OTE Primer - Intro To ICT Optimal Trade Entry

Summary

The video script introduces a new series on the Inner Circle Trader YouTube channel, focusing on daily price action trading strategies. The host emphasizes the simplicity of trading, revealing a basic pattern discovered in price action that is easy to spot and understand. The series aims to teach optimal trade entry (OTE) through a foundational approach, using higher time frames for identifying key support and resistance levels, and explaining the importance of understanding market structure and institutional behavior for high-probability trades without the need for complex indicators.

Takeaways

• 🚀 The video serves as an introduction to a series on the 'inner circle trader' YouTube channel, focusing on daily trading insights and strategies.
• 💡 The primary goal of trading, as stated, is to make money, but the speaker emphasizes that no method guarantees success and that understanding price action is crucial.
• 🔍 The speaker introduces a specific pattern in price action that they discovered, which is easy to spot and understand, suggesting it's a foundational tool for trading.
• 📈 The concept of 'Optimal Trade Entry' (OTE) is introduced as a simplified approach to entering trades based on price action, rather than complex indicators or strategies.
• 📝 The importance of having a trading plan is highlighted, with the speaker advocating for a concise plan that fits on the back of a business card, focusing on risk management and trade execution.
• 📉 The video discusses the use of higher time frames (monthly, weekly, daily) to identify key support and resistance levels, which are vital for understanding market movements.
• 🤔 The speaker challenges the idea that trading must be complicated, advocating for a simplified approach that focuses on the mechanics of price action and institutional behavior.
• 📊 The Fibonacci tool is introduced as part of the optimal trade entry strategy, with specific settings provided to help identify entry and exit points in the market.
• 💰 The video emphasizes the importance of risk-reward ratios, aiming for trades that offer at least a two-to-one ratio in favor of the reward.
• 📉 The speaker explains how to identify market structure breaks and consolidations, which are key for identifying optimal entry points for trades.
• 🌐 The video concludes by demonstrating the application of these concepts on trading platforms like TradingView and MT4, showing practical examples of optimal trade entries.

Q & A

What is the purpose of the video series on the Inner Circle Trader YouTube channel?

The purpose of the video series is to provide daily entries focusing on optimal trade entry techniques in Forex trading, with a New York session live commentary, discussing one particular currency pair per day based on personal choice and selection.

What is the main reason people start trading according to the video?

The main reason people start trading is to make money, although the video emphasizes that no one can guarantee profits in trading.

What is the significance of the pattern the presenter first discovered in price action?

The pattern was significant because it was easy to spot, understand, and it resonated with many people the presenter taught, becoming a popular approach among them.

What are the two main setups the presenter looks at in their personal trading repertoire?

The video does not specify the two main setups, but it mentions that the presenter will teach a generic optimal trade entry approach from a foundational standpoint.

What is the abbreviation OTE and what does it stand for?

OTE stands for Optimal Trade Entry, which is a concept the presenter uses to teach about efficient entry points in trading.

Why does the presenter emphasize the importance of a trading plan?

The presenter emphasizes the importance of a trading plan because it helps traders understand their risk model, entry conditions, market sentiment, execution, and profit-taking strategies, which are essential for consistent trading.

What is the presenter's view on the complexity of trading?

The presenter believes that trading does not have to be overly complex and that a simple understanding of price action and optimal trade entry can be effective.

What does the presenter mean by 'institutional sponsorship' in the context of price moves?

Institutional sponsorship refers to the presence of large entities with deep pockets and sizable orders influencing the market, which can be identified through price action on higher timeframes.

What is the significance of focusing on higher timeframes like monthly, weekly, and daily charts?

Focusing on higher timeframes helps to identify the big money moves and reduces the noise from lower timeframes, providing a clearer picture of the market's direction and potential high-probability trading setups.

How does the presenter define optimal trade entry for a bullish market?

In a bullish market, optimal trade entry is defined as buying retracements after an impulse price move higher, aiming to enter between the 62% and 79% Fibonacci retracement levels.

What is the presenter's approach to risk management in trading?

The presenter's approach to risk management involves measuring the amount of risk for every setup, sticking to a trading plan, and ensuring that the potential profit justifies the risk taken, aiming for at least a 2:1 reward-to-risk ratio.

What is the importance of understanding market structure and algorithmic price models in trading?

Understanding market structure and algorithmic price models helps traders anticipate price movements and identify high-probability trading setups from an institutional perspective, which can lead to more accurate and profitable trades.

Outlines

00:00

🎥 Introduction to the Inner Circle Trader Series

The speaker introduces the first video in a series on the Inner Circle Trader YouTube channel, outlining a daily video log from Monday to Friday. The focus will be on providing live commentary during the New York session, analyzing one currency pair each day based on personal selection. The speaker emphasizes that while the goal of trading is to make money, they cannot guarantee success but will share a pattern discovered in price action that is easy to spot and understand. The video aims to teach optimal trade entry from a foundational perspective, stressing the importance of a trading plan and acknowledging that even with a solid plan, success is not guaranteed.

