Trading Lecture: One ICT Strategy for Life

if I rewinded the clock on my trading career the biggest problem I had was not having a step-by-step process to analyzing and executing in the markets I got caught in a vicious cycle of always trying to learn new systems and entry methods and never focused on a repeatable process but then I tried stripping down everything that wasn't necessary and began to see major improvements in my performance this routine I've put together has helped me generate over a million dollars in trading income over the past few years so if you're tired of running in place like I was I'm going to share with you the one ICT strategy that I would use for the rest of my Life we'll discuss time frame selection Market structure liquidity order flow power of three risk management and trade management if you want full access to the mural board that I'll be reviewing in this video make sure you check out the link in the description so you can get to trading right away and making money in the markets consistently now grab your notebooks and let's dive into the video all right so we're going to go over my one ICT strategy for life and by the end of this video My Hope Is that once you see all the step-by-step processes that you're going to have an outline of what you need to focus on in order to become a profitable Trader because anything outside this I think is unnecessary so if you are struggling with certain things you're not going to be an expert at each one of these nodes I'm going to call them but if you understand your weak points you can go go in and Tackle them all individually so what we're going to cover right again is our time frame selection uh creating a bias the PD Matrix order flow uh power of three risk management uh trade management so all those pieces are you know ingredients to the total recipe which is my one ICT strategy for life we're going to talk about time frame selection this is so important and I can't emphasize this enough if you don't know the time frames that you're executing on you don't really know what type of Trader you are when we're talking about swing trading when we're talking about position trading or even scalping you know I get a lot of questions from even some of my students is how do I you know change my bias or when do I know that my trade's invalidated and that that really stems from not knowing the time frames that you're using and we're going to dive into this a little bit more so you know do you know what kind of Trader you are this is a big question if you don't know what kind of Trader you are this is what you have to work on so no right obviously these are clear and concise if I don't know what kind of Trader I am no I have to work on understanding what that is and how how would I know what type of Trader I am well it really comes from experience in the markets because when I came into the markets I thought I wanted to be a swing Trader and I just quickly realized that I just didn't have the patience to be a swing Trader so that automatically you know kind of put me in a in a different category so when we're talking about you know time frame selection understanding what type of Traders are first and foremost is going to be essential to how you're going to operate in the market because this is going to give us right our high time frame our intermediate term time frame and our lower term and our short-term time frame and where I see a lot of Traders go wrong is they're operating on the short time frame on the shortest time frame that they're possibly using and they're thinking that every change in order flow is you know the shift in their bias and you're doing it completely wrong you have to just make sure that your trade ideas and your trade biases are coming from the higher time frame okay so we're going to go through you know a quick example of that in here so let's just say for example I am a short-term Trader which I am okay now my my trade idea and my bias is coming from the middle to the highest time frames okay so trade ideas will be formed and managed on the middle to highest time frames the lowest time frame is only used for execution of the idea your buyas should not change unless there's a clear change in delivery or inv validation so I'm going to put or inv validation so or inv validation on the highest time frame so if you guys have seen any of my trades that I've taken on the channel or you know you guys foll me on social media you're seeing my trades you're like how is he operating or how do I know when to change bias how do I know when the trade is is going against me and when I'm a short-term Trader all my analysis the majority of my analysis is done on the daily chart or the 4 Hour or the 1 hour so either the middle or the highest time frame it's not coming from the 15 minute and this is where your time frame selection and understanding which time frames you're using is so important and we're going to get into that in the next in the next node which is going to be Market structure okay so when we're talking about the time frames okay I'm only using the 15minute to find my entry in sync with either the 1H Hour 4 hour or the daily chart so a lot of times right Mya my trade idea itself is being created on the middle to the highest time frame it's not being created on the lowest time frame the lowest time frame is really only used to pinpoint an entry in sync with that higher time frame and when we get into stop placement we'll talk about that but basically I'm not using a 15-minute stop loss I'm using an hourly higher low or an hourly PD or a daily PD so I might be using the previous day low as my stop loss if I'm long all right or the previous hour's low or you know previous hour fair value Gap I'm not using the 15 minute and this is where maybe a lot of Traders will get messed up they're getting stopped out because they're doing majority of their analysis on this on the lowest time frame so you know this is going to reduce a lot of the noise that you're seeing and same thing with you know if you're a scalper or intraday Trader the hourly is going to give you the trade idea if you don't have if you don't have a trade idea in the hourly you shouldn't even be operating on these two time frames all right so knowing this right what you could do essentially in your trading view is just disable the rest of the time frames because we in my opinion having more time frames isn't going to make you a better Trader when you're talking about time frame selection we only want to focus on the data that matters to our system and when we're talking about you know Finding entries and and managing our trades you're going to throw yourself off if you are flipping between all these different time frames that aren't in your system right so let's say if you're a scalper day trader and you're looking at the daily or the weekly chart well that doesn't really matter to you be now you're getting information overload so our goal with time frame selection is knowing what kind of Trader we are right if we know what kind of Trader we are which time frames am I going to use okay and these are the most important uh which I would say are you know pretty standard when it comes to short-term Trader because as a short-term Trader I only really care about what's going to happen in the next 24 hours yes I can use the weekly chart but then I'm just adding more information if I'm really just a short-term Trader I can really just focus on the daily chart as my highest time frame all right so this is a clear flow chart so once we have time time frame selection out of the way you can put a check mark next to that one then we're going to go into bias determination and now this is where all the hard work comes in because this is all Technical and technicals can be very difficult if you don't have the Reps and understand you know where you are in in the market which is you know this section is going to cover all of that so determining your bias this should cover all of that uh so first of all we have to talk about the market structure all right so is there a clear Market structure and when I mean by that you know is the market creating higher highs or higher lows if it's not if there's no clear Market structure then you're more likely in range bound conditions and don't have a bias in which case you could possibly uh so you have two options either you sit on your hands and do nothing or you become or you have a model that is for range bound conditions like scalping okay so determining if you're in a trending market right or if you're in a range-bound market is essential to you understanding where you are in the market and the the specific Market condition that you have if we do have a clear Market structure all right what am I going to do you know based on my time frame selection how am I going to do that analysis okay so when we're talking about me being a short-term Trader my analysis for my long-term lows and highs is going to be done on the daily chart now this is a little bit subjective uh because you could essentially Mark out some other highs and lows in here uh as long-term highs and lows but I'm really only selecting the parent price wings so I'm looking at this one this retracement and then this one right here so these are my market structure points I have a long-term low right LTL or lth LTL so I have long-term low long-term High long-term low low long-term high now is that market creating lower uh sorry higher lows and higher uh highs yes so I know that this Market structure is bullish so once I have my higher time frame right going back to time frame selection once the higher time frame is out of the way we're going to drop down to the intermediate term so the intermediate term time frame can either be the 4 Hour or the 1 hour so once I have once I'm down on the 1 hour chart you can see LTL which is my long-term low and then my long-term High So within that fractal I'm just dropping down again and plotting out my intermediate term highs and lows and then you're going to do the same thing on the shortest time frame just understanding where you are inside of the market structure because you can have short-term lows being ran out and then they create they're creating intermediate term lows but this overall Market structure right is still bullish that's all we need to know when we're deciphering you know are we in a are we in a uptrend or are we in a downtrend okay so Market creating higher highs and higher lows bullish Market creating lower lows and lower highs bearish okay and then if we take out a long-term level on The