant price moves?

Before there's a significant price move of any kind, any real magnitude or importance, generally there's going to be a stop hunt that takes place right before that price delivery occurs. So what does it look like? You have relative equal highs, this high and this high. The market goes up when we're what? We're expecting lower prices on that weekly chart.

We're on the last day of the week. It's already been heavy. It's weak.

And the only thing it's been doing is consolidate. And the first thing it did was broke out to the downside, tripping what? Traders in a breakout to go short.

so now they have traders caught on the wrong side offside and now they want to take the market up here where those buy stops are gonna be resting for those that were smart enough to sell short here or here and didn't get out below here So the larger pool of liquidity is going to be resting here because it's in sync with the downtrend. And everybody that was short the day before, they seen this high form. And once it broke below this low here, they all rushed and trailed their stop loss right above that. And I understand if you're new and you think, well, this is easy to explain in hindsight.

But I want to remind you, go back and look at the first slide I showed you. Those were actual entries. That's a live account through Thinkorswim. Charles Schwab.

That was the clearing firm that did the broker's side of the business. So I'm not showing you a demo account. I'm not showing you paper trading.

Those were real entries. They were real reversals, the whole business. But the main thing was I showed you that larger trade. This is going to be the framework that I'm teaching you how to find it.

But this pool of liquidity, once this occurs, you want to drop down to your lower time frames and start looking for something specific. And let's go into those lower time frames and find out what that is. Okay, here's a two-minute chart. Why a two-minute chart?

Well, two-minute, one-minute, or three-minute, or five. Five minutes still has a lot of room for imbalances to occur underneath that time frame. And what do I mean by that?

The one-minute, two-minute, three-minute chart tends to be... the best for finding the imbalances for indices. Okay, don't take my word for that.

Okay, if you're looking for high frequency setups intraday, the one, two or three minute chart are just beautiful. They just offer a real good clarity. The reason... The reason why, because the high frequency trading algorithms are operating on nothing really higher than three minutes. The majority of the time, they're like seconds.

15 second, 30 second, 45 second, 60 second intervals. And what they're looking for, are these small little imbalances. And what does that look like? Well, we have that run on the buy stops here, okay?

Remember that old high here, the old high here, old high here, it runs right on through that. Once this occurs on that higher timeframe, 15-minute timeframe, you wanna drop down to the lower timeframe. And I'm using the two-minute chart because this is exactly what I was using to find that imbalance and trade off of it, okay? The market creates a short-term low here and then it breaks below that. This is key.

This is called a break in market structure. Now the foundations and underlying framework is we're in a market that's what? Weekly bearish.

We're expecting that weekly candle to expand lower. It's been expanding all week. So we have momentum on our side. We have a consolidation that's occurred and we had a pool of liquidity engineered with these relative equal highs and the market broke out to the downside first and then they ran on the highs.

So once it went here, we don't rush in there and just go short because it went above old highs. We're looking for some specific signature that tips its hand to you. Okay.

And I promise you, when you start going through your charts and it's going to be homework for you, you're going to see this occurring almost every single day. And if it's not doing it this way, it's doing it the opposite. direction as a buy.

Again, don't take my word for it. You're going to be flabbergasted. You're like, flabbergasted when you see how many times this thing forms every single week. It's many times throughout the intraday charts that creates this type of move, but it runs the stops. Then we have a short-term low and then it breaks below it.

So now we have a break in market structure. Okay. Once this low is broken, you're going to look for this little area here.

That's that imbalance I mentioned in the beginning, right? So what's happening is, is the market's going to go right up. that area there and that's where you want to sell now if you don't sell there you can drop down to a lower time frame one minute chart if this is a three minute chart you can go down to a minute chart and look for that to occur on that time frame as well and it many times will form, if you're looking at a lower timeframe, like say this was a five minute chart and you looked at a one minute chart, you'd find one down in here.

It's a matter of scaling down in your timeframes because once you have an underlying premise to the market now likely to go lower, it becomes an easy thing to look for these types of things. So in your chart, once you're developing this idea and learning it, you're going to highlight this candle's low, this candle's high, and this right here is what I teach my students as a fair value. gap. You don't have that in books.

You don't have any of that kind of stuff out there. It's something I introduced back in 2016. And obviously, a lot of people discovered how good it is and they try to make courses with it. But I'm going to not touch that right here.

But the idea is once it go up into that imbalance there, and once it does that, as soon as it enters that area, the algorithm that delivers price. Now, some of you may not know what that means, and some of you may not even agree with it. You may think that this is made up or it's contrived. I promise you, if you spend time with this, you're going to quickly come to the conclusion that there absolutely is an algorithm, and it's manipulating the markets every single day, every single tick. It's completely controlled, period.

