Original subtitles

Welcome back folks.

This is February, 2017.

Swing trading, lesson number two, the elements to successful swing trading.

Okay.

Successful swing trading, hallmark.

Okay.

The first is going to be an obvious trend in higher timeframe charts.

That means it's obviously moving higher or wanting to move higher

and let the consolidation, or it's trying to move lower or it's

already left the consolidation and started moving lower institutional

order flow on the hard timeframe.

Charts must be clear.

That means is it giving you clear indications that it

wants to trade higher or lower?

Interest rate markets support the trade.

Are we seeing higher interest rates?

Are we seeing lower interest rates?

Are we starting to see the divergence in the yields that would indicate

a shift that's most likely going to occur in the near future

cot data?

That's commitment of traders report.

Is it confirming now?

It's not required or necessary, but this can enhance the probabilities of the.

Opposing PDA or premium to discount arrays are obvious in the charts.

That's on the monthly, weekly, and daily

and seasonal tendencies.

And again, this is not required, but it does enhance the probability of the

trade panning out profitably and the supporting intermarket analysis confirm.

Your idea in the trade.

Now, obviously this is a very broad overview and it's not every single

hallmark, but in my trading for swing trades, these are the types of things

I like to look for the larger amount of things on this list that I can accumulate

to build the idea that my trade is valid.

The more likely the trade does pan out, there's going to be

times where you don't have.

Every one of these things on the list in your favor, but

the trade will still be viable.

If you stick to trades to have these hallmarks in them, swing trading

will be a lot easier for you.

Your accuracy will be stunning.

You'll be really cherry picking the best scenarios and the trades

will pan out in your favor.

Before we continue, I want to preface it by saying that this is

going to be one of those teachings.

Are going to probably be frowned upon.

This is going to be the, the low end delivery of February in most people's

eyes in this, in this community.

And the reason why this is the one that has the homework

in it, no one likes homework.

Remember what it was like to be in grade school.

But for me to take you to the next level, understanding number one, we had to test

where you're at and your understanding.

We have to reveal to you where you are in your understanding, and by giving us a

basis on what's to relate that to, before I give you the swing trading model, I

want you to be engaged in these ideas.

I'm going to share with you in this teaching for the elements

of successful swing trading, I'm going to give you broader view.

An idea, ideas to stimulate your thought process.

Okay.

And the homework's going to be at the end of the last slide, but I want you

to understand while we go through this, I want you to think about these things

because it's going to help you with the homework assignment at the end.

If you're not paying attention, it's not a lot of charts in this ones.

It's all theory.

I want you to think about what I'm asking you to do, because I'm going to

fill in all the gaps that you create for yourself, or would you have right now

and your understanding as it relates to swing trading, when we get to lessons.

Okay.

Institutional sponsorship, uh, when you're looking to buy, are

there signs in relative strength analysis to support the trade?

That is to suggest that if you're buying Euro dollar on a lower, low, the dollar

index, is it seeing a lower high that would be weakness on a dollar failing

to make a higher high and the lower low on your dollar would be running

out to sell stocks before the move.

And when shorting are there signs in relative strength analysis to support

portrayed an example of shorting dollar swissy on a lower high is the

dollar index seeing that higher high.

So they would be SMT, diversions ideas to measure institutional sponsors.

Bank accumulation and distribution.

That's seen by studying the price action and while prices moving higher or all

the down candles becoming support and seeing higher prices thereafter and are

the swing highs, breaking and seeing higher highs after the swing highs

broken and in down markets or bearish markets are the up candles becoming

resistance and seeing lower prices.

They're at.

And are the swing lows breaking.

And are we seeing lower prices as a result, basically put common terms,

is, are we seeing higher highs and higher lows when it's bullish and

our resistance levels breaking and new support levels being found?

The way we look for bank accumulation is we look at every

down candle to support new.

Because the new buying is going occur when the market recedes

backwards or retraces and goes lower.

When this happens, that gives them buying opportunities to buy at a discount.

They did not buy or do not buy rather, um, at premium prices they have to

buy when the algorithm permits them an opportunity to buy at a lower price.

When we see lower bear markets trending lower, we wouldn't be focusing on these

up candles because we know that the market rallying is going to give them

a short term premium to sell more than.

And establish new shorts or add new shorts to the bear model that's

unfolding in the marketplace.

