Speaker A
All right, folks, welcome back. This is episode six in our ongoing ICT mentorship on YouTube for 2022, and the market efficiency paradigm and institutional order flow will be our topic for this evening.
Episode 6 of ICT Mentorship covers market efficiency, institutional order flow, and smart money trading concepts.
Ask about this video. Answers come from its transcript only — with the timestamp, so you can check them.
Generated from the transcript and can be wrong — check the timestamp.
Key Takeaways
- Trade based on liquidity and institutional order flow, not retail patterns or indicators.
- Smart money exploits retail traders' poor logic and lack of discipline.
- Time of day is crucial for anticipating volatility and reversals.
- There are no secret indicators; understanding price and liquidity is key.
- Market efficiency favors informed traders who think differently about price.
What the video covers
- The video focuses on the market efficiency paradigm and institutional order flow in trading.
- It emphasizes trading based on liquidity and smart money concepts rather than retail patterns or indicators.
- The presenter explains the difference between smart money (informed traders) and retail (uninformed traders).
- Time of day and price action are highlighted as critical factors in trading decisions.
- Smart money aims to exploit retail traders who typically have flawed logic and poor discipline.
- The video debunks the idea of secret indicators, stressing that smart money relies on liquidity and price structure.
- Retail traders often lack understanding of time and liquidity, leading to losses.
- The presenter discusses how algorithms influence price movements at specific times.
- Practical examples of stop placement, fair value gaps, and price displacement are introduced.
- The mentorship aims to reframe how traders think about price and market behavior for better results.
Chapters
- 00:00Introduction to Market Efficiency and Institutional Order Flow
- 03:19Liquidity and the Myth of Secret Indicators
- 06:06Smart Money vs Retail Traders Logic
- 08:39Time of Day and Its Importance in Trading
- 11:18Smart Money Strategies and Retail Trader Pitfalls
- 16:23Practical Examples: Stop Placement and Fair Value Gaps
- 23:06Analyzing Price Displacement and Volatility
- 29:47Summary and Final Trading Concepts
Full Transcript — Download SRT & Markdown
Speaker A
delivery first we do not trade patterns for patterns sake we do not trade indicator readings or momentum we look to enter longs where retail sells we look to enter shorts where retail buys usually when you hear me say something like that or someone
Speaker A
All right, so how do we internalize price delivery? First, we do not trade patterns for pattern's sake. We do not trade indicator readings or momentum. We look to enter longs where retail sells. We look to enter shorts where retail buys. Usually, when you hear me say something like that or someone
Speaker A
marketplace what i'm teaching you is the internal dialogue of what we're doing we're looking at price we're not thinking like the collective that is commonly referred to as the retail trader because majority of retail traders lose they have a failed logic they don't have
Speaker A
that's been trained by me speak like that, it sounds like, well, you know, you're talking like you work for an institution, you work at a bank, you know, you're trading retail too. Yes, we are all operating through retail avenues to get to the
Speaker A
you know all those things unless they're rooted in the basis of liquidity and overflow it's made up it's a religion and i'm not here to argue beyond that that's what i have come to to believe and that's how i operate and my results
Speaker A
marketplace. What I'm teaching you is the internal dialogue of what we're doing. We're looking at price. We're not thinking like the collective that is commonly referred to as the retail trader because the majority of retail traders lose. They have a failed logic. They don't have
Speaker A
market it is but let's just say there's two camps there's the informed or smart money and that's represented by this small little circle over here and then there's a larger collective which is the speculative uninformed money there's a large influx all the
Speaker A
consistency. They don't have, well, longevity. So we want to try to think and engage differently with price that is opposed to the majority of what retail analysis concepts you, whatever it is that you subscribe to as a retail trader,
Speaker A
smart money traders when they look at the marketplace they're not looking at secret trading indicators okay there is no secret indicators just let me put that to bed right now now there may be traders that have tools okay that they like to measure price
