Beginners Guide To Forex Trading In 2025 (+3 hours)

Look, the way that most people start learning how to trade is the reason why 90% of them fail. A quick Internet search or trading content will throw up endless technical patterns claiming to be the secret key to unlock on how to profit on the market. But geometric shapes cannot explain why price moves. You must understand the true market mechanics of how those prices are formed. Otherwise without the right foundation you will waste years not making any money. Until you either realize this or or you give up wasting all of your potential. And no other beginner video will show you what I am about to if you've clicked on this video, you already likely know that trading gives you the potential to generate money with just a click of a button. Trading is undeniably one of the best ways to make money online. You don't have to pay any expensive rent for a store, you don't have to create any products. You don't have any difficult customers to deal with. And it gives you the location, freedom to trade from the comfort of your own home. And now with a range of prop firms offering traders access to millions in capital with 90% profit splits, it's literally never been easier for everyday people to get in the game. There are a bunch of 20 year olds taking advantage of it to get paid as much as doctor but more about that in just a minute. Because you see, there is a catch. The trading world is a very confusing space. There is a lot of noise and it's hard to figure out who is real and who isn't. We literally have the blind leading the blind. And with the wrong guidance you will go around in endless circles losing your hard earned money, wasting your precious time and ending up so confused you won't know your ass from your elbow. Now I'm just a bloke on the Internet sitting in front of the camera talking into a microphone. So this is the part where I'm supposed to give you a little appeal to authority. My name is Matt Dunleavy and I am the founder of Photon Trading. And we help traders get consistently profitable using the power of systematic strategies. And here is just a tiny snapshot of the results from just some of our students acquiring funded capital and banking their first ever payouts using the exact method I'm about to teach you. Not just one trade, not just luck, but an entire system based on real market logic. And that is what I'm going to show you in this video today. And I'm not just going to show you what to do, I'm actually going to prove to you why it works. Because in my Experience. And from what I have seen, it's only once you have that true understanding that you will be able to execute flawlessly. That is required for long term consistent profitability. And I will be 100% transparent with you. Trading is hard. Most people don't make money consistently. And just because some of our students got these results, it doesn't mean you will. I cannot guarantee that you will get the results like our highest performing students. But what I can guarantee is that these are the results of others who are using the systematic strategy based on real market logic. Like Dom here, who was about to give up and he was going around in circles for five years. And then once he developed that understanding and implemented the systematic strategy, he had multiple five figure payouts, he qualified for the FTMO scaling plan and he reached the FTMO worldwide leaderboard. And then Hugo before was crying frustrated, losing money. And then after eight months, he secured $500,000 in funding, he had multiple five figures in payouts, he had a 71% win rate with an average of 3R returns. And we also have Ariel, who had tried multiple other strategies, just going nowhere, getting no results. But then after implementing this, he secured 200k in funding and had almost $9,000 in payouts from just two weeks of trading. And for everything that I'm going to show you guys today, I want you to know that I'm speaking from experience. I started my career as an analyst on a commodities futures trading desk almost about a decade ago now. And I have vast experience trading many different strategies. But it was only once I understood the true underlying market dynamics and I implemented a systematic strategy based on those that I experienced consistent success. And witness firsthand the impact that that has had on the thousands of students we have now had the pleasure of working with. And that entire system based on real market logic is what I'm going to show you today. I'm going to give you everything that you need and nothing that you don't. Now this is not going to be just some high level montage, you know, just to spike your dopamine with perfect little trade examples tricking you into thinking that you've actually achieved something because you're never then going to be able to actually apply it in reality. So today I'm going to make sure that you can close this gap between where you are and your true potential so that you can start making real progress. Now, trading is bloody hard, but it can be simple. And there are three things that make up successful trading. You need to have a profitable strategy. You need to have strict money management and you need to have the mindset to execute your rules consistently. And today I'm going to give you everything for those three parts. So we're going to go deep today and we're going to cover a lot. First we're going to lay the foundations of what actually is FX trading. How much money can you make accessing capital market mechanics so how the market really moves? We're going to look at market microstructure, auction, market theory, order flow. Then we're going to hop on the charts and do the juicy technical analysis looking at market structure, institutional supply and demand liquidity concepts. Then we're going to put it all together into one cohesive strategy with entries and trade management. Then we're going to dive deep into money management, how you actually trade an edge. So this is where we look at the essential but pretty basic trading math that you need. Creating your first trade plan, backtesting brokers, trade execution software tools, journaling and trading psychology. And I'm going to break down every step to scaling from zero to consistently profitable from experience, not theory. And most importantly, I'm going to put all of this information into an actionable plan so you can start your trading journey today and make consistent progress. Now as you can probably tell by the length of this video, we are going to cover a lot today. But you know, I can only go into so much detail so I put together a free training here. It's an intensive 10 part video course. There is so much source in here that's completely free, no strings attached. Okay, you can see everything that we cover within here and you can even see that one of our members had originally gone through this and they passed their funding challenge just from this alone before then deciding to join us. Okay, so if you look in the description of the video, there'll be a link in there for you to get this. Okay, so let's kick things off with the basics. What actually is forex trading? Now to know that we need to know what the actual forex market is. And it is a global marketplace in which a nation's currency is traded for that of another at a mutually agreed rate. Okay, so we have people like us, retail traders and investors, got banks, hedge funds, institutions as well as commercials companies who need to exchange one currency for another and that makes up the market. Now if you've seen one of these before, lucky you've gone on holiday or seen this in an airport, this is where you can exchange your currency for another. So if you've ever flown, say From Italy to Europe, you're going to change your US Dollars into Euros. So with forex trading, currencies are always traded in pairs. So you buy one currency while selling another and you aim it to profit from that difference in the exchange rate. Right? So buy low and sell high. Pretty simple, right? Now, while there are obviously a ton of currencies all over the world, we recommend that you focus on the major eight currencies here. Now, currency symbols always have three letters and generally the first two letters represent the country's name. So here we can see New Zealand and then the last letter is the name of the currency. So in this case, dollar. Now, a lot of the other currencies are called exotics, such as, say, the South African rand. But typically we don't look to trade these because they are not as liquid and have higher trading costs. Now, individual currencies, they do not have an absolute value, which is why we always price them against another currency. So we are always trading them as currency pairs. Now, in this case, we have the Australian dollar versus the US dollar. And, and we would just call this pair Aussie dollar, right? Now, if you wanted to buy this in trader talk, that's called getting long. Okay? So if you were to buy the pair Aussie dollar, what you are actually doing is you are selling your Australian dollars and buying Australian dollars with them. Okay? So you buy Australian dollars and you're selling US dollars. Now, it's a bit confusing. In reality, it's really simple. On your brokerage platform, which I'll show you later, you literally just hit buy or sell and the broker takes care of that. Simultaneous buying and selling for you. Okay? Now the opposite would be if you wanted to sell that, in trader talk, we call it getting short. Okay? And what you'd be doing is you'd be selling your Australian dollars to buy US dollars. So you would do that if you think the Australian dollar is going to weaken compared to the US dollar. Right. A bit of other trader talk here is bullish and bearish, okay? So if you're bullish, certainly you think something's going up and if you're bearish, you think it's going down. Bit of a silly way. I was taught to try and remember that when you're first learning, it is bulls attack upwards with their, with their horns, whatever you call them, and bears swipe down with their paws. It's a bit ridiculous, but it can help you potentially to remember that at the start. But like I said here, this is what your brokerage platform will look like with just simple buy and sell buttons and they take care of it for you. So when you take those eight major world currencies, you can make 28 currency pairs of those. But we recommend focusing on all of the ones with the US dollar in them. They are the eight major pairs as those are the most highly traded and liquid pairs. Now when you look at a Forex quote, you will see for instance pound versus dollar, it will give you the number 1.3035, for instance. And essentially you have the base currency, which is the pound, and US dollar is the quote currency. Okay? And essentially what that means is for every pound is worth 1.3035. Now again, if we get long pound, dollar, what we're trying to do is buy low and sell that high and profit the difference. And if we were to short that pair, it would be the exact opposite. So where can we actually go and trade fx? Well, there are two main markets that people use for speculating currencies. We have the spot market and the futures market. The sport market is what I trade in and what we're going to be going through today. And this is what's called over the counter. Okay? It's decentralized. There isn't actually one major exchange where all this goes through. It's a decentralized electronics communications network of brokers, dealers and banks. If you compare that to say the futures market, which is a bit more simple to understand in terms of this, where you have one central exchange. So for instance, the Chicago Mercantile Exchange cme, all of the trading goes through that a bit like the stock exchange, okay. And that is what is centralized. Now this is quite important to know a bit later when we go through some stuff. So we'll revisit then. Now the Forex spot market is open 24 hours, five days a week. And the only market to eclipse this at the moment is the crypto market, which is open 24 7. So yeah, you guys who trade that are absolutely nuts. So the trading day in the FX market starts over in the east, over in Australia, then opens in Tokyo, then we get the London open and then all the way to last the day in New York. Now the bulk of the volume in most of the FX pairs goes through the European session and, and the American session. Okay, so the trading day starts over in east where first opens up in Australia, then Tokyo, and then as we move up into Europe and then the American sessions, that's where typically the bulk of the volume tends to occur on most of the pairs. And you see the biggest Moves. But we'll touch a bit more on this later. And here you can see that the FX market is the most liquid market in the world with a staggering trade volume of nearly $8 trillion a day. So the three main benefits of trading the FX market is it's highly liquid, which allows us to have cheap transaction costs, minimal slippage, and there is a lot of capacity to scale your trading here. It's a 24 hour market, so there's opportunity around the clock to take advantage of it. And there's high leverage in the SpotFX market, which gives you increasing access to capital. Now, we're going to dive into these in a lot more depth if you're not entirely sure what they are just yet. So don't worry, I've got you covered. Now, the two major questions on every beginner's mind when you're getting into trading is how much money can you make and how do I make that money trading fx? So let's dive into that. The profit potential in trading is made up of two factors, your individual skill set and the size of your trading account balance. Okay? So you should spend 100% of your time focusing on improving your individual skill set, and the capital will then find you and you will enjoy increased trading returns as a result. And the output of this equation is practically unlimited. Let me explain. Trading returns are measured as a percentage of your account size, okay? So whenever you make a return in the amount of dollars or pounds or whatever you are trading, you always then measure that as a percentage of the size of your account balance. So here you can see, if you made a $500 profit and you had a ten thousand dollar account, that would represent a 5% return, okay? And as you can see here, as you have increasing account sizes, the same return equates to a bigger difference in profit. Okay? So for two traders, if they both make 5%, the difference between making a $500 profit or a $50,000 profit, the only difference is simply your account size. Okay? So this is why at the start you just need to put all of your effort into focusing on the skill set, right? Not how much money you're making straight away, but the skill set. Because then once you get access to those larger accounts, you, you're going to produce those larger profits with that skillset that you have built. Now, trading is the most scalable business model on earth. Okay? So let's look at this example. Let's say you start off with a hundred thousand dollars account and you make 6% profit every single month. Now, in the first month, that is going to equate to a $6,000 profit. Now, in the second month, you made the exact same return in percentage, a 6% return. But you have now brought home more cash, $6,360. Because you are compounding, right, that 6% on a bigger account balance is going to relate to that bigger dollar return. And as you get towards the end, by the end of the year, again, 6% return, the exact same skill, you have now brought in $11,000, 390 in that last month simply from letting your account balance grow. Okay? So return the same percentage every month and you will make more money every month. Now, I have no idea if Albert Einstein actually said this, but the most powerful force in universe is compound interest. Six percent per month is a magic number. Now, six times 12 might only be 72%, but when you compound that each month for a year, that leads to a 100% return. I mean, can you imagine any other investment where you can double your money every year? Right. If you see that you started off with 100 grand, 6% every month, and you have $200,000, so you've literally flipped your account by the end of the year. Now is this possible? Absolutely. But is it probable? No, it's not likely that you are going to make 6% every single month. It's not likely you're going to get consistent profits. It's not likely you're going to make that 100% compounded return. It's possible, but it's statistically extremely unlikely. But do you need to make those returns to change your life? Do you need those returns to make a huge amount of profit in the long run? No. Many beginner traders have this fantasy, right? They jump on our compound interest calculator and they think they're going to be a millionaire within a year or so. But the reality is very different. Okay? Even seasoned, professional, experienced traders are going to spend experience lengths of time where their trading account isn't going anywhere, it's in drawdown, they're experiencing losses. Whilst they have different market conditions that is not conducive to their strategy. Or perhaps they're just not performing as ultimately. But you need to develop this long term mindset and zoom out. You need to remove that 9 to 5 employee mindset. Okay? Don't think in the short term you're not going to be earning a consistent monthly salary. You need to be thinking more like a business judging your results by the end of the quarter, really thinking more about the results at the end of the year, not week to week or month to month. Now look, I am not here to impose limiting beliefs on anyone. But if your beliefs about trading are balanced, realistic and empowering from the start, you will naturally have the greatest probability of success. Why? Because you will make the wrong decisions if your expectations are not aligned with reality. And the reason why I'm drilling this into you from the get go is because I've seen so many traders who literally have a profitable strategy in their hands. They have everything they need, they understand it, but they go through this inevitable slow period of drawdown when market conditions aren't quite there or whatever and they give up, they jump ship, they look for the new strategy because they are not grounded in reality. They think that they have to be profitable every month. They think they need to be profitable every trade. They think that they have to be making 10, 20, 30% every month. And it's ridiculous. And they end up going nowhere and being completely disillusioned when actually if they just had those balanced, realistic and empowering beliefs from the get go, even though they don't need to make 100% if it's possible, they don't need to, right, to actually make a very, very profitable career from this. That's my job here today, to try and help you neutralize those fantasies and be completely, you know, within the realities of what training is going to take. Because the potential is here, okay? Once you develop that skillset and you have that large capital, you can start bringing home significant returns. You know, all of you are capable of making 20% in a year. Okay? If you got a million dollars, you, that leads to $200,000 in P and L. Cool. But what if I don't have that large capital yet? That's completely fair. And this is where prop firms come in and they will provide you with capital and a share of any profits that you make as long as you stick within their strict risk limit. So generally how this process works is you will go through a challenge, okay, where you'll need to, say, hit a 10% target and obviously do it within those risk limits. If you do that, there will usually be a second phase which is the verification and which will have slightly easier targets to make sure, you know, you didn't just kind of fluke that first attempt. If you pass that, they will then award you with simulated funding where you will then split any profits that you make. Now, FTMO is one of the leading firms, as of the date of recording, you can have up to starting capital of $400,000 now let's say you make a 20% return, that is going to equate to 8,80,000 gross profit. If you do your 80% profit split, that is going to lead to you taking 64,000 net dollars profit home. Okay? Now the median US salary is around $59,000. In the UK it's a lot less, around 45,000. So you can see straight away the opportunity that is available here from just one firm alone, okay? They also have scaling plans where if within a 4 month period you have a 10% return, they will increase your account size by 100k, increase your profit split to 90% and all the way up to having 2 million in funding. And again, that's just one firm and this opportunity is real. Here is one of our members. They got their first ever profit split and they ended up making a 28% return. Okay? It's an outsized return, but these are possible. And if you do these on these funded accounts, that's going to equate to a juicy profit split. Likewise, we had another guy here, had the first ever payout after joining us, nearly $10,000 and also Cornell who joined us and within two months he also banked his first ever profit profit split. So again, if your beliefs about training are balanced, realistic and empowering, you will naturally have the greatest probability of success. The opportunity is there. But make sure you're approaching this with the right mindset and this is what we help our members do, okay? A lot of people put this funding, this opportunity up on a pedestal and they think it's just going to completely change their life. And whilst that's true, you need to go in with your eyes wide open, okay? There are plenty of drawbacks to everything in life and here's just some of the drawbacks that prop firms have. Okay? I'm not going to go through all of them, but just be aware they are a great opportunity and they are a tool. They are not the be all and end all, okay? And this is why I recommend no matter how much capital you have, is that you actually start with a personal account. Here is where you can build your long term track record, okay? Put in there what you can afford to lose. Of course, then once you're proving profitability, use prop firms to extract capital from them and put them into your personal account to build that. If you've got a salary from a job, you know, business side, hustle any disposal income from that. Add that to your personal account now as you build that track record over the coming years. And if you're truly serious about this, you don't have to do this, but if you want to, you can look to open your own fund and manage capital directly. Just be aware that this is a big, big step. Okay? There's a lot involved with that. You know, legal, big, big cost. Right. But you can have long term goal. Obviously this is beyond the scope of a beginner training video, but something to potentially aim towards. I want to wrap up this section all about how much money you can make. I was just focusing on your developing your own skill set. You must become the asset. Once you have proven that you are worthy to handle capital, that capital will find you one way or another. So cool. We've looked at how much money you can make. We're excited, but our expectations are balanced, realistic and empowering. Right. Now let's look at how you can actually make that money. So as we saw earlier, the whole aim of the game is to buy low and sell high, or sell high and buy low. Pretty simple, right? But how do we know when a currency pair is over or undervalued? Well, there's loads of ways. You can kind of categorize strategies, but probably at the highest level is either whether it's a technical strategy or a fundamental strategy or a hybrid of both. Now, with fundamental analysis, this is what kind of most people outside of trading think everyone is doing, which is looking at essentially looking at the real world, right? You're looking at data, interest rates, employment rates, gdp, sales, you know, industrial production numbers, inflation. There's a lot involved with this. Okay. And the main reason as to why I don't look at this is because there are two types of strategies that you can also put them into buckets. One is what's called discretionary trading and one is mechanical trading. Now discretionary trading is decision based trading. Okay. So when you're doing analysis, whatever process you have, you're going to go through looking at all of this information to then come to a decision of whether or not you're going to execute that trade. Right? With a discretionary strategy, you're kind of just doing it based on your own judgment, own market conditions. You're kind of looking at random things each time and then you're making a gut decision on what you think is right or wrong and then making that decision. The exact opposite of that is a mechanical rules based system, right? Where it literally tells you what to do in every scenario. So something happens. Does it meet the criteria? No, don't do anything. If it does, move on to the next criteria. What? Right. And Then it will tell you whether or not to execute. Okay? So if something is 100% mechanical, you can literally code it into an algorithm and the computer could execute it for you. Now, with fundamental analysis, okay, if we go back here, this is very, very, very discretionary. It's very hard to make this systematic and make it mechanical. And in my experience, mechanical strategies have a much higher probability of finding long term success. Because what did we look at earlier? Trading simplified three things. You need a profitable strategy. You need to have strict money management and you need to be able to execute those rules consistently. Right? So here's how I simplify trading. Another way to think about it, find a repeatable pattern in the market that you can exploit that makes money over time, okay? That's what positive expectancy means. We're going to cover this in a lot more depth in the trading and edge module later. Okay? So find a repeatable pattern that makes money over time, that has clear rules, so you can execute it consistently, that you can then tweak and refine over time, right? To optimize that profit, to improve it in line with trading market conditions. This is it. This is your job and this is what we're going to go through today. The path to success is finding that systematic strategy, proving that it has a profitable edge with hardcore data. Okay? So you prove it to yourself. That way you will then have that bulletproof mindset to execute it consistently, right? Because when you go through that inevitable losing streak, you, you trust the data, you know your edge, and you execute consistently. You will then have consistent results and then it will be sustainable because you trust in what you're doing in the long run. Therefore, you can start to scale those accounts, rocket, make loads of money, be good, okay? That's the path to success. Consistent actions and anything will lead to your consistent results, okay? In trading, outside of trading. So when we look at those types of strategies, technical or fundamental or a mix of both, I prefer to just focus purely on technical. So what is a technical strategy? What on earth do I mean by that? Well, technical analysis is where we literally look at a price chart and we are spotting those repeatable patterns in price data that's already occurred. And that will give us an indication to help us predict what might happen in the future. Okay? So here's a more simple way to think about it. We look at the price data that's occurred, we will spot these repeatable patterns, these footprints in the market that keep happening, and they will allow us to predict with a degree of probability of, of what May occur in the future to give us that profitable edge over time. Now technical analysis gets a bad reputation, and rightly so. We saw earlier, if you look online, you can see all these ridiculous chart patterns everywhere. But geometric shapes do not explain why price moves. You must understand the market dynamics of how those prices are actually formed if you want to have long term success with this. Before we dive deep into these market dynamics, looking at auction market theory, order flow and the market microstructure, first we need to get a quick basic understanding of how a price chart is put together. So we're going to hop in training View and look at the symbols, the price types, the time frames and candles. So the software that we use for charting is Trading View. Highly recommend using it. It's the best charting software in the world by far. So download a free account now. The first thing you actually want to do is search for symbols. So if you literally just type on the chart and what you can do over here is, is filter those symbols by the market. Obviously we are looking at Forex so we can do that. And these are going to be all the different symbols. So you can search for any pair. For instance, if you want to look for pound dollar and then what it will show you if I type it correctly is the different data feeds. Okay. Remember the Forex spot market is decentralized, right? So there's going to be different data feeds from different providers, from the different brokers. So this is essentially what you'll get here. They're all generally the same. You'll see very, very, very minor differences. Okay, so for instance, let's say we get pound dollar and we use your and the data feed. Now this would just be a simple price line chart. And what we are going to actually look at is what's called candlestick charts. Okay. And I'm going to explain these in depth in a minute. The other thing I want to draw your attention to, okay is time frames. Right. So what you can do over here is pick the interval you are looking at. So at the moment we are looking at a four hour chart. So what that means is each one of these candles represents four hours worth of price. Okay. So this one is currently printing, it started at 10am that will obviously close at 2pm Once 2pm reaches, a new 4 hour candle will print. Okay. And you can go through the daily chart. For instance, each one of these candles represents a day. Cool. So let's dive a little bit deeper into what these candles actually mean. Mean. So each candlestick is made up of four things we have the open, the high, the low and the close. So when you get a bullish candle, okay, price will open up at the start of the candle and it will close for that time period higher than it opened, okay? So obviously prices have gone up. That's going to be bullish. When it closes higher than it opens, then the wicks will be the low of the session and the high of the session, okay? And the opposite is for a bearish candle, where it's going to close lower, but than where it started that time period, okay? So for instance, if you were to look at how this bullish candle formed, right, for that entire time period, whether it's one minute, one hour, one day, it's going to be made up of price action within there, okay? So when the price starts at that level, that is where the candlestick opens. Price might trade down after that time period has opened. That will be the low of the session. This will be the high of the session, obviously, the highest point. And then wherever it closes, that is going to be the body of the candle right between the open and the close, and that's the body of the candle there. Then you get the upper and lower wicks. They literally just represent the high and low of the session, right? The highest point and the lowest point of that time period that it traded. And then that is the entire range of that time period with that candle. And then you get the exact opposite for the bearish candle, which I won't go through. Now, as you start to get this basic understanding of candlesticks and you see price moving there, to the downside, does that bearish move, right? Can we say with 100% certainty, only looking at this chart, that it moved to the downside because there were more sellers than buyers? As you probably guess, it's a little bit of a trick question, but we cannot say that that is the case because price can fall when there are more buyers than. Than sellers. And this is why you need to understand the true underlying market dynamics of what is going on, rather than just looking at these basic candlesticks without that understanding. See, the great thing about candlesticks is it obviously condenses a lot of that price information into a neat and manageable graphic display, which is great and it's useful, but it's the ultimate simplication of the market, right? Yes. We just see that candlestick, but we don't see what actually led to the formation of the candlestick. What was all of the interaction of the buyers and sellers and all of the dynamics of that market Activity that led to that candlestick on a chart. Right. You need to have that understanding. Okay, cool. But what is it that's actually going on beneath the surface that then leads to this price action? Well, as history has repeatedly shown, traders are often a very emotionally charged group. When millions of them get together in a highly emotional money game of fear, greed, and uncertainty, their combined behavior takes on a herd mentality. And we can actually spot this on our price charts and make money off it. How? Well, you've got millions of market participants putting millions of orders through the market for a million different reasons. All of this behavior and participation is what drives the order flow that is put through the market. And that order flow is what prints price action on our charts. And that price action creates patterns. And those patterns consistently repeat themselves if you know what you're looking for. Because those large players in the market, they cannot hide their activity. And if you know how to spot their footprints, then you can follow that money flow. So we know that price compresses all of those complex interactions between buyers and sellers into one single variable. But we need to understand what is the underlying behavior of each of those candles on our charts. So before we learn how to analyze price action, first we must understand the market dynamics of how those prices are formed. Then we can simplify with the correct understanding, because, remember, we want to keep trading simple. We want to identify a repeatable pattern that has a positive expectancy over time with simple mechanical rules that we can follow and then tweak and repeat. So before we simplify it on our price chart, we're going to dive deep underwater, and we're going to look at auction market theory, market microstructure, and order flow. This is the stuff that you are not learning as a beginner trader, but it's crucial to your development. So currency exchange rates are a result of supply and demand in the market. Okay? Buyers bring with them demand, driving upward pressure on prices. And sellers bring supply, driving downward pressure on prices. Now, a very simple thing that you need to get your head around is that no trades can take place unless both a buyer and a seller agree on price. So economics 101, if you've ever taken a class where the supply and demand curves meet, that is where the current price will be okay. And if you get any adjustments in the supply or demand in a market, those prices are going to shift, okay? Where the market then agrees on a new fair price. And that process of supply and demand adjusting the price is going on in the market every single second that it is open and it's the market's job to facilitate that auction, to allow prices to fluctuate to meet those buyers and sellers where supply and demand is in equilibrium. Now, don't worry if you don't understand all of that. We're going to simplify this on the charts. So when you actually look at a price chart, obviously on the right hand side, you will see the price. But what a lot of beginner traders don't realize is that this is not a price you can trade, okay? This is what is called the mid price. So what I'm going to do is I'm going to add the bid and ask lines, okay? And we'll add the labels as well, just to make it nice and clear, okay? And these are the prices that you can actually trade at. So if you see over here on the right hand side, if I was to try and buy this, you have a different price, which is higher, right? You buy at the higher price, the ask price, and you will sell at the bid price, the lower price down here. So, okay, so the prices that you see on the candle is the halfway point between those. Okay, let me explain. So as we just saw, what you see on most candlestick charts is the mid price, right? And then when you go to buy and sell, they are different there. So the bid price is the price at which you sell to the market, okay? So if you wanted to sell, you have to sell to the highest bidder, right? The person who's willing to buy, okay? So if you wanted to sell, you would have to cross, go down, and you'd have to sell at a lower price, a worse price. Right. Than what you saw on your price chart because you're looking at the mid price, which is 106, 112, 4. Okay? But you have to sell down here at the bid price. So you have to cross that spread to the downside. If you want to buy, you have to buy up, all right? You have to buy at the ask price because that's where people are willing to sell. They're asking for this or they're offering to sell it at that level, and you have to buy up there, okay? So the difference between the ask price and the bid price is the spread, okay? And that's basically the cost you pay to enter the market. And we'll cover that in a lot more detail later, okay? So there are essentially three prices at all times. The mid price, halfway between the ask price, which is what you have to buy at, and the bid price, which is what you have to sell at. So essentially markets are two way auctions. And if you were to look below the surface behind all of those price charts on there, you will see what's called the order book. Okay? So on both buy and sell side of liquid instruments, you have lots of orders on both the bids and the offers. So on the left hand side, this is all of the demand at all of those price levels. So if I go back, see the blue box in the middle and that price, that is where the last trade occurred, okay? On the left hand side you've got all of the demand sitting on those price levels below the current mid price. And on the right hand side you have all of the supply sitting there on those higher prices. Now think of it like an auction or like ebay where people are both bidding and offering to sell at different prices, right? And as I said earlier, no trades can take place unless both a buyer and a seller, they have to agree on a price. So to execute an order, it must be paired with an order of equal size, otherwise a trade can't take place. So for instance, at that price level, 1.1535, there is 67 lots sitting there, okay? So if 10 lots was to be sold at that price, there must be someone willing to buy at that price, otherwise nothing will happen, right? You can put your order there to sell 10 lots at that price, but unless someone comes and buys it from you, nothing is going to happen. So there are two types of orders, passive and aggressive. Passive orders are those pending orders that we're just looking at, okay? So this is where you want to buy or sell at a price level that is better than the current price. Okay? So if you want to sell at a better level than price, right. You're going to be selling higher than when price currently is. And if you want to buy at a better price, you're going to want to be buying lower than where price currently is, right? Because you want to buy as cheap as possible and you want to sell as high as possible. So if you want to do that, you put in a limit order and these are pending orders, okay? So a typical way you'd usually use these is if you want price to come down and tag you in, right? You want to buy that lower level or you want to sell at that high level above price. So when you're looking at an order book and you see all of those orders sitting there at those price levels, they are passive orders, okay? They are simply waiting to be here. They're waiting for price to come down to the buy orders or Waiting for price to go up to those sell orders, okay? Now if we only had those passive orders, right, just sitting there in the order book, then the market wouldn't move because all of those orders are waiting to be hit, right? They're waiting for price to come to them. So how does price actually start to move to them? Well, this is where aggressive orders come into play. So aggressive orders are essentially market orders and that is where you will buy immediately at the best current ask price or sell immediately at the best current bid price, right? So remember, if you've got the mid price here and you just want to buy, you just want to enter in the market, you have to go up to that nearest ask price, right? You have to buy higher, okay? So you immediately buy the person who had their resting limit order. You buy up from them. And if you want to sell, you sell down to the bid, the nearest bid, okay? You sell into that nearest buyer. So those are aggressive market orders. So if you're an aggressive trader, right, we can, we just looked at all of these passive orders that are sitting on the bids and the offers, right? They're waiting to be hit. But if you're an aggressive trader and you want to buy at market, you are going to buy at that nearest ask price, right? You're going to lift the offer, buy at the ask. If you want to sell, you're willing to sell at worst price and you sell down into that nearest bid, right? It matches the buy and the seller there. And that's how price is going to start moving through the order book. Now there is a third type of common order called a stop order for those of you who are a bit more experienced. And that is actually where you would have buy orders higher than the current market price. Now as you can see there, there's nothing there in the order book showing higher people buying at higher prices, right? So you might be wondering like what's going on there. And that's because when you place a stop order, a buy stop order above the current price, your broker doesn't actually put that into the market in the order book, they hold onto it. And it's only once price actually reaches there that suddenly your broker will throw it into the market as a market order, okay? And that's why you can get slippage on those. That's a bit more of an advanced thing. Just if you are experienced and you're wondering that, but don't worry about that, we'll get onto this in a minute. So now just realize that pending orders are those limit orders. Sitting there, waiting to be hit. They are passive and the aggressive orders are the ones who are willing to cross that spread and they buy at the ask, they buy higher or they come down and they sell at the bid. Okay? Now in reality, when you're looking at your broker and you want to just get involved in the market with a market order, you will just see the buy and sell buttons here. Okay? So that buy button is showing you the best ask price and that sell button is showing you the best bid price that you can sell into. Now that interplay between those passive and aggressive orders is called order flow. So passive orders, like I said, are those limit orders just resting in the order book, waiting to be hit. Active orders are the market orders executed at the bid and offer. Okay? So passive orders are making liquidity. They are called liquidity makers because you, you are adding liquidity to the order book, whereas active orders are grabbing that liquidity. Right? They're removing it from the order book. Right. Once they hit it, they're eating it up. It's kind of a way to think about it. So passive orders are going to slow down and absorb price movements. Okay? So if you think about like all of the passive bid orders just sitting there, if active sellers are selling into it, those bids are just going to absorb that selling pressure, right? So it slows down if there's a lot of passive bids there. And likewise if there's a lot of passive asks as aggressive buyers are trying to buy into it, there's loads of passive pending orders there, right? They're just going to absorb that price movement and make it slow down or even reverse. Okay, so the aggressive orders are the ones that actually initiate those price movements and start getting price moving up that ladder. So down the depth of market. That is same as what we just looked at on the order book, but it's an easier way to visualize the amount of volume of, of supply and demand at each price level. Okay, so you can see there in the middle, there's not a lot of volume at each of those price levels. So it's quite a small column. And then as we get further out where there's a lot more volume waiting to be hit, you can see those larger or wider columns there, right?