05:00

📈 Simplifying Trading: The Importance of Price Action

The speaker discusses the importance of simplifying trading strategies and focusing on price action rather than complex indicators or gimmicks. They mention teaching about selecting key support and resistance levels from higher time frames down to four-hour charts, which is the lowest considered for defining key levels. The speaker advocates for trading based on evidence of institutional sponsorship behind price moves, looking for signs of large orders influencing the market. They stress the importance of using higher time frames to understand where big money moves are happening and to avoid the paralysis effect caused by trying to learn and apply too many strategies.

10:03

🤑 Optimal Trade Entry: Buying and Selling Strategies

The speaker explains the concept of optimal trade entry, focusing on buying retracements when the market is bullish and selling rallies when it's bearish. They describe the use of Fibonacci levels to determine entry and exit points, with a preference for the 62% retracement level. The speaker details how to set stop-loss orders and take-profit levels, emphasizing the importance of having a reasonable risk-to-reward ratio, ideally aiming for at least a 2:1 ratio. They also discuss the importance of scaling out of trades to secure profits and manage risk effectively.

15:05

📊 Algorithmic Pricing and Institutional Trading Levels

The speaker delves into algorithmic pricing models and institutional trading levels, explaining how markets are predisposed to move higher or lower based on key support and resistance levels. They discuss the importance of using higher time frames to identify these levels and give an example of how to find support using an old high as a reference point. The speaker also explains how to identify institutional price levels for potential buy or sell orders, emphasizing the need to understand market structure and the behavior of large entities in the market.

20:07

📉 Market Structure Breaks and Trade Entry Techniques

The speaker illustrates how to identify market structure breaks and optimal trade entry points using the EUR/USD currency pair as an example. They discuss the importance of recognizing impulse legs in price movement and how to use short-term highs as indicators for potential trade entries. The speaker also explains the concept of a buy profile or model, where smart money accumulates at certain levels and then pushes the price higher, creating opportunities for optimal trade entries.

25:11

📈 Trade Execution and the Psychology of Price Action

The speaker continues the discussion on trade execution, emphasizing the importance of patience and giving the market room to breathe when setting stop-loss orders. They use the MT4 platform to demonstrate how to apply Fibonacci levels to identify entry and exit points, and how to scale out of trades at different profit levels. The speaker also touches on the psychology of trading, explaining how market sentiment can be influenced by price action and how institutional traders anticipate market movements rather than reacting to them.

30:13

🤔 Algorithmic Trading Insights and Market Liquidity

The speaker provides insights into how algorithmic trading models work, focusing on how institutions reach for specific price levels to accumulate or distribute positions. They discuss the sensitivity of prices around institutional levels and how orders are stacked around these levels. The speaker also explains how to identify high-probability trade setups by looking for breaks in intermediate-term highs and how to use higher time frame levels to confirm these setups.

35:20

🚀 Conclusion: Mastering Optimal Trade Entry for Institutional-Level Trading

In the concluding part of the script, the speaker summarizes the key points of optimal trade entry, emphasizing the importance of understanding institutional price action and algorithmic trading models. They encourage viewers to study and seek similar trade setups in their own charts and across different currency pairs. The speaker also hints at the possibility of a more in-depth mentorship program for those interested in learning even more about institutional trading strategies.

Keywords

💡Price Action

Price action is the movement of the price of a security, currency, or commodity over time, interpreted using only price data without the use of technical indicators. It is a fundamental concept in trading that emphasizes the importance of understanding the market's behavior through the lens of price changes. In the video, the speaker discusses how they first discovered a particular pattern in price action that was easy to spot and understand, which is central to the theme of the video.

💡Optimal Trade Entry (OTE)

Optimal Trade Entry refers to the ideal point at which a trader enters a trade to maximize potential profit while minimizing risk. It is a key concept in the video, where the speaker promises to teach viewers how to identify these points through a foundational approach to trading, using price action as the basis for understanding market movements.

💡Risk Management

Risk management is the process of identifying, evaluating, and controlling risk to minimize or eliminate potential losses. In the context of the video, the speaker emphasizes the importance of measuring the amount of risk involved in every trading setup and sticking to a trading plan that incorporates this risk management strategy.

💡Trading Plan

A trading plan is a document that outlines a trader's strategies, goals, risk tolerance, and trading rules. The speaker in the video suggests that a trading plan does not need to be overly complicated and can be as simple as a list that fits on the back of a business card, highlighting the essentials of risk model, entry conditions, and profit-taking strategies.

💡Support and Resistance Levels

Support and resistance levels are price points on a chart where the price of an asset tends to stop and reverse. In the video, the speaker mentions a teaching on selecting key support and resistance levels, which is crucial for understanding market dynamics and making informed trading decisions.

💡Algorithmic Trading

Algorithmic trading refers to the use of computer programs to execute trades at high speed based on predefined criteria. The speaker discusses how the market is predisposed to go higher or lower based on algorithmic models, which are used to predict price movements and identify trading opportunities.

💡Market Structure

Market structure in trading refers to the arrangement of prices over time that form patterns which can be used to predict future price movements. The video script mentions the concept of market structure breaks, which are significant price movements that can indicate a change in the market trend.

💡Fibonacci Retracement

Fibonacci retracement is a technical analysis tool used to identify potential support and resistance levels on a chart. In the video, the speaker describes using Fibonacci levels to determine optimal trade entry points, particularly focusing on the 62% retracement level as a key area for potential trades.

