ICT Twitter Space: How To Build Your Own Profitable Trading Model from Scratch
Summary
TLDRThe 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
📊 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.
🎯 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.
Mindmap
Keywords
💡Engagement Model
💡Price Action
💡Silver Bullet
💡Trade Entry
💡Old Highs and Reversals
💡Contrarian
💡Narrative
💡Retail Trader
💡Prime Cuts
💡Apex Predators
💡Scheduled Delivery
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
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