Daily then maybe the market structure is Shifting okay but again this will be subjective because sometimes we'll take out a long-term low but the overall Market structure if going up on a time frame can be overall bullish so starting from top down is so important understanding where you are inside the market structure that way you're not confused when you're going in the charts on the lower time frame seeing a market structure shift One Direction and then thinking that the trend is over okay so making sure that you know our Market structure analysis is structured we're basing it off of are three time frames that we want to cover right because you have a long-term time frame an intermediate term time frame and a short-term time frame price is fractal you guys have to decide which time frames you want to use but stick to those time frames now you know when we get into trade management and all that use these intermediate term time frames and long-term time frames as you're in validation level so you know when I'm looking at the market and we have a specific daily low in place I am saying that unless we lose this low I'm going to remain bullish in the market and then this is just shortterm so if you are trading you know intraday we'll get into the next part which is dealing ranges like understanding where you are within a specific dealing range will help you if you're going to take short-term trades against the trend or if you're in a longer term discount of Premium where you want to know go with the trend so once we have Market structure out of the way and if we don't you know the goal of this as we go forward is to be able to check off all these boxes for our trade plan so time frame selection right out of the way uh clear Market structure yes or no then we're going to go into dealing ranges so dealing ranges if you guys don't know what dealing ranges are you can use a Fibonacci tool basically go in there uh figure out what the parent price swings are where you are inside of a specific range so I plotted them out as this long-term low and we're using the same fractal which was from the dollar we're using you know either a long-term low or a long-term high so going inside of your dealing range and then figuring out do am I in a discount am I in a long-term discount or am I in a long-term premium and then within that long-term premium or discount do I have another range that I can look at as a discount or premium okay because as you can see using our intermediate term highs and lows right then we have intermediate term discounts and premiums right and you can see that these short-term highs in premium are being ran out return to short-term short-term lows at discount and then going higher based on our intermediate term highs and lows so inside of this much larger price swing right we have smaller price wings so again time frame selection is going to be extremely crucial to you guys understanding where you are inside of the much larger range there are other uh dealing ranges in here but I've only really plotted the you know the important ones in my opinion between my intermediate term lows and my intermediate term highs so I'm looking at this range this low to this High all this is in a discount and then all this is in a premium okay but then we also have you know smaller in inside of here maybe you can look at this dealing range in here that's a shorter term time frame all right determining where you are inside of the much larger range is going to help you decipher if you have a high probability trade on your hands cuz if you're at an intermediate term premium and a long-term premium it's very likely that it's going to go against you so if you're trading up here like let's say if this swing High gets put in and then you're trying to go long here well you're already in a major premium right you're not you're neither in an intermediate term discount or a long-term discount so you're really fighting against the powers that be inside of that market right so understanding where you are inside of that fractal is going to be you know pretty much our next step then we're going to go into order flow so order flow can be very straightforward I like to look at order flow using fair value gaps so a lot of my analysis is coming from you know are we respecting specific PD rays in my opinion fair value gaps provide a really great indication of order flow because you're going to see markets that trade into fair value gaps or leave fair value gaps behind and in that case you can really tell which side of the institutional Market structure or institutional order flow you're on and one example that I often talk about with people in my group or just people that I I talk to in the trading space is the dollar Yen and now why is this order flow so bullish and that comes down to fundamental analysis which is a whole different topic we're not going to be covering that in this video this is really just going to be a trading strategy um and then fundamental is know outside of this specific strategy but we can gauge order Flow by our you know our specific fair value gaps being retested left open and then traded higher to while opposing fair value gaps like sells side imbalances uh or bearish fair value gaps are being violated okay so when we see bearish uh fair value gaps being violated then we know that the order flow is strong in our Direction so there's you know there's there's bearish fair value gaps inside of this overall up Trend that are being violated retested and then sent the other way and then we have bullish fair value gaps that are being retested respected and then sent so uh the reason why this Market just keeps going up is because of the interest rate differential so the yens they haven't hiked rates like at all their Central Bank is very stubborn on hiking rates so clearly all the money is pouring into the dollar which has a high interest rate and now why if the yields are going higher why why do you know institutional investors invest with that specific economy because the bond market right if you're you're going to buy a Government Bond it's basically a guaranteed return so if the bond market is offering you a 5% yield uh well so the US bond market is offering you a 5% yield whereas let's say the Japanese you know the Yen bond market they're only they're not offering you anything so why would you invest with them so that's where you're going to see all the money flow the order flow going towards the dollar okay and that's just a very basic quick uh rundown on you know the fundamental side the macro side of order flow and you know how order flow is represented in the market but you know a major thing that we're going to have to figure out is you know are these fair value gaps being respected traded to and away or are they being invalidated you know trading traded through because in a bearish trend you're going to see a lot of bullish fair value gaps being inverted and traded away from so gauging the order flow will come from you know our study of fair value gaps and how we actually you know utilize Our Fair Value gaps in the direction of order flow which we'll get into later down the line so so far we've gone over Market structure dealing ranges and orderflow now all of these all three of these will get you to a specific bias now if you're missing if you're missing some of these right it's obviously going to uh I would say if you're going to grade your bias which on on a scale of 1 to 10 on how confident you are in a specific bias because we need to have a bias when it comes to trying to find trades and enter in the market if we don't have a clear bias right that means one of these things is out of sync like either I'm bullish I'm bullish on Market structure but we're in a premium right no trade or reduce risk you know if I'm bullish on uh Market structure we we are in a discount but order flow is not being respected right maybe it's not the right time yet maybe that bullish fair value Gap fails maybe we're going to see a short-term retracement so all these things are interchangeable so we need to be mindful that I would say all these all these items are interchangeable with each other or they they're all correlated with each other so in order to come up with a really strong bias and this is why market conditions are not always ripe to trade in we have to understand that you know all of these things have to be in sync we have to have clear bullish Market structure we have to have uh prices in a discount and we have to see order flow bullish order flow so we need to see displacement to the upside we need to see fair value gaps being respected and if one of those is out of touch you know if one of those is not meeting your criteria all of a sudden that go that setup goes from an A to possible B or C and maybe we're just going to avoid the markets entirely so this bu determination is also going to help you filter out know when when is it right to trade in a specific Market or when do I avoid a specific Market because a lot of times like even right now the dollar is really just stuck in a consolidation like we tried to make a high today and we've just collapsed back and tied the range so right now the market structure is not quite clear which kind of forces you either to sit on your hands or become a scalper intraday Trader or short short-term Trader because we don't have a higher time frame Market structure guiding us okay so let's say if you're very comfortable with being a position Trader or a swing Trader you're going to have to reduce your risk because you're operating in an area that's not uh it's not part part of your you know overall trade plan or personality trade personality when we're talking about building a strategy out right the strategy has to fit your personality if it's not going to jive with your personality you're going to struggle with it you're going to fight with it so you know all these three all these three things are basically my checklist of saying all right well if all my criteria are met then we have to refer to the PD array Matrix okay and power of three so we'll go over the PD Matrix next which you know this is not something that you guys just pick up right away and again this all this whole strategy right is going to take you some time to get through so again time frame selection sorry if I guys sorry if I went through this quickly I'm going to slow down a little bit so time frame selection right obviously extremely important to knowing how you're going to operate in the markets what you should be looking at which time frames you should be looking