Sterling here from Day Trading ForexLive and as the title of this video shows, a simple forex day tradingstrategy for tracking market manipulation, for trading with thatmanipulation, and then for putting us in line with smart money which is the wholegoal of what we're doing here.
In the previous video, if you guys watch that, wecovered the selection of manipulation points just the process of number oneidentifying where smart money and whatever when I term when I use the termsmart money I'm referring to those the largest market participants in the forexmarket so in the very first video I think is the second video where wediscussed reactive verse predictive trading strategies and how you know 95%of trading strategies fall into that reactive category it's important tounderstand that as we kind of broke down the basics of how smart money tradesbecause when you when you think about how smart money trades how they have totrade we covered a basic point that ten banks control sixty percent of the dailyforex market volume so that's number one I guess if I'd to kind of summarize thisin a better way you know ten banks control sixty percent plus of the dailyforex market volume now that's not them speculatively buying and selling some ofit might be but the vast majority the vast majority of that is smart money orthe banks I should say simply filling orders there for global trade forworldwide global trade worldwide commerce you know obviously speculationinsurance companies hedging against physical I mean the list could go on andon but the main point is that they have to process the majority of the volumeduring the day so the one thing you're gonna know is that if if you had toprocess 60% of the daily volume obviously it's not all getting processedat once because you just simply can't do that all the liquidity is not there atone specific price point so knowing that they had control such a huge chunk ofvolume means that when they control that huge chunk they're gonna search outareas of liquidity they're gonna search out areas where the rest of the marketis likely buying or the rest of market is likely selling or just simplerollover occurring at a specific point and this testing back and forth betweenlevels it's something that happens in all markets I mean I've been doing thisthe the confirming entry some of my first videos on market manipulation onYouTube go all the way back to like March of 2010 I've been doing this fordamn near the better part of a decade and it consistently stays the same itstays the same because this is basic market function we're covering thepeople that control the market have a crap ton of volume because they have acrap ton of volume they have to process they need to find buyers which they wantto sell they need to find sellers if they want to buy that's why we discussthe selection of manipulation points on where that volume might be because ifyou know where the volume is or where it's likely to be sitting I shouldn'tsay no because in trading you know knowing it's a very relative term but ifyou know with a good idea or a higher probability better than 50/50 where thatvolume is sitting now you can start to develop an edge off that because if youknow where the volume is you know where they're likely gonna go if they want toreverse the price down they're likely taking out an upper level first beforethe price drives down if they're coming in to and they want to drive the marketup they're likely going to come in to a lower level take out any liquidity belowthat point before driving the market back to the upside so that was thesecond video I think I was a third video actually we covered on the selection ofmanipulation points and as I mentioned in that video the next one that we'regonna cover is the confirming entry I'm just gonna check make sure we got a anyquestions coming in guys let me know I am still gonna look at the chat anduncover that as we go but let's go ahead and get into the confirming entry andbasically this is the next step you identified the manipulation point so youneed to have a way of actually triggering the entry what's telling youthat you should get into the market that's what this is all about soidentify the manipulation point we've already covered that that's number onethat you're gonna be doing you know first for getting a set up for getting aset up according to these rules identifying where they're likely tocreate this stop run but we don't just blindly enter the market we needthis confirming entry and that's why we have this is number two confirming entrythat's actually what's triggering the entry and giving it to us let's go overto the next high-tech slide here and number one I'm gonna start with therules if you guys want to write this down I would highly encourage you towrite it down ask questions where you have them and let me know if anythingpops up that that I don't cover in this video that you have a question on sonumber one we've identified the manipulation point so I wrote downmanipulation point there I'm not going you know it could be whatever levelwhatever level it is on whatever pair you're happen to be trading but numberone we've identified the manipulation point so that's obviously number onenumber one is far the first thing we look for as far as the actual entryafter identifying the manipulation point is we look for at least a three pitbreak of the level now this is somewhat relative I use 3 pips around 100 pip averge daily range so if you're dealing with say the pound yen it gets up to a200 250 pip average daily range a better a better way to phrase that might be a3% of the ADR break depending on the pair's you guys use and also that willallow you to go to whatever market you want to trade because a percentage ofthe ADR is pretty universal why do I look for a three pit break well I'mlooking for a three pit break because I want to see the market testing beyondthe area of liquidity that I've identified I want to see it testingbeyond that and then the most important factor of this whole process is therejection back away that rejection back away is us giving us us getting anindication that when smart money stepped in to what I term is kind of a stop runsown so basically I'll just do SR I'm terming that as a stop runs own so I'mwhat I'm saying is as they're stepping into that zone if they are selling