💡Scalping

Scalping is a trading strategy that aims to profit from the small price changes of a security or other asset. The speaker mentions not disparaging the ability to make money through scalping but emphasizes that the video's focus is on larger, more significant price movements identified through higher time frame analysis.

💡Forex

Forex, short for foreign exchange, refers to the global market where currencies are traded. The speaker mentions Forex as the asset class they are focusing on for their teachings, indicating that the concepts discussed in the video are particularly relevant to currency trading.

💡Market Maker Model

A market maker model is a trading strategy where a trader acts as a market maker, providing liquidity by placing bids and offers at different price levels. The speaker describes a scenario in the script where they identify a market maker model, which is a setup where they expect the market to trade in a certain way based on previous price action.

Highlights

Introduction to a daily video series on the YouTube channel Inner Circle Trader.

October 2017 New York session live commentary focusing on one currency pair per day.

Teaching a foundational understanding of price action for optimal trade entry.

The importance of having a trading plan concise enough to fit on the back of a business card.

Emphasizing the simplicity of trading and avoiding over-complication with indicators.

Using higher time frames for identifying key support and resistance levels.

The significance of old highs and lows as monthly levels for trading decisions.

Focusing on price action over short-term volatility for institutional trading insights.

Defining optimal trade entry as buying retracements during bullish markets.

Explanation of Fibonacci settings for optimal trade entry in the MT4 platform.

Risk management strategies including knowing entry and exit points for trades.

The concept of scaling out profits and the importance of first profit targets.

Using algorithmic price models to predict market behavior and support levels.

Identifying market structure breaks and their significance in trading decisions.

The role of patience in trading and allowing price to move within a defined risk range.

Teaching how to refine trade entry points using specific price levels and patterns.

Highlighting the precision of trading based on institutional price movements and liquidity areas.

Final thoughts on the simplicity and effectiveness of optimal trade entry for both new and experienced traders.