You're led to believe it's buying and selling pressure. Now, if I go back and use that analogy where it went down here first, then go up here, some of you may argue, see, that's the buying and selling pressure. No, it's not. It's liquidity.

Now, you may argue and say, well, we're arguing semantics. No, I'm telling you what's going on. This is the logic.

This is how these markets book. Once you see these patterns over and over and over again, it's very easy to execute on them. But the impulse to want to do it the first time you see it, because you watch this video, that is going to be problematic for you. So you're going to have to do a certain number of weeks and months of backtesting.

There's no escaping that. You have to do it. Any skill set, any teacher, educator, system, whatever, okay, whatever they're going to give you, there's going to be some kind of growing period where you have to trial and error, fix the problems that you have about yourself.

And I've literally taken your attention to a very specific framework and setup. Notice that? Some of you may think I'm still talking too much, but I'm taking you right into the heart of the matter. This is what it looks like. This is what you're looking for.

Okay. These are the fingerprints of that setup. These repeat. So if you know what they are and what those components are that make up this setup, you'll be able to find them. But focus on the imbalance after the market structure breaks.

So this big candle here, it breaks down. Look at the next candle opens and trades higher and stops right there So from this candles low and this candles high when this candle starts trading Soon as it opens and it runs right up into that. That's a short.

You can go right in there sell short be done Now, where's your stock gonna be? well You can put it above this high here, or you can put it above this candle's high, whichever your risk parameters allow for. Okay. If you're trading the micro, which is, again, it's not a lot of money per tick.

So the multiplier for that is very, very small. small. If you trade the larger full futures contract and if it moves 100 points and they can do it real quick, it can bring you pretty bad. So you may have the leverage to trade with a discount broker.

You may have the initial margin to trade with a discount broker, but you may not have the wherewithal and the skill set to navigate this market. And that's the only thing I'm trying to provide here as an alternative, because there's a lot of individuals out there that will promote the idea that you can go out there. with a discount broker and just clean up. Yeah, if you know what you're doing, but you don't need a discount broker to be profitable. Okay.

Looking at this further, we're going to look at the logic in here. And I want you to think about after this forms and you see that as your choice setup or entry, if it starts to move lower. you can still get in it. There's no reason not to think that you can't get in it here or in here.

It's close to or in close proximity to where that area is as an entry. Once we take out a low though, Once that occurs, then it becomes a matter of your chasing price. And if you try to get in, especially if you use a market order, you may see it trade right to this low and say, okay, now I believe it's going to go down.

You put a market order in a sell short and then slippage gets you down here. That creates a. larger area of risk that you have to assume. And it's just, it's problematic.

You want to learn to trust going short when the market's going higher. And that feels scary at first, but once you start seeing this pattern form, it becomes easy to trust it. And in fact, you want to be doing that. You want to be selling short, expecting lower prices right when the candle's going up. And retail traders can't grasp that many times.

It's just like it goes against the logic because they think I got to have confirmation. All the books say I have to have confirmation. And that's somebody that's coming in late. That's someone that doesn't have read price. They can't really follow it.

And usually they're the people that will trade short with additional sell stops. They'll put sell stops below the marketplace, and then that's the momentum entry for them. And it's kind of like a no-brainer. In fast markets, yeah, it works. But if you don't know what you're doing, you try to do that in a market.

the market is consolidating or about the reverse, it hands you your backside. Okay, so if you're looking at this framework here and we've taken the buy stops, we have our entry pattern here, what would you be looking for as a downside objective? Well I'm gonna teach you the liquidity matrix, okay, and sounds pretty cool, sounds neat and all that, but watch what it is.

This here is your range. This is the low of the day and this is the high of the day thus far. So if we take that range and split it from the low to the high to get the midpoint, all this can be determined by a simple 50 level on a Fibonacci. So you drag your fib from this high down to that lower vice versa and have your 50 level highlighted.

Then anything above that 50 level, this is referred to from an algorithmic stance as a premium market. It means it's expensive. Now markets can stay in a premium for a while and not go to a discount, which would be below the 50 point. Okay.

50% anything down here is a discount. If you're bearish, if you're ever going short, you want to look at the previous range. Where are you at inside that range? So when this formed here, that little fair value gap, once that formed, you're thinking, okay, we are in a premium. So algorithms will want to go to a discount.

That's the opposing side of the marketplace. So if it's going short here, it's driving the market lower. What does that mean? The algorithm is going to start pricing lower. You can have all the buyers in the world come in.

If the algorithm is in a sell program and it's going lower, it does not matter. It's going to reprice lower and lower, lower. And then what will happen is those buyers that may come in with a huge influx of volume, they're going to get crushed and they get squeezed. You ever hear that term? Oh, this is a bear squeeze.