intowhatever buying pressure is occurring people buying on a breakout shorttraders getting stopped out having to buy the position back whatever it mightbe when they step into that level with the three pit breakthat is the first thing I want to see because I want to see him testing that Iwant to see him I want to see them sweating the short traders and see ifthey're inducing that buying pressure I want to see them triggering the breakouttraders by getting the break of that level you're just getting a little moreconfidence that you've seen the false push you've seen the identification ofthe the manipulation moved around that level so that's obviously number one isjust a three pep break a three pip break does not initiate that trade what wethen need to see is what we term is our confirming entry or sorry our confirmingcandle which is the where the confirming entry gets his name obviously so what isa confirming candle well a confirming candle has two very basic rulesthere's nothing complex about this and in my you know close to 14 15 years oftrading eleven and a half of that or so is a full-time trader I you know thethis part to me on simplicity is just absolutely critical because simplicityleads to repeatability and you don't get rich in this market in a month sixmonths even a year it's gonna take you multiple years to grow an account if youdon't have consistency you might as well pack it up or start working on thatbecause that's the key so simplicity or creating that that repetition comes fromthe simplicity and that's where these rules are there that's what these rulesare based on that's why I only see three rules here one rule for what the stoprun actually is just even start this process but then number two is theconfirming candle has two rules number one and I'm talking about a short hereobviously number one it has to close in its lower one-third what you're doingthere is you're measuring from here to here that's the entire spread of thecandle and you're measuring it does it close in its lower one-third so you knowthis would be a third here then you have another third here then you have yourupper third here so this is the lower third and it could have closed anywherewithin that to have satisfied that specific part of the rule set the otheraspect to that is it has to close below the body of the previous candleI shouldn't roll candle body but close below the the below the previous candleI guess I should say candle body close below the previous candle body so doesthis close in its lower third and does it also close below the body of theprevious candle well you can see it very clearly does now here's a little bitdifferent setup it's what a lot of people would term as a pen bar I reallydon't care how that looks I'm looking for one thing to initiate the stop rundoes it break does that one rule does that break by 3pips that's our first rule does it break by 3 pipsif you break by 3 pips I couldn't care less how it looks what that candle lookslike whether it's a wick ends up being a wick through the level or the body doesnot matter to me in that situation so that's number one number twogetting that confirmation closing below the body of the previous candle numberone and then also does it close in its lower 1/3 does that close in its lower1/3 well I think it's pretty straightforward that that does close onits lower 1/3 so a way you could invalidate that just do something likethat let's make it even more obvious now doesit close in its lower 1/3 well no you'd say that's probably you know somewherearound the halfway point right so what you're gonna do is the majority of thetime that's gonna be very obvious whether it is closing in the lower 1/3or whether it's not if it's not measure the entire spread so mark your high getyour exact I get your exact low measure that distance whatever it is take it toyour calculator divide by 3 that'll give you a third does it close in lower 1/3that's what you're asking now we're walking through more examples of thisand I'm gonna go to the computer and I'm actually going to show you some liveexamples of recent trades that we had set up here in a minute but let's see solet's go to the second page here and we'll walk through the entry alittle bit more in identifying this whole process we're talking about stoploss placement now so with stop loss placement what you're going to look atis you've got your stop running the level you've broken by three pipsyou're following candles confirm down it's closed in its lower one-third andit also closed below the body of the previous candlethus validating what we term is a confirming entry now when the confirmingentry is validated the next step you need is actually taken the entry thatwhere we're waiting for the close of this candle so when the next candleopens is where you're taking the entry technically when that next candle opensthe only thing that you need to decide or do you need to determine and be abetter way to phrase that because your your decision process at that time isalready done has it followed the rules that either hazard hasn't for aconfirming candle a confirming entry setup now the next thing you need is youneed to put yourself in a situation where you can have a proper reward torisk ratio a proper reward to risk ratio starts with having a good stop if youhave a fifty pip stop loss in a in an average daily range market that onlymoves 50 pips well trying to even get to one to one is going to be ratherdifficult I want to always look for two to one that's what I always look forwhen it comes to setting a tape profit you'll see down here take profit two toone reward to risk ratio again simplicity keeping it simple two to oneon the reward risk ratio so the take profits pretty simple but you got toshrink the stop size down to be able to have a take profit that is what I preferto be which is forty to fifty-five percent of the ATR a rough rule of thumbor general rule of thumb here 50% of the ATR for the take profit or maybe a touchabove it but not much that's a good rough figure that I've used that I've inmy decade plus a full time trading that's what I've consistently used sothat starts with first identifying your stop size though because you're doublingit for your take profit in a normal market what I look for is I look for ifmy if my take profit is forty to fifty fivepercent of the