Speaker A
you know, all those things, unless they're rooted in the basis of liquidity and overflow, it's made up. It's a religion, and I'm not here to argue beyond that. That's what I have come to believe, and that's how I operate, and my results
Speaker A
time and price the most important thing is time because time that is the most crucial element so time of day is vital when we're engaging price retail doesn't really have any understanding or affinity for time except for the fact
Speaker A
and the things that my students see speak for themselves. We anticipate price seeking opposing liquidity. Okay, so what does that mean? Well, if you're looking at this diagram, imagine if we could take price as a conceptual idea. It doesn't matter what
Speaker A
average trader time for a professional through the lens of smart money time is crucial because time of day there are specific elements in a daily range that really build the likelihood of volatility to come in and also when short-term reversals are likely to
Speaker A
market it is, but let's just say there's two camps. There's the informed or smart money, and that's represented by this small little circle over here, and then there's a larger collective, which is the speculative uninformed money. There's a large influx all the
Speaker A
that was one of the times i gave and it was relentless today smart money so that way i can make this real short and to the point smart money looks to cannibalize this group of trader so because they're typically wrong
Speaker A
time of new uninformed money coming in because there's a large influx of uninformed money going out because they lose their account, they blow up whatever equity they have in your trading account. It's gone because of lack of discipline and a flawed logic.
Speaker A
highs above where they're at if they're in a very small window of profitability unrealized profit means they're still in the trade but they don't have a stop loss in now logic dictates that they should have a buy stop in to protect their position in
Speaker A
Smart money traders, when they look at the marketplace, they're not looking at secret trading indicators. Okay, there is no secret indicators. Just let me put that to bed right now. Now, there may be traders that have tools, okay, that they like to measure price
Speaker A
they have no idea where to put it above that high they don't want to put it too shallow because it might go up and hit it and stop out their trade prematurely and or they don't want to put it up too high
Speaker A
action with. That's not like a stochastics. It's not like an RSI. It's not like a, well, anything you can find on a trading platform list of indicators. Okay, those things are not reached for by informed money. What they're specifically looking at is
Speaker A
to that pitfall that trap and maybe you're nodding your head and smirking thinking man i was there a lot i know and i can admit back in the 90s 1992 1993 that was what i was doing all the time
Speaker A
time and price. The most important thing is time because time, that is the most crucial element. So time of day is vital when we're engaging price. Retail doesn't really have any understanding or affinity for time except for the fact
Speaker A
know a bull flag a wedge pattern or something of that effect they're looking at liquidity what is the underlying narrative right now in the marketplace is it bullish is it bearish is the day's daily range going to go higher but how's it going to
Speaker A
that they have time now to trade because they're in front of their computer or they have time to look at their phone while they're at work, and they're putting on trades. Okay, that's the extent of time when it comes to a retail
Speaker A
and that would be the extent of their plan of action and how does that speculative uninformed money and its liquidity that it provides how can they utilize that that's the market efficiency paradigm it's efficient for smart money traders to view the
Speaker A
average trader. Time for a professional, through the lens of smart money, time is crucial because time of day, there are specific elements in a daily range that really build the likelihood of volatility to come in and also when short-term reversals are likely to
Speaker A
i've done something wrong i've interpreted price wrong i thought something was in price and it wasn't there and it rolled over top of it and there it is that's a loss everybody's going to have a losing trade okay
Speaker A
occur. Okay, so I mentioned in previous lessons that there's algorithms that will start to gyrate and cause price to run at specific times of the day. If you were watching the e-mini markets today, you saw it happen at four o'clock.