So liquidity is the ease with which a market can be traded without affecting its price. You can see that on the left hand side where I put shallow market, right, there's not a lot of volume. That is what we call lower liquidity. So you know, if there's a lot of selling pressure Coming into the price is going to move pretty quickly, okay? So there's not a lot of depth there. Whereas where there is a lot of depth, it's going to take a lot more volume in order to get price to move. So this is why the definition of liquidity there is the ease with which a market can be traded without price essentially moving. Okay? So let's look at a simplified trade example of why all of this matters and how we can start to think about how we're going to try and take advantage of this. So let's say that this was the order book, the depth of market, okay? And a big trader is coming in and they want to buy 5,000 lots at market, okay? So it's just an aggressive order. It's just going to buy the best possible ask price that there is, okay? It's going to take that liquidity sitting there on the ask. So now you can see that candle, what's going to look like when that 5,000 order goes in and they buy, price is going to rapidly shoot up, okay? Because it's going to literally eat up all of that supply that was sitting there. All of those passive orders, right? If I go back, you can see there's 5000 lots, but there's only 115 lots in the first one, 524, etc. Etc. So it's going to rapidly shoot up until all 5,000 of those lots are filled at the best possible price it can get. But it's just going to keep, keep going up until all 5000 lots are filled and then bang, right? It causes what's called a large demand imbalance, right? That imbalance between supply and demand is what causes those rapid movements. And price has to keep going higher and higher. To do what? To search for that opposing liquidity, right? Demand is stepping in and it needs to try and find as much supply as possible to fill that entire order, okay? And now the market is sitting at that new price of 1.1540. And that is what the new current market price has deemed to be fair value. And we have this big bullish candle forming on our price chart, right? But this is what's going on in the order book beneath those candlestick charts, if you kind of think about it that way. Now that big trader put 5,000 lots in, right? They tried to buy at 153 5, right? That's where we started down here. By the time they get filled all of those lots, their average price is probably quite a bit higher compared to really where they wanted to buy. So they've got filled at a worse price, which isn't ideal. And that's what we call slippage. Right. They want to be in at 153 5, but on average they're probably in that 1 5, 3 8. It's not ideal for them. Institutions cannot hide those large imbalances that they are causing in the market. Okay. And this is going to start to give us an edge in the market of how we can follow this and see their activity. Right. So if you know how to support their footprints on a chart, you can start to trade with their order flow rather than against it. Now if we're not looking at the order book, Right. What does that look like on a candlestick chart? Well, here we can see that kind of price is quite choppy. It's kind of just sideways. It's not really moving too much. Right. The market is what's called balanced. It's where buyers and sellers deem it to be at fair value. They're all quite happy. At some point there's going to be that overwhelming imbalance between supply and demand where aggressive traders are going to lift those offers and there's going to be that imbalance. And then what's happening is there's overwhelming amount of demand compared to supply. So price is going to shoot up until what? Until it can find that supply, that opposing liquidity, Right. Where you've got those pending sell limits or aggressive sellers step in to absorb that demand and then the market will rebalance and then the market has now deemed that to be a new fair value. Price is constantly seeking that liquidity to rebalance price and auction. Market theory explains all of this and explains that the market's purpose is to facilitate that trade in a two sided auction, Right. Between the bids and the offers. And the market participants are constantly seeking value. Right. Whether you're a buyer, you want the best possible low price. And if you're a seller, you ideally want to be selling at the highest price possible. And the market is, you know, acting as an auction to facilitate that process to help pair those buyers with those sellers. So what you'll see is that the market's kind of moving sideways and it will be a balanced market where the market deems it as fair value. This is what we call efficient price action. Now at some point, like we just looked at, demand is going to massively exceed supply or supply is going to exceed demand and there is an imbalance. Okay. And this is where the market is inefficient and it will have to start rapidly moving to do what? To seek that balance, to find that opposing liquidity. And this is when we're in price discovery phase. And you see those rapid movements until what? Until it finds that opposing liquidity and we're at a balanced market. Okay. And that's the cycle that repeats. So how does that look like on a chart where you'll see a range in market? Okay. As it gets into the top of that range, there's kind of more premium prices. That's where sellers start to step in. They'll push price lower. Then the buyers will start to step in at the discount they want to buy lower and price will range. Okay. It's just a standard, relatively chilled market. Think of it that way. Now if we zoom out a little bit, eventually aggressive buyers are going to lift all those offers. We're going to get that big imbalance where price is searching for, where is that supply in the market? Where is that sell side liquidity to satisfy the current demand? Eventually it's going to do that. Okay. And we're going to get one or two things. Either we're going to get acceptance at those new high levels where the market participants agree on these new prices, or it's a failed auction. Okay. And this is where price shoots up, but then we rapidly get an imbalance back down. Buyers cannot sustain that. Those new higher prices. Okay. They fail to agree new prices. And this often happens at reversal points. Right. And we're going to dive into this a lot more in a bit. Okay. But let's just look at the first example where we do get that acceptance and we agree on those new prices. Eventually though, what we're going to get, we're going to get an overwhelming imbalance between supply and demand. It could be to the upside, it could be to the downside. In this case, it was to the downside all of that demand was absorbed and aggressive sellers push price down. Okay. Now what will often happen, but not always, price will then rebalance at a previous level of fair value. Now start to think why that may happen. Because we're going to go to that in a little minute. Eventually, aggressive buyers, in this case, they cause another bullish imbalance. Right? Markets are just for sell side liquidity, rebalance, yada yada yada. I think you can sign together. So we have balanced markets. Then we have imbalanced markets where price is constantly seeking liquidity to rebalance price. So we have an accumulation of orders. We get initiation out of the range. Those orders start to get distributed. Right. As people start to offload their long Positions, sellers start to step in, we get an initiation down accumulation. That's the hype, the heartbeat and the cycle of the market. Okay, where we had the balance market, we get the imbalance, looks for new liquidity, we're balanced again, right? You're starting to see how this is working. And when you look at a price chart, which I'm sure you guys already have, you will see that sustained bullish order flow where price will range. But we're in a bullish market. Buyers are in control. They initiate out balances for a little bit, right? Then they initiate out again. But eventually they'll run out of steam, right? Enough supply will absorb that demand and the sellers will start to take control and initiate that bearish order flow. Okay, so here you can see price rapidly initiates out of the range to the downside, creating a supply zone. And it's likely that this was backed by institutional involvement. Price then pulls back to mitigate the supply zone where we can look to get short to catch the continuation. Now you can see the sustained bearish order flow as supply is clearly in control. But markets obviously don't move in one direction forever. Eventually the market moves low enough to discount prices, where demand then comes into the market to overpower supply. Then we see the sustained bullish order flow. And institutions will defend the last levels that they entered at to keep their running positions in profit. And you know, this isn't just me just making up some bullshit. There is academic papers backing this up of looking at why is equity order flow so persistent in the markets? And there's three main reasons. Okay? One of them is splitting. So this is where when those big players are putting their orders into the market, they will divide those large orders into multiple small orders. The other is herding. Okay, so this is literally other players seeing those moves and jumping in on those price levels at the same levels. Right? So I kind of heard mentality, if everyone's buying there, other people are going to start buying there's and then covering. Okay, so this is where they'll be closing a losing trade. So let me explain those in a little bit more depth. So splitting easiest one should probably get your head around big player, you know, they want to buy 10,000 lots at the best possible price. Okay, now let's say they just want to put half of that into the market straight away just to guarantee that they actually get into the market. We kind of looked at that before, put 5,000 lots in. We know that the price is then going to rapidly shoot up to the upside and push Price higher and they're going to get slipped. Right now what they're going to do is those remaining 5,000 lots, they're going to put back down in those previous price levels and add liquidity to the order book there. Okay, so if I go back, you can see here, they buy 5,000 lots, price shoots up, but then they're going to add the remaining 5,000 lots of those orders back down where that price initially initiated out of. Okay, so you can see here, right, you would have had that fair range, those 5,000 lots would have gone in and then you would see price aggressively initiate out of that range. Now where have they put those remaining 5,000 knots? They put them down in that previous level. So if you can start to find these zones and areas on your price charts, you can anticipate that potentially when price revisits there, those that split large order is still going to have some remaining unfilled orders left. Right? There's going to be some passive buy limits there. Okay. Now the second reason, remember, was herding. Other traders are going to spot this. That is people like us, right? And they're going to identify that there's likely going to be unfilled buying pressure there. So we're also going to look to potentially get in there and surf on those coattails right in line with their order flow. So that's going to add even more buying pressure and more pending orders to that level. Okay? So price may eventually return to that level, filling those buy limit orders, absorbing that supply. Okay. And the other third reason, remember, was people covering those losses. So people who were selling at that previous range, if price then goes up against them, right now they're in the red, they're losing money. If price then if they're still in their position and price comes back down to that level, they might just think, you know what, I've got out break even now, I don't want to be in this trade anymore. And they're going to get out of their short position. Now, if you've sold and you want to get out of that position, what do you have to do? You have to buy back your position, right? You have to put a buy order in the market to get out of that. So what are you doing? You're adding more buying pressure in that level, right? So you've got people who split their order and they've got left unfilled buy orders in that level. You've got people who are then hurting and jumping in on that action. They're adding their buy orders and then you've got sellers who are covering their losing positions. They're now adding even more buying pressure in that level. And that's why often you will see at those previous levels of fair value, the market will agree on those news prices again, and you'll see price start to level out in that area. And as the market rebalances and demand absorbs that supply, okay? Now, in this instance, you could say aggressive buyers potentially cause that demand imbalance again, and then the same circle is repeating. So in this academic paper that they looked at, they actually found that the persistence of order flow was overwhelmingly due to splitting rather than hurting. So essentially, when you see those big price movements, it's generally because the big players stepped into the market and they're still going to have unfilled orders at their level. So when price returns to it, even days, weeks, months at a time later, you will see that buying pressure still come in. So to summarize all of that theory, you generally have markets ranging when supply and demand is balanced at fair value, eventually aggressive traders are going to initiate those breakouts, causing those imbalances. And then you're either going to get acceptance at that level or you're going to get a failed auction, and price is going to rapidly reverse to try and find that new fair value. So our job is to try and essentially ride those imbalances to trade from, you know, from balanced to balanced areas and capitalize on those moves. Now, in reality, reading an order book in the live market is extremely hard, right? Trying to understand all of that interplay between those passive and aggressive orders. Why? Well, there is a lot of manipulation. Okay? So spoofing is one of the main ones. And this is where players will place large passive orders, but they have no intent for those to actually be filled, so they'll just cancel them when price gets there. Now, why would they do that? Well, imagine a player, right, essentially places a large buy order around that level 1.530, okay? Because they want other people in the market to think that they're actually going to buy that. So what will happen is other people will see that demand come in on the order book, and they'll buy slightly above it because they want to get in just before them in case that big order is going to be filled and they want to ride that big bullish move. So what will then happen is as those other people jump in front of that big order to get in, that's actually going to cause bullish pressure, a little bit of bullish pressure. And the real reason is because the Big player actually wants the market to come up higher so they can sell at 1-539. They want to sell at that higher price, okay? So they put fake demand in at the lower price to get other people to buy the market up. And then this is the actual price that they want to sell at. And that's where they really want to transact that. So if price had actually come down to where they had that fake order, they'll just cancel it, they'll just pull it, right? They have no intent in actually trading at that level. So you might see all of this demand and supply in the market, but it might not actually be real. It might not actually, you know, have intent to execute. The other one is iceberg orders, right? And this is where you can split large orders into smaller hidden portions to conceal its full size from the market. So you might look at this market and go, well, actually, there's not a lot of demand at 1534. There's only 52 lots. But every time you sell into that, another 52 lots will appear and another 52, another 52, another 52. Because they've hidden it with an iceberg order, right? So a price level may have more depth than what is visible. So it's very, very hard to accurately read order books and to make profitable decisions trading them. And that's not just it. You've also got limit chase orders. You've got time weighted average price orders, volume weight average price orders. You've got dark pools where big institutional players are trading of exchanges with each other. It's very hard to get an accurate overview of how much orders and volume there is in the market. So what do we do? The problem with the order book, like I said, is that those orders are just. They're advertisements, right? They're just advertising that they might want to trade there. They might not. You don't really know. So one solution is to look at volume of actual filled orders. So you're actually looking at past trading activity of how much trading volume actually transacted. And you can look at more advanced things called the footprint market profiles and volume profiles, okay? Which is definitely a valid way to help do this. But here's the thing. One, they're not necessary to do it when you know what you're looking at on a simple price action chart. But the main problem is in the spot forex market, as you guys know, it is a decentralized market, okay? There is no one central exchange, so therefore no one has the aggregate super accurate amount of volume, okay? It's Unreliable. You only have access to volume data from a specific broker or one specific pool. You don't have the entire market. Now what you could go and do is look at the volume and the order book in the futures market, because that is centralized, is centralized. However, it's less than about 5% of the daily volume in the sport forex market. So again, it's not very accurate. But don't stress, because we have the framework via technical analysis of just looking at price action to have a very good idea of what is going on in that order book from a simple and much more mechanical rule set. And we're going to utilize these specific frameworks to look back of where did the big money enter? And therefore where would it likely enter again in the future? So we can try and capitalize with that because we want to be following that money, right? We want to be following that institutional order flow. Because we can start to identify these areas on these charts. I'll show you how to do it in a minute. Right where we can see these orders came in. But we've got random zones here, everywhere. And even, you know, how do we know which ones are going to hold, which ones are going to fail? And even if they do hold, how big of a move are we expecting? How far are we going to trade that? What are we going to do? Right? We need to systemize this, and that's where your systematic strategy has to come in. How are you going to enter the market? How are you going to exit the market? You need to know these things ahead of time. And how are you going to manage your exposure to the market? Because we do not want to be entirely discretionary traders, just kind of making up, acting on pure gut instinct because it's going to be extremely hard to be consistent with that. Instead, we want to try and be pretty damn mechanical and having a repeatable process that we can find data on, prove it and execute consistently. Now, all trading strategies will fit somewhere along the scale, either completely discretionary or 100% mechanical, so that you can literally code it into an algorithm. Because as a human trader, you actually have an edge and you can recognize patterns better than algorithms, okay? And you can see there will be certain times and certain conditions where actually you shouldn't get involved. And sometimes there'll be, when you're, when you're experienced, you'll recognize when to slightly bend your rules and to actually take a trade, okay? Whereas if you are 100% mechanical, there are going to be periods, right, where you will get slaughtered, where the conditions are not conducive to your strategy. Okay, now this is a big topic on the pros and cons between being 100% mechanical with algorithm and not. But generally that's the sweet spot where you are allowing yourself a little bit of discretion. But we still want to be very, very systematic as much as possible, within reason. So a trading strategy should be built of very systematic frameworks where for every trade idea, you are building a portfolio of evidence for and against taking the trade. And then when you have obviously far more reasons in favor of taking the trade rather than the negative reasons against it, then you are going to have a probabilistic edge in taking that trade. Okay, so we want to stack as many confidence as possible by utilizing multiple trading frameworks. And when they all overlap and they're giving you the thumbs up signal, that is where you're going to have high probability trading. So what is my strategy? What is the first one strategy? How do we do this? Well, my edge is understanding what we just went through. The market is an auction. It is seeking liquidity to rebalance price. And we're going to look to follow the footprints of institutional trading activities. I do this through the three main ways. Market structure, supply and demand and liquidity concepts. Now, as we're about to go through all of this, some of it you may have seen before, some of it you may have not. It can seem like kind of these weird concepts and arbitrary rules, but just bring all of it back in your mind that what we are trying to do is identify the footprints of large orders right when they went through the market and where they may be occurring in the future. And if you can grasp that, and that's why we spent all of that time understanding the true and the line market dynamics. And it will make understanding this so much easier and holding onto it, holding onto your belief of why the concepts work. Because then when you go through the inevitable tricky periods into training, you'll find it so much easier to have that bulletproof mindset to keep executing. Okay, cool, let's go through it. So to give you kind of a very high level simplistic overview of what it is we're about to go, right? Three core things of the strategy. You have random price action. And the first thing we're going to overlay is market structure. Okay. And this is what's going to help us to give us our directional bias once we know the direction in which we want to trade. Right. We're not just going to jump into the market straight away. We need to know the Location of where we're going to take those trade ideas and this is where supply and demand zones come in. Okay. Then lastly, we're going to look at liquidity concepts which essentially kind of help us with timing and identifying those hyperbarable zones which we're going to get into. Now again, quick little plug, if you want to get this free training where I'm going to go into all of those concepts in way, way more depth, with way more trade examples and take it really, really slowly. Don't forget, link in the description if you want to get this. Highly, highly recommend you sign up. But anyway, back to the charts, let's dive into it. So let's kick things off with market structure. In my opinion, this is the most important thing. It's the first thing I always start with. For me, market structure is king. It's the skeleton of the strategy and then we slap on all the bells and whistles after that. Once you get this right, because market structure will determine your directional bias and that is the most of the battle. Once you have your directional bias, we use the other things then help with timing. Get this right and everything else will fall in place, right? You'll be skiing downhill from then on. So highs and lows, right? Pretty much the first thing you want to look at. At the bare minimum, a high is going to be where you know, you have a three candle formation and that middle candle is the highest high. Now you can draw that as a high in the market and the exact opposite for a low, right? You've got three candles. And, and if the middle candle is the lowest low out those three candles, that is essentially a structural low in the market. So if you just look at a price chart, you're going to get all of these kind of highs and lows there. If you were to draw a line through it, through those major points, okay, this essentially then gives you your structure. Okay, that is what we are now trying to map. Now the reason why we do that is because at any one point in time you want to be able to tell what condition is the market currently in. Is it bullish? So is it moving to the upside? Is it just ranging sideways or is it bearish? Market structure allows us to identify those conditions. Alrighty, so let's kick things off with some, some basic theory and then as always, we will show you some real examples on the charts. Okay, so bullish market structure, essentially what we call price, making a series of higher highs and higher lows, right? So we get a higher high, price pulls back, but it doesn't break the previous low. So then we get another movement and we get a higher high. So let's break that down in a little bit more detail. Okay? So what you want to do is you want to find a swing point in the market. You get a high and you will draw a line across that. And what happens is price will pull back. And then once it breaks that high, right, to form a higher high, we now have what's called a boss, which stands for a break of structure. Okay, so once we get that break of structure, at that point, we have now formed a higher high, right? So we have a bullish market and we can look back and find the new higher low. Okay? So again, price moves up, it pulls back, it breaks the high to form a higher high. We now have a break of structure. Okay, so aggressive buyers are buying this higher. And what is the market doing? It's searching for that opposing liquidity. We know there's going to be, you know, sell limits somewhere within this market that's price is going to go into. And eventually the market is going to balance out where supply is going to rebalance with demand. But then what happens? Eventually we're going to get a pullback. Okay, now very often those, well, basically after every time we get a break of a high, you want to start thinking about that pullback occurring. Now, once that happens and you get that break, you want to mark out where the previous low was. And now, you know, the current trading range we are within. Okay, so this is the bullish range. We between the low and the high of the market. So we get the bus, the break of structure, price moves up. As soon as we get that break of structure, we want to start thinking about that, that pullback is going to kick in. So supply starts to overwhelm demand and we get those aggressive sellers pushing price down and we get that pullback. But because we are in an uptrend, because we are in a bullish market, right? Although we are expecting that, that pullback, we know that this is the high low and we, we call this a strong low and we don't expect it to break. Okay? The reason why this is a strong low is because it had enough demand within there to break structure to the upside. Okay, so, oops, let me just get rid of those lines to kind of tidy up a bit. Right? This is the current range we're within. At this point when price is pulling back. This is a strong low because it did its job. It broke structure to the upside. So now this is a strong low. We're trading within this range. After we get that break of structure, we expect a pullback. And we can look to sell this right if we get opportunities. But we understand that we are in a bullish market. Price is moving to the upside. Therefore, we know that we're not expecting price to go past this low. And at some point, we're expecting that demand, right, to start coming into the market to push price up again. So when that happens and we get that new higher high, right, we get another break of structure, what do we do? We look back and we find the higher low. And this is our higher low here. Now, after a break of structure, what do we expect? We expect the pullback to start kicking in. But how far is that pullback going to be? We don't know. But we do expect that it won't go past this low. This is a strong low, right? The buyers that broke structure, they have a vested interest in protecting this low. Right? There'll be unfilled orders down here, which we'll get to when we get into supply and demand. Right? And then we expect price to go higher. So it's a series of higher highs and higher lows. And that is a bullish trend, right? So strong lows, targeting those weak highs, right? We pull back into the strong low. And then when we start getting those long positions we want to buy, where are we going to target? We're going to target the week high. What do we expect after break of structure? We'd expect a pullback. Down to where? Down into the strong low. Then we expect price to target the week high. Okay. Can you start to see how that framework's starting to come together? Very simple, but very, very powerful when you understand it. And the exact opposite, in a bearish market, series of lower lows and lower highs, right. This high breaks structure. After a break of structure would expect, we expect a pullback. How far is that pullback going to go? We don't know. But we expect that it won't go higher than the current strong high. Right? So once price pulls back up into there, eventually it's going to start moving down. Whereas our target, our target is to the weak low, right down to the bottom of the range, we get that break. So now we have a new range. Right? After we get the break, we look back. Here's our new strong high, here's our low. So after a break of structure, what do we expect? We expect a pullback. We don't know how high it will pull back, but we expect that it won't go Higher than that high and then we can target the week low, so on and so forth. Now obviously, markets don't move in one direction forever. We are going to get trend changes. So how does that work? Well, you have a bullish market, you have a strong low. That breaks the high. After breaker structure, we expect a pullback of a strong low. That breaks the high. Right. Now when price is pulling back down here at that point in the market, obviously we don't have X ray vision. We have to work with probabilities. What does our framework tell us? Our framework tells us this is a strong low because it broke the high. Therefore we don't. We expect price to pull back. But at this point in time, we are not expecting this low to fail. Right. We expect it to hold. But what ends up happening is it does fail. And that's okay because eventually the trend is going to change. Right. So at this point here, where I put the, the dashed line, once we get that break of structure to the downside where the strong low fails, we now have a confirmed trend change. We have moved from a bullish market to a bearish market. Now what happens? Always, you always want to be identifying wherever price is, what is the current structural range we are within. So if price is here, what is the current structural range? Well, you look back and you find that highest high that broke that previous low. Okay, so that's the range and this is the low. Okay, so now we're in a bearish market after a break of structure, we can play the pullback. We expect the pullback. But how far is that pullback going to go? We don't know how far it will be, but we expect it to not go higher than the strong high. Right. This is a strong high because it broke the low. So we play the pullback up to there, and then when price starts moving down, where do we target? We target the weak low. Why is it a weak low? It felt to break the previous high. Okay. So that's why it's a protected high. Big players have a vested interest in protecting it to continue their short positions for that bearish overall move. Okay, so like we said, we had the expectation of a higher high forming. It didn't happen. We got a lower low. Okay, so that lower low confirms the bearish trend change. We get another lower high and a lower low, another lower high and a lower low. Okay, now at this point in the market, what do we expect? We'd expect this high to hold. It's a strong high, but ends up failing. And we get A higher high. So the bearish expectation of a lower high failed at this exact point. When we get a break higher, we're now in a bullish market. So now we have a new range. This is our strong low. We expect price to pull back, but we don't expect it to go lower than the strong low. And then we expect price to target the week high. And we're in a bullish trend, okay? So if you see how if you follow the concepts of strong highs and strong lows, you expect them to hold until they don't. So expect us to hold. It fails, right? We expect this high to hold, but it fails. So then this becomes a strong one. We expect it to hold and it holds, right? Literally. It's very, very simple. But this will give you such a powerful way to frame your trade ideas in the market and to think in terms of probabilities and to have that high probability direction of where price is going to go. Now, in reality, obviously, we're not just going to have these perfect, nice, easy price movements. Price action is going to be a little bit more choppy, a little bit more range bound. We're going to see highs and lows everywhere, okay? So what we want to focus on is what's called swing structure. Now, swing structure tries to focus on those kind of major, bigger swing points in the market, the real big clear highs and lows. So let's talk through that. So let's say we have a simple, easy pullback. Price breaks up higher. We know that after a break of structure, we look back and we find the swing low, okay? Now when the swing trend is bullish, the swing low is the lowest point that broke the swing high, okay? So this is the lowest point that broke that swing high. So this becomes our swing low at this moment, after a break of structure, what do you expect? We expect a swing pullback, okay? So price pulls back now whilst it's between the swing high here and the swing low, okay? Price can do whatever it wants. But this is not swing structure, okay? We ignore that until eventually price breaks this high and we get a break of structure, okay? We get a new higher high. Now at this moment, when we get that higher high, where is the new swing low? Okay, Is it this low? Is it this low? Is it this low? You know, is it that low? Well, doesn't make sense. Already traded through, we want to look back and find it. The rules that we use is it's the lowest point always that broke the swing high, okay? So when you get that swing high here the moment you get the boss, you want to find the lowest point. A little trick to do that is draw a box from the previous swing high to where it was broken and then drag it down and then the lowest point in there is your new swing low, okay? So this becomes your new swing low, and this is your new range. So now when price is pulling back, right, you can frame trade ideas that we don't expect this low to break. We can trade it short, we can set it down, and then we can start to look to buy with confidence that we expect this low to hold and we can go, okay, now this might quite seem quite simple as I'm saying this and explaining it, but the reason why it's so powerful and why so many beginners particularly get it wrong is they don't have this framework or these rules. And, you know, what do they see? All they look at in the market, like, if I get rid of these lines for a minute or I'll leave on for a second, is price will be up here, right? And they'll see this low break. They go, okay, that low is broken. We've got a lower low. We're in a bearish market now, okay, We've got another lower low. We're definitely in a bearish market, okay? Price gets up into this strong high, they're going to sell. They're going to sell with way more risk than they should, right? And they're getting short. They're thinking, yeah, this is a strong high. I want to target a week low. And then bang, they get stopped out. And that keeps happening and happening and happening. Then like, why, why am I getting caught on the wrong side of the market when that should be a strong high? But they don't understand that this is the true swing structure, right? The bigger, more, let's say, significant points in the market. And that's why having this rule is really, really key. So you will understand now you have the understanding that when price comes down, this is just the pullback, this is just internal structure. And. And as we come down into that strong low, you are expecting that this is going to be the bigger move for that next big leg higher, okay? So really, really key for that same thing in the bearish market, okay? Obviously, if you want to find the highest point that broke the low, we get the pullback. We don't know how far it will be, but we know it. We're not expecting it to break that highest high, okay? So that's swing structure we want to find. When it's bearish, the Highest point that broke that previous low. Again, draw it from where the low was to where it was broken and drag it up, find the highest point. That's your swing high. Okay. Completely, completely mechanical to find that.