ADR then what I want if my stop-loss is gonna be half of thatthen you know I would have a stop-loss that is twenty to twenty seven pointfive percent of the ADR that's half of the forty to fifty five percent range soin this situation here as a percentage of the ADR that's kind of how you canfigure it out your stop-loss somewhere around twenty to twenty seven point fivetwenty five percent of the ABR if you want to make the math simple so in thiscase here that is you know that that's kind of on your max side but as ageneral rule we use of 20 pips top that's kind of how we keep things simpleif the ADR is below 100 pips we use a 20 pips top for the majority I'm not goingto get into the dynamic stop here I'm not going to get into all this otheraspects because this could be a five-hour video but I'm walking throughthe basics here so let's walk through an example based on a 20 pips top andillustrate how that process works now in this example the confirming candlecloses at one spot 1990 right they closed it once about 1990 and themanipulation point that's what this dotted red line is I can see I have thatlisted at one spot 2000 just for reference but I have the high listed atone spot 2020 so if you took the entry right here one spot 1919 and you placeda 20 pips top your stop would be at 2010 that would be well below the high thatstop run the goal of this is to get our stop loss in the case of a short it'sgonna end up being 5 pips above the high and we're gonna walk through why that isexactly but the point being is we want to get that stopped beyond the high ifthis is the stop run if this is the manipulation move then the theory behindwhy I want to get beyond that high is that that was the stop run that was themove that was designed as the trapping move the false move so if I've truly gotit right that becomes a very very safe location just putting your stop above ahigher below a low is kind of a dangerous thing to do because of thisthey're typically going to come for those previous highs that's why it'salmost one of the worst places you can put itunless it's the stop run if it's the stop run well then you've already seenthe stop run its cost inhibitive for them to come back take out that levelagain and doesn't make a whole lot of sense if they've already taken out thatlevel and induce the liquidity they're likely not going for that high again ifthey are you're probably gonna be wrong on that setup so in this case here forusing a 20 pip stop and I want to get five pips beyond the high it's prettybasic math here I got to take the entry at one spot 2005 if I add 20 pips tothat that gives me one spot 2025 which is five pips above the high so I'mtaking the entry to kind of simplify this is your get your high subtract 15pips from that that's where your entry is because your stops gonna be five pipsabove the high get the high subtract five pips that's where the entry is nowin this case here what that would require is that requires taking theentry when the market looks like this right so the market looks really bullishat that point and it's right when you go man this is super uncomfortable I don'twant to take this entry it's a bullish candleyou know we've rallied 15 pips now I'm staring down a completely bullish candlethat's exactly when you want to be taking the entry you know at this pointhow has Comfort benefited you you've taken entries that are comfortable toyou you've taken entries that makes sense you know it's it's aligned withthe trend it's a retracement it's this or it's that they felt comfortable toyou and they've had poor you've had poor results with that you if you're takingentries where you're comfortable or it looks like it's headed in that directionas you're probably making a sacrifice on some way or another whether it's theactual entry the stop size whatever it might be but in this case here that'sexactly what you want to feel you want to feel discomfort when you're takingthat entry that discomfort is what gives you your good reward to risk ratiobecause it just shrunk this stopped from having to be a 35 pip stop if we pulledthe trigger right there thirty five pips if we want to get it above the high wellthat's a completely different dynamic thirty five pips stop you want a two toone take profit that's a 70 pip tape right now that's damn-near not quite twotimes the ADR on the euro but it's one and a half times it's it's a signifi avery significant move so that's why the pullback is there the pullback is theresolely for reward risk ratio there's nothing about this the pullback aspectof this that is designed for anything other than optimize our reward to riskratios by shrinking our stop loss all right let's see what else here takeprofit two-to-one we've covered that if you deal with the 20 pips top 40 piptake profit from where that entry is and again don't over complicate the processguys I did a video on four rules of I don't know beginner rules of the successall right point is the video covers four very important rules and in that video Italked about if somebody took 12 trades a month 2% risk per trade only one 50%of their trades and did so on a two-to-one reward to risk ratio thatequals roughly about a 9% profit at the end of the month based on those figurestwelve trades a month you only win 50 up 50% of them means 6 winners 6 losers anda two-to-one reward risk ratio on that with 2% risk per trade it means you'rewinners you're gonna make 4% you're losers you're gonna lose 2% but thatvideo walks through how this type of reward risk ratio on a relatively whatmost people would consider a low hit rate grows an account so rapidly overthe course of 2 3 4 years I mean at the end of three years at 10k at 10% a monthis a little over 275, 000 10k at 10% a month for four years is just shy of amillion I'm not saying that you should expect to hit that number I'm justquoting basic math here and that basic math illustrates that compounding is keyand this is a huge part of compounding to me because in trading and in myexperience the best traders in the world went about 50% of their trades that'sthe entire secret to trading that's why every BS marketer you see they're gonnaadvertise to you with win-loss ratios it's the greatest way to tell if atraders a profitable trader if he talks about when loss ratiohe or she talks about win-loss ratio is over reward to