Transcript
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Introduces the series, the creator’s background, and the purpose of the guide. The speaker also pushes viewers to take responsibility and commit to real change before moving into trading basics.
Speaker A
This is going to be a complete guide on how to start trading in 2026 as an absolute beginner.So if you guys are brand new to trading or if you guys are just now getting into trading, this video is literally going to be every single thing that you guys need in order to get on the right track and learn how to trade from A to Z.If you guys don't know me, my name is Tyler or people on the Internet, they call me tjr and I've been full time trading for the past couple of years and it has completely changed my life.I've also been blessed with the opportunity to be able to teach thousands of students for free on the Internet through YouTube videos and then also teaching direct students through mentorships to help change their life with trading as well.In this guide, I'm going to provide you guys with literally hours upon hours upon hours of all of the best information that I have on trading and compiled it all into one massive video so that you guys can get off to the right track.
Because I know personally when I was trying to learn how to trade, when I was an unprofitable trader, that I would have literally killed to have an opportunity like this to be able to watch this video and to have myself put on the right track.Because I, I know the younger, unprofitable version of myself.I literally had to scour on the Internet for who knows how long, bro.It was probably months trying to search through every single video required for me to actually get a full grasp on what trading was and to have all the tools necessary.So what I wanted to do for you guys was to put it all in one place.So make sure you guys stay until the end of the video because there's a whole lot of information in here and I wouldn't leave anything out of this if it wasn't required.
So I'm going to put every single thing that is required and leave all of the BS out.So right now we're going to start with the absolute basics.So whether you guys have been trading for the past three years or you guys are just now getting into trading, this is going to bring you guys up to speed so that we're all on the same page.So when we actually do get into all of the other concepts and when we actually get on the charts, you guys aren't freaking out.Like, what's a candlestick?What's a candlestick wick?Or oh my goodness, liquidity sweep.I have no clue what that is.So for, for all of the beginners this is where you guys are going to start.This is going to cover the absolute base fundamentals of what a candlestick is, what a chart is, how it moves.
And then we're going to transition into what is trading, what is liquidity, what are fair value gaps.All of these things, all these concepts that you guys have seen everywhere online.With this first video, the last one that I filmed that I kind of scrapped, it was like sappy, kind of just saying, like, you know, new Year, new you.This is why X and Y reason why you guys need to be starting today.
And, you know, like, this is how trading changed my life.And I hope that the same thing can happen to you.And it's true, I do feel that way.But at the end of the day, man, like, you, you clicked on this video for a reason.You clicked on this video because you do not enjoy the current life that you're living.
And I'm not going to sit here and bullshit you guys and try and persuade you to watch through this entire video series.You know, it's just not.It's not my place to do that.I'm here to give you guys free information, free value, to try and help you guys change your life.Personally, I think it's pretty embarrassing for me as a YouTuber who has already changed his own life and who has actually already changed many other people's lives, like thousands of people's lives from his YouTube videos alone, let alone my paid mentorship, for me to try and get on here and like beg for you guys to have the motivation to be willing to change your own life.
I think you guys need to look at yourself and just get real with yourself, man.Because I was looking back on like that, that video that I scrapped and, like, it was stupid.I was just thinking, like, if somebody actually wants this shit, they're going to go and do it for themselves.I shouldn't have to get on here and tell you trading has changed my life.You've seen how it's changed my life.I shouldn't have to get on here and tell you about how beneficial this is going to be for your life.If you see it, then you see it.If you know you are built and if you know that you are destined for a greater life, then you shouldn't need that motivation.You should already feel it in your soul.And that's exactly how I felt when I was learning how to trade.
I knew that I was destined for a better life.I knew I was destined to do great and big things.And we're Living in this age of edutainment.And unfortunately I fall into this category where people enjoy watching me or learning from me because I'm a young dude.That's sometimes funny, you know, but that's just this new age of YouTube, man.
And people watch these videos on trading, watch strategy videos, watch confluence videos, but they never do about it, bro.Like you, you're making, it's.It's almost like a, like a feelgood videos.Like we as creators are putting out the videos, trying to genuinely help you guys.And you guys are watching it not to try and help yourself, but just.
Just to fucking entertain yourself, just to make yourself feel good.As if you.You think that you're.You're just making yourself feel like you're learning something and then you never go and apply it.It's honestly like this first video of this series, I kind of just want to make it just talking about you and yourself and how disrespectful it is to yourself and your creator for you guys to be given the gift of life and for you guys to waste it and fucking squander it by living your life for other people's opinions, by living your life that was given to you for other people and not for yourself.By living your life in quite literally the worst way possible.You clicked on this video because you don't enjoy the current life that you're living right now.And you've wasted the past 18, 20, 30 years living your life on somebody else's terms, working underneath someone and disrespecting not only yourself, but also our creator that brought us here.
And that's really what makes me upset.And it should make you upset as well, because that you have one life for all we know.It's the only one that we know about.You sit here and you just let the days go by and you don't feel any sense of urgency to take your life into your own hands and take a fucking risk, bro.There's too many people in this world that are too bitch, too fucking soft to take a singular risk.You think of any, any successful person in this world, every single one of them had to take risks to get to where they're they're at.It's very, very easy in this world that we're living in to live a comfortable life.
Back in the day, you know, if you were, if you were broke, you were living a hard and difficult life.But now with the technology and the advancements that we have in this world, it is very, very easy to live a comfortable, comfortable Life while not being fulfilled.We have screens in front of our faces.People are fucking smoking weed to drown out the noise or the anxiety or the disappointment that their subconscious keeps telling them that you deserve better.But people just shut that up by taking another puff, by watching a video like this and then not taking any action.
I want to encourage you guys to get really fucking pissed off, get very, very, very upset at yourself.Because every single decision that you have made from birth has led you to be where you are at today.And if that does not infuriate you, if that does not make you so very disappointed with yourself, I do not know what will be able to push the needle for you.And I do not know what will be able.What, what sort of fire has to be lit underneath you to be able to get you started.
Because once you start taking matters into your own hands, once you can take full responsibility, it's not your parents fault, it's not your siblings fault, it's not your friend's fault, it's not your environment's fault.Once you start taking the blame for everything in your life when whether it was your fault or not, but you put the blame on yourself, no matter what, that lets you dictate your future.Because now your life is in your own hands and now you can actually see life for what it is every single day that you wake up and don't do something to help you get towards your dream life or towards your dream version of you.It's not your shitty job's fault.It's not how you grew up.It's not how you grew up.There's people that have literally grew up in the absolute fucking slums that are a hundred times, 1,000 times richer than me.
So to say that you don't have a chance is stupid.To say that you don't have a chance at all in this life is very, very, very disrespectful to yourself.That's just kind of been the thing that's been in my head for these past two months.
As you know, people are starting to say, hey, let's get motivated for the New Year.Everybody's writing down New Year's resolutions.I've had my New Year's resolutions for the past six months.I already knew what I was trying to accomplish at the end of 2026, halfway through 2025, because I hit all of my goals halfway through 2025.If you are unwilling to take action to be able to change your life, then don't sit there and cry about how horrible your life is.
And I know this video may be depressing or there's people that might take this video in the wrong way because you want to play the victim role.But at the end of the day, those are the people that are never going to make it.So I don't want you watching my videos anyways.You're not the type of person that I'm here to speak to.So leave a hate comment, unsubscribe, and good riddance.Dude, those are not the people that I want to speak to.I want to speak to the people who want to actually make a change, who are ready to actually take their life into their own hands and who are ready to take action.Like I was saying before, it's going to be one thing for you guys to tune into these videos every single day and just watch, but that's.That's half of the game.
And you're not even you.You haven't even taken your first step yet.You just watching the videos isn't even taking any sort of action.You're just digesting the.The content after every single day.You need to be taking active action to do something based off of these videos.
And if you are not waking up every single day with a fire lit up underneath your.Your ass, feeling anxious, feeling just like, so ready to go.Because you know time is ticking and you know your time is getting wasted away.And there's no better time to start than now than like I said before, I do not want you here.So if you guys are one of those people that just feels like nobody's there for them, that's what I want to be for you.
I want to be your guys's crutch.I want to be your guys's guide.I want to help you guys get to where you want to go in your life.Because I know when I was trying to make this work, I didn't have anyone to lean on and it was very, very difficult mentally for me.So this is for everybody that is ready to take a risk, ready to live life on their own terms, and ready to actually build the dream life that they've always wanted.
So set those goals, set that roadmap, and we are going to be in for a good new year.And also I don't want you guys thinking that whatever, like, this is on some New Year's motivation, like, bullshit.I'm going to show up for you guys regardless.I showed up all last year and I'm going to show up again this year and put in the same, if not more effort for you guys.So, I mean, I'm here for you is essentially all that I'm trying to say is that, like, you know, you can count on me no matter what.You just have to count on yourself to show up.So, yeah, Happy New Year's.And let's, let's.Let's take this shit head on, boys.This is going to be a crazy year, not only for myself, but also for you guys.I know it without a doubt, Without a doubt in my mind.
I know it.And hopefully you guys can light that fire under your ass to wake up every single day ready to take action and ready to go and just take that dream life.Go get it.Let's go and fucking get it, boys.
Explains the core mindset shift that trading is about building skill, not chasing money. Uses basketball analogies to show why focusing on process and probability matters more than profits.
Speaker A
We are going to be talking about the mindset and the psychology that you guys have to have in order to make money with trading.I know a lot of people are probably going to skip this video and say this isn't beneficial.I just want to learn the strategy to make me money.Tjr, show me the strategy to help me make money in trading in 2026.Well, unfortunately, strategy is only one step of the puzzle.So I'm going to pretty much just do an overview and hopefully rewire how you guys think or are thinking about trading so that you guys can have the right headspace when you're going about taking action in trading.This is mainly focused on trading psychology.This was a huge mindset shift that literally helped me turn from being an unprofitable trader into a profitable trader.So hopefully this can help you guys out as well.
So what I'd like to do with pretty much all of my concepts, you'll see me do this with every single one of the confluences when I'm explaining and teaching them to you guys, when I'm explaining the strategy, everything for me is needs to make sense.Why are we using this thing?What does this thing mean?Why are we executing an order here?Right.Why are we using certain confluences?
Because orders are getting filled or it's showing a continuation in a trend.I need to know the reasoning why.Okay.And that's where I struggled a lot with some of these other strategies that are online, like a support and resistance.I didn't like for support and resistance.You know, it's just like, oh, we break through a ceiling and then we retest the floor.The ceiling turns into a floor.You don't really know what's going on in the market versus the way that I trade and the way that I'm going to teach you throughout this entire Month, you guys will actually be able to understand, like, hey, when we take out a sweep of liquidity.And I know that for some of you guys, if you guys are brand new to trading, this may sound daunting, this may sound intimidating, but don't worry, you guys will be able to understand this.
Like, if we take out a draw on liquidity, that means, hey, we have the potential to fill orders.
Orders.What does the potential to fill orders give us the possibility to do?It gives us the possibility to reverse the trend.If we're going to reverse the trend, then I'm going to start looking for more confluences to show confirmation that the trend is reversing.And then I'm going to look to enter, see how.See how much more sense that makes compared to just, oh, like this is just some random chart pattern and you have to blindly press buy and just like, hope that it works out.For me, I like to actually understand what, why we're doing things.And that's what I want to talk about in today's video.This is strictly going to be talking about what is trading.What, like, genuinely, what are we doing when we are trading?
So the mindset that most of you guys have when you guys got onto the first video and started watching through this series is you guys were thinking, I want to make money in 2026.I want to have a better life.I want to be a millionaire.I want to live life on my own terms.I want to be free.
And all of those things are great.You know, it's good, good to be thinking that way.But it's.It's the wrong way to think when we're, when we're getting into trading.Okay, so all of you guys are getting into trading to make money.
Okay, so you're saying, why are we trading to make money?Most people think that's the objective with trading, that's not the objective with trading.And a good analogy that I like to give is, and you guys will hear me give, a bunch of these basketball analogies.Played basketball all throughout high school, one of my favorite sports.And it's very comparable to trading because trading is a skill set.Basketball is a skill set.It's very easy to correlate the two.But anyways, let's think about LeBron James, okay?Was he thinking when he was getting into basketball, I want to make money, or was he just playing the sport and was he just trying to get better at the skill?He was trying to get better at the skill.
Maybe, you know, he was thinking in the back of his head, hey, if I get good enough at this skill set, there's going to be money at the at the end of the road for me.But what does he have to do?First?He has to get good at the skill.He's not thinking.When he's on the basketball court in high school, he's not thinking, oh, this bucket is going to make me 10 bucks down the line, or, oh, this assist or this pass that is good is going to make me $15.He's not thinking like that.He's just thinking, I want to play to the best of my abilities.And then when he's practicing, is he actively thinking, oh, yeah, if I put up a hundred shots during practice, that's going to make me a hundred bucks?Or is he thinking, no, by me putting up a hundred shots during this practice, it's going to make me better at playing basketball and it's going to increase my skill set at the skill of being a good basketball player.
And then in turn, what's the side effect of being a really good basketball player?You can potentially make money and a lot of money from it.So how does this correlate to trading?So every single one of you guys, like, why are you guys getting into trading?Why did I get into trading in the first place?It was to make money.Everybody wants to make money.And unfortunately, trading is very strongly and very closely correlated to making money.The biggest issue with this is that that causes us to take incorrect action when we get onto the charts.Because if I get on to the day trading charts and I'm thinking all I want to do today is to make money, that can lead me to take a plethora of actions that are going to be detrimental to my account balance, to the funded account that I'm trading on to cause me to potentially lose money.
So if I get into the market and I'm sitting there and I'm thinking, I want to make money today.
You know, I'm going to press buy right when market opens off of some sort of fear of missing out because I want to make money, right?How do I make money?I'm going to leverage my entire account.I'm going to put my entire account on the line and I'm going to press either buy or sell.And that has the potential to make me money.
But is that what we should be doing?No.We need to be going into trading with a strategy.We need to be taking trades based off of price action based on the candlestick charts.And that's what this entire series is going to teach you guys what to do.
So in turn, when we get into the market and if we're thinking, hey, I'm only here to make money, that's going to cause us to take multiple trades that we shouldn't be taking.It's going to cause us to risk more than we should be risking.And in turn, it's going to lead us to a reward or consequence that we do not desire, which is actually losing money and not being able to predict where price wants to go.And that's actually what trading is about.How do we make money from trading?Well, we have to get good at the skill set of trading.So what is trading?What is day trading?Day trading is having the ability to predict where price on any sort of asset class is going to go with a high probability on a daily basis.That is how you become a skilled day trader.
And the best side effect in the entire world of gaining that skill set is making money.So when we get onto the charts, are we thinking, I want to make money today?No, because that's going to lead us to take poor action.However, if we get onto the charts and we think, how can I predict where price is going to go with a high probability today?That's going to cause us to take much safer, much calmer action, and in turn, it's going to lead us to a desirable result, which is potentially being a profitable trader.Okay, so how do we predict where price wants to go with a high probability?Well, that's what I'm going to teach you throughout this entire YouTube series of how we can use different confluences, build a strategy that gives us high probability of predicting where price wants to go, and then to be able to do it on a daily basis, to be able to execute this strategy, to be able to predict when one thing happens and where price is going to go following that.
That is what trading is.Trading is about being able to predict price action with a high probability on a daily basis.Okay?And that's all trading is.We have to get really freaking good at predicting where price wants to go.We aren't trying to get good.That's the thing with everything.Every successful person, every single skill set in the world, people say, yeah, that dude's really good at making money.No, he just has a lot of skills.That dude's really good.Like, think about it.The best, best basketball players in the world, they're really good at making money.But why are they good at making money?Because they're the best at their skill.The best day traders in the world, they're really good at making money.Why?Because they're the best at their skill.You think about the best artists in the world making a ton of money, or most of them are dead.
So that's kind of a bad example.But you think about any other skill set, somebody who's the best at something in the entire world.I mean, depending on what category that skill set is in, they're going to be able to maximize it and they're going to be able to monetize it, and they're going to be able to make a lot of money compared to everybody else in their field.You know, the, the worst basketball players in the world.Are they making.Are they making any money?Not through basketball, they're not.Okay, so that's how we need to be thinking about trading.When we're thinking about trading, we.I need you guys, like, write this down in your notebook.Whatever it is, you guys need to get it through your head that day trading is not, I repeat, it is not about making money.So when you guys are going through this YouTube series, you guys need to remove the thought process of.
Okay, by me learning this confluence.Is this going to help me make money today?No, it's not.But what is it going to help you do?What are all of these videos going to help you with in your trading?They are going to help you build your skill set as a trader.And in turn, if you guys can become a skilled trader, if you guys can build the skill set of being a.Being able.
Being able to predict price action with a high problem.Geez.Being able to predict price action with a high probability on a daily basis.The awesome side effect of having that skill set is the ability, the ability to make money from the markets.And that's how we need to be thinking about trading.
And it's very, very difficult to remove that from your headspace because that's why you guys clicked on this series.You guys are trying to change your life.What do you guys think about changing your life?It's boom.Life changing money.How can we change our life?Money's a tool.Money is energy.Money helps us do things.Money can help us get places that we want to be.
Okay?It gives us leverage.But we are unable to make money with no skills.The only way to be able to get to the money is by building skills that help us get there, that help us create and generate wealth.And that's what I want to do within this YouTube series.But you guys have to ship.I can promise you, literally without a doubt, in my mind that if you guys go into the markets thinking, I want to make money today or how can I make money today?You will never be a profitable trader, no matter what.If as you guys have that headspace, if you guys keep that mindset throughout your entire trading career, you will never make money from the markets ever, ever, ever, ever, ever.You will never be a net positive day trader.
You guys have to remove the mental attachment that you guys have from money in order to find success within day trading.That's the only way that you guys are going to be able to make this happen.Okay?And by doing that, it's going to help you guys one not be focused on making money so early because again, this is a skill set.This is difficult to learn.
I would be lying to you if I told you guys that.Yep, right after you guys go through this entire YouTube series, you guys are going to be freaking millionaires.No, that's not the case.Like I said on day one, this is a 50, 50 transaction.You, I'm making these videos for you.I'm going to show up every single day.It's up to you guys to watch the videos, but then also up to you guys to take action on these videos.If you guys aren't taking action on these videos and you're going to go nowhere, you guys, I'm providing you with the knowledge and the education to help you guys build the skill set in the best way possible.But it's up to you guys to take action to actually start building the skill itself.Because I can't do the work for you.You can.
And that's really what I want to focus today's video on is just removing the mental and the emotional attachment from money.And the second that we remove the emotional and the mental attachment from money within trading, the second that it's, it's just, okay, I don't care if I lose a trade.Why?Because first of all, you guys should be trading on a demo account.You guys are learning how to trade.You guys should be trading on an account that isn't real money.That's how you guys can build the skillset.Okay?So when you guys lose, you don't care because first of all, you're not actually losing real money.
And then also you're actually happy that you're.That you lost because that's a lesson and that's room for growth, that's room for improvement, and that gets you closer towards what our actual end goal is with trading is to be very highly proficient about predicting where price wants to go with a high probability on a daily basis.You guys are going to hear me repeat that over and over and over again throughout this entire series because that is what trading is.That's why the title of the video is like this.What is trading?It's predicting where price wants to go with a high probability on a daily basis.Or at least that is what a high skilled trader does.They do not make money.Making money is a side effect of the skill set that they have.
Continues the argument that losses and wins should be treated as lessons for skill development. The speaker emphasizes journaling, repetition, and removing emotional attachment to money.
Speaker A
So our goal with this entire series and with learning these confluences, learning the strategy, reinforcing our psychological discipline and learning the risk management strategy that we've built out, it helps us get better at the skill set of day trading and not get better at making money.
Okay?There's no such thing as, as being good at making money.Somebody that's good at making money just has a lot of skills, okay?And if you're bad at making money, you have no skills.So again, we need to be thinking, if we lose a trade, are we sad?Are we mad?Are we disappointed?No, we should be happy because that's a lesson learned.That's a mistake that we can never, that we can try and never make again.And then what is that going to cause us to do?It's going to cause us to grow and it's going to cause us to build that skill set of trading.Okay, so when you guys win, what are you going to do?Are you going to be happy because you made money?No, you shouldn't be.You shouldn't be happy about it.
I mean, granted you can, you can pat yourself on the back, but what you shouldn't be focused on the money.You should be looking at what did I do correctly on this trade?Why?Because our focus is not to make money.Our focus is how can I repeat that winning trade?
How can I replicate that?So I'm going to look back in my trading journal and I'm going to say, okay, what are all the things that I did correctly so that I can do this again?Because what does that help me do?It helps me become more proficient at predicting where price wants to go on a daily basis.If I'm able to predict where price wants to go on one day, I'm going to analyze the fuck out of that trade.
I'm going to look through my trading journal and I'm going to say, how can I do this again tomorrow?You want to analyze your wins, analyze your losses.Losses are lessons.Mistakes are lessons that ideally you never make again.And that is going to Cause growth.
You look at the wins, you look at the, the pros that you guys have, okay?You look at the good thing that, the good things that you guys have done within the market and then you replicate it.You do more of the good, less of the bad.That is how growth happens.That's how we build skills.
Now, just like with any skill, after learning these confluences, are you guys going to be marking them out correctly?No.That's like giving me a piano and setting in front of me.I've never played piano in my entire life.And telling me, hey, play this Beethoven piece and putting a freaking sheet in front of me.And I'm just going to be clanking away at the keyboard and I'm going to absolutely suck.But then let's say I watch a YouTube video on how to play piano.It's a beginner, beginners, whatever, YouTube video, and I say, okay, now I know a couple notes, the next day that I go and attempt playing Beethoven's thing.I'm still going to suck and I'm not going to do it correctly.But hey, at least I know a couple notes and at least I, I'm, I'm, I'm better than I was yesterday.
And then I keep learning.I keep watching YouTube videos, I keep practicing, I keep practicing, I keep practicing, I keep failing, I keep failing.I do less of the fail, I do more of the good.I keep working and I keep working on my skill set and then eventually I am going to be good at playing piano.It's the same thing with trading.It's the same thing with basketball, okay?LeBron James didn't wake up and just become the best basketball player overnight, okay?It was a lot of hours in the gym.It was a lot of like, it was just literally like putting in more work than anybody else.Just putting in, putting in significant, significant amounts of work.
Obviously, he's the goat.He's got some nice genetics attached to his body.But with trading, trading, trading.Oh, man.Trading truly is a skill based game.
There's no genetics involved.There's nothing involved.It truly is who can put in more work and who can put in the most amount of work to the point where it is unreasonable for them to not be a skilled trader.That's how you guys should be thinking about this that's how you guys should be thinking about this series is how can I watch these videos and then how can I put in so much work to the point where if I don't become, to the point where me becoming a profitable trader or Me staying unprofitable is very unreasonable to happen.You need to be putting in so much work to the point where you guys becoming a profitable trader should be expected.
Like, I know that's how it felt for me, where it's like, dude, I've been.I put in years of work, hours of chart time.So the time that I turned, like, when, when I turned profitable, I wasn't like jumping for joy.I wasn't excited.I was just thinking, it's about damn time because I've been doing all of this work and I just knew that it was going to happen.
Like, you guys see all the freaking YouTube plaques up behind me, you know, and this is, this is something else.Like, I think about my growth on social media, and When I hit 100,000 subscribers, I wasn't excited.I was like, I, I already knew that was going to happen when I got my million, million subscriber plaque.I was like, you know, this is great, and I really appreciate the love and the support that I get from my followers.But for me, as a personal accomplishment, did, did I feel anything about that?Hell no.Because I knew it was going to happen because of the unreasonable, because of all the fucking work that I put in.I, I knew that I was going to get that plaque because I was putting in the work required to get there.And that that's exactly how you guys should be thinking about trading, where it's like the, the work that you guys are putting in on a daily basis needs to be for like, if, if you guys are looking at your end goal of becoming a profitable trader or making money from trading.
It's not a matter of like, oh, I'm, I'm like, so excited to become profitable.
It's like, I just, I know that I'm going to be a profitable trader, and it's just only due time with the amount of work that I'm putting in.
So that's what I wanted to talk about in today's video is reshaping the way that you guys think about, one, making money, two, going about trading.Because I know for a fact, I mean, bro, I was a victim of it too.And victim of it for a long time until I actually got through my head like, hey, day trading is about predicting, predicting these charts, not about, you know, trying to make $500 every single day.You know, not, not everybody can have a green day every single day.There's losses that are involved with this.So the second that you just disassociate trading, the direct correlation, and that's the super unfortunate thing with trading, it's like, hey, you either made money today or you lost money today.And there's just a direct correlation versus like any other business, you know, LeBron has a bad basketball game, does that immediately mean he's going to make, he's, he's, he's going to make less money?
No, he just had a bad game.He could have a hundred good games and then one bad game.Does that make him a bad basketball player?Hell no.And it's the same thing with trading.We can have 100 green days and then one red day.But if we dwell on the red day and say, I should have made money today and oh, trading is all about making money, then on that red day I fucked up and I'm no longer a good trader.
So we need to start disassociating trading in the skill of trading with making money itself.And it's more focused on, hey, what's my win rate?How often am I winning compared to losing?Because that's showing a direct correlation to the skill set of trading.What's my risk to reward?
How much am I risking compared to what I'm winning on it, On a, on a trade to trade basis?Okay, and then risk to reward and win rate combined together, that's going to spit out whether you're a profitable trader or not, or realistically whether you are a skilled trader or not.And that's what I'm going to, I'm going to show you guys kind of how we can break down mathematically with data, how we can look at some of these online trade journals where we can input and feed in all of our broker statistics in there and it can spit out what our win rate is, what a risk reward is, how we can optimize risk management based off of those numbers.We're going to get super, super down into like the nitty gritty of stuff like that and like show you guys what percentage win rate you need and what risk rewards you need in order to be considered like a profitable trader or actually to be making money consistently from the market.
We're going to get into all of that.But the first thing that we need to do is we need to separate the emotional and the mental attachment that we have to money.And once we do that, that's when the game actually begins.Because instead of thinking, I want to make money today, it's I want to get better at trading today.And that is our first step in the right direction to learning the skill set of trading.So with that being said, I love to appreciate you guys.We'll get into some actual trading stuff tomorrow.Peace.
Introduces TradingView and walks through setting up a clean chart layout and New York time. The speaker prepares viewers for reading candlesticks and understanding chart structure.
Speaker A
Good boys.Welcome to the beginner side of things.This is going to be an introduction to trading view how to read a candlestick chart.So we're going to be going over how to understand candlestick anatomy, how to identify highs and lows in the markets, and then how to identify trends in the markets.And then from this we will start delving into kind of what most people are going to want to be a part of the series for, which is Liquidity explained, Fair Value gaps explained advanced liquidity concepts, Inverse fair value gaps, Advanced imbalance concepts, fucking SMT divergences, Time theory, all of this stuff that actually helps us become full time traders and actually helps us get good at trading.And if you guys remember yesterday's episode, what is trading is being able to predict where price wants to go with a high probability on a daily basis.
So in order to do that, we need to actually see price.Okay, there's two different types of traders.And I'll preface this before we get into looking at the chart, this is just super quick.There's two different types of traders.There's technical analysis traders, which is what I am, okay?I do the majority of my trading purely based off of what the chart is telling me, so what price is telling me.And then there's fundamental analysis traders, okay?These are people who very rarely actually are looking at the chart and are more so looking at the news.So there's several good examples of this.But somebody like Warren Buffett for example, he's doing his investing off of just the global news or the news around the company.You know, he's reading earnings reports, all that stuff.He's not necessarily focused on like, hey, this candlestick closed this way and then this candlestick closed this way.
So I'm going to look to invest right now.He doesn't do any of that, okay.He focuses on the fundamental, the big macroeconomic side of things.And again, he's more of a long term, you couldn't even call him like a swing trader.He's just like an investor, you know, like buy and hold, you know, hopefully that you're, you're right over the long, long period of time.
But for us, we are actively trading price, right?That's how I explain what trading is.That's what day traders do.We are just trying to buy low, sell high, sell high, buy back low, right?And that's how we're going to make money.Obviously there's going to be mistakes involved but in order for us to do this, we have to be able to see price and this gets us to Trading View.Okay, so this is the first time that you guys are going to be looking at a chart.What I want you guys to do, whether it's during this video or after this video, whatever you guys can follow along with me.You guys are going to go to tradingview.com this is the, I mean, the only kind of charting platform that I would use for active live charting.Okay.There's a couple back testing softwares that we'll get into much, much later down the line in this to help you guys practice this skill set.
But in terms of live trading and reading, the live market, Trading View by far has the cleanest ui.Everybody in trading uses it.I literally don't know anybody that is an active day trader that doesn't look at Trading View charts.So when you guys go to tradingview.com this, it's not super overwhelming.You'll see a Get Started for free tab right here.I'm going to click this and then all my information is going to pop up.So I'm just going to put my face back over the screen real quick and then click on this.But essentially before we, before we do that, you can see that you can do, you can get started for free.So I have a premium version of Trading View, but that's literally just so that I can have multiple indicators on, on my chart.And we'll get into the indicators that I use later down the line once we get through all the confluences.
I personally don't use any indicators to actually take trades, but I use indicators to help me mark out my confluences.But that's besides the point for you guys getting started.Awesome thing about Trading View, you guys can get started for free.So you guys are going to click get started for free.
I'll do the same on my end.All my.Okay, awesome.My information hasn't popped up yet.You'll get something like this that shows up, okay, and it says free until you're ready.So you can literally do boom, $0 forever sign up, no credit card needed.I'm pretty sure for me, I'm on one of these plans.Like I think I'm on the plus or the premium plan.Like I said, you know, I, I'm doing this full time.You guys definitely do not need to be purchasing the premium plan.You guys just go ahead and sign up for free.So you guys are going to click that sign up for free.And then this is where all my Information pops up.So I'm just going to put in just so I can get a like base base trading view layout.Okay.
Awesome.Oh, oops.I signed into my actual account.Let me sign back out.Sign back in.
Let's do this account.This account should have nothing lit.Okay, cool.So once you're signed in, it'll look something like this.Okay.Again, pretty overwhelming.But what you guys are going to do, you're going to click on Trading View Home and then from there there's going to be something that says launch supercharged.So that's what we want to do.We're going to have a watch list full of a bunch of stuff.On the, on the left hand side we have indexes, we have forex, we got commodities, we got bitcoin to the right hand side.
This can be super daunting, this can be super scary.But don't worry, we're going to clean this up for you guys.All that you guys are going to do is you're going to click Launch Supercharts.Then that's going to take you guys into something that looks like this.Now mine, my chart, I actually have already programmed this to make it look this way.
So I want to see if I can reset this to base.
So your guys's will be looking something like this.Okay.And you guys will also probably have some graphs on the back.
You guys will have something like this.You guys will have.
Yeah, this is pretty approximately what your guys's chart will look like.Again, very overwhelming over stimulating.So you're going to do exactly what I did and we're going to reformat these chart colors.Me personally, I do not like having green and red candlesticks on my chart.So if we look at what my actual chart looks like, it looks like this.Right.And if we go to the chart settings, you guys can do one of two things.You guys can copy my settings if you guys want to use the same candlestick colors as me.But I like to avoid using the green and the red candlesticks for one reason.It's because it actually the colors of green and red negatively affect our psychology when we're trading.
Like we talked about yesterday, we need to find ways to be able to disassociate our ourselves and our mental from the connection to money.And unfortunately on trading a green candle, what do we associate that with making money?A red candle, what do we associate that with?Losing money.Even though we're going to be taking long positions, so buy positions predicting that the market's going to go up and sell positions, short positions, predicting that the market's going to go down regardless.
We are the.The colors green and red are just known psychologically to affect how we think about money.And in turn, that's not good for us psychology, psychology wise.So I use pretty neutral colors.I use blue and black.
I know there's some people that will do like white and black and then change the background to something like a gray.You guys can choose whatever colors you guys want.Okay, this is how I mind set up.I blue and then black all the way through.And then on the back, I have just a solid white.
No grid lines.This is what my crosshair looks like, really.Everything else is kind of not really needed.But what I also want you guys to do is notice right here where it says time zone.Okay, we are going to set our time zone to New York time.Even if you guys are in Africa, if you guys are in Brazil, if you guys are in California, we need to be on Eastern time.Our brains, everything just need to, need to.Needs to be programmed to east Eastern time.Well, you're probably saying, well, I live in Africa and I don't live on Eastern time.Well, the market lives on Eastern time.
So in turn, we have to live on Eastern time.At least our charts have to live on Eastern time.Because when we're explaining market open, I'm going to say, hey, market opens at 9:30, 9:30am Eastern Time.For me, living in Puerto Rico, market opens at 10:30am Eastern.Saying Eastern time.Because my head is so, like, just built to be on Eastern time.But for me, market opens at 10:30am Puerto Rico time.But on the charts, market opens at 9:30am Eastern Time.And we just need to be on the same time time zone or time frame as the market.Because when we're explaining session open, session closes.
Like, when does the New York Stock Exchange open?When does pre market in.I don't want you guys to be on Sao Paulo time, okay?And me saying, hey, market opens at 9:30.And for you guys to be putting a line at market open, but you're on Sao Paulo time and I'm on New York time.And you're like, hey, the strategy doesn't work.And it's like, well, yeah, because you're, you're, you're three hours behind or you're two hours behind.So we need to set this to New York time, all right?And once we've done that, okay, we're going to have.Let's reset this and let's remove this, okay?We're going to have something that looks like this.Now, again, this can be very daunting.And I don't really want to talk like about how do we even figure out where the price.Price is going to go off of this.
We're going to.We're going to learn that in due time over the course of these next two weeks.Okay?We're going to be figuring out like, hey, price comes up, took out this high and then went down.Why did that happen?I could explain that all to you right now, but it would be a little bit confusing.
So we're not going to talk about that right now.We're going to talk about what do each one of these candles represent?
Teaches the four parts of a candlestick and how different timeframes change what each candle represents. The speaker uses simple examples to show how to read open, high, low, and close.
Speaker A
How can we identify highs and lows in the market and then how can we identify trends in the market?Because that's the first thing that we need to do.It's the bare minimum.
Because on these charts, every.Every single one of these charts, no matter what, what time frame you're on, whether you're on, the daily time frame, the weekly time frame, the hourly time frame, these candlesticks make up and show us every single second of price movement throughout the day, throughout the hour, throughout every single five minutes.And if you guys are unable to understand the can the Japanese candlestick anatomy, okay, then we.It's like we're not even going to be able to go anywhere.Okay, that's another thing.
There's a bunch of different ways to read these charts, okay?There's bar, there's bar candles, there's hollow candles, there's volume candles, there's line charts, there's step line charts, there's columns, there's high loads, there's volume footprint, all of this stuff.There's heikin ashi candles, there's Renko candles, okay?All of these different types of candlesticks.But for us to be able to read the market, Japanese candlesticks are by far the most valuable because they tell us four different things about every single time frame.So what we're going to do.So I'm going to draw out a candlestick for us here.This is going to be a green candle.Okay?So this is what.
This is what an up candle looks like.Okay.And this is what a down candle looks like.Now, Japanese candlesticks tell us four different things about what, about what happened during.During this period of time.
So every single candlestick represents a period of time, depending on what time frame we're on.And I'll explain that a little bit later.But every single candlestick Represents a period of time where Price went during that time, where Price opened and where Price closed.So we'll go over time frames.Right now if we go up to this left hand side up here, we can see that there's a bunch of different time frames.
Okay?There's the one second, there's the five second, there's the one minute, there's the five minute, there's the one hour, there's the one day, there's the one week, there's the one month.Okay, whatever time frame we click on, okay?So right now we're on the daily time frame.That represents the period of time that every single one of these candles represents.