That's going to promote resistance ideas and are we seeing

support levels of giving way?

Are we seeing lower prices and a failure to break through resistance

levels and new creation of resistance?

That was in the form of up candles.

We measure accumulation from the banks by buying it downtown.

And we measure bank distribution at up candles as resistance.

Okay.

When you're looking for your setups, you want to be looking

for Marcus to have clear price action and very discernible level.

Okay.

Above where we are current market price or below the market price, regardless

of what asset class you're trading.

Okay.

The PDAs are obvious and they're easy to identify.

It means above us.

We can clearly see as any voids mitigation blocks, breakers, fair value gaps.

Rejection blocks, old highs or lows.

And below us, we would see mitigation blocks, breakers, liquidity voids,

fair value gaps, bullish order blocks, rejection blocks, and old lows or old

highs in that spectrum of the PDAs.

The more obvious they are in terms of the current price action and you're

trading at for that asset class on their study, the more discernible, more clear

and obvious they are the better that trade's going to be price not traded

at in recent weeks or months left and imbalance basis, monthly and weekly.

Those levels are going to be a high draw on price, especially as it

relates to monthly and weekly level.

So price is going to return back to fair value, or it's going to

seek a new level of imbalance.

If price is at equilibrium, we're going to be looking for an opportunity to

see that price move to an imbalance.

Preferably we want to see it move out of a consolidation and then it

will move to an imbalanced level.

If it's moving higher, that's going to go to a premium.

If it breaks up a consolidation, lower we're looking for it

to go to a deep discount.

That's an imbalance on the buy-side and an imbalance on the sell side.

We'll be moving to.

The cleanest price action or the most favorable markets to trade in.

There's less chance for our erroneous price action to

distract us and or fool us.

I've been doing this for two decades.

And I have learned the hardest lesson is to demand the cleanest

price action in your charts.

The more obvious price action is the more favorable the outcome's going to be.

It's, it's simple as that, the times that I forced the idea, the times that I made

the idea come to fruition in my own mind.

And K instead of just simply looking at the chart and saying,

okay, is this outcome favorable?

Is it likely, is it.

Or am I just really forcing something the times that the trade does literally

leaps off the chart, those instances that's when the trade is most highest

probable, it's going to be the easiest ones to take too, because they're just,

they're very easy to see if you have to study the chart and look for in

your Hammond hall about back and forth.

And you argue with yourself, is this really, that is this an oral

block or is this a liquidity point?

If you're having to convince yourself, chances are, it's probably

not a good trait pass on it.

And it's price respecting institutional levels.

That means the big figure levels.

Zero, zero levels.

The 50 mid figure levels, the 80 level, the 20 level or

the small round numbers, 37.

Okay.

And when we're really looking at in less than three, or are we talking about more

specific rules and role-based conceptual methods, but in our trading in every

discipline, not just swing trading, we have to have role-based conceptual

methods and every trade has to pass through a rule-based filtering process.

Now the rules are standardized and they're static, and that means they

cannot be changing on each and every trade set up, whatever we do, we do

the same procedure, every single trip.

When the trade setups fail, the filtering process, the trade has passed on period.

No exceptions.

We do not make the rule exceptions.

Well, ICT said he liked that trade.

If you're a rule-based idea says you can't take that trade.

And you hear me say, I like to take that trade you don't side with ICT,

you started with your wall based ideas.

When the trade setups pass the filtering process, the trade is executed.

Risk and equity management permitting now, just because we see a set up there,

we may already have a trade or two trades open, and our risk parameters

will not permit us to have more allocation exposed to the marketplace.

We cannot assume more risk than a specific percentage just because the trades.

Doesn't mean we break our money-management rules just to take the trade.

We either have to weigh out whether or not that new trade is more valid than

the ones that we have existing and or if it's a better potential payer.

So in other words, if, if we have a trade in, say, see, we're in gold,

we're long, and we think 1240 is going to unfold, but then we look at the

soybean market and we think soybeans are going to go up a full dollar.

Well, that means it's probably going to be a better payout, right?

The soybean market, because it may explode faster and you get

more velocity with your money.

So if that happens, we may see a opportunity that trans buyers

over a shorter period of time in soybeans than we do in gold.

And you have to weigh these factors out.