risk ratios there's onetrader I know that doesn't run a really high reward to risk literally one that'sprofitable so I'm not saying you can't do it I'm just saying this is in myexperience by far by a magnitude of a hundred gonna be a hell of a lot easierto be profitable at a 50/50 hit rate with a two-to-one reward to risk ratioand not only is that super profitable but it's actually more profitable thansomebody that wins seventy percent of their trades with a one to one rewardthe risk ratio do the math on that sometimes if you have it okay candlecount we're gonna get a little complex this is also why I say you have to seethings again and again and again this is why in the in the room we do a dailymarket preview or in the members area we do a daily market preview every daywhere I go through these steps day after day after day because like we talkedabout in one of the first videos and I gave that reference on landing a planeand and when I learned to fly a plane and land in a crosswind you know what todo it's just doing it in real time with all that pressure with the instructorand the right seat and you know him you don't want him to take the controls cuzyou want to do it on your own but you don't want to die you know there's a lotto that that process and you need to see it done again and again and again butnumber the the second aspect with that is you can't learn to fly a plane with acourse you can't learn to trade Forex with a course or just some simple videoor text you then need the second aspect literally every complicated professionyou'll ever think of has an education phase and then it has a hands-ontraining phase you're gonna let a surgeon operate on you if he went toschool for 10 years he learned every possible thing good about this onestrategy but he never stepped foot in an operating room you let him operate onyou I think not same principle here with Forex guys that learning it is greatthey need to learn how to apply it in real time and that's why I encourage youto find you know whether it's this strategy or not find an education thatteaches you not just a course you need somebody showing you showing youhow to apply that course and the rules in that course in real time if they'renot again they're probably not showing you that live because they're notprofitable or they're not a real traitor so keep that in mind guys and don't wellthat's another subject we'll get onto that some other day okay Candlemas sotemple of taught right yeah it's very true it is you know you can you can cutliterally years off the learning process I talk about a guy named Tim I don'tknow if I'd be a profitable trader I met a guy named Tim about a decade ago inthe Forex diamonds room it was if you guys you guys have all heard a ForexPeace Army I'm guessing and Forex diamonds was one of the first forexrooms that was really popular in the retail market and that guy had he tradesone our trend line strategy so it I don't really believe in the strategyit's not something I trade but he taught me so much about reward to risk ratiospatience discipline and those are the things that I credit for making me aprofitable trader I I do credit this the strategy a bit but if you don't havediscipline patience money management the strategy you trades are relevant it hasyou know really no effect on your profitability okay candle count let'sget into candle count because you can't when you come into a manipulation pointwe have a certain number of candles that we will use to say this is still validor it's not now one simple rule and again I encourage you guys to write downrules come back to it add to it you know watch the video again and see what youmissed the one basic rule we have for determining whether a level is stillholding or not is once two candles consecutively open and close beyond themanipulation point the trade would get tossed so this is a little bit separatesubject but I realized it after I drew all this out so I just want to sharethis with you guys real quick what that would look like it could look manydifferent ways but you know maybe it looks like that but the point is twocandles that consecutively open and close beyond the manipulation point soopen close I don't care what the wicks doing the waycan be below that on both of them it's not really relevant to me it's all aboutthe clothes that's how I invalidate a level that's when the level that's whenthe level goes bye-bye no more level here at this point allright so that was just a side subject I wanted to cover because that's importantfor this strategy and some of you guys remember some of you guys aren't so ifyou're gonna trade it you need to at least have some of the basics candlecount though let's get into candle count the candle count starts with the firstcandle that breaks the level and by the way I'm going to show you live exampleshere in about five minutes recent examples last couple days setupsthat we've had so the first thing we look at is the first candle in thatcount it starts once you get the three pit break as I just mentioned so thisright here would be what I would term as the number one candle and the count nowwe have something we term as the resetting of the count or candle part ofthat candle count is resetting of the candle count meaning just because itstarted as the number one candle doesn't mean it's going to be the final numberone candle for each candle that progressively sets a higher candle bodylow and there's no easy way to say that you're saying high and low in the samesentence sounds ass-backwards but there's not really another way to saythat so when the next candle produces a higher candle body low in other wordsthe candle body is higher the low of that candle body is higher than theprevious candle body low when you create a higher candle body low that resets thecount the count can be reset until you have a confirming candle okay if you hada confirming candle after this it would lock in the count then if it rose upagain you could not reset the count again so the next candle it sets ahigher candle body low it resets the count it becomes the new number onecandle this is a little bit of an exaggeration but I exaggerated so youguys can see the point typically not going to work out like that they justyou don't see it sequence 1 1 1 it just typically doesn't happen it will fromtime to time it's just