Simple Forex Entry Strategy for Day Trading Market Manipulation - 30 Day's to Better Trading Part #4
Sterling here from date trading Forex live and as the title of this video shows a simple, forex. Day trading strategy. For tracking market, manipulation, for, trading with that manipulation, and then for putting us in line with, smart money which is the whole goal of what we're doing here in the, previous video if you guys watch that we covered, the. Selection. Of manipulation, points just the process of. Number. One identifying. Where. Smart, money and whatever when I term when I use the term smart, money I'm referring, to those the, largest market participants, in the, forex market, so, in the very first video I think is the second video where we discussed, reactive. Verse predictive, trading, strategies, and how you, know 95%. Of trading strategies, fall into that reactive, category. It's. Important, to. Understand that as we kind of broke down the basics of how smart, money trades, because. When you when you think about how smart money trades, how, they have to trade we, covered a basic point that ten banks control sixty, percent of the daily forex, market volume so that's number one I guess if I'd to kind of summarize this in a better way you. Know ten banks control sixty percent plus, of the daily forex market volume now, that's not them speculatively. Buying and selling some, of it might be but the vast majority the. Vast majority, of, that is smart. Money or the banks I should say, simply. Filling, orders there, for, global trade for. Worldwide, global trade worldwide commerce, you. Know obviously speculation. Insurance. Companies, hedging, against, physical, I mean the, list could go on and on but. The main point is that they have, to process the, majority of the volume during the day so, the one thing you're gonna know is that, if, if, you had to process 60%. Of the daily volume obviously. It's not all getting processed at once because, you just simply, can't do that all the liquidity is not there at one specific price point so. Knowing. That, they had control, such a huge chunk, of volume means that when. They control that huge chunk they're, gonna search out areas, of liquidity they're gonna search out areas, where the, rest of the market is likely buying, or the rest of market is likely selling. Or just simple rollover. Occurring, at a specific point, and this. Testing. Back and forth between levels, it's, something that happens in all markets, I mean I've been doing this the, the confirming, entry some of my first videos on market manipulation. On YouTube. Go all the way back to like March of 2010. I've been doing this for damn, near the better part of a decade and it, consistently. Stays the same it stays the same because this is basic, market function we're covering the, people that control the market have a crap ton of volume because. They have a crap ton of volume they have to process they need to find buyers, which they want to sell they need to find sellers if they want to buy that's. Why we discuss the selection, of manipulation, points on where that volume might be because if you know where the volume is or.
Where, It's likely to be sitting, I shouldn't say no because, in trading you know knowing it's a very relative, term but. If you know with, a good idea, or, a higher, probability better. Than 50/50, where that volume is sitting now you can start to develop an edge off that because if you know where the volume is you know where they're likely gonna go if they, want to reverse the price down they're likely taking out an upper level first before the price drives down if they're coming. In to and they want to drive the market up they're likely going to come in to a lower level take. Out any liquidity, below that point before driving the market back to the upside so that was the second video I think I was a third video actually we covered on the selection, of manipulation, points and as. I mentioned in that video the next one that we're gonna cover is the confirming, entry I'm just gonna check make sure we got a any. Questions, coming in guys let, me know I am still gonna look at the chat and, uncover. That as we go but, let's go ahead and get into the confirming, entry. And. Basically. This is the next step you identified, the manipulation, point so you, need to have, a way of actually triggering the entry. What's. Telling you that you should get into the market that's what this is all about so. Identify. The manipulation, point we've already covered that that's number one that you're gonna be doing. You. Know first for getting a set up for getting a set up according to these rules identifying. Where, they're likely to create this stop run but. We don't just blindly enter the market we need this, confirming, entry and that's why we have this is number two confirming, entry that's actually what's triggering, the entry and giving it to us let's. Go over to, the. Next high-tech slide here and. Number. One I'm gonna start with the rules if you guys want to write this down I would highly encourage you to write it down ask questions, where you have them and let. Me know if anything pops up that that. I don't cover in this video that you have a question on, so. Number one we've. Identified the, manipulation, point so I wrote, down manipulation, point there I'm not going you know it could be whatever level, whatever. Level it is on whatever pair you're happen to be trading but number one we've identified the, manipulation, point so. That's obviously, number one number, one, is far the first thing we look for as far as the actual entry, after identifying. The manipulation, point is we, look for at least a three pit break of the level now, this. Is somewhat, relative I use, 3 pips around, 100 pip a verge daily range so. If you're dealing with say the pound yen it gets up to a 200, 250, pip average daily range a better, a better, way to phrase that might be a 3%. Of the ADR break depending. On the pair's you guys use and also, that will allow you to go to whatever market you want to trade because a percentage. Of the ADR, is pretty, universal. Why. Do I look for a three pit break well. I'm looking for a three pit break because I want to see the market testing, beyond, the. Area of liquidity that I've identified I. Want. To see it testing, beyond that and then, the most important, factor of this whole process is the rejection, back, away that, rejection, back away is us giving us us, getting. An indication. That. When smart money stepped, in to what I term is kind of a stop runs own, so. Basically. I'll, just do SR. I'm. Terming, that as a stop runs own so I'm what I'm saying is as they're stepping into that zone if they are selling, into whatever buying pressure is occurring, people buying on a breakout, short. Traders getting stopped out having to buy the position, back whatever. It might be when. They step into that level with the three pit break. That is the first thing I want to see because I want to see him testing, that I want to see him I want to see them sweating, the short traders and see if they're inducing that buying pressure I want to see them triggering.