at because the time frame is going to provide you the invalidation of specific levels if you need to change your bias but if those higher time frame levels aren't invalidated and obviously we stay on one side of the market and bias determination I'm basically doing this every time I sit in front of the charts so whenever I sit down in front of the charts you know that's pretty PR pretty much every single evening getting prepared for the next day I'm asking myself all of these questions and if one thing is not in sync or jives with my system then all of a sudden it becomes very very difficult for me to try and plan an A+ setup for the following day because if there's no clear Market structure going into the next day like what what's all of a sudden going to make it clear for you um all of these things really need need to line up for that A+ setup that you know is really just going to expand to your targets without providing you know High Resistance all right then we're going to get into the PD array Matrix which again will take a lot of time dealing with well all these things take practice so if you're and like I mentioned in the beginning of the video if you're struggling with any one of these you're going to have to spend a lot of time with them um and as you can tell you know this is how I segment everything that I'm studying instead of trying to learn all this stuff at once right I'm bringing you through the flowchart of what you need to focus on first okay so time Fram collection a lot of people struggle with that get comfortable with the time frames that you're on then go into the bias right first you have to do Market structure if you suck at doing Market structure you're stuck here all right you're stuck on this node until you increase that skill set and then can unlock you know these other ones but so once we get all these out of the way right on our checklist our trade plan checklist we will get into the PD Matrix now once we have you know our bias determination in place next becomes the PD Matrix where can I execute in the market and when okay because this is going to be extremely extremely important uh for you to learn how to use some of these things and now I'm not using all of these but um when I'm when I'm journaling I would essentially if I'm if I'm going to try and use all of them I would try and have a statistic for each one of these because each one of these trades is going to have its own hit rate for you how you're going to execute with that specific PD now I'm using the fair value Gap 90% of the time just because it lies within you know 50 it's basically 50% of anything else so you know trading order blocks or anything like that I like Fair value gaps because you know again going back to order flow my opinion it's like kind of in the middle of the road setup for you to try and um to enter the market whereas you know some of these other ones you really it's really the order flow is really going against you because sometimes it'll go through the fair value Gap hit an order block or take out an old low and then turn around um in that case you know either you're going to get stopped out or you have to get in sync with the market after those PD rays are hit but when we're talking about PD rays and learning all of them you know each one of these is going to you're going to have to spend intimate time learning all of these so you know going through your charts and only plotting out old highs or old lows or only plotting out rejection blocks or only plotting out order blocks or only plotting out fair value apps or only plotting out liquidity voids or only plotting out Breakers and mitigation blocks this these are all homework assignments in themselves so anybody that's listening to the video that's struggling with a full strategy it's because maybe you're lacking context because I'm using all of these I understand all of them but I'm not using them all to trade I'm just using them all for uh my context and my narrative so if I see an old low be taking out all right and then we close back above above the old low and then we get a market structure shift and then we trade into the fair value Gap I'm only going to take a trade on the fair value Gap I'm not taking a trade off of the market structure shift not taking a trade off of running the old low which sometimes I will but that's because I understand all of these um 80% of the time if I only understand fair value gaps like you know I know some traders that are only trading the 2022 model or the unicorn model right so you're looking for basically three signatures and when it comes to trading the PD Matrix right it it aligns it has to align with time so these uh you know these signatures need to align with time and they need to align with price so are these PD arrays being formed below the open so again if you're struggling with understanding any of these PD Rays you know I urge you all to go and you know dedicate a lot of your time to studying when we're talking about building the strategy you don't need all of these just you could focus on a couple but I would say you need at least two to three of them in order to build enough context around a specific trade to take the trade okay so not only does time line up you have to have some confluences so if you have you know for example a bullish breaker lining up with a bullish fair value Gap now it's giving you additional confluences so when we're talking about the PD Matrix right we want to make sure that we have at least two to three confluences so we want to make sure that we have at least two to three confluences okay before taking any trade if you've made it this far you know that having a strategy and implementing it are two totally different things if you're tired of operating alone in the market to need more confidence Clarity and accountability I'm building the best community in the trading space to help you transform your trading I'll help you tackle every problem you face right now because I've been where you are I know what it takes to go from loser to consistent winner and some of my students are proof of that so if you're interested in working directly with me go ahead and apply using the link below now I don't want to take up too much of your time so let's get back into the video now we're going to get into the power of three so what is the power of three right power of three first of all we need to have an overall bias um the power of three is essentially accumulation manipulation and distribution so when we think about of if we think about the formation of any specific candle just let's take example for the daily candle nearly every bearish candle will start out bullish right it's usually not going the other way around like you're not seeing a bearish candle at the end of the day go make the high of the day right doesn't make any sense is usually making the low of the day towards the end of the day and for any bullish candle you know 80% of the time time is starting out bearish so that's really the manipulation phase we need to try and position ourselves within that higher time frame so let's say if you're a shorter term time frame or a scalper the next hour right I should be trying to buy it below the open if I'm if I have a bullish bias going into the next hour two hours 3 hours I'm trying to position myself inside of a PD Ray below price if I'm bullish okay so again we're we are combining all these things before we get to power of three power of three in my opinion should be the last thing on your list because power of three really in my opinion comes down to execution we're not focused on power of three if everything else is out of sync and this is why I have this nice flowchart here right again we are going step by step if one of these breaks right this line no more we cannot go onto the PD Matrix if we don't have a bias okay so when we have our overall bias right let's say it's bullish all right is the market above or below the high time frame open if I'm bullish and the market is above above the high time frame open either I have to reduce my risk or it's no trade because that's telling me that the market has possibly already expanded and moving towards our Target and we've already missed the entry especially if the Market's already traded below the open you know if it hasn't traded below the open then maybe it's a duud to swing the other direction and maybe your bullish bias is incorrect okay so if you're bullish right and let's say the day opens up and let's say here's the open let me just scroll down actually so if you're bullish right and the open uh if we just trade up straight off the open let's say if we have the daily open and it just trades up that to me is not very bullish because if I'm bullish I want to see it open lower into a key PD Ray if it's going to open higher and maybe hit a key PDR that's an automatic red flag okay so when it comes to our execution this is going to help us we want to be able to position ourselves inside of a higher time frame Wick and if we're not doing that we're not operating as smart money so when we're talking about you know power of three this is going to help us execute in the market so let's say if we are bullish right and the Market's below High time frame open then we're going to find an execution using a discount PD so the power of three and the PD Matrix are pretty much hand inand we have to use both of them right but once we find our execution then we have to talk about our stop-loss placement and our trade management so we're going to go into risk management and I already brought this up in my last video but I always like to refer to my bank roll with casino chips now let's say let's just say we're talking about prop and this can apply to your personal counts as well but let's just say that I have a 10% draw down limit or whatever it is with future terms it's way less maybe it's like 3 and half% um but I want to give myself at least 10 to 20 chances all right so what do I have to divide that you know that total risk number by to get 20 to 30 chances all right if you're going to divide it by if you're going to divide like 3 and a half% draw down by 10 that means you can't risk more than 35% on a trade right it's going to give you 10 chips for you to bet with if you don't know what your max consecutive losing is it's going to make it really hard for you to trust your trades because you can possibly go on a 10 plus losing streak it's not uncalled for I've seen it happen before it's happened to me before like way back in the day not anymore but I I sometimes will have three to four