So right now we are on the one day time frame.That means every single one of these candles represents 24 hours worth of price action and price movement.Now, what are the four key price points that these candles tell us about what Price did within the 24 hours of the time frame that we're on the bottom of a green candle of?So this right here, we see the filled in.This is what we call the body of the candle.Okay?So from this line up to this line, this is what we call the body of the candlestick.And these little lines, these are like snail trails.Okay, so imagine you're a snail.You got a leaky butt, okay, you got like booger booger semen serum coming out of your butt.
And you scooted your butt all the way up here and then you came back down.There's going to be a little snail trail showing on the mud or on whatever the concrete that, hey, there was a leaky butt snail that went all the way up here at some point in time.Same thing with this wick down here.Okay, Leaky butt snail at some point in time during pretty much candles are leaky butt snails, essentially, but specifically the wicks.Okay, so at some point in time during this 24 hours, leaky, but snail went all the way down here and said, oh, I'm going to turn around and left a little snail trail on the concrete showing.Hey, there was a.There was a snail with a leaky, but that went down here at some point in time.And that's essentially what it's showing us with Price.
Okay, Price has a leaky, but like, if, like, wherever Price goes, this candle is going to show it.Okay, so the bottom of the body, okay, so again, from here up to here is the body of the candle.
This is the top wick.This is the bottom wick.The bottom of the body of the candle is the candle Open.The top of the body of the candle is the close.The top of the top wick is the high, and the bottom of the bottom wick is the low.
So again, this can be a little bit confusing.So let's walk through it.We are on the daily time frame.So that means every single 24 hours, a new candle opens.Okay, so let's say, boom, 24 hours is up.
Or let's say this.This candle just closed.When this candle opened, it opened at this price right here.So if we look to the right hand side, we can see the price at which it opened.$30,241.50.
That's where this candle opened.And over the course of the 24 hours, price came down.This was the lowest point that it got to during the 24 hours.So $29,777.50.And then also at some point in time during that 24 hours, price came up to this high, which is at $32,227.
And then at the end of the 24 hours, where did price close at?It closed right here.So at the start of the 24 hours, where was price at?Right here.Sometime during the 24 hours, the lowest point of the 24 hours.
24, 24 hours it got to was $29,714.The highest point that it got to during those 24 hours was $32,214.And then at the end of the 24 hours, it ended right here.So this was the start of the 24 hours.This was the lowest point that price got to during the 24 hours.
This was the highest point price got to during the 24 hours.And then at the end of the 24 hours, price closed right here.Now, for a down candle, it's the exact same, except this up here is the open.Right?Because over the course of 24 hours, if we open at a high price and we close at a lower price, what's.What's that going to make this candle?It's going to make it red and it's going to be a down candle.So on a down candle, this is the open.This is still the highest point that price got to during the 24 hours.This is the lowest point that price got to during the 24 hours.
And then once the 24 hours was up, this is where price was and ended up closing.So we can see on a bullish candle, boom.We can even show you guys in real time markets right now.So this is another nice thing about trading view if you look to the right hand side, you can see the time that is left for this candle to close.So this candle is still forming.
So let's do a little lesson right here.Where was the open of this candle?This is a down candle, Right?So the open was right here where the body is.Where the body starts at $25,478.Where was the highest point that Price has got to within the past 19 hours and 30 minutes that this candle has been open?Right, because it hasn't been a full 24 hours yet, or else this candle would be closed and wouldn't still be forming.The highest point that this candle has gotten to.Look at this snail trail.Oh, Price came all the way up here to $25,806.And throughout the 19 hours and 30 minutes, where was the lowest point that Price has gotten to?Right here, the bottom of the wick at $25,294.And right now, at this point in time, where is Price currently?Well, we can see it on the right hand side.
It's at $25,391.50.
So each one of these candlesticks represents a day's worth of price action.So we can look at yesterday.Where was the high, where was the highest point that yesterday got to over the course of 24 hours?Right here at $25,716.Where was the open?
The open was right here.So price opened at $25,683 at the start of that time period.Where was the lowest point that Price went to during that 24 hour time period?Down here at $25,429.And then at the end of the 24 hour time period, where did Price close?
It closed down here at $25,456.This gives us a very good look again, as we were just explaining of what price did throughout 24 hours.Now, let's say we want an even closer look.We can just go down into a lower time frame.So instead of looking at things on a 24 hour scale, we can look at things on a four hour scale.
Now, by me changing the time frame, what does that do?Now, instead of every single candlestick representing a day's worth or 24 hours worth of price action.Now, every single one of these candles represents four hours worth of price action.So now with that in mind, we can say, all right, we, we know that every single one of These candlesticks represents 4 hours of price action.And then on the right hand side what can we see about this current candlestick?Well, when did it open?It opened around 2 hours and 30 minutes ago.Okay.Because it has an hour and 25 minutes left for it to close.If we look at the candlestick beforehand, during this four hour time period, where was the highest point that this, that Price went during this four hour time period?
Up to here.Where is the lowest point that it went to during this four hour time period?Down here.And if we zoom in real freaking close, where did price open?This is a bullish candlestick or an up candle.
It opened right here.Right, because it closed up.It's a blue candle.So we know that it opened lower and then closed higher.So it opened at $25,730.And then where did it close?Right here.So during the four hour time time period, it opened right here.During the four hours, it got all the way down here.And then also during the four hours, it came all the way up here.
But at the end of the four hours, it closed right here.What happens if we scale down to the one hour time frame?Now we can see, if we go to the one hour time frame, we can see that for our candlestick, instead of just in one candlestick, we can see it in four candlesticks.So we can see that that four hour candlestick opened on this hourly candlestick.And then there is one candle, two candle, three candle, four candles.
So every single one of these candles, it's showing us the same price movements.But now we're on the hourly time frame.So we can see even a deeper look of, okay, we know exactly what price did during that during those four hours.But what, what if we want to see what price did during every single hour within those four hours?Well, now we can, we can say, okay, price opened right here during the first hour of those four hours.
The highest point that it got during that first hour was up here.The lowest point that it got to was right here.And then after the hour was up, it closed right here.And we can get even lower.We can see, okay, over the course of that hour, we can see during 15 minutes.
Okay, so now we have four candles that are showing us 15 minute time intervals that happened during that hour that we were just breaking down.And you can go as low as possible.You can see five minutes.You can see one minute, okay, where every single one of these candles is showing one minute's worth of price movement and it's all showing us the same thing.So on the one, the one minute, okay, if we look at this one minute chart, there's no difference in the price movement besides the number of candles that are on the screen, right?Because if we scale this back to the five minute, we're still seeing the same price movement, but just on bigger candles because they're representing larger times.If we scale back to the hour, it's still showing us the same time movement, just bigger candles, because each candle is representing a larger period of time.
And then if we scale all the way back to the daily time frame, we can see one day's worth of price action encapsulated in one candle.I'm going to get in deeper as the series goes on, on what time frames are going to be beneficial for us, what time frames.We want to be looking at all of that stuff.
But I don't want you guys to get overwhelmed today.I know when I was watching my first video explaining candlestick anatomy and time, time, time frames, like, I was freaking out.All you guys are probably freaking out right now.Don't worry.Take a deep breath.
It's all going to be okay.You're going to understand this very soon.There's no reason to get overwhelmed just yet.Okay?Just yet, Just yet.There's no reason to get overwhelmed because I know you guys are probably thinking, how the fuck am I supposed to remember all of this?Trust me, eventually it's going to become second nature.Just like basketball.Like, you learn how to dribble a basketball, you're bouncing it off your foot, you're hitting it off your knee, and you got to look down to make sure that you're dribbling it correctly.But eventually, once you get good, you're not even, you're not even looking, and it's just second nature.You put the ball on the ground and you know exactly where it's going to come back up to your hand.You're hitting it between the legs and you don't have to look down at the ball.
Like, you're able to do all these moves with, like, subconsciously without even having to think about it.So that's, that's eventually where you guys are going to get to.Don't worry.
Right now this seems super overwhelming, but don't worry.We, we are going to help you guys progress and get you to where you need to be.
Explains how highs and lows form in the market and how they create uptrends and downtrends. The chapter ends with homework to practice spotting highs, lows, and trend patterns.
Speaker A
Now let's talk about.Now that we understand candlestick anatomy and a little bit about time frames, we are going to talk about highs and lows in the market.Now we need to understand highs and lows in the market because this is going to Be very key in our strategy and understanding where price wants to go and being able to predict price action with a high probability on a daily basis.To make us good traders, we also need to understand trends.Okay.And order flow.All right, so I know all those things sound daunting and sound scary.They're really not.It's very, very simple.I'm going to explain to you guys highs and lows right now.So let's just think.If you guys think about a high and a low, typically, what does.If we, if we were to make.
If you were to just imagine, what does a high consist of?Well, is it just constant moves up forever and always?Well, not, not really.Because in order to establish a high, what do we need?We need.
We need.I mean, not price, but really anything to give us a peak.Right?And it's the same thing with trading.So we can't just move up forever and always.
There's always going to be a move up and then eventually followed by a move down.And following the move down, that's when we create these peaks and those are highs.Okay?And then if we think about a low in the market, it's the same thing.We can't just move down forever and always.
Eventually we are going to get a move up.And then this looks like a low.This doesn't look like hello.Right.Because it's like, where, where's the low?Where does, where does it end?With a move up.That's all it is.Highs and lows consists of move ups, moves up, or a high.We'll do high first.
A high consists of a move up followed by a move down.A low consists of a move down followed by a move up.Okay.Pretty simple concept, right?Just a high is a move up followed by a move down.
A low is a move down followed by a move up.Congratulations.You guys know what highs and lows are in the market?I know, I know.Probably the most difficult thing you've ever learned.
This is.This, is this learning.This is going to help you make more money than your college education will ever be able to get.You, believe it or not, move up, then a move down, that's a high.Move down, then a move up, that's a low.Now why is this important?Because highs and lows make up trends in the market.Now this is important as well, because trends are what move the market.Right?There is uptrends, there's downtrends, and then there's consolidation.
Okay, so we're going to talk about three different ways that the market can and is able to move.And it sounds dumb, but it's.I mean, it's true.Okay.The market can move up or down.
Crazy, right?Or sideways.Okay.And there's three different ways to identify whether we're mov or sorry.There's ways to identify whether we're moving up, whether we're moving down, or whether we're moving sideways.
And the way that we identify that is through being able to identify highs and lows in the market.Like I was just mentioning, a high.And a low consists of a move up, then a move down.A low consists of a move down, then a move up.Well, how are we supposed to identify a move down in a move up?Well.Awesome.We just learned about candlesticks.So what does that mean?Well, we need an up candle followed by a down candle to create a high.
We need a down candle followed by an up candle to create a low.Let's go on here, and let's look for them.We have an up candle followed by a down candle.That's a high.We have a down candle followed by an up candle.
Awesome.You take the lowest point of those two candlesticks.So whichever wicks wick is lower.Boom.This is a low.
We have an up candle followed by a down candle.We take the highest point of those two candlesticks.So this is the highest point that this candlestick got to.But this is the highest point that this candlestick got to.So this is our high.
Again, I don't want you guys to get overwhelmed, but what I want you guys to do is to be on your trading view and mark out five different examples of a high and five different examples of a low.So we have a move up, then a move down.What do we do?We mark the highest point of those two candles.Which one has the higher wick?This first candle does.Awesome.This is our high.We have a move down, then a move up.Lowest point of those who candlesticks.Boom.This is a low.Now, to be able to identify trends in the market, now that we know how to identify highs and lows in the market, we need to be able to identify a series of highs and lows that form a pattern in the market.So how do we know when the market is moving up?
The market will form something called an uptrend, which consists of higher highs being created and higher lows being created in the market.So when we're moving up, the market will form an uptrend.And an uptrend looks like this.Where we come up, we make a High.And then we come down and we make a low.
And then we come up, make a higher high.Come down, make a higher low.Come up, make a higher high.Come down, make a higher low.Higher, high, higher low.
Notice how this is.This is the high.And then market comes up and makes a higher high.This is the low.Market comes up, it makes a higher low.
This is an uptrend, right?If we look at the S P500 over the course of months, right, we can see that this follows a pretty, pretty, pretty strict pattern of an uptrend.Right?That's why everybody invests in the S&P 500.Right?We can see low right here.We can see a high right here.We can see a low right here.What is this low?Higher, low, high.
Higher, high, higher, low.Higher high, higher low.Higher high, higher low.We have the COVID move down, but that's.We'll talk about what this is on a later date.
Higher, high, higher high, Higher low.Higher high, Higher low.Higher, high, higher.Okay, so the S P500 is just forever and always, at least on the high time frames in an uptrend.That's why a lot of people invest their money into it.Because over the course of a long period of time, it just keeps going up.Okay, now that's an uptrend.That's when price is moving up.Okay, we know that price is making higher highs and higher lows in the market.Now what happens when price is moving down?
Well, it's the same thing when price is trending down.We are making lower highs and lower lows in the market.So if we're moving down, we make a low, then we make a high, then we make a lower low, then we make a lower high, then we make a lower low, then we make a lower high.So there's a low, there's a high, lower, low, lower, high, lower, low, lower, high, lower, low, lower high.And that is a downtrend.
That's how we can spot the market moving down.Now if we look here, let me try and find a good example of a downtrend.This is decent.It's good enough at least.Okay, don't look at any of this on this side because we'll, we'll get into like how we can actually decipher all the price movements and break of structure and how new trends form.But right now, I just want us to be able to spot trends.Trends.We have a high right here.Move up, then a move down.We have a low right here.Move down, then a move up.What do we go, do we come down, we make a lower low, move down than a move up, we come up, we make a lower high, move up then a move down, come down, make a lower low, move down than a move up, come up, make a lower high, move up then a move down come down, make a lower low, move down then move up, come up, make a lower high move up than a move down.
And right now we are in the process of putting in a lower low.So this is a very distinct, very easy to tell that we are in a downtrend because we have a high, we have a low, we come down, we make a lower low, make a lower high, we make a lower low, make a lower high, make a lower low, make a lower high, make a lower, even lower low.And this is how we can identify trends.
Now, trading is not as simple as saying, hey, we're in an uptrend.I'm just going to blindly press buy because trends can break, trends can change.Okay, Just because we're in a downtrend doesn't mean, hey, I'm going to press sell right now because we're in a downtrend and price is probably going to go lower.That's not the case.But in order to predict where price wants to go with a high consistency and a high probability on a daily basis, because that's what we're here to do, we need to be able to identify these market trends and be able to at least see them on the chart and be able to understand them.
Okay, so we learned a lot today.I kind of want to end this video here, but you guys have homework.So what I want you guys to do is first of all obviously set up your guys trading View account, choose some chart colors that you enjoy, make sure that it's set to New York time because that's how we're going to be operating for the rest of the series.Regardless of if you live in Africa, regardless of if you live in Mexico, you need to be on New York time.You need to start programming your brain.Hey, if I want to be an actual day trader, then I need to be on New York time.I need to be on esd.Okay.At least your charts do.Bare minimum.
Okay.The second thing that I need you guys to do is once you guys get set up on Trading View, I want you guys to just literally just play around with these time frames.So rotate from like the four hour to the one hour and see.Okay, yeah, there's four one hour candles that encapsulate a four hour candle.And identify, practice identifying the open, close the open, high, low and close of every single candlestick and being good at identifying that.
The next thing that I want you guys to do, do like 5 reps.If even more is even better.Okay.You know, like the more, the more work and the more effort that you guys put in, it's going to be better for you guys.What, what else I would like you guys to do is I want you guys to identify 5 highs in the market.
So 5 up up candlesticks followed by a downs candlestick and finding the highest point of those candlesticks together.Five lows in the market.So move down.Then it moved up.Okay, Find the lowest point of those two candlesticks, identify five uptrends.
So a series of higher highs and higher lows being formed in the market.I want you guys to spot five downtrends So a series of lower highs and lower lows in the market and then from there we can go into tomorrow's video.So that being said, love and appreciate you guys.Today was rather beginner friendly, but as we start getting deeper into the series, we are going to start getting into very, very advanced stuff.So again, if you guys are brand new, take your time, don't feel rushed because we're going to very quickly start speeding things up.
If you guys are advanced again, you guys probably didn't need this video, but it's always good for a little reminder and yeah, I'll see you guys tomorrow.
Defines liquidity as resting orders and explains why highs and lows attract buy and sell orders. The speaker shows how market makers use liquidity sweeps to manipulate price and create reversals.
Speaker A
Liquidity, Liquidity explained.Numb nuts.Welcome to finally when we can actually start talking about fun stuff.Holy.
The first couple episodes were boring.We're so freaking boring.You guys know how difficult that is to sit down and talk about candlesticks.Now we can actually get into something beneficial.Liquidity.
If you guys don't understand liquidity, then you guys are never going.Well, I'm not gonna say that because there's a lot of people that make a lot of money from trading from a bunch of different strategies.But liquid liquidity is by far one of the most important concepts for the way that I trade and for the way that the vast majority of a lot of other profitable traders trade.And if you guys don't understand this concept, then just rewatch this video 100 freaking times and get it through your brain.Today is going to be liquidity explained.
Tomorrow's going to be advanced liquidity explained.And then we're going going to keep going into all these other concepts.So first thing that we need to talk about today is liquidity.What is it?How to Identify it, why it's beneficial, and how we can make money using it.Okay, let's jump onto the charts, dude.Also, this is what I want to do.I realized that I wasn't presenting myself in a good looking, hot manner.And I can realize that I can be a bit of an eyesore sometimes.So I got ready for you guys today.I dressed up.Even though I'm spending literally every single day or every single day in my house, I don't go outside, I don't do anything.So you're thinking TJR is looking good.I'm doing it for you.Okay, we got computer in front of us, right hand gripping schlong, left hand lotion.
Let's get into liquidity, and let's try and make you guys bust with some liquidity.First and foremost.What is liquidity?Okay, what is liquidity?Liquidity is resting orders.Okay?That's all it is.Okay?It's just resting orders on the chart.Now, why is this important?
Okay, so the first thing that you guys are going to write down, all the beginners, okay?What?Geez, we're glitching?What?
Speaker B
What?Liquid what?Liquidity.
Speaker A
What is liquidity?What?
Speaker B
Liquidity.
Where?Liquidity.
Speaker A
What is liquidity?Resting orders, okay?And all of you advanced people, you guys are probably gonna be like, I already know this.Shut up, shut up, shut up,
Speaker B
shut up and trade, bitch.
Speaker A
Okay?Shut your mouth.You guys are going to learn something from this, okay?What's liquidity?It's resting orders, okay?Now why is this?Why.Why is liquidity important to us?Okay?Why do we want to know where resting orders are?Well, in order for the market to move, it needs what orders to be filled in order to push the mark, in order to be able to push the market in the direction that it wants to go.Because if this.There's no orders getting filled, then the market's just going to go sideways, okay?And not move at all, okay?Orders are constantly getting filled while the market's open.Okay?So why do we want to know where liquidity is?Because there's resting orders and at areas of liquidity.I was about to jump forward and give you guys a sneak peek or tell you guys the secret of where liquidity is, but we're not quite there yet.
We're going to be there in like two seconds.Okay?So now that we know what liquidity is first, okay, we're glitching.We're glitching.
What is liquidity?It's resting orders.Why is that beneficial for us?Because the market needs Orders to move.So obviously us as traders, we would like to know where these orders are lying.
Because from there again, what are we trying to do with trading?We're trying to accurately predict where price wants to go with a high probability on a daily basis.Okay?Once we understand that, we know that if we can spot resting orders in the market, then we are going to be able to accurately predict where price wants to go.Because if we know where liquidity lies and if we know where orders lies, then we are going to be able to take trades based off of those orders in the direction that those orders are going to push the market.
Now we're talking.So liquidity is literally the center.The center, the totem pole.The like, I don't even know the, the better explanation.Besides, it's the goat, the goats of confluences, okay?Because this is where everything of our strategy begins.It begins with liquidity.It begins and it ends with liquidity, okay?So that's why it's important.Where does liquidity lie?
Where are the orders?
Speaker B
Where orders.
Speaker A
Where.Where the are they?Let's think about this before, before I tell you guys, let's think about this.What did we learn?When was that?Yesterday?Yes, yesterday.What did we learn yesterday?
How to identify trends.How to identify highs and lows.So if we as traders know that the market moves in higher highs and higher lows and lower highs and lower lows, what can we safely assume?Okay, we know that when we're forming an uptrend, people are probably going to be pressing by, okay, and when people are pressing buy, because the majority of people understand this market structure order.This is like very, very beginner stuff.Most people understand the market moves in higher highs and higher lows, lower highs and lower lows.With that understanding, when we're in an uptrend, most people, they notice and identify, hey, when we push above this high, I'm probably going to press buy, okay?I'm not telling you guys to do that, but that's what the vast majority of people are thinking.Why are they thinking that?Because they're like, hey, we're in an uptrend.
And once we push past this high, that means the uptrend is confirmed and we are going to go up and make a higher high.So they're pretty much betting on the fact that once we push above this high, we're going to make a higher high.And that's how they're going to make their money, right?From pressing buy above this high and then trying to close somewhere up here or regardless if it comes down a little bit, they're still probably in profit because it doesn't come back underneath this high.That's not what I want you guys to do.
And I'll explain a little bit later why that's the case.But a lot of people are pressing buy above highs, okay?On top of that, when these people press buy, what are they doing?Well, there's two ways to take a trade, okay, in these markets, okay?It's by pressing buy and by pressing sell.The goal is to buy low and sell high, sell high and buyback lower.Okay?There's two different directions, right?You can make money in both ways through day trading, okay?This isn't like investing where we're only trying to buy low and sell high.
We have the opportunity to make money both ways in the market, okay?We're switch hitters, okay?We can put it in the cooch or we can put it in the butt.Doesn't matter.Okay?All fair game around here does not matter.We're accepting of both ways, okay?You can be a switch hitter any day of the week when you're a day trader.Outside of that, we.We won't talk about it.Okay?So when we're pressing by above highs, what do we want to do?We want to protect our orders by using a stop loss.This is a very useful tool.It helps us so that we don't lose a significant amount of money.
So if we understand in an uptrend we are making higher highs and higher lows, and if most people are pressing buy after we push above highs in the market, what are they going to do or where are they going to put their stop loss?To protect their orders, they are going to put it underneath the low.Why are they going to put it underneath the low?Because if this is a true uptrend, then ideally we will not put in a lower low and we will actually put in a higher low.So this is our invalidation point, or these traders, invalidation point.
They're going to be pressing by when we push above a high, and then they are going to put their stop loss or their protection point underneath the low.Because ideally, if this is a true uptrend, we push above the high, we're going to make a higher high, putting their trade in profit.And in turn, if it's a true uptrend, it's going to put in a higher low.And that's why we have the stop loss underneath this low.Because if it's a true uptrend, then this stop loss shouldn't get hit.And again, it's to protect us from.Just in case market structure wants to shift.If market structure shifts out of this uptrend, then boom, this stop loss gets hit.You lose money on that trade.Now you're probably saying, tjr, why are you telling me about all of this stuff?This is boring.This is lame.
This is useless.Wrong.This is the most useful information that you guys will ever learn in day trading.
Because we are just doing that method right there.Just going through that exercise.What did we do?We just identified two areas where orders are resting.Oh, yeah, get down there, buddy.Suck me off.Underneath the desk.Suck it, buddy.Yep.And what did we just identify?
Where liquidity is.Because liquidity is resting orders.So what is resting above highs?Buy orders.What is resting underneath lows?Sell orders.And that's for people that are looking for long positions because again, they're pressing buy when highs get pushed above and they're pressing sell or their stop loss is underneath lows in the market.Okay, so there's going to be resting buy orders above highs.Sell orders below low.Sorry, I'm glitching.That was a big minus sign.You get the point.Now if we go over to the right hand side right here when we're talking about downtrends, it's the same situation if we're in a downtrend.Okay.So this was putting in the.In the cooch.Okay.This is when you're putting it in the.But again, no hard feelings.I'm all for it.
Okay.Especially when we're trading outside.Do your thing.Okay.When we're in a downtrend, this is the opposite direction.So same exact situation as the uptrend, but downtrend is just the opposite.So if we're in a downtrend, again, most traders are going to say, hey, we're making lower lows and lower highs.So when we push underneath this low, I'm going to press short or I'm going to press sell.Why?Because we are in a downtrend and we're probably going to make a lower low.
And then on top of that, the people that are pressing Sell, once we push underneath this low, where are they putting their stop loss?They're putting their stop loss above highs.Okay.So notice we have two sets of resting orders.Now.
We have people who are going short on downtrends.They are pressing Sell when we push underneath lows and they are pressing Buy or exiting their positions or putting their stop loss above highs in the market.So we have two sets of resting Orders.There's people that are entering into positions when we push above highs, and then there's people who are exiting positions or getting stopped out when we push above highs.So there's two sets of resting buy orders above highs.Now, that's a lot of orders.Not only do we have people pressing buy when we push above highs in the market because they think price is going to go higher, but we also have people that are forced to press buy that are putting stop losses above highs in the market that are going to get stopped out if these highs get pushed above.Why is that important?
Because that is where liquidity lies.And what is liquidity?Resting orders.So again, there's people that are looking to press buy when these highs get pushed above.And then there's people that are exiting their trades and press and being forced to press buy because that's where the stop loss is.Above highs.Same thing with lows.
When we push underneath lows, what is happening?People are entering into sell positions.Okay.And then also there are going to be people when we push underneath lows.Like, let's say we push underneath neat these lows.
There are people getting stopped out of their buy positions and being forced to to enter into cells.So there's two sets of resting orders underneath lows.There's people who are entering into short positions or sell positions when we push underneath lows.And then the people that were previously in buy positions when we push underneath these lows, they are getting stopped out.So what did we just learn from that entire conversation?
Well, we learned a couple very useful things.We learned where resting orders are.And you're probably saying, well, tjr, I'm on the spectrum and I don't know what you just said.Okay, Timmy, shut up.I'm going to tell you, where do orders lie above highs and below lows in the market?
Because there are people when we push above this high.And let's just put on one trend so we can show this easier for you guys.
Speaker B
Where orders,
Speaker A
where are they?They are above highs and below lows.And that is where liquidity lies.So let's say the market is trending up.Okay?This is our little uptrend.There are people that are going to be pressing by when we push above these highs.And then there are also people.Here, let me redraw this real quick.
Okay?This is good.
When we push above highs, there are people pressing by.There are also people with cells resting underneath lows.
Okay?Why is this beneficial for us to know?So there are some people that see this and think, hey, we're in an uptrend.So when we push above this, above this high, they are going to be pressing by.There are also people, because again, people have different opinions on the market.People may think that the market's moving in a different way.Not everybody is going to be pressing, pressing buy.When we push above these highs.Some people on this move down, they might be pressing sell.And if they're taking a short position on this move down because they think the market's going to continue lower on that move down, what do they have above this high?
They have buy orders as their stop loss.So there's two times the amount of buy orders.There's people that are getting stopped out from their sell positions when we push above this high.And then there's also people that are pressing buy that are entering into long positions.So there's people that are exiting their sell positions by pressing buy.Because again, if we try and sell high and buy low, that's how we make money from the market.So these people see the market moving down, they press sell.Where are they going to put their stop loss above the high.Because if that high gets pushed above, then their bias is wrong in the.In the uptrend is continuing.
And then there's also people who say, hey, when this uptrend continues, or if this uptrend continues and we push above this high, I'm going to press buy.So there's two sets of buy orders above highs.There's also two sets of sell orders underneath lows.There are people that Let me get rid of this.Get rid of this.
Get rid of this.Get rid of this.Get rid of this.Get rid of this.Oops.
Get rid of this.Get rid of this.Get rid of this.There are two sets of sell orders underneath lows.So let's say, for example, right here, there are people that are pressing by on this move up.
Okay, the people that are pressing buy on this move up, where are their stop losses?Their stop losses are underneath this low.Now, what happens when the market pushes underneath this low?The people that were in buy positions, they get stopped out, so they have to sell their position for a loss.So all the people pressing buy on this move up, when the market comes down and hits that area, they are getting stopped out of their trade and they are being forced to sell their positions back for a loss.
There are also traders that when this low gets pushed underneath that are entering into short positions because they think price is going to go lower.So there's two sets of resting Orders underneath lows.Now, again, you are probably asking tjr.Why, why, why, why, why?Why are you telling me all of this stuff?
This is how the retail trader thinks.And what do we know about the vast majority of traders?99% of traders fail.And I'm not trying to tell you guys this.I mean, we talked about this on day one.I'm not, I'm not trying to tell you guys this to discourage you.I'm telling you guys this to use this to your advantage.We need to be thinking about.We need to be thinking like the market movers.We need to be thinking like smart money.
So if we understand that there are two sets of sell orders underneath lows and there are two sets of buy orders above highs, we don't want to be following the method of pressing buy when highs get pushed above or pressing sell when lows get pushed underneath.Because that is how retail traders are trading.That's how the vast majority of traders are trading.We want to be trading in the opposite direction.And this is how the market makers think.Going back to our topic for today's video, what is liquidity?Liquidity is resting orders.We just talked about where retail traders resting orders are.Now let's think about smart money and let's think about the market makers.The people who actually move the market.
They need a significant amount of orders to be going in the opposite direction of them for their massive amounts of orders to be filled, for them to be able to push the market in the direction that they want to go.You're probably saying, what does that even mean?Let me explain.Think back to our high school economics class.Okay, how does a stock exchange work?If I want to buy one share of Apple stock, we.I need to find somebody that is willing to sell me a share of their Apple stock at the current price.Now, back in the day, it used to be done by calling up your broker saying, hey, I want to buy one share of Apple.They say, okay, I'm going to try and sell source, source this for you.I need to find somebody that's willing to sell this, sell it to you at this price nowadays.
And then boom, they sell it to you.It takes a couple days and they say, boom, here's your paperwork.They ship it to you in the mail.And then also you have your contract that says, I own one share of Apple at this price.Cool.
The, the same thing applies.But in today's day and age, we have brokerages, we have exchanges that do this at mass scale online.For us, it's the same exact thing.When these big smart money market movers are trying to place their trades and move the market, they need X amount of orders, like let's say freaking 1000 orders to be going in the opposite direction for people.They need 1,000 people.
Let's say they want to take a 1,000 contract trade.Sorry, we'll simplify this.Let's say they want to take a 1,000 contract trade.In order for them to be filled on those thousand contracts, there needs to be 11000 contracts that are willing to either buy or sell, depending on what direction they want to move the market in the opposite direction of as them.So if the market movers, market makers want to push the market down and they want to fill 1,000 contracts, they need 1,000 contracts in the opposite direction.And this is where liquidity comes in.They will manipulate price and push price above highs in the market.To do what?To activate and get those two sets of resting buy orders to get activated.Right.The people that, that were pressing sell on the way down, what do they have?They have their stop losses above here.
And then once price pushes above this, this, this high, those people get stopped out of their sell positions.And then also the people that think price is going to go higher, they enter into buy positions.So now there's a bunch of people that are willing to go long or press buy in the market.
What does that give the market makers the opportunity to do to fill their massive amounts of sell orders to cause the market to go down.Reverse psychology is how I like to think of liquidity.They are faking retail traders out to think that the market's going to go higher.They are getting people out of sell positions by pushing above the high and they're getting people into buy positions.And then they're able to fill their massive amounts of sell orders because there's a massive amount of people that are willing to go buy here or being forced to buy their positions back for a loss.
And then they are able to fill their sell orders to push the market lower.Same thing in the opposite direction.If we have a low, what is sitting underneath lows?A massive amount of sell orders.Because there's people that are pressing by because they think this move is going to go higher.Where are their stop losses?Underneath these lows.And then when the market comes down, trades underneath these lows, what happens?Those people that were in buy positions have to are forced to sell their positions back at a loss.And then there's the people that are entering into sell positions because they're saying, hey, a downtrend has started.
What does that give the market makers the opportunity to do?Fill their massive amount of buy orders.Why?Because there's a massive amount of people that are entering into cells here and then that gives them the opportunity to push the market higher.We do not want to think like retail traders.We want to think like smart money traders.We want to think like the market makers.That is why liquidity is so very important.And we're going to go onto the charts now and show you guys real time examp of this happening.I'm not going to tell you guys how to take trades on this just yet.We're going to get into that later, later on in this series.But this is the most crucial and the most important lesson that you guys are going to learn in trading.There are sell orders that are sitting underneath lows.
Does that mean we want to press sell?No, it means we actually want to be looking in the opposite direction because there's a massive amount of sell orders sitting underneath lows.What does that give the market makers the opportunity to do?Fill their massive amounts of buy orders underneath those lows because retail traders are pressing sell and that lets the market makers press buy to be able to fill their massive orders and change the direction of price.With that being said, let's show real time examples of this happening.We have one right here.What do we have right here?A high in the market.All the people that were pressing sell on this move down.Their stop loss is above these highs.Once these highs get pushed above right here, what happens?The people that were pressing sell get stopped out of their sell positions.
And then all the people that think market's going to move higher, what do they end up doing?They end up pressing buy because they say, hey, a new trend is going to start.What does that give the market makers the opportunity to do?Fill their massive amounts of sell orders to push price lower.This happens on every single time frame because this is how the market moves.
The market needs orders to be filled the market needs orders to be filled in order to push price in the direction that it wants to go.Let's show another example right here.Price comes down.Okay, so we just showed you guys an example to the upside.Now we'll show you guys an example to the downside.
Price comes down underneath these lows.What do we know is resting underneath lows in the market?A bunch of sell orders.What does that give the market makers the opportunity to do?It gives them the opportunity to fill their massive amounts of buy Orders.
So when price comes down, what happens?All the people that were pressing by throughout this, they are getting stopped out of their positions with their stop losses are underneath these lows.And then all the people that think price is going to go lower, they are entering into sell positions right here.What does that give the market makers the opportunity to do?Fill their massive amounts of buy orders to push price higher.
Hopefully you guys are starting to get this now.Let's show another example.
We have a high right here.We have two sets of highs and this is what we're going to get into for our advanced liquidity concepts.But we have a bunch of low resistance draws and liquidity stacked up relative equal highs.
We'll get into this in tomorrow's video.But stacked up relative equal highs right here.
What is that making the people do?When we push above this high, what are people doing?They're pressing by.When we push above this high, what are people doing?They're pressing by.Everybody that was pressing sell, where is their stop losses above this high.Everybody that was pressing sell, where is their stop losses above this high.So now we have four times the amount of orders we have four times the amount of orders, buy orders that are sitting above these highs in the market.What does that give the market makers the opportunity to do?Fill their sell orders above these highs.
So the so the market makers push price up, manipulate these highs, enter their sell orders and then what does the market do?It falls.This happens on every single time frame.I can show you guys examples of liquidity sweeps on the five minute time frame, on the 15 minute time frame, on the one hour time frame, on the weekly time frame, on the quarterly time frame.There are examples of liquidity sweeps everywhere.
You remember the tariff flash crash.Super spooky.Oh my goodness, there's tariffs in the market.All that it was was buying opportunity.We have a low.We have a low.We have a low.Sell position.Sell positions.Sell positions.What does that give the market makers the opportunity to do?Fill their massive amounts of buy positions to make the rich get richer.You guys Remember what happened February 2020?That very, very scary, scary sickness that went around.This is on the monthly time frame, folks.
This is how the rich continue getting richer through market manipulation, through scaring the population with one agenda in mind to make themselves richer.Oh no.Super scary sickness.Psych liquidity suite.All the people that were buying right here entering sell positions.All the people that were buying right here forced to sell their orders because their stop losses are underneath these high time frame lows.Oh, no.The economy's gonna collapse.All of you guys should.All of you guys should sell everything.All of you guys should short everything.Psych.What does that give the market makers the opportunity to do?Fill their massive amount of buy orders and make the rich get richer.It happens on every single time frame.