So let's hop on the charts and show you this with some real examples. So what you want to do with swing structure is just focus on the obvious swings in price, right? It says it in the name. Okay? So here we can see we have a clear swing pullback, okay? And then eventually price breaks that and forms a higher high. So at this exact moment, what you want to do is look back and go, where's the swing low? It's the lowest point that broke that high. Right. You can use the box tool here. We from that high to that low, and there you go. That's going to be your new swing low. So at that moment when price is pulling back, we expect price to not. To not break that low. Sorry, this low here, right. The lowest point. And then eventually price breaks that swing high to form a higher high. Right? So then you want to find the new swing low. This is the low that we expect to hold. But eventually price then breaks it. Okay? So now the expectation is fell. We have a lower low. This becomes a strong high because it did its job. It broke structure. So now we expect this to be the strong high that holds, right? So we can play the pullback, but expect price won't go higher than that. And then eventually price will target the week low. Right? Because it's a bearish market and we get that lower low to the downside. Okay? So price comes up, and then we're expecting price to target that. Then what do we get? At this point here, we have a new break of structure. So we want to find the new range. Where's the highest high that broke the previous low? It's this high here. Okay. This becomes our strong high. And you see now how we can trade high. Probable trade ideas around this, that after a pullback. Sorry, after break of structure, we expect a pullback, but we expect this high to hold. And eventually price will move there to the downside. Okay. And we can rinse and repeat this. And this has been going on since literally since the time markets have begun. Okay? So now we've started to see how we can apply swing structure to our charts. We can map out the swing ranges, and we can find a strong swing swing high and the swing low. The next thing we're going to look at is what is called fractal structure. Okay. And these are the tinier Little movements in price. You see where you can see price comes down, then it pulls back, then it pushes down. So we have a little fractal high here that we call it. And then price breaks that. Okay? So these smaller little highs and lows in the market, that's what we call fractal structure. And we look at that to help us time when those pullbacks, those swing pullbacks may be starting to and ending. Okay, so when we get a fractal structure trend change, it's a bit weird, but we call it a change of character or a chalk for sure. So let me kind of just explain this, right? We get a swing breaker structure here. After a swing boss. What do we expect? We expect a swing pullback. So what we can look for is a break of the fractal low to signal the start of that pullback. And then we can look to play the pullback down into this strong swing low. Now, how can we look for a first signal that this swing pullback might be finished? Well, we look for a bullish change of character, right? We look for the fractal structure to change trends. So at this point, we mark that high. That is our bullish chalk. And now when that happens, that's a pretty good signal that this pullback is over, right? We get the bullish chalk, and now where are we targeting? We're targeting the weak swing high. For a higher high. We get that swing break of structure, we get a higher high. We now what do we expect after a swing breaker structure? We expect a swing pullback. And this is where we get that change of character, that bearish change of character, right? We get the shift price ends up dropping around eventually gets that higher high, right? Then we get a bearish trend change. Okay, we got the bearish trend change, but we get the bullish change of character to signal the start of the pullback, right? Price comes into the strong swing high. How can we signal the end of the swing pullback? We look for a bearish chalk. We get that bearish shift in the fractal structure. Price moves down. Where are we targeting? We're targeting the weak swing low. After we get a bearish swing boss, what we're expecting, we're expecting a swing pullback, right? We get that shift to structure here. Up into where? Up into the strong swing high. When can we time the end of that pullback? Once the fractal structure shifts. Bearish. When do we get that? We get that change of character there. We get that fractal lower low. Where are we targeting now? We're targeting the swing low. Rinse and repeat swing boss, swing pullback, bearish change of character. Then we get the shift target the low, right. So on and so forth, and we keep going with that. Now, it is an aggressive way of mapping structure, so you will get some false signals. Okay. It's not 100% win rate thing and we're going to pair that with all of the other frameworks that you're going to learn. But it's a really cool way to to spot that first initial change in order flow, where you get that fractal higher high. Right? You get that shift in trend. So yeah, now the rules that we use for that are 100% mechanical of exactly how we identify that and where we draw on the highs and lows. It's beyond the scope of this video for us to do that. We reserve that for our members where we teach it. It's actually something that I've got my developer to code 100%, but for now, just identify those kind of smaller highs and lows and it can really help you to time those opportunities. So so far you've learned two types of structure. First, we looked at swing structure, which is the most significant. We just looked at fractal structure there. Right? Changes of character, where we get the change in fractal trend. That is the most aggressive way of looking at market structure. Now we're going to look at the third and final type of structure, which is called internal structure. Okay, so we are getting quite advanced already. This is definitely not typical beginner content, but you know, watch this as many times as you need. I'm gonna hold your hand. We'll go through it slowly and it will all start to make sense of how this framework comes together. Okay, so swing internal fractal swing structure is where we look at that major swing in price, right? We get the swing high, we get a swing break of structure and we get that swing lower low. We can now mark that out as our strong swing high. Okay. We don't know where our swing low is yet until we actually get that significant pullback. Then we can mark out our weak swing low. Okay, so fractal structure that I just showed you on the chart, it's those little movements in price, right? These little movements down here where you get a high that gets broken and you get that fractal higher high. And that's what we call a change of character. A chalk. Okay. And you'll see those, right? So this little movement here is a chalk. This little movement here is a bearish. Chalk, right? Where a low that broke a high gets broken. Okay? So little shifts in trend. Now, like I said, those are the most aggressive. So sometimes you'll get a chalk and it'll be a full signal, and we'll push down lower, right? Sometimes we'll get a chalk, and there'll be a full signal. So you have to be aware of that. And this is where internal structure comes in. So we might first see that chalk. Okay. But what we would then want to see is a significant pullback come in. And now we're starting to form internal structure. So what internal structure is is essentially these larger, more significant swings in price, but they form within the swing range, okay? So sometimes what you'll get is really big swing ranges because you'll get a big, impulsive move like this. So then the swing range ends up being really big, and then you'll get big highs and lows within there, and that's what we call internal. Okay, so after a swing break of structure, what do we expect? We expect a swing pullback. Now, the signal we can use is the internal structure. All right? When that starts to shift bullish, that signals the start of the swing pullback. So as we start to form higher highs and high lows with the internal structure, we know we're forming a swing pullback. Now we can start to follow this and buy this bullish internal structure right from these strong lows. Look to buy it targeting the weak highs. But what do we expect? Well, swing structure is king. Swing structure is the most important, and this is a strong high. And we. What do we understand? We expect that price is not going to break that swing high. So as we come into that swing high, what can we start to anticipate? We can start to anticipate that the internal structure is going to shift bearish, right? So at this point, this is a strong internal low. It broke the internal high, okay? Price comes down into that strong low, internal low. And you could be forgiven for thinking, well, I expect it to hold. But this is where we recognize swing structure is king. The internal structure has fulfilled its objective, which was to facilitate the swing pullback. That job is now likely complete because we've come into the strong swing high, right? So now we're ready to shift bearish. So at that point, this becomes our strong internal high. So when we play the internal pullback, we expect that internal high to hold, and then we can turn on target the weaken tunnel low all the way down into the weak swing low. Okay. It's a lot of information to Take in. I get it, okay. But that's basically the relationship. We have a bearish swing range. We expect the internal structure to shift bullish to facilitate that swing pullback. When the swing pullback is finished, we expect the internal structure to shift bearish. And then we can follow the bearish internal structure until the weak swing low is taken out. So where does fractal structure come in? Well, fractal structure is that first little aggressive sign that we're getting the start and ends of those internal pullbacks, right? So we get that fractal shift, right? That change of character. There's the internal movement. Now, when Price pulls back, if we get a bullish choch, right, that's our next internal leg. Okay. I haven't drawn it on, but you would get a bearish chalk to signal the start of the internal pullback. I haven't drawn it on, but there would be a bullish chalk here that signals the end of the internal pullback and the next bullish internal leg after an internal boss, what do you expect? Expect an internal pullback or an internal reversal because we're at the strong swing high. So we get the bearish change of character. That's the first aggressive sign for short. After the iBoss, we can expect an internal pullback, right? The chalk will signal the start of the internal pullback. Then you would get a bearish shock. What does that signal? The start of the next bearish internal leg, so on and so forth. So do you see the relationship between them? Changes of character? So fractal structure trend changes. They signal the start and end of internal pullbacks, right? The internal movements, internal leg. And then I bosses. When you get the change in trend of the internal structure, that signals the start and end of the swing pullbacks, right? So the other variation is if you get like an internal high here and we break it in the previous leg, okay? And then we get the bullish trend. That's the swing pullback. When the swim pullback is complete, the internal structure shifts trend. Okay, I appreciate for some of you, this is simple. For some of you, it's a lot to take in. I get it. But. But let's open the charts and I'll show you. So here we have a clear bearish trend, right? We get the swing high. That breaks the swing low. After a swing break of structure, what do you expect? We expect a swing pullback, but we don't expect Price to break this strong swing high. Okay? So we get this large bullish move and we end up getting a change of character. As well. So we can clearly see the internal structure is starting to shift. Bullish. Right. We get an internal higher low that breaks the weak internal high. So this would be our bullish iboss. But in this case, where are we? We're already pretty much at this strong swing high. So, you know, we're not expecting that bullish internal trend to go too much higher because at any point that swing pullback can finish. And obviously we're expecting that next bearish swing leg. Okay, so the first aggressive way to look for those shorts is where you get this little shift in fractal structure. We get the bearish choch. Now at that point, that can just signal the internal pullback. And eventually we get the bearish IBOSS to the the downside. Once we get that bearish eye boss, that's the strongest confirmation that we have that the swing pullback is over and price is now ready to target that swing low. Okay, so if I just remove some of these drawings to make it a bit clearer. All right. Swing pullback, bullish internal structure. We pull back into the strong swing high. The internal structure shifts. Bearish. This becomes our strong internal high. Price pulls back up into that strong internal high. This is high probability. Now to look for shorts because the internal structure is bearish. It's a line bearish with the swing structure. This is a strong high. This is where we want to be selling and where we're targeting, we're targeting the weak swing low. Obviously, in this case, price goes a bit further. Okay, so can you really see the relationship between them? And also, that's where fractal structure comes in. Right. When we got this internal movement up after the iBoss, we expect at least an internal pullback. The bearish change of character signals that. Right. Likewise, we've got the bearish iboss and then within there, we've got the bullish truck to signal the start of the internal pullback. But we don't expect it to go any higher than that internal high at that point. And then what do we get? We get the bearish shock. That's where it's all systems go. That's what we have. Full, full alignment between swing internal and fractal bearish swing structure, bearish internal structure. We've got the internal pullback into the internal high. Then we get the bearish fractal structure. Now all three structures are bearish. Bang. All systems go to go. That's the hyperbole training where you have everything aligned. Okay, one more example. In this case, right. Price action comes in all different shapes and sizes and forms. So that's why when you're learning the theory in the diagrams, you have to remember the rules and then you get the experience of going, okay, how does it look like with real price action? When it's going to look different in every scenario, but the framework is the same. Right. So in this case, zoom out a little bit because we get a big range. All right. That was our swing pullback, a new swing breaker structure. So that ends up being our swing high. So you see, sometimes you kind of get smaller ranges like here, and then sometimes you get bigger ranges because we get this big impulsive movement. So here, you know, you could view that as a swing pullback. I just viewed that as an internal pullback in this instance because it wasn't quite as big as like the previous pullbacks. So what do we expect after a swing breaker structure? We expect a swing pullback. Okay. We get one leg lower. Then eventually we get that bullish eye boss. Right. So now the internal structure shifted. Bullish. This is our current swing range. So we expect the bullish internal structure to facilitate the swing pullback. Right. Eventually we get that swing pullback. This is a confidence we'll talk about a little bit. We come up to the EQ of the range. Don't worry if you don't know what that means. The internal structure shifts. Bearish. So at this point, what do we now know? Now we expect it to stay bearish until it takes out the weak swing low. Right. Remember back on the diagram here, right. Once we get that bearish iboss, that's the end of the swing pullback. And that's when we expect price to then make its way down towards the swing low. That's this exact moment here. Okay. We get the bearish eyeballs to the downside. This is our strong internal high. So we can start to follow that bearish internal structure until it takes it. Okay, so that's the swing and internal relationship. Remember, you can go one step lower.

