99% of Traders Will NEVER Know This Secret

Summary

In this insightful lecture, the speaker discusses how to avoid losses in trading by analyzing price action on July 23, 2025. They highlight key concepts such as CSD (Complex Structure Divergence) and SMT (Structure Market Trend), using real-time market examples. The speaker explains how a failed CSD leg and SMT divergence on the highs helped them avoid a loss. The lesson emphasizes the importance of ensuring no SMT goes against the trade direction when considering a CSD, especially when trading with the same PD (price direction) on both instruments.

Takeaways

• 😀 Understanding price action and the importance of timing: The script discusses how to avoid losses by focusing on key price action events from a specific day.
• 😀 Double SMT: The term 'double SMT' is mentioned, which refers to a pattern where the ES fails to break above the previous 10-minute low while the NQ forms its low, signaling caution.
• 😀 CSD and SMT's relationship: The script emphasizes that if a CSD (Conditional Setup) leg has an SMT (Smart Money Trap) against your direction, it’s a low-probability setup.
• 😀 ES and NQ divergence: The script highlights how ES failed to break above a key low while NQ was able to do so, pointing out the significance of this divergence in trading decisions.
• 😀 Significance of higher time frame trends: The speaker was bullish on the higher time frame but remained cautious with the CSD leg because of the SMT divergence.
• 😀 Risk of being taken out: Even with a double SMT, the failure of ES to break a key level meant the trader was saved from a potential loss, reinforcing the importance of monitoring multiple assets.
• 😀 Importance of the CSD: The CSD leg is a crucial part of the strategy, and the setup must align across multiple instruments for higher probability trades.
• 😀 Low probability setups: The script emphasizes that low probability setups, like those with SMT against the direction, should be approached with caution.
• 😀 Avoiding losses: The takeaway focuses on how the trader avoided a loss by understanding the failure of the CSD leg and its implications for risk management.
• 😀 Advice for traders: The speaker advises traders to ensure that there is no SMT against their direction when looking for a CSD with the same price dynamics (PD) across multiple instruments.

Q & A

What is the main focus of today's lecture?

The main focus is on how traders can avoid losses by interpreting price action and understanding key market signals such as SMT and CSD.

What does SMT stand for, and why is it important in trading?

SMT stands for Smart Money Trigger, which occurs when two correlated instruments diverge. It's important because it helps identify low-probability situations where a trade could lead to a loss.

What is the significance of the date and time mentioned in the transcript?

The date and time (July 23, 2025) are used to analyze real-world market conditions, demonstrating the practical application of the trading strategy discussed.

How does the speaker define a low probability setup in trading?

A low probability setup occurs when there is a divergence between instruments, such as when one market breaks a support or resistance level but another fails to do so, causing an SMT against the trade direction.

What does CSD mean in the context of this trading strategy?

CSD stands for Current Support/Resistance Divergence, which refers to a scenario where price action fails to break through key support or resistance levels, affecting the likelihood of a successful trade.

What role does the Price Divergence (PD) play in this strategy?

Price Divergence (PD) is a critical factor in this strategy, as it highlights discrepancies in price movements between correlated instruments, which can affect trade decisions.

Why did the speaker avoid a loss on July 23, 2025?

The speaker avoided a loss by recognizing an SMT on the highs. Even though the NQ showed a bullish signal, the ES failed to confirm the same, signaling a low-probability setup.

What is the relationship between the ES and NQ in the trading scenario?

The ES (E-mini S&P 500 futures) and NQ (E-mini Nasdaq 100 futures) are two correlated instruments. In this scenario, the divergence between their price actions created an SMT, which helped the speaker avoid a potential loss.

What should traders look for when using CSD in their trades?

Traders using CSD should look for price action that confirms support or resistance breaks. However, they should be cautious if there is an SMT against their trade direction, as it signals a low probability setup.

How can SMT impact the success of a trade?

SMT can impact the success of a trade by revealing a divergence between correlated instruments, which lowers the likelihood of a successful trade if it occurs against the trader’s direction.