The Breakout traders, by. Getting, the break of that level you're, just getting a little more confidence, that you've seen the false push you've seen the identification. Of the the manipulation. Moved around, that level, so. That's obviously number one is just a three pep break a three pip break does not initiate that trade what, we then need to see is what we term is our confirming, entry or. Sorry our confirming, candle which is the where. The confirming, entry gets his name obviously, so. What is a confirming, candle well a confirming, candle has two very, basic rules, there's nothing complex, about this and in my you. Know close to 14. 15 years of trading, eleven. And a half of that or so is a full-time trader I you, know the this part, to me on simplicity is, just absolutely, critical because. Simplicity. Leads to repeatability, and you, don't get rich in this market in a month six, months even a year it's gonna take you multiple, years to grow an account if you don't have consistency, you. Might as well pack it up or, start, working on that because that's the key, so. Simplicity. Or. Creating. That that repetition comes. From the simplicity and that's, where these, rules are there that's what these rules are based on that's why I only see three rules, here one rule for what the stop run actually is just even start this process but. Then number two is the confirming, candle has two rules number, one and I'm talking about a short here obviously number. One it has to close in its lower, one-third. What, you're doing there is you're measuring, from. Here. To. Here, that's the entire spread, of the candle, and you're, measuring it does it close in its lower one-third, so you, know this would be a third here, then you have another third here, then you have your upper third here so this is the lower third, and it, could have closed anywhere, within that, to. Have satisfied, that specific. Part of the rule set the. Other aspect, to that is it has to close below the, body of the, previous, candle. I shouldn't roll candle body but close, below the the, below. The previous, candle, I guess I should say candle body close. Below the previous candle body so. Does this. Close. In its lower third and does, it also close below the body of the previous candle, well, you can see it very clearly does now, here's a little bit different setup it's what. A lot of people would term as a pen bar I really. Don't care how that looks I'm looking, for one thing to initiate the stop run does it break, does that one rule does that break by 3 pips that's, our first rule does it break by 3 pips if you break by 3 pips I couldn't care less how, it looks what. That candle looks like whether it's a wick ends up being a wick through the level or the body, does.
Not Matter to me in that situation. So. That's, number one number two, getting, that confirmation. Closing. Below, the body of the previous candle, number one and then also does, it close in its lower 1/3. Does that close in its lower 1/3 well I think, it's pretty straightforward that, that does close on its lower 1/3, so, a way you could invalidate, that. Just. Do something like that, let's. Make it even more obvious now does it close in its lower 1/3, well. No you'd say that's probably, you know somewhere around the halfway point right so. What you're gonna do is the majority. Of the time that's gonna be very obvious whether, it is closing in the lower 1/3, or whether it's not if, it's, not measure, the entire spread, so mark. Your high get your exact I get your exact low, measure. That distance whatever it is take, it to your calculator, divide by 3 that'll give you a third does. It close in lower 1/3, that's what you're asking now we're walking through more examples, of this and I'm gonna go to the computer and I'm actually going to show you some live examples of, recent trades that we had set up here in a. Minute but, let's. See so. Let's go to the second page here. And. We'll walk through the entry a little bit more in. Identifying. This. Whole process we're talking about stop loss placement now. So. With stop loss placement what. You're going to look at is you've. Got your stop running the level, you've broken by three pips you're. Following, candles confirm down it's, closed, in its lower one-third, and it also closed below the body of the previous candle, thus. Validating, what we term is a confirming, entry now, when. The confirming, entry is validated. The next step you need is actually taken, the entry that where, we're waiting for the close of this candle, so when the next candle opens is where you're taking the entry technically, when. That next candle opens, the only thing that you need to decide, or, do you need to determine and, be a better way to phrase that because, your your decision, process at, that time is already done has. It followed. The rules that either hazard, hasn't, for a confirming, candle. A confirming, entry setup now. The next thing you need is you need to put yourself in a situation where you can have a proper, reward to risk ratio, a proper. Reward, to risk ratio, starts, with having a good stop if. You have a fifty pip stop loss in a in an average daily range market, that only moves 50 pips well, trying. To even get to one to one is going to be rather difficult I want. To always look for two to one that's what I always look for when it comes to setting a tape profit you'll see down here take profit, two to one reward to risk ratio, again, simplicity. Keeping, it simple two. To one on the reward risk ratio, so the take profits, pretty simple, but you got to shrink the stop size down to. Be able to have a take profit that, is what, I prefer to be which is forty, to fifty-five percent of the ATR a rough. Rule of thumb or general, rule of thumb here 50%, of the ATR for the take profit or. Maybe. A touch above it but not much that's. A good rough figure that I've used that I've in my decade. Plus a full time trading that's what, I've consistently, used so. That starts, with first identifying, your stop size though because you're doubling, it for your take profit. In. A normal, market, what, I look for is I look for if my if my take profit is, forty to fifty five percent of the ADR then, what I want if my stop-loss is gonna be half of that then. You. Know I would have, a stop-loss. That is twenty, to, twenty seven point five percent of the ADR that's half, of the forty to fifty five percent range. So. In this situation here, as a percentage, of the ADR, that's kind of how you can figure it out your stop-loss somewhere. Around twenty, to twenty, seven point five twenty, five percent of the ABR if you want to make the math simple so. In this case here that is you, know that that's kind of on your max side but, as a general, rule we use of 20 pips top that's, kind, of how we keep things simple, if the ADR, is below 100 pips we, use a, 20, pips top for the majority I'm, not going to get into the dynamic, stop here I'm not going to get into all this other aspects, because this could be a five-hour video but. I'm walking, through the basics, here so. Let's walk through an example based. On a 20, pips top and. Illustrate. How that process works, now, in this example the, confirming, candle closes at one spot 1990. Right they closed it once about 1990. And. The. Manipulation point, that's what this dotted red line is I can see I have that listed at one spot 2000, just for reference, but. I have the high listed, at one spot 2020. So if you took the entry right here one, spot, 1919. And you, placed a 20 pips top your stop would be at 2010 that would be well below. The. High that stop run the, goal of this is to get our stop loss in the case of a short it's, gonna end up being 5 pips above the high and.