Looking at the fractal to help you time the internal pullbacks. We get the bearish eye boss. Sometimes price is getting a little bit choppy. Right. It's not always super easy, but we get another signal. There's the bear shock there, the pullback, we get that next leg higher. Right. Shift in structure there and eventually get the internal reversal. Okay, after a bearish eye boss, what do we expect? We expect an internal pullback, but no higher than the strong high. And we get the bullish change of character here. So now we can play the Internal pullback. Then what do we get? We get the bearish change of character. That's the signal at the end of the internal pullback. Right. And then we go all the way down, rinse and repeat the same things again and again and again. And you can back test this as far as possible. You will see the same things occurring. Okay. Literally, there's just endless examples. Swing pullback, bullish internal structure. Okay. Up into the strong swing high, bearish iboss. Now expect it to remain bearish until what? Until it takes out the swing low. Again and again and again. Don't just take my word for it. Go and prove it to yourself. Once you prove it to yourself, you have the data. Now you can see you have an edge. Before we've introduced any of the other shiny concepts, supply and demand liquidity concepts, you already have such a powerful way, even if you've got already a trading strategy, to add this to your, to your arsenal now. Okay, okay. Premium and discount. This is a very simple way to basically help you to see if you are entering at a good area of value. Okay, so this is something called the Fibonacci tool, which you can grab over here. Okay. The fib retracement. You can just copy my settings here if you want. Essentially, style. There we go. It's just showing the halfway point. Okay. The 50, the 0 and the 1. What it basically represents is when you have a current range, the halfway point is the equilibrium. Everything below that is the discount. Okay, so this will be the discount prices. Everything above that is the premium prices. It's expensive. So if you're going to be selling, you want to be doing it in the premium, the top half of this range. And if you want to be buying, you want to be buying in the discount of the range. So not always, but generally pullbacks are going to come down into where into the discount level of that range, because that's where buyers are going to want to step in to push prices up. So if you're playing the pullback and you're selling, ideally you want to be doing it at the start of the move in the premium prices. And if you're buying, not ideal to buy up here, right? Because you might get full signals. But as we get down into the discount of the range, into that strong swing low, this is the ideal area you want to be doing it. Okay. Exact opposite for selling. Right. Bearish move strong high. Where is the highest probability, not guarantee, Right price does not have to pull back to premium pricing. Especially when the trend is strong. It can Just do this. But the best area to be selling is in the premium levels, okay? That's where we want to be selling. And if you want to be buying to play the counter trend pullback, you want to be doing it down here. As price starts to make its way higher and higher into those premium prices into the strong swing high. Not going to be ideal to be buying, is it? Right. So this is a quite simple way to kind of help you frame your ideas with that. So here you can see it, right? When you've got more kind of complex price action where you have a large swing range, you. You can literally draw the range on this entire. If I grab that, the entire swing range here and get the premium and discount, okay? So from the swing low to the swing high, drag it across everything in the top 50% is what we call premium pricing, okay? So buying up here is not going to be ideal, right? Because you might get the internal structure here, it might shift bullish, okay? But you're more likely to be getting full signals that the swing ball back isn't ready because it wants to pull back down into the discount prices nearer the strong swing low. Then if you get the bullish eye boss, that will be a much stronger signal that we're about to get that next leg, right? There's going to be a lot more buyers willing to step in and those discount prices. And then likewise, you can take that to, you know, again, this is advanced trading, okay? So don't worry if you're overwhelming this, but when you're trading those internal ranges, okay, we know that price is going to want to likely pull back down towards the swing discount. But if you want to trade these internal ranges, wait for price to have the internal pullback into the premium of the internal range, right? So this is your internal range here. It's bearish. We're expecting terrain bearish to facilitate that swing pullback. So we mark on right the premium and discount of the range. We look for price to pull back into the premium of this range right above the eq. Now it's a nice level to sell down into the swing low, you see. And likewise, as we pull down into what into the discount of this larger swing range, we get the bullish iBoss. We mark out the EQ of this internal range. This is our strong internal low. Let price pull back into the discount of that internal range. Now we're in the discount of the internal range. We're buying pro, internal trend, pro swing trend. Everything's alignment. This is high, high, probable trading to now Target that high. So do you see how these concepts piece by piece we're starting to overlay them together. So quick example from the three types we just looked at right when we had that swing range, draw it from the swing high to the swing low and you can see how now strong bearish momentum. So price probably isn't likely to pull all the way back up into this high. You can see where did we come into? We came into the EQ of the wage range, the equilibrium good area for sellers to start stepping in and there's more premium prices. Okay. Then we got that bearish iboss. So at this point high probable trading to look for shorts. Why? Because the internal structure is aligned bearish with the swing structure. We can then try and time. Where are we going to find that internal lower high? Where can we start to sell? So draw the premium and discount of the internal range. And where does price pull back into it pulls into the premium of that range. Then what do we get? We get that bearish fractal chalk. Right. That change of character, that's just short bang. So another very, very simple tool, but it helps you to get in at the right areas of value. Now the final piece of the puzzle with market structure is multi time frame frame analysis. Okay. So so far we have only looked at one time frame, but with three types of structure. Now to be fair, even if you, if you truly get your head around the three types of structure and you just look at one time frame, you can honestly have a really, really profitable edge. But bring it to that next level. Really giving you this 3D look of the market is when you bring multiple time frames together. And again this is not beginner trading. This is really getting into that more intermediate and advanced. But do not be intimidated by it. The sooner that you start to tackle this and the sooner you get ahead around it, the sooner you will see consistent success. Okay, it's worth doing it. So multi time frame analysis, analyzing multiple time frames together. Okay, so if you were to look at a weekly candle, that weekly candle is going to be made up of five daily candles, which is going to be made up of a significant number of four hour candles, which is going to be made up of even more one hour candles. Right. Hopefully that will make sense. Now time is power the monthly candles be made up a lot more price action than the weekly. Right. So it's more significant, I. E. The weekly is going to be more significant than daily, daily, the four hour, so on and so forth. Okay. Now similarly to what we were saying at the Start of this video, that price action is simplified, right? And beneath that, there's all of those interplay dynamics of the order for buyers and sellers, how those orders are matched, aggressive and passive, you know, orders being filled. The same analogy can be used for multi time frame analysis. When you're only looking at one time frame and you're seeing the candles of that time frame, they're made up of all of the lower time frame candles and price action going from that. And that's what understanding multi frame analysis is going to allow us to do. Okay? The lower time frame price action can actually help us anticipate what's going to happen on the higher time frames and to help us time it. So let me give you the key, the absolute key that helped me to get my head around multiple analysis and hopefully that will help you. Okay, so what we've looked at so far, basic market structure in a bullish trend, we get a series of higher highs and higher lows, right? And the breaks of structure. Hopefully you get that by now. Now that runs the upside, right? We get a run, then we get a pullback, then we get a bullish run, then we get the counter trend pullback, then we get the next bullish run. So runs and pullbacks, okay, they're called market phases. So what you want to do is you want to identify, first, we're in a bullish trend, we're making higher highs and then higher lows. But then in that exact moment, wherever price is, for instance, if price is up here at the top of this arrow right now, we're currently in the run phase, right? We're forming that pro trend run. So what will be the next phase? The next phase will be the counter trend pullback. Okay? So those phases of runs and pullbacks, they collectively make up a trend. Pretty simple so far. Hopefully you get that the key is understanding that a phase on a higher time frame is a trend on a lower time frame. Okay? So each of those phases, a run, that run, will be a bullish trend on the lower time frame, that higher time frame pullback, that phase will be a bearish trend on the lower time frame. So a higher time frame phase, whether it's a run or a pullback, will be a trend on a lower time frame. So here we can see that we have two time frames. The thick black line is what we could call a higher time frame. Think of the four hour chart that helps you. And then the thin gray line is a lower time frame. Think of the one hour chart or the M15 and that helps you. So let's focus on the hard time frame first. High time frame run. Hard time frame pullback. Hard time frame run, Pullback run, Pullback that turns into a run because there's a trend change. Pullback run turns into another rung to get trend change, pullback run. Okay, now let's say price action is over here, right? We are currently in a bullish higher time frame run. Now, that run is made up of a series of higher highs and high lows. A bullish trend on the lower time frame. Now, eventually, what is the high time frame going to do? Eventually it's going to run out of buyers. Supply is going to start stepping in and it's going to have that pullback. Okay? Now what the lower time frame will likely do is the lower time frame will shift bearish to facilitate that higher time frame pullback. Okay? So think about it. The lower time frame fulfills the objective of the higher time frame, right? It's a soldier, it works for it. So if you're sitting on the lower time frame and you see that strong low break and we get a lower low, we're now in a bearish lower time frame trend. This is your strong low. Sorry, strong high on a lower time frame. So if you're only looking at one time frame, right. You're expecting this bearish trend to continue, right? It's broken that low. This is a strong lower time frame high. So as price comes into that strong lower time frame high. If you're only looking at the lower time frame and nothing else, what should you expect? If you're following the framework, you should expect that strong high to hold and you would expect that next movement. But then what happens is you get blasted and it changes trend. So this is where, if you're using multi time frame analysis and you're looking at the higher time frame, you can now anticipate that that lower time frame trend is about to shift bullish. Why? Because the higher time frame is only forming a pullback. Right? So again, if I simplify it, get rid of the lines high time frame run. Now we're having a pullback. We know the pullback is not going to be that long. So therefore, when we see the lower time frame shift. Bearish trend, shift into a bearish trend, we know it's not going to last very long. We can anticipate that once that higher time frame pullback is over, we're expecting the lower time frame to form a longer bullish trend to facilitate that next hard time frame run. Right? Then it's just bearish again for the pullback, just bullish again for the next run, just bearish again, so on and so forth. And then if you look at an either another higher time frame, say like the daily chart, what are you going to see that bullish four our trend is going to be what one big daily bullish run. Then when the four our chart shifts bearish. What is that on the daily chart? It's a daily pullback. Then when the daily forms the next bullish leg, what's the four hour chart going to do? It's going to shift bullish. Okay. That's how you get the 3D thing. X Ray vision of the market so far. When we're going through this multi time frame analysis, I just only want you to think of swing structure and nothing else. Because if you try to understand multi time frame market structure and you're thinking of three types of structure all at once, that's a lot. That's very hard for you to get your head around at this stage. Okay, so for now almost forget about the three types of structure, only think about swing structure and then we can start to start to understand. Okay, so this thick black line, right, we're going to call that our higher time frame and this is going to be the four hour chart. So what we get is we'll get a bullish four hour breaker structure and a bullish four hour run. After a four hour break of structure, what do we expect? We're going to eventually expect a four hour pullback Right down into the discount of the four hour range. Right. Eventually we're going to get that next phase which is the four hour pullback. Once that four swing pullback finishes, then we'll expect the next four hour run up towards a week for our swing high. Okay, so we're only thinking about swing structure on the four hour chart. That should hopefully all make sense. Now when we're at this point in the market, when we're expecting that four hour pullback, what is the lower time frame going to do than the M15? Okay, we're actually going to call this our middle time frame. Right. Well the M15 is going to shift bearish. Okay. So the M15 swing will shift bearish. I know I didn't say think about three types, but that's probably like a four hour chalk. But we'll essentially get the M15 shifting bearish. So now we can follow that bearish M15 swing trend. But we know that the M15 swing trend has only shifted bearish to facilitate the four hour pullback. Right? So as the four hour starts to come into that four hour swing low and we're starting to think that the pullback could be over, what are we going to look for in the M15? We're going to look for the M15 to shift bullish. Right. Once that M15 trend shifts bullish, that's a very good signal that the four hour swing pullback is finished. And now what do we expect? Now we expect the M15 strong swing lows to hold and we can follow that bullish M15 swing trend all the way up to the 4 our swing high. Right? Then eventually, what do we expect after a 4 our boss, we expect the 4 hour pullback to occur. What is the M15 going to do? The M15 is going to change trend and then it's going to facilitate the four ring pullback down into the new swing low. Then it will shift bullish the next. Do you see what I mean? Hopefully the penny's starting to drop. So that's two time frames. Now at this point here, right, where the 4s and pullback likely finished and the M15 shifted bullish, what can we do? We can mark out that M15 range, we can mark out the premium and discount and we can look for the M15 to pull in. Because this is the trade we want to buy. We want to buy that M15 high low. And that's a big, big high probable trade where the M15 is bullish, the 4 hour is bullish. Okay, but how can we time the M15 high low? Well, maybe we can go down to an even lower time frame. Maybe go down to the M5. Right. And what would you expect in the M5? Well, as it comes down into that strong M15 low, we're going to look for the M15 to shift bullish. Sorry, the M5 to shift bullish. Once the M5 shifts bullish, we can start to target that M15 high, right? Then the M55, which is bearish again to facilitate the next M15 pullback, then the M5 will shift bullish again. Do you know what I mean? Do you see how they're all interrelated? Don't worry if it's not all making sense. Watch this as many times as you need. But that's essentially the bulk of the strategy. Once you get your head around the three types of structure, the frameworks we use for strong highs and strong lows, how to then interlay that with the swing and turn on fractal and then to do that across multiple time frames and understand how they work with each other. You've got it. You honestly have it. It's such a strong edge in the market. But now the next levels that we're going to look at is just timing a little bit where we're going to add in supply and demand zones and we're going to add in the liquidity concepts. But first put all of your effort into wrapping. Head around market structure, no matter what strategy you trade and it's going to help you hugely. So as always, let's apply this to a real price action. Example. So here we have the four our chart and we're in a bearish trend, right. With a lower low, lower high, lower low, lower high, lower low, lower high. Right, Lower low. And then we eventually get a higher high. Now just going to make sure this appears on our time frame and if we drop down, we can see how the one hour chart fulfills the objective of the four hour chart. Right. So let's jump down and have a look. So here you can see those big lines. Now if I change color here, say.