Speaker A
well just like the trend is your friend that trend is not your friend when it's at the end and it's reversing okay so there's always a rule to the rule there's always an exception to every rule okay and that's experience
Speaker A
That was one of the times I gave, and it was relentless today. Smart money. So that way I can make this real short and to the point, smart money looks to cannibalize this group of traders because they're typically wrong
Speaker A
way you can go in the price immediately you don't need 18 months you don't even need four months it's immediate i've received a ton of feedback and i appreciate all that that you all can go into the charts and
Speaker A
in their directional bias, in their stop placement, should they choose to use one, because a lot of traders don't use a stop loss as a retail trader because they're afraid. They may expect the market to go lower, and they understand that the
Speaker A
not your typical ict you know the stale boring stuff this is the things that really work in the marketplace so with that in mind let's continue so i want to give a little bit more specifics about the fair value got that
Speaker A
highs above where they're at, if they're in a very small window of profitability, unrealized profit means they're still in the trade, but they don't have a stop loss in. Now logic dictates that they should have a buy stop in to protect their position in
Speaker A
okay do not try to fancy dances okay and try to turn it into some kind of a mentorship course and rename everything with your name and and don't do that okay just take it for what it is i already know people are going to try
Speaker A
case the market screams against them. At least it limits the amount of equity lost, but they may look at an old high and say, okay, I understand that my stop should be above that, but because of their infancy,
Speaker A
time to put it out here for you so the bearish ict fair value gap this is institutional order flow and it's a pattern that you can see the order flow actually coming into the marketplace when you look at like
Speaker A
they have no idea where to put it above that high. They don't want to put it too shallow because it might go up and hit it and stop out their trade prematurely, and or they don't want to put it up too high,
Speaker A
mindset about that very thing but simply because you think that doesn't make it true it doesn't okay so what i'm trying to do is take my students into the marketplace with a chart a time-based chart okay there's some out
Speaker A
and then it spikes through that, reaches for them, and then it reverses and goes in the direction they're holding. So they take a big loss and get stopped out. So those are the two conundrums that a retail trader falls into,
Speaker A
look like well if you take a look at this diagram it's rather crude i know but you have a run preferably above some kind of old high so the first candle is the high and the next candle is
Speaker A
that pitfall, that trap, and maybe you're nodding your head and smirking thinking, man, I was there a lot. I know, and I can admit back in the '90s, 1992, 1993, that was what I was doing all the time.
Speaker A
the next candle has to trade with an extended low as well that went below candle number two but does not trade with a high that trades back to candle number one's low what that creates is this small little
Speaker A
You know, I just didn't know what I was doing, and I was falling victim to myself in just infancy, not knowing. But the smart money traders are not looking at price with, give me a pattern to trade off of, you
Speaker A
there so imagine if you're painting your wall at your home okay and you take your roller you put it in the paint and you put the paint up against the wall and you roll down okay at first the first foot or so
Speaker A
know, a bull flag, a wedge pattern, or something of that effect. They're looking at liquidity. What is the underlying narrative right now in the marketplace? Is it bullish? Is it bearish? Is the day's daily range going to go higher? But how's it going to
Speaker A
porous okay what do you have to do to fix that you just change directions and start rolling the paint roller back up the same place you roll down that's exactly what price does there's an algorithm that delivers efficient market delivery
Speaker A
go higher? Is it likely to go lower at the beginning of the day first to sucker traders and going short, run out sell stops they can acquire long positions at, and then rally going into the close or maybe into the afternoon,
Speaker A
charts the same way again it'll unlock a lot of things we're going to move the matrix and neo finally sees the matrix as it really is in binary code ones and zeros he has clarity well that same event as
Speaker A
and that would be the extent of their plan of action. And how does that speculative uninformed money and its liquidity that it provides, how can they utilize that? That's the market efficiency paradigm. It's efficient for smart money traders to view the
Speaker A
offered so that's like taking the paint and applying it to the wall and drawing down with the roller but now as you pull down there's little pockets right in here between this candle's low and this candle is high where price has
Speaker A
marketplace in that perspective versus technical analysis, the mumbo jumbo things that traders put on their charts. Okay, and you can lock me in there too because the times where I'm trying to use the logic that I trade with, and if it fails,
Speaker A
inefficient area at some future time the market's going to want to trade back into that area when it does and you're bearish that's a short signal okay you can go short and sell there with the expectation it's going to start to move
Speaker A
I've done something wrong. I've interpreted price wrong. I thought something was in price, and it wasn't there, and it rolled over top of it, and there it is. That's a loss. Everybody's going to have a losing trade. Okay,
Speaker A
youtube channel is meant for you to look for periods where price runs above an old high then it breaks down and then you look for this pattern this is what it looks like you're not looking at anything prior to
Speaker A
but I'm not looking at price with patterns on the sake of just trading for the pattern's sake. In other words, just because I think I see a pattern there because there's a misnomer that goes around, trade what you see.