Transcripts

okay folks welcome this is gonna be the

first video I do as a beginning or a

point of origin if you want to call it

that for my continuing series on the

YouTube channel inner circle trader so

it's gonna be a daily entry in terms of

the YouTube channel will have a Monday

through Friday video log so there'll be

something posted and in October 2017 I'm

going to be doing a New York session

live commentary so I'll be talking about

one particular pair per day based on

personal choice and selection it doesn't

mean there's gonna be a setup that comes

to fruition every single day it just

means I'm going to give you an example

focusing on one particular pair and

using that as a foundation in

understanding you're in learning price

action so the first thing I want to kind

of bring the focus to is why everyone

starts trading obviously they want to

make money okay number one I'm not

promising you that okay cuz no one can

the only thing I can tell you is this is

a particular pattern that I first

discovered in price action and it was

very easy to spot

it was very easy to see and understood

the mechanics rather quickly and I think

from everyone I've ever taught this is

the one pattern that most gravitate

towards there's a lot of different

trading patterns out there especially in

my personal repertoire but truth be told

I only have only two setups that look at

and I'm not gonna give you there's

particular setups here but I'm gonna be

teaching you the generic optimal trade

entry from a foundational standpoint or

bare basics approach to it now right

away much like everyone else has already

gone through my free tutorials they

either dismissed it as oh well you know

it's too easy too simple trading can't

be that easy and no trading isn't

and CLE easy quote-unquote makes it

difficult this is you have to measure

the amount of risk involved for every

setup and then you have to stick to a

trading plan that you know follows that

setup and even that doesn't guarantee

you're gonna make money so the author

I'm guaranteeing you here is a solid

understanding of what I see in terms of

price action as it relates to optimal

trade entry or as it's deemed on the

Internet and in my own tutorials OTE

okay just abbreviation for optimal trade

entry alright so the first idea is

number one before we do anything I'll

kind of like want to remind you all that

I did a lecture years and years ago

about how your trading plan as many as

some might feel that's necessary to have

you know 14-page you know treaty yeah

what it is you're going to do I think

personally once you understand the

mechanics of it all and what you're

doing and conceptually it only needs to

be enough to fill the back of a business

card okay so you need a short little

list of things that you know by heart

what's your risk model how to frame that

what makes your entry what gives you the

conditions in the market place that

makes you bullish and bearish and you

know how do you execute and how you

manage that trade and then you obviously

you know where do you take your profits

at so obviously it's a very

oversimplification on my part admittedly

I understand that but my return back to

online I guess tutelage and teaching

it's really kind of like bring it back

in the scope of simplification because I

have a lot of things that I've taught

everyone about trading every asset class

specifically Forex the common consensus

this is because everyone's tried to

learn everything I taught and they tried

to apply it to every possible scenario

and every particular trading day that

they have time to sit in from the Sharks

it doesn't promote you know solid

understanding in fact it creates kind

like a paralysis effect so what happens

is

one quickly walks away from the material

thinking well number one he's just a

demo guy because you can't do it or

because I haven't showed a track record

and it's always been about you not about

me so if you take this information use

it I promise you you will have a greater

understanding about price action than

you have right now that's the only thing

I can promise now does that mean you're

gonna making be making any money no I

can't promise that okay so everything I

talk about is going to be referred to as

a hypothetical scenario because I'm not

trying to take ownership of the risk and

rewards that you take in using this

information so this understand that -

it's for informational purposes only I

think if you look at it you'll quickly

see that there's something of worth in

terms of studying it says the first

thing we're gonna look at is

understanding what makes the market

predisposed to go higher or lower now if

you recall for those that have had that

benefit of going through my old

tutorials I had a teaching on selecting

key support resistance levels and it's

primarily just marking from a higher

time frame monthly down into the lower

time frame so you wanna say lower time

frame that would be about the four hours

the lowest I'd go in terms of defining

it as a key anything less than four

hours is too short term to refine that

on a large institutional basis so what I

like to look for is and when I taught

one if Reta twirls is that if you used a

higher time frame monthly weekly daily

n' four-hour and will just leave the

four-hour offer right now this focus on

a monthly daily and weekly time frames

if you look for key levels where price

has moved away from it in other words if

price has moved up to a resistance level

and repelled and went lower we can

reasonably assume that there was a large

degree of institutions that had a

interest and being short there and if

the market trades down to a level and

bounces off of it and goes higher we can

reasonably assume that there is an

institutional basis for that rally to

ensue no without going in the great

detail and revisiting everything I've

ever done and trying to compressing into

a very short video just

that that simple premise of using a hard

time frame chart and use a monthly chart

there's plenty of high probability

scenarios that you could find just using

a monthly chart no you don't get a whole

lot of setups but if you're watching a

wide array of particular assets there's

always something trading at or near a

monthly level okay and what's a monthly

level an old high an old low simple as

that now

everything I'm going to be teaching and

revisiting in the YouTube channel is all

about simplification very simple

processes simple ideas no indicators no

gimmicks none of those types of things

you don't need all that stuff a very

simple understand of price action the

premise behind what makes these things

strong is we're looking for the evidence

that there's going to be a institutional

sponsorship behind the price move that

means big entities deep pockets lots of

orders coming in large sizeable orders

are coming in we're not looking at

ladders we're not looking at little tiny

little fluctuations of intraday

volatility we're looking at big massive

tell-tale signs that these big boys have

pushed price around and you can see that

on the hard time frame I've said this so

many times if folks would just focus on

these timeframes it will answer 80% of

the problems you're having because

you're too worried about what's going on

in these lower timeframes because you're

in enamored by something maybe I've done

with an intraday chart five-minute

15-minute something that we've been one

minute charts you get on social media

everybody's a wizard now and they're

showing all kinds of things that they've

either done or can do and that's great

but one minute charts are not going to

decipher what smart money's doing that's

just very short-term volatility now I'm

not disparaging the ability to make

money doing that because I can do it