Pink. So the one hour chart is in a bearish trend. Now eventually, what does the four hour pullback the four hour needs to do? It needs to pull back to give you the answer. The one hour chart. Zoom in a little bit. Okay. There's a higher high. Eventually it's going to break the high and form a higher high. So when we get that bullish one hour trend change, we're not expecting it to last a very, very long time. Why? Because we're just facilitating the four our pullback. So once that four our pullback is complete, what's going to happen? The one hour chart is going to shift bearish, which it does this down becomes a strong one hour high and we expect it to stay bearish until when? Till at least the four hour swing low. So now we can try and short these lower highs all the way down to here. Obviously it can go a little bit further. Then eventually, what do we expect after a four hour boss? We expect a four hour swing pullback. That's where we can look for the one hour chart to start to form those higher highs and higher lows. Price pulls back. Then what? The one hour change shifts bearish and then we can expect it to target the low, just bullish again to get the next four hour pullback. Okay. And then you know, rinse and repeat. Eventually pulls back into the four hour swing high and then the one hour shifts bearish and then we go. Okay, so hopefully you can now see Those interactions between them and yeah, the lower time frame fulfills the objective of the higher time frame. Higher time frame, phases, runs of pullbacks, trends on the lower time frame. I can't make it any more simple than that for you. Put in the practice, do these little exercises, go back as far as you want in price action, and you'll see this be respected to the end of time. Okay, so that wraps up the market structure portion, which is probably the biggest portion because it, like I said, it's the most important. Get that right, get the skeleton right first. Then you can underline what current range am I trading? What is my directional bias? Where is my strong high or low? Where's my weak high? Low? You've already framing a really hyperbole trade idea. Now we want to do the timing. Okay. And this is where we're going to overlay supply and demand zones. Okay. So try to rack your memory of what we went over in the start of this video talking about order flow, talking about the big players getting involved. This is juicy. Let's dive into it. So, as we saw earlier, supply and demand essentially occurs where we're looking at split orders, at a consolidation that causes large moves. So in more simple terms, if you see price ranging around chopping, but suddenly you see a large imbalance occur from that level, we know that it's likely big players aggressively cause that initiation out of that range, and they're likely going to have some unfilled orders left within that area. So when price returns to that zone, returns that supply, demand zone, we're going to look to see if those remaining orders can be filled and then capitalize on that next leg, that next continuation of that move. So remember, here's the version of the order book. Let's say an aggressive trader puts in 5,000 lots, they cause that large initiation out of the range, and they're going to leave some of their remaining order split at that price level for when price returns there to fill those orders. So we'll see price ranging. We'll see that initiation out of the range. We'll then identify that as demand range. We'll look for price to come back in, fill those orders. We call this a mitigation. It's a bit of a dumb word, I won't get into it. But essentially we get that next leg which is the continuation. And generally this is the move we're trying to capture, right? We're identifying where are those onfield orders, and then we're looking for price to come in. And this is the move that we're generally looking to trade and then the opposite for supply. Right. Looking for price to come in, fill those remaining orders and capitalize on that next leg. So actually applying that to a candlestick chart, what you'll see is price ranging and then you'll see that thrust candle close and initiate out of the range. So we're looking for price to come in and fill those orders and go to the downside. Okay. So you can draw it a little bit, unless like less refined, let's say. And then you have this entire range because we don't know exactly whether all of the orders are going to be in to cause that next movement. So this is where you can be a bit more refined and just draw it to the single candle pivot. Or if you get like a big large thrust candle like this, you can draw the zone on both candles. Okay. Now generally what you want to see for it to be a valid supply or demand zone is you want to see that price actually close below the previous candle's low or above the previous candle's high. Okay. You want to see that actual imbalance out of that previous range. So generally for supply, you get like the buy before the sell. Buy to sell. We get the sell before the buy. Okay. We assume that there's going to be unfilled orders within here and then we're looking for price to come back in. So like I said, it depends on how refined you want to be if you take that whole range, okay. And you want to enter here. So I haven't probably explained what risk rewards all is for those of you who don't know. Okay, this kind of represents your trade, how you're sizing your trade. Okay. So this tool, you can find it over here on the right hand side. Your long position or a short position would be selling from supply. So it's a short position tool. If you're using the default settings, it's going to look a little bit different. It's going to look something like this. Okay. Green and red. I prefer to use neutral colors. Green and reds are definitely a lot more fear and green inducing. That's why they use them in casinos. We'll get into all of that now. But yeah, prefer to use neutral colors anyway. So if you were selling from this, okay, this represents where you would put your sell order, right where you're going to sell from and enter your market in a short position. And then this represents your stop loss, okay. Where you're going to get out if you're wrong. So this red box represents your Risk and then this is where you're going to get out of your. Right. So this entire green box represents your reward. Now we're going to explain this in a lot more depth in the trading and edge module, so hold tight for that. Okay, so if you enter on the range, you're increasing the probability that you'll get tagged. But your risk reward isn't as good compared to say like you see here. Right. If you enter on the pivot, if you draw the zone to the pivot, you can get better risk reward. Okay. Or if you refine to fractal. I never do that, but you can do that. Now as I said here, more refinement leads to increased accuracy. Right. Giving you higher risk reward, but more missed trades. Okay. Because we don't know anywhere within this range there can be enough supply being filled to then cause that next level. So we can be more refined here. But you never know price is going to get there or not. I would recommend when you're starting out, just focus on pivot. It's what I take for most cases. Okay. And that's a nice in between to make sure you're getting in enough tags but also getting decent risk to reward there. Okay, so let's start to think about this from a multi time frame perspective. If you are on a lower time frame and you draw a supply range, right, from the lower that candle to the top of the candle that gets engulfed with the first candle, what do you think that's likely going to be on a higher time frame? That lower time frame range is going to be a higher time frame pivot zone. Right. If you think about the one hour chart, that's four one hour candles. And what are they going to make up on the four hour chart? One four hour candle. Okay. So a lower time frame range will be a higher time frame pivot zone. Now like we saw earlier, we can start to identify these zones on our charts. But like, you know, how do we start to know what ones we expect to hold, what ones we expect to fail even if they do come in? How far are we going to target all of those things? Right. We need to have much more of an edge than that. Market structure was why we learned that first because that's obviously going to give you a huge edge in that. Now we need to dive in a little bit deeper. So with these zones I have two minimum criteria. One is that it must cause a break of structure and two is that it must be fresh. Right. That you know, we basically give us the maximum chance that most of the unfilled orders are still left within there. There are six other major confluences that I use and basically what I call them are like nice to haves. Okay, they don't have to be there for me to trade from it, but generally I'm looking for as many of those to be like present visible as possible. But the two minimum criteria are one, that it causes a break of structure and two, that it's still a fresh zone. So let's look at that. Looking for a zone that breaks structure is just the easiest filter really. It takes a lot of money for price to break structure on a liquid instrument. And the larger the structure that it breaks, generally the more powerful that zone is. Okay, so swing structure we know is the most key. If a zone can break spring structure, that's going to be the strongest zone, then internal, then fractal. So here we can see that's demand entered the market causing that imbalance and it led to breaking the previous swing high. So that is a significant demand zone. It broke swing structure. So when price returns to a zone that breaks that broke the previous swing structure, that's most likely where you're going to see the next move to break the next swing high. Okay. Previously institutions entered at that level to break the previous swing high. They're more likely to have unfilled orders there and also defend that level to keep their positions running in profit to then target that next higher high. So look, we spent quite a while going quite slowly or reasonably slowly at least for this video through the market structure stuff. I'm going to go through this a little bit of a quicker pace. Like I said, link in the description for that course if you want to go through supply and demand in much more slower looking at a few more trading examples, I'm going to go through this a little bit quicker now because hopefully you understand the market structure and we'll do a much bigger kind of in depth trade example at the end. Okay, so you guys should understand this now, right? We have a bearish swing range. We get a swing breaker structure to the downside, this is our strong swing high. When we're getting the pullback. What we really want to do is try and figure out where is that next lower high going to be so we can get that pro trend short. So now what you're going to do is when you're looking at the current range that you're within is you're going to look left in this previous swing leg here and and identify where are those supply zones that led to that previous break of structure, right? We want to find this is the current range. And when you're within there and you want to get short, look in the previous leg and look for where are the fresh supply zones that cause that previous break of swing structure. Why? Because that's likely where there's going to be unfilled orders within here, right? To cause that next leg lower. Now, we don't always know which one there's going to be, but we can start to use confluences to identify with probabilities what they might, you know, where they might be. Now in this case, it comes off this zone and we get another break lower. So now we're in a new range, okay. We have two zones that led to the previous break of structure. Price comes into this one and then we go. Now, eventually we're going to get a bullish trend change. Okay? Now when you get that bullish trend change, you can look left and you can find these previous fresh supply zones, right, that weren't hit that are here. But what you need to realize now is that the market is bullish. So when it's bullish, old supply zones to the left, they are just reaction points to facilitate pullbacks because we're now bullish. You have to understand that old zones outside of the range, they're just to give us pullbacks. Because now we're focusing on the bullish movements. We look for the demand that broke the previous swing high. This is now where we're going to target the new high and so on, so forth. Old zone to the left, unfilled orders we can trade short from here, but what do we expect? It's just a pullback down into the previous demand that broke the high. And there we go. Okay, go and apply that to your charts and you'll see exactly what I mean. And again, it's not about identifying just random supply and demand zones. It's all about having the framework to manage your expectations of what you expect price action to do.

Purely through probabilities. Okay? It's not always going to work. And that's why you need to wrap your head around those market structure frameworks. Because again, we have the large swing structure. This is the demand zone that broke the previous swing high. So this is where we expect that next swing high low to form to get there. But within that we can trade a lot more. We can trade the internal structure, right. When we get that big swing leg to the upside, eventually price is going to come into an old supply zone to the left. We can start to anticipate that that swing pullback is going to kick in. But what can we wait for? We can wait for the internal structure to shift bearish to give us much stronger confirmation. Now if we come to our desk on this day, what do we have? Well, first things first, we map out our swing range. We're in a bullish swing range. Okay, cool. But what phase are we in? Well, we think we're playing the swing pullback because the internal structure shifted bearish. Okay, cool. So now I have a bearish internal range. This is my strong internal high. I want to get short because I want to play that swing pullback right down into the strong swing low. So what do I do? I look within the leg and I find the supply zones here and here that caused that previous eye boss. And then I look for price to come into them. Either this one or this one or however many you find. And that's where we want to be looking to short to play the pullback down towards that low and potentially further. Okay, you start to see how this all comes together. We come down into the strong swing low. We have demand here. You could start to look to enter straight away. You could wait for a bit more confirmation. You could look for a bullish chalk. That fractal shift that's going to create fresh demand. You click to get involved in here, that's your first opportunity or second opportunity. Then we get the bullish iBoss. So now the internal structure shifted bullish. Much stronger confirmation that the swim pullback is over. Strong internal low. Look for price to come in. Here's the demand zone. Right, that broke that high. So you could enter straight away. Maybe you wanna wait for a bit more confirmation. Look for a bullish choch signals the end of the internal pullback fresh demand that caused the chalk get involved target the weak internal high. Now we get a new one. Right. There'll be demand here that cause the IBOSS look for price to come in, so on and so forth. So it's literally the same thing as market structure. But you're identifying where those demand zones are that you've just seen how to draw to time where those entries are gonna be. And now you have your targets based on the structural framework. Alrighty, so first minimum criteria is that as least broken some structure. The next is that nine times out of ten I want to be trading from a zone that is completely fresh. So I'm maximizing the probability that you know, all of those unfilled orders are still within there and they haven't been filled. Now you Hear a lot of different names in the industry, and yes, there might be slightly different variations and true definitions of exactly what those people are meaning. But a lot of the times I find that these names like liquidity gaps, fair value gaps, imbalance and efficiency, there might be some slight differences, but it generally comes down to you want to see a zone that has caused that large imbalance, and it's still completely fresh that price hasn't touched into it since. So for a fresh zone, price has not yet traded back into it. Higher probability that there is enough unfilled orders within it to cause another significant move that's worth trading when price returns to it. Okay, so how do we actually, you know, mechanically define that it's fresh? Well, let's say, for instance, we have this candle or this zone, I should say, that breaks this high. Now, obviously, the candle that I'm pointing to here, you need to wait for that. That candle to finish printing to then be able to draw that as valid demand. Right? Because remember, the candle needs to close above the previous candle's high for it to be valid demand. Okay? Now at that point, you can see that price, since that, that kind of a closed price has not traded back into it. So now we have, or we can say that any orders that have been left within there, right, those split orders, they can still be unfilled because price has not come back in to touch them. So we're increasing the probability of a decent reaction when price returns there. And that is what we call the liquidity gap. Okay? So from, from the high of that initial candle to now where price is moving away, we can say that the zone is fresh until that gets filled, until price comes back into the zone. So here you can see when that zone was created, right, that first yellow circle, price came back in and tapped it, and that led to a significant move. Now, yes, it only tapped the top of the zone. It's quite a large zone. So that arguably is still a lot of unfilled orders within the zone. But for me, once that has been tapped, it drastically reduces the probability that when price returns there, you will see a reaction that is worth trading. So I'm pretty damn strict on this, and I only trade from zones that still have that gap and are completely fresh. Okay, so here you can see if you look from the left, from where the zone was created, you had that liquidity gap. Price has not traded into it until we look for that move to get along. And they are the zones that I want to focus on, right? They are the highest probable Ones that I find.

So they're the two minimum criteria at least causes some break of structure and is completely fresh. Now we're going to look at the other confluence. So flip zones. And this is where a zone flips another zone, a stack zone. So this is where it's nested within a higher time frame zone, a session zones, this is where it's created during a high volume session. Trading pro trend, pretty obvious, but one we want to add in for sure and then two of them that are based on liquidity that we'll cover in the liquidity section.

So a flip zone, this is where you have a supply zone that basically overpowers a demand zone or a demand zone that overpowers the supply zone. So in this scenario we have a fresh structure zone. Right. This demand zone broke that high. So we can say that there were a decent amount of orders within there that broke the high. So when price pulls back to it, what do we expect? We expect those, the demand within that zone to cause a bullish reaction. Now if we start to see that what is our expectation at this point with the information that we have from a structured perspective, we expect price to go on and break that high. Right. That's what we expect. Higher highs, higher lows. Demand is in control and it forms a bullish reaction. And that is a good signal. You want to see the reaction because it signals that there was a decent amount of demand in the market at that point where that orange circle is. Okay. So it's key that you see a reaction. Then the expectation is for demand zone to break that week high. But in this case it fails to do that. So the reaction fails. FR failed reaction. The demand fails and we get a break of structure to the downside. Okay. So demand has failed. We've got a failed reaction and structure shift. Bearish. So now what we want to do is we want to, we want to identify where did that supply step into the market to not only overpower demand but also break structures. The downside. Right, because that's going to be a lot of supply that we want to now trade in line with. Sure. And what we do is we take from the low of the reaction to the top of the reaction. That is the range where we say we can identify that supply came into the market to flip demand to supply. Right. So we call it demand to supply flip. That's where we want to get involved for the shorts, where hopefully there's going to be those unfilled remaining split orders to get the next movement. Okay. So demand is in control, we get a reaction from demand. It fails to make a higher high. Supply comes in, causes a failed reaction, causes structure to shift. Bearish. We identify that range. So I'll go through. Right, we expect a higher high. It fails, structure shifts. Bearish. Identify the supply. We want to look to short from there and bang. And then we get the opposite for a supply to demand flip. Right, Failed reaction plus a structure break. So here we can see supplies in control. That blue zone I've drawn, that led to the previous break of structure. So as price comes into there, right. What do we need to see? We want to see the reaction because we want to see there actually is supply within there. What does it try to do? It tries to make a lower low, but it fails to do so. Big demand has stepped into the market, caused the reaction to fail, caused the zone to completely fail now and structure shifted. Bullish. So we want to identify where was that demand that came in? Well, we draw it from the top of the reaction to the bottom reaction. Or you can refine it to the pivot within it. And there we go. Nice hyperbole trading opportunity to follow the order flow. Right. So you can see you're a trader, you're not an investor. Go with the flow. Supply is in control. It broke structure. Okay, let's short from there. Oh no, wait, now it's flipped. Now it's bullish. We can follow that. Right. And we're going to be looking for where those interactions between supply and demand are occurring in the market and seeing that exchange of money and seeing who is stepping in to take control there and then getting on board with it. In line with all of the other confluence we use. Right. Context is key. So the next key factor is a stacked zone. And this is very simply if you can find zones nested within each other. Okay, so let's say you are looking at the daily chart and you see this big daily demand zone. You can go and look on the lower time frame within there and identify like a four hour zone to help you time it. And when you have orders across multiple time frames like that, it drastically increases the probability of those zones causing, you know, significant move. So here, if you're trying to time that daily level, you can increase your risk reward by finding the four hour zone within it. Okay, session zone. So this is a zone created during a high volume time period. Now remember what I said, the start of the technical analysis module, you're going to be learning all of these concepts, all of these rules, drawing lines, boxes here, there and everywhere. Bring it back to what are we trying to do? What is my edge? What did I say at the very start about what my edge is? It's trying to identify institutional activity on the charts and trading in line with it. That's what everything is about and what I think I'm trying to do here. So why do I want to concentrate on zones that are created during high volume periods? Because that is likely, or I should say that is those zones were most likely created by institutional activity. If you draw a zone on when there was low volume or likely low volume and it wasn't, you know, big institutional activity going through, how likely is it that there's going to be big orders still within that? Right. So focusing on the zones that create through those high volume periods like London and New York is typically what I find to be the horrible zones I want to trade from. Okay, so in most of the USD major pairs, the Asia session is where it's a low volume period. Again, price typically in always, but typically just ranges. There's not a lot of trading activity going through during London and New York, the European and the American sessions. You'll see that volume kicking in. And those zones that formed during those periods I much prefer to trade from. Okay, so this is a pretty simple trade idea. We're on the M15 chart here. We can see that we had an M15 pullback, a break of the low. This is a high. Okay, so if this bearish swing trend is going to continue, then this high needs to hold. Now this is just before 7am London time. Okay, 7am is the start of the session. I trade where the Frankfurt volume starts to pick in or kick in, I should say. Now at this point you go, right, well we're bearish. We pulled up into the strong swing high. You know, we pulled into the, the premium of the range and we started to form, you know, potential bearish order for lower highs, lower lows potentially. This is the supply we want to look to trade from. Right. It broke structure and now we can look to short down towards there. Now that could be completely play out. But what we've just gone through is that when did this zone form? Well, this formed during the Asian session and I have an indicator here, I just use midnight to 5am UK time. Okay for that. And I know that I don't want to trade from here. Now there's other reasons that we can get into Asian session range liquidity equal highs here and loads of other things. But just purely a simple rule, wait for those zones that are formed during High volume periods and you will drastically increase your strike rate. So this is where I'll just be a bit patient. Okay. And again, there's other things going on here on the chart, other confidences you can use. But I'm purely just talking about simple rule of waiting for a zone to be created during a session. Timing. Right? So as we come up now again there'll be it will be swept this liquidity. You won't know about that just yet. We're going to cover that next. But now London has come in. We've had a sharp movement up, a sharp movement down and we've had a change of character. Okay, so people on the wrong side of the market have been caught short. We've seen this sweep of liquidity. We've seen the fractal structure shift bearish.