We're. Gonna walk through why that is exactly, but the point being is we want to get that stopped beyond. The high if this is the stop run if this is the manipulation move, then. The theory behind why, I want to get beyond that high is that, that, was the stop run that was the move that, was. Designed, as the trapping, move the false move so, if I've truly got it right that, becomes a very very. Safe location. Just, putting your stop above a higher below a low is kind of a dangerous thing, to do because. Of this they're typically, going to come for those previous, highs that's why it's almost one of the worst places you can put it unless. It's. The stop run if it's the stop run well then you've already seen the stop run its cost. Inhibitive, for them to come back take out that level again and doesn't, make a whole lot of sense if they've already taken out that level and induce the liquidity they're, likely not going for that high again if they are you're probably gonna be wrong on that setup so. In this case here, for, using a 20 pip stop and I want to get five pips beyond the high it's pretty basic math here I got to take the entry at one, spot, 2005. If. I add 20 pips to that that gives me one spot 2025, which, is five pips above the high so. I'm taking the entry to kind of simplify this is your get. Your high subtract. 15 pips from that that's where your entry is because. Your stops gonna be five pips above the high get. The high subtract, five pips that's where the entry is now. In this case here, what. That would require is, that requires taking the entry when, the market looks like this. Right. So. The market looks really, bullish at that point and it's right when you go man this is super, uncomfortable I, don't want to take this entry it's a bullish candle, you know we've rallied 15, pips now I'm staring, down a completely bullish, candle, that's. Exactly, when you want to be taking the entry you know at this point how has Comfort. Benefited. You you've. Taken entries, that are comfortable to you you've taken entries that makes sense you know it's it's aligned with the trend it's a retracement it's, this or it's that they felt comfortable to you and they've. Had poor you've had poor results with that you if you're taking entries where you're comfortable or it looks like it's headed in that direction as, you're. Probably making a sacrifice on some way or another whether it's the actual entry, the stop size whatever. It might be but. In this case here that's, exactly what you want to feel you want to feel discomfort, when you're taking that entry that discomfort, is what gives you your good. Reward to risk ratio, because it just shrunk this stopped from having to be a 35. Pip stop if we pulled the trigger right there, thirty. Five pips if we want to get it above the high well that's a completely different dynamic thirty. Five pips stop you want a two, to one take profit, that's a 70 pip tape. Right, now that's damn-near, not, quite two times the ADR on the euro but it's one and a half times it's it's a signifi. A very. Significant. Move, so.
That's Why the pullback is there the pullback is there solely. For reward risk ratio, there's nothing, about this, the, pullback aspect. Of this that, is designed, for anything other than optimize, our reward to risk ratios, by, shrinking, our stop loss. All. Right let's see what else here take profit, two-to-one we've covered that if you deal with the 20 pips top 40 pip take profit, from where that entry, is and, again, don't, over complicate the, process guys, I did a video on four, rules of I don't know beginner, rules of the success, all right point. Is the video covers four, very. Important, rules, and. In, that video I talked 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, that equals roughly, about a 9%, profit. At the end of the month based. On those figures twelve trades a month you only win 50 up 50%, of them means, 6 winners 6 losers and a, two-to-one reward risk ratio on that with 2% risk per trade it. Means you're winners you're gonna make 4%, you're losers you're gonna lose 2%, but. That video walks through how this, type of reward risk ratio, on a relatively. What most people would consider a low hit rate grows. An account so rapidly, over the course of 2 3 4 years I mean at the end of three years at 10k. At 10%, a month is a little over, 275,000. 10k. At 10%, a month for four years is just shy of a million I'm not saying that you should expect to hit that number I'm just quoting basic, math here and that, basic, math illustrates. That compounding. Is key, and this. Is a huge, part of compounding, to me because in trading, and in my experience, the. Best traders in the world went about 50% of their trades that's the entire secret, to trading that's why every, BS. Marketer, you see they're gonna advertise to, you with win-loss ratios. It's, the greatest, way to tell if a traders a profitable, trader if he talks about when loss ratio, he or she talks. About win-loss, ratio is over reward, to risk ratios. There's. One. Trader I know that, doesn't run a really, high reward to risk literally. One that's profitable, so, I'm not saying you can't do it I'm just saying this, is in my experience by. Far by a magnitude. Of a hundred gonna, be a hell of a lot easier to be profitable, at a 50/50. Hit rate with a two-to-one reward to risk ratio, and not. Only is that super, profitable, but it's actually more profitable. Than somebody that wins seventy. Percent of their trades with a one to one reward the risk ratio do. The math on that sometimes if you have it. Okay. Candle. Count we're. Gonna get a little complex. This. Is also why I say you have to see things again and again and again this is why. In the in the room we do a daily market preview, or in the members area we do a daily market preview, every day where. I go through these steps day, after day after day because. Like we talked about in one of the first videos and. I gave that reference, on landing, a plane and and when. I learned to fly a plane and, land in a crosswind. You. Know what to do it's just doing it in real time with all that pressure with the instructor, and the right seat and you. Know him you, don't want him to take the controls, cuz you want to do it on your own but you don't want to die you, know there's a lot to that that. Process, and you need to see it done again and again and again but. Number the, the second aspect with that is you can't learn to fly a plane with a course you, can't learn to trade, Forex with a course or just some simple video or text you, then need the second aspect literally. Every, complicated. Profession, you'll ever think of has, an education, phase and then, it has a hands-on, training phase you're.