This is a bull squeeze. All that is an excuse for them not to know why the algorithm is doing what it's doing. That's it.

That's all it is. It's an out. I'm telling you, this is what's really going on.

So the market's moving from this premium high, this specific entry point, to a level below the 50 of this range, this low and this high. Now, I want you to, again, go back and rewind the video once we're done and look at that execution. page where I showed you my entries going back and forth, up and down, up and down, and where I got out at, where I got in at. Okay.

I want you to think about what below this level here, the 50 level, what is resting below here? Sell stops. So now think about the idea of someone like you and I that would see this ideal entry as a short.

We have to sell to get in that short. How do we get out of that short? We've got to buy it back or cover it by buying. Well, we're going to find willing sellers at a low price relative to this point here.

They're willing already sitting down there with their sell stocks right below that low. Now look closely. What else resides right near that low? Do you see it?

Pause the video before I show it to you because it kind of ruins the experience because if you find it and I don't tell it, it feels good. Right there is that imbalance I mentioned. Okay.

It's only one single candle passing up and the previous candle is high and the next candle is low. That area right there is an imbalance. From this area here, it went down below the 50 level and attacked these sell stops and completely closed in this imbalance. So every point of this candle's high to this candle's low, that range with the candle only going up, that's a buy side imbalance.

It has to have an equal delivery to be efficiently priced and booked by the algorithm. It goes down and completely closes it back in with down movement. Notice the candle on this here. It opens and then trades down.

So it fulfills its role of balancing the buy side offering, now the sell side offering. So that is an efficiently delivered price move. Precision elements from the entry here down to here. Everything else after that for the rest of the day, I didn't care about.

Even though I had an objective of that old daily low, I wasn't expecting it to run into this particular day. and that's why I didn't participate anymore the rest of the day. In hindsight, I wish I would have left a small position on it and just let it go, but you're going to have that.

You're never going to be right about everything all the time, every single day. You're going to leave things on the table. You're going to get in too early.

You're going to gonna hold too long you're not gonna buy enough you're not gonna sell enough there's always gonna be some reasons why you didn't do something right so don't beat yourself up without it okay but if you can find elements like this repeating in the price action can you agree with me that that isn't amazing precision and this is the logic I used to do that trade the very trade that I showed you that was the largest one in the example of saying which one would you rather learn how to do I basically just handed you an ATM machine. Okay. This repeats every single week. Every single week.

Now, I want you to count the number of the handles in this move. Let's say you got in at, well, let's say you got in at 800, 14,800. It started to go down.

You trust it. Okay, we're going to go short. Ideally, you want to enter as it goes into that, but it's going to take time for you to trust that.

But let's say you got in at 14,800. If you got out down here like I did, I exited as it went right to the top of that range right here. This range here, that's the top of it. Once it went below that, That was it for me.

That closed the trade. Is that five handles? Is that 10 handles?

Is that 20 handles? Is that 30 handles? Is that 50 handles?

No, it's over a hundred and some. Now let's assume for a moment. that you get good at this or I get the inclination that I want to go to some kind of a deep discount broker and I go in and I do trades like this and I'm putting on 15 to 25 full futures contracts what do you think the results are going to be yep so not everything is going to be easy right away and you're not going to see these things happen just because you sit in front of the charts you have to study and you have to practice and by experience of looking at old moves and watching real price action as best as you can if you can't watch it live trading view has a replay button where you can watch the candles kind of form but they're they're little stilted because it's not completely painting the candle okay and you can't practice with entering like that you can only just study how price moved and gravitated towards certain levels. It's the best thing you can have if you at least consider doing that much, that's good. But if you really want to take it to the next level and say you're running a business or if you're going to school or you have a job and you can't watch the timeframe around the opening of the index futures.

And I like watching it around 8.30 in the morning, New York local time to 11 o'clock. There's usually a setup in there that I'm going to be able to find. Obviously you've seen I did multiple setups.

executions today but the point is this that's like that sweet little spot in the morning that I focus on I teach that in this YouTube channel I teach it in my paid mentorship group so you're getting real stuff here it's not something that was contrived I didn't just make it up because this day worked out in my favor my students recognize these things also and these are simple elements that repeat What you're looking for is a run on liquidity, buy stops or sell stops. If you're bearish, you're looking for buy stops to be ran. Then a break in market structure, lower, a short-term low being broken. That's what it looks like right here.

Short-term swing low. We have a candle high. I'm sorry, a candle higher to the left with its low here.