Now we want to look to short to target the weak swing low. And what do we have? This is a supply zone that led to that change of character, that fractal low being broken. When did this session form? This zone formed during the London session. So now it's much more likely that there's unfilled orders within this zone. Okay, Trace short from here to target that low.

And then bang, New York volume kicks in and we get the continuation of that move. Okay, So a very, very simple rule of just avoiding those zones that form during those overloading periods. They can play out, but more often than not they don't.

But again, I'm just some guy on the Internet. Don't take my word from it. You never should take these things. Create systematic rules about it. Go and test it for yourself. Collect data. Do you find it to give you an edge? Great. Implement it. It doesn't give you an edge, discard it. Right. Use what works for you, discard what doesn't. That's trading. Alrighty. Other confluence. Obviously trading pro trend. We want to be trading in line with the overall trend. You know, if you're just stuck on one time frame, you could see what just looks like so high probability for all of the confluence on that time frame here on the M5 clear bearish order flow supply chain forming other confluence. We're going to get into just now. We're expecting a continuation of that move. Okay, but if you go up a time frame on the M15. Where are we? Well, we pulled down into the M15 strong swing low into the extreme fresh demand. We're now expecting that next bullish M15 leg. Therefore the M15 is probably about to shift bullish. Sorry, the M5. Do you want to be shorting on M5 against that? No. And that's when you end up getting smashed. You're not zooming out and understanding where you are within the bigger picture. So multi. So mastering multi time frame analysis will help to avoid a ton of losses. So don't be scared of trying to, you know, you need to learn it sooner rather than later because time is power and the higher time frame will usually win. So there we have it. Those are the four extra confluences and the remaining two. So looking at sweep zones and inducement are based on the idea of liquidity liquidity concepts. So let's dive into that topic. So overlaying liquidity concepts is the final.

Concept and key to our approach. Okay, You've got market structure, you've got your overall direction. You're starting to identify potential demand zones in which you're looking for the continuation of those moves. Now, looking at liquidity is one, how we can filter out some of these zones that potentially we don't want to trade from, that might be traps and two, extra timing of things that we're going to look for when price is pulling back into those zones. So again, like I keep saying, the whole thing you want to be thinking of with technical concepts when you're on the charts, no matter what strategies you use, is what is the theory and idea behind it. And remember, what you learned is that no trades in the market can take place unless both a buyer and a seller agree on price and they need to be trading with equal volume. Okay. Large orders need equal and opposing orders to get filled with minimal slippage. So remember that when there's shallow market and low liquidity, if a big guy is trying to get in, price is going to move rapidly and are not going to get filled at a favorable price.

So institutions are going to want to transact at those price levels where there are large pools of opposing liquidity. Right? So if they're going to want to sell, they're going to want to sell where there's loads of other people buying so that they can get into the market at that price level without getting slipped and having to trade lower and lower down. Right. They want to sell as high as possible. And the way they're going to want to sell is where other people are buying from them opposite. Right. If they want to buy the best possible price price, they want to buy where loads of other people are selling. Right. So they can get in there without the market rapidly shooting away from them. So what are we doing here? Well, we are going to be looking at in the past on the price chart, where has liquidity been taken? Because that's going to be signaling that they entered there using liquidity to get involved. And then if we're going to be looking to get in line with their training in the future, where we want to get in, we want to be looking at where is there available liquidity for them to enter those new positions, but we're going to be trying entering with them. Okay, so we're about to kind of look at some technical concepts here, but it all comes back to this. Where was liquidity taken that they used to get in the market? And where is their available liquidity for them to enter again? And we want to try and trade with that. And liquidity is a big, big concept. There is a lot to it. But the two main ways we're going to use it I'm going to talk about today, like I said, is identifying sweep zones and inducement. So a sweep zone is simply just a zone that swept liquidity when it was going to created. Now what I'm going to do is I'm going to quickly introduce these two to you, but then I'm going to go into a bit more depth of the technical details about it and then we'll come back to it again and simplify it. Okay, So a sweep zone is very simply a zone that sweeps liquidity when it was created. Okay. So in this case, you'll see there'll be liquidity below these lows, which I'll explain in a minute, but there's liquidity below these lows. Sell side liquidity. The institutions are going to use that to buy and that's going to basically be another sign that when we see a demand zone, did it break structure? Yes. Okay, that's a pretty decent sign that there was institutional volume to lead to that breaking structure. Two, did it take liquidity when it was created? Another sign that that was backed by institutions that move because they're going to need that liquidity to enter the market. That's the idea behind that. If it doesn't make sense just yet, hold on two minutes and it will. Okay, so the sell orders below those lows, they're going to buy against that to create that movement, at least a break of structure. So we're going to be looking for these zones that also sweep liquidity as they break structure. The other way we use it is looking for available liquidity in front of the zone. Right. So sweep zone, if I go back, that's looking at where did they enter in the past and then we're going to see if that zone is going to play out in the future. But what do they also need if they're going to be entering again? They're also going to need more available liquidity to get in without being slipped. And that's what we will look for. We look for available liquidity in front of that zone. So here you can see that low. There's going to be liquidity behind it with sell orders in front of that zone that we're going to be looking to buy from. Institutions are going to be using that sell side liquidity to fill their long positions. So we want to see available liquidity in front of the zone. They're the two concepts. Did the zone take liquidity, did it sweep it and does it have available liquidity in front of it? So here you can see real example available liquidity in front of that zone. That's a mouthful when I try and say it quickly. And then the move plays out here on the left. There's no available liquidity there. There's nothing strong built to the right. So very often those zones are a trap and they will fail. Liquidity is behind the zone. So as you guys have seen a million times now, if the market is not very liquid and there's not a lot of volume here, if a big guy comes in and buys a lot of volume, what's going to happen? Price is going to rapidly shoot up. So ideally where they want to transact is they want to transact at levels where there is a lot of volume. So how do we identify that? Well, you know, if we look at a price chart and we can see the prices on the right hand side and we're not looking at the order book, we can assume that there's going to be orders, right, passive orders at every single price level. And you know, there'll be demand down here as well. Okay, we can just assume that. But if we're not looking at the order book, how can we know where there's going to be like huge, you know, where, where are the big pools? Right? Where is the big levels of liquidity that institutions are more likely to transact that? Well, we want to be mechanical about it. And the way we do that is we look at clear highs and lows in the market. And the more significant that higher low is, the larger the pool of liquidity that I assume is likely, not always, but likely going to be behind that. Okay, so for every high and low in the market, right, when price starts to move away, I'm going To assume that there's untapped pools of sell side liquidity below that low, likewise for a high, I'm going to assume that there's untapped pools of buy side liquidity behind the high. Now this is just a high didn't really achieve anything, so it might not be that much liquidity behind it. In this case it's a strong high because it breaks a low. In that case, I would assume there's going to be a lot more, and I'll explain in a minute when we come into inducement, okay? So the more significant, the more liquidity, I assume available buy side liquidity will be behind there. Likewise, if you get like equal highs building up, or if you get trendline liquidity or other things like previous day highs and lows, session highs and lows, previous weekly highs and lows, things like that, they are key areas in the market where a lot of available pools of liquidity are going to build up. Let me explain why. And it comes down to the concept of inducement. So essentially inducement just means like a thing that persuades or leads someone to do something. So let's just take this one by one, right? Let's say we see some lows, some double bottoms forming in the market, right, like this. Now what happens is you start to build what people call a bit of a support level, right? We start to see that's being respected and price is moving away from it. Now what happens is the more and more people who are buying here and getting long, right, they're buying, where are they going to place their stop loss. So stop loss is going to get them out the market if they're wrong. So they're buying here, but they're going to place their stop loss below the market so that if price breaks below these lows, they're going to cut their losses and they're going to get out. So because they're long and they want to get out, that stop loss is going to be what it's going to be a sell order, right? Because they have to sell their position back to the market. Okay? So if lots of people are getting long here and they're putting their stop losses below, which is a sell order, what do you think is happening then? Or what can we assume? We can assume there's a lot of sell side liquidity below these lows, there's lots of available sell orders here building up below those equal lows, right? So if you're a big guy and you want to get long and you want to buy and you don't want to get slipped. You need a lot of sell side volume to buy against. You're going to know there's going to be or there's going to be a lot of sell side liquidity below those levels, right? So now we can start to anticipate that. Let's say we're looking at a demand zone down here, right? And we want to buy from it. If we start to see these big equal lows or strong lows forming in front of this demand zone, that's a really good sign because now we know there's going to be available sell side liquidity for the big guys to buy against. You starting to see how this is coming together now.

Another way in which equal lows generate sell side liquidity is not people getting long and with their stop losses, but also people who want to sell this, right? They want to sell the breakout, maybe it's a flag pattern, breakout of a range, whatever, and they will sell this. There's all sorts of reasons as to why Lowe's create available sell side liquidity. Okay? You know, people buy strong lows as well, they're going to have their stop losses, same thing. It's just going to drink, it's just going to generate more sell side liquidity and then the exact opposite for buyers, right? If people were selling, you know this, they see this as a key resistance level prices and breaking higher, they sell here, right? So if they're short and they have a stop loss behind, what is their stop loss going to be? It's going to be a buy order, right? They have to buy back their position from the market. So it's going to generate a lot of buy side liquidity. Likewise, buy people buying the breakout of equal highs. They think this is a key level they want to buy, fine. It's going to generate more buy side liquidity. So again, if we're looking at a supply zone here that we want to sell from and we start to see equal highs or strong highs or session highs, whatever you want to use, whatever mechanical rules you have for significant highs, we can start to see there'll be buy side liquidity there. That's a good sign that potentially the big guys will use that buy side liquidity from the supply zone with their previous split orders to get short. Okay, so can you remember the two main ways we're going to use liquidity? One, sweep zones looking at where they potentially entered in the past and two, available liquidity which we'll get into in a minute. So sweep zones is looking at where have they potentially entered. So when we first look at the supply and demand, what was the main, main, main criteria we looked at to potentially identify if that zone was created by institutional activity? What we looked at, did it break structure? Okay, now what we want to see is when that zone was created and it broke structure, did it take liquidity when the zone was created? Because remember, what do we assume is behind highs? We assume that there is buy side liquidity that the institutions can use to sell against to then create that movement. So very often when you see these zones that form through the sweep and break structure, right, it sweeps this strong high, then break structure, that's a sweep zone or sweeps these equal highs, it's a sign that potentially that zone was created by institutions. Okay, now I'll show you a reason as to why the exact opposite can occur. Is when you see say price coming down like this.

Whoops.

You now have a valid supply chain in a bearish market, right? It broke this structural low, but what did it not do? This high didn't break anything, right? Didn't sweep any structure. So it hasn't taken any liquidity. So it's less likely that this zone was created by institutional activity. Because what do they need? They need buy side liquidity to sell against. Where is the available buy side liquidity? It's behind these highs. So very often if you see a zone like this that didn't sweep liquidity when it was created, not always, but very often, price will come up, it will break it, it will take the buy side liquidity behind here, and then you'll see the movement. Okay, so that's why we want to see price sweep the high first. And that's why then if you get that movement now what do you have? Now you have a zone.

That swept liquidity, you have a sweep zone, and this is much more likely to be a zone backed by institutional activity that you will then see the move created. So that's why we want to see sweep zones. The second main way we use it is inducement. This gets massively over complicated, but basically we just want to see is. Okay, we've identified a zone that we like, but is there available liquidity in front or within the zone for institutions to potentially fill? You know, new orders to get long or short. So in this case, what do we have? Okay, we have a zone here that led to a break of structure. Okay, cool. But when price is coming down, there's no structural lows here and there's no significant lows here. So there's nothing that has Induced or created available sell side liquidity for them to buy. So if there's nothing here, if there's no liquidity to the right or to the left, where is the available liquidity? Well, it's going to be behind this low. That's where all of those sell orders are going to be. So it's much more likely that price is going to break that low. That's where people or the big guys are going to be entering long to get that next leg. Okay, so you want to see available liquidity either here to the left, right, There's a low. Increases the probability of this zone holding. Or you want to see it built in the right. Okay. Increases the probability of the zone holding. Or you can have both. Now, how you define mechanically what is valid liquidity and what isn't, what time frame you need to see it on and what time frame isn't valid, how near it needs to be to your zone, your point of interest, your POI or not. Those are all things that you need to try and make rules around and make it systematic. I've created that, I've tested that, I have that. I'm not going to give that to you. You need to do the work and put that work in. You know, we reserve that source for our members. Okay. But this is more than enough for you to get going with, to really help you identify a bit of a cheat sheet here of what you want to be looking for. So again, sweep zones. Did the zone take liquidity when it was created? Does it have available liquidity in front of it? That's how you can start to follow the footprint of institutional activity in the market. So what do we have here? Price shoots up, it pulls back, starts creating these equal lows. What's that going to do? It's going to generate sell side liquidity below that bang that gets taken and swept leads to the next move there. And what you'll see is when you start to form this bullish trend, how those strong lows form is they typically form through sweeps of liquidity because that's what institutions use or need to fill their long positions. Right. So what do we get? We get a pullback. Price comes down, sweeps this low, and it also creates a low that breaks a high here that gets swept as well. So even more liquidations occur. Then we get the next leg higher. Right now we have enough juice, we come into the previous demand range as well. But we get that next leg to the upside, Right. Price doesn't do it straight away. It shoots up, it pulls back and it shoots up. But what happens here, this movement doesn't sweep any liquidity, okay? And it moves up. Now when price is coming back in, you could think, well that's a higher low. Let me buy here to try and get that high. But what's happened, no liquidity has been taken. There's no available liquidity in the leg. So where is the available liquidity? It's behind this low. So price ends up inducing that low, right? The sell side liquidity below it into this demand range. This was the demand that flipped it. Okay? Now this, don't worry, you don't have to pitch a perfect, see this every time and get all the zones. But it's to understand what is going on here, right? We've had a swing pullback, we swept liquidity, we're starting to move up. We get a pullback, but no liquidity was taken. We need that sell side liquidity to fuel the next movement. Where the big guys are going to be stepping in again. So it comes down, that low gets swept, right? There's available liquidity in front of this zone now. And now we get that sweep to generate the next movement. And you see how that was where the last injection of demand was to overpower this level of supply, right? We got that supply to the mild flip, available liquidity in front of it, high, probable longs now to target the next high. And the exact same things happens, right? That was the last injection of supply, sorry, demand to break the swing high.

