ICT Twitter Space: How To Build Your Own Profitable Trading Model from Scratch

Summary

The transcript delves into the intricacies of trading psychology and strategy, emphasizing the importance of having a consistent model for engagement, whether it be short-term trading or position trading. It stresses the significance of patience, understanding market narratives, and the 'why' behind price actions. The speaker candidly discusses the predatory nature of successful trading, advocating for a mindset that views the market as a battleground where only the prepared and disciplined thrive. The summary also touches on the structured timing of trading, comparing it to the scheduling of a favorite TV show, highlighting the need for discipline and patience in awaiting the right opportunities.

Takeaways

• 📈 Focus on the 'how' of engagement by identifying your trading model: scalping, swing trading, or position trading.
• 🔍 Understand the 'what' by recognizing what you are patiently waiting for in terms of market signals or patterns.
• 🤔 Consider the 'why' by developing a narrative that explains why the market should behave in a certain way based on your analysis.
• ⏰ Emphasize the 'when' by recognizing specific times of the day or week that are most relevant to your trading strategy.
• 🔑 Develop trust in your trading model and stick to it rather than constantly switching to new strategies presented.
• 🛡️ Be aware of the mindset required for trading, viewing it as a battle where you are taking from others in the market.
• 🚫 Avoid the temptation to chase quick profits by sticking to a disciplined approach and not deviating from your model.
• 🧠 Cultivate an understanding of market narratives to predict how the market is likely to move and why it will do so.
• 💡 Look for specific market behaviors such as reactions to old highs, reversal patterns, or other signs that fit your trading model.
• 🕒 Be patient and wait for the market to present opportunities at the right time, much like waiting for a TV show to air.
• 🗓️ Schedule your trading activities within specific time windows to align with market conditions and your trading plan.

Q & A

What are the four key aspects of trading mentioned in the script?

The four key aspects of trading mentioned are how, what, why, and when. 'How' refers to the model of engagement, such as short-term trading, scalping, swing trading, or position trading. 'What' is about what traders are patiently waiting for or conditioning themselves to anticipate in price action. 'Why' is the narrative or the reason behind why the price should react in a certain way. 'When' is about the specific time of day or calendar day for trading.

What does the term 'scalping' refer to in the context of trading?

Scalping in trading refers to a strategy where a trader makes many trades within a short time frame, typically aiming to profit from small price movements and often holding positions for only a few minutes.

What is the importance of having a consistent model in trading according to the script?

Having a consistent model in trading is paramount because it allows traders to deliver results consistently. It helps traders to understand the market's behavior and their own trading style, leading to a more disciplined and profitable approach.

What is the 'narrative' in trading as described in the script?

The 'narrative' in trading refers to the underlying reasons or the story that explains why the market should behave in a certain way. It's the trader's understanding of the market's likely behavior based on their analysis and expectations.

Why is it crucial for traders to have an understanding of why the market is behaving in a certain way?

It's crucial because understanding the 'why' behind market behavior allows traders to make informed decisions. It helps them to anticipate market movements and react appropriately, which is essential for successful trading.

What is the significance of the 'when' aspect in the script's discussion on trading?

The 'when' aspect signifies the importance of timing in trading. It emphasizes that traders should have a specific time frame for their trading activities, much like a TV show has a scheduled broadcast time. This helps in maintaining discipline and patience in trading.

What does the script suggest about the mindset of a successful trader?

The script suggests that a successful trader should have a predatory mindset, viewing trading as a battle where they are actively taking profits from others. It emphasizes the need for traders to be disciplined, patient, and focused on their trading model.

Why does the script compare trading to watching a TV show with a fixed schedule?

The comparison is made to illustrate the importance of patience and discipline in trading. Just as viewers wait for a TV show to air at its scheduled time, traders should wait for the right trading opportunities according to their model, without trying to force the market.

What is the 'Silver Bullet' mentioned in the script, and how does it relate to trading?

The 'Silver Bullet' is not explicitly defined in the script, but it seems to refer to a specific trading strategy or model that the speaker believes is optimal. It suggests that traders should find a model that makes the most sense to them and stick with it, rather than constantly chasing new strategies.