This is how the market moves.15 minute time frame.What do we do?Push above a high.Boom.
Market collapses.Let's go to the five minute push above this high.Market collapses.Now, before we end this video, I don't want you guys to just think, okay, whenever we push above a high, I'm going to press sell.And whenever we push below a low, I'm going to press buy.
That is not what I want you guys to take away from this video because we just, we just demonstrated in yesterday's video that the market moves in trends.The market does move in higher highs and higher lows.So trends happen.But liquidity and liquidity getting swept and new trends being formed, that's how new trends are formed, okay?Through liquidity getting swept.
Okay?And by these orders getting filled.So if you guys think back to like kind of halfway through this video, there is something that I said and a word that I want you guys to keep in mind.When we push a above a high and when we push below a low, it doesn't mean that the market makers are instantly going to reverse price just because there's buy and sell orders there.Right?We can see here that, okay, we have a high, we push underneath a low here.Would that have been smart to press buy?No, we end up keep going lower, we push below this low.Would that have been a good spot to press buy?No, we keep going lower.
We push underneath this low.Would that have been a good time to press buy?Eventually, yes.So what I want to end this video on is a very, very key component of liquidity.Liquidity lies above highs and below lows.
All that liquidity does for the market makers is it gives the market makers the opportunity to change the trend.Okay?It doesn't mean that the trend is going to change every single time.It just gives the market makers the opportunity to change the trend above highs and below lows.Now, us understanding that above highs and below lows, there is an opportunity for us to change the trend.
That is the first step of our strategy.Because if we can focus on catching the bottoms of reversals up, we are going to be able to make so much more money.And if we can focus on catching the tops of reversals down, we are going to make so much more money.Now, again, pressing buy below lows and just pressing sell sell once we get above highs is not a good strategy.I could show you guys a million reasons why, but you guys are going to have to trust me on this because again, like if we.Look, if we, if we were to press sell when we pushed above this high, what would have happened?Okay, we lose a whole bunch of money if we press sell when we push above this high.What would happen?We lose a bunch of money if we press sell when we push above this high.
What would happen?Well, we lose a bunch of money if we press sell when we push above this high, what happens?We actually are able to make money.But notice how there was an opportunity for price to reverse here.Did it happen?No.There was an opportunity for price to reverse here.Did it happen?No.There was an opportunity for price to reverse here.Did it happen?
Yes.So all that I want you guys to take away from today's video is just understanding orders lie in resting orders lie above highs and below lows in the market.We are going to get into later in this series of how to take advantage of the opportunity of understanding that orders are lying above highs and below lows in the market and then how to identify other confluences to give us confirmation that orders are actually being filled on the market maker side and the trend is reversing.That's what we're going to get into later on in the series.So what I want from you guys, your homework for today is to identify again, I don't want you guys to be trying to understand the reasoning of why did price reverse above this high and not above this high.We're going to get into that later in this series.
But what I want you guys to understand is understanding.Okay, we know that price has the opportunity to reverse above highs and below lows.Your homework is to just give find five examples of price pushing above a high and then reversing off of it.Pushing underneath a low and then reversing off of it.
Very, very simple stuff.And then in tomorrow's video we are going to get into advanced liquidity concepts.So expanding more on this.So that being said, love and appreciate you guys, do your freaking homework.I'll see you guys tomorrow.
Expands liquidity concepts into session highs and lows, showing how Asia, London, and New York sessions create important targets. The speaker demonstrates how different sessions often sweep each other’s highs and lows.
Speaker A
Now that we've covered kind of just the base fundamentals, it's time to get into the actual concepts that build up my strategy and how we actually start making money from these charts.So these are concepts that took me years to master.It's very easy to understand, but it Takes a long time to actually fully process how they work together.So I highly recommend you guys get a nice little notebook out, you guys start taking notes because this is when shit gets serious.When you guys can maybe lose track a little bit.You're thinking, oh, the basics, that's just absolute beginner stuff.I don't really need to focus.If you guys weren't focusing then, then hopefully you guys start focusing now because these concepts are how the market moves and it's literally the key to my probability within the markets.And if you guys have been enjoying this video so far, I really appreciate that.
If you guys have any questions, I do offer one on one mentorship where you guys can ask me direct questions and get on coaching calls with profitable coaches and myself.If that sounds interesting to you, there's going to be a link down in the description.But if you guys are just enjoying the free information, we can keep it moving.
Somebody clip this, somebody clip this into an edit.Somebody clip this into an, into a hard ass edit of like me being like tough and then.
Boom.Koenigsegg at 23, Ferrari at 22.Widebody Mansory Cullinan 22 years old.Bravis Gle 21 years old.Gold.
Oh, welcome to explain liquidity advanced concepts.Queue up the edits.Cue them up, boys.We learned about liquidity.Let's learn more about advanced liquidity concepts again today.
Okay, so there's 1, 2, 3, 4, 5, 6,
Speaker B
7
Speaker A
forms of advanced draws on liquidity.Okay.Or just overall better draws on liquidity that we can look to target.
So as we know, little refresher, what did we learn yesterday?Where does liquidity lie?Above highs, below lows.I'm going to suck on your toes.Now in today's episode, we're going to talk about just higher probability draws on liquidity that are more, more beneficial to us than not.
That was nice to be able to help us.Okay.Identify the stronger draws on liquidity than just like, oh, this is a high, this is a low price.Could potentially move off of this.Okay, so the first one is going to be session highs and session lows.
Okay, so how do we identify these, this or first of all, what are session highs and session lows?So if you guys are unfamiliar with this, we're going to get into this a little bit more when we talk about time in the market.But specifically today we're going to be talking about sessions.Okay?There's three sessions throughout the 24 hour trading day.
There is Asia session, there is London session and there's A New York session.And then within New York session, there's am session and PM session.Today we're just going to focus on the three sessions and why those sessions are important.So something that I want you guys to think about for every single session, okay?We have Asian session, okay?All the Ching Chongs, they're getting in there and they're like, okay, when Asia session opens, they got their freaking.Their It's Japanese candlesticks, right?They're fucking turned up.Ramen noodle, all that.Sorry if that was disrespectful.You guys get the point.But when Asia session opens, all the Asians, boom.It's their market.They're ready to run with it.Okay?So all of the Asians are moving the market at that point in time.And then, boom, Asian session closes.Then all the London.I'm a London British chat mate, and I'm gonna beat you off.
I'm gonna.
I'm gonna beat off you like a wanker, mate.I'm gonna beat you.And I'm from Brixton, okay?All the Brixton bullies, they get into the market and they're like, man, fuck the Ching Ching Chongs, okay?We want to take all of their orders them, and we want to move the market where we want to go.
So Ching Trangs, they get into the market, they move the market where they want to go.Brixton bullies, they get into the market, their money comes into the market, moves the market where they want to go.Then boom.Bald Eagle, Screech USA, NY session opens.All the big fat guys on Wall street eating McDonald's, boom.They're pressing buttons, their money comes into the market.Why is this important?Why is it important for us to know about Genghis Khan, Central Sea and the fat ass Americans?Why is this important?Because it's every single time there's new money from different markets coming into the market and moving it.Okay, so we talked about the market makers yesterday.We have Asian persuasion market makers.We have central C market makers, and we have obesity market makers, okay?Each one of those market makers, they have their own session where their money is putting, getting put into the market.
And they are going to manipulate the market in the way that they want to.
Now, again, why is this important?What did we learn yesterday?This is, let's say this is Asian session.Okay?We'll make this is Asian session.Boom.Asian session does this bow.Boom.This is Asian Session.We'll make the line yellow.Just so you guys understand it a little bit better for no reason.Okay, so this is Asian Session.Bing Bang and Ching Chang, they push the market up to these highs, okay?Sing Long and Ching Chong push the market down to these lows.
Okay?Then boom.Central C comes into the market will make him blue.Central C comes into the market.What, what are the London traders going to try and do to the Asian Session traders?Because right now Asia, the Asian Session traders, they're controlling the market.They're moving the market where, where they want to go.So when the bricks and bullies get into the market, what do they have to do to all the Asia Asia Session traders in order to move the market in the, in the way that they want to move?They need to stop out the Asian Session traders.They need to manipulate whatever trend or whatever highs and lows.They need to take out draws and liquidity from what was formed during Asian Session to be able to move the market where they want to go.So coming into London Session, if Central C wants the market to move higher, what is central going?
Central.Big, big cinch going to do to the market.He's going to push price underneath the Asia Session lows.Why?Because that's probably where there's going to be people that are willing to go short.There's people that are getting stopped out of their, their buy positions right there.Boom.Central Sea is going to stop out the Asia Session traders underneath Asia Session low and then they are going to go up and target Asia Session highs.Because the London traders, they don't, they, they want to manipulate everything that happened during Asia Session, okay?They want to be able to fill their orders down here underneath the Asian Session lows so they can stop them out of their, of their buy orders, right?And then also get people into sell orders.And then what do they do following that?Once they're able to fill all their buy orders underneath here, they're going to push price up to be able to take out, boom, fulfill all of their buy orders, also stop out all the people that were going sell that were selling on this move down again.
Remember, there's going to be two times the amount of buy orders above highs.And when Central C pushes the market above these highs, what are they able to do with the orders that they filled down here?They're able to liquidate those orders because again, they're buying down here and then they're selling up here.What are they selling into?They're selling into the Asian persuasion.Chinatown traders stop losses up here.Boom.Game is game.You just got cooked by Central Sea.Now we got obesity coming into the market now.
Obesity time.Bang.New York session opens.Okay?We'll make obesity.
We'll make obesity red.Boom.Now we have London session lows down here.London session highs right here.When obesity comes into the market, they're thinking, man, I rock with King Vaughn.
I rock with pop smoke, Travis Scott, Central C, okay?Obesity comes into the market and they're like, man, I want to stop this dude out.I don't like their orders.I want to fill my orders and I want to make price move where I want to go.Okay, so what are they going to do?They're going to push price above London session highs and then they're going to fill their sell orders to push price down.Boom.To London session lows.Because they're going to fill a bunch of sell orders up here while all the London traders get stopped out and enter into buy positions.And then boom, New York gets.You buy back their sell positions for a lower price and then make money on their short positions.You're probably saying, tjr, that was.That was a whole bunch of mumbo jumbo.You're right, it was.
But what did I just showed you?
I just showed you where significant draws in liquidity lie within.Within the market.Who?Central Sea, Chinatown and obesity.How does that play into trading?
It's everything.Okay?Not only is your homework going to be to go get ramen noodle from Panda Express while listening to Central Cee, you also need to get a Big Mac.Okay?That's part of the homework.
Remember it.Okay?
Asia session highs.Asia session lows.London session highs.London session highs.London session lows.New York highs, New York lows.All of these are significant draws on liquidity that when new sessions start and end, the new money that's coming into the market is going to want to target these session highs in these session lows because there's a significant amount of resting orders above and below them.So let's show it on the chart.You're probably saying, I don't get it.Shut up, Timmy.We'll show it to you.Okay, I have this nice little indicator.It does the.For me.I'll put a. I'll put a link to it in the description.
But Asia session high.Asia session low.London session high.London session low, New York high, New York low.And then the session start line indicator is with red.
Just to make this easy for you guys, I'm going to remove all of these lines.
And we're only going to put the session starts on, okay?Just so we can actively show this happening.In real time.
So first of all, what are the number values again?Remember when we set up, this was something that is super important.Remember when we set up our trading view, we need to make sure that we are on eastern time.Okay?We need to make sure that we're on New York time.
All right, so boom, we're on New York time.What are the session times?Asia session starts at 1800.London session starts at 3am New York.New York session starts at 9:30.
And New York pre market starts at 8:30.So we can kind of group both of these together.
Let's get in here and let's look at this.Okay, where is London session high?Well, from 3 to 8:30, where's the highest point that we got to?Boom, right here.Where's Asian session high from 1800 to 3?The highest point that we got to was up here.Where is Asian session low from 1800 to 3, where's the lowest point that we got to?Right here.Where is London session low from 3 to 8:30.Where's the lowest point we got to?Right here.Notice the manipulation from Central Sea Asia session high.Asia session, Asia session low.Boom.Right when London session opens.What does Central C say?He says, you and your.You and your lows, mate.
What's the Central C song?I got a bando in the trap, mate.Boom.Moves and manipulate these lows to be able to fill Central C's buy orders right here.Then Central C says, thanks for the liquidity.
And then bang.What do we go up and do?Take out Asia session highs, shout out Central C, manipulate the Asia session lows, bang.Right up into Asia session highs.And then boom, Right when we take out the Asia session highs, who comes into the market?
Big daddy obesity.Obesity comes into the market and says, hey, Central C. Hey Asians.You guys, boom.Thanks for the liquidity.I'm taking out both of your guys's highs.
While all of you guys are going long and getting stopped out of your orders, I'm pressing sell.And then what does the big fatty get to do?Target Central seas lows.Bang.
And that is how money shifts from session to session.Okay?It doesn't happen every single day.And matter of fact, I just chose this day at random.This was beautiful.This was honestly beautiful.This was literally New Year's Eve when the market's actually not printing that well.But this was gorgeous.Okay, let's do another example to show you guys.
Covers previous day highs and lows as major liquidity targets and introduces low-resistance trend liquidity. The speaker explains how stacked highs and lows can be used as entries and exits.
Speaker A
This happening now again doesn't have to happen every single session, okay?But these are very important highs and lows.In the market.And again, what do we know about the highs and lows within the market?What did we talk about yesterday?It is just giving the market the opportunity to potentially reverse.So just because we push up above central seas highs doesn't mean that the market needs to reverse off of it.The market has the opportunity to.Again, we haven't gotten into the other confluences to be able to spot confirmation of these opportunities actually being taken for us to be able to take trades off of them.We will eventually.Okay, but we need to understand these advanced liquidity concepts, specifically understanding the high probability highs and lows that give us more opportunity than just hey, this is a random high on the chart.This is a random low on the chart.
I'm going to mark it out and hope for the best.Okay.Very important that we understand that.Let's do another example.Okay, let's see.What's this?1800.This is Asian persuasion high.
Boom.3.This is Central C. When he comes into the market.Boom, this is 8:30, this is New York pre market.And then Boom, this is 9:30.
This is New York market open.
Where is Asian persuasion high?Right here.Where's the lowest point that Asian persuasion gets?Right here.Oh my days.
Look at what?Central C. Look at Central C. Look at Central C. He does not like the eight.Okay, no, I'm not gonna say that.I'm not gonna say that.I'm not gonna say that.
That.So I like Central C. Central C is cool.But anyways.
Are, are you seeing it?Are you seeing it?Okay.Asian persuasion high.Asian persuasion low.
Central sea low.
Central C high or no, this is Central SE high.Boom.Asian high.Asian low.Central C comes into the market.
Boom.Fuck your lows.What does that give Central C the opportunity to do?Fill his buy orders.Once those buy orders are filled, where is he going to push the market?He's going to want to push the market to be able to exit these buy orders.Where is he going to be able to exit his buy orders and be able to sell where there's resting buy orders for him to fill his sell positions because he bought low and he's looking to sell high.Where are their buy orders?Above Asian persuasion highs?There's sell orders underneath Asian persuasion lows.
Central C is going to buy here because there's a lot of sell orders so he can go in the opposite direction and then where, where is he looking to offload those orders at above Asian persuasion highs?Because he knows that there's, there's going to be a lot of people going long there.So he buys low, sells high, fills his buy orders and then where does he immediately target?Boom.Asian persuasion highs right there.
Central C enter, Central C exit.And then right when that happens, what do we notice?Boom.New York pre market opens.What does New York pre market do?
Says thank you very much for central seas highs.Thank you very much.Asian persuasion highs.Time to manipulate you fools.Boom.
What does that give New York traders the opportunity to do?The obese guys, they can go short above these highs.Why?Because there's a whole bunch of people going long so they can take the reversal of that position.And then where do they go?They say boom.Thank you Central C for the lows that you made.
Are you not getting hyped up about this?It's day.What day is it on this path to profitability?I don't know, but it's day something and you guys are learning a lot.
Okay, you guys seeing this?This is manipulation.So what do we need to remember?Important highs and lows within the market.Asia session highs are important.
Why?Because when new money comes into the market, what is it going to want to do?When central C comes into the market, what is it going to want to do?He's going to want to manipulate those highs and then push price in the other direction.Why are Asian session lows important?
Because when central C comes into the market, he has the opportunity to push underneath those Asia session lows to fill his buy orders.When the big fat obese people come into the market, what are they looking at?They're saying central C, your highs and your lows, they're mine.Okay, what does that give the obese people the opportunity to do?Push price, Manipulate price above central seas highs and then to be able to target central seas lows or the other direction, the obese people can come into the market market, manipulate central seas lows and then target central seas highs.
All in all, session highs and lows are very important highs and lows within the market.
So again, remember these numbers.1800 Asian persuasion to 3.1800 to 3 is Asia session.3 to 8:30, London session.8:30.
Back to 1800 is New York session.
So this is Asian boom.London boom, New York boom.And that encapsulates a full day of trading.All right, Pre.So session highs and lows, that's important.
Next draws on liquidity.That are important.Previous day highs and previous day lows.Now this is the same exact thing, but just all of those sessions encapsulated into one.Okay, so instead of looking at okay, Asian persuasion highs, Asian persuasion lows, Central C highs, Central C lows, fat persons highs, fat person lows.We're looking at all of those sessions combined, finding the highest point and the lowest point of all three of those sessions combined.And that's going to give us our daily highs in our daily lows.These are important draws on liquidity as well.Okay, so if we go back, let's find a good example of this on the daily chart.We have boom, previous day high, previous day low.
Okay, this was the previous day high.This was the previous day low.Right.We can just toss on the daily chart.Boom, new day opens for New York session at 8:30.
Okay, that's pre market.And then 9:30s market open.
What do we see?Price do.Price comes up.We manipulate the previous day high.Okay.During London session we were over it for a little bit.But then again this is like a mix of both previous day high getting manipulated then and central C, Central seas highs getting manipulated.Okay, so London session opens.We come up above previous day high.Not really much motion.Central C couldn't really pull anything off above these highs.But boom, big fat guys, they come into the market.Motion.Okay, they come into the market.Pre market starts.We manipulate above central seas highs right here.Okay.And back above previous day highs right here.And then what do we do?Boom.
Where do we end up targeting?Not only do we end up targeting central seas lows right here, we also end up targeting Asian persuasion lows right here.And then we also end up targeting previous day lows right here.
Okay, again, this doesn't, this isn't just 1 million percent foolproof.I'm going to press sell every time we push above a previous day high.And I'm going to press buy every time we push underneath the previous day low.That's not the case.But what can it tell us?
It gives us a higher probability high and low for us to look at in the market that price is going to look to target.Because again, what lies above highs and lows within the market resting orders.That is how the market moves.If the market wants to move lower or if the literally, if the market wants to move lower, where does it have to go?First it needs to manipulate a high.
And then once we manipulate highs in the market to push the market lower, where is it going to offload all of these orders that were just filled back underneath lows.So that's through.Boom, London session low, Asia session low, previous day low.And we'll, we'll get into this when we talk about how to look for take profits.Okay?
But this is very first steps of understanding significant draws on liquidity in the market.So we have session highs, session lows.Check, check, check, check, check.Previous day highs and previous day lows.Check, check, check, check, check.
Explains relative equal highs and lows, then adds news-driven data highs and lows as important liquidity zones. The speaker shows how high-impact news candles can become useful targets or reversal areas.
Speaker A
Next we have low resistance liquidity.So low resistance highs and low, low resistance lows.You're probably like, what does that mean?
Speaker B
Well, I'm going to tell you, buddy.I'm going to tell you,
Speaker A
okay?Honestly, I think like the people that say this, I mean, I just put it because it sounds cool.Realistically, bros, I'm going to keep this shit a buck fifty with you.I'm going to explain this to you guys as if you were me in high school.All these other freaking nerds on YouTube, bro.They're like
Speaker B
low resistance liquidity and current market structure shift.
Speaker A
You guys are freaking nerds.Shut up and make the understandable.Low resistance liquidity is just stacked up highs and lows.
Or you.We can even call it trendline liquidity or just trend liquidity.Okay, so what do you.What do we know about trends?They make higher highs and higher lows, right?
So boom, this is our uptrend.
Beautiful.
We have a low right here, a low right here, Low right here, low right here.So when we eventually decide to manipulate a high to reverse the market to be able to fill sell orders, we have all of these trending lows that are stacked up.What do we know that lies underneath lows?Liquidity.So if we fill a massive amount of sell orders up here, what are we probably going to want to target in order to offload the map?The sell orders, in order to turn this into a profit, we need to target loads.Because what's underneath lows?People that are willing to go short.And if we're pressing short up here, we need.We need people to be looking to short while we're buying back our positions for a lower cost, making us a profit.
Oops.
So that's why low resistance draws on liquidity are very important.It's when we have a series of lows or highs that are stacked up.If we go up and we manipulate this high and then we start getting whatever our entry confluences, we can look to take out all of these lows because all of these lows are yet to be manipulated.And a good analogy that I like to give when we're looking at low resistance, liquidity is cookies in the cookie jar, okay?If I'm the cookie monster and I'm like, I like
Speaker B
the cookie,
Speaker A
okay?And we manipulate These highs and underneath these lows is a cookie.And I fill sell orders up here.I come down,
Speaker B
I want a cookie,
Speaker A
okay?I want to be able to target these lows.Why?Because I'm going to be able to buy back my positions for a lower price and make me a profit.
But why would I stop there
Speaker B
when there's another cookie
Speaker A
right here?When there's even more sell positions right here, it's not going to stop me.I want more cookie, okay?
Because I want more profit.Remember, the market makers are greedy.They want as much money as possible.And why would we stop there?There's another
Speaker B
cookie.
Speaker A
We're going to keep going.Why would we stop there?There's one more
Speaker B
cookie.
I want cookie,
Speaker A
okay?Where the fucking cookie monster?
Same thing.When we're reversing from a downtrend.If we're in a downtrend, we have a high, high bank.And then boom, we finally start reversing.
Speaker B
I can hear my watch ticking.
1, 2, 3, 4, 5, 6.Okay, sorry,
Speaker A
I ended on 6, 7, period.Okay, lock in.Let's lock in.Okay.When we're in a downtrend boom, let's say whatever price ends up manipulating these lows.There's cookie above this high.But why would we stop at this high?Because there's another cookie and then there's another cookie and then there's another cookie and then there's another cookie and then there's another cookie.
We are going to want to take out all of these highs.Why?Because there's a whole bunch of resting orders that are lying above these highs that we can just blitz through.Absolutely blitz through to be able to take out.So we can use.And you're probably saying, how is this useful for us?Well, it's useful in both ways.Again, when we're traders, we're switch hitters.We can go both ways, my dog.We can.
We can do both.All right.We can go both ways.We can either, let's say we're at a point in time where we're looking for a trade and we manipulate these lows and we see an entry entry confluences to press.To press buy right here.
Awesome.We can use all of these highs as exit confluences as take profit points because we know there's a whole bunch of resting orders above these highs.So we know that pressing buy right here is a pretty good option, especially if we have entry confluences.Why?Because there's a whole bunch of orders that are going to want to get filled from the market makers on this move up now, what about on the contrary?
Okay, if we're looking to enter into a position, okay, if we're at this point in time in the market, Let me see if I can get an eraser.Is that even possible?No.
Let's say we're looking to enter into the market, and the market just came down and took out all of these draws on liquidity.Well, awesome.We just took out one cookie, two cookie, three cookie, four cookie.That's a whole bunch of sell orders that have just been taken out from the market.What does that give us the ability to do?
Fill a massive amount of buy orders to push price in the opposite direction.So we can use this not only if we're looking to enter into a sell position up here as targets where we can target all of these cookies, but also we can use it as again, let's say Central Cee during his session, he already said, those damn cookies, I want them fat.Obese guy says, bear, I wanted those cookies.But all good.I'm still going to use those cookies to my advantage because you ate all the cookies over here.
So I know I'm going to be able to press buy because there's no more sell orders in the market or all of these sell orders just got executed.Now I can fill my massive amount of buy orders and then say, fuck you, Central C. I'm going to take out your highs so we can look at it in both ways.Hit it both ways.Okay, so that's the importance of low resistance liquidity.Another.
So again, session highs and lows, significant draws on liquidity.Previous day, highs and lows, significant draws on liquidity.Now again, you're probably saying, I
Speaker B
want to take a trade.Shut up,
Speaker A
shut up, dude.We're not even there yet.I know you want to trade.I know you want to make monies.We're not there yet.Digest the information, write it down, take notes, and we are going to get there.Okay?We're gonna get there.This takes time.Session highs and lows, very important, very high probability draws on liquidity where there could be potentially reversals at previous day.Highs and lows, same thing.High probability highs and lows where we can see a reversal at low resistance draws and liquidity stacked up.Highs and lows that can either be served and all of these can serve as entry points and exit points.Points.So again, if we, like we saw during the session, session, if New York session comes up, sweeps out central seas highs.
What's a good exit point?Central seas lows.Right.Price is going to want to Take out these highs and then what's a good exit point?Boom.Session lows.Okay, so these are not only good entry and entry points, they're also good exit points.So session highs and lows, very important draws on liquidity.Previous day highs and lows, very important draws in liquidity.Low resistance or trend line, trend trending highs and lows, very important draws on liquidity.
Next, relative equal highs and lows.So this is significant draws in liquidity.Just like, just like with low resistance draws and liquidity where we have stacked up highs and lows, this is when we have pretty much like dead equal highs and lows.So we see a high right here and then we see boom.Oh, wait, let me show you an example.
Just so you know I'm not capping.Let me show you example of low resistance draws and liquidity getting taken out.And again, remember guys, the awesome thing about these confluences in the way that we trade, it happens on every single time frame.So you guys will find examples of this happening everywhere.Okay, so let's show a good example of low resistance draws and liquidity getting just out of absolutely torched.
Okay, we have boom, one low, boom two low, boom three low, boom four low, boom five low.Okay, and we can even show this.What is this?This is New York market open.What are these?These are central seas highs.Market opens, boom.We manipulate central seas highs and Asia session highs.And then what do we have?We have a whole bunch of stacked up cookies.
We have 1 low to low, 3 low, 4 low, 5 low.We end up dumping and taking out all of them stacked up highs and lows.So in this case, this would be using low resistance draws and liquidity as exit points and session draws and liquidity as an entry point.We just use 2 of our high, highly probability.We just use 2 of our high probability highs and lows to our advantage.One for entries, two for exits.We use session highs and lows or session highs as our entry point.And then low resistance draws and liquidity as our exit point.Exit here, exit here, exit here, exit here, exit here.
Let's show another example in the opposite direction.This is perfect.What do we have high?What else do we have?
Another high.What else do we have?Another high.What else do we have?Another high.
So we have what is this?A downtrend high.Lower, high, lower, high, lower, high.Okay, we're in a downtrend.We start reversing.We take out this high, this high, this high, this high.And now we can use low resistance draws and liquidity.In this example, for an entry, we came up, took out all of these highs, what is that going to give the market the opportunity to do?Because there's buy orders sitting above every single one of these highs.It's going to give the market the opportunity to fill sell orders and then cause the market to go down.
And then what do we notice within this?Once we fill the sell orders, what are we looking to target?We have a low.We have a low.We have a low.
So once we go up and take out all of those low resistance highs, we sweep them, and then where do we go and target all of these low resistance lows?Simple, simple, simple, simple, simple.Next is relative equal highs and lows.Okay?Same thing as low resistance draws and liquidity, essentially.
But it's just when we have two highs that are either equal to each other, so dead equal in price.So the same exact price or just like right underneath it.Okay, Relative equal highs and lows.Like an equal highs and lows.It's pretty much the same thing as low resistance draws and liquidity.Why?Because it's like, hey, what do we have above these highs?Buy orders.Buy orders.2 cookies better than one.
Right?And then even better if it's equal highs and lows.Right?So if we have the same exact price for both of these highs, there's four times the amount of buy orders.Why?Because there's people that are going to get stopped out from their cells on this move down.Okay?There's people that are looking to go long above this high.There's people that are going to get stopped out from their cells on this move down.And then there's people looking to go long above this high.So there's two sets of buy orders above this high.Two sets of buy orders above this high.Boom.Whole bunch of cookies out.
Okay?Same exact situation.Same thing with the lows, okay?It's just when we have two equally priced lows or two lows that are very, very close in price.Okay, so let's show an example of this.
I want to find a good example.Like I'm seeing equal highs and equal lows getting manipulated.Oh, this is good.This is a good one here.Okay, so here, these two lows, I mean, close enough, close enough, close enough.Okay, this is, this is a good enough example.Okay?Low right here, Low right here.Literally 50 cents apart.Okay?
The market sees boom, relative equal lows or equal lows manipulates it.What does that give the market the opportunity to do?4 times the amount of cookies underneath here?Buy positions Bow pushes price back above these highs.Okay, let me find one more example but for highs and then we'll show you guys data highs and data loads.
Okay?I mean this is a decent example.So we have one low right here and then we can see boom, another low move down, then a move up right here.And then we have another low move down, then a move up the these two wick.This wick and this wick are the exact same, exact same price.
So we have relative equal lows or equal lows on both of these lows.And then we also can combine that with boom, low resistance liquidity because we have three lows stacked up.Okay, this is on the low time frame.It doesn't really matter, but it just, it showcases the concept and just proves, proves the point of this happens on every single time frame.Okay, so price comes up, we start reversing.When we start reversing, what can we do?We can look.I mean this is another good example.We have boom, one cookie here, two, three, four cookies.What is the market market going to want to do?Target all of those lows.There you go.Relative equal lows.
No.Did I get rid of it?Okay, doesn't, doesn't matter because the last one is data highs and data lows.What are data highs and data lows?Data highs and data lows are news data highs and news data lows.Okay, so this is coming after high impact news events.Okay?So what we can do is we can go on to this handy dandy website called Forex Factory and what we are going to look for is red news folders.Okay?So this, and we'll talk about high impact news and like risk management stuff later in this series.But essentially what we can do is we can look at these high impact news events.Okay.Like on the 13th, I believe.Yeah.So the 13th we have CPI news data coming out.Okay.And this comes out an hour before market open.I'm in Puerto Rico, so this shows me Puerto Rico time.
This is coming out at 8:30am Eastern time.Okay.9:30am My time, but 8:30am eastern time.Okay, so we'll, I'll show you guys an example of previous cpi.Hopefully it plays out because I, I wasn't trading for all of December.So this will be good.I don't even know.We'll, we'll see if it can demonstrate it well enough.But, but essentially when we have these high impact news events, the candles will be very drastic.Right?Because it's like boom, we get very important economic, macro economic data about Our country and in turn the Nasdaq and the S&P 500.When these news, when these news announcements come out, it drastically affects the market, okay?
And it drastically affects the market on the low time frame.So what we can do is the highs of the news candles and the lows of the news candles are very, very beneficial for us and serve as high probability draws in liquidity.Same thing as all these other draws in liquidity.We're just looking at the highs and the lows of the news candle.So what we'll do is we'll look at December and we'll look through and try and find CPI news data from December 18th.Okay, awesome.18th of December.So let's see if this ends up working in our favor here.Kind of not, not so much on this day.Let's try and find a better example of it.Just manipulating news candles, news candle highs.Because again, like I was, like I was telling you guys, you're probably saying, well, okay, I'm just gonna give up now because this didn't work.
No, that's not the case.Again, remember these high probability highs and lows, it just gives the market makers the opportunity.So again, just pressing sell when we push above a data high or pressing buy when we push underneath a data low or pressing sell when we push above London high or pressing by when we push underneath the London session low.
That is not a good way to trade because we need other confluences to confirm that price is actually going to move in the direction that we want it to move.Okay, but we can just show, show this example here.Okay.I mean this, like we kind of get it.So this is market open.
This is when news data came out.Okay?This is the news data candle high.This is the news data candle low.Okay?
So boom.This, this, this news data wasn't like super, super drastic as other typical CPI news data candles are.But this is pretty much what we would mark out.We would mark out the high in the low of the news data candle.And then this could be used as a draw on liquidity.Let's see if we can go to, oh, November there was the government shutdown.So I don't know if we had, we had PPI news data on the 25th maybe.Let's try and look at that.Let's see if PPI news data moved the market at all on the November 25th.Not really so much.
Let's see if we can find a good example of news data.
We've unemployment claims.Maybe.Let's see, November 20th.
Yeah, I mean, I guess, I guess this is about as good as it's gonna get, but you're gonna have to take my word for this.So, boom, these are the highs.So this right here, 8:30.When is this?25th.
Oh wait, 20th.Oops.And it's still not, still not the best.But whatever.This is when unemployment claims came out.
This is.We can see we're not using the high as a reversal point.We're really using this like really this high time frame high.But what are we able to use as a take profit point?Data date, data lows.
So again we get manipulation.We don't really use this high as much of a manipulation point really.It was just taking out this high time frame high and then we get a reversal and then we end up taking out this news data low.And it kind of sucks because we didn't get much news data throughout this government shutdown.
On Farm.And we haven't.Like this, this, this upcoming week is going to be good.This is, this is actually perfect for you guys to look for examples of this coming up because this entire week we have a whole bunch of news.Okay, so like tomorrow or I guess today is when you guys will be watching this.
Look and see what happens on ISM Manufacturing PMI.Okay?This comes out at 10:00am Eastern Time.So if you guys traded today, look at what happened to the ISM Manufacturing PMI candle.See if we manipulated the high, see if we targeted the low.
But that is pretty much the last form of high probability draws on liquidity highs and lows that we can use to target or use as exit points within our strategy.Now I know that was very long, very hard, okay, for you guys to consume, but hopefully that elevated your guys's understanding of liquidity a little bit more.I know that was a very long lesson, but hopefully that helped you guys understand liquidity a little bit better instead of just saying, hey, yeah, look above highs and look below lows.And as we get into creating our strategy and putting all of this together, you're going to see tomorrow we're going to be talking about fair value gaps and imbalances, okay?That's essentially talking about internal liquidity, okay?Because this is something that you guys are going to hear me say a lot throughout the series.Price is always either looking to take out external liquidity, which is highs and lows, or fill imbalances, which is internal liquidity, okay, which is typically like fair value gaps and imbalances, okay?
And there's a bunch of different imbalances that we can talk about not just fair value gaps, there's going to be imbalances and then imbalances like advanced concepts just like we did with liquidity.Okay, so keep your notebooks out and your guys's homework for today is not only to get Panda Express while listening to Central C while eating a Big Mac so you guys can understand how all the sessions work together.
Introduces break of structure as the confirmation that market order flow has changed. The speaker shows how candle closes above or below recent highs and lows signal a shift in trend.
Speaker A
The other thing that I need you guys to do is mark, practice marking out the sessions and then just look at how set sessions just like how we did today.
Sweep out the session highs and then target the session lows and then also do the same thing with previous day highs and previous day lows.Do the same thing with relative equal highs and relative equal lows.Do the same thing with low resistance highs and low resistance lows.Or just trend, trend, trending highs and trending lows.And then last but not least, if you guys want to do a little extra credit, go through Forex factory, find a bunch of high impact news events and then see how we use data highs and data lows as draws and liquidity for either potential entries or potential exits.Even if you guys don't necessarily have a strategy yet, just start trying to formulate in your head like, okay, we sweep out highs to then target lows.That is the forefront of our strategy.We're using draws on liquidity to target other draws.