not super common the next candle what does it do itcreates a higher candle body low it resets the count the low of that candlebody you're probably asking why that's important well think back to theconfirming candle rules we have a rule that says it needs to close below thebody of the previous candle so the lower the previous candle to me the lower thethe low of the candle body the previous candle body is important to me for thataspect so each time we're stepping up we are resetting the count this could bethe new number one candle now let me show you a little bit of a reset whereit goes 1 2 1 and that would look something like this it's gonna get alittle complicated here now we got to invalidate the setup because that wouldbe a confirmation so I'll invalidate it now it's not closing and it's lower 1/3so that's not a valid confirmation so at that point what you'd have is you'd havea number 2 candle so then in order to get a reset the next one couldtechnically confirm down that's a possibility you could get a confirmationoff that but what we're walking through here is we're walking through kind of anextended version of this whole process so I'm dragging it out longer than youprobably would see so what we have here is let's say the second candle comes upand then you get another candle here so what you'd have is you'd have candlenumber 3 but then this one right here would reset the count why would thatreset the count well that resets the count because itproduces a higher candle body low as compared to the highest low at thispoint right now that is the highest candle body low does that make a higherlow note it's lower does that make a higher low nope lower that one does soyou'll notice how each of these black lines is stepping up as I'm drawing itat the bottom of that candle body and that's resetting the count now thisprocess can't contain indefinitely it can't continueindefinitely because you're gonna blow through and then maybe two candlesconsecutively open and close or you know as maybe we draw out here you have thiscandle over here which produces a confirmation and at that point now youhave candle number two which is a valid confirming candle all right so now youhave a valid entry off of that and stop-loss goes five pips above the highfive pips above the high of the stopper on the candle that produced the higheststop run at this point this is just a quick overview of candle count guys Iwould encourage you to ask questions I'd encourage you to you know shoot me anemail questions cover this video a few times I don'tthink I had anything else here let's see you might go to the chart after this noI don't think so alright any question do you want me tocover see a bunch of comments but no questions if there are any questions Imight have missed one do you enter before that bearish oh here's a questiondo you enter before that bearish bar closed no so what the confirming candleneeds to be closed because we don't know where this thing is gonna close rightthis it could rally down then the last ten seconds they could shoot back up andand close right here and be all wick so we let the confirming candle close andthen on the next candle on the pull back we take the entry when it gets to within15 pips of the stop run hi okay Wendy ask questions yeah if you gotta me feelfree to shoot okay let's go into and I haven't done this so it's gonna be alittle experiment going over the computer let's see if this works alright let's try this do you guys stillhave you can help me out and let me know if you can still see the screen thatwould be awesome I would appreciate it and well what we'll do here is whatwe'll do here is we'll walk through just a few entries so number one what I'llstart with is and you guys still have sound right all good ok cool so we'llstart with here let's just go with the let's say euro dollar and the euro herewas one of our pretty selected points let's start with the level selectionprocess I'm gonna go out to a 4-hour chart I'm only going out to a 4-hourchart even go to an hourly I'm just going out to a wider timeframe chartchart to show you what else is around what else was around that level so thiswas the the manipulation point that we had selected I'll walk through somebasics here so this why did we select this manipulation point maybe it'll helpif I go out to the 4-hour chart so I had this high selected and I will zoom incloser here in just a second just bear with me here for a second I had thishigh selected because there is no other level back here so to me anybody thatwas long or sorry anybody that was short through this entire rise the one thingthat I can say for certain is if this high goes there under water anytime Ihave a higher a low that puts a good chunk of the market on your water whichwe're going to give you plenty more examples here in just a second that'salways going to be a point where I'm expecting there to be liquidity so thenall of that confirmation stuff I talked about goes off the 15-minute chart yeahI can walk through that it'd just be like a 10 hour video so the actualcourse is 13 videos and it's spread out over I think 9 hours so try to try to dothat on Facebook where I or YouTube where I keep everything in my head atthe time that's why it's kind of hard to do as far as that goes but that's kindof the point of this video series I'm trying to do that for those of you guysthat are not members of the service I want to give you some insight so you canstart making some progress and you're trading so going back to thatlevel here here's what it looks like on the 15-minute chart remember this iswhere it formed I don't know where our arrow went but the bottom line is that'swhere it was formed as I illustrated in the second video I'd go as close to thatcandle body as I can without going into it and then I look for the stop run didwe get a stop run here no you didn't have a break by three pips so until webrake by three pips this is another beautiful aspect of thestrategy you can set up alerts and there's no need to stare at the chartsone of the biggest benefits to the strategy that trait for somebody thatthat works full-time which I would encourage while learning to trade and itallows you to kind of it allows you to not have to sit there and stare at thechart all day long so we come back through and finally on the 17th weactually get the break of that level so we start with the mechanics we just walkthrough number one do you get a three pet break of that level this is againthe euro dollar 15-minute chart April 17th the end of this box is the Europeansession by the way guys so this was coming into this high right around rightaround 4:30 a.