What do we do? We come down and we sweep that low into that extreme level. It's a bit subtle, but we do actually get a slight sweep there, come into supply. This sweeps the low. So we get a sweep flip, price comes up higher, high, higher low. Now you think, okay, are we going to continue from here? But what do you notice here? Exact same thing that happened over here. This pullback didn't sweep any liquidity. It pushes up. There's no available liquidity. So where is the available liquidity? It's behind the low mouthfuls to say. So we come in, take those sell orders into the previous level, that flip demand. Exact same scenario here, right? This flip demand has the available liquidity. Same thing. There we go. Now we can generate the next movement. Just rinse and repeat, right? We come in, generate these lows, get swept and eventually we go come back, generate equal lows sweep. That's the new strong swing low. Come down sweep, new strong swing low, right? It just goes on and on and on. So there we have it. We'll do a Quick recap. Sweep zones and inducement, that's the main way to use liquidity. There's a lot more to it, but that's the major, major key. So sweep zone s and design that swept liquidity when it was created, okay. We look for basically did it sweep. There's going to be sell orders below there. They can use that sell side liquidity to fill their long positions. Increases the probability that that zone was backed by institutional involvement. Right? They buy against that sweep. Least a break of structure, generally a decent zone. But again, context is key. Pair it with everything else that I'm teaching you. Inducements. The other side, Right? We looked at sweep zones in the past where they entered, but now we're going to look to enter from the new zone. Do they have available liquidity to use for that? So we want to look for available liquidity in front of or within that zone for them to buy against. If they don't have that to the left or to the right, very often these are traps. When you see those perfect movements, very often they will fail. Why is this concept here? How do we summarize it? Remember, for every buy order, there must be an equivalent sell order for a trade to take place. This is why we spent so long understanding the true underlying market mechanics of how prices move. Because then when you start applying these boxes and these lines and these shapes to your charts and your fancy drawings, you actually understand that it's based on real market logic. Because those large orders need equal opposing orders to get filled with minimal slippage. Okay. Institutions aim to transact the price levels where those large pools of opposing liquidity are going to be selling into large demand or buying from large supply. So we want to look for, where has liquidity been taken in the past? There's your sweep zones. Where is the available liquidity for those zones? It's going to increase the probability that they're going to hold. There we go. All of that will give you high probability POIs. POIs, points of interest. Just a fancy silly name for a zone. Okay? Use all of those, test them, add them into your plan. Create mechanical rules. You're well on your way to getting there. So overall, those are the three big frameworks and concepts that we use for our strategy. Understanding the market is an auction. The market is seeking liquidity to rebalance price, and we're following the footprints of institutional activity. When you overlay as many of those concepts together, that is high probability. Trading a concept on its own is pretty much useless. Okay, Context is key, and you need to understand how to map all of those together in a way that works for you to give you an edge over time. Okay. You're going to go through tough periods where market conditions aren't going to be great. But think about quarters, think about years. That is where your true edge lies over a large sample size of trades. So a hell of a lot for you to take in. We want to try and systemize things as much as possible and make them reasonably simple for us to wrap our heads around. So let me do a bit of an overview of kind of how we put it all together, how we actually build our trade idea with those frameworks, how we start to identify an area of interest that we want to get involved from. And then I'll talk about entries and management before we go on to the final topics. So I use three main time frames for my trading. I have a higher time frame, a middle time frame and a lower time frame. I basically spend 90 of my time just looking at the middle time frame. Okay. I trade middle time frame ideas with lower time frame timing and the higher time frame just to help to give a little bit of context. Okay. So when I'm doing my day trading strategy, my higher time frame is the four hour chart. So if you look at this big thick black line, this would be the four hour chart. Let's say we're bullish on the four hour swing. We'll be looking for the four hour to pull back into the four hour strong swing low and then we look for the next four hour leg. Okay? So remember, all we do with that higher time frame, all we do. But generally we just want to know what higher time frame phase are we in? Are we in the run phase, the pro trend run phase? Or are we in the higher time frame counter trend pullback phase? Are we pulling back or are we forming the pro trend run? Because what that will do is then we're on our middle time frame, which is the most important time frame for me that will manage my expectations of how far I expect the middle time frame trend to last. For instance, if this is the middle time frame, right, this red line, it's bullish. But now that we've had the four our boss, what am I expecting? I'm expecting that four hour swing pullback can start to occur. Therefore, I'm on the ball that the M15 is likely going to shift bearish soon. When it does shift bearish and I'm following the bearish M15 trend, what do I, what am I aware of? I'm aware of that I'M only doing the four our pullback. Therefore, as we come into the four our swing low, we come into four hour demand. I'm anticipating that the M15 is going to shift bullish. Okay. That's how I use those two together. But the middle time frame for me, the M15, that is where what I am trading. It's that idea. Okay. So every time I set my desk for the training session, I'm finding where is that M15 current range. So for instance, let's talk through this scenario, right? I get to my desk and let's say price is where the circle is. Okay, so what's my framework? Look at the higher time frame first. Higher time frame is bullish. Let me get rid of some of these lines actually, just to simplify it for you guys a little bit because. There we go. Right? So this is where price action is. What's my framework? Go to the four hour chart first. Identify the swing structure. I can see that this is my four hour swing high. Swing low. This is my swing high. We are bullish. We have formed the swing pullback. We've come into the strong four hour swing low. We've mitigated for our demand in a discount. Right. That broke the previous swing structure and now we're starting to move up. So it's pretty likely this is the target, the four hour swing high. Okay, cool. So now I'm trying to trade the four hour run, the pro trend run. Let me now go down to the M15. Where is my current range? Well, I can see the last thing to occur was a bullish M15 break of structure. So this is my M15 strong low. This is my M15 weak high. So now what do I have? I have the M15 aligned with the four hour chart. They are both bullish. We pull back to the discount. It's now highly likely the M15 will remain bullish until it takes out that high. So now do you see how we're already framing really high? Probable directional bias. Okay, cool. I want to get long. Where do I want to get long? I need to time that. So this is where supply and demand comes in. And obviously premium and discount. So from the the low to the high, I now have a premium discount. So in an ideal world it doesn't have to, but an ideal world, price will pull down into the discount of the range. Okay. Because what I'm now looking in this previous leg here, I can identify all of the demand zones that are fresh and are mitigated that led to the previous break of structure. So I want to get long. I've identified multiple zones. Okay, now we can start to filter them. Well, this zone is in the premium. Let me zoom in a bit here. This zone here is in the premium. It doesn't have any available liquidity in the left. Maybe something will be built to the right. But there's nothing here. And it didn't sweep liquidity. Right. It's just a pullback. So this I'm already skeptical of trading from the zone. I would probably want a lot more confirmation. I'd probably want to wait for the M15 to pull back in form, like a bullish chalk or a strong liquidation. Then potentially I look to get involved. So it's probably likely that this zone is a trap. So now I'm probably mainly waiting for price to pull back down here. Because now what do we have? These are both in the discount. This swept liquidity when it was created. So did that one. They both led obviously to the break of structure. And this has available liquidity to the left. Okay, so now you see straight away how I'm looking for all of those signs that you've just learned. And to get involved now, there's other things you can wait for, right? You can wait for things to be built in the pullback, strong liquidations. You can wait for more confirmation. You can wait for the M15 to shift bullish here. Then you get fresh demand during session. Then you can do things within here. You can enter directly on the zone. You can wait for lower time frame timing. There's so much, but the bulk of it is getting your high time frame correct, your middle time frame correct, identifying the current middle time frame you're within. This is what I'm concentrating on for the session. Identifying those zones I want to trade from now. Sometimes there won't be good zones. That's fine. Wait for price to pull back. Let it do its thing. Let it take liquidity, let it shift. What will that do? Create a fresh zone. Bang. Hyper trading. Now I want to get involved. That is what I'm doing. Day in, day out, the same framework every time. There's more little complicated things you do. There's more little, you know, details you can pay attention to. I actually have more than three time frames. I look at the daily chart too. There's other stuff you can do, but it all comes back to this. This is the core, core, core framework. That's high property trading. They are the main things I try to focus on. Let's look at a trade example. So I'm actually going to make it a little bit more complicated for you and add in the daily chart here. Just because context is pretty key here, it's helpful. This was a recent trade example, right? So we have this big bearish daily trend and we just broke the daily low. What do you expect after a daily boss? We can start to expect a deeper daily pullback. And if we really want to dig into, we can see there was an unmitigated level of demand here that price has come in and we're starting to see a reaction from. So there's every possibility now the price can form that deeper daily pullback. And also from a liquidity standpoint, right, there is valid daily supply here that led to the break. But there's no available liquidity in the leg. So it's very likely the price is going to need the available liquidity behind the high there. Right? So we may see some further upside before seeing downside or could even see a deeper pullback. Right. So there's some decent science here for counter trend longs here on the daily chart. Now you're well within your rights to ignore the daily chart. Keep it simple. When you're starting, three times frames is more than enough. You can start on the four hour time frame as your highest time frame. We've had a swing pullback lease the breaker structure. This is our four hour swing high. Okay, now we can see that we're starting to form that four hour swing pullback. We big, big wicks in here showing that big bullish pressure coming into the market. Not the cleanest price action. The internal structure for sure is a little bit messy within here, but we can see what happened. Price pushed up, we got that shift. We had this unmitigated level of demand and what to do. Price came down and swept liquidity into that level, had a movement away that then broke structure to the upside, creating another demand sign. Now is it the curious in the world? No. But we can start to see, you know, where demand is entering the market, right? Prices come in available liquidity use that sells our liquidity to fill that demand another leg higher. We have some demand here. So whilst these highs are being respected and this demand is holding, we can potentially expect further upside. So now we framed a four hour idea. We want to get long, but it is counter trend. So it's a little bit riskier. But whilst this demand's holding, we can look for price to push up. So now I go down to my middle time frame, right? So again, what have we just looked at with the, with the, with the Concepts the four Our chart tells me what phase we're in. We're in the pullback phase. We're playing the pullback phase. So if the M15 is bullish, I'm just going to look for quick moves in case the M15 shifts bearish, then we're expecting that movement. Right. So quick four hour pullback moves is what I'm looking for here. Okay. So dropping down to the M15. Right. And what we can see if I actually zoom out, I haven't got it drawn on. But essentially this is that four hour swing pullback. That's your four our low and this is your four our high. So what we can do is follow the bullish M15 trend right to play the four our pullback. And then once the M15 shifts bearish, that will be a good sign that potentially we are heading lower. Now sometimes you'll get false signals right where we saw the M15 shift, bullish went bullish for another leg but then it shifted bearish. Okay, so now if you go oh well, the M15 shifted bearish perhaps. Now we're ready to target the new swing low. But this is where you have to be aware of what's going on on the four hour chart. And remember we saw that there was unmitigated for our demand here. And what that M15 bot ended up being was the four hour sweep into four hour demand to push up back higher. Okay. So markets aren't always super simple. They can be a little bit tricky like that. But you can be aware of what's going on if you're looking at the four hour chart and understand that this might be a bear trap to push up higher. But anyway, now we have more alignment because the M15 is bullish. This is our strong M15 swing low. This is our weekend 15 swing high. And we have four hour demand. So what are we expecting? We're expecting price to push up a little bit higher to continue that four hour pullback. So you can start to see now how we are framing our trade idea. I'm actually just going to hide this four hour demand just so we can focus on the M15 a little bit more. Okay, so what you can do is you can use templates like this M15 swing strong, draw on your strong, swing low. And this can just help intraday just to keep you of your bias clear. Know where you want to trade from, know where you want to be targeting. We want to trade from strong and we want to target weak. Okay. Premium discount. What has happened if we mark that on prices pulled down into the discount of the range. We can see that. Right. So if we pull down into the discount of the range into four our demand and we have taken significant liquidity to the left. And what else? We're starting to see structure start to shift. Bullish forming higher highs where we get that bullish iboss, that bullish internal structure. Now what do we have? A lot of confluence to show that the M15 swing pullback may now be finished. We have a strong internal low and now potentially we can follow the internal structure up towards a weak swing high. Okay. It's still risky. Anything can happen. We could come down lower. Then we could go, we could reverse. If the four hour trend is continuing. We are dealing with probabilities so always be aware and prepared for both sides. Okay, so if we have that session, volume is about to kick in. Internal structure has aligned itself bullish with the swing structure. It's pulled back to the discount we've taken liquidity. So now let's identify some zones in which we could potentially look for longs had this zone here, it led to the previous iBoss. Okay. Now it's subtle but it swept liquidity below this fractal low. So it technically is a sweep zone. Okay, you can see very subtle but it is a sweep zone that meets my rules. And then we have this next zone below here. Now this is a little bit trickier to see but we did actually get this sort of weird flip zone where we had supply previously. Right. You can see price came into that supply tried to break lower and then demand has stepped in. So we can start to see demand taking control. So happy to get long from either of these zones.

We have Asian range liquidity here. That's what this indicator is showing. So liquidity builds up below these lows. Get the Asia range liquidation into this POI mitigation into the Z mitigation. Not quite sure. So let's see and wait for confirmation. Let's wait for the M15 to shift. Bullish. Okay, the fractal water flow now shifts. Bullish. That's what I call it. At least where we get the fractal structure shifting. Bullish here. Right. Little shift. Just confirming with the session volume kicking in now. Now what we're looking for, corrective pullback. Asian low swept into that M15 demand. That was a sweep zone that led to the previous ibos. So now what do we have? Pretty much full alignment. M15 swing is bullish. M15 internal is bullish. Pull back to M15 internal discount demand sweep zone. We get the fractal shutter shifting bullish. Now what also do we have? Now we have a zone that was formed as that session volume starting to pick in. Much more likely to be backed by institutional involvement. Okay, and now we can look to get involved in the trade. Now in this case you can just assume or we can say we're going to, we're going to talk about entries a bit more in a minute. But you could literally just enter directly. So this is where you buy. You put your stop loss below behind it in case you're wrong. And then first targets, you know, Asia High. Fix 3R. We'll talk about management in a minute. Or you can target all the way up towards, with pure market logic, up towards the weak swing high. Okay, and now you've framed a good idea. Now always be aware of both sides before you're entering a trade. Be willing to accept that you could be wrong. That can now be the strong liquidation into this zone. And then be prepared for what you're going to do if you're going to take that entry or not. Okay. And that's a beautiful trade. This was actually a trade I also took not so long ago. I didn't target all the way to the swing high here because this was a counter four and trend play. I just took a quick in and out fix 3R targeting the Asia high and this liquidity here. But regrettably, yeah, ended up going a lot further. But that's trading. You've got to follow your rules. You're never going to call the tops and bottoms and perfectly exit. I made my money, I got in, I got out and there we go. But hopefully you can start to see now the frameworks here. Okay, every trade is going to look slightly different because price action is always unique every day.

So learn, learn the framework, learn the rules and then you need to get the experience to know how to apply it to when price action looks different. So that's it. Let's dive into entries and management. So again, just to summarize, really it's three core set, three core steps. If I could keep it simple. Market structure gives you a directional bias. Then find the supply and demand zones within that current range. That's going to help you time that directional bias. And then use those liquidity concepts to filter out those pois, those zones and to help you time those trades. Okay, so trade entries, so many different ways you can do that. As we looked at risk reward, right, the entry is where you're going to enter, stop losses where you're going to risk is going to be, and where you take profit is your reward. How you get your entries is really kind of how you try and maximize your risk reward ratio. To talk about this a lot more in depth in a minute, but generally with entries, your whole aim is to enter as close as possible to where your idea is invalidated. Okay, so you want to go, right? If price breaks below this low, I'm wrong because the market's going bearish, right? So I want to be out. So that's where I'm going to put my stop loss. And ideally you want to enter as close as possible to that invalidation point, because that's going to allow you to get your stop loss as small as possible. And therefore for every pip that price goes in your favor, your risk reward is going to be favorable. Again, if you're a complete true beginner and you don't even know what risk reward is, it might not make sense just yet, but we'll get into that in the next module. Okay, so before we get into entries, the key, at least with my training, is that building the middle time frame narrative and picking those middle time frame zones. So again, for me it's all about the M15. For me, M15 structure. M15 zones, that is the key to success if you're not getting the narrative. So by narrative I mean building the story, building the directional bias. What is most likely to happen next? Where are my strong highs and lows? Is the internal and the swing aligned? Right? That's building the overall story of what you expect and then identifying hyperbarable zones for that. If you can't do that, doesn't matter how good your entry is or how you know how many bells and whistles you have in your entry model, because you're just gonna get slapped around by the market. Okay? The perfect lower time for a entry model in the wrong middle time frame area is worthless. It's all about the middle time frame or higher time frame for you. Okay, Middle time frame ideas with lower time frame timing. That is my recommendation. So how I do that is M15 zones with M5 all the way down to M1 entries sometimes. Now, I'm not going to share with you the exact entry models that I use. Okay? We'll keep that source reserved for our members. Can't give you everything, but generally this is how you want to think about entries. Again, keep it simple. What you are doing is identifying your middle time frame zone. Okay? This blue box in line with the overall trend. Okay? Keep the nice and simple. You've Got two main options. You either do what we call a risk entry where you just enter directly on that zone and your stop loss behind and that's it. Okay, so you don't even go down to lower time frames. You just set it on the M15 zone, nice and simple. If you want to get a little bit more advanced, you can use lower time frame timing. Okay. And this black line represents the lower time frame price actions, say like M5, M3, M2, M1, whatever you want to use. Again, I'm not going to go into the bells and whistles of how you do it, but use everything you've learned today and just apply it to the lower time frame. Right? In this most simple case, you want to see the M15 zone hold and you want to see the low time frame start to shift bullish. And then you want to try and time these higher lows buying it. That's it. You can use liquidations. You can look for the lower time frame zones within here. There's all different things you can add in. You can add in Fibonacci retracements, you can add in whatever you want. But the general idea is either enter on the zone directly because you have confidence or wait for lower time frames to start to give you extra confirmation. Whether it's through liquidations, whether it's for it starting to form that bullish order flow. Then you look to time your ideas within there. Okay, that's it. I'm going to leave that with you for now. There are certain you want to try and make it systematic as possible. But my advice is is do not over refine too much. The money is made in identifying the correct pois and building the narrative. Once price gets there and you've got good risk reward and you know you have a lot of conflicts aligned, just get involved, have an invalidation point, have your entry have a target. Stack the numbers in your favor. Let the market do the hard work for you. Once you've got your entry, obviously now you need to manage the trade. Okay, so everything a trader actively does after a trade is executed to minimize risk and maximize profit. It's kind of five main ways I've sort of categorized different trade management strategies. There's so many different variations of each, you could even combine them multiple ways. This is where your creativity can come in and really figuring out what's best for your strategy and your personality. Okay, so fixed our technical targets, partials training, stop loss and a time based exit. Fixed R is what I use a lot, is what I recommend for when you're starting out and essentially what it means is that you target the same risk reward every time. Okay. So when you enter a trade, you're always targeting let's say three times the amount that you're risking. Okay. So when you're wrong, lose say like 1R. When you're right, you win 3R. You're just trying to be the casino, stack the odds in your favor, it's set and forget. You're not chopping and changing, right? So lets you be consistent. You have your full size and your winners, so you're not taking partials. Okay. You'll see that in a minute. You have your full volume and your winners downsides are that you can give running profit back because you're just, you know, you're leaving it and if it doesn't hit the 3R and it hits a technical level and reverses, you have to leave it alone, right? If you're being mechanical, your risk is fully open, right? Because you're not trading your stop loss, it's completely set and forget and you can leave some profit on the table if price runs a lot further than your 3R target. But overall fixed R is definitely what I recommend for beginners and for most traders it lets you be consistent, it lets you collect consistent back testing data. It's way easier on the mindset and you're just trying to. Trading's a numbers game and you're just trying to stack those in your favor here. So I definitely, definitely recommend starting with fixedar. And I actually have a back testing sheet that I use that allows me to show me what the perfect fixed R will be based on the data that I've collected, which I'll show you in a bit when we get onto the backtesting module. Technical targets. This is again very, very common one where again if you understand market structure, for instance, and you're getting long, technical target would be to target the nearest weak high. Okay. Exiting at those technical levels. Bit more discretion on this. I can target internal high, the swing high, what time frame, things like that. But generally it's a good way if you don't want to limit yourself to kind of that fixed R approach. Another way is trailing your stop loss. So this is a bit more of an active management main way to do that is either on your technicals levels or your evolving risk for reward. So technicals would be if the market starts forming higher highs and higher lows, just trail your stop loss behind there again, be systematic with how you're going to do it, what time Frame are you doing on? Is it swing structure? Internal structure? Is it fractal structure? How much of a gap behind the high lows are you going to leave it? Things like that? Are you going to use an algorithm to do it for you? Are you going to try manually do it? Can you be on the charts to actively doing it? Think through these things, systemize it. If you're doing it on evolving R, you're not going to look at technical levels. You're just going to go right. For instance, when, when Price is running two hour in profit, I'm just going to move my stoppers to break even, right? And then leave the three or four hour target, whatever it is. So there's pros and cons to every approach. You need to think through it.

One of the main downsides is that you know, if you trail behind as high lows, sometimes price can come down to grab the liquidity and continue. And you trade trope to the trade too early, right? But sometimes when you do that, you're actually on a trend change. So look, there's no perfect approach. There's only trade offs in trading. So you just need to find the one that you feel you have a better edge with over time with the data you collected. And again, what feels good on your psychology. Some people are really good at letting trades pay out and they get pissed off if they exit too early. Some people, their psychology can't handle that and they need quick profits. Okay, so over time you'll figure out what works well with you.

Partials. I'm not a big fan of this, but essentially you close a bit of your volume at each level, so you're basically locking in a bit of profit. I'm not a big fan of that. I think by the time Price gets on your winners, you end up not having much volume left. But there are ways to do it again. You can decide to close the different technical levels. You, you can just decide to close at different evolving R levels. You know, you can set it with set and forget. You can use trade assistance to help you with it, help you pay yourself. You can, you know, remove the risk as price is going in your favor. But the maybe your major downside, which is why I don't like it, is when Price actually does hit your big target. You know, you've got barely any profit actually running because you've closed all of the volume there. So that's why I'm personally a big fan of it. But yeah, explore it and see if it works for you. Then we have a time Based exit. Not a lot of people use this, but this actually works pretty well. I think a lot more people use it in the, in the algo trading world, the automated world where essentially just after a certain time you exit the trade. So you're just letting those winners just run as far as they can. And as the volume starts to die down, say at the end of the day or the end of the session, you just exit. Okay, so again, another very mechanical thing that you can pretty easily back test. So those are the five main ways. Like I said, my recommendation is start with fixed R. It's very simple, keeps you consistent and then explore other avenues as you go. So like I said, there's no one rule, you know, fits all. It's different for everyone. Find what suits your strategy, your psychology and your lifestyle. You know, don't do something that requires active management. If you can't be on the charts or don't want to be on the charts. Keep it simple and mechanical. You know, always try and remove the risk the same way and just test loads. One tip for if you do want to kind of practice holding those bigger trades towards those bigger longer term technical targets, just leave like minimal volume on the trade, like 0.01 lots, just to see what it feels like holding the trade for that longer term management. So money management, AKA risk management, this is key. You are a professional risk manager. Protection of your capital is way more important than optimization of profit. Okay, Trading is a long term game of probability. It's about who can survive in the long run. Ultimately, trading is a numbers game. You want to be the casino. You want to stack the odds in your favor and have the numbers on your side. You were going to have rough periods where conditions are not conducive to your strategy, where you are not performing. Make sure you take this seriously. Stay in the game. Like I said, trading simplified. You need three things. We've just looked at how you have a profitable strategy. You now have that. Now you need to learn that even with a profitable strategy, if you have the wrong money management, you will lose money over time. Okay, so that's what we're going to look at now. We're going to look at how you calculate your position sizing. What are pips? How do you calculate those lots? Leverage, margin, win rate, risk reward ratios, your profit expectancy, random distribution and the law of large numbers. So position sizing is really how much should you risk on a trade? Okay, you framed your trade idea, but how much money decide to put on it? Well, this is entirely dependent on how you frame your trade idea. So you need to know where are you entering, where are you putting a stop loss and where are you putting your take profit? And of course, that's determined by the rules of your strategy. Okay, so the distance between your entry and your stop loss is your risk. That's how much you're willing to risk if you lose a trade. And then the distance between your entry and your take profit is how much you stand to gain if price obviously hits your take profit.