losers in a row which you know if you go half halfway down your draw down limit that's really hard to crawl out of so the the one way that we're going to obviously reduce some of that risk all right well so first of all if we don't know what our Max consecutive losing streak is you have to understand what your risk of ruining and if you guys don't understand what that is then you really don't understand risk management at at all whatsoever because um if your strategy is not operating where it should be your risk of Ruin goes up okay so your percentage of failure increases if you don't understand what your risk of Ruin is right if you don't understand what your win rate win rate is and if you don't understand everything else that goes into this then it doesn't really matter what your risk management is because your hit your win rate is going to go down if you don't understand all these other previous nodes so um you know do you know your Max consecutive Los and streak let's say if you do you know then are are you in draw down or are you not okay so if you're not in draw down and your trade was a loss then you could either reduce your risk or use standard risk if it was a win then you can stay with standard risk okay so that means let's say if I started with 10 chips and I added a couple more chips all right either I can keep betting because I'm up right I'm above my initial balance or I could reduce to minimize the effect of me losing these chips all right both are both are sound decisions and when we're talking about all of this this you know these flow charts with these trees this all comes down to proper decision making which is what trading is trading is about proper decision making if we're not making proper decisions we suck and we're going to lose money all right so you know if if I'm not in a draw down these are the two acceptable things that we could do either reduce risk or standard risk but if we are in a draw down here's the problem is everybody's trying to crawl out of the draw down very fast okay but the biggest thing is to be able to protect your tips because if you keep risking standard risk on your trades that means you're just going to blow up faster all right but if you're able to reduce risk and stop the bleeding you basically can buy in more chips so let's say hypothet hypothetical example if I start out with a 10% draw down limit and I go down 5% in my draw down what is the easiest way for me to get more chips let's say you know I have a Max cons consecutive losing streak of 10 historically and I don't want to breach 10 what's the best thing I can do if I have five chips left well let's say if the table limits are less than these chips cost all right let's say these chips are worth $25 and I start betting $10 now all of a sudden this stack goes much further I can tell the I can ask the dealer to exchange this chip now all of a sudden I now I have possibly 20 to 30 trades left right if you stay at standard risk you're really going to hurt yourself um especially if you're on a cold streak which is you know it when it happens it's very hard to to be able to commit to reduce risk because it do not going to feel good you're going to you your back is going to feel up against the wall but it's extremely extremely important to understand that I need to stay in the game because if you run out of chips we can't play okay so this is very straightforward risk management you know are you going to draw down not are you not understanding what your you know Max consecutive losing streaks are and then sizing your positions accordingly I'm not going to tell you risk 1% risk 2% that's that's kind of up to you guys now we're going to talk about trade management so stop- loss placement all right you know can I place the stop- loss in a logical area if I can't like if everything else lines up and then my stop loss uh to my target is not favorable risk the reward then I have I don't have a trade right like if if all these other things line up everything else lines up the market structure is bullish dealing range is bullish uh you know we're in a discount order flow is bullish discount bullish Etc blah blah blah um but let's say the Market's moved too far away and now all of a sudden uh to my first point of liquidity I'm not getting the best risk reward like my stop loss has to be wider than I than it should be then I really don't have a trade and I have to just wait for a short-term retracement so you know trade management our stop loss placement is going to help us decide whether we should take the execution or not and having a logical level based on Market structure or a fair value Gap is way more important than for forcing the trade into a standard size right let let's say oh I want to average 25 Pips just a fixed 25 Pips and make 25 Pips or I want to average a fixed five handle risk in futures or a fixed 10% profit Target but neither of those levels line up with either liquidity or inefficiency then we have a problem okay then you have to manage your size accordingly this is where trade management comes in to your position sizing you have to reduce the risk because your stop is wider all right it's either that or you don't take the trade so if it can be placed in a logical level with proper risk reward then we go into trade management and this is totally optional if you're a Trader that is really only trying to focus on um mechanical entries and exits then you don't need trade management because this part could possibly hurt you but when it comes to trade management and a lot of people will ask me you know how do I manage my specific trade it really comes down to understanding where my exits are going to be because the exits are way more important than the entries right if it's so easy to enter the market it's hard to know when to get out so when it comes to trade management again it's optional uh tp1 will be at the first point of liquidity or resistance wherever that first level that might um cause an issue is you know maybe it's a previous session High maybe it's the daily open maybe it's the previous uh daily High something something like that okay so when that first point of liquidity is hit you know then it becomes down to discretionarily you know how much do I want to take off do I want to take off 25% 50% of my position 75% of my my position I can scale out a partial and then reduce my stop loss um this you can do both when my trade management comes into play sometimes it's both sometimes I'll scale out a partial and then if I have additional Market structure then I'll reduce my stop loss if there's no additional Market structure then I might leave the stop loss the same and maybe scale out more right this is very discretionary and this is why in my opinion trade management can be optional because this is a whole different skill set entirely then I'll have a tp2 possibly right maybe I'm scaling off another 25 to 50% % of the position um again same thing scaling out the partial reducing the stop loss and then the final TP will be at external range liquidity okay so let's just quickly run back through everything that we've covered and I hope that you guys can see how all these pieces of the puzzle are necessary before you get to the next step so before you even think about trade management or risk management or power of three these are all the necessary steps before you have before you get to that level so again when it comes to my strategy first and foremost is time frame selection and I'm not just a short-term Trader so I'll swing trade FX now and day trade uh Futures so I know exactly which time frames I'm using for my bias my invalidation levels and it makes things very straightforward and structured when I'm going into my journal and trying to figure out or plotting my charts what is my higher time frame what is my intermediate term time frame and what is my short term time frame and then I'm going into bias determination so I I will go through all of this information prior to the session uh you know night before and before the session starts you know if anything changed overnight that I need to be uh weary of so I'm going through all of these different pieces before the session if you guys decide to download the PDF I will have a specific trade plan in place that you can fill out before each session or before each trading day then once I have my bias determination then it comes to the execution all right so once we have the bias going into the session or going into the next day then I'm looking for power three and the PD Matrix you could flip these around you could think about power of three first or PD Matrix whatever the case is you know you're using both both of these in conjunction with each other so if it's trading down into a bullish level am I below the open all right it's very simple um this looks very complicated but it I'm telling you once you practice with it and once you understand it once you see it pan out the strategy is very simple and it's repeatable this happens every single day power of three happens every single day every single hour every single 15 minutes it h it's happening on a lower time frame it's happening on a higher time frame so understanding that fractal nature of price is going to be extremely important for you to understanding this whole strategy as a whole all right and then once we figure out you know our execution then it comes to risk management and trade management I hope you all enjoyed the video and learned something valuable by how I approach the markets with confidence each and every week if I helped you get past some pain points make sure you leave a comment as I love hearing about all the things that are holding you back it helps me provide better more valuable content in the future also don't forget to like And subscribe to the channel and I'll see you guys in the next video