just as well as the next guy can but

what I really want to focus my time on

this is what I taught from 2010 that's

it really just to 4x but it really goes

across all asset classes if you use a

higher time frames you want any asset

classes you're looking to speculate in

or study that is where the big money

moves are it's as simple as that it

doesn't get any plainer than that okay

so we're going to assume for a moment

that we are

you assumed it's a markets bullish okay

and we would be looking for the market

to trade higher optimal trade entry is

really based on buying retracements okay

as the market makes a impulse price move

higher that impulse price move has to be

incorporating a break in market

structure and I'll show you what that

looks like in the chart and then your

what you're doing is you're trying to

buy the retracement slower and obviously

it's very cliche to here in technical

analysis buy the dips sell the rallies

okay if you're bullish you're gonna be

buying the dips or any retracement

slower after a price leg higher and then

the expectation is you're buying it when

it retraces and then you want to buy it

as it does that and then capture the

next leg higher and everything's

reversed for when it's bearish we'd be

looking for rallies in price and we look

into sell those rallies with the

expectation that we're going to break to

lower lows okay and that's the optimal

trader through short and optimal trade

entry long in a bare definition simple

definition so what it looks like is on a

fib this is the basic model there's been

many approaches to having the Fibonacci

show what I use for optimal trade entry

but this is the bare bones is how it

started this is how it is and I'll show

you what these settings are let's go

here and click on and I'll let you see

the settings that way you can set your

mt4 or equivalent to the same the zero

level is first profit and scaling I'll

explain these as I go

62 percent retracement level unraveling

it and then you have the 100 level which

is one here and then we have the %

dollar sign just allows the mt4 platform

to plot the actual value you can see

that over here and then it's 0.7 0 5 for

the sweet spot for optimal for entry

that's the price level I'd like to see

price trade - and 79% and we have our

target levels which is

zero negative zero point six two

negative zero two seven and then

negative one for a symmetrical price

swing okay and then the same as this you

know done over here I don't need to show

you the property settings for that it's

the same thing that's shown in the scale

of looking for downside objectives so

the premise is we would be looking for

price to do something like this okay we

have a impulse price leg higher and then

we have another impulse price leg off

that level and trading down into optimal

trade entry okay so we're trying to do

is get below halfway of that price leg

higher down into 60 to 70 and a half to

79% raise my level okay I try to get my

fill at 62

just to everyone knows right away it's

for completeness sake I try to get a

tour very close to the 62% tracing level

I allow up to a little small deviation

below the sub types of trades along 280

ok now I allow that for price now my

stop will be exactly at this low not 10

pips for 5 to put pips below that it's

gonna be right at that low okay so it's

the easily defined if we are trying to

get in at 62% traits level it'd be my

fill would be one I'm sorry 1234 0.3 was

calling this is the gold market behind

all this stuff it's just that's the

price is showing I'd look to get there

um fill that basically 12:35 we'll call

it okay just a little bit about 62 I'm

not gonna fancy dance around try to get

the actual level I just want to be in a

level that makes sense okay and then

between net and where I think the lows

should be formed based on my analysis

where price would be turns for the price

swing I'll show you what that looks like

in the chart this stop would be exactly

right there so between the two reference

points that would be the risk okay the

level up here

zero level is when you take off first

profit now I like to go a little bit

early because it can always fail getting

back to this high so at that high or

just below it that's where my first

profit is that's your first scaling

that's not your first target first

target is here okay so you got to expect

price to want to eventually get to this

level or maybe this level if you're

really extremely bullish all the way up

here to have a measured move what's a

measured move the impulse leg low to

high that move is the same thing just

add it to the high up okay so that's a

perfectly symmetrical price swing you

don't always happen to that degree and

that's why we have to be looking to take

profit right before our old high because

it could fail there and if it goes above

it at the 127 extension basically is

what this is I'm gonna be looking to

take something off there and if we get

to 162 extension up here I would be

another portion for me to take profits

and then if I'm extremely bullish I'll

leave a small piece on for a measured

move type effect so the same thing as

seen over here for when the markets

bearish we look for an impulse leg lower

in price okay and then we expect to see

price retrace higher back into optimal

trade entry and that's defined between

62 and 79 cent racial it can be anywhere

in here now the problem is is I'm not

teaching supply and demand so supply and

demand zones and stuff like that I don't

do those types of things I look for

specific price levels and I'll teach you

through the month of October how to

refine that down to a specific price

level and not just wonder you know where

it is in that zone you're going to be

taking a trade at okay so I'm going to

do the actual price levels to look for

the same thing we would expect the price

to show willingness to drop lower

limiting our risk to the actual high

between their entry and the hi that's

our risk so we would take that amount of

risk defiant divided by you know the

percent risk that we're willing to

assume based on our count let's say it's

a half a percent we're a half percent of

your account is you take that in terms

of the pips and break that down and that

would give you your per pip leverage and

I know something I'm brushing over that

rather quickly and it's because I'm

trying to just give you a pound a ssin

and then obviously through the entire

scope of October will actually refine as

you can see how to do your risk how to

determine your risk and figure out what

you can earn on the position and what

you're you're risking and I'll teach you

how to move all the stops when when it's

supposed to be done and all that but

ultimately we would expect to see it

then move down into some reasonable

objective first profit would be down

here but just above the old low so we

would on take profit here the thing is

this is what why most traders screw up

and you don't make money and they're not

profitable either in demo or in live is

they don't do this practice right here

knowing where to get out it's our first

scale you have to know what that is and

it has to be a reasonable amount of

range to promote the idea of

justification for the risk so if I know

I'm getting in here in my entry exit but

a loss is up here with my stop it has to

be a reasonable you know better than in

my opinion better than two to one okay

and that's about as good as I get

in terms of trusting reward to risk

ratios okay so what I'm looking for is

everyone will look like this way they'll

say okay I'm I'm trading here at is

short and my risk is here so that's my

risk okay whatever that multiple is then

they start doing this it's okay for if I

get short from that point there's one

are there's two are there's three orders