Okay, so we sweep out highs, we're looking for sells down to lows.We sweep out lows, we're looking for buys up to highs.
You guys are slowly, slowly but surely starting to get this.Love and appreciate you guys.I'll see you guys tomorrow.What is going on, sexy people?Welcome to break of structure.
Let's get into this.What is break of structure?Why is it useful for us and how can we apply it to the charts?And how can we apply break of structure with the advanced liquidity concepts and the liquidity concepts that we learned over the past two days.That being said, let's jump straight into it.Today is going to be a relatively quick lesson.Okay, guys don't really need to learn too much.It's very, very, very simple of what break of structure is.So if you guys think back to I think it was like day three or four when we learned about how the market moves, what trends are.Okay, so we know that uptrends move in higher highs and higher lows.Boom.We already understand that.What else do we know about trends?They move in lower highs and lower lows.So now we know what a trending market looks like now, this is market structure.
We have a high than a low.Higher, high, low, higher, low, higher, high, higher, low.And a downtrend.It's a low, A high, lower, low, lower, high, lower, low, lower, high, lower, low, lower, high, lower, low, lower high.Okay?That's how the market moves, and that is market structure.So when we're in a downtrend, we're in bullish market structure.Or, sorry, when we're in an uptrend, we are in bullish market structure.And when we're in a downtrend, we are in bearish market structure.So if we think about the word of the confluence that we are learning today, what does break of structure mean?
It means when the current market structure, that price is in breaks.So how do we break a bullish market?How do we break bullish market structure or an uptrend?Well, if we're forming higher highs and higher lows, what would be a market structure break?We would have to break underneath the higher low and in turn make a lower low, and then in turn make a lower high, and then boom.
That is a market structure shift.That is a break of structure.Okay, and then on the flip side, what's a break of structure to the upside?When we're in a downtrend, we're making low, high, lower, low, lower, high, lower, low, lower, high.We have to push and break above a high to end up making a higher high than creating a higher low.
That is a shift in market structure to the upside when we are in a downtrend.So you're probably saying, well, how do we identify this on the chart?It is very, very easy.It's just like how you guys were using and identifying uptrends.If you guys did your homework on that day where we're looking for higher highs, higher lows, higher highs, higher lows.It's as simple as looking on the chart and seeing, okay, we're making higher highs and higher lows at this point in time, and all that we're looking for is the most recent low to get closed under underneath.That is when we break bullish market structure now in the same way, but in the opposite direction.If we're in a downtrend making lower lows and lower highs, how do we see a market structure break to the upside?We need to see a candle closure above the most recent high.
Emphasis on the most recent high.
So if we are looking.If we are looking at price action, are we looking at this low to get broken?No, because this is the most recent low.Are we looking for this low to get broken?No, because this is the most recent low.Are we looking for this high to get broken above?No, because this is the most recent high.Hopefully you guys get that.Now, with that being said, let's go onto the chart.Like I said, this is going to be very, very easy.Very, very simple for you guys to understand.Let's look from this point onward.What are we in?Well, we have a high, then we have a low.Then we have a higher high.Then we have a higher low.Awesome.We're in an uptrend.We go up, we make a higher high.We go down, we make a higher low.
We go up, we make a higher high.Then, oh, what do we do?We make a lower low.When do we break structure?When we see a candle closure underneath the most recent low.
So if we go on here and we see.Okay, what are we in?We just identified bullish structure.We have a high, a low.Higher high, higher, low, Higher high, Higher, low, higher high.
Oh, somebody pooped his pants.If we go on here, we can.Again, if we're looking for a change in market structure, all that we're going to be doing is if we're looking for a change in market structure to the downside, all that we're going to be doing is we're going to be monitor.Monitoring the most recent lows that are made within the uptrend.So this was the most recent low.
When do we break structure?Is it on this candle?This is a.This is a good example right here.No, it's not on this candle.This is a very difficult one to read because we don't actually close underneath the low right here because it's the candle.The candle body is equal with this low.We need the candle body to close underneath the lowest point of the most recent low.So when do we actually get that break of structure?We get the break of structure right here on the s and P500.And then from there, what are we now in?We're in a downtrend.We have a high, a low, lower, lower, high, lower, low.Making a lower high right now, potentially going to make a lower low.And I'm actually in a short position right now from all of this market structure.Believe it or not, eventually you guys are going to be able to take trades like this, and you guys are eventually going to start making money.
But that's not what we're here to talk about just yet.Again, the goal is for us to be able to accurately predict price action on a daily basis with a high Probability.And without these confluences, we are going to be unable to do that.Do that.
Now let's show an example of a break of structure to.To the upside.So we can show.We can see a pretty clear downtrend here.We have a high, then we have a low.Then we have a lower high.Then we have a lower low.Lower high.Lower low.Lower high.Big sell off to make a lower low.And then we make a lower high, Then we make a higher low.Just.Or sorry.Just because we make a higher low from this low doesn't mean we've broken structure yet.Why?Because when we're looking for a break of structure to the upside in bearish market structure.Okay, what do we need?We need a candlestick closure above the most recent high.So are we looking for this high to get closed above?No.What high are we looking to get close above?This one right here.
We see a move up, then a move down.This is the most recent high.
So wow.This is super similar to the last one that we did.So when do we get a candlestick closure above this?Do we get it on this candle?No, because all it did was put a wick above it.That's something that's super important.If we see candlestick wicks that go above these highs, are we immediately pressing by?Absolutely not.We need to wait until a full candlestick closes above the most recent high and then we can say awesome.Price has shifted its order flow to the upside.Okay, awesome.And then we end up going higher.All right, same thing here.Okay.We see a downtrend that, that's, that gets formed.Now let me show you a quick example here.That can confuse a lot of people.Let's take price from right here.Okay, we have a high, then we have a low, then we have a lower high.
But does this break market structure?No, because when we're looking for a break of structure to the downside.Down to the downside.When we're.We are in a current uptrend, we are looking for the most recent highs to get close above or.Sorry.
When we are looking for a break of structure to the downside, we are looking for the most recent lows to get close below.Sorry, we are in an uptrend.So what are we doing?We are monitoring the lows.So we have a move down and a move up.Awesome.This is the most recent low right here.We have a move up, then a move down.This is a high.Is it higher than this high?
No.But does that mean we've broken structure to the downside?No.Because in order for us to break structure to the downside, we are only monitoring the lows that are formed on the chart and specifically the most recent lows that are formed within the trend.So following that, we end up putting in a new low.So we have a move down and a move up.Awesome.Now, this is the low that we're monitoring.Do we see a candlestick closure underneath that?No.
Awesome.We have a high, Then we go up.We make a higher high.Awesome.Then we get a move down, then a move up.Awesome.A higher low.Now, this is the low that we're monitoring to look for a break of structure to the downside, we make a higher high.We come down, and we make a drastically lower low.Okay.We look at this candlestick wick.It comes all the way down here.Is this a break of structure?Is this a break of structure?
No.Why is it not a break of structure?Why is it not a break of structure?Because we don't get a candlestick closure underneath this low.So we get a move down.That a move up.Okay, move down and move up.Where's now our most recent low?Now, this is the most recent low that we're monitoring within this uptrend.We're still in an uptrend, even though we end up making a lower high and a lower low.We need a candlestick closure underneath the low up.We see a move down, then a move up.Awesome.That's a new low that we're monitoring.
Now.Do we get a break of structure to the downside?Yes.When do we get it on this candlestick closure underneath this low, and then from there, we end up making a lower high, Lower low, lower high, higher low.And then, boom, we start the reversal one more time back to the upside.Once we close above this high right here, that is all breaker structure is.It's a very, very simple concept.It's a very simple confluence, and we are going to be using it side by side in tandem with liquidity sweeps.We can.I mean, it's very beneficial.We can.I can literally show you guys this working in real time right now on the S&P 500, price pushes up, takes out this high, takes out this high right here.And then if we go down to the lower time frames, how can we identify the change in order flow and the.
The filling of those orders?On that liquidity sweep again, price comes up, takes out high.Time frame, draws on liquidity, A bunch of highs.What can we do?We can scale down to the lower time frame.And we can see that those orders are getting filled.How?
Through a low time frame.Five minute change in trend.How can we identify change in trend?By spotting break of structure.Boom.We get a break of structure and now we are trending lower.Why do we know that we were going to go lower from there?Well, because we had a bunch of resting orders that had the opportunity to get filled up here.How did we know that they got filled?Because we saw a change in the current bullish market structure on the low time frame.
There are other confluences that come into play with this.It's not just as simple as, okay, we pushed above a high and we got a break of structure to the downside.So price is obviously going to go lower.But you guys are hopefully starting to understand what, what we are looking for in the markets by slowly putting these confluences together.Okay, so today was very, very simple, very, very easy covering break of structure.How to understand when a trend is changing.Changing structure to the upside, changing structure to the downside, how to identify it Again, it's not a candlestick wick, it's a candlestick closure.Candlestick closure.And we are monitoring the most recent highs and the most recent recent lows in the market.My trade is doing very well right now.I need to keep an eye on it.But with that being said, I love it.
Appreciate you guys.I will see you guys tomorrow to talk about fair value gaps, which is our first continuation confluence.
Defines fair value gaps as imbalances in price created by a three-candle pattern. The speaker explains how these gaps can act as continuation zones in both bullish and bearish trends.
Speaker A
Okay, break of structure is a confirmation confluence.Why do I call it a confirmation confluence?It's because it confirms that the that orders have been filled.Okay, where do orders have the potential to be filled?Above liquidity.My strategy is as follows.We look for potential for orders to be filled, confirmation that orders are filled, and then a continuation of the current trend that is now being created.What's going on, guys?And welcome to fair value gaps explained.So today is going to be another video that is a very, very crucial concept in understanding because fair value gaps represent imbalances within the market.And like I said, I believe it was during the liquidity video, price is always either moving to take out liquidity or to fill an imbalance.So you can understand why this is going to be a very important concept for us to learn.
So we're just going to jump straight into this.So before I like actually break down what a fair value gap is, why it's beneficial for us, I use two different words to talk about fair value gaps.Just so you guys don't get confused during this video, I'll either call it a fair value gap or I'll call it an imbalance.It's the same thing.It's literally just an imbalance in price.Fair value gap is just a nice way to call it.So what is.Well, I mean we just explained what a fair value gap is.It's an imbalance in price.So it's essentially a three candlestick pattern where price has one set of price movement and then an expansionary price movement and then another set of price price movement where there is a imbalance of price and a lack of orders that is in between the first and the third candlestick.
And this is really like a lot of people, they trade candlestick patterns.I don't trade candlestick patterns.Candlestick patterns are like head and shoulders, double top, double bottom.Like I don't really believe in that shit because it's like again, why, why is price moving the way that it is?You don't fucking know.You're just saying, hey, I saw the McDonald's pattern on the chart and I decided to press sell.Me personally, I like to know, hey, I'm entering it because orders are being filled and I saw a change in change in order flow.And then from there I saw a continuation of the order flow that orders were filled in from the liquidity suite.That makes a lot more sense than I saw a head and shoulders pattern on these random ass candlesticks.Like what is that even telling you?It tells you a whole bunch of nothing.
So, so that's why I don't trade candlestick patterns.However, fair value gaps are essentially a three candlestick pattern.It's a series of consecutive candlesticks.And this is pretty much how it's going to look.And then I'll show you guys examples of what it looks like on the chart.So we have one candle, two candle and then we have our third candle.Okay.And we'll go ahead and we'll use little trend lines to do the, the wicks of the candle.This bottom wick doesn't really matter.This candles wick doesn't really matter either.We can just do it like this, really just the top and the bottom wick matter.So this is essentially what a fair value gap looks like.Okay.
I really only drop drew out the necessary portions of this.But it's a three candlestick pattern where we have the first candlestick.Okay.And then we have a wick that goes up, we have the expansionary candle.Okay.So the candle that pushes price pretty, pretty drastically up.This is an example of a bullish fair Value gap.And then we have the third candle.Fair value gaps.We do not see color.Okay?So fair value gaps.We are not racist.We do not care what color the first or the third candlesticks are.Okay, now you're probably saying, okay, well, what if this was a bullish candlestick?Then the bullish candlestick would just look like this.We would just flip this shit right on around.Okay, let me move this away.If it was a bullish candlestick, it would look like this, and this would still be a fair value gap.
Okay?
The first candlestick could even be a down candle.Okay?So the candle could look something like this, okay.And this would still be a fair value gap.Okay?
So this can be a.Well, this is still actually an up candle.So how.How do I make.Well, yeah, okay, let's.
Yeah, because the first one was actually a down candle.So let's say it looks like this.There we go.This is a down candle here.This is still a fair value gap.
Okay?All that we need in order for there to be a fair value gap is a gap between the first candles top wick and the third candles bottom wick.Okay, so this is where we have an imbalance in price.Now, why is there an imbalance in price?Well, let's think about our candlestick anatomy real quick.
Price opened, price opened up here, right?And at some point in time, price pushed up up here.And then what happened?We had sell orders that ended up pushing price down.So we had buy orders that pushed price up.And then we had sell orders up here to push price down.And then we eventually had sell orders that caused us to close right here.This next candle we open, and then we get buy orders that, boom, push price all the way up here.And then we have sell orders that push the pushes price down.Then from here, we have open, and then we buy orders that push price up.And then we have sell orders that push price all the way down to here.Okay, so what do we notice?We notice that there is a lack of sell orders within this gap.How do we know that?
Because at some point in time, price push up.
Okay, and then what happened?There were sell orders to push price down to have price actually end up closing this as a bearish candlestick.And again, the first and third candle, we do not see color.We do not care what the first and the third candlestick color is.Why?We only care about the candlestick wicks.And to see if there's a gap in between the first candles top wick and the third candles bottom Wick.Okay, if we look at this third candle, what happens?We get sell orders that push price down to here and then buy orders that push price back up.So where is there a lack of sell orders in the market in this candlestick pattern?
All within this gap here.Now, why is this a bullish fair value gap?Well, because we know that this expansionary candle was able to swiftly move through this imbalance of price action.Imbalance of price.Why?
Because there was a lack of sell orders within here.So if we fill buy orders all the way through this candle, the second that we hit this area, boom, we're going to be able to push much higher.Same thing happens when we want to go revisit this candle.Okay, so this third candle closed up here.What will typically happen is price will want to come down.
And if price ends up filling this gap and we see buy orders out of it, what will that cause price to do?It will cause price to push higher.Okay, this is what I call a continuation confluence, because in this case, we are already in an uptrend.And this is a confluence that helps us identify a continuation of the trend.Okay, how do we see continuation?
Well, price is going to come down into this imbalance of price action where there's a lack of sell orders.And if we see buy orders pushing price up and out of that, we know that the trend is going to continue higher.Why?Because there's a lack of sell orders.And if we fill buy orders right here, it's going to cause a price to push higher.
Now, let's show an example of a bearish fair value gap.Okay, so we have a candle right here.Again, it doesn't.The first and the third candle, it does not matter what color they are.Okay.
Really, the only candlestick color that matters is the one in the middle.Okay, so this one is a down candle.Okay, so we have an up candle, then a down candle, and then we can even have another down candle right here.Again, the first and third candlesticks, it does not matter.And in this case, we are looking for a lack of buy orders.
Okay, so we're going to take.For a bearish value gap.We're going to take it from the bottom wick of the first candle in the top wick of the third candle.And as long as there is an.A gap between the two, as long as there is a gap in between the two, then this is an.This is imbalanced price action.Why is it.Why is it imbalanced?Because at some point in time, price had sell Orders that push price down here, but then have buy orders to push it back up price open right here.At some point in time we had buy orders that push it up to here, but the buy order stopped and then price ended up coming back down.
So where is there a lack of buy orders within the market?All the way through here.How do we know that there's a lack of buy orders?Well, on this candlestick, we were only able to push price down here and then up buy orders pushed it back up and then on this expansionary candle, what were we able to do?Move very swiftly through this imbalance gap.
How do we know that it's an imbalance?By looking at the third candlestick and seeing oh, buy orders were only able to push price up to here.So what do we know that is in between these two candlesticks with candlestick wicks?We know that there is a lack of buy orders.So if we are in a downtrend and price pushes into this imbalance price action and we see sell orders coming out of that, what do we know?We know that sell orders have been filled within a price range where there's a lack of buy orders.And what is that going to cause the market to do?Because there's a lack of buy orders, there's going to be no sort of hesitation.If we are able to fill sell orders in this gap, we are going to be able to push price lower.Okay, so all a fair value gap is is either in a bullish sense, there's a lack of sell orders within its current price range.
And then in a bearish for value gap, there's a lack of buy orders within a price range.Okay, now this is really all that I want to cover in today's video and I want to show you guys examples of this on the chart.Now something please.Just like all of our other confluences, we are unable to take trades on just a break of structure to the upside, on just a break of structure to the downside, on just price pushing above a high, on just price pushing below a low.We are slowly but surely learning all of the confluences that we need in order to put them all together to be able to build a profitable strategy that gives us probability.
But we cannot use these confluences on their own.And I'll show you several examples of this happening in real time.
Shows what does and does not count as a fair value gap, including overlapping wicks and stacked gaps. The speaker explains when a gap becomes invalid and why old gaps should be removed after price has balanced them.
Speaker A
Actually, before I do that, I need to show you guys examples of what a fair value gap is not, so you guys don't get confused.Okay, so let's go here, let's go Here, let's go here.Okay, let's say the third candlesticks wick goes all the way up here and this candlestick wick goes all the way down here.
The first candlestick.Again, we draw these imbalances out from at least bearish imbalances from the bottom of the first candlestick and the top of the third candlestick wick.Okay, so do we have an imbalance here?No, because the wicks are overlapping, meaning there was enough buy orders down here to push price back up and there was enough buy orders from down here to push price all the way up through here.So is there a lack of buy orders?No buy orders overlapped in this case.This is not an imbalance of price action.Same thing to the upside.Okay, if this is a bullish for value gap.If this is a bullish for value gap, we get price to push up and then we have sell orders that pushes price back down.So we know that sell orders stop on the first candlestick right here and then we get a decent sized move up.
But then on the third candlestick, what do we see?Sell orders that push price all the way down here.So we see an overlap of sell orders and there is not an imbalance.There is no lack of sell orders within this price range.
So there is no not an imbalance.So price wants to come back down within this price range.That's we're not looking for a fair value gap because there is none.Again, it's a gap between the first candlesticks top wick and the third candlestick bottom wick when it is a bullish for rally gap.Okay, so now with that being said, let's show examples of this on the chart.
Let's go on to the hourly time frame.Show you guys an example.This is a perfect example right here.Okay, let's look at price right here.What are we in?We are in an uptrend.How do we know that we're in an uptrend?Well, we have a high.We have a low.We have a higher high.We have a higher low.We have a higher high and then we have a higher low.What do we notice about about this higher low?Where does this higher low retrace into?What's this?This is a bullish fair value gap.How did we identify it?Well, we can see a gap between the first candlesticks top wick and the third candlesticks bottom wick.Okay, so what do we know about this?There's going to be a lack of sell orders within this price range.So when price comes in and then pushes out of it, we can understand, hey, we pushed into an imbalance price range and we saw buy orders coming out of that.
What is going, what is that going to cause price to do do?It's going to cause price to push higher.Okay, let's show an example of a bearish for value gap.This is a good example right here.
Okay.On the 15 minute time frame we can actually see all of our confluences slowly starting start to come into play here.So let's put this all together really quickly.What do we have right here?We have a high.What does price do come up sweeps the high.So what do we have the potential to do?We have potential to fill orders up here.Then what does price do?It comes down and it breaks structure to the downside on this candlestick.
Awesome.So we see that orders were filled, we see confirmation that orders were filled through break of structure of the downside.How do we know that this trend is going to continue at least in the short term?Well, we have our continuation confluence, which is a fair value gap right here.What is this?This is a bearish for value gap.If we look, we see the bottom of the first candles wick, the top of the third candles wick, we have the expansionary candle.What does price do?Price pushes up into the imbalance price action.And then from there we see a bearish candle following that and then from there price continues lower, at least for the time being.Okay, so this is an example of a bearish for value gap.Now let's show an example of a fair value gap getting disrespected.And we're actually going to learn about this in a completely separate video because this can actually be used as a confirmation confluence.
But we're not going to go there just yet.We are going to talk about how to identify a fair value gap that gets disrespected first.Okay, we're not going to necessarily talk about inverse fair value gaps just yet, but this is examples of fair value gaps getting disrespected.So let's go here.This is a good example right here.And this just proves my point a little bit where we cannot just be taking trades off of these confluences willy nilly.Just saying, hey, there's a fair value gap and then we got whatever, a down candle out of it.I'm just going to press the sell button.Okay.That's not how we do things around here.That's not what we're looking for.So what do we have here?We Have a bearish revali gap, right?We get a break of structure to the downside.Boom.We create a bearish value gap.
The bottom wick of the first candle, the top wick of the third candle.We have a good expansionary candle right here.We see price come up and then we see a rejection candle right here.However, what follows, we see, boom, a big bullish candle.When is a fair value gap disrespected?When we get a candle closure, it's almost just like a break of structure when we get a candle closure above the gap.
Okay?So if we get a bullish candle closure above our bearish fair value gap, that fair value gap is no longer valid and is no longer useful to to us.Okay.And in turn, I mean, this is kind of giving a hint at what we're going to talk about for inverse for value gaps.That typically means the trend has changed and we are going to move higher.
Because again, if we think about this logically, a fair value gap is supposed to show a continuation of the current trend that we're in.So if that fair value gap gets disrespected, that's pretty much saying that the trend that we're in just got disrespected, similar to a break of structure.And hopefully you guys are slowly but surely starting to understand that.Okay, let's show an example of a bullish for value gap getting disrespected.Same situation right here.
We have boom, a gap.This is a bullish gap from the first candles top wick to the third candles bottom wick.This is the expansionary candle we come in.Now, this is.It's just like break of structure, okay?
Where if we see a candlestick wick that goes all the way down here, all the way down here, but we still do not close underneath the gap.It has not been disrespected yet.Obviously, very shortly after, we get a massive close underneath the gap in that disrespects the fair value gap.But on this bullish candlestick closure, this gap is still maintained and is still valid.So it's just like break of structure where we need to see a candlestick closure underneath this line right here in order for the gap to be invalidated.
Now, there's a couple examples that I'm going to try and find on the chart that might confuse some people.Like right here, for example, what happens if we have a bunch of fair value gaps stacked up on top of each other?Okay, so in this case, we have, boom, a bullish fair value gap right here.And then we have another bullish fair value gap right here.And then we have another bullish fair value gap right here.
Okay, what do we do when we have fair value gap stacked up on top of each other?Well, all of them are valid.Okay.So if we are in an uptrend and we end up closing, especially so when they are stacked up on top of each other, when we have bullish for value gap, bullish for value gap, bullish for value gap.With no form of a retrace in between there, that's very important.
With no form of a retrace in between these fair value gaps that are stacked up.So no down candles.All of these, all of these fair value gaps are valid to be pushed into.So in this case, we end up respecting this fair value gap and then we push higher off of that.Okay.
When we do that, we can now remove all of these fair value gaps that are underneath.And this one, because it's been used.Why is that the case?Because if we were to just zoom out on the higher time frame, pretty much this entire move up is just imbalance price action.Right?Because it's just fair value gap stacked, stack stacked.So from here to down here is the imbalanced price price action.When price comes into the imbalance price action and then pushes higher, that means that price did not need to balance out any of this price action.And once we push above the high in a bullish scenario, then we no longer need to have these fair value gaps on our chart.Why?Because from here up to here was the imbalance price action.Price came in, balanced out that imbalanced price action, and then decided to move higher.
Okay.Now on the flip side, price very well didn't have to respect this top fair value gap.It could have closed underneath it.
Does that mean that the trend has changed?No.Why?Because we still have this imbalance right here.And we have this imbalance right here.
So just because we invalidate this top fair value gap doesn't mean that price still is unable to use this fair value gap right here.So price very well could have closed underneath this gap.That means that this gap isn't viable.However, this one is.So price could have put its wick down under here.
And then if price did that and then pushed above this high, what does that mean?Awesome.We balanced out the price range as much as we needed to and now price is going to continue higher and we no longer need this fair value gap.Price could have done the same thing with the second fair value gap.We could have Closed all the way underneath here, put a wick into this fair value gap, and then from there push above the high.
And that still would have been valid.Okay, let me show you an example.That is not the case when we have fair value gaps stacked up on top of each other.Okay.And I'll show you guys a bearish example as well.
Okay, here we go.So right here, what are we in?We're in an uptrend.Why?Because we close above this recent high.Right.We have a high.Low.Higher.High.
Awesome.We have several bullish fair value gaps that are stacked up on top of each other.We have a fair value gap right here.We have a fair value gap right here.We have a fair value gap right here.
And we have a little itty bitty fair value gap.Just kidding.We don't.Okay.This still holds true, though.
Okay, so what do we see?Price.Do we see Price push all the way through this fair value gap.Awesome.And we see a wick that goes underneath it and then into this gap.
And then from there, we get a bullish closure out of it.We're still in an uptrend, Right?Because we don't break structure to the downside.We don't break structure to the downside.And price is in bullish market structure.
So we come down, we fill this gap.Does that mean we have to reverse off of this gap?Well, no, because we have this gap right here and this gap right here that Price could respect.Price goes lower, fills this gap, and then we get a bullish candle out of it.Awesome.From there, we know that, hey, Price has balanced out this price action.Why?Because we see a bullish candle closure.Okay.From there, we can safely assume that Price is going to move higher from there.Obviously, this all has to come with context.We need to put all of our confluences together in order to make this happen.But we can see that this is a good example of Price pushing through one fair value gap and then wanting to hit another one that's stacked up on.On top of each other.And then from there, once we fill this fair value gap and this fair value gap, do we leave this fair value gap on right here once we push above this high?
No, we don't.This fair value gap is no longer valid.Why?Because we had an imbalanced price range from here all the way up to here.And we saw Price come all the way down, balance it out, push above this high, pretty much telling us, hey, this, this imbalance price action, that was all we needed to do.We didn't need to fill this gap gap to balance out that price action.So in turn, you need to delete it from your chart and you're not going to drag it all the way over and say, yeah, this is going to be valid somewhere over here in like 3 years for price to come down and hit it as a bullish for value gap.No, that's not the case.Okay, let me find another example.Okay, this is a good example right here.
So we have a bearish fair value gap right here and then we have another one stacked up on top of it right here.So we have two consecutive bearish for value gaps.We get a retrace up into it, we're in a downtrend and then we see a bearish closure underneath it.And then we push underneath this low.Awesome.
Again, the imbalance price range is from here down to here.So price very well could have pushed up and use this fair value gap and push lower.That would have been valid.But in this case, price is telling us, hey, we push into this, we push into the imbalance price action and then once we push underneath this low.So on this candlestick, it's pretty much telling us, hey, we balance out everything that we needed within this price range.We no longer need to go back up into and to balance this out.So what a lot of people will do is they will look at this retracement on up and they'll be like, oh, it was just filling the bearish for value gap.No, it wasn't.Right.This move up was not filling this bearish for value gap.
Why?Because this imbalance of price price action was already balanced out by this move up and then this move down.
So why did price move up here?It wasn't for the fair value gap.It was for the sweep of liquidity to take out these highs and then to push price lower.That's where a lot of people will mess up.They will leave fair value gaps on the chart that have either already been used or they will leave fair value gaps like this one up here and drag it all the way over here.And then they'll see price come up into it and then see a little sell off and they're like, oh, I'm going to take a short off of this when that's the stupidest thing ever.Because we know that this was the imbalance price range and price already came up, filled this imbalance price range and told us, hey, we balance out that price range, all that we needed.Okay, so we need to delete this fair value gap off of our chart or else that's going to cause us to take short positions off of this and then end up getting fucked and getting stopped out.
Okay.Very, very important.
Okay.And we're going to go in deeper when we talk about inverse fair value gaps, how these stacked up gaps are going to work on that end.But that's just, this is just the first, the first little lesson when it comes to fair value gap.So hopefully you guys were able to understand that.Okay, what are fair value gaps?It's an imbalance in price.Okay.How do we, how do we identify it?It's from, in a bullish scenario, it's from the top wick of the first candlestick to the bottom wick of the third candlestick with an expansionary candle in the middle.Okay, we.
What is not a fair value gap when the two weeks overlap?In a bearish, bearish scenario, it's from the bottom wick of the first candlestick to the top wick of the third candlestick with an expansionary candle in between.Can we have fair value gaps that are stacked up on top of each other?Yes.Let me do one more example real quick.
Just so you guys do not get confused.Here is one last example that I want to show you.We have a bullish fair value gap right here.And then we end up getting another one right here, very little one.And then we end up getting another one right here.
We have this fair value gap right here.Price comes up, we get a retracement down.This fair value gap does not get filled.And then we end up pushing above this high.What do we do with this fair value gap?Once this high gets pushed above, do we keep it on our chart?Do we drag it over?No, because even though this is imbalanced price action, when we see price come down and then close above this high to continue the uptrend that we're in, we have a high.Low.Higher high, Higher low.
Then we push up to make a higher high.Yes.We have an imbalance of price action right here.Price does not have any obligation to us or the chart to have to fill this gap, to have to fill out this balance imbalance price action again, just like liquidity.Just because we push above a high doesn't mean that price has to reverse off of it.
It just has the opportunity and it just, it just has the opportunity to.So when we're in an uptrend and we have imbalanced a imbalanced price range right here, and we get a retrace, but we don't end up filling this imbalance price range.And then we continue the trend by pushing above this high.
What is price telling us?It's telling us that, hey, we didn't need this fair value gap to.To push price higher.We didn't need to balance out this price action.So what does that tell me about this fair value gap?We can, boom, get rid of it from my chart.Why?Because we close above this high and we pushed higher.Price was telling us that we did not need to balance out this price action right here.
Now let's look again.Right here we have a fair value gap, then another fair value gap, then we get a retracement down.Following that retracement down, what do we do?We actually end up, I mean, this was over the weekend, but we end up closing a lot higher or opening a lot higher.So what does that tell me about both of these fair value gaps?Do we drag them over?Because we're like, hey, this is an imbalanced price action that can be used, no price retraced and then pushed back above this high, continuing the uptrend.So what is price telling us about these two imbalanced price price ranges?It was saying, hey, we understand that there's imbalance price right here, but we do not need that to continue the trend.So price ends up pushing higher.
So what do we do to these fair value gaps?We remove them from our charts.We do not drag them over.We.That is not the reason for price to push higher right here.
That is not the case.Okay.It is only within the current trend that we are in.We don't drag it over.We aren't trying to say, hey, look, these fair value gaps from right here are going to get used all the way over here.
No.Why?Because price already pushed up into it and balanced out the price action from both of these fair value gaps right here.Both of these fair value gaps are stacked up on top of each other.There's no retrace in between.
So both of these are valid.We have imbalanced price action from this candlestick wick to this candlestick wick.What do we see price do?Balance it out and then boom, we come down and we close underneath the low.So what does that mean about both of these imbalances or about this imbalance price action?
Price wanted to balance it out, it did.And then when we push underneath the low, it's saying, thank you, we were able to fill these orders and now we're done with this imbalance price action.So what do you have to do to these fair value gaps?You remove them from your chart or else over here you're going to say, oh, price is filling a imbalance price action where if we see sell orders out of that, then we're going to go lower.No, that's not the case.
Why?Because price had already balanced out that price action.
Covers new day, new week, and new candle opening gaps, then introduces balanced price ranges. The speaker shows how rapid moves up and down create illiquid zones that can be used as targets or entries.
Speaker A
Cool, cool.What is going on, guys?And welcome to Advanced Imbalanced Concepts.
Okay, so this is going to be covering other imbalances that we can see within the market and then also touching a little bit up on fair value gaps just one more time.And then tomorrow we're going to be covering inverse for value gaps.But today I want to talk about the different, there's other imbalances that we can see within the market.So with that being said, let's jump straight into it.So what are the other imbalances that are in the market besides just for value gaps?
There are new day, oh geez, New day opening gaps, new week opening gaps, new candle opening gaps.And then there are BPRs.And we'll talk about fair value gaps a little bit more at the end of this.So first thing, this is going to be super, super easy for you guys to understand.What is a new day opening gap?Well, it's pretty simple.It's when we close the current day and then we open into the new day, there's a small hour where the market is not going to be trading during that time.And in turn, if we, let's say close the previous day right here and then we open the day, the new day right here after that hour, then this would be considered a new day opening gap.Okay, you guys will see this, we'll show examples of this on the chart.And all that it is is a area of imbalance price that price is actively going to want to seek out to balance out before continuing in the direction that it wants to go.
Now how can you guys use this to your advantage?To be honest, it's very rare that we are able to be able to take trades towards new day opening gaps or towards new week opening gaps.So you're probably saying, well, why are you even teaching, teaching us about this?Because it is my duty to you guys as your mentor to be able to pretty much teach you guys everything that I know about the markets within the series.That's my goal with this, is to teach you guys everything.
And on occasion, there are very, very good trades that we can do that we can take to target these new day opening gaps and new week opening gaps.And potentially new candle opening gaps.Okay, so same thing with.So that's new day opening gaps.It's very, very simple.Okay, let's say the previous day closed right here.An hour goes by, the new day open opens up here, There's a gap between the two candlesticks close and open price is actively going to want to seek out to fill the new day, the new day opening gap and then continue in the direction that it wants to go.So how is this beneficial for us?One, we know that we can actually treat these new day opening gaps as very strong draws on liquidity.Now you're probably saying, I thought imbalances aren't draws on liquidity.
Yes, fair value gaps are, are not required to get filled.That's what we talked about yesterday.They are by all means not required to get filled.And new day opening gaps and new week opening gaps are not required to get filled either.However, price more often than not has a very high probability of actively wanting to seek out these gaps in these imbalance price ranges, specifically new day and new week opening gaps, to balance it out and then continue price in its direction.So you can use this as one of two things.Either as an entry point by understanding, hey, we have imbalanced price action right here and we are going to want to target the new day opening gap first before continuing the trend higher and look for an entry there.Or if we are well above a new day opening gap, you can say, hey, look, we have a new day opening gap right here.
This is probably where price is going to want to draw towards and we can use it as a target.Same thing with new week opening gaps.As you guys know, the market market closes on Friday and then reopens in like Sunday the afternoon, depending on what time zone you're in.So typically, I mean, we will show it on the chart, but boom, let's say this was Friday's close right here and then boom, Sunday open is up here.It's the same exact thing, but just happening on over a week on the weekly candlesticks.Okay, so again, if there's a gap between Friday's close and Sunday's open, what will price tip typically do?It will want to actively seek out that weekly imbalance price action and then continue in the direction that it wants to go.Again, you can use this through to your advantage by either taking trades towards the new week opening gap as a target or taking trades within the new week opening gap as an entry.
Okay, the next thing is new candle opening gaps and then we're going to show all of these on the chart.So new candle opening gaps are literally the exact same thing as new day, new week opening gaps, but just on any time frame that you're trading on.So just like how on the daily time frame we can have gaps between the days and just like how on the weekly time frame we can have gaps between the weeks, we can also have gaps between candlestick closures.So let's say that we are on the four hour time frame, for example, and the four hour candlestick closes right here.And then we have the next four hour candle opens up here.It jumps up.This right here is imbalanced price action.What is price actively going to want to do?It's going to want to balance it out and then come continue in the direction that it wants to go.