Speaker A
either one of those fits this criteria so what you're looking for is a pool of liquidity of buy stops resting above these highs that's buy side liquidity smart money will want to trade up into that and go short
Speaker A
Well, just like the trend is your friend, that trend is not your friend when it's at the end and it's reversing. Okay, so there's always a rule to the rule. There's always an exception to every rule. Okay, and that's experience.
Speaker A
that's what smart money is looking for they're looking for that right there and then once they see that they go in either with their limit order mark it in something to that effect and get short and the stock would be
Speaker A
But what I've hopefully done in this model so far, and I promise this is the end of the boring stuff, we'll get into the nuts and bolts, I'm stripping everything down and placing components at their logical place and order so that
Speaker A
all your back testing label number one candle the number two candle is always going to be where the gap resides and then the number three candle gives you the lower end the upper end of the fair value gap is going to be the low of
Speaker A
way you can go in the price immediately. You don't need 18 months. You don't even need four months. It's immediate. I've received a ton of feedback, and I appreciate all that, that you all can go into the charts and
Speaker A
so the easiest entry would be trading just above candle number three's high you can put a limit order right there and be done simple don't have to worry about guessing where to put your limit order in it's right there
Speaker A
see these things right away, and some of you actually started trading it. I'm not asking you to do that. I'm not trying to inspire you to do that. You need to study it more, but that's how quick and different all this is. Okay, this is
Speaker A
start out i'm assuming that all of you are brand new you may not be but i'm teaching it with that perspective in mind some of you that have been with me for a longer time you know how to reduce that stop and i
Speaker A
not your typical ICT, you know, the stale boring stuff. This is the things that really work in the marketplace. So with that in mind, let's continue. So I want to give a little bit more specifics about the fair value. Got that?
Speaker A
be reporting you're doing good but you don't know what you're doing yet okay just trust me you got to practice and do a lot of back testing then demo it then you'll get it the bearish market structure shift
Speaker A
We have the rules, what it looks like so that way you understand exactly what it is and where it forms because this is GOI.
Speaker A
that's when the new trade idea is now being birthed you don't even know where you're getting in at yet until you go through this process i'm going to show you right now the market will see a price delivery
Speaker A
of a rally above an old high or highs and then quickly shift lower that's this right here now the significance i'm placing on the term quick is linked directly to the term displacement okay it's got to be energetic it can't be a little lethargic
Speaker A
little move it's got to show a real willingness to want to go lower and preferably close below that if it does that that to me is a little bit more significant whereas if we just go through this low a little bit
Speaker A
like a wick and come back up um that to me is not all that convincing i want to see that it has absolutely displaced and then the candle closed and then we look inside this range here so when you're looking at market
Speaker A
structure shifts this is all time frames so don't think this is just the intraday version of it but i'm specifically dealing with intraday so when we create that high that high down to the low that breaks the short-term low here so now we have that
Speaker A
shift in market structure there right below that low that is the displacement low this is your displacement high so what's the big deal about that oh you're just trying to add some words ict sound smart that way don't you
Speaker A
no it's conceptual ideas being expressed so what you have in between that range that right there you're gonna be hunting your fair value gaps because that's exactly where it's going to form don't take my word for it every one of
Speaker A
your examples are going to have this oh don't take my word that's the only thing to believe go into your charts and you will be convinced of it in short order period so if you're bearish and you see price run above an old high
Speaker A
then it breaks below the old high and takes out a short term low prior to that run above that short term low being broken draw that out in time that's your displacement low and the high is your displacement height
Speaker A
so that range between here and here that's displacement how do you know it's displacement how it closes down here below that low is it just a real short little drop below it might have a fair value gap but it
Speaker A