if I rewinded the clock on my trading career the biggest problem I had was not having a step-by-step process to analyzing and executing in the markets I got caught in a vicious cycle of always trying to learn new systems and entry methods and never focused on a repeatable process but then I tried stripping down everything that wasn&#39;t necessary and began to see major improvements in my performance this routine I&#39;ve put together has helped me generate over a million dollars in trading income over the past few years so if you&#39;re tired of running in place like I was I&#39;m going to share with you the one ICT strategy that I would use for the rest of my Life we&#39;ll discuss time frame selection Market structure liquidity order flow power of three risk management and trade management if you want full access to the mural board that I&#39;ll be reviewing in this video make sure you check out the link in the description so you can get to trading right away and making money in the markets consistently now grab your notebooks and let&#39;s dive into the video all right so we&#39;re going to go over my one ICT strategy for life and by the end of this video My Hope Is that once you see all the step-by-step processes that you&#39;re going to have an outline of what you need to focus on in order to become a profitable Trader because anything outside this I think is unnecessary so if you are struggling with certain things you&#39;re not going to be an expert at each one of these nodes I&#39;m going to call them but if you understand your weak points you can go go in and Tackle them all individually so what we&#39;re going to cover right again is our time frame selection uh creating a bias the PD Matrix order flow uh power of three risk management uh trade management so all those pieces are you know ingredients to the total recipe which is my one ICT strategy for life we&#39;re going to talk about time frame selection this is so important and I can&#39;t emphasize this enough if you don&#39;t know the time frames that you&#39;re executing on you don&#39;t really know what type of Trader you are when we&#39;re talking about swing trading when we&#39;re talking about position trading or even scalping you know I get a lot of questions from even some of my students is how do I you know change my bias or when do I know that my trade&#39;s invalidated and that that really stems from not knowing the time frames that you&#39;re using and we&#39;re going to dive into this a little bit more so you know do you know what kind of Trader you are this is a big question if you don&#39;t know what kind of Trader you are this is what you have to work on so no right obviously these are clear and concise if I don&#39;t know what kind of Trader I am no I have to work on understanding what that is and how how would I know what type of Trader I am well it really comes from experience in the markets because when I came into the markets I thought I wanted to be a swing Trader and I just quickly realized that I just didn&#39;t have the patience to be a swing Trader so that automatically you know kind of put me in a in a different category so when we&#39;re talking about you know time frame selection understanding what type of Traders are first and foremost is going to be essential to how you&#39;re going to operate in the market because this is going to give us right our high time frame our intermediate term time frame and our lower term and our short-term time frame and where I see a lot of Traders go wrong is they&#39;re operating on the short time frame on the shortest time frame that they&#39;re possibly using and they&#39;re thinking that every change in order flow is you know the shift in their bias and you&#39;re doing it completely wrong you have to just make sure that your trade ideas and your trade biases are coming from the higher time frame okay so we&#39;re going to go through you know a quick example of that in here so let&#39;s just say for example I am a short-term Trader which I am okay now my my trade idea and my bias is coming from the middle to the highest time frames okay so trade ideas will be formed and managed on the middle to highest time frames the lowest time frame is only used for execution of the idea your buyas should not change unless there&#39;s a clear change in delivery or inv validation so I&#39;m going to put or inv validation so or inv validation on the highest time frame so if you guys have seen any of my trades that I&#39;ve taken on the channel or you know you guys foll me on social media you&#39;re seeing my trades you&#39;re like how is he operating or how do I know when to change bias how do I know when the trade is is going against me and when I&#39;m a short-term Trader all my analysis the majority of my analysis is done on the daily chart or the 4 Hour or the 1 hour so either the middle or the highest time frame it&#39;s not coming from the 15 minute and this is where your time frame selection and understanding which time frames you&#39;re using is so important and we&#39;re going to get into that in the next in the next node which is going to be Market structure okay so when we&#39;re talking about the time frames okay I&#39;m only using the 15minute to find my entry in sync with either the 1H Hour 4 hour or the daily chart so a lot of times right Mya my trade idea itself is being created on the middle to the highest time frame it&#39;s not being created on the lowest time frame the lowest time frame is really only used to pinpoint an entry in sync with that higher time frame and when we get into stop placement we&#39;ll talk about that but basically I&#39;m not using a 15-minute stop loss I&#39;m using an hourly higher low or an hourly PD or a daily PD so I might be using the previous day low as my stop loss if I&#39;m long all right or the previous hour&#39;s low or you know previous hour fair value Gap I&#39;m not using the 15 minute and this is where maybe a lot of Traders will get messed up they&#39;re getting stopped out because they&#39;re doing majority of their analysis on this on the lowest time frame so you know this is going to reduce a lot of the noise that you&#39;re seeing and same thing with you know if you&#39;re a scalper or intraday Trader the hourly is going to give you the trade idea if you don&#39;t have if you don&#39;t have a trade idea in the hourly you shouldn&#39;t even be operating on these two time frames all right so knowing this right what you could do essentially in your trading view is just disable the rest of the time frames because we in my opinion having more time frames isn&#39;t going to make you a better Trader when you&#39;re talking about time frame selection we only want to focus on the data that matters to our system and when we&#39;re talking about you know Finding entries and and managing our trades you&#39;re going to throw yourself off if you are flipping between all these different time frames that aren&#39;t in your system right so let&#39;s say if you&#39;re a scalper day trader and you&#39;re looking at the daily or the weekly chart well that doesn&#39;t really matter to you be now you&#39;re getting information overload so our goal with time frame selection is knowing what kind of Trader we are right if we know what kind of Trader we are which time frames am I going to use okay and these are the most important uh which I would say are you know pretty standard when it comes to short-term Trader because as a short-term Trader I only really care about what&#39;s going to happen in the next 24 hours yes I can use the weekly chart but then I&#39;m just adding more information if I&#39;m really just a short-term Trader I can really just focus on the daily chart as my highest time frame all right so this is a clear flow chart so once we have time time frame selection out of the way you can put a check mark next to that one then we&#39;re going to go into bias determination and now this is where all the hard work comes in because this is all Technical and technicals can be very difficult if you don&#39;t have the Reps and understand you know where you are in in the market which is you know this section is going to cover all of that so determining your bias this should cover all of that uh so first of all we have to talk about the market structure all right so is there a clear Market structure and when I mean by that you know is the market creating higher highs or higher lows if it&#39;s not if there&#39;s no clear Market structure then you&#39;re more likely in range bound conditions and don&#39;t have a bias in which case you could possibly uh so you have two options either you sit on your hands and do nothing or you become or you have a model that is for range bound conditions like scalping okay so determining if you&#39;re in a trending market right or if you&#39;re in a range-bound market is essential to you understanding where you are in the market and the the specific Market condition that you have if we do have a clear Market structure all right what am I going to do you know based on my time frame selection how am I going to do that analysis okay so when we&#39;re talking about me being a short-term Trader my analysis for my long-term lows and highs is going to be done on the daily chart now this is a little bit subjective uh because you could essentially Mark out some other highs and lows in here uh as long-term highs and lows but I&#39;m really only selecting the parent price wings so I&#39;m looking at this one this retracement and then this one right here so these are my market structure points I have a long-term low right LTL or lth LTL so I have long-term low long-term High long-term low low long-term high now is that market creating lower uh sorry higher lows and higher uh highs yes so I know that this Market structure is bullish so once I have my higher time frame right going back to time frame selection once the higher time frame is out of the way we&#39;re going to drop down to the intermediate term so the intermediate term time frame can either be the 4 Hour or the 1 hour so once I have once I&#39;m down on the 1 hour chart you can see LTL which is my long-term low and then my long-term High So within that fractal I&#39;m just dropping down again and plotting out my intermediate term highs and lows and then you&#39;re going to do the same thing on the shortest time frame just understanding where you are inside of the market structure because you can have short-term lows being ran out and then they create they&#39;re creating intermediate term lows but this overall Market structure right is still bullish that&#39;s all we need to know when we&#39;re deciphering you know are we in a are we in a uptrend or are we in a downtrend okay so Market creating higher highs and higher lows bullish Market creating lower lows and lower highs bearish okay and then if we take out a long-term level on The Daily then maybe the market structure is Shifting okay but again this will be subjective because sometimes we&#39;ll take out a long-term low but the overall Market structure if going up on a time frame can be overall bullish so starting from top down is so important understanding where you are inside the market structure that way you&#39;re not confused when you&#39;re going in the charts on the lower time frame seeing a market