What does the script imply about the nature of trading and the market?

The script implies that trading is a competitive and aggressive activity where traders are predators in the market. It suggests that the market is not passive and that traders need to be proactive, waiting for opportunities to 'pounce' and take profits.

Why does the speaker emphasize the importance of not abandoning a trading model every time a new one is presented?

The speaker emphasizes this to caution traders against constantly switching strategies, which can lead to a lack of consistency and understanding in their trading. It's important to develop a deep understanding of a single model to achieve consistent profitability.

Outlines

00:00

📊 Trading Strategies and Market Engagement

The speaker discusses the importance of understanding the 'how,' 'what,' 'why,' and 'when' of trading. They emphasize the need for a consistent model of engagement, whether it's short-term trading, scalping, swing trading, or position trading. The speaker encourages traders to patiently wait for specific patterns or signals in price action, rather than jumping between different strategies. They stress the importance of having a clear narrative for why the market should behave in a certain way, and how this understanding can help traders anticipate market movements. The speaker also warns against constantly switching strategies and the importance of sticking with one that makes sense to the trader, to build a deep understanding of price action and oneself.

05:00

🎯 The Predatory Mindset in Trading

This paragraph delves into the mindset required for successful trading, likening it to a predatory approach where traders must be ruthless and focused on taking profits from others in the market. The speaker uses vivid metaphors to describe the trading battlefield, positioning traders as apex predators who are not scavenging but actively hunting for the best opportunities. They discuss the importance of patience and timing, comparing the trader's approach to waiting for a favorite TV show to air at a specific time. The speaker also touches on the moral implications of trading, suggesting that those who are conflicted should reconsider their involvement in the markets. The paragraph concludes with a reminder that trading is not a passive activity but an aggressive pursuit of profit.

Keywords

💡Engagement Model

An engagement model in the context of the video refers to the different styles or strategies of trading, such as short-term trading, scalping, swing trading, or position trading. It's about how a trader chooses to interact with the market. The script emphasizes the importance of having a consistent model that makes sense to the trader, rather than jumping from one strategy to another.

💡Price Action

Price action is the movement of the price of a security over time, reflecting the collective sentiment of the market's participants. It is a core concept in technical analysis and is used by traders to make decisions without relying on indicators. In the script, price action is what the speaker is patiently waiting for and conditioning themselves to anticipate, suggesting a deep understanding of market movements.

💡Silver Bullet

In the video, 'Silver Bullet' is used metaphorically to refer to a perfect or ideal solution, particularly in trading. It's a concept that the speaker suggests traders might be seeking but warns against the idea of a single, ultimate trading strategy, emphasizing the need for a personalized and consistent approach.

💡Trade Entry

Trade entry refers to the specific moment or conditions under which a trader decides to enter a trade. It's a critical decision in trading that can be based on various factors, including technical analysis, market conditions, or personal trading models. The script mentions looking for optimal trade entry as part of the trader's model.

💡Old Highs and Reversals

Old highs and reversals are technical analysis terms that refer to price patterns where the security's price reaches a previous high and then reverses direction. In the script, the speaker mentions looking for reactions to old highs and reversals as part of their trading model, indicating a strategy that involves identifying and capitalizing on these patterns.

💡Contrarian

A contrarian trader is one who takes positions opposite to the prevailing market sentiment or trend, often based on the belief that the market will soon reverse. The script uses the term to describe a type of trader who might be looking for specific patterns like 'turtle soup' or 'climax reversal patterns' to identify potential market reversals.

💡Narrative

In the context of the video, 'narrative' refers to the underlying story or rationale that explains why the market is behaving in a certain way. It's about understanding the 'why' behind price movements. The speaker emphasizes the importance of having a narrative to guide trading decisions and to anticipate market reactions.

💡Retail Trader

A retail trader is an individual investor who trades for their own account, as opposed to a professional or institutional trader. The script discusses how the speaker's trading model is designed to outperform the average retail trader, often by taking advantage of common mistakes made by less experienced traders.

💡Prime Cuts

The term 'prime cuts' is used metaphorically in the script to represent the most desirable or profitable parts of a trade. The speaker uses this term to express their aggressive approach to trading, aiming for the most profitable opportunities rather than settling for leftovers.