Well, every time we take a trade, for instance, you may see an opportunity

in the Euro dollar and you're already, um, short dollar Swiss.

And, you know, and you have to take these in consideration, which, which one

has, the more likely probable outcome that would be profitable for you.

If you see a better setup and you want to cut the trade that you have on now to

take on a new trade, that's the way you would do it, but you cannot take a new

setup just because it's a good setup.

You can't keep.

Open risk.

And the other trades, you have to take something off or pass on the

trade, but you cannot take the setup.

If you're risk and or equity management, doesn't permit it.

Probabilities, reward, diligence, limiting setups to three to one reward.

The risk permitted.

As low as 34% accuracy to be net profitable.

Now it's not wildly profitable, but marginally profitable.

And that means you're making money when you're wrong.

66% of the time.

Now, for some of you, that sounds like a good idea.

If you're new and you know what it was like to be a new trader, you were probably

like a 99% accuracy in terms of being.

And I believe me, I know what that felt like when we see setups that

pay out three to one, or we look for setups that we're willing to hold for

three times what our initial risk was.

We're giving ourselves the potential to do very well and not

require a great deal of accuracy.

But if we can frame our setups with rewards of five times our risk, we

have a higher odds of being profitable and we can endure losses much easier.

Now, the setups that we have, the most movement potential.

The better risk reward ratio is now, obviously it's, it's common sense,

but I did say that we would mention in every teaching discipline, we

would mention some form of money management and risk management.

Now, this is the only thing we're going to be talking about, but I want

you to think about this because it's going to be part of your homework

and that's brings us to our homework, which is a mock trading.

Now mock trading plan is something that you are going to be formulating yourself.

You're going to create it yourself.

You're going to map out everything from the beginning process to the

end and what you do throughout the trading process of being in the trade.

What starts the trade with executes the trade?

What makes your stop loss?

What it is?

When do you move your stop loss?

When do you take your profits?

When do you collapse the trade?

How do you pick the trade?

How do you, how are you going to frame this?

Okay.

I already know some of you have no idea what to do with this.

Okay.

But I still want your involvement because it's going to help you

jump a big, huge step forward.

And your understanding when I give you less than three, I'm gonna actually

walk you through the process of building a swing trading model from ground up.

But the first thing you want to be doing is you want to be outlining what you

right now in your present, understanding what you would look for for an initial.

Opportunity.

What frames that opportunity, what would you see as an opportunity needed to

make that in a form where you can put it to paper, you're gonna write it out.

What makes your opportunity and opportunity and what are

you looking for in the chart?

And then secondly, what would you identify as a trade set up for valid swings?

Now it's one thing, knowing what you're looking for, but then how do

you frame it as a, as a swing trade?

And again, I don't expect everyone to use, to know how to do this, obviously,

because you paid the learn, but I want you to do the work to try your

best right now with what you know, to try to formulate a mock trading plan.

That's all we're doing is it's an exercise.

Okay.

How would you determine your profit objectives?

What makes the objective a goal in terms of, if it gets to that

level, I'm going to take profit.

What is that?

How are you defining it?

And it has to be in a static form where every trade will be filtered

in that same capacity, every single setup, every trading opportunity.

It's the same way.

How are you looking for the setups to be profitable?

What makes that a profitable trade?

How would you frame the risk management?

How much are you going to risk?

How much of your account are going to have a total exposure.

And when are you going to move your stop?

Or are you going to take partial profits?

I want to see this in writing.

I want you to share it with me either by way of the forum preface.

Or if you just really, really shy, you just want to send it to me in an email.

That's fine.

But if you're going to do it in an email, just know that I'm not

gonna probably get to it right away.

I'll look at it over the course of the coming months, but for now, just to

be interactive for those that have.

The willingness to do it, you know, consider the form.

And what would your filter process consist of?

Like how, how are you going to go through what you understand about

the marketplace and ICT concepts?

How are you filtering the markets?

How are you filtering your trade ideas?

What is the step-by-step process that you're going to go through to

eliminate the opportunities that don't have the highest probabilities

or to move to the executable stage?

Okay.

Your trades, what is that process going to be?

I want over in vague terms in this teaching here to stimulate your ideas and

thought processes, but how are you in this mock homework of trading plan development?

I want you to create a swing trading model for you, and it's not that

you're going to be trading on it.