Eastern Time this by the way this block is New York just fora reference the bigger wider blocks are Asia 5:00 p.
to 2:00 a.
the smallerskinnier blocks are from 8:00 a.
Eastern to noon 12:30 right around thereso anyways comes into the level creates the break breaks by over three pips weget a break of that level that initiates the stop run the following candleproduces the confirmation of the downside that confirmation has two rulesdoes it number one close below the body theprevious candle yes number two does this candle and you guys can see my cursor Ihope number two does it close in the lower 1/3 well if you measure that itvery clearly does close in that lower 1/3 you have a beautiful entry at thatpoint runs off it's a relatively low stress trade this was you know two daysback we go over to the euro yen it was a very similar situation on the euro yenwe had another nice beautiful setup from this great level the level was 120 677 Ibelieve let me zoom out to show you why it was a solidlevel major overall high is essentially what we were working off of this highhere which pretty much correlates to the previous highs anybody short throughthis range anybody short through this range I'm not expecting there to be alot of liquidity coming from down here it's not really what I care about Idon't care where it comes from I just know this overall hi anybody on theshort side of the market is underwater should that high start to go anybodythat is short should that high start to go is underwater it also makes for agood breakout point to the upside so when you have these levels that arethere's there's nothing else around it you got to put yourself in theperspective of really the main thing we're looking at is all this tradingthat occurred for multiple days through here right all this trading that occursthrough this period of time that's probably the majority of the liquiditythat liquidity that's getting stopped out or that's getting induced by thatfalse break of that level but anybody short through this price action thathigh is really the last high you have to choose fromnothing is more pervasive nothing is more used nothing is more focused onthan previous turning points in the market that's why they attract liquidityso well but you need to know which ones to go to this is a great example of oneto go to because there's not another choice beyond it if there's not anotherchoice than anybody on the short side of the market this becomes a damn goodlocation for stops to be placed beyond it becomes a prime location for themarket to come up create the false break into that level before rejecting backout the other way we use what we term is a confirming entry as we've discussedmany times here today so on the 17th same situation comes in breaks the nextcandle resets the count and becomes the new number one candle because it createsa higher candle body low the following candle confirms down produces a validconfirmation we were already well within the entry zone at that point the highgot you got back to within 7 pips of the high so you were well within the entryzone technically on this I'm not going to over complicate things but if youremember and you're following the daily market preview you'll know we had a 16pip stop max on the euro yen there's other ways we decrease and increase stopsize but it's a very it's just too hard to cover in one simple video guys soreally nice setup there I mean the dollar cad had a couple beautiful setupshere the dollar cad same exact principle let's go out to the hourly or thefour-hour chart just to show you the wider range and I'm not picking the fourhour because the four hour special or anything like that I'm just zooming outto show you some wider levels by the way guys the four levels you see here fourlevels I had from the daily market preview for a couple days in a rowactually because not not a whole lot changed as we sat in this range but onthe I think it was the 16th so the day before a couple of those other setupsand actually let me illustrate the level the level we were working fromspecifically that got the setup was this high heresame exact principle as every other one anybody short through this range the onething I can say for certain is if that high goes there underwater so anytime Ihave an area that puts one side of the market underwater that's always going tobe a manipulation point for me I shouldn't say always but the vastmajority at a time that's going to be a manipulation point for me now let's gointo the 15-minute chart so we can see the actual stop run itself the stop runstarted on the 16th or initiated on the 16th came into the level created thebreak next candle resets the count next candle confirms down that closed in thelower 1/3 by about a tenth of a pip so closing the lower 1/3 at that point andprovide the pullback beautiful entry same situation here at the lows we havethis beautiful stop run of the lows I did not get this entry 3287 was thelevel that was another level these were these were pre-selected like days inadvance I'm not exaggerating when I say days I mean these levels sat there fordays so you knew the level days in advance comes down gets the stop runconfirms up but the unfortunate part about this setup which is why I missedit personally is that you only pulled back to about to about 15 and 8/10 awayfrom the low I was looking for the bid price to hit 15 pips from the low as wedo with a standard entry I missed it unfortunately by a few tenths of a pipand it ran off the other factor here that's kind of a little bit morecomplicated aspect of the discussion but anyways hopefully this walks through itguys that walks through some of the basics for you now if you have anyquestions I'd be happy to field any questions as they come in the commentsare a little bit delayed but I'll probably get back in front of thewhiteboard if there are any questions that you guys would like to walk throughlife for the comment from YouTube in regards to the question of can you walkthrough this full analysis A to Z if you're interested in learning thisstrategy obviously all there's a ton of free information on YouTube there's thebank trading course actually on the site and all the continuing education thatcomes with that there's a lot of avenues you can hit and then also you knowyou're always welcome to shoot me an email support at day trading forexlive.