💡Apex Predators

Apex predators are animals at the top of their food chain, with no natural predators. In the video, the speaker uses this term to describe the mindset of successful traders, who are portrayed as being at the top of the trading ecosystem, hunting for opportunities and not being prey to market fluctuations.

💡Scheduled Delivery

Scheduled delivery in the video refers to the idea that successful trading requires patience and adherence to a schedule or process, much like waiting for a TV show to air at its designated time. The speaker uses this analogy to emphasize the importance of discipline and timing in trading.

Highlights

Engagement models discussed: short-term trading, scalping, swing trading, and position trading.

Importance of having a clear model for what you are patiently waiting for in price action.

The need to understand why the market should behave in a certain way, the narrative behind price movements.

The danger of constantly switching models and not developing a deep understanding of one.

The necessity of trusting your trading model to deliver consistently over time.

Trading as a war, taking someone's head off in the marketplace, and the predatory mindset required.

The reality that profitable trades come at the expense of others in the market.

The importance of having a clear 'why' behind your trading actions and trusting the model.

The comparison of trading to a TV show, emphasizing the scheduled and patient approach needed.

The analogy of being apex predators in the market, hunting for prime opportunities.

The discussion on the moral implications of trading and the mindset required to succeed.

The concept of retribution and seeking reparations through trading as a form of justice.

The aggressive approach to trading, not being passive but actively taking profits by force.

The importance of timing and patience in trading, waiting for the right moment to act.

The comparison of a trading model to a TV show schedule, emphasizing the importance of timing.

The need to avoid the retail mindset and instead adopt a more strategic and patient approach.

The final emphasis on the importance of patience and sticking to a model for consistent results.