structure shift One Direction and then thinking that the trend is over okay so making sure that you know our Market structure analysis is structured we&#39;re basing it off of are three time frames that we want to cover right because you have a long-term time frame an intermediate term time frame and a short-term time frame price is fractal you guys have to decide which time frames you want to use but stick to those time frames now you know when we get into trade management and all that use these intermediate term time frames and long-term time frames as you&#39;re in validation level so you know when I&#39;m looking at the market and we have a specific daily low in place I am saying that unless we lose this low I&#39;m going to remain bullish in the market and then this is just shortterm so if you are trading you know intraday we&#39;ll get into the next part which is dealing ranges like understanding where you are within a specific dealing range will help you if you&#39;re going to take short-term trades against the trend or if you&#39;re in a longer term discount of Premium where you want to know go with the trend so once we have Market structure out of the way and if we don&#39;t you know the goal of this as we go forward is to be able to check off all these boxes for our trade plan so time frame selection right out of the way uh clear Market structure yes or no then we&#39;re going to go into dealing ranges so dealing ranges if you guys don&#39;t know what dealing ranges are you can use a Fibonacci tool basically go in there uh figure out what the parent price swings are where you are inside of a specific range so I plotted them out as this long-term low and we&#39;re using the same fractal which was from the dollar we&#39;re using you know either a long-term low or a long-term high so going inside of your dealing range and then figuring out do am I in a discount am I in a long-term discount or am I in a long-term premium and then within that long-term premium or discount do I have another range that I can look at as a discount or premium okay because as you can see using our intermediate term highs and lows right then we have intermediate term discounts and premiums right and you can see that these short-term highs in premium are being ran out return to short-term short-term lows at discount and then going higher based on our intermediate term highs and lows so inside of this much larger price swing right we have smaller price wings so again time frame selection is going to be extremely crucial to you guys understanding where you are inside of the much larger range there are other uh dealing ranges in here but I&#39;ve only really plotted the you know the important ones in my opinion between my intermediate term lows and my intermediate term highs so I&#39;m looking at this range this low to this High all this is in a discount and then all this is in a premium okay but then we also have you know smaller in inside of here maybe you can look at this dealing range in here that&#39;s a shorter term time frame all right determining where you are inside of the much larger range is going to help you decipher if you have a high probability trade on your hands cuz if you&#39;re at an intermediate term premium and a long-term premium it&#39;s very likely that it&#39;s going to go against you so if you&#39;re trading up here like let&#39;s say if this swing High gets put in and then you&#39;re trying to go long here well you&#39;re already in a major premium right you&#39;re not you&#39;re neither in an intermediate term discount or a long-term discount so you&#39;re really fighting against the powers that be inside of that market right so understanding where you are inside of that fractal is going to be you know pretty much our next step then we&#39;re going to go into order flow so order flow can be very straightforward I like to look at order flow using fair value gaps so a lot of my analysis is coming from you know are we respecting specific PD rays in my opinion fair value gaps provide a really great indication of order flow because you&#39;re going to see markets that trade into fair value gaps or leave fair value gaps behind and in that case you can really tell which side of the institutional Market structure or institutional order flow you&#39;re on and one example that I often talk about with people in my group or just people that I I talk to in the trading space is the dollar Yen and now why is this order flow so bullish and that comes down to fundamental analysis which is a whole different topic we&#39;re not going to be covering that in this video this is really just going to be a trading strategy um and then fundamental is know outside of this specific strategy but we can gauge order Flow by our you know our specific fair value gaps being retested left open and then traded higher to while opposing fair value gaps like sells side imbalances uh or bearish fair value gaps are being violated okay so when we see bearish uh fair value gaps being violated then we know that the order flow is strong in our Direction so there&#39;s you know there&#39;s there&#39;s bearish fair value gaps inside of this overall up Trend that are being violated retested and then sent the other way and then we have bullish fair value gaps that are being retested respected and then sent so uh the reason why this Market just keeps going up is because of the interest rate differential so the yens they haven&#39;t hiked rates like at all their Central Bank is very stubborn on hiking rates so clearly all the money is pouring into the dollar which has a high interest rate and now why if the yields are going higher why why do you know institutional investors invest with that specific economy because the bond market right if you&#39;re you&#39;re going to buy a Government Bond it&#39;s basically a guaranteed return so if the bond market is offering you a 5% yield uh well so the US bond market is offering you a 5% yield whereas let&#39;s say the Japanese you know the Yen bond market they&#39;re only they&#39;re not offering you anything so why would you invest with them so that&#39;s where you&#39;re going to see all the money flow the order flow going towards the dollar okay and that&#39;s just a very basic quick uh rundown on you know the fundamental side the macro side of order flow and you know how order flow is represented in the market but you know a major thing that we&#39;re going to have to figure out is you know are these fair value gaps being respected traded to and away or are they being invalidated you know trading traded through because in a bearish trend you&#39;re going to see a lot of bullish fair value gaps being inverted and traded away from so gauging the order flow will come from you know our study of fair value gaps and how we actually you know utilize Our Fair Value gaps in the direction of order flow which we&#39;ll get into later down the line so so far we&#39;ve gone over Market structure dealing ranges and orderflow now all of these all three of these will get you to a specific bias now if you&#39;re missing if you&#39;re missing some of these right it&#39;s obviously going to uh I would say if you&#39;re going to grade your bias which on on a scale of 1 to 10 on how confident you are in a specific bias because we need to have a bias when it comes to trying to find trades and enter in the market if we don&#39;t have a clear bias right that means one of these things is out of sync like either I&#39;m bullish I&#39;m bullish on Market structure but we&#39;re in a premium right no trade or reduce risk you know if I&#39;m bullish on uh Market structure we we are in a discount but order flow is not being respected right maybe it&#39;s not the right time yet maybe that bullish fair value Gap fails maybe we&#39;re going to see a short-term retracement so all these things are interchangeable so we need to be mindful that I would say all these all these items are interchangeable with each other or they they&#39;re all correlated with each other so in order to come up with a really strong bias and this is why market conditions are not always ripe to trade in we have to understand that you know all of these things have to be in sync we have to have clear bullish Market structure we have to have uh prices in a discount and we have to see order flow bullish order flow so we need to see displacement to the upside we need to see fair value gaps being respected and if one of those is out of touch you know if one of those is not meeting your criteria all of a sudden that go that setup goes from an A to possible B or C and maybe we&#39;re just going to avoid the markets entirely so this bu determination is also going to help you filter out know when when is it right to trade in a specific Market or when do I avoid a specific Market because a lot of times like even right now the dollar is really just stuck in a consolidation like we tried to make a high today and we&#39;ve just collapsed back and tied the range so right now the market structure is not quite clear which kind of forces you either to sit on your hands or become a scalper intraday Trader or short short-term Trader because we don&#39;t have a higher time frame Market structure guiding us okay so let&#39;s say if you&#39;re very comfortable with being a position Trader or a swing Trader you&#39;re going to have to reduce your risk because you&#39;re operating in an area that&#39;s not uh it&#39;s not part part of your you know overall trade plan or personality trade personality when we&#39;re talking about building a strategy out right the strategy has to fit your personality if it&#39;s not going to jive with your personality you&#39;re going to struggle with it you&#39;re going to fight with it so you know all these three all these three things are basically my checklist of saying all right well if all my criteria are met then we have to refer to the PD array Matrix okay and power of three so we&#39;ll go over the PD Matrix next which you know this is not something that you guys just pick up right away and again this all this whole strategy right is going to take you some time to get through so again time frame selection sorry if I guys sorry if I went through this quickly I&#39;m going to slow down a little bit so time frame selection right obviously extremely important to knowing how you&#39;re going to operate in the markets what you should be looking at which time frames you should be looking at because the time frame is going to provide you the invalidation of specific levels if you need to change your bias but if