This one I'm going to be, I'm going to keep it.An absolute buck with you guys is pretty freaking useless.But I figured I would put it in there because it does happen and it is an imbalance in price action.You will very, very, very, very, very, very, very, very, very, very like 0.0000001% of the time be looking to take a trade off as an entry or a new candle opening gap as a target.And the reason behind this is because we need a thing new day opening gaps.Why are we able to use this as a target or as an entry?Because there's an hour worth of price action or there's an hour that we are pretty much skipping from market close to the new day open.So there's an hour that price can shift and that price can move.For new week opening gaps, there's two whole days that price is able to shift and that price is able to move.
So with that understanding, it's like, okay, there's, there's, there's time in between these candlesticks closing, closing opens.
However, for new candle opening gaps, it's like there's, it's, it's literally from the candlestick close to the next candlestick open.And if the market's open, you know, it's pretty rare for a candlestick to close and then the next candlestick while the market is open to just jump up in price.While the market is open fluid and orders are being filled right Versus the new day and new week, there's actual time in between the two for price to actually move up or move down in price to cause those gaps to get formed.So with that being said, let's go ahead and look on the chart to show examples of this, this happens very, very frequently.Okay, so we can, can, I mean this is a good example right here.
What do we see from this daily candle?Where do we close?We close down here and then boom, the new daily candle opens up here.And actually what do we see from this daily candle?We come through and we fill this gap completely.
So if we go here on the four hour time frame, we can see that the daily candle closed right here at 1400 and then the new day candle opened up here at 1800 and we can even scale down to the hourly time frame and show the exact moment.So the hour that is skipped is 1700.We can see that this is the 1600 candle right here.This was the close, this is the next candles open and then boom, immediately right when the new day opens, what do we come down and do?We come down and we fill that gap.We can even scale down onto the five minute time frame to show it a little bit better.We can see that boom.This is when the previous day closed.This is when the new day opened.What do we immediately do?We come down and we fill this gap.
Now again, this is during Asian session, so I'm really never looking for these trades to be taken.That's kind of why I said that this is kind of hit or miss on when we're able to use it.However, new week opening gaps, we actually have more opportunity to be able to take advantage of that because typically the new week opening gaps are going to be a little bit larger and a little bit more drastic and potentially creating a, a bit more of a range for us to be able to trade into.And maybe on sun on Sunday open, we're trading pretty stagnant because again, it's Sunday.
No new money from the US market has came into the market yet to be able to move it.So it gives us an opportunity on Monday to either take a trade towards the new week opening gap or as an entry out of the new week opening gap.So, so let's show an example right here.We can see that this is a very good example.We have boom.This was the weekly candlestick closure right here from the week of Monday, October 20th.And then we can see that this week opened all the way up here.So we have a huge weekly gap within here.And then if we go onto the daily time frame, what do we slowly but surely do?We can see that boom, the Friday, this was Friday's close, this is Sunday's open.
And then from there we slowly but surely come in to fill this gap.So in this, this scenario, what would we have been looking for?We probably would have been looking at it like this.Boom, this was Sunday's close, this was Monday, or sorry, this was Friday's close, this was Sunday's open.We trade up and then boom.What is this?This is around when Wednesday we get a liquidity sweep and then we go down to fill in this gap down here as a target.Okay, let's show one more example of a new week opening gap.Again, the odds of you guys using this is, I mean, I don't want to say it's low, but very rarely I will occasionally take trades off of this.So boom, this is a good example right here.We have Fridays close and then we have Sundays open.And we can see that literally right when the market opens, Boom, market opens, we immediately trade down, we fill this gap and then we continue higher.
So in this case, this would be an entry point.But again, the odds of us trading on a Sunday, it's just not very likely.But again, when we do have the off chance that these gaps don't get filled immediately because like I said, price will very rapidly want to actively seek out these imbalances and fill them as soon as possible.
These gaps in the market.When we don't, when we don't fill them and coming into Monday open, then it's a very, very good target.So that's new day, new week, opening gaps.And then let's show an example of a new candle opening gap.Now, again, like I said, these are pretty difficult to spot, but we can try and find an example right here.So this is a good example.We can see that boom, this candle closed right here.This is on the one minute chart.And then boom, this new candle opened right here.So this is an imbalance.Once this candlestick closes, what do we immediately come up and do?We come up, fill it, and then continue a little bit lower.Okay, let's show another example.This is a good example right here.We have the close and then we have the open.
Okay, so there's a small gap within here.Once this candle set closes, what do we immediately come up and do?We balance out price action.Again, the odds of you guys using this.As you can see, these are very microscopic, very, very small moves.
It's to keep it a buck.It's useless.Okay, so new candle opening gaps.There you go.Now you know it.You can show your grandparents and say, hey, I know what I'm talking about and you're never going to use it again.Happy birthday.Okay, next thing that we're going to be looking at is bprs.Okay, we're going to be looking at bpr.So what is a bpr?
A BPR is essentially two sets of or pretty much inbound, a imbalanced price range that we get a swift move down or a swift move up through and then followed by a swift move back up or down through.So we actually had a couple of good examples of this over the past couple of days.I believe my trade yesterday, it was taken off of a bpr.So matter of fact, let's just go to that.Let's just go to that.And I can show you guys the example trade that I took.It was on Wednesday and it was a short position, I believe rates.
Did I take it on?Let's see, Wednesday, it was a long on the S P 500.When did I take it at 9:36.Oh, wait, no, no, no, no, no, no.It was on Tuesday that I took the trade.
It was on NASDAQ short 1041.There we go.NASDAQ.It was a short on Tuesday at 1041.Let's try and find this thing Tuesday.
Yes, this is exactly.Look what I was looking for.Okay, cool.So.
When we have.
So this is kind of what I was talking about.And I guess this kind of leads into what the extra stuff that I was talking about with fair value gaps.When we have all of these fair value gaps, stock stocked up, stacked up, or even better, if we can look at just this price action.
What, what do we see?What do we see that price did here?This was a very, very rapid, very, very swift move up.Okay, so what do we know about imbalance price action?What do we know about these imbalance ranges?
We know that when they are created, it means that there's.Okay, in the bullish sense, there's a lack of sell orders.Right.So.Or there's just a lack of orders.
So we can see boom, price.What does.What is price able to do?Boom, rip right through it with the buy orders that were filled down here.Okay.
Typically when we have a big swift move straight up or straight down, when price re enters that range, it will be able to one completely fill that range right back up, but also move just as swiftly down through it as it moved up.So my trade on Tuesday was actually taken off of this.It was identifying that, hey, we have a very, very illiquid price range right here.If price is able to start giving me some bearish confirmation, which it did up here, then I am going to look to take a trade all the way down to the bottom of this price action.Why?
Because I know that this is a imbalanced price range.And two, I know that once price enters into this imbalance price range.Price range, just as how quickly price was able to move up through it, price is going to be able to move down through it very, very smoothly.And then once it gets filled, price will probably continue in the same direction that it was going to.There you go.
So this trade was taken.So this was taken on the creation of a bpr.So you're probably saying what does a b.What is a bpr?A BPR is essentially a illiquid price range.
Okay.That we can identify a swift move up and then also a swift move down.So I don't want to get you guys like super confused or whatever.Like cause you guys to panic and freak out and think, oh my goodness, like I need to understand this because again, it's very.Most of these concepts, I just want you guys to understand it and have it in your back pocket.Because if or when I take a trade like I did on Tuesday towards this, I want you guys to be able to understand it.And I also, again, like, I'm teaching you guys all of these advanced concepts because I feel, feel like you guys need them, okay.Because there is off chances that these things happen.Okay?So a BPR is when we have a swift move up through imbalance price action, and then we have a swift move down through imbalance price action.
And then from there we can just identify this entire range as imbalance price.Okay, so how can we use this to our advantage?Well, there's one thing.When we see the swift move up, we can use it as a target, knowing that, hey, once we enter back into this range, we, we are going to move very swiftly to the bottom of the range that was created on that swift move up, either as a target or we can use it as an entry point.Once we fill back in this big range, which again is pretty much an imbalance, we can look for a continuation out of it.So we can see a break of structure to the upside and then we see a retrace down and then price continues higher.Okay, so let me show you guys more examples of these BPRs and how they can be beneficial to us.
So this is another good example right here.What do we see?A very swift move down through here.So what do we know about pretty much from here all the way across?This is a very imbalanced price range.
So I'm pretty sure I took a trade off of this as well.When was this?No, this was in December.But let's look right here.Where does this imbalance price range?Or look, boom, big dump down.Where does price finally start to, like, regain its senses?Right down here.So we know, okay, realistically, we can kind of.We can drag this higher.But realistically, when did the dump down start?Boom.From this low, we flood down.Boom.Flood down.Awesome.This entire range is imbalanced.And then what do we notice right when we crack above these highs right here?Like, literally right when we push above these highs.
Look at these highs right here.
The second that we push our head above these highs, bow rapid fire straight up through the imbalance.And we can even narrow this down to two sets of imbalances or two sets of very illiquid price ranges.This is a set of.This is a illiquid price range.And then this is an illiquid price range.And notice how price comes up, fills the illiquid price range.Okay, Balances out a little bit.Price comes down, fills in this illiquid price range.And then, boom, we bounce back up, fills in this illiquid price range.Okay?And then we can even notice.Look, look, look, look, look, look, look, look, look.We can even notice it within the same moves like this.This whole price range was so illiquid because you can see, boom, what happens even within there.Rapid move up.And then once price pushes underneath these lows, boom, rapid move down, balances it out.
And then, boom, we finally start trading back to normal again.You are going to see this very, very frequently on your guys's charts.So how is this going to be beneficial for you?Just like I said.
Well, we can use it either as finding an entry point and then understanding that, hey, once we push into this illiquid price range, boom, we're going to rapid fire all the way up to be able to balance out this illiquid price range.So we can, boom, Try and find some sort of bullish confirmation down here to take a trade up to be able to balance this out.Or you can just look for it for confirmation.Like, maybe you see, okay, boom, price came up, balanced out this price action.Now I'm going to be looking for shorts to come back down and balance out this price action.
Again, we're going to get into how we can put all of these confluences together for you guys in a proper strategy.But this is.I'm just kind of like, I'm spitballing here so you guys can understand.Again, okay, like, this is.Again, it's Very, very obvious.Look, rapid fire, move up.What is going to happen once we crack back underneath these lows?Rapid fire, move down.And then look at this.What do we have?Massive bpr.We have a boom.Rapid move up.Boom, rapid move down.Okay, this is our.This is our imbalanced price range and it's really from here.So what do we see?The second that price is able to push above this high, what does it do?Rips all the way up through it.Rips all the way up through it.To balance it out, we can.I mean, it's.It's.
I bro, like, do I even have to explain myself anymore?Huge imbalance price range.What do we do?The second that we push underneath these lows?Rapid fire all the way through it.Same like it's.It's everywhere.
Okay, rapid move up.The second that we push underneath these lows, Boom, rapid move down.It is everywhere.And you can use these to your advantage.Okay.Boom, rapid move down.Once we push above these highs.Boom, rapid move up.It's beautiful.Okay, same thing here.
What do we have?Rapid move up.What do we do?Rapid move down.Illiquid price range that we can use either to.Boom.If we're taking shorts off of this, we can use it to target to understand that, hey, price is probably going to want to balance out this entire imbalance range and then from there do whatever it wants to do.Or you can look to take a trade off of it.I mean, I feel like I've explained myself pretty thoroughly on.On this.Again, sometimes they don't necessarily completely overlap, but we can see this is a good example.Again, from here down to here, boom.Price fills, this consolidates a little bit and then boom, rapid fire straight back through it.Same thing right here.I mean, we can do this all day long.
Boom.We have an imbalanced price range right here.What do we do?Rapid fire through it and then we can go back.Boom, rapid fire right back through it.And then boom.What do we do?Rapid fire right back through this very, very beneficial concept.I'm like literally just as we are scrolling, we see it all the time.Boom, rapid move up.Boom, rapid move down.You can use it to either look for entries or use it as targets.So that's BPR and that's pretty much what I wanted to cover in terms of the fair value gaps.And yeah, really the last thing that we need to cover with imbalances is inverse fair value gaps.
Explains how a fair value gap becomes an inverse fair value gap when price closes through it against the expected trend. The speaker shows how this can confirm a trend change earlier than break of structure.
Speaker A
And that's going to be tomorrow.
Welcome to inverse for value gaps explained okay, so we talked about fair value gaps two days ago.Today we're talking about inverse for value gaps.Yesterday we talked about advanced imbalance concepts.So with that being said, let's jump straight into this.So as we remember fair value gaps, what do they do?
We've kind of established.I hopefully we can start laying.And now that we have a couple confluences under our belt, I would like to be start classifying each one of these confluences.So first, liquidity.Okay, for me, this is just like the reversal confluence, right?Because Price has the opportunity to fill orders, right?To be able to start a reversal when we push up above or below a draw on liquidity.Because again, if we're in an uptrend and we push above a high, what do we have the opportunity to do?Boom, fill some orders above here and then cause Price to go lower.Or if we're in an uptrend and then there's a high time frame high right here.And then we push above it, we have the opportunity to potentially cause a reversal.So liquidity, step one of our strategy.Now, again, I'm not going to get in depth into our strategy just yet, but I want to start classifying all the confluences that we've learned thus far.
So liquidity, what does that correlate to the reversal?As you guys know, I would much rather sell the top and be buying the bottoms of every single move because that's going to give us a better risk reward.
That's going to give us higher odds and better chances of being correct about the overall move as well.From there, we are going to be looking for a change in trend.So so far, what confluences do we know or have we learned that helps us identify a change in trend?Well, break of structure.Or we can just abbreviate it to bos.
Okay, break of structure.For me, this is giving me this I call a confirmation confluence.Why do I call it a confirmation confluence?Because it's saying, hey, we pushed above a area that we could potentially fill orders at.We pushed above an area that we could potentially fill orders at.
And then when we get the break of structure, what does that tell me?It confirms to me that orders were filled above this high, right here, above the liquidity sweep.Because again, what do we know about liquidity?Price just has the opportunity to fill orders above highs and below lows.It doesn't mean that Price has to fill orders.It just means Price has the opportunity.So how do we confirm, confirm that Price actually took that opportunity and wants to cause the reversal we see a change in trend through break of structure.Now that's the only confirmation confluence that we know for now.And then just recently we learned a continuation confluence through fair value gaps.So what are.
Sorry, I can't talk and type at the same time.So what are fair value gaps?Well, let's think about it again.Liquidity gives us the opportunity to reverse.So if we're in an uptrend and then boom, we push above this high, awesome.We have the opportunity to reverse and then boom, we break structure to the downside.Awesome.We get confirmation that the trend has broken.What do I need?Because I like to be extra safe about my trades and I mean you guys should be too because eventually we're going to be risking our hard earned money on, on, on these trades in our strategy better be fucking airtight, okay?I'm not just going to be taking a trade off of us pushing above a high and then breaking structure to the downside.Because guess what, this could just be a higher time frame retrace, right?
And then Price could just boom, go all the way up from here.So what do I need?I need to show proof that the new trend that we are starting like this downtrend is going to continue.
How do we identify a continuation of the downtrend Downtrend?Right now the only continuation confluence that we know is fair value gaps.Okay, so in this case we get boom.We push up into liquidity, we get the confirmation and as of two days ago, we learned fair value gap.So if there's a fair value gap right here, boom.We push into the fair value gap and then we see a continuation of the trend again, opportunity to fill orders, confirmation that orders have been filled and then confirmation that the trend is going to continue down.Hopefully you guys are now seeing how this is a very, very optimal trade entry to then be targeting other draws on liquidity.Over here to the left hand side.Now with all of that understood, today we are going to learn another confirmation contract confluence.And it's actually, believe it or not, using fair value gaps.
Because again, if we think about it, what are fair value gaps supposed to do?They are supposed to show us continuation of a trend.So if we have a fair value gap right here that gets filled and then we push up higher, it's showing a, it's showing continuation.What else do we know what happens if a trend doesn't continue?Then it's pretty freaking obvious that Price is going to start a new trend.
So what happens if we inverse or if we disrespect a fair value gap that's within a current uptrend.What if we have a fair value gap right here and price comes down and closes underneath it?Well, that's not what continuation confluences are supposed to do.Price is supposed to come into this continuation confluence and move higher.So why is price pushing and closing underneath this continuation confluence?Maybe because price is actually changing direction and this is giving us a confirmation confluence that price is going to go lower and this is going to be a change in trend.And that is all inverse fair value gaps are.Now we already know how to identify fair value gaps, so we're just going to jump straight to the chart and I'm going to show you guys examples of this all.An inverse fair value gap is, is a fair value gap that gets disrespected within the current trend that it's in.
And we can use it as a break of structure or as a confirmation confluence.
So let's get in here and let's find an example for us.We can go, let's see, where's a good, Where's a good one?Where's a good one?This is a good example right here.Boom.Let's look at this four hour price action.Okay.Price comes down, we break structure to the downside right here.Right.This is the most recent low.We get a closure underneath it.Awesome.Cool.We're in a downtrend at this point in time and oh, what do you, what do we see?Awesome.We have a bearish fair value gap right here.What does price do?Price comes up and then what do we end up doing?We end up inversing this fair value gap.So in turn, we were in a downtrend because we closed underneath this low, but now that we close above this fair value gap, inversing the continuation confluence that realistically should have sent price lower, but instead didn't, then what does that cause price to do?
Slowly but surely move higher.We inverse this gap, Price comes down, retraces, and then we continue with the uptrend.We get a high, we get a higher low, we get a higher high, we get a higher low, we get a higher high, we get a higher low, higher high, higher low, etc.That's one example.Let's show an example to the downside.
And the nice thing about inverse fair value gaps is I want to find an example where we are able to use this to our advantage before we are able to find a break of structure.Now that's why this is very useful.And again, you're probably saying well, why would we want to use this when we could just use break of structure?Well, that's the thing.Sometimes, like in this case, we can look and identify a change in order flow before we actually get the break of structure.
So notice right here we are in an uptrend, Right.We closed above the most recent high to confirm that we're in an uptrend.So if we're looking for a break of structure to the downside, we are going to be monitoring this low.Right?This is the most recent low.
But now with this newfound confluence of fair value gaps and inverse fair value gaps, we have a bullish for value gap right here.So realistically, if this trend wants to or is supposed to continue higher, we should respect this fair value gap and continue higher.Why?Because it's a continuation confluence.This is the last form of imbalance price on this time frame that price needs to tap into to continue higher.
When do we invalidate this gap?Is it on this candle?No, when we get a candlestick closure underneath the bottom of the bullish fair value gap.Right.Because this invalidates the bullish for value gap, we're getting a candlestick closure underneath it.
Awesome.Now once this candle closes, we know that price is probably going to turn into a downtrend.And look at that.It does.However, if we only had the confluence of break of structure, we probably would have had, we would have had to wait for another four hour candle to form until we got underneath this.
And now this is why you guys can hopefully see how important having this confluence is.Because we were able to enter up here instead of having to wait till all the way down here, that's an extra 68 ticks.And that could literally be make or break for us on having a better risk reward, having a better win rate.Okay.By being able to execute right here.Because if we took a short position right here and target these lows, this is a pretty good risk to reward.This is a 1 to 1.1.3 risk reward ratio.By entering right here and then targeting this draw on liquidity, and then targeting these draws and liquidity right here, we have a one to two risk reward.However, what would happen or what could potentially happen if we didn't know about inverse for value gaps and we had to enter on this break of structure, look how drastic that changes our risk to reward, but also how, how much larger it makes our stop loss.
This makes my stop loss literally two times the size and now makes me have a risk reward that's not even 1 to 0.5.
Meaning if I'm risking $1,000, I'll only be able to make $450.That's horrible, right?Versus if I take this trade up here, if I'm risking a thousand dollars, I'll be able to make $1,300.That's a little bit better.Okay, so again, having this as another confirmation confluence, again, we, you guys don't necessarily know how to put these pieces together just now.And we can't just be taking sell positions on inverse fair value gaps to the downside and taking buy positions to inverse value gaps in the upside willy nilly and just expecting for price to go in our direction.However, this is a very, very key confluence that is going to be beneficial for you guys down the line in helping understand our strategy.Because I use this confluence almost every single day, almost more than break of structure because more often than not it happens before break of structures even do like again, I'm looking at this, this is another very good example right here.
Boom.What do we have?We have a bearish fair value gap right here.What does price do we close above it?And notice again, this is the high that we are monitoring.And for us to have a break of structure, we fully would have had to wait for another four hour candle and look at the difference.Boom.
We could have entered this trade right here.Compared to having to wait for a break of structure all the way up here, that's 123 ticks that we literally are chopping off from our trade by not knowing this confluence.So this confluence is very, very useful, very, very helpful for us.I use it on a daily basis so make sure that we understand this.Now there's going to be some caveats with this, so I'm going to get into it it with like when we have multiple fair value gaps stacked on top of each other and then we're going to wrap it up today.Okay.
All right, Now you're probably saying, well tjr, remember when you were telling us all about how when we have multiple fair value gaps stacked up up a top on top of each other, all of them are valid and it just depends on which one it wants to push into.And if it pushes into one of them and then ends up going higher than all of the other ones that were underneath end up getting invalidated, blah blah, blah, blah, blah.Yes, I do remember that.So let's show examples of this and show you guys how to be able to tell which one is actually going to be the invalidation point of a stack of fair Value gaps.Okay, I'm trying to find a good example for you guys where we have a couple fair value gaps stacked up on top of each other without getting a break of structure first.
Okay, this is a good example right here.So in this case.Oh, is this a fair value yet?Barely.Okay, cool.So in this case, what are we in?We are in a uptrend, right?We are are closing above most recent highs.So we know that we're making higher highs.Awesome.We're in an uptrend.
Okay, so in this case, we have two fair value gaps stacked up on on top of each other.Again, how do we identify this as just fully these two are together in imbalance price action?Because there's no retrace in between these candles.So again we have a fair value gap followed immediately by another fair value gap.There's no black candle in between it.Awesome.These two are grouped together.Now let's look at this and let's have.Let's sit here and let's look to be able to identify what fair value gap do we wait for and what fair value gap do we look to get invalidated when we're looking for an inverse for value gap?Because now in this case, we have two fair value gaps that we could potentially use that we could potentially retrace trace off of.Well, if you think back to me explaining fair value gaps in this concept, right.
Price could come into this imbalanced price range and it could push higher.Right.And then from there we no longer need this imbalanced price range.Why?Because price came down to this imbalance.Price range said, yep, that's enough.That's all I needed to do to to balance out price and I want to move higher.But what does price also still potentially have the opportunity to do?
It can still close underneath this fair value gap, come down, fill this one and push price higher.Hopefully that explanation helped you understand what fair value gap needs to be inversed when we have a stack of them.For this to be a proper contra confir confirmation confluence, it's going to be the bottom fair value gap when we are looking for inverses to the downside.Okay, so the bottom fair value gap when we have multiple fair value gaps stacked up on top of each other needs to be inverse.Why?
Because price closing underneath this fair value gap and in this case we closed underneath both of them.But I wish there were this candle ended like right here.Because price closing underneath this fair value gap, it doesn't mean anything.Why?Because we can still come down and fill this gap to push price higher because this is still a valid imbalanced price range.
Again, like I was telling you guys two days ago, price can come down and fill in this gap and then push, push higher.Okay, so me looking at this, I'm like, okay, we need to wait for not this gap to get close underneath in order for me to flip bearish, but this gap to get close underneath because this is the last fair value gap that is holding up the trend.Right?If this fair value gap gets inverse, it's not a problem.Right?Because the trend could still continue off of this one.However, if this one gets inverse, then this 100% means that, boom, the trend is gone.And what do we see?We see price barely close underneath it, and then price ends up going lower for a little bit.Okay, let me show you guys another example of this of stacked up fair value gaps.
Okay, so this is a good example right here.So again, let's see.We're in an uptrend here, right?And we have two fair value gaps that are stacked up on top of each other.We have this gap immediately followed by this gap.Again, there's no retrace in between.There's no price showing us that we balance out these price ranges yet.So awesome.We know that from here up to here, this imbalance price, we see price come down and then what do we do?We close underneath this gap right here.
So what does that mean?Does that mean, oh, no, price is actually going into a downtrend?No.Why?Because price still has the opportunity to one main, maintain the bullish trend that we're in.
How do we know that we're in an uptrend?Because we close above the most recent high.We haven't broken into a downtrend just yet.So awesome.Us closing below this fair value gap right here doesn't mean anything.
Why?Because price can very well continue the trend out of this gap because these gaps are stacked up.So if I wanted to see a inverse or a confirmation confluence by using a inverse fair value gap, what fair value gap would I have to wait for?For?In the stack of these fair value gaps, I would have to wait for a closure underneath this gap.
Okay, now obviously that is going to take a lot, but that just shows an example of us having a stack of two fair value gaps, the first one getting closed underneath, but us still be able still not being able to classify it as a full inverse.Because if we wanted an inverse, we would be looking for this gap to get close underneath, not this one.Because again, if this one gets closed underneath.Doesn't matter.The trend is still intact.
We can still use this one in our favor.
All right, this isn't an example of a stack, but this is a good example for us to look at.So right here, what are we in currently?We're in a downtrend.We have a high.We have a low, lower, high, lower, low.We close underneath the most recent low.We're in a downtrend trend.Right.What do we have?Right here, we have a continuation confluence, at least that we could be potentially looking at for price to come in, fill, and push lower.Right.But what happens?Price comes up, we get a candle closure within this fair value gap.Is this on this candlestick closure right here, a inverse fair value gap?No.
Even though we push a wick above this fair value gap, it is not a inverse for value gap until we get a full candlestick closure above the gap.Just like with break of structure, we need to wait for a full candlestick closure above the gap.So when we get that on this candlestick, and then from there we can see, awesome, this trend has reversed.And then what do we see?Boom.We see price come down, fill this gap, and then move higher, come down, fill this gap, move higher, come down, fills this gap, moves higher.We can see the trend being formed in these imbalances being created and being respected on.On our way up after getting a inverse of this gap in an inverse of our previously continuation confluence, which now turns into a confirmation confluence.So hopefully you guys understand inverse for value gaps.
Now, that is another one of our confirmation confluences that I use literally every single day.
Okay.It's very, very important that you guys understand this concept.So if you guys.Guys don't necessarily understand it just yet, you guys will probably be able to get it a little bit more as we go through this series and as I show you guys more examples of it and it being used in real time, whether you guys are watching my trade recaps or not, but this is a very, very important confluence for you guys to learn.And with that being said, we are going to introduce another continuation confluence.So now we know two confirmation confluences.We have break of structure and inverse fair value gaps.And right now, we have one continuation confluence, which is fair value gaps.The next continuation confluence that we're going to learn is equilibrium.I'm going to teach that to you guys tomorrow.
So with that being said, I love and appreciate you guys.
Teaches equilibrium as the midpoint of a swing range and how it separates premium from discount. The speaker shows how equilibrium works alongside liquidity, fair value gaps, and trend continuation.
Speaker A
I'll see you guys tomorrow.
Let's get into equilibrium, explain.This is going to be Another one of our continuation confluences.Okay, this is probably the easiest confluence to grasp yet.Somehow I don't understand it.I literally do not understand it.How you guys still seem to mark out equilibrium incorrectly.So I'm going to make an attempt.I'm trying.I'm going to try not to blow my brains out.Be just thinking about some people and some examples that I've seen of people marking out equal equilibrium in the past.But it's so easy.Don't it up and just listen to what I'm saying.What is equilibrium and why is it beneficial for us?It's a continuation confluence.So what does it show us?It shows us the opportunity to continue a trend.Okay, Equilibrium.I like to use a GAN box to be able to to determine it.All that equilibrium is is all equilibrium.
It all that.
The definition of equilibrium helps us identify premium and discount ranges within the current trend that we are in.So let's say that we are in a uptrend.Let me get rid of this GAN box for a second.I'll show you guys my settings on that as well so you guys can copy it.But let's say that we are in an uptrend, right?We have boom a move up, then boom a move down.Boom a move up.Right now what are we currently in?We are currently in a premium, right?When we're in an uptrend uptrend.When we finish our extension, we are going to be in an in a premium.So what equilibrium allows us to do is it helps us identify the premium in the discount of the current range that we are trading in.So in this case, if we are trying to take a buy position on within this uptrend that we're in, it would be pretty ideal for us to not want to press buy anything above this line, which is equilibrium because down here is a discounted price range with from this swing low up to this swing high.
And up here is a premium price range from this swing low to this swing high.Now again, let's think about the market makers again because that's who we're trying to trade like that's who we're trying to trade with.
Are they going to be looking to top blast their own positions up here and take take longs right there?No, they want to push price into a discounted price range and then they're going to buy up all the shares to be able to push price higher.So in this case, right, if as we see price coming down, do we want to be bidding this?Do we want to Be bidding this.No, no, no, no, no.
Boom.We push past equilibrium.Now we're in a discounted price range for longs.What do we want to look for?We want to look for potential buys and the market makers want to do the same.
This is a very, very simple confluence.All that it does is it identifies the 50% mark from the most recent swing low up to the most recent swing high within a trend as a continuation confluence.And once we push underneath equilibrium and then we can get some bullish confluence influences out of it, we can say, awesome, we pushed into a discounted price range.Now we're trading back into a premium price range.We know that buy orders were filled underneath here, so price is probably going to continue the trend higher and push past this high.
Okay, now again, if we think about our strategy and we think about when we put all of these things together, how is this beneficial to us?Okay, well, let's just walk through it.What confluences do we have?Well, we have liquidity, right?The option opportunity for us to fill orders.So if we're in an uptrend and then boom, we push above a draw on liquidity and then price says, hey, I'm going to take this opportunity.What am I going to do?What did we learn yesterday?Awesome.Inverse for value gap.So let's use this as an example.We end up inversing this fair value gap right here.Showing us, hey, we have the opportunity to fill orders through liquidity.We get confirmation that we're filling those orders because we are not continuing the uptrend by inversing this fair value gap.Then from there, what can we look for as a potential continuation confluence?
Either a fair value gap or equilibrium.Now price is able to come up, fill a discounted price range and then move down out of that discounted price range.Awesome.We can take shorts off of that.Why?Because we had the opportunity to fill orders.We confirmed that orders were filled through a confirmation confluence, and then we're waiting for a continuation of the current trend that is forming.Beautiful, beautiful, beautiful, beautiful.Okay, so again, how do we mark out equilibrium?It is very simple.When we are in an uptrend, we take it from the most recent low.Listen to me.Because this is where every idiot this up and it pisses me off.
It pisses me off.So listen, it literally makes me want to punch a hole through my screen.How?It's the easiest confluence on earth.The most recent low to the most recent high.
If there's a low right here that's connected to this high, do we draw equilibrium from this low up to this high.
No.No, we don't.We draw it from the most recent low up to the most recent high.Okay, so if we are in an uptrend and we have this boom, what do we take it from?We take it from the most recent low up to the most recent high that was formed.
Okay, if we do something like this, do we take it from this low up to this high?
Speaker B
No,
Speaker A
we don't.And.And you're probably saying, yeah, tjr, let's get to the charts.You guys are idiots sometimes.You guys are such freaking idiots sometimes that this is actually an issue.
I'm sorry.I. I like.I love you guys.I'm trying to teach you, but holy crap.The
Speaker B
most recent low.So where's the most recent low?It's this one.Where's the low?It's
Speaker A
this one up to the most recent high.Awesome.That's how we market.
Speaker B
Is it from this low to this high?
Speaker A
No, it's the most recent low to the most recent high.Okay.You're literally just following the trend.Okay.And then for a downtrend, it's from the most recent high down to the most recent low.
So if this is our downtrend,
Speaker B
do we take it from this high down to this low?
Speaker A
No, we take it from the most recent high down to the most recent low.We're looking for price to come up.And in this case, this is a premium price range, and this is a discounted price range.You're probably saying, well, I thought the market makers don't like premium price ranges.Well, in this case, the premium is actually the.The discount because the premium.We want to be trading into a premium so that we can take shorts because we want price to go lower.Okay.
But we take it from the most recent high down to the most recent low.Cool.Let's show examples of this happening.This is very, very easy.Very, very simple.
Happens all the time.We can show you guys this happening on the weekly time frame.Okay, so let's see here.From this most recent low up to this most recent high, what do we do?We come down, poke our head underneath the discounted price range.Now we're getting continuation higher back above this high.Beautiful.Let's show another example of it.Let's see right here.Do we push into equilibrium?Oh, would you look at that?We do.From the most recent low up to the most recent high.We come down, we poke our head just barely underneath this.Or I think we made equal lows right here with the Equilibrium.But regardless, on this candlestick, we end up pushing right underneath the equilibrium.And then from there, boom, we end up pushing above this high again.This confluence is completely and utterly useless to you guys if it is not used with correct context.
Okay, let's show.Let's show a good example of like kind of us slowly but surely forming these things all into one.
What do we see here?Price coming down, sweeping out a low.We're currently in a downtrend, so we're in a downtrend.What do we do?We have the potential to fill orders underneath a low.Awesome.We get liquidity sweep from there.What can we see?Well, we get an inverse fair value gap.Awesome.So we get a potential to fill orders, confirmation that orders are orders were filled by this inverse for value gap.From there, what can we look for?We can either look for, boom, a fair value gap, a bullish for value gap that gets filled.But also what other continuation confluence do we have now?Equilibrium.Oh, look.And look.This is a perfect example.When equilibrium doesn't get filled, we can use fair value gaps.And then, boom, Price ends up moving higher.
Let's see if equilibrium was filled from this low up to this, this high.It wasn't all good.Let's see if equilibrium was filled from this low up to this high.Awesome.It was.Price comes down, pokes its head underneath equilibrium, and then extends higher.It's literally that.That simple.It's literally that easy.Let's show some examples to the downside now.
Okay, so right here, what do we do?We inverse this gap so we know that we are in a bearish trend.Let's see if we hit equilibrium.We take it from the most recent high down to the most recent low.Awesome.We come down, we come back up, we push into a premium, and then price pokes its head above the premium price range and then pushes lower.Okay, let's show the continuation of this trend.Now we take it from boom, this most recent high down to this most recent low.And we can see both of our continuation confluences working in tandem here.What do we have?We have a fair value gap and we have equilibrium.What does price do?Boom.Pushes into the fair value gap, pushes right above equilibrium, and then comes down and continues lower.Beautiful.Beautiful, beautiful, beautiful.This should be very freaking easy for you guys to do and for you guys to look at.
Okay?I mean, we can, we can do this all freaking day long.We can take it from this most recent low to this most recent high.
Low up to high.We're in an Uptrend price comes underneath equilibrium and then pushes higher.Okay, okay.Like, it's.It's literally that simple.It's literally that easy.And it's a very useful confluence to show us a continuation of the trend.We can show it on every single time frame.Just like with all of our other confluences.It's very, very useful, and we can use it to be able to spot retrace points.Okay.For new trends that are forming.So again, up to the high, down to the low, what do we do?We come up, we fill equilibrium, and then we continue lower.What else are we doing?
We are also coming in and filling this fair value gap.Beautiful.Our confluences, hopefully now you are starting to see them work in harmony and how they can work together again.How do we know that this was going to be a downtrend?We saw break of structure to the downside right here.
Awesome.We see break of structure to the downside.We see price come up, fill a fair value gap, fill equilibrium, and then price starts to rumble down.Beautiful, Beautiful, beautiful, beautiful.That is equilibrium explained.You're probably saying, tjr, I want more.There's
Speaker B
no more.More.
Speaker A
There's no more.
That's about equilibrium.And I swear, bro, I swear, if I see someone marking out equilibrium like this, okay, Taking it from this high down to this low, why is this incorrect?You're stupid.Because this is the most recent high.Down to this most recent low.
Okay?And I guess I should have put more.More context here.Jeez.I guess I should put more context here.
Let's just go to where.Where were we at?Right here, okay?Because you're probably saying, well, there's other highs and lows over here.Okay?