also might be likely to go higher and create another high so that's this is the secret to it here knowing how we trade below that and if it's energetic a lot of movement big a big beefy bearish candle that closes low
Speaker A
below this level right there okay if we have that as soon as we have that candle form start watching to see if it creates a fair value gap in between this low and this candle's high or that range okay
Speaker A
that's exactly where the fair value gap to sell short will form if there is no fair value gap in here guess what you don't have a trade you wait or go to another market because one of them is going to be there
Speaker A
every single trading day okay every single trading day this pattern forms are you telling yes i'm telling you just like that every single trading day this pattern forms every single day long and short but you have to look for it
Speaker A
with this process okay everything i teach obviously is reversed the same way so i'll just go through this a lot quicker because this is already becoming a longer video than i wanted it to be but bullish ict fair
Speaker A
value gap again institutional order flow pattern and it's three candles formation the candle here is number one the second candle here and the third candle there candle number one's high that is the low of the fair value gap
Speaker A
candle number three's low is the high of the fair value gap candle number two is where the fair value gap will be formed so that is your favorite value gap and everything you would expect to see in form of a
Speaker A
market run below an old low or multiple lows for sell side liquidity once it starts trading higher and takes out a short term high that's not being shown here okay cause i'm showing you the pattern itself this is what you're
Speaker A
looking for okay this separation between three candles that's the criteria you have to blend in the logic of a market structure shift that's bullish so what does that look like you have a market trade below no low and maybe go a low another
Speaker A
leg lower and create a run into sell stops once that occurs then you're looking for a run higher that takes out a short term high and it closes above it with an energetic displacement higher once you see that then you have a trade
Speaker A
idea being birthed you don't have a trade entry yet until you determine if it has a fair value gap where does that reside between the displacement high and the displacement low in between right before the market structure is
Speaker A
broken bullishly and the low that ran into the cell stops that is your range this is exactly where you're looking for a fair value guy so in that range that's where your bullish fair value gap resides if there isn't one there you
Speaker A
don't have a trade is that not specific and clear it's perfectly illustrated there's no ambiguity to it it's exactly the logic you're going to use going forward it does not change it doesn't mutate into anything you don't bring something else
Speaker A
into it you don't add something else that some other educator has taken my stuff and twisted it up and try to make it sound like something new and they've created themselves no this is what you're supposed to be doing
Speaker A
if you do anything other than this you're not going to get the results you're looking for and you're not going to find my ict fair value got okay all right so let's go into the price action you survived you made it here
Speaker A
so here we have the 15 minute timing frame from today this is the e-mini nasdaq and this is a 15-minute timing frame this is where i tell you to start this is your bellwether chart naked chart okay pause the video
Speaker A
and look and see if you see anything of any importance which swing high would you anchor where is there a stop run on buy stops when you're ready to listen to the rest of the video unpause the video
Speaker A
some of you never pause the video alright so we have 8 30 marked here okay very specific right element of time 8 30 why because there's news that comes out okay employment data came out today so at 8 30
Speaker A
the market from that point on here look to the left what do you see what's the first swing how you come to right there is that hard was that was that complicated no very simple so this high here
Speaker A
draw that out in time and you'll get this right here okay but watch with this run right there on a 15 minute time frame what do you do with it well you start stripping down from a top down five minute four minute three
Speaker A
minute two minute one minute so once you have this level on your chart on a 50 minute time frame you drop down to your five everything's transposed from the 15 to the five minute you can see it trades
Speaker A
above it here and the market starts to trade lower when it's trading lower in here you're going down into what the four minute here we have here is there a fair value gap in here yet nope there's one right there
Speaker A
see that right there so we traded below this swing low there's a fair value got right there you can enter there right on this candle's high you can go short there what's the rules do you remember what the rules were