for our I think that's flawed okay and

that's the reason why I make fun of

folks when they want to talk about risk

to reward models it really should be

done on first scaling okay so if I'm

getting here as an entry and my risk is

here it needs to be enough of the

position coming off that promotes

at least two to one so this is one are

in terms of risk whatever that is

I have to be able to make two times that

in my first profit that's what I'm

trying to shoot for now sometimes I'll

take trades that are just slightly

underneath - it might be like one in

three quarters okay if I'm really really

aggressive and I'm just in a fast market

and we're not even fast mark I should

say like this if I'm gonna market debt

is indecisive but I'm already in a

position so I'm managing it I'll I'll

look to take out one and a half percent

but I'm really looking for trades

that'll frame a model that will give me

around - okay so whatever my risk is

from here to here I want two times that

from my entry to first profit okay and

that's why I want to get as deep as I

can you know into that 70.5 level I'm

not going to demand 79% tracing level

I'm gonna be looking for the 70.5

preferably they give you my entry at 62

so that's what I'm looking for so not

all trade scenarios are gonna give me

this gearing but the ones that do are

the ones I'm gonna take okay and

obviously it's not as good if it's owned

like a 1 or 5 minute chart cuz the range

is gonna be very very small this setups

that on like an alloy chart they're good

because it'll give me enough of a range

to get close to that two-to-one reward

the risk and if I get that everything

past that first scaling out takes care

of itself and that's why it's I laugh

when I hear folks saying it's stupid to

take first profit or scaling out profits

because your initial risk is X and then

you've taken a small profit yada yada ya

well that's because I'm looking for

these objectives down here and it takes

care of itself okay and it ends up

becoming my last portion ends up being

way more generally than what I did in my

first scaling so it's it's not an issue

for me to be worrying about if you see

examples of it going forward you'll

you'll see quickly there's no reason to

be thinking it's a bad idea actually so

let's go over to the charts and I'll

give you some examples of how quickly

and easily you can find these setups and

we'll give you all kinds of examples of

it going forward in October okay we're

over here at tradingview dot-com and

admittedly I'm a little clumsy when it

comes to this platform I've not been

active in using it but I've been

practicing with it so that way I can use

it as our medium for our teachings so I

want to kind of draw your attention to

how price on the euro dollar this is a

wiggly timeframe and price in recent

weeks have pushed above these old highs

over here okay so if we did this on a

monthly scale and that's still it just

for completeness sake okay you can see

this high here you do me a little bit so

we have this high here in this high

comes in at one 1714 okay one 1714 for

this particular month so what I'm gonna

do is I'm gonna draw a horizontal line

right on it and I'm gonna ask you a

question regarding pricing so if we see

price trade on this particular month

right here it trades above this high

rate above it once we go above this old

high just think in terms of simple

support resistance folks it's not

complicated when price is above it

whatever that price level is an organ

we've already assumed not assembly that

I figured it out it was 1 1714 the

markets trade in an algorithmic format

okay there's price engines that generate

you runs on price and runs on stops and

it's accelerations in price and we're

delivery skips and jumps to specific

areas and pricing the easiest way to

understand what that is is if you look

at a chart you can do it like on an

hourly chart or a 15-minute time frame

you can see it on all time frames but

really 15 in one minute if you do it

every course of a week you'll see how

price gravitates from a full figure okay

that would be an example of like one

1700 to 118 zeroes there that would be a

full penny move in a year a dollar that

one penny move is broken down

algorithmically to the 11780 level 11750

level or mid figure 117 20 level and

then we have 117 big figure okay so my

question G is this if price traces above

it this old high back here because we

broke through that this look this is

high I'm sorry this high is 1 1714 so

from an algorithmic standpoint what

price level would it want to reach back

down into if it's gonna go down for

support 1 17 20 which was it's just

above the 1 1714 right so if this high

would have been 117 say 65 what would

the level be that we you'd expect to see

it reach down into for an algorithmic

support level 1 1750 mid figure okay so

think in terms of that okay and what

this does is it eliminates all this

distraction ok looking at ladders and

depth of market and all those types of

things you can probably swear by it and

tell me you've done really really well

and that's great just like anybody else

using crossovers and MACD they can tell

me they've done really well it out - I'm

not telling you that you can't make

money doing that kind of stuff I'm just

simply suggesting to you there's a much

easier purpose to doing this than

everyone's doing so we're using an old

high here and while the level is 1 1714

and the specific high from an

algorithmic standpoint we would look for

sensitivity or support to form around or

at 1 1720 okay so we're gonna leave the

level here and we're gonna drop down

into a daily okay so we have the 1 4 on

1 1714 level on our charts

and now I'm going to ask you to consider

what is going on in reference to the

institutional level from an algorithmic

standpoint in other words we look at our

pricing model it's full figure above it

the 20 level above that mid figure 50

above that the 80 level institutional

and then we have the next full figure

okay or 118 so if we're above price when

it trades above it here we expect to see

price find support when it comes back

down into the 20 level okay

so now we can adjust this level here in

show at 117 20 okay so 117 20 is the

institutional price level from an

algorithmic standpoint price is going to

want to trade back down to that level

the reason why it does that is it allows

the market to pick up orders at just

below or above that level okay

there's limit orders there there's there

stops there but generally it's coming

down to run stops to pair the orders

with smart money's limit orders okay

every time you see my chart below the

market I'm always referring to it as

running cell stops above the market I'm

always referring to it as running 5

stops those that are not in the know

they will question whether or not I'm

using the right definition I am using

the right definition because I'm looking

at things from an institutional

standpoint those cell stops they're

below the market place smart money will

have their buy limits to pair up with

those cell stops okay so my perspective

is not retail so I'm looking at it from

an institutional standpoint from where

I'm from I don't look at retail so if we

understand it the market is above this

20 level when it trades down into it we

should see the market rate into a

support level

that sport level is going to be defined

by some pricing model and I just gave

you one that's very simple

we used a old monthly high and we're

finding support we want to see price

trade-off of that and give us a pattern

so now we have a level it's been rounded

to an institutional level twenty

seventeen twenty and now we can drop

down into lower timeframe charts and

we'll just look at a fifteen minute time

frame

okay anymore okay here we are