It's.I'm talking to you guys as if we're in this real time.Right?So where's the most recent high post?I mean, I need to move this back one more time.
Awesome.Because we are putting this on as the retrace is forming, right?So we have the most recent high.Boom.We put an up candle in, and now this is the most recent low.
Boom.We strap on the gan box and then we look.Boom.Oh, price comes up, fills it.We get down, move.
Awesome.Price is probably going to move lower.Beautiful.Beautiful, beautiful.Okay, now if we want to draw out equilibrium, what are we going to be waiting for on this next candlestick?We need to wait for an up candle, right?So if we play this boom.We get an up candle right here.Jeez, bruh.We get an up candle right here.So if that Were the case, we would be taking it from boom most recent high down to most recent low.Unfortunately in this case we don't feel equilibrium.But what do we end up doing?We end up filling our other continuation confluence and then we end up moving lower.Okay, it's, it's really that easy.You just take it from most recent high down to most recent low and then in an uptrend you take it from the most recent low up to a most recent high.
That's all it is.That being said, I love and appreciate you guys.Let's get into SMT divergences.This one might melt your brains a little bit tomorrow.So strap in guys, let's get into this.
Introduces SMT divergence using the S&P 500 and Nasdaq to spot early trend differences. The speaker explains how one index can lead while the other lags, helping with bias and timing.
Speaker A
Welcome to SMT Divergence Explained.So for the Forex and commodities people, unfortunately this is not going to be as beneficial for you guys because this is specifically talking about the divergence between the S&P 500 and the NASDAQ and we literally are forming one right now.So again it involves looking at two different instruments.So the S&P 500 and the NASDAQ at the same time.And then pretty much we're going to be comparing and contrasting their highs and lows and that will help us dictate whether or not one the trend is going to change before even being able to see a break of structure or an inverse for value gap.And we know that we learned about those yesterday in the day in like a couple days ago for inverse for rally gap and break of structure.So in SMT divergence is actually using both the indexes, seeing a divergence between the two and then that is going to help us identify if the trend is to going going to change specifically when an SMT divergence is happening at a significant draw on liquidity.
So with that being said, let's get into it.To be honest, I'm not going to sit here and bullshit you guys.I have no clue what SMT divergence stands for.Smart money transfer divergence.I don't know, I don't care.All I know is that I know what a divergence means.I think it just means the difference.
Difference.I think, okay, this is horrible, but whatever, let's get into understanding it because this is actually what's beneficial.So let's say we have a high time frame high right here.And we're going to split this down the middle.This is the S&P 500 chart and then this is the NASDAQ chart
Speaker B
lit.
Speaker A
Okay, so we have a high time frame draw on liquidity right here.Or let's Actually move this down a little bit.Boom.And on the S&P 500 chart, we come up and we sweep out that high, and then we come down, and then we make a lower high.
So what does that probably mean?It probably means, hey, orders have been filled and we're starting to change the direction to the downside.Now, if we look over onto the NASDAQ chart, we can see Nasdaq doesn't necessarily have to push above this high.Okay, the high on the NASDAQ chart.So again, the Nasdaq and The S&P 500 are very correlated pairs, so they trade very similarly.However, we are able to capitalize on these small divergences that they have because they can tell us, like, literally the future about what the other one is going to do sometimes.So if I get on here and I see, boom, Es came up, swept out a high time frame draw on liquidity, we make a high, come down, make a lower high.But on Nasdaq, we come up, we make a high, and then we make a higher high.
What do we see here at the same time as we are sweeping out this high time frame high?What is ES telling us about Nasdaq on this?You're probably saying, well, I'm not sure.I don't really quite get it.Well, The S&P 500 swept out a high and made.Made a high and then made a lower high.Pretty much signaling that, yep, sell orders were able to get filled here.And we are probably going to reverse off of this significant draw on liquidity where orders had the potential to get filled versus on Nasdaq.We look over here and we see, okay, a high, this high, was formed at the same time that this one was, but then this one forms a higher high at the same time that this lower high was getting formed.So what is the S&P 500 telling us about NASDAQ?1, that NASDAQ is the more bullish pair, but also it's helping us.
Yes, is helping us be able to identify what's going to happen in Nasdaq a little bit later on.
Because if The S&P 500 continues this trend down, then what is going to happen to Nasdaq?Nasdaq is going to follow suit, in turn, potentially giving us a higher risk reward trade on Nasdaq, or just in turn helping us be able to identify the direction that NASDAQ is going to go.Because if we had just came up and made a higher high, we would still be under the assumption that, hey, we're still in an uptrend.But now that we have the newfound knowledge of ES making a high than a lower high and NASDAQ making a high than a higher high, instead of thinking, oh, we're in an uptrend on Nasdaq, we can look at the S&P 500 and we can say, oh shit, this thing might actually go down.So that's just like a little example of what an SMT divergence is on the chart.
Now let's talk about identifying it.So again, let's put our line, line down here.This is going to be the S P 500.This is going to be NASDAQ.So when is this going to be useful?
It's specifically going to be useful when we are actively sweeping out draws and liquidity.Why?Because this is where orders have the potential to get filled.Obviously, the S, P 500 and NASDAQ are not going to perfectly align with each other and be perfectly correlated.24 7, 365.
So that's why it's very important that we have context here and understand that SMT divergences are, are very powerful when used when sweeping out draws and liquidity.However, outside of sweeping out draws and liquidity, these things will show up all the time and will be pretty much like, useless to us.So let's get into identifying them.On the, on the chart.A bearish SMT divergence is when The S&P 500 makes a high and then a lower high.
Doesn't matter which which chart this is on.So it just is when one of the indexes makes a high, then a lower high, and then the other index makes a high than a higher high.This is a bearish confluence for both the indexes.So not only a bearish confluence for the S P500 because it's the leading index in the downward move because it's making a lower high, but also it's a bearish confluence for the lagging index.Why is it lagging?Because it's continuing the uptrend while ES is forming a new downtrend.So this one's lagging, lagging behind es because ES was able to fill probably more orders and is able to move a little bit quicker than NASDAQ at this point in time.You know, it could be for any reason, but what is it telling us that NASDAQ is going to do?It's going to go down.
So that's a bearish SMT divergence.And again, these two charts can be changed.So the S&P 500 can be the one that's making a higher high, and Nasdaq can be the one that's making a lower high.Again, if we look at the chart and we see, oh, Nasdaq made a high, then a lower high, while ES made a high than a higher high, what is Nasdaq telling us about the S&P 500?It's telling us that, hey, NASDAQ is the leading index.We probably filled orders above this draw on liquidity that we just swept out, and now we're forming a downtrend, and ES is the lagging index.But regardless, this is going to be a bearish confluence for both.Okay, now, with that being said, let's go into into the bullish SMT divergence example.So again, it can be on either of the indexes on the S&P 500.
All that it's going to be is when we're in a downtrend, we make a low, and then, boom, we make a lower low.Awesome.Continuing that downtrend.However, on Nasdaq, we might make a low, then a higher low.What is that telling us again, especially when we're taking out a significant draw on liquidity, what is Nasdaq telling us about the S&P 500?What is it helping us do?It's saying, hey, we were able to fill orders underneath this significant draw on liquidity, and NASDAQ is already starting an uptrend by making a higher low, while The S&P 500 is making a lower low.
So regardless, what is this telling us about both of the indexes?Oops.What is that telling us about both of the indexes?Nasdaq, it wants to move higher.It's the leading index.
The S&P 500, it is going to move higher.It's the lagging index behind Nasdaq.But NASDAQ is giving us a early jump to the game and pretty much telling us the future of what's going to happen with the S&P 500.Now, I know that might have been a little bit confusing, so let's get onto the chart and let's show you real deal examples of this.Let me split this thing on up and let's see why my chart looks like this.
Blue and black, maybe.
Settings.
Okay, this needs to be completely off.Okay, okay, okay.And boom.
Okay, so we're on the daily time frame right here.Let's try and find an example on the daily time frame or I believe the one hour is going to be easier for us.You guys don't necessarily need to have the the charts split screen Split screen like this.But it is.
It's easier for me to show it like this than not.So let's.
Oh, this was a good example.So this was on the higher.On a higher time frame, but you can still see it.So boom, we have a high right here.And then, boom, we have a lower high right here on the S&P 500.And then if you look at the same time, we have the same exact high that was made on Nasdaq, but a higher high that was formed on Nasdaq.So Nasdaq, what did we do on Nasdaq?We came up and we swept out this significant draw on liquidity.This is actually on the four hour.So if we want to go here, boom, and then four hour here.
So this is a good example right here.So we can see this high.NASDAQ comes above it, it makes a higher high, while ES is well underneath this high and it makes a lower high.So once we form this high, what can we safely assume about Both these indexes?One, the S&P 500 is the more bearish index.
But two, we know that NASDAQ was able to sweep out orders, and even though it made a higher high, we know that overall the price, price is going to be bearish.Why?Because The S&P 500 made a lower high.So what?In terms of, like, entry, since this is on a higher time frame, I'm going to be looking at this and I'm going to be saying, okay, I'm probably going to want to take a trade on the S&P 500.
Why would I want to to take a trade on the S&P 500?Because it's the leading index.It's the index that is already more bearish.Okay, so if we see a bearish SMT divergence, I'm not going to want to take a short position or a sell trade on the bullish index, which is Nasdaq, because it pushed above this high.Right.I want to take it on the S&P 500, the one that's leading the move to the downside, the one that is actually making a lower high.Okay.And then on top of that, this is really going to be used for bias, especially on the high time frames.But I'll show you guys examples on the low time frames of when we're actually able to use it for execution.So this is a good example of a bearish SMT divergence of us sweeping out a high on Nasdaq, making a higher high, but us unable to sweep it on the S&P 500 making a lower high.
And then what do we see price do on both the indexes following that?Boom, we dump down.Boom, we dump down.Okay, let's show examples of this on a lower time frame.Let's see if we can.
Let's, let's look at Friday's price action.Okay.Yeah, I mean this, there wasn't like a actual like strategy entry, but this is a good example of how you could look for a entry or potentially use it as a confluence.So even though my strategy doesn't show up here, this is a good example of it showing up on the low time frames and in a bullish scenario.Now, so look right here, we're on the five minute time frame on the S&P 500, we have a low.Then we have a higher low.If we look at the same time that this low was formed right here on the S&P 500, we have this low.And then when this higher low was formed, we look over to that same point on Nasdaq and what does it do?It makes a lower low.What immediately happens after we get the SMT, SMT divergence.
The S&P 500 ends up trading higher and NASDAQ ends up trading higher.So this is a good example of again, all of our confluences show up on every single time frame.But this is a good example of how.Look right here.What are we doing while this is happening?We're actively sweeping out high time frame draws and liquidity right here.So again, this very well, even though this price action isn't that good to the left hand side.Again, I'm going to want to be taking the trade on the leading index on the S P500.Why?Because it's the more bullish index.Right?This is a bullish smt.I want to be taking the trade on the index that is leading the charge and not the one that's behind.Right.That's still forming the downtrend.I want to be the one that in a buy position, in the one that's forming the new uptrend.
Okay, so I get on here, I see awesome.Like this can be a quick breakdown.We come down, we sweep out a high time frame, draw on liquidity.Awesome.We see a low and then we see another low get formed and you're like, hey, wait a second, that's a higher low.Let's look over at nasdaq.Nasdaq.And then we see NASDAQ has the same low, but then, oh, there's a lower low.Awesome.What Is that telling me that's a very bullish confluence for the S&P 500 and a bullish confluence for Nasdaq.And look, this is a prime time example.If we look at the S P500 compared to NASDAQ, the S&P500 again is the leading index.We can see a bigger and a faster expansion than on Nasdaq.NASDAQ isn't able to get up as high.
These were the highs that The S&P 500 move past.Boom.S&P 500 was able to move past these highs.Nasdaq didn't even get close to them.So again, just showing examples of why we want to take the leading index rather than the lagging index.
So hopefully, I mean, this is really all that we needed to cover this.It's kind of a blend of the confluences.And I'll show you and I'll explain what I mean by that when we start getting into strategy.But hopefully you guys understood what this is all about and you guys will learn a little bit more as we start introducing it and trade recaps and as you guys start seeing me put it together with our strategy videos.But right now I want you guys to be able to at least identify them and then see reactions off of them.Specifically off of high time frame draws on liquidity because that's when it's going to be the most beneficial for us.And yeah, with that being said, tomorrow we are going to get into time theory and then I think it's going to be time for us to be able to put all of our confluences together because we pretty much learned every single confluence that we need in order for us to be able to take trades, which is awesome.
So tomorrow we're just going to get into some advanced stuff like the timing of the market and when to be looking to take trades, when to be looking for manipulation in the market.But other than that, we're on a very, very good track here.So you.
Covers the most important trading times, especially New York open and the manipulation window. The speaker shows how session timing helps identify likely reversals and entry periods.
Speaker A
What up, guys?Welcome to time in the market explained.So, as you guys know, or as you guys hopefully should know, timing within the market is very, very important.Okay?If we do not understand the time of the market, then we are not going to be able to trade just with high probability on a daily basis.Right.Our goal trading is to be able to make high probability decisions within the market of where price is going to go on a daily basis.And without understanding the timing of things, we are pretty much screwing ourselves over.So we already mentioned that there are three sessions and luckily for us because we trade US indexes, we're really only looking to be trading New York session.So there's the three session times and then there's specific times during New York session that are very valuable to us.So we'll go over them.
So first there's Asian session, Asian persuasion.It starts at 1800 and it goes till 3.Okay.Then next we have London session.Okay.London session goes from 3 till 8:30.Technically, technically London session goes till 11:30 New York time.But we want to end all of these sessions when the next one is opening.So Asian session, London session, pre market actually opens at 2.
But London session, market open opens at 3.New York pre market opens at 8:30.The reason why I have it marked out at 8:30 is that, that, that very typically we will actually see pre market manipulation.So it's very important that we understand that that is when new money is coming into the market.That's when US traders are coming into the market.And then for New York session, we go from 8:30, which is pre market, to 9:30, which is market open.So that's pre market.And then we go from 9:30 all the way to 1700.And then the gap between 1700 and 1800 is what we call spread hour, where there is no market that is open.And that's typically when you guys will see, if you guys trade on like a CFD broker or a Forex or a commodities broker, you will see the spreads on every single pair get very, very large.
It's because there's no money in the market.Okay, we call the spread hour.So, so now that we understand this, you're probably saying, well, how is this useful to us?Well, we already talked about it a little bit when we mentioned session highs and session lows within the advanced liquidity concept video where we say, hey, these sessions are very important because we can see new money coming into the market and manipulating the session highs and session lows.And we understand that when new money comes into the market, it's going to want to find some sort of manipulation and then reverse towards a draw on liquidity.
Right?That's just what we know when new money comes into the market.So awesome.These times are very, very valuable to us.Now let's talk about specifically because we already talked about how session times are useful for us.
But if we're trading the S&P 500 in Nasdaq, which is what I'm teaching you guys how to do within the series, then we need to know the specific times during New York session that are Going to be valuable for us.So we have open, right, which is at 9:30am Eastern Time.Again we're operating on Eastern time.Okay.And then we have what I call our manipulation time frame, which is from 930 to 9 50.
And then so we have open at 930 we have manipulation from 930 to 950 and then from 950 really to like 10 10.Wow.Look at from 950 to 1010 we have our entry period and then the rest from there like we kind of just carry on.We also have PM session that opens at around 1pm Me personally, I don't trade this, but we can add it on, on there as well.So cool.
Now that we already, we already understand the use case for the, the previous sessions and how that's useful for us to be able to identify manipulation from each session.And we can use them as solid draws on liquidity, whether we're looking for it as a target or whether we're looking at it for an entry.Now how are these times useful for us as New York session traders?Well, I'll tell you this, we know that because market opens at 9:30, there's going to be new money coming into the market.And because new money's coming into the market, what can we expect from New York Session?We can expect there to be some form of manipulation.So awesome.What times is price typically going to be manipulating from?Whether it's a high time frame draw on liquidity or a low time frame draw on liquidity.Well, there is going to be manipulation from 930 to 950.
Sometimes the manipulation happens, you know, from 9:30 to 9:30 to 9:40.And there's an entry at 9:45.But typically the manipulation, whether it's on the high time frame or the low time frame, is happening within these time zones.And then from there our typical entry is going to be from 9:50 to 10:10.That's just, that's called the macro.
It's what a lot.Typically the ideal entry time.And then for me I am, if I can't find a trade by 10:30, I'm done for the day because that's when the market tends to slow down.So this is going to be very quick video.This is really all that we, all that we need.
We can go and we can show examples of this happening in real time.So let's go to the previous day right here.
Okay, so let's look at this real quick.So we have 9:30.Oops, that's 925.So we have 930 and then we have 950.So this is a good example of boom.Within this time frame, what are we doing?We are manipulating up and then by the time 950 comes through, what does it deliver us?It gives us an entry at 10 and then the ideal position, the ideal position would have been to short down to these high time frame lows right here.
We're not going to go exactly into strategy and what trades we should be taking on this.We'll get into that when we put everything together with all of our confluences.But we can see very clearly that from 930 to 950 what we were we doing, we were manipulating up and then we came back down and then boom, 950 hits.We get one last push up to give us our entry.And then boom, we trade all the way down to the high time frame, draw on liquidity by 10:05 and then boom, our trade is done for the day.
Awesome.Let's show another example of this.And this is literally all that we're going to be going over today.Just very, very simple, going over the valuable times for us.Okay, so we'll go 9:30 right here.
And this is another really freaking good example of this.950.Oh my goodness, it's beautiful.Literally happens every single day.So let's look right here.930 opens.What do we do?We come down, we manipulate these high time frame lows and then boom.950 hits.We get the manipulation, we come up, we get a retrace, we get our entry right around 10 and then boom, we get an extension higher.
Beautiful, beautiful, beautiful.Let's keep going and we'll just show literally just a couple more examples of this.And this is all that I really want to cover for for this today.I know it's going to be a little bit short, but this is really all that we need to cover on this topic.Talking about the times.
So let's get into this 950 boom.So we can see market opens.What are we doing from 9:30 to 9:50 we are manipulating up and higher.And you know, who knows if there was an entry within here.But regardless, maybe we we were able to see an entry right here at 1005.And then what does price do?It comes down and then delivers to take out all of these low resistance draws on liquidity right here.Okay, let's show one more example.
This was a high impact news day, so this isn't going to be super beneficial for us.Let's look at Monday.Okay.This isn't a very good example.Let's see if we can look at the 1 minute to see if we can see this a little bit clearer.
Oh yeah, this price action kind of sucks, but it is what it is.In this case we get boom, market open the manipulation timeframe, we literally get nothing.But we finally see the final leg of manipulation happening a little bit later at 9:52.We sweep out these legs and then we get the expansion higher.So in this case the manipulation was just two minutes to two minutes later than our typical manipulation time frame.And that's the thing, like this doesn't have to be point blank period.Like we can only look to enter at 950 to 1010.That's not the case.I take trades at 1020 sometimes, I take trades at 945 sometimes.But it's just very good for us to be able to identify hey, market opens at 9:30.
We are typically going to see some form of manipulation, like bare minimum, some form of manipulation between the times of 9:30 to 9:50 and then from there we're typically going to get a good entry point for the overall hourly trend from 9:50 to 10:10.And then we know PM session starts at 1 and then the rest is all good.So I mean shit dude, that was pretty freaking simple class today.But that's really all that we need to cover.
Explains how prop firms work, why they help low-capital traders, and what rules matter. The speaker compares different account types, payout structures, and consistency requirements.
Speaker A
Tomorrow we'll be going over very briefly talking about some funded accounts, the best prop firms for you guys to use.And then from there we can actually start putting stuff together in terms of like strategy, how to actually take trades and putting all of this stuff together.But first I want to introduce funded accounts to you guys and explain kind of in depth because a lot of you guys are getting into these funded accounts with like literally no knowledge of like what the risk parameters are and like what risk you're actually taking on when you buy the funded account and understanding all those rules.So I want to make sure that that is very clear for you guys before you guys jump the gun and like start a live account or start start trying to trade on a funded account.We'll go over brokerage and we'll also go over funded in that video.
So that being said, let me appreciate you boys.I'll see you guys tomorrow.What's going on guys?And welcome to the funded account portion of the Path to Profitability.So in this video I'm going to be explaining what funded accounts are, how you guys can use them to your advantage if you are somebody with low capital, which again the vast majority of us when we were starting trading.And for you guys, you guys getting into trading, you guys don't have lot of capital to start with, so it's difficult for you to be funding a live account with the small amount of money that you guys have right now, which, okay, that's, you know, completely fine.There's no shame in that.These companies, these prop firms, are going to be a huge, huge, huge tool for us to be able to scale our capital fast, for us to be able to leverage their capital and be able to pay a small amount of money from our low amount of capital to be able to leverage and trade with a high amount of capital through these prop firm account challenges.
So with that being said, let's talk about what prop firms are.So prop firms are essentially a company that we can pay a small fee to where they are going to give us a trading challenge.And within this trading challenge, we have to just be able to pass and hit a certain profit target without going down and losing a certain amount of money, which is our drawdown.
Now, each one of these prop firms is going to have different sets of rules.There's also different types of accounts on every single prop firm.There's some prop firms where you don't even have to pass a challenge in order to get live funding, but there's stricter rules in order for you to get a payout.Now, again, before we go into that, what I want to explain to you guys is why this is beneficial for you guys as lower capital traders.So most of these prop firms have $50,000 accounts, $100,000 accounts, $150,000 accounts, $25,000 accounts.
Right.And that's a much larger amount of capital than you guys are typically going to be able to afford.Right.On just a regular live account, do you guys have $50,000 that you can just send straight out from your bank account into a brokerage account?Probably not.Do you guys have $100,000 that you guys can wire straight from your bank account into a brokerage account?Probably not.But these prop firms, they are going to give us the opportunity to be able to be trading with that amount of capital.But first we have to prove that we are able to pay with that amount, play or trade with that amount of capital by trading and passing a trading challenge.So again, depending on what prop firm you use, I'm going to go over two prop firms that are very good, some of the biggest leaders in the industry, and we're going to break down some of their accounts.
But Depending on what prop firm and what company you decide to go with, then their account challenges are going to be built out a little bit differently.There's going to be some that are more expensive than others that might make it slightly easier for you to pass, that maybe give you a higher potential payout.There might be accounts that are a little bit cheaper, but it's a little bit more difficult to pass in.The payout cap is a lot tighter.Where let's say I'm on a $50,000 account or yeah, a 50,000, $50,000 funded account and I only pay, let's say 79 bucks for it, then the process of being able to pass that challenge and then get to a live account to then be able to potentially make money and then request a payout from it, you are going to have a slightly more difficult time.
And then on top of that, the payout that you're going to be able to potentially receive is going to be slightly smaller than something that costs a little bit more that you're pretty much paying for a slightly easier challenge for you to pass and then also a larger payout cap.So with that being said, hopefully you guys can, hopefully you guys have already heard about prop firms and if not hopefully, that was a good explanation of we are paying money to be able to prove that we are profitable.So this is very, very key before just jumping into prop firms and into buying all these accounts saying I can't wait to make $2,000 or I can't wait to make $5,000 from this prop firm, from this prop trading account because they're giving me all this money to trade with.Yes, that, that, that is the case.
But you also have to understand not many people are able to pass these account challenges and it's for a good reason.
It's because you genuinely have to be good at trading in order to pass these challenges.Now, as you guys know, throughout the past 12 days we've been talking about all of these different things and different confluences to help you guys get good at trading.But also we haven't even discussed strategy yet.We haven't discussed risk management, we haven't talked about entries and exits.Okay, so we, if you guys are brand new beginners, starting from day one all the way up until this point, you guys aren't even fully there yet in order to be able to buy one of these things.But again, like I was saying at the beginning of this video, it is a super, super, super valuable tool that's going to help you guys scale up your Capital very, very, very quickly.However, what do you need before that?You need to have the skill of day trading.
Let's think back to day two of what even is trading.What is trading all about?It's being able to predict with a high probability where price wants to go on a daily basis, right?And if we're unable to do that, then we are going to be unable to pass these funded account challenges and we are going to be unable to make money from the markets.Because in order, just like on a live account, just like on a demo account, just like on a prop trading account, in order to make money, in order to have a positive P L, you need, need, need, need, need, need 1 trillion percent need to be a good trader, okay?Point blank period.You need to have the skill of trading.
So with that being said, let's show you guys two of some of the best prop firms within the space and let's go over their rules and why these are going to be beneficial for you guys.So the first one that we have here today is Alpha Futures, okay?And the nice thing about Alpha Futures again, and they have it on their very front page, is they have the largest payout cap, okay?So as we can see here, the industry normal is around 1,200 to $5,000 max withdrawals at all these other prop firms in the space.However, with Alpha Futures, Alpha Futures offers a max withdrawal of $15,000 per standard or advanced account, which is pretty insane.
And that's why they are one of my top choices for prop firms to recommend to you guys.Okay?So again like I mentioned, there's several different plans and they all, all are useful for different things.So this one right here is the Alpha Alpha zero plan, okay.Which means that there's zero activation fee.Okay.And what are the account sizes that we can choose from?We can choose from a $50,000 account and a $100,000 account.And again like I said, all of these different account styles, the zero plan, the standard plan and the advanced plan, they all have different rules and they all have different regulations that you need in order to be able to pass in in order to be able to receive a payout.And there's not, there's nothing to say that oh, this one's better than this one, this one's better than this one.
It really just depends on your trading style and it really depends on what you are trying to do with the account.So just like I was just saying that there's no like definite this one's better than this one.But the Vast majority of people when they are trading on Alpha Futures are typically going to be trading on the Alpha Futures Advanced Plan.Okay.People across the industry say the Alpha Futures Advanced accounts are some of the best accounts and it's because of that massive payout that you can receive.
Okay, so we can see that there's an evaluation phase.You have to be trading for a minimum of two days, your profit target.So again, this is your evaluation, this is your challenge.Your goal on this $100,000 account is to make 8%.You need to make $8,000 on your $100,000 on your $100,0000 account.
On top of that, your maximum position size that you can enter in is 10 contracts.So you are going to be able to enter in with 10 contracts maximum per trade.And trust me guys, that is plenty of contracts for you guys to be able to trade.Unless you guys are trading on like, like the very, like the seconds time frame.Trust me, 10 contracts is plenty to trade with.So this is not limiting you whatsoever.And then the max amount of, amount of drawdown that you can go down is $3,500.So what does that mean?That means if I'm trading on my $100,000 Alpha futures advanced Plan account, that means I cannot have the, the, I cannot have the account go down to what is that?$96,500 in total equity or balance.
Okay.Or else I lose the challenge and I end up failing.And if I fail, then this money goes down the drain.And we're actually going to talk about that in our risk management lesson, talking about how you guys can actually manage your risk when you guys are buying and paying for these problems firms.Because you guys have to understand, a lot of people think that these prop firms like they don't cost any money for whatever reason because they're just thinking about the potential payout that they can get from them.But at the end of the day, it is very real money that you're putting on the table.And a lot of people don't realize that it's real money until after they blow the account.And then they're like, wait, I just lost $279, I'm going to freak out now.Okay, so let's, let's not do that again.
During the challenge phase there's obviously going to be no profit split because during that time you can are just trying to prove to the prop firm, in this case it's Alpha Futures that you are a good trader in order to be on a qualified account so that you guys are able to get an actual profit split, you can reset the account for another $279, which means again if you fail and if you hit this max drawdown, then you can reset it for the same cost, which is nice.
There's no daily loss limit, which is nice.And again, like I was saying, depending on what prop firm prop firm you use, Alpha Futures is one of the more expensive prop firms in the space.But it's for a good reason.Not only is it for a good reason because you can get the largest payout in the space, but also you have a very big consistency rule.Okay?Most prop firms are anywhere from like 30 to a 40% consistency rule.In this case, Alpha Futures is a 50% consistency rule.Meaning in order for you to put pass the evaluation phase, you need to be able to take.You need to be able to split your winning profits across three trades at the minimum.Okay.In order for you guys to be able to pass with this consistency rule.So it pretty much means you can't have the vast majority of your profits being over 50% in order to pass this challenge.
Okay?From there there's also some other rules like yes, you are able to hold through news.Now I don't want to bore you guys and stay on here and just go over, hey, this one is this.This one's, it's this.I actually have a free doc for you guys that is going to have the information on all of the Alpha Futures accounts and then also all of the Tradify accounts which is the problem that I'm going to go over next.That is linked down in the description.So if you guys want to go to that Google Doc and you guys can click on it, you guys can download the PDF, it breaks down pretty much the pros and the cons of every single account that these two prop firms have.And on Tradify specifically, they actually are doing something really sweet for you guys by making it for this video and for me only if you guys want, there's a one time use code of TJR40 for you guys to be able to get a 40% discount on literally every single one of these accounts.
So you guys will be able to get a 40% percent off discount on a growth 50k 50k account.You guys can get a 40% discount on a select 150k account.You guys can get A 40% off on a lightning 50k account.Okay, it doesn't matter.It's one time use per per person though, not per account.So I can't just buy a lightning 50k account that's 40% off and then a 25k account.Okay, code tjr will save you 30% off after that.But there is a one time tjr.The code is tjr40 that is going to save you guys 40% off.It's a one time code that you guys can use that is going to be activated for this video and probably will only last till the end of today.
So take advantage of that.This is like literally the biggest sale that they have done and they gave it to me for this video, which is really, really awesome of them.Now let's get into into their accounts again.If you guys want to look through the Google Doc and do compare and contrast of all the pros and cons, I've already laid it out in there.But tradify their best accounts are going to be their instant funded funding accounts.Okay.A lot of people will will choose between their select accounts or their lightning accounts which gives you instant fundings.Okay.The select accounts are great as well because you have the opportunity to be to be able to get daily payouts, which is pretty sick.Okay, so if you're trading on 100, $150,000 account and you're able to pass this evaluation, you can literally one be able to pass the evaluation in the span of three days and then be able to be qualified for a payout in four days.
This is one of the only prop firms in the industry where you are able to start an account challenge on Monday and then be able to receive a payout by Friday by going through with the select accounts.Now the lightning instant funding accounts are very, very interesting because like I was saying at the beginning of this video, there are some prop trading accounts that you do not need to pass a challenge in order to jump onto a live account.So again, typically how the prop firm industry works is you pay money to be able to take the challenge.You take the challenge, you try and pass.If you pass, awesome.They move you onto another account and then on that account you're able to earn money on that and you're able to request a payout.However, some prop firm companies have these instant funding accounts where they say, hey, if you truly believe in yourself, we're going to give you a very large one time fee.
And if you guys use code tjr then you guys are going to get or if you guys want to use code TJR40 for these lightning accounts, you guys can save 40% off on a one time or if you guys are Using this a second time, you guys can just use code tjr.You guys can also use code TJR on Alpha Futures.Forgot to mention that to be able to save 10 or 20%, it depends on what account that you guys are choosing.
Code TJR on Tradify saves you guys 30%.So again, use my name all across here.You're going to save a whole bunch of money.But lightning funded accounts are very, very great because you, you do not need an evaluation.There's no evaluation, you just instantly jump in with funding.Now don't be fooled, you still have to be good at trading.You're probably saying, well I suck at trading.I'm just going to take the one that you don't have to do a challenge in order to get funding for.Well that's the thing on this.There are some rules still set in place for you guys in order to make it not difficult for you guys to be able to get a payout.But there are some rules in line that are, I guess make it so that you still have to be good at trading in order to be qualified for a payout.
Now what are some of those rules?Well, the payout frequency, there's a five day payout frequency.You can only have max amount of five accounts on this.But the big one is the 20% consistency rule.So that means you need to at minimum need what is that going to be around like five or six trades that encapsulate the total amount that you are requesting a payout payout for.So again this 20% consistency rule is very, very different from the alpha futures 50% consistency rule.And it actually, when you think about it in terms of risk and trades required to reach a payout, it ends up pretty much being the exact same thing because on this you need a minimum of two trading days and we know that it's going to take a minimum of three trades in order for us to be able to pass this.
So that means there's three, three trades at the minimum for us to be able to pass the challenge and then for us to be able to be qualified to, or for us to be able to trade on the qualified account and then be able to receive a payout.There's no consistency rule but we need a minimum of five trading days.
So really all that we need to do is we just need to win on one trading day.So that means four trading days total and then just do like the bare minimum required to be able to hit these trading days.So realistically you're taking four trades in order to get a payout on the Alpha Futures advanced plan.And you're needing six winning trades in order to get a payout on the Tradify plan.So at the end of the day it ends up being pretty much the same whether you're passing the challenge and then going on to a live account and then getting a payout or skipping the challenge phase and just jumping straight into funding due to this consistency rule.
Now again I'm here and I'm unbiased for you guys.Personally, I think it's better to go with something like a select account where there's going to be daily payout offerings instead of the Lightning fund, Lightning funded and instant funding accounts.A lot of people really like these lightning funded accounts from Tradify.I don't blame them.You know, if you're a very consistent trader, you have pretty decent daily loss limit, pretty decent drawdown, a good amount of contracts for you, for you guys to use and you can stack these accounts.There's five accounts that you guys can use on, on top of this.And you don't even have to think about potentially passing the the eval.You can just jump straight into trading how you want.So yeah, that kind of covers pretty much the majority of prop firms and how the prop firm space works and why it's beneficial for you guys.
Because again, think about it like this.You're putting up $500 to potentially have access to be able to trade with $150,000 as long as you can stick within these rules.And you're going to be able to get payouts upwards of $2,500.$5,000, right.So these prop firms are a very, very advantageous tool.I would be doing you guys a disservice without being able to cover these and tell you guys the pros and cons of each of them.And again, if you guys want the Google Doc going in a lot of depth about the growth accounts, the select accounts, the lightning accounts, the zero accounts, the standard plans and the advanced accounts.All of that is going to be in the Google Doc doc below.You guys can use code TJR to save you, save your guys, save you guys some money on Alpha Futures.And remember on Tradify There's a code TJR40 to be able to save you guys 40% off on any of these funded accounts.
Okay, so if you guys want to select 150k account, you guys can use code TJR40 and then once you use that 40% off code from there, if you guys use code TJR.
All of you guys can use that on a daily basis.It's going to save you yourself 30% off.So the first code is going to be TJR40 on the Tradify one.And then from there you guys can can use code just TJR to save yourself 30% off on the rest of these.So with that being said, I love and appreciate you guys.Tomorrow, what are we getting into?I can't remember.But regardless, I will see you guys tomorrow for another video.
Shows how to build daily bias by combining trend, liquidity, fair value gaps, and equilibrium. The speaker walks through multiple live examples to show how bias guides target selection and trade direction.
Speaker A
Now that I've covered every single one of the confluences that I use in my strategy, you're probably thinking, awesome, I have it.Well, no, not necessarily, because we haven't put it all together and we haven't fully explained my strategy strategy that I use yet.
But also there's a couple things that we want to implement with these confluences that are going to give us probability within the market, such as understanding our Daily bias, like whether we think the market is going to go higher or lower, and then also understanding our risk management, like when we're supposed to put more risk on the table to be able to make more money or when we should maybe de risk because the markets are uncertain and we think that it's a low probability market.So without understanding these things, things, we will be overly cooked if we just jump straight into the market thinking that we know everything when we don't.So make sure you guys stay tuned for these next segments.It's going to be very important.All right, guys, welcome to our Daily Bias video.