Speaker A
you can put your stop above this here or the swing high there's a swing high right there candle number one or the swing high does it hit your stop no this might be more than you're willing to absorb
Speaker A
but there's micros you're only trading two dollars per handle there it's not twenty dollars per handle okay or four ticks it's two dollars for each tick or 50 cents each tick so that's not a lot of money being risked there but
Speaker A
i want to go down and really fine tune it so i'm dropping down through all the time frames five four three two one and if i'm being completely honest with you i have those charts all open at the same time across my desk
Speaker A
so i'm constantly referring to all of them now you can do that cycling through rather quickly and just look for the form in the two-minute chart you don't have a fair value gap in here until there as well same entry and you
Speaker A
can put a stop there as well and on the one minute chart we have the run here the break below the short term low here fair value gap straight up into that look how many times it gives you a chance to get in
Speaker A
this candle that's one two three then it continues even lower so you're getting a really really tight entry there now some of you gonna say oh yes guys talk about hindsight i got you covered i actually went in and traded this today
Speaker A
on trading view and you'll see me entering right here and writing down and taking out my exits below an old low but i'm going to also teach you how you can use the model here and use the exit
Speaker A
strategy i use today for external range liquidity oh something new so let's go over to trading view all right so i'm going to kill two bursts of one stone here i don't use the replay button this is going to
Speaker A
be the first time you've ever seen me use it but it's only for the purpose of teaching how you if you can't watch live data okay just use this i guess is the best thing you can i guess have
Speaker A
as an alternative also i'm not sure if i mentioned this in the past but if you are going to tradingview.com and you're pulling up the symbol nqh2022 and you're going into a one-minute chart the data is delayed here and to be quite
Speaker A
honest which i don't recall if it's 10 minutes or 20 minutes or i don't know exactly i don't remember what the delay was but i pay the four dollar a month subscription rate to get the e-mini data and
Speaker A
i also have a professional account so i'm not sure if that four dollars a month is because i have a professional account or if it's just four dollars for anyone so you'll have to investigate yourself to see if that's something you want to
Speaker A
do you don't need to have that data while you're learning okay you can use this function here so while i do have real time data because if i didn't you'd see like a little orange d up here letter d
Speaker A
that would uh basically communicate to anyone that would see the chart that it's a delayed data this is live data and i have it scrolled to this morning for february 3rd 2022 and i have my chart delineated with the
Speaker A
15 minute high with that level and i'll show you this and then we'll zoom back out to a 15 minute chart you can see everything as it was because i'm going to show you there was actually a trading
Speaker A
entered on this today but you want to have a vertical line dealing needed on trading the way you do that is simply go in here pick the vertical line and drop it right there at 8 30 and there it is okay
Speaker A
so for the replay button and i feel weird just doing this because i just don't do it but i have to do it because i know students need this resource while they're learning okay but i i don't use this my mentorship
Speaker A
that paid me to get education knows i never even use this okay but i'm showing you so that way you can back test and practice and look at price action in a way where it means something more than
Speaker A
just looking at a static chart all right so it started at the 8 30 hour our line here is at that 15 minute high so what we're expecting is a run above that high okay and i'll keep it kind of quick i don't
Speaker A
want to spend too much time with this so clicking the play button we're running above a short term high right here there's a fair value got right there hit that now watch it should sell off that's not what i want i want
Speaker A
to use this high back here but if you're a scalper you could take that low out right there and that would have been a trade there as well but for the daily range which is much more significant i'm using the 15 minute high i'm bearish
Speaker A
one day i'm expecting lower prices because we've already went up a lot on the daily chart so now if you're waiting all day you might look at this and say oh i missed it there's nothing for me to do don't
Speaker A
think like that okay because the equity market opens at 9 30 stock markets start getting really busy and volatile around that time frame and we're coming up on it in a few minutes here and usually not always but usually the
