Original subtitles

Great.

Welcome back.

This is module two of month, two of the ICT mentorship.

We're going to be specifically teaching on how to frame low risk trade setups.

Now before we actually consider doing this, we have to consider what makes a

setup worth taking and ideally selecting trade setups on higher timeframe.

Charts is ideal.

That's the primary function of a high odds probability trade.

You have to look at a hard timeframe chart to give you the directional bias

to give you the institutional order flow.

The the support or resistance ideas that would be framing the buy or sell

the idea that you're looking to do.

And the reason why we do that is because the large institutions and

banks analyze markets on daily, weekly, and monthly monthly basis.

Now, when we do these things, we're locating price levels that align

with institutional order flow.

This is key because if you don't have the understanding of institutional

order flow on a monthly, weekly, and daily time, It's going to limit

your exposure to high probability.

So yeah.

Higher timeframe, setups form slow and provide ample time to plan

accordingly folks that can't day trade, uh, folks that can't be

inside of the short-term intervals.

Uh, in terms of charts, they have businesses, they have jobs.

They have.

Uh, you know, barriers that keep them from being able to be a intraday trader.

Uh, you don't necessarily need to be a day trader.

You can be using these higher timeframe charts, and they'll

be able to frame out really low risk, high end probability setups.

It doesn't require being in.

Okay.

Can we do to lower the risk in a trade?

The higher timeframe has more influence on price.

So we focus.

the conditions that lend to a trade setup on a higher timeframe can

be refined to a lower timeframe.

Transposing the higher timeframe levels to lower timeframe charts is

important because that way we can start to reduce the overall exposure

in terms of pips for our stock.

And then finally refining higher timeframe levels to lower timeframe.

Charts allows for smaller stop-loss placement and by default lower risk.

Okay.

Sticking to our model.

Uh, we used the Aussie dollar daily chart.

The last time we're going to look at this same setup and we're going to look at

it in terms of refining with lower risk.

Now I want you to look at this chart carefully, because this

is exactly the same chart you saw in the previous teaching.

Now I'm going to amplify on this, but it's important.

You understand the way the framework is here.

You're going to see it's exactly the same thing.

Just brought down to a lower timeframe chart, and we're actually

going to do it in two scales lower.

I want you to look at the fact that we have the higher timeframe.

75 20, 75, 12 level relative to the daily chart.

That's what this line is here.

Delineating the daily bullish order block.

Notice we have an old low here in price, goes through that, down

into that higher timeframe level.

It's really important.

You see that because not only is it just because we're going below.

Oh, Lowe's not enough to expect a rebirth.

Okay.

We're not looking for that just because that's the case.

We're looking for a higher timeframe.

Premise.

Why should we expect there to be buying down below an old low, because

this daily chart level 75 12 is an old Bush order block because

banks have bought there before.

So if we trade into that level again, okay.

Look at the framework here.

We have a hourly chart with a low being violated down into a key support

level relative to a daily time.

We've noted.

Obviously the buy stops above here, just like we did in the first teaching and

obviously the second area of by stop.

So we have upper level objectives framed on this trait.

It's not a scalp, it's not a day trade.

It's something that's going to give us a little bit more magnitude.

Okay.

Four objectives for, for hauling impacts.

Now, obviously be framed in the first teaching in this month's delivery of

content that we looked at this down candle as the bullish shorter block.

And we were looking at 75, 42 as a long entry.

And obviously by doing that, we framed it what a 20 PIP stop.

This is where our stop-loss would be, which would be below the mean

threshold of this down candle, which is a bull shorter block.

So what if you want to get a smaller.

In relative terms to, uh, 20 pips.

And here's a more important thing.

What if you want to be buying lower and offering yourself a lot

less in terms of risk exposure?

Well, that's going to require us going down into a 15 minute timeframe.

Everything here, look very closely.

This is very close to what you saw on an hourly chart.

We have an old one.

Price trades down below that Ola right into that key level, 75, 12 level.

Now this up here is the buy order that would be needed on

an hourly chart way up here.

But what if we focus our attention down in this area here?

What could we do do with this information?

Well, obviously this is things there.

We have sell stocks below an old low whereby orders can be

paired up when the smart money.

And you see the market trades down into that level 75 12.

So we do have a turtle soup long set up, but we don't require the price to come all

the way up here before we started buying.

So how can we do this and reduce risk?

Well, we can take the bullish order block here, that down

candle rate off of that level.

And why is this a bullshitter block?

That's, it's valuable and it's worth taking because this

candle trades through it, right.

And now we can focus on the mid point of that candle up to a tie in that area.

We can be a buyer, so it could be a buyer down here.

It's 75 20.

Okay.

And have a stop loss down here at 75 0 7.

It should not go down to 75 0 7.

If it's going to go higher, it should go up higher from where it's at.

By doing so now we have a 17 PIP stop loss and look how much lower we are in

relative terms to what we saw on the setup on the hourly chart, way closer

to the key level of 75 12, and we're using a 15 minute timeframe to do it.

So looking at it in terms of even further reducing the risk, we can take this small

little area in here and refine that same.

Sample size of data.

Okay.

I'm going to take a closer look into it.

Okay.

So we're zoomed in now.

I want a five minute chart.

All we're doing is looking at that same 75, 12 level.

Okay.

And we're refining the entry from 75 20.

What can we do differently here?

Well, let's take a look at what's going on inside this yellow area.

Okay.

We have price with another down candle as it hits that bullish or

block 75 12 on the daily chart.

This down candle gets violated right here to now we can start looking at this

down candle from its open or high down to the mid point, and we can be a buyer

there, or we can just simply say, okay, well that's basically the 75 12 level.

We'll just add the spread to it in terms of buying that puts us in around 75 50.

Our stop-loss can still be down here at 75 0 7.

That's less than 10 pips, less than 10 pips on a buy.

Now you can refine this where your risk is eight pips here and in first

profit of eight pips above here.

Second and third.

So we have a multiple of three.

Before we even take out the buy stops above this old high

on a five minutes right now.

No, this is not even the biostats that was framed on an hourly chart.

All we're doing is using the price action on the timeframe we've

executed on and looking at where price is going to be reaching for it.

So we have a multiple three R or no worries.

We've made three for every $1 we rift.

So the price has already moved 24 pips up from our entry.

On our stop is only eight pips below, or you would enter at, at this old low here

notice also by refining our risks like this.

We're actually getting multiple of three, our reward for our $1 risk.

As we hit the entry, that would be assumed on an hourly chart

at that night at 75 42 level.

We're hitting that level here.

With lower risk and we're getting a three to one reward ratio.

Think about that.

The risk reward is $1 for $3 to be made, or in terms of reward the risk.

We're looking at $3 made for every $1.

So it's amazing how you can take this and refine it down to smaller timeframes.

You don't have to have big, super wide stops, but it does require

you to understand what you're doing and why you're doing it.

Just can't get in there with these ultra short stop-loss orders.

If you don't understand price action and why it should be

responding on these levels.