Then you have the low of this candle and the next candle is higher low than this one. So you have a swing low formed. If you have that and then you have a break below that, if it happens, that creates a...

gap like this, that's what you're looking for. When it trades up into that, you can go short. Or if you want to use sell stops, you can use a sell stop in this candle here and let it trip you in and then use the high of that candle as your stop. That may be too wide for you, but I mentioned the logic around this is you're using a micro.

Micros aren't that big of a deal. It's not a lot of money. You're not risking a full futures leverage.

It's very, very small. So if you're looking at... these types of setups.

And you can find them forming repeatedly over and over and over again. And you study them. You're going to see that you don't need to get these little five handle moves, these little ten handle moves. You can make a living doing that.

Don't get me wrong. I'm not trying to say that people cannot be profitable and wildly profitable. But when you learn how to do something like this, and you're able to pull down this number of handles.

And then you have sound money management. Nothing compares to it, folks. These are the things that I use. When you watched when I was on Twitter and I ran up the demo accounts really high, these are the types of setups I was using.

These types of setups. And as the account grew, it was more demo account leverage. Well, I'm not using a demo account right now. I'm showing you with a thinkorswim.

And anybody that knows thinkorswim, when I'm showing you those screenshots, the paper trading shows as orange. Everything on that page is orange. When it's a live account, it's green.

Okay? Also, here's the rub. With a demo account, it's just demo, demo, demo, demo. Okay?

I'm not trying to promote the idea. That you're going to get rich. Notice that account hasn't gone bonkers.

It hasn't ran up to a million dollars. Because this mentorship is to hopefully inspire you to pick up a skill that if you deem it useful. And you decide at your own discretion and your own timing. And you assume that risk on your own.

Because I'm not going to tell you to do this. If you decide to get really good at this. And you put money behind it. That's a skill set that could. I'm not promising, but it could alleviate some of the problems with what I believe is coming in terms of financial hardship, not just in America, but everywhere.

Jobs are getting harder and harder to have. The economy is a mess. So how do we answer that?

How do we get another income stream coming in? This is, in my opinion, this is one of the ways that you can at least investigate the idea of doing it. All right, so I'm going to give you some homework in closing. I want you to go through. All of the E-mini futures contract charts, okay, just like I showed you here, these timeframes, go back and look at the presentation and see what the timeframes I gave you.

Listen to what I gave you in terms of audio commentary. That is enough. In fact, I gave you a ton. and it may have your head spinning if you're brand new to me, or if you're brand new to technical analysis or trading, you may feel like, man, this is too fast. Do not send me an email.

I promise you the lessons I have planned will help eliminate and answer majority of the things you're going to ask. Just try to study and keep up with the pace that I'm going to put you through, which isn't going to be all that bad. But...

As we progress deeper into the teachings, many of the questions are going to come up. Or when you start going into the homework assignment, where you're looking at old data, an intraday chart is anything less than a daily chart. So like a four-hour chart, that's intraday. One-hour chart, that's intraday. minute three minute two minute one minute all those time frames are intraday what you're going to be looking for are breaks in market structure after a pool of liquidity okay buy stops or sell stops have been taken in an opposing direction of your weekly expected range.

In other words, are you expecting higher prices or lower prices on the weekly range? So if you're looking for lower prices, your focus is on a run above an old high. Once that forms, then you're looking for a break in market structure on a lower timeframe.

Once that occurs and you have an imbalance, that's your trigger. Okay? And then you split that range that was created, find out where the 50% is.

And then if you're selling short, you want to find something like an old low or an imbalance to aim for as your target. And you want to get the closest target. Don't try to get fancy and say, okay, well, I think it's going to go down to that lowest low and try to use that for your exit. Because sometimes these markets can deny you that. So low-hanging fruit is how I do it.

how I teach. You want to have the easiest target and then allow the market to go farther and you just not be a part of it. It's okay. Is 125, 130 handles in an index not good enough?

I think it's good enough, but I'm probably just biased. But the homework assignment is, again, you're going through the charts using the logic I framed in this introduction lesson, looking for breaking market structure. I also have lessons in this YouTube channel that talks about market structure breaks and things like that.

And then you're going to look for the imbalance in price, which is that fair value cap. Then you're going to determine where an opposing high or low resides, then log and backtest the number of handles you see in hindsight examples. In other words, how much did it offer? and you're going to get a collection of doing that.

The next lesson, I'm actually going to show you how to go back into the charts and look for them, how to log them in your journal, and give you more insights about how you can find these setups that repeat every single week. So again, I'm going to build on this foundation in the next episode. The next episode will be next Tuesday, and the time upload will be 10 o'clock New York local time. Hopefully you've enjoyed this one.

Until I talk to you next time, I wish you good luck and good trading.

Transcript for:Introduction to Trading Setup Essentials

Transcript for:
Introduction to Trading Setup Essentials