com happy to get back with any of you guys on that give you a little moreanalysis as to what we're doing here and in what we're looking at moving forwardbut the point one of the final points I'd make is that when you're wheneveryou're learning whenever you're in the process of learning whatever strategyyou choose to learn guys a course is not going to be enough and I'm saying thatafter 14 years of trading having run day trading Forex live for the better partof a decade probably haven't spoken to over a hundred thousand traders I meanfive thousand alone being members of day trading Forex live you're not gonnalearn it overnight and you're not gonna learn it with just a course whateverstrategy you guys decide to learn make sure there's a really well detailedcourse but number two if the educator is not willing to prove that what he or sheis doing if they're not willing to prove that live if they're not willing to geton the mic in advance and say this is my trade then there's a reason they'redoing that 99 or probably 95 percent of educators in this market are not tradersyou need to be careful it's two very simple rules check the reviews make surethey do it live if they don't do both of those things well therefor there's probably some issues with that educator so I say that because notall you guys are gonna like this strategy you're gonna like other thingsnot all you guys are like me you might think you don't want to look at my faceyou know I don't know what it is but the point being is you you got to have aneducation that has the application phase somebody's showing you how to takewhat's in the course and apply it to the market all right let's see here usingthe 200 so a couple questions came in yeah I'm happy too happy to helpglad you're enjoying the information life let's see here are you using the200 moving average as the first line of support in resistance or just adirection of the market so the way I use that and I'd encourage you to go back tothe last video we did on the selection of manipulation points because rememberyou got to select the manipulation point first and then you wait for the stop runof that point right so if you're if you're getting the stop run at thatpoint and I'll turn back around here and talk to you guys but if you're if you'regetting our number 1 you've selected the manipulation point that's that's whereit starts that's why I said go back to that video but the 200 moving averageand I use the EMA versus the SMA I know the SMA is more well used if you look atdifferent TV programs and they're pulling up stocks a lot of times you'llsee the 200 SMA I know that but I prefer the EMA that's just based on my decadeof trading my personal experience I'm not saying like I have all thisexperience I'm saying based on my time trading that's what I've found to be themost accurate the EMA puts more weight on the more recent price action that'swhy it always made sense to me but I don't use it as a directional bias I useit as a supporting factor for this so if I've identified the way that comes up ina real world situation is maybe maybe of a weaker manipulation point right maybefor some reason or another it's it's a weaker level and you're going back andforth on whether not you should choose that level as amanipulation point and you're just not sure if you should choose it there's nota you know it's just over minimum criteria there wasn't a huge bounce offthat level whatever it might be but it also happens to line up with say the 200EMA so now you have a little bit of supporting factor behind this rememberwe're looking at all these areas whether you're talking about a major fibretracement s1r one daily pivot which is really all I'd care about with fourpivots all these areas psychological barriers like round numbers one spot mmone spot 2100 or yen crosses 110 111 112 all those factors what they're doing iswe're just trying to use really commonly use things to identify where tradersmight be buying or selling because if you know where traders might be buyingor selling then you know where the liquidity is if you know where theliquidity is you know where smart money is gonna go to get that liquidity andthen if you see them go actually take the liquidity with the stop run now youhave a very good indication of the next short-term direction in the marketbecause if they're going to get the liquidity and they're selling into thebuying pressure the market is probably not going up the markets more thanlikely going down now something could change that and news could come outsomething could change that but for the most part you know you you're in linewith the next short-term direction and and here's the thing is you win 50% ofthose trades with a two-to-one reward risk ratio you're gonna be doing veryvery well do you look on the daily weekly or monthly uh for me it's mainlydaily or it's all daily and remember especially for fibs and pivotsespecially those two factors people are their staunch followings along thoseeven among the quote unquote professional professional side oftrading they're very well used that's why they attract liquidity but be verycareful in trying to use them as a standalone manipulation point in myopinion nothing attracts liquidity like a previous turning point in the marketand then a previous turning point in the market that is properly identified youknow what else is around it has it had a large enough balance has there beenenough accumulation after it formed four there'd be any liquidity at that levelyou know all those are things that go into it but it revolves around theprevious turning-point any of those other factors mentioned in the previousvideo on selection of manipulation points is what I term is a supportingfactor so don't use it as a standalone use it as something to support a levelthat already had a reason for being there so you know whatever wherever thatmarket came in and then produced a 30% of the ADR run off of that level it atthe very least but again if it's a weak level you get a little