I'm not asking you to trade it, not even in a demo, but I just want to see

where you're at in your understanding.

And I want you to have a record of what you think you know right now.

And then when we complete this month, how much that increases.

Okay.

Cause it's going to give you a big.

Eric to know how much you really gleaned from this month's content.

Now less than three, I'm going to address all this.

And I'm going to actually present a model for your contrast.

Now don't pass on this exercise.

You want to put it to paper form, and if you are willing, please consider

sharing it with the ICT forum and other.

That way you can see what other people will have in terms of feedback.

And they may actually may instill some more ideas because it's going

to be this coming Friday before you actually get less than three.

So I want you to have some time to interact with one another on the

forum and also to think about it.

But you have a time limit.

You have to have it done by Wednesday.

You have to have it up there by Wednesday.

You have to have it to pee.

You have to have it in paper by Wednesday.

And the reason why, cause I don't want you to cheating and missing

the lovely opportunity of being able to take that big growth spurt.

When I give you less than three.

Now you're going to use one example in hindsight for your

study for illustration purposes.

Now again, you don't have to do this in the form.

I'm asking you to consider it, but for your own study, you need to

find an opportunity in hindsight.

As an illustrator, a point of reference using what you think you know about

swing trading and all the ICT concepts right now have that used for your record.

And then when we complete this month, I want you to go through the

process of actually how I show you how to build a swing trading model.

What procedures do you go through?

What steps you go through.

And then we're actually going to go into marketplace and find a

setup and actually execute on it.

And then we'll see how that pans out going into the coming weeks

after we complete this content.

But you're going to have a greater understanding about what it is.

You should know once less than three has been given to you, and

then it'll fill in all the gaps.

And then once we get into the specific setups, that'll make

it really rich for you because then you'll know what the setups.

In terms of swing trading and it's only two, it's not a whole lot.

And then you'll know how to go about it yourself.

But if you skip on this lesson, I promise you, you're going to miss the wonderful

opportunity of filling in a lot of gaps.

If you think you're just going to just walk less than three.

And so a, this others go right to the meat of it and no, you know, no,

it helps solidify and you retain the information and you, you build the

process oriented thinking by doing this.

Trust me, this isn't the first time I've done this.

The folks that always try to jump ahead and don't do things like this.

They never do as well as the ones that actually do it.

Take some time, put yourself to, to a pad of paper and a pen and write out the

things that would make your swing trading.

What it is from beginning to end.

What starts the process?

What, what changes the process mid trade?

What cancels the trade.

You may have an idea that they think the trade is going to be

there, but something changes.

What would change that idea?

And you nix the trade.

You don't want to do it anymore and you won't execute on it.

It kills the whole idea.

Pro the actual trade starts.

All those ideas have to be in the plan.

You have to have that because if you don't have it, you're either going to

force the trade or you're going to skip on something and you'll miss an option.

So this way, when you, when you make a decision, you always

know why that decision's made, you're not reacting on emotions.

You're not reacting on a psychological impact from either me or talking

heads on the TV or watching other people on Twitter or on the forums.

You're only executing and making decisions based on the information

that you're receiving from price.

And that way, you know, immediate feedback, you have the right side

of the marketplace, or you're probably on the wrong side.

And then.

You be more fluid in your trading you'll know exactly what it is you're supposed to

be doing and why you should be doing it.

And if you get stopped out, you're not going to wonder why you got stopped out.

You didn't know exactly the reason why he got stopped out.

And if there's a new opportunity based on that occurrence, you'll

know that as well, or you'll know how to move to the sidelines.

So I'm going to wish you well in your homework, remind you that you

have to have it done by Wednesday.

I know it's a rather daunting task for some of you.

I know, but.

Certainly try to have it done before Friday 8:00 PM, because I don't

want you to see the less than three.

And if you do not get it done before Friday, take the time

to do this exercise, please.

I'm asking you as your mentor, humor me, please.

It's it's for your benefit.

It's for your enrichment through this study, do the mock-up right now, from what

you understand about the ICT concepts, what would you would be looking for?

How you frame.

And then if it takes you getting to Sunday, then watch less than three.

The please don't do less than three until you do this exercise.

I promise you, you will.

You'll jump leaps and bounds ahead.

And your understanding if you do it until next week, I wish

you good luck and good trading.