And this, you guys are going to learn how to find Daily Bias.And then hopefully we can kind of start putting together potential trade ideas in your guys's headspace.And then after this, I think we're gonna cover some risk management and then we'll finally like put together how we how I'm actually looking for entries.I want to cover Daily Bias first because without Daily Bias, you don't know where the market's going to go.So how are you going to be able to look for an enter or how are you going to look for an entry?
Right.And then if that's the case, then why the are we entering in the first place if we don't know where the market wants to go?Right.So kind of difficult.Sue, let's get into Daily Bass.
We're getting into Daily Bias.So we'll go over today's trade.Today there was a pretty easy daily bias.And this again is going to start combining all of the stuff that we have Already learned thus far.So let's look at the current market.What are we in?We are in an obvious downtrend, right?We are making a high high, that low, lower, high, lower, low, lower, high, lower, low, lower, high, lower, low, lower, high.And then that was pretty much leading us into market open.So what did we expect coming into market open?
We were probably going to deliver a lower low.Now, also on top of that, why did we assume that we were going to deliver a lower low?We have all of this low resistance draws and liquidity stacked up.We have a low right here.A low right here.A low right here.Low right here.Low, low, low, low, low.A whole bunch of lows all stacked up throughout here that can give us good entries for these shorts within this downtrend.Right.Because draws and liquidity can be used for several different things.Draws and liquidity can be used as entries and it can also be used as targets.So coming into today, my bias was bearish.Why?Because on the high time frame, we had a whole bunch of draws in liquidity to the downside.
And on the high time frame, we were forming a downtrend.Okay.So on the hourly time frame, we were coming into this hourly fair value gap.So awesome.If this is going to continue being a downtrend, I am going to safely assume or we need to see price come into this fair value gap and respect it.
If that gets respected, where is price probably going to draw down to all of this?These high time frame low resistance draws and liquidity today was about as easy as it gets.Right.We identify what the high time frame is doing.Awesome.The high, high time frame trend is in a downtrend.We see, okay, there's very awesome draws and liquidity to the downside that price could want to go down to target.And then from there we look at current price action and we see, okay, we just made a high and we just made a lower low up.So in turn, what is price going to need to do?It's going to retrace.And what is one of our two retrace confluences?Matter of fact, we can use both here.We use fair value gaps in equilibrium.So we see a fair value gap formed right here.
Awesome.
If this downtrend is going to hold, this fair value gap is going to get respected and then we are going to target all of these lows.Let's say you didn't see this massive fair value gap and you just wanted to look look at equilibrium.Well, awesome.From this high down to this low.What, what else do we do we come up, we fill the fair value gap and on top of that we hit equilibrium and then we deliver lower to the draws and liquidity.So that was a good example from today.Let's go and show some examples from yesterday.I'm going to want to leave my NASDAQ drawings on there because I have a call, right, with my blueprint students, which again, if you guys want to join the blueprint and you guys want extra help with coaching where it's like a little bit more direct, you guys can ask me your personal questions on what happened for you guys on the charts today.
I'll leave a link down in the description for you guys to get coaching from me.So let's look at this.
So if we can just drag this to right here.
Awesome.Let's look at the high timeframes here.So high time frame, what are we in?We are in an uptrend, believe it or not, right?We have a high, then we have a higher high.And you're probably saying, oh, well, no, we made a lower low.Well, that is the case.We did make a lower low.However, this low is actually coming down and it's sweeping out this low right here.And on top of that, we are yet to break structure to the downside.So in my opinion, right, Especially coming into New York market open, we know that there's going to be some forms of manipulation we can safely assume.And again, like this is happening, all of this happens before we're even looking for a trade.So regardless, it's like, okay, we, we might be in a downtrend and then boom, this massive candle forms and it's like, okay, we're probably not in that downtrend anymore.
So on the one hour time frame, what are we looking at here?Well, we see that we come down, we sweep out a high time frame low.So awesome.We get a high time frame liquidity sweep.So what do we know about this?We know that orders have been filled down here.Where does price need to go in order to get out of these orders?Right.If we're buying low, where are we going to want to do?We're going to want to sell high.So if we enter into a bunch of buy orders, where is there going to be a bunch of resting buy orders for us to enter into sell orders to be able to liquidate this position right here.Right?
Because we got to think we push underneath these lows.Why did we push underneath these lows?Because there was a lot of sell orders in order to fill our buy orders.So when we're going back higher and we're looking to get out of this position, we're looking where there's going to be a lot of buy orders where we can enter into sell orders to be able to get out of this buy order position right here.Right.So again, trying to use reverse psychology on the market.So what do we see price?Do we come up?Awesome.We form this big, big, big hourly candle.The upside.We're already in an uptrend.How can we identify that?Well, we get an inverse of this hourly gap right here and then we also get a one hour candlestick closer to the upside.So again we're not going to get into entries here but I can show you on the five minute time frame that even though we're forming a whole bunch of up candles, there is going to be a, a good enough and good, good retraces or some a continuation trade to be taken to be able to target these highs.
Because again, where does price need to go in order to liquidate the buy orders from down here?Right.They need to push it above here to, to be able to take profit and to be able to exit out of those buy orders.So if we just go and play the rest of this candle or the next candle, we can see that the next couple candles end up pushing up and hitting full take profit or this draw on liquidity right here.If we go down to the lower time frame again we can see that there's plenty of opportunity within here.We see price retrace into a five minute fair value gap right There could have been longs off of that with stops underneath this candlestick.And then this could have been our take profit.We could have even gotten lower on the low time frame frames.
We can see a low time frame 5 minute sweep of these lows right here.And then we would just be looking for a change of order flow for a break of structure to the upside boom.Could have longed off of that stops underneath here.First take profit.Second take profit.There's a whole bunch of different ways that we could have looked for entries off of this.But again the focus today is our daily bias.So how did I come up with our, our bullish daily bias today?Well, I looked and I see okay, during pre market what did we do?We came down and, and we manipulated these lows from there we inverse this fair value gap on the hourly time frame.So what do I see?We're currently in a downtrend coming down.Then we sweep out a draw on liquidity where orders have the potential to get formed and then boom, we disrespect this fair value gap.
Which means to me, hey, we're probably no longer going to be in bearish price action.Because if we were going to be in bearish price action, we would have respected this gap and we would have continued lower to take out this low and this low.But that's not what Price did.What did price do?It closed above this gap, signaling to me, hey, Price wants to go higher.We just invalidated this hourly gap.And if we wanted to go lower, we would have respected it to push price down to these draws and draws on liquidity right here.That's not what happened.And then what does price end up doing?We know that we filled orders right here.We know that the low, the high time frame trend got invalidated right here.So, so where does price need to go?To the next draw on liquidity right here.
All right, let's go and look at the next day.So this was Monday.Let's go ahead and let's look at some Friday price action.All right, so let's look at this.This again is pretty clean price action.Okay, we see initially we're in a downtrend, right?We break structure to the downside right here.But then when do we break structure, structure back to the upside?Once we get a candlestick closure above this high right here.So boom, we are in a four hour uptrend.If we go down to the hourly time frame, it's a little bit clearer for us, right?We can see the four hour high is right here.We break above it, we come down, we continue higher, higher, higher.And on the 11 hour time frame, we are in a very obvious and clear uptrend.So once again, I mean it's, it's very, very obvious to me that what is our draw on liquidity going to be?
It's going highs right here, right now.Why is that the case?Well, we are in an uptrend and right now we are perfectly respecting the current hourly bullish order flow.We have a high right here.Awesome.We have a low right here.We push past that high.We have a higher high right here and then we have a higher low right here.And then from there we push up, we make a higher high and then we're about to form another higher low.Now, coming into the market on this day, what am I going to be looking for?I'm going to be looking for some form of manipulation because we don't really get much manipulation.
And as we know, if we Typically are going to want to look for some sort of manipulation.Whether it's coming from London session, during Asian session or come New York market open.We do have hourly manipulation right here.But coming into the low time frames, we, we don't really have much.We have these equal lows right here.
Do we invalidate this gap up here?No, we don't.So me personally, I mean, it looks, it looks okay.I would want to see how these next couple candles close.So what we can do is we can play this.
Can it print?
Okay, so again.Well, again, we're not, we're not looking for entries just yet, but I see these equal lows I want.Because New York market hasn't given us any form of manipulation yet.I'm going to be looking for some form of manipulation.Whether it's five minute manipulation or an hourly manipulation of these lows down here.
Or again, I mean we kind of get a sneak peek or hindsight of what price wanted to do down here.But we'll continue playing this and then see where price goes from here.
Okay, so boom, just like that.Okay, let's pause it.So boom, just like that.Can this not keep printing candlesticks?So just like that we end up coming down again.
We know our targets are these hourly highs all the way up here.But what do we need?We need to be able to fill orders in order to get up to these hourly highs.So where do we have the potential to fill orders underneath these lows and underneath these lows.Because what gives us the potential to fill orders draws on liquidity.So if we're looking to target these highs, just like we showed in the last example, how we had a liquidity sweep and then from there we could go up and target the highs.This is the same case, right?We need a liquidity sweep to either take out these lows and these lows and in the S&P 500 case, to then be able to liquid to then be able to again fill orders down here, liquidate the orders up here.Right.We're pushing underneath areas where a lot of sell orders are going to get filled.
And in that case we're going to fill buy orders and then price is going to end up going up to an area where there's going to be a lot of buy orders so that we can enter into our sell orders and take profit on these positions that we're taking down here.Okay, now again, we aren't going to be entering on.We aren't going to be smart enough to be able to press buy Right underneath these lows.However, we are going to be
Speaker B
able
Speaker A
to be able to catch this move and to be able to target these highs.So again, if we just play this a little bit more.
There we go.We just got a five minute break of structure to the upside.We just took out these highs.Awesome.Now if we.
I don't want to jump ahead, but if we look at the hourly candle, we can see boom, sweep down, Orders filled, orders filled.And then if we go down to the five minute, we can see boom, sweep down, orders filled, orders filled.Now we just broke five minute structure to the upside.Now what am I going to be looking for?We see, boom, orders got filled.We were initially in a downtrend.Now we're in an uptrend.What do I want to see following this?I want to see potential continuation so that we can go ahead and target these highs up here.So we'll play this a little bit more.And this is just giving you guys like a little sneak peek of potentially like the type of entries that we're looking for.
Okay, so we get a little doji candle.Let's see if we get any sort of retracement into.
Any of our confluences.We have a fair value gap right here.
Boom.We get a big push down.Now again, just because we close underneath this gap doesn't mean that this entire uptrend is invalidated because we have another gap right here.Matter of fact, we have another gap down here.So for this entire trend to get invalidated, we would have to invalidate this gap down here.
And actually, this is a gap that I would want to target because it's underneath equilibrium.And this is actually in a discounted price range because again, we're looking to take longs in discounted price range.So we'll see what price wants to do from here.
Boom.Awesome.We tapped into discounted price range and we pushed past this fair value gap.So at this point in time, I'm seeing this and I'm saying, okay, look, we just came down.We filled the fair value gap.We filled equilibrium from there.What am I going to be looking for?I'm finally going to be able to reposition my targets and look, look for these highs.
And what do you freaking know?Take profit gets hit.I mean, as if the strategy wasn't given to you guys in this video, hopefully you guys are starting to get it now again, what do we need in order to get up to these highs?Obviously these highs are our draw on liquidity for the day, but we need orders right we need to sweep out liquidity in order to push to this draw on liquidity.How do we do that?
We get into the low time frame, we see price come down underneath these hourly lows.Underneath these hourly lows.Awesome.We know that we have potential to fill orders here.How do we know that orders were filled?Well, we get a break of structure to the upside on the five minute from there.What are we looking for?We're looking for a continuation of the new trend that is formed.So what confluences can we use?We can use our equilibrium confluence.
We can use our fair value gap confluence.Awesome.In this case, we end up closing underneath this fair value gap.But that doesn't, that doesn't disqualify this uptrend.Why?Because we still have equilibrium and we still have a fair value gap right here that could have potentially been tapped into for us to be able to push higher.Price comes down, pokes into equilibrium.And then as I told you guys, we will from there look for price to move higher.What does price end up doing?Boom.Moves higher, takes out our drawn liquidity.Beautiful, beautiful, beautiful.Let's show one more example of this and then hopefully you guys will have gotten the point.So let's go ahead and put.Oh, this was a super ugly day.But because this was the day before fomc, let's do a different day.Let's do.
Okay, this one's a little bit difficult, but see what we got going on here.So
Speaker B
okay,
Speaker A
So on the four hour time frame, what are we in?We are in a very obvious uptrend, right?We have these draws and liquidity over here.This, this is super high up.I remember on this trading day I specifically was not super in favor of going long just because we had these super high draws and liquidity over here.But I mean it is what it is.You kind of have to play with what you play with what you can get.So boom.We have these right here as well.Awesome, awesome, awesome.Okay, so on the four hour time frame, what do we see?Okay, awesome.We are in an uptrend.We just came down, swept out this low, invalidated this gap.Now we have a high, low, higher high, higher, low, higher, high.
Making or forming a higher low with this action right here into this four hour gap.So once we're filling this four hour gap gap, what are we thinking?Okay, price either can do one of two things.We can either come down, invalidate this gap and then from there what are we, what are we going to be targeting?We're going to be Targeting this low and this low because we're invalidating the bullish continuation confluence for price to move higher.
Okay, from there, how do we know that this bullish confluence was actually pushed into and respected?Well, we start printing up, like literally up only candles from the hourly time frame frame.From there, we end up getting an hourly break of structure from us pushing above this hourly high right here.Okay.So we see four hour dip into the four hour fair value gap.How do we know that the four hour fair value gap is respected?Because we end up breaking one one hour structure out of that, saying, hey, we're going to continue this higher.Now from here, once we push above that hourly gap, we can scale down to the low time frames and identify the current trend.So we can see.Awesome.We get the sweep.Awesome.We have a high, low, higher, high, higher low, higher high, higher low.We just finished making a higher high.
So what are we probably going to do?We're probably going to make a higher low on top of that, on market open.What do we do?We manipulated these low time frame low time frame lows.So we already got some form of manipulation.We could potentially grab a little bit more if we wanted to revisit these lows right here.
Or potentially this low and this low over here.Okay.There's potential for that if we end up invalidating this gap right here.So we're already in a very key position.Right.Because if price invalidates this gap, what then am I going to be targeting for the day?I'm going to be targeting this, this low, this low.This low.Right.Even though my bias is bullish.
However, if we end up respecting this gap and then pushing higher, I can safely assume, hey, we're probably going to want to push higher and then I can go and try and find some, some lower time frame highs that I can use, like take profit points all the way through here.Because I'm not going to want to set this as my take, as my one and only take profit all the way up there.Okay.So with that being said, let's play this out.Let's see what happens.
Boom.So perfect.See, this is why we want to be patient.Awesome.We end up inversing this gap right here.
So what do we know?Hey, we want to go lower.And again, unfortunately for us, when we inverse that gap, we end up taking out this low.However, we still have opportunity to go lower down to this low and this low.And then from there, you know, maybe we can retarget, retarget these highs.But what is a Key position that we are going to want to be looking for.Just like how we had this gap right here.I'm going to be looking at now this gap because again, if this is going to be bearish order flow after inversing that gap, what should Price do?Price should technically come up, give us a retrace into equilibrium or into this fair value gap and then from there give us bearish confluences.If that's the case, awesome, we're going to go lower.
However, if Price comes up and then closes above this fair value gap, what can I safely assume?Price just wanted to come down, sweep out this liquidity to then send it higher.Right.There's lots of conditions with this.We, we always are staying on top of it and looking at the, the, the trends of the markets and what current order flow we're in.So let's play it and let's see what price does.
Okay, so we end up pushing, pushing slightly lower here.Let's see if price is even able to give us an entry.
So we were unable to get an entry there.However, we're in again, another advantageous point.Why?Because we just took out this draw on liquidity and now both of these draws and liquidity.So now we're in the same exact position that we were in right here.
Are we going to continue lower by respecting this gap or are we going to disrespect this gap and then are we going to be able to target all of these highs that are up here as draws on liquidity?Well, personally, because this is our 4 hour low and if we are going to continue respecting this four hour uptrend, which we just did on this bullish four hour candle closure to the upside, I think that we are going to be moving higher out of this, out of this liquidity sweep.Right.Because we're respecting high time frame continuation confluences right here.I don't really think that we're going to come up and then boom, destroy this low because we just use, we just have put this low in as a respecting point.So I'm going to be looking at this inverse or value gap, honestly looking for it to get invalidated.
So let's see.
Okay, we don't quite invalidate it just yet.Let's see what the next candle looks like.
Boom.Okay, so good at this boom.Price invalidates this and then from there, to be honest, like I would be willing to enter into a buy position and then just go ahead and target this high right here.And then whatever I look on the lower time frames and scroll all the way over here to look for other entry points.And again, this is one of these later, later entries where it happens a lot later in the day.
And price, again, like some of these trades, again we're just kind of like going over it and like mocking, mocking up.So we came up and took this out but hopefully you guys are getting, getting the point.This isn't to cover entries, this is to cover daily bias.Again, we are looking at the current draws and liquidity and where price wants to go, right?We are in this case, we.What were we in?We were in an uptrend on a four hour.We were pushing into a fair value gap.So what do we expect price to do?We expect price to respect this fair value gap and push past these highs and take out other draws in liquidity over here.Because again, how does a trend move?It moves from boom high, okay, down to fair value gap equilibrium, then back up to what high, then down into what fair value gap or equilibrium then back up to what highs?
Okay?That's how uptrends move.It moves from external to internal, external to internal, external to internal.Same thing with downtrends.Okay?We move from boom, internal to external, internal to external.Right?When we push into our bearish confluences, we are expecting to push down back to the lows.When we push into bearish confluences and then we get bearish confirmation, we are expected to push down to the lows.Okay, same thing.When we push back, when we push underneath these lows, what are we expecting price to do?Retrace into the internal, right into our continuation confluences.That's the ebbs and flows of the market.
Okay.We go from pushing underneath a low.Once that happens, hey, price is probably going to come up and fill a fair value value gap or hit equilibrium.Once price goes up and fills a fair value gap or hits equilibrium, hey, price is probably going to want to come down and take it, take this low out.It's the ebbs and flows in the market.It's how the market moves.And hopefully that gave you guys a better idea of how we get, how we can establish daily bias coming into the market.We are really just looking for where, where was our most recent liquidity sweep or are we currently sweeping liquidity on top of that?What are our high time frame imbalances and equilibrium levels that we are looking at within this current trend in the market?Let's do one more example where we don't necessarily go like full fledged deep dive, but we can show.
Boom, Boom, No.What did I do?
Is that today?Oh, I'm an idiot.
Okay, let's look at this real quick.So, boom, we go right here.Awesome.So what do we see price doing before market opens?We see price come down.
Oh, my goodness.We just broke hourly structure to the downside.At least that's what we're thinking at first.Right?That's what we're thinking at first.
We say, okay, if price is going to continue this downtrend, what does price need to do?Well, price needs to come up and it needs to fill this fair value gap or it needs to hit equilibrium and then it needs to continue lower.Right?Correct.So price makes this fair value gap.Price comes up and then we get a down candle right here.Did that hit this fair value gap?No.Did that hit equilibrium?No.
Oh.And then in turn, what does that do?That creates a high.We're going to move up and move down.So now this is the high that price has to respect in order for us to continue this downtrend.This should be the lower high.What does the hourly time frame end up doing?Boom, we rip up, we break structure to the upside.So what is that telling me?We are now in bullish order flow.So now I no longer give a fuck about this for value gap.Right here.We are in bullish order flow.And where do we need to target Boom, these highs?Now, unfortunately, price already came up and took care of business right there, right when market opened.But we can see that this is, this is like super, super clean price action.Right.If we go into the lower time frames, we have this high time frame drawn liquidity right here.
We can see on the five minute, we come down, we sweep out this low right here.And then, boom, we break structure to the upside.
From there we come into this 5 minute fair value gap.Push down, push up.Bullish confirmation that, hey, the five minute was previously in a downtrend.We break structure to the upside.Now we're respecting this new five minute trend that we made.And where are we going to want to to target these highs?Right here.And the rest is history.We moved a lot higher than that.So that's another good example of us like literally just looking at the high time frame trends, identifying our continuation confluences and identifying our draws in liquidity and looking for price to either respect it or disrespect it.And then in turn, we're able to develop a bias based off of that.Okay.On top of that, we're, we're hopefully you guys have learned from this video.We're trying to look at our potential draws and liquidity as well.So not only, and I know I make it seem like a little bit easy but not only am I looking and seeing okay, price came down and we push underneath these lows so now we're in a downtrend.
But oh, we just broke structure to the upside.Once I see that breaker structure to the upside, what am I immediately doing?I'm immediately looking at what potential draws in liquidity do we have to the upside for price to go up and take out.I immediately saw this high right here which is Asia session high and then I see this high right here which is previous day high.So we have two significant draws in liquidity to the upside.
Whereas price going to want to draw towards those draws and liquidity.Why?Because we just broke structure to the upside right here we are in an uptrend, we come down, we fill equilibrium.Awesome.Then on the five minute we see low time frame confirmation.We are going to want to long.
Beautiful, beautiful, beautiful.So that wraps up our daily buys for today.Tomorrow I can't remember what we're covering.I think it's going to be risk management and then I think we're ready for some executions and how to actually put this shit to work.So that being said, love and appreciate you.Appreciate you boys.I'll see you guys tomorrow.
Explains that psychology is really discipline: sticking to strategy and risk rules. The speaker discusses contract sizing, drawdown limits, and how different prop firm rules affect risk management.
Speaker A
What up guys and welcome to another path to profitability video.I'm sorry, completely forgot to film this yesterday and it was like it's.It may be because it's such like a small and short video that I forgot to film it but yeah, sorry, forgot to like literally completely forgot.
But today is going to be short and simple.It's going to be on risk management.There are three skill sets that we need to learn as traders to make us overall a profitable trader.We need strategy which we have the bare bones now for.We've learned pretty much every single confluence that I use within the markets to be able to execute.
We just haven't put it all together and how I look to execute just yet.We've also identified how we can finally daily bias in the market.So we're pretty set on strategy.Besides me actually giving you the full fledged sauce and I've been edging you guys waiting, waiting, waiting, waiting to be able to give that to you guys because most of the time people just watch that video and then they're just like boom,
Speaker B
goodbye.
Speaker A
Like I'm just going to take this and run.So that's why we're doing risk management before, before strategy so we need strategy, we need good risk management, and then we also need good psychology.Okay, Psychology literally just means sticking to both of these things.Like at the end of the day people are always like, how do I get good psychology in trading?Well, it's as simple as sticking to your trading plan and sticking to your risk management plan.That's literally all psychology is.And I don't know, I think people, like even myself included, like when I was trying to learn how to trade and especially when I first turned profitable, I was like robbing rah rah.Psychology is the biggest and best thing that you need to learn how to do when you're day trading.But then once you actually get good at trading, you kind of start thinking about it in a different way and you actually realize like, okay, it's like psychology isn't like, like what even fucking is psychology.
So today is going to be like risk management and psychology combined.
But psychology is literally just discipline.Like, just discipline as the skill set.And it's the discipline to be able to stick to your strategy, only take trades when your strategy presents itself and stick to your risk management plan.Don't over risk, don't over leverage, and don't over trade.If you do these two things correctly, then you technically have good psychology.
If you fail to stick to your trading plan, then you have bad psychology.If you fail to stick to your risk management plan, you have bad psychology.So again, for me, as somebody who has relatively good psychology psychology within the market, I just think it's like a skill that just comes along with already being good at the other two skills.Like if you stick to these two skills, then you automatically get this one.But if you can't stick to these two two skills, then you never get this one right here.
So it's kind of a weird concept because there's literally nothing that I can get on here and tell you to do that's going to make you a, like a better, like to give you better psychology.Like there's literally not one single thing, like I can't tell you something motivating, I can't tell you some sort of homework for you to do to make your psychology be better about trading.It's literally all dependent on you and just if you want to become a profitable trader or not.So what do I mean by that?It's, it's literally determined on, okay, are you going to stay disciplined to the two things that we know for a fact creates a profitable trader?
Sticking to a trading plan and using correct risk management.If you do Both of these things, then you get psychology and you also will be able to become profitable.Now it's a lot more difficult than you think to just say, yes, I'm going to stick to my strategy and yes, I'm going to stick to my risk management plan.Because we obviously as humans have a lot of emotional attachment to money.However, at the end of the day, if you really wanted to, if you truly want to be a full time day trader, you would just do the things that you're required to do in order to get there.
So I'm telling you right now, the only piece of psychological advice that I have for you guys as day traders is if you want it bad enough, you will stick to your day trading strategy and you were, you will stick to your risk management plan because there is no other way in the entire world that you are going to become a profitable trader without sticking to both of these.Because without sticking to both of these, then you don't have good psychology within the markets.And what does it mean by sticking to these?It means only taking a trade when your strategy presents itself using correct risk management, which we'll talk about today.There's different variations and different ways that we can use correct risk management.
And that's, that's literally it.Like, if you stick to your strategy and if you make sure that you're risking the correct amount, you're gonna be a profitable trader.Like if your strategy based off of data through like a trading journal such as like trade seller, proves to you through, through statistics that you have a positive win rate and a positive risk reward ratio, you are a profitable trader.And all you have to do is stick to that strategy that has a proven problem, that has a proven probability in the market and just use correct risk.Like use a consistent risk that is not going to blow your account if you lose a couple trades in a row.
Use a consistent risk that isn't going to blow your account if you have a losing month or another losing month after that, right?We just want to be using a consistent amount of risk that is going to, again with the stats provided from our strategy going to make us a profitable day trader.So again, psychology as like, I know you guys are probably watching this video and you're probably thinking, well damn, like I thought psychology was like a huge thing in trading.It is, it really is.It's massive in trading and it's why the majority of people are unable to turn profitable.
But at the end of the, at the end of the day, it's not like it's not something that you can like work on or grow.It's just like, do you want to turn profitable or not?It's like if you want to turn profitable, then you stick to your strategy and you stick to your risk management, risk management plan.And you kind of just have to be real with yourself.And you're probably saying, well, I want to turn profitable, but my psychology still, still sucks.
Well, it's because you're thinking about trading in the wrong way.Okay?So it's not your psychology.You're thinking, I want to get rich quick.And if you're thinking, how can I get rich quick?
That's going to be by taking trades that aren't in line with your strategy because you're going to be trying to take as many trades as possible.And that also means ramping up the leverage and ramping up your risk every single trading day so that you can win more on a trade and get rich quick.So in turn, what are you doing?You're breaking both strategy and risk management.So again, do you want to turn profitable or not?
And hopefully this goes without saying, trading is not something that is going to get you rich quick.Okay?If you think that you're going to get into trading and make a ton of money within the span of a couple months, you're in the wrong business, dude.And you're, you're not doing, you're, you're not in the right space.So hate to break it to you, if you thought you were going to get into trading and become a freaking billionaire within the first couple months, you should, should look into buying lottery tickets because there's literally nothing else in the world that can do that for you besides potentially winning the lottery.
And that's the harsh reality of literally any of these high income skill sets.It's, it's, you just have to put in a lot of work and you have to gain the skill first, which takes a lot of time.And then from there, once you have the skill, it's going to take time to build up your capital.And then from there you're going to be able to reap the rewards of the skill set.Like for me, bro, like I just recently, within my own trading was able to start reaping the rewards of the skill set of trading.Like if you look back to me like two or three years ago, like I was not trading with the size that I am now, I was not making nearly as much money from trading as I am now.And that's just point blank, period, like how it works.
You just like scale with time.And a lot of people, like some of you guys may be first time viewers on here and you just think that I spawned in here like two months ago and magically like just had all of this money.And that's not the case.
You know, it's, it's a culmination of years of work to be able to get to this point.So the reason why I'm saying that is because a lot of you guys think that you're just going to be in my position at the end of this year and I would be lying to you if I told you that that was possible.You're able to do what I've done with my life for sure.But it's going to take a lot of time and it's going to take a lot of effort.So that's really all psychology is.Psychology is just being like point blank, period honest with yourself and saying, hey, I know that this is going to take a long time.I know I need to focus on the skill set of trading and I know that the only way for me to turn profitable is by sticking to the strategy that gives me a probability in the market and sticking to a risk management plan that makes sure that when I'm using the strategy I don't blow the account and I live to trade another day.
And then from there it's just going to be slow stacking.And there's a bunch of companies and softwares that are able to help low income or low capital individuals to be able to scale a lot quicker, like funded accounts like we talked about in yesterday's video or the day prior's video.So again, like, I'm not saying that it's impossible to scale up quickly, I'm just saying it's going to take time.
And that's all psychology is, is being brutally honest with yourself, understanding that this is going to take time for me to learn the skill set of trading.And the only way for me to turn profitable with trading is by sticking to my strategy and sticking to a risk management plan.So with that being said, let's go over risk management again.Risk management, dude.Like realistically, strategy is like the most complicated thing within trading.At the end of the day, guys, trading is very simple, you know, like you find a strategy that gives you a probability within the market and then you find a risk management plan that is able to sustain that strategy within the win rate and within the risk reward so that you can live to trade another day so that you're not blowing your account when you go on a little losing streak.
And you just have to stick to those two things.Like, when you put it like that, trading is.Trading is pretty freaking simple.So for me, for my risk management, like, I used to do the whole thing of like, calculate 1% of your balance, and then I'm going to only risk 1% of my account balance per trade on this.
And for each person, it's going to be different depending on what their risk tolerance is.But for me, I moved away from doing, like, hey, I'm going to be risking like only 1% of my account balance per trade.And I just went to, I'm going to risk this amount of contracts per trade.It just makes.Makes my life a lot easier.So I'm not thinking and having to pull up like a lot size calculator or contract size calculator.It just makes it a lot easier of just like, okay, whenever I press buy, whenever I press sell, it's going to be the same amount of contracts for Nasdaq.And then I have the number of contracts on ES that I'm going to be using.And it just makes my life a lot easier.And if you guys are trading on a live account, I would recommend you guys do the same.
You want to find the number of contracts that is a safe amount for you to be risking for your account balance.Okay?So that doesn't mean you're risking 10% of your account balance per trade.That doesn't mean you're risking freaking 20% of your account balance.That doesn't mean that you're risking 5% of your account balance.
Usually the sweet spot is anywhere between like 1 to 3%.If you can find a contract size that again, when we're looking at the charts, like, you can literally just find, hey, what's my typical.What's my typical stop loss size?So on this trade that I took today, that ended up being a big win, my stop loss size on ES was around 16 ticks, right?So I can keep that in my mind.I'm like, awesome.On this trade, it was 16 ticks.And then I can look back to another short position that I maybe, maybe had on the S P 500.And on this trade it was 34 ticks.And then on another trade, it was like 28 ticks.So I can say, okay, on this trade, we had a relatively tight stop loss.So on this, this, on this position, you know, we're going to be risking whatever, like three, three contracts.
So this will be like the bare minimum that I'm going to lose because this is going to be the lowest amount and then if I'm risking three contracts to on this, you know, how much am I going to lose when it hits a 35 tick stop loss?And then as long as I'm comfortable with both of those numbers, obviously for the smaller stop loss it's going to be a much more comfortable number.But as long as we're comfortable with like kind of the largest stop loss, like stop loss amount that we're going to be typically using on a trade to trade basis, then that's all, that's all that matters.Right?And again like us going up to you know, 35 ticks that could potentially be risking like 3 or 4% of the account.But I'm willing to do that because again If I'm risking 3 to 4% of the account and then I'm only getting like a one to one risk to reward ratio, you know, I'm still able to get a 3% gain on this and then if I lose, doesn't really matter that much because whatever I guess I get stopped out, I lose 3%.
But then on a trade like this where high, high have a much tighter stop loss with probably a higher risk reward, I'm not going to be risking as much as I am on the higher risk, lower risk to reward trades, but I'm going to be making more.Like on this trade we hit full take profit.So this was a 1 to 4.81 risk reward.So again I'm risking less but I'm in turn either making a little bit more on this trade or pretty much the exact same as a one to one risk reward on a a larger stop loss.So at the end of the day it always ends up like evening out by using the same contract size.Now I would like to preface one thing.If I do have, there's a couple times when I change the contract size.So one time is if the stop loss is like very drastically larger than usual, then I'm going to just cut the contract size in half.
And then the other times are when we see fundamental data.So if we look and we see, hey, today there's there was PPI news data.So the market is going to be a little bit more choppy and I'm not so sure about how the market's looking today, then what am I going to do?I just say to myself, hey, I don't really like the way that the fundamentals are looking on the news, so what am I going to do?I'm just going to cut my contract size in half.Okay.That's really how I do it.It's, it's made my life so much easier.Instead of like panicking, having another browser open for the contract size calculator just makes my life a lot easier.
Now as for funded accounts, you're probably saying okay, that's for live accounts.What, what about for funded accounts?So funded accounts is going to be determined on a prop firm to prop firm basis.So a company to company basis and also dependent on what accounts you are trading on.So let's say you're trading on alpha futures, for example.Alpha futures, they have a little bit of a larger drawdown for you to be trading in and then also a easier consistency rule to stick to versus tradify.They are going to have a tighter consistency rule and not as large of a drawdown but in turn those accounts are going to be cheaper.Right?There's pros and cons for each prop firm.But what you guys need to do is you guys again, it's unfortunate because I wish I could be like, oh yeah, this is like the one stop shop and like the one way to use proper risk management on funded accounts.
But unfortunately every single prop firm is different.Some prop firms, there's trailing drawdown.Some prop firms, there's trailing end of the day drawdown.Some prop firms, there's no trailing drawdown.Some prop firms, there's trailing equity drawdown.Some prop firms it's on $150,000 account, it's a $3,000 draw, $3,000 drawdown.Some prop firms on a $150,000 account, It's a $5,000 drawdown.So every single prop firm is going to be very, very different when it comes to using correct risk management.So you're just going to have to look, I know this fucking sucks, but you're literally just going to have to look yourself at the rules on what account you are trading on and you're going to have to see for yourself, okay, how am I going to manage my risk with one the consistency rule that they have because the, that's very important especially if they have consistency rule on the challenge and then also a consistency rule on the payouts and then on top of that I need to be looking, hey, is my drawdown trailing with the equity of the account?
Is my drawdown going to be trailing by the end of the day on the account is how large is the amount of drawdown that this company is giving me?So all of those things are things that you need to take note of and be very conscious of, of when you are trading on prop firms.And in turn, everybody's risk management plan is going to be a little bit differently.Even, even on top of that, your risk management plan is going to be a little bit different from the challenge account to the live account where you're going to be eligible for a payout.Most people, what they do is they'll get on the challenge account and they're, they'll, they will pretty much do the max amount of risk for them to be able to pass the account in as few trades as possible.Right.Because they're just trying to get through the evaluation phase as quick as possible.
And then once they get through the evaluation phase, once they're on the live account and they're eligible for a payout, what will they do then?Then they'll scale back the risk because they're like, okay, this is the showtime.This is time for me to again, I don't want to blow this on one single trade versus the eval.They're willing to potentially blow it on one single trade because they're like, hey, I'm just trying to pass this as quick as possible.But once you pass it, that's when it's like, hey, let's pull on the reins here.We want to potentially, we want, we want to be trading a little bit less risky because we have the opportunity to get a payout now.So all in all, that is risk management and psychology explained.Tomorrow we're going to go over strategy and then that is going to be a wrap for the path to profitability.
Wraps up the series by stressing that strategy only works with practice, repetition, and discretion. The speaker explains his overall framework for reading order flow, confirmations, and liquidity without rigid step-by-step rules.