Gonna Let a surgeon operate on you if he. Went to school for 10 years he, learned every possible, thing good about this one strategy but he never stepped foot in an operating room you. Let him operate on you I think, not same principle, here with Forex guys that learning, it is great they, need to learn how to apply it in real time and that's, why I encourage you to find you know whether it's this strategy, or not find, an education, that teaches you not just a course you, need somebody showing you showing you how to apply that course and the rules in that course in real, time if they're, not again, they're probably not showing you that live because, they're not profitable or they're not a real traitor so, keep that in mind guys and, don't. Well. That's another subject we'll get onto that some other day okay. Candlemas, so. Temple, of taught right yeah it's very true it is you know you can you can cut literally, years off the learning process, I talk about a guy named Tim I don't know if I'd be a profitable, trader I met a guy named Tim about a decade ago in the, Forex diamonds room it was if you guys you guys have all heard a Forex Peace Army I'm guessing and. Forex. Diamonds was one of the first forex rooms that. Was really popular in the retail market, and. That. Guy had he trades, one our trend line strategy, so it I don't really believe, in the strategy it's not something I trade but. He taught me so much about reward, to risk ratios. Patience. Discipline, and those are the things that I credit, for making me a profitable, trader I I do credit this the strategy, a bit but. If you don't have discipline, patience, money management, the. Strategy, you trades are relevant it has, you, know really no effect on your profitability. Okay. Candle. Count let's get into candle count because you. Can't, when you come into a manipulation, point we, have a certain, number of candles, that we will use to say this. Is still valid or it's not now one simple rule and again I encourage you guys to write down rules, come. Back to it add to, it you, know watch the video again and see what you missed, the. One basic, rule we have for determining, whether a level is still holding or not is once. Two candles. Consecutively. Open, and close beyond. The manipulation point, the trade would get tossed so this is a little bit separate subject, but I realized it after I drew all this out so, I just want to share this with you guys real quick what. That would look like it, could look many different ways but you know maybe it looks like that but. The. Point is two candles, that consecutively. Open, and close, beyond, the manipulation point so open close I don't care what the wicks doing. The. Way can be below that on both of them it's. Not really relevant to me it's all about the clothes that's, how I invalidate. A level that's when the level that's, when the level goes bye-bye, no more level here at this point all, right. So. That was just a side subject, I wanted to cover because that's important, for this strategy and some. Of you guys remember some of you guys aren't so if you're gonna trade it you need to at least have some of the basics. Candle. Count though let's, get into candle count the, candle, count starts. With, the first candle, that breaks the level and by the way I'm going to show you live examples, here in about five minutes, recent.