bit of supportfrom that maybe this lines up with a sixty one point eight on the last majormove that you've had so you get a little bit more influence with there being amajor fib retracement there it's a point of support it's not a standalonemanipulation point all right how long have I been running my mouth hereprobably a while I don't know I'm sure the time is somewhere but I don't knowso anyways guys let's see it's wrap this up sober I don't know how you can startmotivated to help 299 I mean I love this business guys I I'm 32 years oldand I've never worked for anybody in my life you know I'm not sitting on tenmillion dollars I'll I'm totally honest about that you don't see me driving aLambo and and you know I don't live in a mansion the one thing I have done thoughis I'm 32 and I make a damn good living from the forex market and I don't workfor anybody and I work right here from my home stay home do whatever the heck Iwant go golfing during the day you know when you get e-mails back from peoplewhere they're like sterling you've changed my life on three years intotrading there's one lady we know probably one of our best traders shejust trades gold but she just did over three mil so when I when you get youknow you get comments like that and then number two I don't know if I'd beatprofitable if it wasn't for ten you know that guy had I mean I'm like scared tothink if I would never have met that guy because what would I be doing I met himwhen I was like 19 you know what would I be doing the familybusiness was blueberries or drywalling or a machine shop all things I didn'twant to do so when I put it in that perspective I loved doing this I mean Iloved the education process and the other thing is trading is pretty darnboring so to have a group of really cool guys that you can chat with you know youcan provide feedback too it's just it's just kind of nice to have a communityfeel as well which is what I try to do with the bank trading strategy as wellas the bank trading forum where we teach it where the course is where there's alive chat box people can talk about setups they can post in the forum I runa live room twice a week you see me talk for a couple hours go over set ups takelive set ups if they're setting up at the time and you know that communityfeel it's huge for me it's just it's a benefit to me i reinforce to myself dayafter day what it takes to be a profitable trader and what I shouldn'tdo so you know there is a lot of benefit to the educator as well what's thepercentage of time what percentage of the time does the price break thoselevels compared to when they don't break you know I could come up with a randomnumber here but it would be a guess and the point the the reason that doesn'tmatter to me at all is because when we draw a manipulation point what we'resaying like whatever formed for us to draw the level here at whatever pricepoint whatever pair you're you want to envision here on on this setup theweather this level breaks or not is not really why I had it drawn there I had itdrawn there because I expect there it'll be liquidity around this area so theconfirmation and it's really important to understand we're not saying we expectthe market to turn there if the market comes back into this when I have amanipulation point drawn I am in no way shape or form saying I expect the marketto turn from that point but what I am saying is if we see a stop runof that level okay now I expect it to turn the other way let's sorry I stoppedrun followed by a confirmation to the downside okay now I expect it to turnbut it's just as much an illustration of the strategy doing its job when a leveldoesn't hold it is just as much an illustration of the strategy doing itsjob when you don't set up so when the market just continues to push to theupside never producing a setup this is exactly what you want to see it'sexactly what you want to see because of you two got this set up you two lostright so that's another aspect with with any entry strategy is the strategiesability to keep you out of bad trades it kind of goes back to I posted a video athell I don't really know where this is but I talked about oh is the 20 train 20trade challenge article but I reference a video it's called floored it's about abunch of floor traders and kind of their struggles when the computers came in howthe pits have changed and all that but one of the guys he's retired now and hesaid you know I never made the most amount of money I plenty of guys mademore than me I never had the big days but I lost less than them and then hegoes on to say it's really not about what you make it's about what you don'tlose and that is such an important point because it's not about necessarily justthe profitable setups getting a stop run short long getting a profitable setupit's about the times that this level isn't going to hold the times were yeahmaybe you did identify a liquidity point what smart money doesn't have aninterest in selling from that level maybe they want to sell from an upperpoint that's why we got to wait for that confirmation and that's why the levelbreaking without producing a set up is just as much an illustration of thestrategy doing its job as is a confirmation down when there's gonna bea profitable set up so hopefully that makes sense all right guys I'm gonnawrap it up if you have any other questions you can shoot me an emailsupport at day trading Forex live come or check out the site I got a tonof videos articles on the site you can check out the bank trading course what'sincluded in that and whatever else you guys want to look at there's just athere's a bunch information also you don't see all the videos check outYouTube ton information on that and be sure to LIKE the video subscribe so youcan see the next one I'm not sure how these alerts go out to you guys for thenext live video this whole live process is kind of new to me but I hope you'reenjoying them and I'll be back for the next one I think when the next one I'mnot quite sure what I'm going to cover so if you have any suggestions on that Ithink I kind of want to get into some trade management ideas and you know someother things along those lines that are going to be really useful positionsizing different things like that so we'll be back for the next one and Ihope you guys enjoyed this video until then happy trading.