those higher time frame levels aren&#39;t invalidated and obviously we stay on one side of the market and bias determination I&#39;m basically doing this every time I sit in front of the charts so whenever I sit down in front of the charts you know that&#39;s pretty PR pretty much every single evening getting prepared for the next day I&#39;m asking myself all of these questions and if one thing is not in sync or jives with my system then all of a sudden it becomes very very difficult for me to try and plan an A+ setup for the following day because if there&#39;s no clear Market structure going into the next day like what what&#39;s all of a sudden going to make it clear for you um all of these things really need need to line up for that A+ setup that you know is really just going to expand to your targets without providing you know High Resistance all right then we&#39;re going to get into the PD array Matrix which again will take a lot of time dealing with well all these things take practice so if you&#39;re and like I mentioned in the beginning of the video if you&#39;re struggling with any one of these you&#39;re going to have to spend a lot of time with them um and as you can tell you know this is how I segment everything that I&#39;m studying instead of trying to learn all this stuff at once right I&#39;m bringing you through the flowchart of what you need to focus on first okay so time Fram collection a lot of people struggle with that get comfortable with the time frames that you&#39;re on then go into the bias right first you have to do Market structure if you suck at doing Market structure you&#39;re stuck here all right you&#39;re stuck on this node until you increase that skill set and then can unlock you know these other ones but so once we get all these out of the way right on our checklist our trade plan checklist we will get into the PD Matrix now once we have you know our bias determination in place next becomes the PD Matrix where can I execute in the market and when okay because this is going to be extremely extremely important uh for you to learn how to use some of these things and now I&#39;m not using all of these but um when I&#39;m when I&#39;m journaling I would essentially if I&#39;m if I&#39;m going to try and use all of them I would try and have a statistic for each one of these because each one of these trades is going to have its own hit rate for you how you&#39;re going to execute with that specific PD now I&#39;m using the fair value Gap 90% of the time just because it lies within you know 50 it&#39;s basically 50% of anything else so you know trading order blocks or anything like that I like Fair value gaps because you know again going back to order flow my opinion it&#39;s like kind of in the middle of the road setup for you to try and um to enter the market whereas you know some of these other ones you really it&#39;s really the order flow is really going against you because sometimes it&#39;ll go through the fair value Gap hit an order block or take out an old low and then turn around um in that case you know either you&#39;re going to get stopped out or you have to get in sync with the market after those PD rays are hit but when we&#39;re talking about PD rays and learning all of them you know each one of these is going to you&#39;re going to have to spend intimate time learning all of these so you know going through your charts and only plotting out old highs or old lows or only plotting out rejection blocks or only plotting out order blocks or only plotting out fair value apps or only plotting out liquidity voids or only plotting out Breakers and mitigation blocks this these are all homework assignments in themselves so anybody that&#39;s listening to the video that&#39;s struggling with a full strategy it&#39;s because maybe you&#39;re lacking context because I&#39;m using all of these I understand all of them but I&#39;m not using them all to trade I&#39;m just using them all for uh my context and my narrative so if I see an old low be taking out all right and then we close back above above the old low and then we get a market structure shift and then we trade into the fair value Gap I&#39;m only going to take a trade on the fair value Gap I&#39;m not taking a trade off of the market structure shift not taking a trade off of running the old low which sometimes I will but that&#39;s because I understand all of these um 80% of the time if I only understand fair value gaps like you know I know some traders that are only trading the 2022 model or the unicorn model right so you&#39;re looking for basically three signatures and when it comes to trading the PD Matrix right it it aligns it has to align with time so these uh you know these signatures need to align with time and they need to align with price so are these PD arrays being formed below the open so again if you&#39;re struggling with understanding any of these PD Rays you know I urge you all to go and you know dedicate a lot of your time to studying when we&#39;re talking about building the strategy you don&#39;t need all of these just you could focus on a couple but I would say you need at least two to three of them in order to build enough context around a specific trade to take the trade okay so not only does time line up you have to have some confluences so if you have you know for example a bullish breaker lining up with a bullish fair value Gap now it&#39;s giving you additional confluences so when we&#39;re talking about the PD Matrix right we want to make sure that we have at least two to three confluences so we want to make sure that we have at least two to three confluences okay before taking any trade if you&#39;ve made it this far you know that having a strategy and implementing it are two totally different things if you&#39;re tired of operating alone in the market to need more confidence Clarity and accountability I&#39;m building the best community in the trading space to help you transform your trading I&#39;ll help you tackle every problem you face right now because I&#39;ve been where you are I know what it takes to go from loser to consistent winner and some of my students are proof of that so if you&#39;re interested in working directly with me go ahead and apply using the link below now I don&#39;t want to take up too much of your time so let&#39;s get back into the video now we&#39;re going to get into the power of three so what is the power of three right power of three first of all we need to have an overall bias um the power of three is essentially accumulation manipulation and distribution so when we think about of if we think about the formation of any specific candle just let&#39;s take example for the daily candle nearly every bearish candle will start out bullish right it&#39;s usually not going the other way around like you&#39;re not seeing a bearish candle at the end of the day go make the high of the day right doesn&#39;t make any sense is usually making the low of the day towards the end of the day and for any bullish candle you know 80% of the time time is starting out bearish so that&#39;s really the manipulation phase we need to try and position ourselves within that higher time frame so let&#39;s say if you&#39;re a shorter term time frame or a scalper the next hour right I should be trying to buy it below the open if I&#39;m if I have a bullish bias going into the next hour two hours 3 hours I&#39;m trying to position myself inside of a PD Ray below price if I&#39;m bullish okay so again we&#39;re we are combining all these things before we get to power of three power of three in my opinion should be the last thing on your list because power of three really in my opinion comes down to execution we&#39;re not focused on power of three if everything else is out of sync and this is why I have this nice flowchart here right again we are going step by step if one of these breaks right this line no more we cannot go onto the PD Matrix if we don&#39;t have a bias okay so when we have our overall bias right let&#39;s say it&#39;s bullish all right is the market above or below the high time frame open if I&#39;m bullish and the market is above above the high time frame open either I have to reduce my risk or it&#39;s no trade because that&#39;s telling me that the market has possibly already expanded and moving towards our Target and we&#39;ve already missed the entry especially if the Market&#39;s already traded below the open you know if it hasn&#39;t traded below the open then maybe it&#39;s a duud to swing the other direction and maybe your bullish bias is incorrect okay so if you&#39;re bullish right and let&#39;s say the day opens up and let&#39;s say here&#39;s the open let me just scroll down actually so if you&#39;re bullish right and the open uh if we just trade up straight off the open let&#39;s say if we have the daily open and it just trades up that to me is not very bullish because if I&#39;m bullish I want to see it open lower into a key PD Ray if it&#39;s going to open higher and maybe hit a key PDR that&#39;s an automatic red flag okay so when it comes to our execution this is going to help us we want to be able to position ourselves inside of a higher time frame Wick and if we&#39;re not doing that we&#39;re not operating as smart money so when we&#39;re talking about you know power of three this is going to help us execute in the market so let&#39;s say if we are bullish right and the Market&#39;s below High time frame open then we&#39;re going to find an execution using a discount PD so the power of three and the PD Matrix are pretty much hand inand we have to use both of them right but once we find our execution then we have to talk about our stop-loss placement and our trade management so we&#39;re going to go into risk management and I already brought this up in my last video but I always like to refer to my bank roll with casino chips now let&#39;s say let&#39;s just say we&#39;re talking about prop and this can apply to your personal counts as well but let&#39;s just say that I have a 10% draw down limit or whatever it is with future terms it&#39;s way less maybe it&#39;s like 3 and half% um but I want to give myself at least 10 to 20 chances all right so what do I have to divide that you know that total risk number by to get 20 to 30 chances all right if you&#39;re going to divide it by if you&#39;re going to divide like 3 and a half% draw down by 10 that means you can&#39;t risk more than 35% on a trade right it&#39;s going to give you 10 chips for you to bet with if you don&#39;t know what your max consecutive