Examples Last couple days setups. That we've had so the. First thing we look at is, the. First candle. In that count it starts, once you get the three pit break as I just mentioned so, this right here would be what. I would term as the number one candle, and the count, now. We, have something we term as the, resetting. Of the count or candle, part, of that candle count is resetting, of the candle count meaning. Just because, it started, as the number one candle, doesn't mean it's, going to be the final, number one candle. For. Each candle, that progressively. Sets, a higher. Candle. Body low and there's no easy way to say that you're saying high and low in the same sentence, sounds, ass-backwards. But there's not really another way to say that so. When. The. Next candle, produces, a higher. Candle. Body low in other words the candle, body is higher. The, low, of that candle, body is higher. Than. The previous. Candle. Body low when. You create. A higher candle, body low that. Resets. The count the. Count can be reset, until, you have a confirming, candle, okay, if you had a confirming, candle after, this it would lock in the count then, if it rose up again you could not reset the count again so. The next candle, it sets a higher candle. Body low it, resets. The count it becomes, the new number one candle, this. Is a little bit of an exaggeration, but. I exaggerated, so you guys can see the point typically, not going to work out like that they just you, don't see it sequence. 1 1 1, it just typically, doesn't happen it will from time to time it's just not super common, the. Next candle what does it do it creates a higher, candle. Body low it resets. The count the, low of that candle, body you're probably asking why that's important, well think back to the confirming, candle rules we have a rule that says it needs to close below the, body of the previous candle, so, the lower the previous, candle, to me the lower the the. Low of the candle, body the previous candle body is important, to me for that, aspect, so, each time we're stepping up we are resetting, the count this could be the new number one candle. Now. Let me show you a little bit of a reset where it goes 1 2 1 and. That, would look something like this. It's. Gonna get a little complicated, here. Now. We got to invalidate the setup because that would be a confirmation. So. I'll invalidate, it now it's not closing and it's lower 1/3, so that's not a valid confirmation. So. At that point what you'd have is you'd have a number 2 candle, so, then in order, to get a reset. The. Next one could technically. Confirm, down that's a possibility, you could get a confirmation off, that but what we're walking through here, is we're, walking through kind of an extended, version of this whole process so, I'm dragging it out longer than you, probably would see. So. What we have here is let's, say the second candle comes up and then you get another candle, here so, what you'd have is you'd have, candle, number 3, but. Then this one right here would reset, the count why. Would that reset, the count, well. That resets, the count because it, produces. A higher, candle. Body low, as. Compared. To the highest low at this point right now that is the highest, candle.
Body Low does. That make a higher low note it's lower does. That make a higher low nope lower, that. One does, so. You'll notice how each of these black lines is stepping, up as I'm drawing it at the bottom of that candle, body and that's, resetting. The count now. This. Process can't contain, indefinitely, it can't continue indefinitely because, you're. Gonna blow through and then maybe two candles consecutively, open and close or, you. Know as maybe, we draw out here you, have this candle over here which produces, a confirmation. And at. That point now you have candle number two, which. Is a valid confirming, candle all right so. Now you have a valid entry off of that and. Stop-loss. Goes. Five. Pips above the high five. Pips above the high of the stopper on the candle, that produced the highest stop, run at this point. This. Is just a quick overview of candle, count guys I would encourage you to ask questions I'd encourage you to you know shoot me an email questions. Cover, this video a few times I don't think I had anything else here let's see you might go to the, chart after this no. I don't think so alright any question, do you want me to cover, see. A bunch of comments but no. Questions, if there are any questions, I might have missed one, do. You enter before that bearish oh here's a question do you enter before that bearish, bar closed, no, so what the confirming, candle needs to be closed because we, don't know where this thing is gonna close right this. It, could rally down then the last ten seconds, they could shoot back up and, and close right here and be all wick so. We let, the confirming, candle, close and, then on the next candle, on the pull, back we take the entry when it gets to within 15, pips of the stop run hi. Okay. Wendy. Ask questions yeah if you gotta me feel free to shoot, okay. Let's go, into and I haven't done this so, it's. Gonna be a little experiment, going over the computer let's see if this works. Alright let's try this do you guys still have you, can help me out and let me know if you can still see. The. Screen that would be awesome I would. Appreciate it and. Well. What we'll do here is. What. We'll do here is we'll walk through just a few entries so number one what, I'll start with is and. You. Guys still have sound right all good ok cool so. We'll. Start with here, let's just go with the let's. Say euro dollar and the, euro here, was one, of our pretty selected points let's start with the level selection process, I'm gonna go out to a 4-hour chart I'm. Only going out to a 4-hour chart even go to an hourly I'm just going out to a wider timeframe chart chart, to show you. What. Else is around. What, else was around that level so this, was the the manipulation, point that we had selected I'll walk through some basics, here, so. This why, did we select this manipulation, point maybe it'll help if I go out to the 4-hour chart, so. I had this high selected, and I will zoom in closer here in just a second just bear. With me here for a second I had, this high selected, because there is no other level back here so to me anybody. That, was long or sorry anybody that was short through. This entire, rise, the. One thing that I can say for certain is if this high goes there, under water anytime. I have a higher a low, that puts a good chunk of the market on your water which we're going to give you plenty more examples, here in just a second that's, always going to be a point where I'm expecting. There to be liquidity. So. Then all of that confirmation stuff, I talked about goes off the 15-minute, chart. Yeah. I can. Walk through that it'd just be like a 10 hour video so the actual course is 13. Videos and, it's, spread out over I think 9 hours so try, to try to do that on Facebook. Where I or, YouTube, where I keep everything in, my head at the time that's why it's kind of hard to do, as. Far as that goes but that's kind of the point of this video series, I'm trying to do that for those of you guys that are not members of the service I want to give. You some insight so you can start making some progress and you're trading so. Going back to that level here here's what it looks like on the 15-minute, chart remember, this is where it formed, I don't know where our arrow went but. The. Bottom line is that's where it was formed, as I. Illustrated, in the second video I'd go as close to that candle, body as I can without going into it and then. I look for the stop run did, we get a stop run, here. No. You didn't have a break by three pips so until, we brake by three pips, this is another beautiful aspect, of the strategy you, can set up alerts and there's no need to stare at the charts one of the biggest benefits to the strategy, that trait for somebody that that works, full-time which, I would encourage while learning to trade and.