alright so we have price trading down on

the 27th and hitting the 20 level notice

what it does it hits it and it rallies

away that rally this is what you're

looking for you want to see it take out

a short term high that is seen here you

a short term high it trades through it

once it does that this break above that

short term high is a market structure

break okay so now from an algorithmic

standpoint the price will want to

retrace back down once it retraces okay

it's going to pick up more orders and

then rally again okay

we have another break above this short

term high here and I'm quite certain you

guys that are more proficient with

trading view you're probably smiling

saying you could have done this or that

and just made a copy I don't know all

that yet so this is give me some time so

we have another break here okay so we

have short term high broken and another

high broke and now watch this high being

higher than this one from a market

structure standpoint short term high

intermediate term high so now when this

breaks here

have a much more solid setup for a

pencil potential running and price

higher now we have to enter the optimal

trade entry because we already have a

consolidation in here price trades away

can came back to the consolidation

distribution redistribution smart money

reversal low-risk Buy and here we're

looking for another area to buy okay or

another area of accumulation or Aria

cumulation to take us above this

consolidation now what I just described

to you is a market maker by model simple

as that some of you will say oh that's

Wyckoff well I kind of got the idea from

looking at price action alone and then

when I saw Wyckoff describing that

scenario it made me feel better that I

seen something that someone years and

years before me was able to see that

same price structure but his definitions

and things I don't use that there's a

different approach in folks that went

through my mentorship know right away

and I've challenged them as well to go

through Wyckoff and see if what I was

teaching was Wyckoff it's not it's very

similar in terms of the general market

profile itself because it's a very

generic process markup and discounts and

simple as that but the long and short is

the the run above here right there that

impulse leg is all that's necessary

because now we have a a buy profile or

model it would take us above this

consolidation so we would look for this

whole price action right in here

to be traded above okay because that's

where the buy stocks are hitting are

sitting so smart money buys down here at

the 20 level and we would know this

level beforehand and it's basically the

one 1820 because above this high this

height would be 118 10.2 and obviously

above 118 10 the institutional level

will be what 118 20 and that would be

where smart money would want to exit

running those buy stops why they want to

run by stops because

the orders they picked up down here

going long and then Baltimore down here

there alone so they have to have people

that want to buy it from them at a

higher price

so by stops it would be above here why

would there be by stops there Michael

because folks that are being short

this is the last intermediate term high

for anyone that has not trailer

stop-loss lower and got stopped out

there gonna make a run on that liquidity

right there which is the reason why the

boy market I could buy model is so well

good all right so we're gonna look at

this little area right in here okay and

this is going to be the optimal trade

entry that we're going to talk about

just for tonight and it's make us a

little bit bigger

okay so this impulse leg rallying away

and then coming back down picking up

more orders that's optimal trade entry

that's what it looks like in price

that's the the executable price level

you can trade on now I'm going to ask

you to let me go back to MT for just for

the the pattern sake but I wanted you to

see how it can be shown on trading view

it's not just simply a empty for trick

pony it's it's there as well but I want

to go over to MT for because a little

bit more efficient with that charting

platform and then we'll go into looking

at the example okay so we're over at mt

4 and it's kind of like re define what

we've already discussed this is the old

monthly high okay 117 14 and price was

coming down away from higher levels and

we had a short term low here and we had

a little bit of a rally in there and

folks to try to capture old lows or try

to capture any advancement higher if

they're lucky enough to get in and see a

little bit of a profit they obviously

fall in love with it they marry the vein

the expression is and obviously there's

their stop would be resting below that

so the market trades down into that

twenty

institutional level picks up orders

right in here okay runs hits that and

then rallies through breaking this short

term structure hi when it does that we

have a market structure break we wait

for it retracement lower okay now the

first time it does this you're going to

maybe lose the low-risk buy for a market

maker by model the consolidation here

the runaway come back to the

consolidation distribution smart money

reversal low-risk by re accumulation

that's what we're looking for the next

area of accumulation so this short term

pied being broken here we mention that

this is a higher high than this one so

this is an intermediate term high okay

my old tutorials brought out concept I

picked up from Larry Williams which is

my mentor back in the 90s he taught

market structure and high that has two

lower highs on either side of it it

makes that high in the middle a

significant high and that nests out it

gives us a market structure model here

this high being broken right there is

much more convincing than this short

term here without understanding

everything I'm giving you here is an

outline or understanding the expectation

of how orders are stacking around higher

time frame key levels and understanding

algorithmic price models because that's

what I'm teaching here tonight from a

very basic approach this all stuff I

taught in my free tutorials sniper and

precision trading concepts and all the

other stuff in between but this rally

right in here this impulse like right

there is all that we would be looking

for so this move up when price trades up

and creates that high what it's doing is

it's making a more convincing run above

this high so it's a market structure

break on an interview term high so it's

much much more reliable so the

retracement on that it's going to be

much more significant so when we look at

price moves we want to look at the price

move

on the bodies of the candles I've taught

this in my tutorials the wicks are

always going to be the thinnest price

action okay and if you look at

everyone's price across all different

platforms and brokers the part that's

always different that serves everyone

off is the wicks because the brokers

allowed to have some measure of

flexibility I'm just gonna say it that's

the polite way of saying it where they

can spread price a little bit more so

you're already getting a derivative of

price from an interbank feed anyway but

the discrepancy between that and what

you see it your broker is many times way

off okay and you sign your agreement to

that when you set up your account you're

allowing that to occur okay so you can

cry about it they did this to me to do

destiny but you really give them

permission so it is what it is all right

so this rally up we're looking at we're

gonna put on the bodies of candles up

here this is the highest body right

there

this candle right there and we're gonna

look at that as the open so open is one

seventeen ninety nine so that's where

our fib will be draw right there okay