Transcripts

we're looking at four things here how

what why and

when how you're engaging price that

means what your model of Engagement is

short-term trading scalping swing

trading position

trading but what are you patiently

waiting for what have you been doing

case studies on what are you

conditioning yourself to anticipate in

price action is is it the Silver Bullet

is it model 2022 is it standard optimal

trade entry are you looking for

breakers like what what is it you're

looking for are you looking for

reactions to Old highs and reversals so

like turtle soup or climax reversal

patterns because you're a

contrarian that's the

what that's that that model that your

model that's what you're looking for

what you're patiently waiting for you're

not shifting in and out of different

things ict's talked about

before the one thing that you feel drawn

to in your studies that makes most sense

to you your early initial evidence of

building an affinity for a specific

thing I've either taught or mentioned

that's the one you start with it doesn't

mean abandon it when I release something

new you're hurting yourself when you do

that this is my my creations and

I'm telling you honestly if you're

dropping whatever you're working on

every time time I present something new

thinking that's the thing that you

needed better you've wasted your time

and you're wasting your your valuable

time in developing understanding about

price and yourself because the first

part of this presentation today is

Paramount to you ever finding how a

model will deliver consistently you'll

be too busy wrestling with

yourself

why why what is it you're doing in in

price action what is it that you're

doing that trusts that model the why

behind why price should be doing what

it's doing the narrative is basically

what I'm

saying why should price react this way

why should it or why will it not do this

very thing that you're expecting in

price you have to have an understanding

of narrative what makes this Market

likely to behave a certain

way if the market is expected to go

lower you've been anticipating the

market going lower on the weekly chart

there's something down there 150 handles

below where we're at at the close on

Friday so your analysis on the weekend

before the Market opens up you're

looking at you're anticipating that it's

likely to draw down 150 handles okay

that sets the tone for your bias going

into the week then you want to see how

we open on

Sunday Monday morning see how we traded

overnight what we did in London session

and then how we primed for Monday's

opening

what you would expect to see is a rally

higher that's

rejected a clear and obvious shift in

Market structure with a displacement leg

that has a fair value Gap easy peasy

lemon

squeezy but you don't want

that you want laser

lights and flying across

your charts and all that kind of

stuff because it's It's Entertainment

then entertainment I'm entertaining

myself with the money I'm making

okay I'm at War right now I'm taking

somebody's head off in this

Marketplace everybody that gets in there

it's on the other side of my trade is

Falling on My

Sword the why is why this Market's going

to the average person that doesn't

know what they're doing that's

narrative how is this going to hurt the

average retail Trader that's the most

succinct easiest straightforward no

punches held explanation of

narrative

that's exactly what it's

doing the lesson formed Street

money how is it going to unwind on them

how is it going to remove

them how is it going to take from them

how is it going to stop them out so they

can give their seed up on the

bus that's

narrative you can't read a chapter in a

book I can't talk about it in a long

winded video or playlist it needs to be

experienced over months seeing what

price does so 40-day don't work

one week Bo boot camps don't

work one year is a good foundation but

that's not enough either to be

consistently profitable and that you'll

know you'll know that your model

will

deliver deliver to

who

you price is doing whatever it wants to

do

it's unaware that you have an interest

in taking a trade you haven't you

haven't entered it yet you're not in the

marketplace you're not part of the open

interest right now you're just in a part

of I'm watching price and see what

happens it's not even aware of

you but you have to trust this model

will deliver for

you I love all of you as my students I

want to see you do all all of you do

well but when I'm in a trade this is the

truth I don't give a if you're on

the other side of

it I don't care you made the mistake you

pay for

it that's what your mindset should be

now I'll leave it to you you can wrestle

with all that moral you know

about it but the bottom line is is

whenever you win whenever you make a

profitable trade you have taken from

someone and if that is a moral Conflict

for you then you have to figure that out

or stop trading but here we're

Killers we're Savages we're out here

we're meat eating vampires

sucking the blood out of the retail

mindset we are literally caving their

skulls in walking all over their

corpse and picking their pockets

before we leave and if you want

to say it any other way to make it more

palatable for you then that's your

business but that's that's the way it is

for me that's how I look at it it's

barbaric

yes but that's how I look at it because

I was that that got stomped

up and my pockets were picked when I was

20 years old I know what that feels like

I'm coming back for Retribution I'm want

my reparations give me my

with interest that's how I'm

looking at it every time I go in there I

want somebody's ass on a silver platter

and I'm going home with

it parading it

around that's this that's just the way

it

is this is not 401K Investments

okay sit back and passively earn income

that there's nothing passive we are

aggressively going out there taking it

by Force we're waiting in Ambush

waiting for this come into through

our crosshairs step in this

vantage point and I'm gonna pounce on

your

ass we are predators here we are Apex

Predators we're not Scavenging we're not

going around and picking up what was

left we're not vultures to sit

around and watch when the real

work's done the carcasses that are left

whatever Meats left over then they go in

there and eat on that that

I want the Prime Cuts I want that

Fresh Off the

Bone some of you vegetarians are

probably squeamish right

now change it to whatever you want to

call

it that's just how I think about

things so we talked about how what and

why but

when at a specific time of day on a

specific day calendar and time of

day everything just like your favorite

programs that show billions just came

back on and I for whatever reason I I

was unable to keep up with it I got like

halfway through the first season I know

it's supposed to be a good show and what

I what I liked about it and what I saw

was was good but

uh does that show or any show

that you like watch and just come on

whenever it wants to come on

random times every day every week it's

something different no it's

scheduled

your model is a scheduled

delivery for you you have work hours you

have a a Time window this is when I'm

going to work and when it's done I turn

the off when billions or whatever

show that you like is watching does it

repeat as soon as it ends it go right

back on and play it

again no you have to wait until

the next time it makes another broadcast

of it

patience is required you're submitting

to a process the process is you're going

to get it spoonfed to you here there

little on their time schedule that's

what the market does that's all it's

doing and you can't force it as much as

you can't wait to see the next thing so

and so did this in the closing minutes

of the of the show I can't wait to watch

it I hope to see this happen you can't

make it you can't make it play

sooner but you try to apply that mindset

to trading I just took a I made money

man it feels good let me get

there and do it again what are you

doing what the are you doing that's

not your model that's retail

Rick at the driver's wheel

hello hope you're wearing your

seat belt because that's a tree

coming when a specific time of

day in

the most refined way Silver Bullet 10:00

to 11:00

folks that's 60 minutes out of your 24

hours