It. Allows you to kind of it, allows you to not, have to sit there and stare at the chart all day long so. We come back through and finally. On the 17th. We. Actually get the break of that level so we start with the mechanics, we just walk through number, one do you get a three pet break of that level this is again the euro dollar, 15-minute. Chart April. 17th. The. End of this box is the European, session by the way guys so this was coming into this high right around right. Around 4:30. A.m., Eastern. Time this. By the way this block is New York just, for a reference the bigger wider blocks are Asia 5:00 p.m. to 2:00 a.m. the. Smaller skinnier, blocks are from 8:00 a.m. Eastern to, noon, 12:30. Right around there so. Anyways comes into the level creates, the break breaks, by over three pips we. Get a break of that level that initiates. The stop run the, following candle, produces, the confirmation, of the downside. That. Confirmation, has, two rules does it number one close below the body the previous candle, yes number, two does. This candle and you guys can see my cursor I hope number. Two does it close in the, lower 1/3, well if you measure that it, very clearly does close in that lower 1/3, you. Have a beautiful entry at that point runs off it's a relatively low stress trade this was you, know two days back we, go over to the euro yen it was a very similar situation on, the euro yen we had another, nice beautiful setup from this great. Level, the level was 120. 677. I believe let me zoom out to show you why it was a solid level. Major. Overall, high is, essentially. What we were working off of this, high here, which pretty, much correlates, to the previous highs, anybody. Short, through. This range. Anybody. Short through this range I'm not expecting, there to be a lot of liquidity coming, from down here it's not really what I care about I don't care where it comes from I just know this overall hi anybody, on the short side of the market is underwater, should, that high start to go anybody. That is short should that high start to go is underwater it also makes for a good breakout, point to the upside so. When you have these levels, that are there's there's nothing else around it you got to put yourself in the perspective of. Really. The main thing we're looking at is. All. This, trading that occurred for multiple days through here right all, this trading that occurs through, this period of time that's. Probably, the majority of the liquidity that liquidity, that's getting stopped out or that's getting induced. By that false, break of that level but. Anybody short, through this price action that high is really, the last high you have to choose from, nothing.
Is More pervasive nothing, is more used nothing is more focused, on than previous turning points in the market that's why they attract liquidity, so well but, you need to know which ones to go to this. Is a great example of one to go to because. There's not another, choice beyond, it if there's not another choice than, anybody, on the short side of the market this becomes a damn good location, for stops. To be placed beyond it, becomes a prime location, for the. Market to come up create. The false break into that level before rejecting, back out the other way we. Use what we term is a confirming, entry as we've discussed many times here today so, on the 17th, same, situation, comes in breaks the, next candle resets, the count and becomes the new number one candle, because it creates a higher, candle, body low, the. Following candle confirms, down produces. A valid confirmation. We. Were already well within the entry zone at that point the high got, you got back to within 7 pips of the high so you. Were well within the entry zone technically, on this I'm not going to over complicate, things but if you remember, and you're following the daily market preview, you'll know we had a 16 pip stop max on the euro yen there's, other ways we decrease, and increase stop size but it's, a very it's. Just too hard to cover in one simple video guys. So. Really nice setup there I mean the dollar cad had a couple beautiful setups, here the dollar cad same exact principle, let's. Go out to the hourly or the four-hour chart just to show you the wider range and I'm not picking the four hour because the four hour special, or anything like that I'm just zooming out to show you some wider levels. By. The way guys the four levels you see here four levels I had from the daily market preview. For. A couple days in a row actually because not not a whole lot changed, as we sat in this range but on the, I, think it was the 16th, so, the day before a couple of those other setups, and, actually. Let me illustrate the, level the, level we were working from specifically. That got the setup was this high here, same, exact principle, as every other one anybody, short, through this range the one thing I can say for certain is if that high goes there underwater so. Anytime. I have an area that puts one side of the market underwater that's always going to be a manipulation, point for me I shouldn't say always but the vast majority at a time that's going to be a manipulation, point for me now. Let's go into the 15-minute, chart so, we can see the actual stop run itself the stop run started, on the 16th, or, initiated. On the 16th. Came. Into the level created, the break next, candle resets, the count next, candle confirms down that closed in the lower 1/3 by about a tenth of a pip so. Closing the lower 1/3, at that point and provide. The pullback beautiful. Entry, same. Situation, here at the lows we, have this beautiful stop, run of the lows I did, not get this entry, 3287. Was, the level that was another level these were these were pre-selected like. Days. In advance I'm not exaggerating. When I say days, I mean these levels sat there for days so. You, knew the level days in advance comes, down gets the stop run confirms. Up but the unfortunate part about this setup which is why I missed it personally, is that. You only pulled back to about to about 15 and 8/10, away from the low I was looking for the bid price to hit 15 pips from the low as we do with a standard, entry I missed it unfortunately. By a few tenths of a pip and it ran off the. Other. Factor. Here, that's, kind of a little bit more complicated aspect. Of the discussion, but. Anyways, hopefully. This walks through it guys that walks through some of the basics, for you now, if. You have any questions, I'd be happy to field any questions as they come in the. Comments. Are a little bit delayed but I'll probably get back in front of the whiteboard if there are any questions.