don't let go so now what happens is

price rallies through impulse leg up and

it drops back down look how nicely it

gives another little bounce rate there

trades back up higher and it spends all

this time on a fifteen minute time frame

this is going to chop traders with no

patience up they're gonna get scared

every time it comes down or when it

starts to rally like this they Jam their

stop-loss right on then and then it's

this low here and then look at it does

eventually comes back hits it you have

to give the price freedom to trade from

where you're trying to get in at to your

stop let it go did a full stop it's

there for a reason to protect you

but if you don't give it room to breathe

you're never going to give these markets

the ample room that needs to desire

eight and then expand towards your

targets so the same Fibonacci settings

okay nothing is different here when

trades up to this price level right

there or just below it there's your

first profit okay so what if you're

trying to get in at seventy twenty five

or sixty two percent treatment level

this movement here you got to see at

least two of

that one - okay first profit scale off

put your stop to break-even let it go

price trades up to the first target you

can scale something off their trades to

this level here you can scale something

off there and trade up to symmetrical

price swing boom it's that okay and then

look at the reaction after that all the

way back down

you think that's by happenstance this

you know coincidence no it's going to an

area of liquidity we have a bearish

order block here overlaps with target -

really nice move there but look at this

short term high here what do you think's

resting above that buy stops now there's

going to be some out there that don't

understand what I'm teaching because

they don't see things from an

institutional standpoint you have no

idea how to look at it like this but

there is trio by stops that don't get

trailed down here not everyone carries

that model where they got to jam it up

seven tips you know above the recent

high when they're bearish that's what

retail does longer-term trending models

they have their stops farther back okay

and this is one that we've been targeted

and here's another one as well okay and

it overlaps with the symmetrical price

swing that we have on fit okay which is

a 100% measured move of whatever them

call swing is this low to this body's

high is the same thing from that body's

high all got to this level

it's 100% the same in terms of pips and

range it's the same thing from this

price point to here added to this and

you get that very very precise very very

precision based trading it reaches for

the 20 level okay you can that come out

to work there was around it near the 20

a lot of 20 20 to 20 so the market will

die great and work around these levels

here okay this is one penny move in the

euro so look at the sensitivity around

the 20 level it trades up to and

consolidates a little bit and gives

another optimal trade at your rate in

here from this impulse leg up rallies

again what's it doing it near the 50

level well it's not exactly a 50 Michael

exactly because at these levels at 50

there's orders that are just above it or

just below it or at the 50 level just

like we have at the 20 level it can be

at the level 20 above the 20 a little

bit or below it everyone's going to have

orders that are close proximity to these

specific levels that's why the algorithm

reaches for them now institutions like

these levels from a generic standpoint

because it makes it easy for them to

price their models in we had two old

high at 117 14 that's an odd number so

look for the manipulation here a stop

run in a break-in mark structure rally

when we have that anticipate some

measure of buying and then wait for the

intermediate or high to be broken here

you're gonna lose all this there's

nothing wrong with that but if you want

high probability and you want

confirmation and I'm holding my fingers

up in quotations you want confirmation

this is what it looks like

you have an intermediate term high

broken with market structure and then do

everything I just sit here and you have

a complete trading model targets how to

know one to do it using a higher time

frame level what to reach for well you

gonna have to look for a little high to

run through okay so if you're buying low

you want to sell high where do you sell

high it just find it on high somewhere

okay and do it in that scope that as we

outlined here this is one example you

see many of examples of these going

forward but this is this one that is

available to you and you can see it in

your own charts and study it and seek it

in other pairs throughout this week that

we've had and find similar examples of

this even looking for it for shorts as

well but this is going to complete this

first introduction to optimal trade

entries as your first time here this is

what it looks like coming back down into

it here that's the buy okay you can buy

here or here and look at the dynamic

react reaction now with this like it is

on the chart I'm going to drop down into

an hourly chart and you'll see why I

like the hourly setups because they're

much cleaner a lot of noise when these

lower timeframes but same impulse like

here and it comes right down it's

beautifully here the body is respecting

the candle I'm sorry the body is

respecting the FIB level not that the

third level is giving them is no magic

in afib it's just giving a specific

crane

work for us from the best perspective we

could have not being on an interbank

level institution where you can actually

see because you're not seeing these are

worse folks you're not you know that's

why I laugh when folks will say you know

I'm looking at you know well I said I

wasn't gonna do those types of things

I'm not gonna belittle anybody else

because if you're making money doing

what you're doing you know god bless you

that's why I like Forex because I

understand the animal and the things

that everyone hopes they can see in the

little gimmicks and their indicators

that's what makes the opportunity

because it's there for us to take

because it's giving a sentiment it's

providing and molding a traders mind or

a trader sentiment about a market and

what are they gonna do instinctively

they're gonna react and I don't react I

anticipate and that's what we're going

to teach using just one simple pattern

optimal trade entry and you'll see that

that's all you really need you've never

needed anything more than that but I

asked back then you know things 2012 if

you want to go deeper and 660 some of

you I want really deep night they know

everything I know and I'm not teaching

another mentorship to please don't ask

me people are still asking that's gonna

be the first introduction to it

obviously it'll be much more refined in

structured as we go forward but this is

certainly good enough and it really

gives you an encapsulated view of an

entire breakdown from an institutional

price move how institutions work inside

the model of how price is being

delivered and why it should go where

it's going and what to setup look like

and where they occur but you have to

understand how the algorithm that makes

the price engines Drive up and down they

drop down to allow traders to pick up

orders at very very very low pricing and

then it rallies up to allow traders to

get out at very high high prices so in

between there there's opportunities to

trade you don't see them because you're

not trained or taught from Annie retails

perspective but I just gave you here is

exactly how bank level traders trade and

anybody that says different simply

doesn't know anything for what they're

talking about so until next time wish

good luck good trading and I'll catch up

with you next week