Speaker A
first run at 9 30 is opposite to what the real move you want to be doing not every time now here here's a 930 volatility look how crazy it gets okay it's creating a low with another low here so there's what
Speaker A
what's building underneath that sell stops traders are being induced into thinking long trades go long go long go buy and get in there and go high buy low sell high right but it's it's sloppy in here but it's keeping these lows over here
Speaker A
intact above these highs that's where my interest is okay so i don't have a trade until we get up above this level there and this is on a one minute chart okay small little shallow run we want something that's going to push
Speaker A
through it no favorite value got filmed anyway okay i just paused it right there now look at this initial poke above that high that we've drawn a line on it went above it it went down yes did it create
Speaker A
any fair value gaps in it no every candle overlaps there's no gaps there okay there's also no swing low taken out so there's nothing in here yet now we have a higher high running above this high and the high we're looking at
Speaker A
on the 15 minute timeframe which is denoted by that horizontal line right there now we have the likelihood we if we're watching it live we're waiting to see does it break lower if it breaks lower where is there a swing low
Speaker A
right there so if we can trade down below that swing low and as soon as it does that look in the highest high that forms and that low see if there's a fair value got the forms right there
Speaker A
we went below it after taking out the high here's your number one candle the number two candle and the number three candle so there's your gap right in here so if it trades back this candle's high plus i don't know one handle
Speaker A
or one tick maybe two ticks whatever whatever you believe is an ideal entry for you the easiest one to is just go one tick above that and removes all the doubt and there's no guesswork there there it is
Speaker A
and where's your stop loss going to be above the high of candle number two or you can use above candle number one which creates a swing high okay whichever one you can afford and allows you to put the trade on
Speaker A
some of you are going to look at to say oh this is too much risk okay then don't take the trade i'm just i'm giving you a model that works boom right there that candle if you had a limit order right there
Speaker A
that would trip you in going short and your stop would have to be above here another one right there there's your second entry right above this candle here that's entering that's your limit order getting in go short same stop
Speaker A
third opportunity almost completely closes in all that range right there see that right there if you see that live it feels like it's going to keep going higher because this candle at one time when it was at the
Speaker A
high was all green and bold you need to trust and train yourself to look at this pattern as it's forming because once you see dozens of it occurring it changes your perspective you don't get scared in fact it's
Speaker A
fascinating to anticipate okay it went here so now it's going to go lower so at that point right there at that entry from this candle's low to this candle's high where's about 50 about right here right so before we go any further where do we
Speaker A
take our profits well you have a fair value gap right there right you see that same thing just going up candle number one it's high kindle number two and number three the low the range between candle number one's high and the
Speaker A
third candle is low that's your favorite value gap so if you're selling short up here you can buy it back below here because you're below 50 of the range that it range from high to low you're at a discount
Speaker A
down here so there's your first target remember those equal lows down here i was telling you about what's below that sell stops so you want to be taking profits here and or here this is ideal okay let's go back and watch the rest of it
Speaker A
right there that's it these are minute candles so you're selling short here or maybe you entered on the first one here so that's minute one so one minute two minute three minute four minute five minutes six minutes seven eight nine ten eleven
Speaker A
minutes and you have 10 20 30 40 50 we'll call it 60 we'll just call it 60. 60 handles in minutes okay that's literally over a thousand dollars in a matter of time that would probably be longer spent for someone that smokes a
Speaker A
cigarette think about that if you are going to hold it focusing below these lows down here okay trust the bias that type of move right there is intended to upset traders and get out and if they trailer stop lost too short
Speaker A
and aggressively they get knocked out right before the big move comes down takes out the lows down here so we're looking at right in here well let's look for 14 680.