That. You guys would like to walk through life. For. The comment from YouTube in, regards, to the. Question of can you walk through this full, analysis, A to Z if, you're interested in learning this strategy, obviously all, there's a ton of free information on YouTube there's the bank trading course actually on the site, and. All the continuing, education that comes with that there's a lot of avenues you can hit and then also you, know you're always welcome to shoot me an email support, at day trading forex live.com. Happy. To get back with any of you guys on that give, you a little more analysis, as to, what. We're doing here and in what we're looking at moving, forward but the point one, of the final points I'd make is that when you're whenever you're learning. Whenever. You're in the process of learning whatever, strategy, you choose to learn guys a course. Is not going to be enough and I'm saying that after, 14, years, of trading, having. Run day trading Forex live for the better part of a decade probably. Haven't spoken to over. A hundred thousand traders I mean five thousand alone being members of day trading Forex live, you're. Not gonna learn it overnight and you're not gonna learn it with just a course whatever strategy. You guys decide, to learn make. Sure there's a really, well detailed, course but number two if the educator, is not willing to prove that what he or she is doing if, they're, not willing to prove that live if they're not willing to. Get. On the mic in advance and say this is my trade then, there's a reason, they're doing that 99. Or probably 95 percent of educators, in this market are not traders, you need to be careful it's two very simple rules check the reviews make. Sure they do it live if they don't do both of those things well. There. For there's probably some issues with that educator, so I say that because not, all you guys are gonna like this strategy, you're gonna like other things not. All you guys are like me you might think you don't want to look at my face you know I don't, know what it is but. The point being is you you. Got to have an education that has. The, application, phase somebody's. Showing you how to take what's in the course and apply, it to the market. All. Right let's see here, using the 200 so a couple questions came in yeah. I'm happy too. Happy. To help. Glad, you're enjoying the information, life, let's. See here, are you using the 200, moving average as the, first line, of support, in resistance or just, a direction, of the market so the way I use that and I'd encourage you to go back to the last video we did on the selection, of manipulation, points because remember you, got to select the manipulation, point first and then you wait for the stop run of that point right so. If you're if, you're getting the stop run at that point and, I'll, turn back around here and talk to you guys but, if you're if. You're getting, our. Number 1 you've selected the manipulation, point that's that's where it starts that's why I said go back to that video but. The, 200, moving average and I use the EMA, versus the SMA, I know the SMA is more well, used if, you look at different. TV programs and, they're pulling up stocks a lot, of times you'll see the 200 SMA. I know, that but. I prefer the EMA that's just based on my decade, of trading, my personal, experience, I'm not saying like I have, all this experience I'm saying based on my time trading, that's. What I've found to be the most accurate the EMA, puts more weight on the. More, recent price action that's, why it always made sense to me but, I don't use it as a directional, bias I use it as a supporting.
Factor, For, this so. If I've identified the. Way that comes up in a real world situation is, maybe, maybe. Of a weaker, manipulation, point right maybe, for some reason or another it's, it's a weaker level and you're. Going back and forth on whether. Not you should choose that level, as a manipulation, point and. You're, just not sure if you should choose it there's not a you know it's just over minimum criteria, there wasn't a huge. Bounce off that level whatever it might be but, it also happens, to line up with say. The. 200, EMA so. Now you have a little bit of supporting, factor behind this remember, we're looking at all these areas whether. You're talking about a major fib retracement. S1r. One daily. Pivot which. Is really all I'd care about with four pivots all. These areas psychological. Barriers like round numbers one spot mm. One spot 2100. Or yen crosses 110. 111 112. All. Those factors, what they're doing is we're. Just trying to use really, commonly. Use things to. Identify, where traders, might be buying or selling because. If you know where traders might be buying or selling then, you know where the liquidity is if you know where the liquidity is you know where smart money is gonna go to get that liquidity and then, if you see them go actually take the liquidity, with the stop run now, you have a very good indication, of the next short-term direction, in the market because, if they're going to get the liquidity and they're selling into the buying pressure the market is probably not going up the markets more than likely going down now, something could change that and news could come out something, could change that but for the most part, you. Know you you're. In line with the next short-term direction, and and, here's the thing is you win 50%, of those trades with a two-to-one reward, risk ratio, you're gonna be doing very very well. Do. You look on the daily weekly or monthly uh for, me it's mainly daily or it's all daily and remember. Especially, for fibs, and pivots, especially. Those two factors people are their. Staunch, followings. Along those even. Among the quote unquote, professional. Professional. Side of trading they're very well used that's why they attract liquidity. But. Be. Very careful in trying to use them as a standalone, manipulation. Point in my opinion nothing, attracts, liquidity, like a previous, turning point in the market, and then, a previous, turning point in the market that is properly. Identified, you know what else is around it has it had a large enough balance has, there been enough accumulation. After it formed four there'd, be any liquidity, at that level you, know all those are things that go into it but it revolves, around the previous turning-point any. Of those other factors mentioned in the previous video on selection, of manipulation, points is what, I term is a supporting, factor so don't use it as a standalone, use.
