OTE Primer - Intro To ICT Optimal Trade Entry
Summary
TLDRThe 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
🎥 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.
📈 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.
🤑 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.
📊 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.
📉 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.
📈 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.
🤔 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.
🚀 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.
Mindmap
Keywords
💡Price Action
💡Optimal Trade Entry (OTE)
💡Risk Management
💡Trading Plan
💡Support and Resistance Levels
💡Algorithmic Trading
💡Market Structure
💡Fibonacci Retracement
💡Scalping
💡Forex
💡Market Maker Model
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
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