Speaker A
there it is now is that a lot of time getting short here weathering some of this you already took first partial down here so even with this pulling back your stop stays here you use the first partial to
Speaker A
kind of like quench that desire to roll your stop don't do that if you do that you're probably gonna get stopped out because you don't have the understanding or the experience to know where to place a protective stop while
Speaker A
it's being trailed once it takes this low out down here and if you want to hold on to position then you can roll your stop to here but not before why because you've taken out a significant intermediate term low
Speaker A
this low that is high on a one minute chart that's an intermittent term price swing so it's taken out here but it's also a full target for selling short up here and getting out down here so what was the
Speaker A
rough price level we used well let's look at the high here 14 we'll just call it 14 800 just for sake of the math so 100 100 handles is 14 700 and then we have the 80 fourteen thousand six eighty so
Speaker A
120 handles that's a significant price move using exactly what i've taught in this model now for those out there to say oh this replay button he uses the replay button that's the first time and make sure you remember the date
Speaker A
because that's the first time you see me ever do market replay on trading view so if you look at this area in here i'm going to show you paper trading account oh i said we were going to talk
Speaker A
about that here is the account history here you go the time put a shorter on let's take a look at where that actually occurs on the chart and i'll show you the execution right there two minis fourteen thousand seven ninety two and a
Speaker A
half and i think i was reading that wrong down here because i was showing you the exit yeah close the short position yeah i read it wrong sorry so the entry price here selling short two minis at 14 792 and a
Speaker A
half using the favorite value got holding on to it first partial here fourteen thousand six seventy five and then the limit order i had here was fourteen thousand six forty seven so how does that look on the grand scheme
Speaker A
of things getting short here with that logic below the cell stops down here and in the limit order there and hopefully you've got something from this and you've seen that there is obviously more to it than just fluff
Speaker A
it keeps repeating how many examples have you seen already since i started teaching this it's there and these are the two this is the first uh order covered and this is the second one okay don't look at this and say oh my gosh
Speaker A
he's got 52 return and one day on first trade that's nothing that's nothing but i don't want you thinking that's what you can do okay don't think that please don't think that at all all i want you to do is practice
Speaker A
on this logic it's a simple process so now in closing i revisited the idea of this high to that low that's your range okay if you put a fibonacci on that man i tell you i wish i had this stuff
Speaker A
and i was coming up god coming in here for free look at this so we have 50 that's your equilibrium so everything above that price level because this low to that high that's our price run and 50 below it is discount so there's your
Speaker A
little fair value got right there you see that that right there that's your target going short there but this is internal range liquidity because it's internal relative to this low and this high that range so it's in the middle of that
Speaker A
range which makes it internal range liquidity what is the stops below these lows down here external range liquidity so partials internal range external range your trade very simple logic isn't it is there a lot of moving parts did i confuse you
Speaker A
simple isn't it you may still have questions because you may be entirely brand new to charting and trading that's normal but by practicing and following along in this in this video series it's an ongoing mentorship it's not going to
Speaker A
stop next week okay this will help you understand but i have to give it to you in bite-sized pieces because i give you too much you know it's not going to be meaningful to you but the logic hopefully even if you
Speaker A
don't understand what i'm drawing you to in your own chart like you can't find it yet on your own chart i'm showing you exactly where it forms and is every example i've shown you happening in the time of the day
Speaker A
the same way each time and is it performing as i taught it yes that's a model that's a trading plan that's an executable idea that you can go in and engage with a demo account and over time you get good at this
Speaker A
you determine what you want to do with it i'm never going to say go and trade live money with it but i already have people already that have been trading for a while they're a little bit more versed than
Speaker A
some of you if you're brand new it's okay but traders that have been doing live fun trading for a while this really resonated with them and they could see it and it wouldn't enter this week and they were catching
Speaker A
trades real trades and like i said i don't want the credit for that but i already know this stuff works it's sending me emails telling me that this is amazing and it's great please don't do that you don't need to
Speaker A
do that i already know it works i'm giving it to you so that way you can be fascinated by it okay this is just one model of dozens that i have and this is the stripped down version so hopefully
Speaker A
you find insight and obviously you know benefit from following it and if you don't you know i'm sorry i didn't scratch that itch for you i'm sure if you study other things in my youtube channel you'll probably find something else that tickles your
Speaker A
fancy until i talk to you next tuesday enjoy weekend and be safe
Topics:ICT Mentorshipmarket efficiencyinstitutional order flowsmart moneyretail tradersliquidityprice actiontrading psychologystop lossfair value gap