Speaker A
Hopefully you guys have enjoyed the series so far.It's been fun for me to make and unfortunately tomorrow it's going to come to a close.So now you guys are finally ready, ready for me to reveal my full day trading strategy that I use on a daily basis to help me make money and give me high probability within these financial markets.Now one thing that I ask you guys is once you guys fully understand the strategy, I don't want you guys to just jump in with real money straight away.Again, I want you guys to use a demo account.I want you guys to practice this because it's one thing to sit here to watch and learn from the education, but it's another thing to go practice it.An analogy that I like to use is think about a basketball player.If a basketball player sits down and watches a nine hour long basketball training video that just teaches him how to do all the moves versus if we took somebody and told them to go play basketball and gave him a Bunch of drills to do on the actual court for nine hours.
Who is probably going to get better?Probably the person that's actually doing the drills.Now what happens if we had someone do both?
That's when they're going to be very, very good because they're going to learn how to do it correctly and then they're going to go and apply it.So that's exactly what you guys are going through right now.You guys are learning how to do it correctly, but now you need to go and apply it.So before you guys jump in by buying a funded accounts and you know, trying to trade with your own money, there are tools that we have for a reason to help help us understand these markets.And again, maybe some of you guys are still struggling while after learning the the strategy, that's completely fine.That's actually why I have a mentorship in place to help students like you guys.Again, I put out so much free content, but sometimes the free content isn't going to solve your specific personal questions.Because how am I supposed to make a individual YouTube video for your specific problems and be able to give you you specific personal solutions to your problems?
It's absolutely impossible.I can't spend all day going through YouTube comments and saying, oh yeah, this is how you do this.That the third, because one, my time is super valuable and two, then people would be asking me questions all day 247 in the YouTube comments and I would just get completely caught up with it.So that's why I want to give you guys the opportunity to join my one on one mentorship.There's going to be a link down in the description.And again, that's only if you guys are having trouble.And you guys can literally just wait until after watching through this entire video practicing yourself.And if you guys are still having trouble, then you guys can come back to me and say, hey, I'm having some issues and I want to see if I can become one of your students.And then we can see if you're going to be a good fit.
But from here we're going to jump into the strategy.I hope you guys are ready.All right, guys, welcome to our very last episode of Path Profitability where we put everything together and give you guys the strategy that you guys have been waiting your entire lives to learn.The strategy that's gonna make you a million dollars.Just kidding.It's not true.Okay, so before we get into the actual strategy, that's.This is what we need to preface beforehand.
Just because you know, the step by step of how to enter a trade.Does that mean you're instantly going to be able to make money from trading?No.Second thing, just.Sorry.The second thing is that even though you have the strategy, we need to have risk management and we need to have psychology in check in order to be a profitable trader.Because again, we need all three skill sets in order to be profitable as a full time day trader.We need strategy, we need risk management, and we need good psychology.Okay?Without all three of those, we are unable to be a full time profitable trader.
Now another thing that I want to preface, and this is something that I'm going to do a little bit differently than I have in the past.Most of the time when I do these strategy videos, I'm like, this is step one, step two, step three, step four, and then I'll go ahead and I'll post like a trade recap.And you know, granted that those other strategy videos are pretty dated and whatever, like my strategy has changed since then.People will be like, hey, well you didn't wait for this to happen in your strategy or hey, you skipped over this step.And that's the problem with when mentors get on here and teach you guys their day trading strategy that helps them make money.
We are trying to make it in like the easiest and most digestible way possible.In reality, a lot of strategy and a lot of trading comes down to like just overall like market experience.So there could be some times, like for the most part I'm following the same steps every single time.But there might be one day where I, instead of scaling down to the five minute, I scale down to the one minute and I try and take a lower time frame trade.Or instead of waiting for this confirmation, I wait for another confirmation.
And that's like more of the discretionary side of this because in reality if we wanted to just make some sort of like trading bot that automated our strategy that like, and if that strategy actually gave us like 100 profitable results over a long period of time, then awesome, everybody would be able to get rich.And that's, that's kind of the last thing that I wanted to talk about before getting into this.Just because you have this strategy doesn't mean that, you know, you're just instantly going to be a profitable trader.Trading is a lot more than that.It comes with a lot of market experience.
It comes with watching the charts for hours and hours and hours over and over and over from market open to market open.And there's a lot of variables that go into being able to predict when Price, price action is good.Being able to predict or you know, like decide whether to size up in your risk management, whether to size down and all of these things are factors that play into whether or not you actually end up being a profitable trader or not.And really the only thing that is going to be able to give you that skill of discretion and that skill of market experience is quite literally putting in the time and effort required to be able to earn that skill, which is just looking at the charts and getting repetitions in.Because again, this is like, I relate these series and like these YouTube videos to like a.
Let's say LeBron James made a basketball pre training guide, right?And he gives you every single tip and trick required that he did when he was growing up to be able to become the best basketball player in the world.Just because he gave you guys that blueprint, does that mean you're able to sit down, watch those videos, not take any action, and then end up becoming like LeBron James?No.What needs to happen after you watch the videos?Well, you need to actually go out and do the exact same amount of work and put in the exact same amount of effort to even one have the possibility of getting close to him in terms of skill.And then there's a whole bunch of other stuff that's involved like, like whatever genetics and just real like basketball iq.And it's the same thing with trading, right?
So like I can get on here and I can explain my strategy and I can tell you, hey, you need to do this, you need to do this, you need to spend this amount of hours doing this, you need to make sure that you understand this concept, this concept, this concept.And then you need to put a ton of time into the charts and that's how you're going to be able to make money from trading long term.
I, I've already done that and I continue to put in hours on the charts.But for you guys, it's like just watching these YouTube videos and just digesting the content is not going to make you a profitable trader.It's one step, it brings you, it gives you the knowledge required.But once you get the knowledge, you need to act on the knowledge that you got and then you start making more mistakes and then you learn from those mistakes.So getting the info, getting the correct information is one thing, but then going from, okay, now I have the information to actually taking action on the information that was given to you, that's a whole other thing.
And that's where most people end up fucking up.And that's where most people end up going wrong is like, they get the information and then they get it in like this edutainment format where they're like, oh, life is so great.I just learned the best strategy that's going to turn me profitable.So now I don't have to do any work and I don't have to practice this.I don't have to back test, I don't have to journal, I don't have to do anything.
And I'm just gonna take one trade a day every single day on Market Open and hope and pray for the best.And it's like you're going to suck at trading for your entire life if you do that.You need to put in the hours required to be able to drill out this strategy, to be able to understand the strategy correctly and to get yourself in the right headspace to genuinely just like, be good at trading.You need to put the hours in.There's a, there's a rule.It's like the 10,000 hour rule.If you want to be a master of something, you have to put 10,000 hours into it, you know, and the more the better.Like, I'm like, if you think about Kobe Bryant, like, he was rest in peace, he was one of like the best to show and prove that rule.He put in probably the most amount of work and just had the craziest work ethic out of all of like the great basketball players ever.
And it showed, right?
He showed up, put in well over 10,000 hours worth of work and became a master of his craft.It's the exact same thing with training and it's the exact same thing with anything that you're trying to pursue, right?You can't just say, hey, I'm going to sit here and watch a couple YouTube videos.Because guess what, this YouTube video, you know, by the time the year is up, will probably have well over a hundred thousand views.But you really think that a hundred thousand people are going to watch this video and then proceed to put in the 10,000 hours that's required to end up becoming a profitable trader?Probably not.So if it was easy as just sitting here and watching a YouTube video and then, boom, we're all millionaires.I wish that was the case, but it's not the case.I need to be open and honest with you about how this works.
And that's the truth.
It's one thing to get the information.That's this, that's what this video is here for, for you to get the information required to be able to Build a good strategy to be able to build maybe some sort of discretionary trading plan.But then from there it's up to you to actually trade and make the mistakes, learn from those mistakes, grow from the mistakes, make mistakes, learn from those lessons.I ideally never make them again.And then that's how we become a better trader.
So for me, I learned this strategy, I taught myself this strategy based off these confluences that I've learned from a bunch of other people in the space and then kind of made this into my own strategy that has worked for me and has made me a profitable trader.And I put in the hours required to be able to test this and then to be able to actually make money from this, you guys need to do the exact same.So whether you guys learn the confluences and then maybe want to twist this in a little bit a different way, and then that's the last thing I'm not going to give you.Like I was saying, like a step by step, hey, this, this, this, this, this.I'm just going to give you the overall ideations of how I'm going to be looking at trades.So what I'm looking at when I'm looking for my daily bias, what I'm looking at for when I'm looking to enter and how I'm using the certain confluences that I've taught you guys throughout this entire series to be able to make those predictions and to be able to make highly probable decisions within the market on a daily basis.
Because that's our goal with trading.Because again, from what I found in the past is like, you give people like, hey, step one, step two, step three, step four, then I do a trade recap.And then they're like, hey, you skipped this step.Is this a new strategy?And it's like, like, no, that was just like literally 5 years plus of trading experience telling me, hey, I've seen this shit before.We should probably scale down to the lower time frame and take a shorter time frame trade instead of waiting for, for a higher time frame confirmation because there's a bunch of draws and liquidity that are about to get hit.So I know that there's not going to be a high time frame, higher time frame confirmation.So I'm going to scale down so I can at least get into this trade so I can make some profit.
Right like that.
That thought process only comes from being able to.That thought process will only be built by putting the time required by seeing market open so many times and by seeing these candles print for years and years.And years for hours and hours and hours for days and days and days.That's literally the only way that you're able to be able to make adjustments like that.And then at the end of the day when you really get down to think about it, it's like, okay, so what was the trade taken off of the strategy or was it taken off of discretion?
And that's the big kicker with all of this.And I don't want to ramble, but I just really want you guys to understand this.Where it's like, what I'm going to teach you today is the ideation and the thought process of how my strategy is constructed.Okay?We go from orders being filled to change in order flow to continuation of the new trend.
And I'm looking to enter and I'm looking to target other draws in liquidity or internal draws and liquidity.Because in my head it's orders have been filled or orders have potential to get filled.How do we know orders have been filled?We see a change in order flow or a change in market structure and then how do we know that change in market structure is going to hold?We see continuation of that market structure and then where am I going to target where those orders that were filled up there or down here can be exited, right?So that's going to be at draws and liquidity or imbalance, price action.So that's how I think about my strategy when creating it and I'll show you guys, or when I was creating it and I'll show you guys a couple examples on the chart and I'll write down like the step by step.
But you guys have to know and understand.And this is why I'm not going to be like, hey, you look at this time frame first and then you look down on this time frame and then you look on this time frame.Because like the second that you don't do that exact step by step, the comment section is going berserk saying you wouldn't follow your strategy.And it's like, shut up, bro.Like, I know what my strategy is and I changed it so that I would, I was able to be able to take advantage of this price action that was in my favor.It's like I'm making sound decisions based off of what I've seen the market do for fucking seven years now.And you're like talking about you change your strategy and it just drives me nuts.So we're not going to do the step by step strategy.
Look at this time frame and wait for this and then you have to do this right after this.This it's going to be.This is how I built my strategy, and this is how I think about the markets and how the markets should be moving on a daily basis.And this is how I look for entries.Okay.And you guys will be able to get a pretty good gist of what I'm looking for on a daily basis and how I'm able to construct this and how I'm able to construct my thoughts when I'm looking at the markets.I'm not just going to give you like, step one, step two, step trip three, because one, people that up all the time, and then two, they, they, they leave no room for any discretionary trading.And that's what I want to leave room for you guys to be able to do is to be able to let your mind, like, flow and let your mind actually be able to see the candlesticks get printed and actually force yourselves to put in the time required on the chart to be able to understand why Price is moving the way that it is, why Price didn't want to go hit this draw on liquidity compared to this one.
All of those things are very important things for you guys to know.And I feel like as your mentor, I should purposely omit little pieces from this strategy video so that you go out and learn them yourself.
And it's not like that I'm leaving the shit out, like, because it's so valuable and it's like some secret sauce.It's like, no, I'm not going to tell you to do certain things because there's some things that shouldn't have very strict control constraints on it.Like, hey, we can only enter when this happens, then this happens.Like, no, I want you guys to be more of like a free little pony prancing through the rain and just having all these confluences in your arsenal, like a toolbox.
Speaker A
So every single day, there's a different set of blueprints that are set down.
You have all the tools and you have all the materials to be able to build what the blueprint is.But every single time, you're probably not going to be using the same tools because the blueprints are different, the tools and materials are the same, but you might not need a wrench to be able to build whatever the blueprints say on this day.And then the following day, you know, you might need the rent, but you might not need the hammer.Right?That's how I want you guys to think about how we have our confluences, how we build our out our daily biases when we're looking at the market because the market's a different market every single day.
That's one of the awesome things about trading, but that's also one of the difficult things about trading is we have to constantly be adapting to the new things that the market's giving us.So by unrestraining and unrestricting ourselves to, hey, you have to follow this super, super strictly.It allows us to adapt to the market.So here we are on the SMP 500.
Speaker C
SMP 500.
Speaker A
So let's imagine that we are right here.Okay?Market is literally within the next millisecond going to open.Okay?This 30 minute candle just closed, which means market is open.
Okay?We obviously can't see the market open candle forming, but market is now open.What am I going to be looking at?Well, the first thing that I'm going to be looking at is where are, where are our, where are draws on liquidity for the day?Because again, what is my thought process?And I'm kind of going to break this down while we're going through this trade that I took on Friday so that you guys can get a good gist of what I'm looking for for trades, okay.And how I break this down.So the first thing that I'm looking for is have we swept out liquidity yet?Where are our draws on liquidity and what point are we at within current market structure?Okay, so on the S P500, this candle, it doesn't look, it doesn't look like this.It's just formed like this because the trade replay.
But on the high time frames, we are continuing this four hour bullish market structure.Okay?So we come up, we fill this gap, we see extensions out of it.However, we form a down candle right here.
Same thing here on nasdaq.However, we actually disrespect this gap.However, there's one gap underneath it.So it's not a full fledged disrespect respect of the bullish order flow that we're in.We are actually just filling equilibrium from this low up to this high.Okay?So we filled equilibrium, we respected it, we moved up.So at this point in time, I'm seeing on the high time frame, we're in B. BU Bullish.We're in BUL bullish order flow.Okay?We inverse this top gap right here, right?So we move down, we inverse this top gap and now we're respecting this for this four hour equilibrium.And on the S&P 500, same situation, we inverse this top gap so previously we were in a downtrend, but then we inverse this top gap.We also broke structure to the upside.So boom, we know that hey, we're in an uptrend now.
And how do we confirm that we're in an uptrend?We come down, we fill this gap and then we see legs up out of it.So awesome.That's my first thought process.That's the first thing that I'm thinking when I see all of that go down.
So I say cool.But that's, that's before way, way, way, way before market open.From there we're going to be looking at Asia session.What else can we do?We can look at previous day highs, which are right here.
And then we have previous day lows, I believe.Nope, these were previous day lows all the way down here.Okay, so we previous day low right here.Previous day high.Sorry, right here.
What day is this?Thursday.Sorry, getting all mixed up.There it is.Okay, the previous day high, previous day low.
Boom.What else can we look at?Well, we can identify, boom, we have Asia session low from this new day that we opened.We have London session low right here.And then we have.
Let's see.Right here.This is London session high.Awesome.So right now we're in bullish market structure.On the four hour.We came down, we filled this continuation confluence.We're seeing legs up.Me personally coming into this day, I'm pretty bullish.Okay, why?Because we have draws and liquidity to the upside.Right.We have London session high right here.We've got some hourly high stacked up right here.We also have previous day high all the way up here.
Okay, this is previous day low.This is Asia session low.
And this is London session low.
So what did I just do?What's the first step of finding my strategy?Well, it's daily bias and we had a daily bias video like two days ago.Okay.So I'm looking to one, identify the high time frame trend identify.
At what point in time are we in?In the high time frame trend.So at this point in time, what are we in?We were filling an imbalance and we were seeing extensions out of it.Right.
So for me, I'm like, okay, cool, we're filling imbalances.We're probably going to want to seek out some form of external draw on liquidity because that's how trends move.Right.For in an uptrend, which right now we are, we inverse this gap.We come down, we respect the four hour gap and then we start seeing legs out of it.Awesome.Our targets should be up here.Right?So the first thing that I'm doing is doing that, identifying what order flow are we in on the four hour and on the one hour.Okay, the next thing that I'm going to want to do, sorry, disregard that massive candle that hasn't happened yet.
The next thing that I'm going to want to do is identify all of our draws on liquidity for the day.So what did I just do?I went in and I said, okay, we appreciate previous day high right here.We have previous day low down here.We have a session low right here, which is Asia session.We have session high right here, which is London session high.We have a session low right here, which is London session low.Asia session high had already been pushed past London session highs and there was no reaction off of it.So in turn, that draw on liquidity is pretty useless for us.Same thing here on the S&P 500.We have have London session high, we have previous day high, we have Asia session low, we have London session low.And then we can even mark out these hourly highs right here.
That look pretty good.So now we have identified the high time frame trend that we're in and we identified the draws and liquidity.So me personally, what am I going to want to see?
Especially right now because we're in an uptrend, I'm going to want to see candles out of and reacting bullishly.Again, disregard this hourly candle right now.Let's imagine as if we can't even see this, but I want to see price start reversing up because right now on the S&P 500 we're in a downtrend.And on NASDAQ at this point in time, we're actually in an uptrend.This candle should not be, shouldn't look like this right now.
But at this point in time we are in an uptrend.And actually even better for us is we are sweeping out liquidity to the downside on the one hour.So for me I'm thinking, hey, if we can get confluences to the upside, that to me means that hey, we're going to want to come up and take out all of these very solid draws and liquidity, right?We got London high, we got hourly high, hourly high, previous day high.All of these highs up here look great, right?And we just recently saw that price came down and swept out these lows and now we're reversing and awesome.We already hit one of our draws in liquidity, but market is just opening.So we weren't able to take a trade on that.Maybe we can take a trade to be able to target some of these highs.
So the first two things is I establish my bias.Okay?So my bias today is bullish.I'm looking at all of these highs here.All right.The second thing that I do is identify the key draws in liquidity.
Now, again, what are draws and liquidity?Areas where price has the potential to fill orders.Okay.To cause reversals.Right.
So with that in mind, I'm looking at these draws and liquidity as one of two things.Okay.Entries and targets.Right now we just pushed up above this Friday's high on the S P 500.We're, or, sorry, London session high on, on.On the S P500.We're significantly underneath this high right now.What is a concept that we learned when we are pushing above a high on one of the indexes and then below a high on another one of the indexes?An SMT divergence.Specifically a bearish SMT divergence.So, oh, even though we are in bullish market structure on the four hour time frame and we're respecting bullish market structure and I probably want these highs, what do I have to consider?I have to consider that, hey, we might be potentially sweeping out these orders right here, missing these orders right here and forming an SMT divergence from this high down to this high, from this high up to this high.
And what is the S P500 telling us about Nasdaq?That, hey, we probably want to go down and we actually might want to take out these London lows, these Asia session lows, maybe even the previous day lows all the way down here.Right.
So with that in mind, let's play the market out a little bit and let's see where we end up going.All right, so we'll play this boom, this candlestick stick forms.Does this give us any real overall sense of where the market's going to go or what decision the market has made?Not really.Right.This is a pretty indecisive candlestick.The S P500.We are still remaining underneath these high time frame highs.So for me, I see this and I see that we're underneath these high time frame highs.I'm thinking, hey man, we're still above these highs on NASDAQ and we're still underneath these highs.
My bias is still the same.I would potentially want some sort of high time frame entry to, to take.To take buy positions.But I have to be conscious of a potential bearish smt.So from there, let's play it a little bit more.
Boom.Okay.So from here we end up getting boom, another down candle.So now I'm thinking, okay, we've, we, we've made an extension up.We were unable to sweep out this high.
We made extension up, we swept out this high.So the S P500 is the leading index to the downside.Right now.However, we are still in bullish order flow to, to the upside on the five minute.Right.So as well as taking into account the high time frame, high time frame water flow, which at this point in time is bullish, we also want to take into account the low time frame order flow.So I'm looking at the five minute and I'm saying this is bullish.We haven't broken structure to the downside yet.For me, even though we're making a bearish SMT divergence, I want to see a change in order flow.Okay?I want to see a change in structure because it's one thing for us to again sweep out, have the orders, the potential to get orders filled.But just because we have two legs down doesn't mean that all of these sell orders were filled for us to reverse this.
Right.It just means that there's potential because we came up, came up here.How do we know that orders are getting going, got filled from those highs when we break structure?
So right now we could just be retracing to move higher to target these highs.Right.So we need to continue to be patient.So let's play one more candle.Boom.
Now do we think orders were filled?Probably right.So I see a massive down candle and we break structure to the downside on NASDAQ and on the S P500.
Now what is confirmed?NASDAQ swept out a draw on liquidity.
We have a confirmed bearish SMT divergence.Nasdaq for sure filled orders up here.How do we know that orders were filled?Because we changed the current order flow of the low time frame from there.What am I looking for?I'm looking for a continuation of the low time frame trend in order to prove to me that hey, we just broke this and we're starting a new trend, you know, to the downside.I want to see that new trend continue to the downside.So again, the change in order flow or the change in structure could have been seen in two ways.Either via break of structure or an inverse for value gap.In this case, we didn't have a fair value gap to inverse within this leg up.
So we had to wait for a break of structure and luckily, the market gave it to us.Same thing here on the nasdaq.We didn't have a fair value gap that we could inverse.So what did we wait for?A break of structure.
Now if we're waiting for a continuation of the current trend that we're in, what do we have to wait for?We have to wait.We have to wait for one of our continuation confluences, which is either a fair value gap getting filled or equilibrium.So right now we don't really have the opportunity for either of those because we don't have a bearish for value gap that's formed yet.And we don't even have an up candle to draw equilibrium from this high down to the low of the up candle.
So let's see.And again, I'm going to want to now be focusing on this trade, specifically on the S P500.Why?Because it's the leading index.Okay.
And it's leading to the downside, meaning this one didn't.This index didn't have enough buy orders to be able to push above this high.So what is it signaling to me that The S&P 500 is the more bearish index.So if I'm looking to take a short position, I'm going to want to take a trade on the index that doesn't even have enough buy positions to be able to push up above these highs that already has enough sell orders to be able to push down without needing to take out these highs.Right.So I'm going to want to focus my, my targets on the S&P 500.Okay.Price comes down, break structure right here.From there, let's play it.Awesome.
Boom.Big candlestick to the upside.
So now what am I looking at?I'm saying, okay, from this high down to this low, where we're at, where are we at?We just filled equilibrium.Awesome.Once we fill equilibrium, we can wait for one of two things.Me personally, I like to scale down to the lower time frames so that I can get ahead of this.But once we fill the confluence, what's the last thing that we need in order to be able to enter?Well, we just need confirmation that not only was the confluence filled, but that we are actually going to move down out of it.Right.Because it's one thing just for price to push in to equilibrium, but price easily could have just gone all the way up.Right.So if we just press sell, right when equilibrium gets pushed into, then why did we even draw equilibrium in the first place?
It's pretty much useless.Why do we have equilibrium there it's to be able to see price come into it and then respect it.And then that's when we're looking to enter.
Okay, continue.And same thing with a fair value gap.We didn't make a fair value gap on this, but if we have a fair value gap, do I enter the trade right when Price pushes into the fair value gap?Well, no, that would be stupid.Because if the candle is still forming and right when we get into the gap, what happens if price just keeps going higher and higher, you're immediately going to get stopped out and that all of that could have been avoided by just waiting for price to fill the confluence that you want and then wait for confirmation down and out of it.
So you can wait for one of two options here.You can either wait for just the 5 minute, the following 5 minute candle to close bearish to prove like, hey, we filled this continuation confluence in the market is showing that we want to move down off of this, or you can do what I do and what the majority of other people do is you can scale down to the one minute time frame and you can look and see, okay, so we came down and we came up, we filled the continuation confluence, whether it was equilibrium or a fair value gap.And then typically on these retraces, up on these five minute retraces, we are going to break one minute structure back to the upside, either via an inverse for value gap or through a break of structure.So at this point in time on this candlestick, we are bullish.
We're bullish going into this continuation confluence which on the higher time frame is going to be bearish for us.
And we actually want Price to break structure or get an inverse fair value gap while pushing into these confluences because it's going to give us our entry confluence.What is my entry confluence?Well, it's simply just waiting for Price to push into the five minute continuation confluence.And then on the one minute, we break structure to the upside and then we just simply wait for a break back down or wait for a change in order flow back down.Because that, what is that proving on the market?
It's proving that Price came into a continuation confluence and we, when we push into the continuation confluence that is supposed to be respected of this new trend that we're forming on the low time frame, we get a break of structure or an inverse for value gap.That's proving to me that hey, we filled all of the orders that we needed to up here and we are actually going to continue this trend down.So in this case, I Entered this trade.You guys can watch the trade recap.It was literally yesterday.
On Friday, I entered this trade.Once we inverse this gap right here.
And I put my stop loss above these highs.
Okay?And then from there I targeted all of my draws and liquidity.So we had London session lows.We had, I believe these were the Asia session lows.We had these high time frame hourly lows all the way down over here.
Okay.We had really good draws in liquidity on the high time frame.All right, now again, let me just walk you through the entire thought process of being able to take this trade.I needed.This is the step by step TJR strategy, how he thinks about entering trades.
I need the potential for orders to be filled.Okay, how do we see the potential of orders to be filled by us pushing above a high, a significant high, or below a significant low?Once we have the potential for orders to be filled, what do I need to see?I need to see confirmation that the orders actually were filled.How can I see confirmation of that?
Through a change in trend on the lower time frames via a break of structure, via an inverse fair value gap.From there I want to see a continuation of that new trend that was formed.How do I spot continuation of a new trend that was formed Via equilibrium and via fair value gaps.And then if you want to, during that process, when you're looking at the continuation, you can scale down into the lower time frames to be able to spot confirmation out of the continuation confluence to prove that price is going to go down a little bit earlier than just waiting for a five minute candlestick to close.Because notice this is going to be a lot better entry than if we wait for.
The next five minute candlestick to close.
Because now again, we would be entering this trade down here instead of up here.And one of our take profits has just been hit.So while my take profit one is getting hit, you guys are just now entering by waiting for this candlestick down.And again, we can look in here.It is very obvious that we push into the continuation confluence and then we confirm that orders were filled out of the continuation confluence on the lower time frame because we're disrespecting bullish continuation confluences right here.So what's that telling me?It's telling me that, hey, we're disrespecting bullish continuation confluences.We're going to go down, right?And if that's the case, then we're probably going to sell off pretty hard towards our draws and liquidity, which again are where we are going to be able to offload all of the orders that we filled up here, which is the last step of our strategy.
So we need the opportunity to fill orders.
We need confirmation that that opportunity was actually taken by seeing orders get filled through a change in structure via break of structure or an inverse value gap.From there I want to see a continuation of the new trend that is formed off of the orders getting filled via equilibrium or fair value gap.And then from there I want to exit the position where we are going to be able to liquidate the orders that were filled.So again, where do we have the potential to fill orders up here?And in this case, we had a bearish SMT divergence.So that strengthens my bearish bias.Now you're probably saying I thought you had a bullish bias going into the day.Yes, that's correct.I did have a bullish bias today.But what did the market do?
The market proved me wrong and instead did what it wanted to do.So there's very many ways or there's so many times where I'll come into the market and I'll be looking and I'll be saying, hey, these highs look really good.I want us to target those highs and then we'll have this exact movement happen.And it's just like the market was like, you're just wrong for the day, okay?And that's completely fine.
We can let the market prove us wrong and we can still make money.Okay?So we have the potential for orders to get filled above these highs on nasdaq.And in turn we made a bearish smt.So we know that NASDAQ swept out the highs.ES didn't.So this is still a potential for orders to be filled.We saw confirmation that the orders were filled with a five minute break of structure.We saw continuation of the new trend that was formed by 5 minute equilibrium.And then we saw confirmation out of that continuation confluence on the one minute.And then we entered and then we are looking to exit underneath significant lows in the market where these orders that were filled are able to get liquidated and to be exited.Okay?So we can let this play out.You can see that the rest of every single take profit ends up getting hit.
Okay, so we hit take profit one, take profit two and take profit three.
And I was able, I was able to make a significant amount of money off of this trade.And that is quite literally how I look to take trades in the market every single day.Okay?I look for and you guys should be doing the same.You should be Looking for potential for orders to get filled.Where do we see potential for orders to get filled via liquidity sweeps?How do we confirm that orders have been filled through confirmation confluences?How do we see continuation of the new trend off of those orders that were filled through our continuation confluences, equilibrium, or for fair value gaps?And then where are we looking to exit the trade once we get that entry?We are looking to exit the trade at possible liquidation points such as high time frame highs, high time frame lows, previous session highs, previous session lows, where those orders that were filled can be liquidated.
Right.Again, we want to think about liquidity.And that's why my strategy makes sense.My strategy makes sense.If you think about it and you guys think about how I just talked you through it.
We have the potential to fill orders.We see confirmation that orders are filled.We see continuation of the trend once those orders have been filled.And then we exit in areas where those orders can be liquidated.We are quite simply trading and moving with the market flows, with the inflows and outflows of the market.
That is how we are trading.We're not trading off of support and resistance.Okay?Prices bang.Like bouncing off of a floor and it's going to go to a ceiling.Like, come on, like what?Like what, what even is the thought process on that?Like, you're, you might as well, you might as well.Like, like you're just flipping a coin at that point.You're just like hoping and praying.
I'm not the big.I'm not the biggest fan of support and resistance.I know there's some people that are very successful with it, but me personally, I'm not the biggest fan of it.So yeah, that's my strategy explained.Hopefully you guys enjoyed it and hopefully this entire series has helped you guys become better traders.
So with that being said, it's been a fun little ride.Path to profitability has been lit.But with that being said, I love and appreciate you guys.I'll catch you guys on probably a trade recap.Not on Monday because Monday market is closed.
We'll do a trade recap on Tuesday or I don't know, maybe a YouTube video.Something else.Me teaching you guys other concepts, maybe how to pass a funded account.I don't freaking know.But I'll catch you guys regardless.
Love you.If you made it this far into the video, I just have to say that I already have enough faith in you because 99% of people do not have the attention span to be able to sit through this long of a video dedicated to one skill set.To even have the belief in themselves, to think that they can be able to change their lives here, the better.And at the end of the day, that's all that it takes.You know, everybody is on a different, different timeline for themselves.
To be able to turn them into a profitable trader, or to be able to find success or be able to make money.But at the end of the day, every single successful person, they all have one specific trait, and it's belief in themselves and the belief in the will to never, ever, ever give up, no matter what.So if you guys even even took a chance to watch this video and said, oh, yeah, I think day trading is going to be something for me, and you guys made it to the end of this video.I want you guys to never leave or never let go of that feeling that you guys feel today while watching this video, that you guys think that you have the possibility to change your life.It actually is so freaking devastating watching so many kids who have this dream and end up letting it die out and end up settling for the rest of their lives.
Would you rather be the person that is on their deathbed thinking, hell yeah, I have literally no regrets for my entire life because I gave it my all.I gave it up my all, chasing my dreams, chasing my goals, and doing everything that I ever wanted with my life.Or would you be laying on your deathbed thinking, what if?What if this worked out?What if I spent a little bit more time on this?What if I actually pursued that thing that I was thinking about when I was in my twenties?Never in my entire life would I ever want to be that second individual.Because I know personally with my life, I wanted to quit so many times.I actually tried to attempted to end my life multiple times.And I mean, geez, bro, every.Every time that I think about this, it just takes me back to how much of a scary time it was for me when I was struggling with my own life and how sad it was because I had no goals, I had no ambitions, and it felt like nobody loved me.
And the second that I realized that is just a sad way to look at the world and that I have full power and full control over my life, and so do you.To be able to change it, to be able to do whatever you want, to be able to make as much money as you could ever imagine in the entire world, that's the second that your life gets unlocked, and that's the second that you can actually start living it.And, you know, if you Watch this video and you think, oh, yeah, trading is not for me, that's fine.But I want to encourage you to never let that drive, never let that feeling of I can do something better with my life ever go.
Because that is what keeps you alive.That is what makes life so fun.You only have one life, so why the would you waste it?Why the would you settle?Why the would you work a job that you hate?
Why?Why would you do that to yourself?Why don't you take a freaking chance?Why don't you take a chance on yourself?And guess what?When you take a chance on yourself, the only person that can fail you is you.And best believe that there is no such thing as failure until you quit.And if you're the one that decides whether or not you fail, because you're the one that's going to decide whether or not you quit, then guess what?You're never going to fucking fail.You're always going to be a winner.You can turn every single loss into a win, no matter what.Every single failure, every single loss, every single mistake is a opportunity that you can seize, that you can look towards for growth and for more success for your life.So again, I just want you guys to leave with this one thing.
Whether you guys are pursuing trading full time and really want to make this work, you guys have a specific feeling in your chest, in your heart right now that is telling you that you guys have an opportunity to either change your life for the better or go down the same path that, that literally every single other person in the world goes down living a life that they hate, working a job that they hate, and feeling very unfulfilled and feeling sad.You're literally just giving your life up to the system.
I would, I wouldn't be here on this earth if I had to live that life.And that's actually why I was struggling with mental health so much, is just because I could not see myself there.I was driving myself insane because of how badly I wanted this.And I know for a fact that you guys are at a crossroads right now where you guys have a choice to either take that chance on yourself or just say, nope, I don't think I can do it.I don't think I can do it and I'll leave it.I'll give that opportunity to somebody else.Because guess what?God gives every single person opportunities.He drops opportunities, opportunities from the sky every single day.And it is up to you to reach your hands out and take that opportunity and freaking run with it.I would be pissed off if God put an opportunity right in front of my face and I said, nope, I'm not deserving of that.
I'm just going to live a regular life.No, God is putting in an opportunity right in front of your face right now and it is up to you to grab it and freaking run.You guys are being faced with a decision and it doesn't even have to be with trading.It can be with whatever the freak you want to do with your life.
If you guys get one thing from this video, hopefully you guys learned a lot more than just this.But if you guys can take one thing from this video, it's that whatever you guys want to do with your life, you are able to do it.Take a freaking chance.The worst thing that could possibly happen is that you end up in the exact same position that you're in now.But at least you trust tried, at least you gave it a shot.
The other option is you continue living the same life that you're living right now.And personally, I know from my experience the life that I was living prior to all of this was not fun, it was not enjoyable, it made me sad, it made me depressed.And I'm sure a lot of you guys are living that life right now.And, and I just want you guys to know that there is light at the end of the tunnel for you.I don't know how long it's going to take, I don't know at what point in time you guys are at on your timeline of success, but I can promise you without a doubt in my mind, and I'm telling you this because I have done it.
You cannot give up on your dreams, you cannot give up on your goals.Because the second that you give up is the second that you fail.You will never fail.You will never lose if you don't give up.
The only thing that stops you is death if you never give up.So please, if you guys take one thing away from this video, understand that anything is possible with your life.I don't need you guys to fully pursue trading.This is a free video to hopefully help you guys change your life for the best, better.And I've changed thousands of other people's lives through my free content and also by helping them through paid content, through paid education where I help them one on one individuals that come to me directly with their questions.Because sometimes it's not as simple as just watching a couple hour long YouTube video and then boom, it's all in my brain immediately.
Sometimes you fail, sometimes you need help, help.Sometimes you need a coach to be by your side to help you get to where you want to go.But at the end of the day, what do all of those people have in common that had success, that were able to actually make it out?They never stopped believing in themselves.If you guys had belief in yourself and you have believed that you are able to do it, then I promise you, without a doubt in my mind, I know for a fact that you guys will be able to get there.
Okay?So that being said, I love and appreciate you guys.We'll catch you guys in the next one.Peace out.