It As something to support a, level, that already had a reason, for being there so you, know whatever wherever, that market, came in and then produced, a. 30%. Of the ADR run off of that level. It. At the very least but again if it's a weak level you get a little bit of support from that maybe this lines up with a sixty one point eight on the, last major move that you've had so, you get a little bit more influence with there being a major fib retracement, there it's. A point of support, it's not a standalone, manipulation. Point. All. Right how long have I been running my mouth here. Probably. A while I, don't. Know I'm sure the time is somewhere but I don't. Know so anyways, guys let's, see. It's wrap this up sober I don't know how you can start motivated, to help 299 I. Mean. I love this business guys I I'm 32. Years old, and I've. Never worked for anybody in my life you know I'm not sitting on ten million dollars, I'll I'm totally honest, about that you don't see me driving a Lambo. And and, you. Know I don't live in a mansion the one thing I have done though is I'm 32, and I make a damn good living, from the forex market, and I, don't work for anybody and I, work right here from my home stay. Home do, whatever the heck I want go golfing, during the day. You. Know when. You get e-mails back from people where they're like sterling you've changed my life on three, years into trading there's one lady we know probably one of our best traders, she just trades gold but she just did over three mil so. When. I when, you get you. Know you get comments like that and then, number two I don't, know if I'd beat profitable, if it wasn't for ten you know that guy had I mean, I'm like scared to think if I would never have met that guy because, what. Would I be doing I met him when I was like 19 you know what, would I be doing the family business, was blueberries. Or drywalling, or a machine shop all things I didn't want to do so. When. I put it in that perspective I loved doing this I mean I loved the education, process and the other thing is trading, is pretty darn boring so to have a group of really cool guys that you can chat with you. Know you can provide feedback too it's just it's, just kind of nice to have a community, feel as well which is what I try to do with the bank, trading strategy, as well as the bank trading forum. Where. We teach it where the course is where there's a live chat box people can talk about setups. They can post in the forum I run a live room twice a week you see me talk, for a couple hours go over set ups take live set ups if they're setting up at the time and, you. Know that community, feel it's, huge for me it's just it's a benefit to me i reinforce, to myself day, after day what it takes to be a profitable, trader and what I shouldn't do so, you. Know there is a lot of benefit to the educator, as well. What's. The percentage of time what percentage of the time does the price break, those levels, compared, to when they don't break. You. Know I could come up with a random number here but it would be a guess and the. Point the, the reason, that doesn't matter to me at all is. Because when we draw a manipulation, point what we're saying like whatever. Formed. For us to draw the level, here at whatever price point whatever pair you're you want to envision here, on on this setup the. Weather. This level breaks or not is, not. Really why I had it drawn there I had it drawn there because I expect, there it'll be liquidity, around, this, area. So. The confirmation. And it's. Really important to understand we're, not saying, we, expect, the market to turn there if the market comes back into this when I have a manipulation, point drawn I am, in no way shape or form saying, I expect, the market to turn from that point but. What I am saying is if we see a stop, run. Of that level. Okay. Now I expect, it to turn the other way let's sorry I stopped run followed by a confirmation. To the downside okay, now I expect, it to turn, but. It's just, as much an illustration, of the strategy, doing, its job, when. A level doesn't, hold it is just as much an illustration of the strategy doing its job when, you don't set up, so.
When The market just continues, to. Push. To the upside never. Producing, a setup this. Is exactly, what you want to see it's, exactly, what you want to see because of you two got this set up you two lost right, so. That's. Another aspect with. With. Any entry, strategy, is the strategies, ability. To keep you out of bad trades. It. Kind of goes back to I, posted, a video at hell I don't really know where this is but I talked, about oh is the 20 train 20, trade challenge, article, but, I reference, a video. It's, called floored, it's about a bunch of floor traders, and kind. Of their struggles, when the computers, came in how, the pits have changed, and all that but. One of the guys. He's. Retired now and he said you know I never made the most amount of money I plenty. Of guys made more than me I never had the big days but. I lost less. Than them and then he goes on to say it's really not about what you make it's about what you don't lose and, that. Is such an important, point because it's, not about necessarily, just. The profitable, setups getting a stop run short long, getting a profitable, setup it's about the times that this level isn't going, to hold the. Times were yeah maybe you did identify, a liquidity point, what. Smart money doesn't have an interest in selling from that level maybe they want to sell from an upper point that's, why we got to wait for that confirmation, and, that's, why the, level breaking, without producing a set up is just. As much an illustration, of the strategy, doing its job as is. A confirmation, down when, there's gonna be a profitable set up so, hopefully that makes sense. All. Right guys I'm gonna wrap it up if you have any other questions, you can shoot me an email support, at day trading Forex live, come or check out the site I got a ton of videos articles, on the site, you. Can check out the bank trading course what's included in that and whatever. Else you guys want to look at there's just a there's a bunch information, also you. Don't see all the videos check out YouTube ton information, on that and be sure to LIKE the video subscribe. So, you can see the next one I'm not sure how these alerts go out to you guys for, the next live video this whole live process is kind of new to me but I hope you're enjoying them and I'll.
Be Back for the next one I think when the next one I'm. Not quite sure what I'm going to cover so if you have any suggestions, on that I think I kind of want to get into, some, trade management, ideas and. You. Know some other things along those lines that are going to be really useful position. Sizing. Different. Things like that so we'll. Be back for the next one and I, hope you guys enjoyed this video until. Then happy trading.