losing is it&#39;s going to make it really hard for you to trust your trades because you can possibly go on a 10 plus losing streak it&#39;s not uncalled for I&#39;ve seen it happen before it&#39;s happened to me before like way back in the day not anymore but I I sometimes will have three to four losers in a row which you know if you go half halfway down your draw down limit that&#39;s really hard to crawl out of so the the one way that we&#39;re going to obviously reduce some of that risk all right well so first of all if we don&#39;t know what our Max consecutive losing streak is you have to understand what your risk of ruining and if you guys don&#39;t understand what that is then you really don&#39;t understand risk management at at all whatsoever because um if your strategy is not operating where it should be your risk of Ruin goes up okay so your percentage of failure increases if you don&#39;t understand what your risk of Ruin is right if you don&#39;t understand what your win rate win rate is and if you don&#39;t understand everything else that goes into this then it doesn&#39;t really matter what your risk management is because your hit your win rate is going to go down if you don&#39;t understand all these other previous nodes so um you know do you know your Max consecutive Los and streak let&#39;s say if you do you know then are are you in draw down or are you not okay so if you&#39;re not in draw down and your trade was a loss then you could either reduce your risk or use standard risk if it was a win then you can stay with standard risk okay so that means let&#39;s say if I started with 10 chips and I added a couple more chips all right either I can keep betting because I&#39;m up right I&#39;m above my initial balance or I could reduce to minimize the effect of me losing these chips all right both are both are sound decisions and when we&#39;re talking about all of this this you know these flow charts with these trees this all comes down to proper decision making which is what trading is trading is about proper decision making if we&#39;re not making proper decisions we suck and we&#39;re going to lose money all right so you know if if I&#39;m not in a draw down these are the two acceptable things that we could do either reduce risk or standard risk but if we are in a draw down here&#39;s the problem is everybody&#39;s trying to crawl out of the draw down very fast okay but the biggest thing is to be able to protect your tips because if you keep risking standard risk on your trades that means you&#39;re just going to blow up faster all right but if you&#39;re able to reduce risk and stop the bleeding you basically can buy in more chips so let&#39;s say hypothet hypothetical example if I start out with a 10% draw down limit and I go down 5% in my draw down what is the easiest way for me to get more chips let&#39;s say you know I have a Max cons consecutive losing streak of 10 historically and I don&#39;t want to breach 10 what&#39;s the best thing I can do if I have five chips left well let&#39;s say if the table limits are less than these chips cost all right let&#39;s say these chips are worth $25 and I start betting $10 now all of a sudden this stack goes much further I can tell the I can ask the dealer to exchange this chip now all of a sudden I now I have possibly 20 to 30 trades left right if you stay at standard risk you&#39;re really going to hurt yourself um especially if you&#39;re on a cold streak which is you know it when it happens it&#39;s very hard to to be able to commit to reduce risk because it do not going to feel good you&#39;re going to you your back is going to feel up against the wall but it&#39;s extremely extremely important to understand that I need to stay in the game because if you run out of chips we can&#39;t play okay so this is very straightforward risk management you know are you going to draw down not are you not understanding what your you know Max consecutive losing streaks are and then sizing your positions accordingly I&#39;m not going to tell you risk 1% risk 2% that&#39;s that&#39;s kind of up to you guys now we&#39;re going to talk about trade management so stop- loss placement all right you know can I place the stop- loss in a logical area if I can&#39;t like if everything else lines up and then my stop loss uh to my target is not favorable risk the reward then I have I don&#39;t have a trade right like if if all these other things line up everything else lines up the market structure is bullish dealing range is bullish uh you know we&#39;re in a discount order flow is bullish discount bullish Etc blah blah blah um but let&#39;s say the Market&#39;s moved too far away and now all of a sudden uh to my first point of liquidity I&#39;m not getting the best risk reward like my stop loss has to be wider than I than it should be then I really don&#39;t have a trade and I have to just wait for a short-term retracement so you know trade management our stop loss placement is going to help us decide whether we should take the execution or not and having a logical level based on Market structure or a fair value Gap is way more important than for forcing the trade into a standard size right let let&#39;s say oh I want to average 25 Pips just a fixed 25 Pips and make 25 Pips or I want to average a fixed five handle risk in futures or a fixed 10% profit Target but neither of those levels line up with either liquidity or inefficiency then we have a problem okay then you have to manage your size accordingly this is where trade management comes in to your position sizing you have to reduce the risk because your stop is wider all right it&#39;s either that or you don&#39;t take the trade so if it can be placed in a logical level with proper risk reward then we go into trade management and this is totally optional if you&#39;re a Trader that is really only trying to focus on um mechanical entries and exits then you don&#39;t need trade management because this part could possibly hurt you but when it comes to trade management and a lot of people will ask me you know how do I manage my specific trade it really comes down to understanding where my exits are going to be because the exits are way more important than the entries right if it&#39;s so easy to enter the market it&#39;s hard to know when to get out so when it comes to trade management again it&#39;s optional uh tp1 will be at the first point of liquidity or resistance wherever that first level that might um cause an issue is you know maybe it&#39;s a previous session High maybe it&#39;s the daily open maybe it&#39;s the previous uh daily High something something like that okay so when that first point of liquidity is hit you know then it becomes down to discretionarily you know how much do I want to take off do I want to take off 25% 50% of my position 75% of my my position I can scale out a partial and then reduce my stop loss um this you can do both when my trade management comes into play sometimes it&#39;s both sometimes I&#39;ll scale out a partial and then if I have additional Market structure then I&#39;ll reduce my stop loss if there&#39;s no additional Market structure then I might leave the stop loss the same and maybe scale out more right this is very discretionary and this is why in my opinion trade management can be optional because this is a whole different skill set entirely then I&#39;ll have a tp2 possibly right maybe I&#39;m scaling off another 25 to 50% % of the position um again same thing scaling out the partial reducing the stop loss and then the final TP will be at external range liquidity okay so let&#39;s just quickly run back through everything that we&#39;ve covered and I hope that you guys can see how all these pieces of the puzzle are necessary before you get to the next step so before you even think about trade management or risk management or power of three these are all the necessary steps before you have before you get to that level so again when it comes to my strategy first and foremost is time frame selection and I&#39;m not just a short-term Trader so I&#39;ll swing trade FX now and day trade uh Futures so I know exactly which time frames I&#39;m using for my bias my invalidation levels and it makes things very straightforward and structured when I&#39;m going into my journal and trying to figure out or plotting my charts what is my higher time frame what is my intermediate term time frame and what is my short term time frame and then I&#39;m going into bias determination so I I will go through all of this information prior to the session uh you know night before and before the session starts you know if anything changed overnight that I need to be uh weary of so I&#39;m going through all of these different pieces before the session if you guys decide to download the PDF I will have a specific trade plan in place that you can fill out before each session or before each trading day then once I have my bias determination then it comes to the execution all right so once we have the bias going into the session or going into the next day then I&#39;m looking for power three and the PD Matrix you could flip these around you could think about power of three first or PD Matrix whatever the case is you know you&#39;re using both both of these in conjunction with each other so if it&#39;s trading down into a bullish level am I below the open all right it&#39;s very simple um this looks very complicated but it I&#39;m telling you once you practice with it and once you understand it once you see it pan out the strategy is very simple and it&#39;s repeatable this happens every single day power of three happens every single day every single hour every single 15 minutes it h it&#39;s happening on a lower time frame it&#39;s happening on a higher time frame so understanding that fractal nature of price is going to be extremely important for you to understanding this whole strategy as a whole all right and then once we figure out you know our execution then it comes to risk management and trade management I hope you all enjoyed the video and learned something valuable by how I approach the markets with confidence each and every week if I helped you get past some pain points make sure you leave a comment as I love hearing about all the things that are holding you back it helps me provide better more valuable content in the future also don&#39;t forget to like And subscribe to the channel and I&#39;ll see you guys in the next video

Transcript for:Trading Lecture: One ICT Strategy for Life

Transcript for:
Trading Lecture: One ICT Strategy for Life