So how much are you willing to lose if price goes down and hits your stop loss? $100, $500? How do you decide this? How do you calculate it? So the position size is essentially how much volume you put on a trade. In forex, we use lots. Some of your brokers will call them units, but in the spot CFD space, we use lots. Okay, so once you've got your risk reward and you know the distance, you now need to know how many lots I'm putting on. So if price hits that, you know how much money you're going to lose. It's always predetermined. You always know how much money you, you're willing to lose on a trade. Okay. And we do this as what we call risk percentage. Okay? So we're going to pick a number that will be the percentage of your account balance that you want to risk the trade. For instance, do you always Want to risk 1%? Do you always want to risk 0.5%? And how you decide that we'll get into in a minute. Now to be able to do this, you need to know one, your account size, balance, and again, the number that you've picked, your risk percentage. So let's say you, you have a 10 grand account and you're always going to risk 1%, then obviously that's going to be $100 that you're willing to lose on that trade. So what we're going to do when you calculate how many lots to put on that trade is you need to know what instrument you're trading, what the currency of your account is in, how much you have in your account, where your account balance is, what is your risk percentage. Then you need to know what's your stop loss size and pips, and then you can calculate how much volume you should put on that trade. Okay, so in this case, if you enter at 10:15 and your stop loss is at 10:11, that is what we call 40 pips risk. So what on earth is a pip? But a pip is a percentage in point and it's the unit for measuring the changes in value between two currencies. Essentially it's just a fourth decimal place of price. Okay? And that is one pip. So 0.01, that is a pipeline. So there are exceptions to the rule, like the Japanese yen pairs, they only go to two decimal places. The case or knows 0.01 is 1 pip. Now, in the modern world, we now have what's called pipettes or micro pips, and that is the fifth decimal place. Okay? So if you see that fifth number, right, that is your pipette or micro pip. So in this instance, if euro dollar goes from 35. 2 to 35, 7, that is a half a pip or 0.5 pip. Movement in price just allows you to be even more accurate. Okay, so trade example, let's say we were framing up this trade idea, right? And we wanted to enter at this level and we want to put our stop loss behind here. And we're going to target like this level here, right? Okay, cool. So that's the trade. But you know, how much do I buy? What's the volume I put on? And this is where you then need to look at your inputs. Okay? Now you can use a calculator here. I've never really used it, but what I do, what I recommend is you take the entry price and the stop loss price and you can see your stop loss in pips. Or an easy way to do it is literally here, right? You see how this is moving the stop loss and this number here is pips. Okay? So that says 74, it's 7.4 pips. Okay, because that's the fifth decimal places on micro pip, remember? So that 7.4 pips. So let's keep it simple and go to 8. Right? So that's an 8 pip stop loss. So what I recommend is using a position size calculator. Myfaxbook has a good one. So we're trading Euro dollar, right? Pick the pair you're trading. Let's say you have a US dollar account. We'll keep it simple and you're the zoom in a bit. Your account size, let's say is 10,000. So 10,000, we're going to risk 1%. Okay? And our stop loss is 8 pips. So now we want to calculate it. And there we go. So we're going to obviously risk 1% of our account, which is $100, and we're using lots with our broker. So it says because you have an eight pip stop loss, you want to risk $100 and you're trading euro dollar and you have a US dollar account size, you're going to risk 1.25 lots. If you want to know the in depth calculations behind all of this, why it matters if you have different currency pairs, why it matters if your current currency, it's because of all of the exchange rate conversions that they have to do to make sure you're risking the right amount. I'm not going to cover this. It's extensive. Go on chat GBT or some other. There's loads of resources out there. Okay, but keep it simple. Position as calculator will tell it. So once you've done that, you then go into your broker and you'll enter your entry, your stop loss and your trade size. With that I'll show you brokers and trade execution in a little bit. Okay. Now another thing I would recommend for those of you who are using Metatrader as an execution platform, you can download that here. Okay, you just go into MetaTrader 5 again. We'll cover this a little bit later, but you can I recommend installing a trade assistant. Okay. I'm not affiliated with them in any way whatsoever. Do your own research. There's plenty of options out there, but essentially you can install this and you can basically drag your risk reward tool on there and it will automatically calculate your risk and all of that good stuff. And there's loads of other features. I know that you can do that on Trading View I believe now if you attach your broker, I think if you go down to Trading panel, it's not something I've ever done. I personally like to keep my broker separate from my Trading View charts just so I don't do anything emotional or accidentally click a button and drag a line. I like to keep them separate. But for those of you who are just setting up, if you want to, you can definitely, I believe use the restroom tool to set orders now within Trading View. So you don't have to be a dinosaur like me who's not adjusting with the the new updates. So yeah, multiple ways to do it. You definitely don't need to manually calculate your your position size. So what are lots and how do they work? Well, the lots represent the units of the base currency that you are trading. Okay, so let's say your account currency is in US dollar and the pair you're trading is Euro dollar. So one lot will basically mean if you're trading euro. Again, if you're trading euro dollar and you have a US dollar account for every one lot you have in your position for every pit, the price moves for or against, you will be worth $10. Okay, if you trade 0.1 lots, each pip movement will be worth a dollar and a micro lot. So 0.01 lots, each pit movement will be worth 10, 10 cents. Okay, so remember this trade example, we were saying that we had a 40 pip risk. Our stop loss was that big. So we want to know, okay, if I want to risk 1% of my account, $100, right? And it's 40 pips, what is the pip value? So that if there's 40 pips go against me, I only lose $100. Well, 0.25 lots is 2.50 a pip. We've got 40 pips of risk, right? So it's $100 at risk. That's the basic maths. Again, you can just chuck in a piece of nice calculator. It doesn't all fool you, but that's the basic maths as to what is going on here. Now, 0.25 lots gives you a notional trade value of €25,000. But Matt, the account size was $10,000. So how on earth do we have a position that's worth €25,000? What's going on here? Well, that's where the beautiful world of leverage comes into play. Okay, so leverage gives you exposure to large amounts of currency without having to pay the full value of your trade up front. Think of it just like a mortgage from a bank, right? You want to go buy a house that's worth 500 grand. You've only got 100 grand. So how are people buying it? Well, they get leveraged, right? The bank is going to lend them the extra 400k. Well, essentially your broker does that for you. It loans you the rest of the money that you need, okay, so that you can get that larger market exposure. So you put down a bit of margin, okay, which is a bit, basically your deposit. They'll freeze that in your account, Then they'll leverage up your trade to get that exposure. Now, don't worry. Yes, in that previous example, you have a 25, €000 notional trade value, but you're not risking 25, €000 because you have your stop loss in place. So that tiny, tiny movement of 40 pips means that you'll lose a hundred dollars, and then you're out of the trade. And then you give them, you essentially give that, that margin back to the, the broker. Okay, so here you can see, right, one, not on your dollar is 100,000 notional value of €100,000. If you use 100 to one leverage, right? So the literally you have to put down a very, very small amount of margin for that. Right? So the notional value divided by the leverage or €100,000 divided by the notional value. Again that would depend on the current exchange rate. Okay, that ends up being, in this example, the exchange rate was 110 for euro dollar. Basically you would only need a thousand dollars worth of margin to be able to control a hundred thousand euro dollar position in the market. Okay, so yeah, it's a great way. This is why forex is really, really good or appealing, let's say for beginners, because you can leverage up your capital, but you need to do it with risk management, which is what this module is all about. Okay, so think of your broker who learns loans you the €100,000 to place a trade, but all they ask for in return is, is that $1,100 good faith deposit, right? When you exit the trade, that deposit will be returned to you plus or minus the profit you make on the trade. So leverage varies with different brokers. Obviously the higher the leverage, the less margin is required, which means you can open multiple, multiple positions. If you don't have much leverage, you won't be able to open as many positions at once. Okay, so we know how to position size, we know how to calculate our risk in pips, we know how to then put it into lots. We understand leverage, how we can execute that trade, but we base that on saying we're just going to risk 1% of our account. But how much should you risk? What should that percentage be? Let's dive into that.

My golden rule. And it's what I do in my own trading and it's what I recommend for all beginners. You don't have to listen to me if you don't want to, but I'm going to do my best to try and guide you as to why you should never risk more than 1% of your trading account balance per trade. Let's say you take 10 losers in a row, you're down minus 10%, you're going a horrible, horrible losing streak. But because you kept your risk small, all it takes is a few winners, right? If you have positive risk reward ratio and you're back in the green, okay? Stay in the game, Keep your risk small. Think of your trading account balance like a submarine that has compartments in it, right? Now imagine if that submarine gets hit by a missile and one of the compartments leaks. Well, if you're risking 10% risk per trade, that's going to Represent a huge chunk of your submarine, right? It's much more likely to start to sink. But what do I do? 5%. Look at how many more compartments you have now that are not exposed to that leak. What about 1%, right? Hopefully. It's nice little analogy to help you see how much protection you get by doing this in the long run. The other thing is, right, is when you stick to a consistent risk profile like that, you benefit from the compounding that we covered at the very start of this video with infinite potential upside. But you also get to benefit from the opposite of that, the reverse compounding losses, where actually your amount you can lose reduces and reduces so that if you stick to it, it's mathematically impossible to blow your account. Assuming that you don't get any slippage. Okay, let me prove it to you because what you need to do here, right, is eliminate the risk that is you, particularly at the start of your career. So drawdown is a reduction of your capital after a series of losing trades. So when you look at your account equity, that gap between the peak of your trading account balance and the trough, that is your drawdown, okay? Now when you're in drawdown, recovering a loss is mathematically harder than making the loss. What does that mean? Let's say you got a 10 grand account, you risk 1% and you lose a trade. You've lost 100 pounds. Now your account balance is 9,900. Now let's say you make 1% back, right? So you should be back to break even. Wrong, because 1% of that 9,900 is only 99 pounds, right? So although you lost 1% and then you made 1%, you're actually now down 1 pound. Well, it's just 1 pound. What's the big deal, right? Well, look at this. When you start to get into deeper and deeper drawdown, the recovery rate is huge. If you lose 50% of your account, you don't have to make 50% to get back to zero. You need to make 100%, you need to double your account, flip your account just to get back to break even, okay? Like if you go past like 30%, you're in deep, deep trouble, okay? It's doable, but it's not where you want to be. But oh, Matt, you know I'm never going to get in 30 or 40% drawdown. Well, let's take a look. If you were at say, risk 5%, which a lot of newbies want to do, okay? And you hit six losers in a row, you're going to be in 26 and a half percent drawdown and that is going to require a 40% return to break even. Everyone thinks they can handle drawdown until they're in it on significant capital. You do not want to be in that situation, so don't do it. But Matt, I'm not going to lose six losers in a row. I have a really high strike rate. Okay, let's take a look at that. Here is the probability of experiencing a number of consecutive losing trades within a large sample size. Right? So if you look at that 98% I've circled in blue. That is if you have a 60% win rate, you have a 98 probability of experiencing at some point experiencing six losers in a row. Okay? And if you risk 5%, you're not on, you're now down 26.5% in the red and you now need to make 40% return just to get back to break even. That's not where I want to be. It's not where I encourage you to be. Okay? So bear that in mind. At some point, no matter how good you are, you are going to experience a tough losing streak. So all of your trades should end in one of four ways. A small win, a big win, a small loss or break even. Okay? Eliminating those large losses are going to keep you in the game. Small regular profits are key, right? And it's going to help you to benefit from the compounding on the upside too. Banking is regular profits and it's good on your psyche, right? Banking that mental capital too. So we've looked at downside protection, but we do also need to pay attention to the optimization of profit. So risk reward is a ratio between your stop loss and you'll take profit size. Okay? So essentially your reward is expressed as how much you are risking. So for here we can see that your reward is three units of your risk. Okay, so if you have a 1 to 1, 2, 2 to 1 or a 3 to 1, right. The higher reward, the higher you're going to make money when you're right. But your risk is constant each time. Okay? So again, two to one risk reward means when you're right, you bank two times the amount of money that you lose when you're wrong. Now, win rate on its own is pretty useless. How much money you make from your average P and L on its own doesn't really tell you that much. But combining them both gives you your profit expectancy and that is what matters. Essentially, your profit expectancy is how much you get paid in the long run to execute A trade. Now let me explain. Let's compare to fighters or two traders, okay, Juan has a strike rate of 75%. Strike rate is another word for win rate. But Steve, here's a terrible win rate in comparison to Juan, okay, where he only makes, he only wins 30% of his trade. So who is the better trader? Well, we don't have enough information. Like I said, win rate on its own is meaningless. So we need to look at how much money they make when they win and how much money they make when they lose. As we can see, Juan only makes a hundred, sorry, $1,000 when he wins. And he loses $3,000 on losing trades. So he has a one to three reward to risk ratio. Whereas Steve, when he wins, he wins big and when he loses, he loses small. Okay, $3,000 to $1,000. So he has a three to one reward to a risk ratio. Okay? So profit expectancy essentially means how much do you stand to gain or lose for every dollar risk? Okay, so what we need to do is go, when you win, how much do you win and how often do you win and when you lose, how much you lose and how often are you losing? So it's win rate times average winner, loss rate times average loss. So here we can see, when he wins one, he makes a thousand dollars, but he's winning 75% of the time, which is a lot, but he's losing big. He's losing three times as much as he gains and he's, Even though it's 25% of the time, over the long run, he ends up being a break even trader. Whereas Steve, who wins big but not very often and loses a lot, but he only loses very often, but only loses small amounts, he actually makes money over time. Okay, because with a 30% win rate and a 3 to 1 risk to reward ratio, he actually has a small edge. And in the long one he will actually make money even though he's losing way more often than Juan. Okay, so you can see that there. Now FXCM did a huge study in all of their retail traders and they actually found that most people were winning, they had a 62% win rate on average. Right? But here's the thing, when they won on average, they only made 48 pips, and when they lost, they only made 82 pips or so they were losing 82 pips, right? So their winners are way smaller than their losers. Okay? So that's why 70% of the traders were losing money. So even being right, way more often than not, their losers were bigger than their winners. Okay, so that's why profit expectancy is what matters. Okay. It's a combination of both. You need to have that right level. So how do we think about that? Well, trading cliche, you know, it's all about how much money you make when you're right, how much and how much you are losing when you are wrong. Okay, so there's two types of profitability models really. You have a strategy that has a really high win rate or a strategy that wins big but not necessarily often. And it's generally a trade off between the two. Okay, the holy grail is having a really high risk reward and a really high win rate. But generally, the higher the risk reward that you were targeting, the lower your strike rate. Because price has to go further and further to hit your profits, you're going to have a lower win rate. So again, it's a balance. So here you can see that the higher your average risk to reward, the less often that you need to win and vice versa. Okay? So somewhere along those lines you'll be able to figure out where that break even line is for your trading. And here you can see it's a good example. If you've got a really low win rate, 30%, as we went through earlier, in 10 trades, you only win three. But because you win bigger than when you lose, you still come out on top. Okay, you can be wrong up to 75% of the time and still do better than break even. Now, once you work out your average risk reward, here are the strike rates that you can deal with to actually see whether you'll break even or make money. So now we're going to look at trading an edge with a trader math and actually see the big three common mistakes that I see holding beginners back. Okay, that's changing your position, size, risk, skipping high probability setups, and hopping between strategies. Right? This is the only area of successful trading where luck plays a huge role. And it all comes down to understanding random distribution. And that is that you will never know the order of your winning and losing trades. Like, when are they going to occur? Some people just think they're going to win five trades in a row, they have 50% strike rate and lose five trades. But reality, they all come in different sequences. Okay, I'm not going to go into this in super depth. I'll do another video on this. If there's demand for it, let me know in the comments. But essentially the law of large numbers say that whatever your edges, you won't really see that in your results. Until you've executed a large sample size of trades. So think about it. When you flip a coin, it's a 50% probability, right, of whether you're going to get heads or where you're going at tails. But if you only flip it five times, it probably won't show that 50% edge. If you flip it a thousand times, then you will see the 50% edge. Okay, so what this graph is showing, those gray lines are people trading the exact same strategy edge. Right? But some people are going to start out on the losing streak, and some people are going to start out on the winning streak. But over that large sample size of trades, they'll all eventually start to converge on where the mean performance is of that strategy. Okay, so what I'm trying to get at here is in the short term, when you're trading day to day, you'll never know when your winners and losers are going to be. And you could start off with a really profitable strategy, but you could just by pure luck and random chance, have a really bad losing streak to start off with. Or it could start off really, really well. Okay, but you need to let your edge play out and you need to keep executing consistently, right, following your strategy. This is really hard to get your head around in reality. Let me show you a quick example. Right? So you've got three traders, all trading the exact same strategy. One is consistent. They take all setups, they risk 1%. The other person takes all setups, but they change how much they're risking depending on what they feel about the trade. And the other person skips setups. Now, I'm not going to go through all the numbers. You can look at it here when they do that. But essentially, when you get to the end, the person who was consistent ends up on 14%. The person who varied their risk, right, depending on how they felt about the trade, they end up on only 2%. And the person who skipped the setup, they end up only on 4%. Okay, but they all should have ended up on 14% if they were consistent. And it's because they tried to second guess the market. They tried to guess when they thought the winner or loser was going to occur. They tried to skip trades. They tried to think they knew better than the strategy, and they didn't. And it's because they don't understand the law of large numbers, or they don't apply it, and they don't understand random distribution, or they can't let themselves get out of their own way to let it play out. And that's the Hardest part about trading. Here's another example, right? Let's say they're not letting the law of large numbers play out and they start off on a losing streak, but they see some guy on Instagram who's took four winners in a row. I should do his strategy. Same thing happens, they join in, they get the losing streak of that strategy. Let me hop ship again, same thing. They hop into the next starting losing streak of what was probably a profitable strategy anyway. And they're constantly just thinking, oh, forex is a scam. This doesn't work. I've tried everything. Well, no, you haven't. You haven't let your edge play out. If you have a proven edge, and this is what I see occurring so often, okay? So don't make these mistakes. So again, you're not a genius if you end up starting a winning streak. You're not the worst trade in the world if you start on the losing streak, if you've proven your edge, eventually it'll play out. You just have to keep faith and keep executing. As long as you're taking valid trades, don't strategy hop. Freedom is in sticking with what you're doing, tweaking, refining and optimizing, not jumping ship at the first sign of trouble.

So random distribution is a random order in which winning and losing trades are likely to occur. And as you execute more of those trades, right, the average result would approach what your profit expectancy should be. Okay? So don't change your position, size, risk in each trade, don't skip setups, and don't hop between strategies. This is the only area of successful trading where, where pure luck plays a role. Alrighty, you've got a profitable strategy. You understand risk management, you understand how to trade an edge. Now let's start to craft your plan so you can go back, test it, and you can start executing it in the market. Plan a trade. Trade your plan. So you want to customize your plan to exactly what is tailored to you. Okay? Even if you're in the community, you're trading, same strategy, you're going to have slight variations on exactly how you view the market. So how are you going to enter the market, how we exit market, and how are you going to manage your risk? They're the three core components that need to be in every plan. Usually when you start out, your plan is pages and pages because you kind of write down your entire method. As you get more experience, it's going to be very, very simple. But just make sure all three of those are covered. Okay? Again, some of you like creating flow flow diagrams to make it very, very systematic. It can help you visualize it. I highly recommend doing that too because if you can't describe what you were doing as a process, it's likely you don't know what you're doing. Okay. So trying to create a flow diagram, it doesn't have to be super in depth, it can be quite high level. But it really helps you to get your thinking clear. So here on notion, this is a dashboard that we create for our traders to use. And again we just give you a very, very simple trading plan layout. Put in how you do your high time frame POI selection. What are the rules you use for low time frame execution? Trade management should be very simple. How are you risking position size risk, maximum losses in a day, maximum drawdown limit. There's all these things. I'll talk about it more in another video. You want to have them in there. How do you map structure have all of your rules in there? Just these are examples, screenshots of your entry models. You know, have a few high probable examples to scan before each session. A few little quotes there to kind of help you keep it simple, turn it into your own. The other thing I recommend is having a setups folder. Okay. Have all your entry models in there. You know your, your diagrams of the theory and then have multiple trade examples, winners and losers to see in there of what it looks like. Prime yourself pre session during session. Really important that you build out your playbooks. Now the other way you can look at types of strategies is whether you are kind of scalping. You're looking for quick little moves and you're getting in and out on the lower time frames. Bit more of a day trader. So not quite as much as scalping, but looking for the kind of just the move of the session. If you're looking at swing trading, so holding for multiple days, looking for those big higher time frame moves, or position trading like holding for weeks and months. Generally the lower the time frames, the more opportunities you're going to get. The higher the time frame, the less frequent of opportunities. So you want to play around with the variables of how many instruments you're looking at, how many markets you're looking at and how many setups you have in your trade plan to play around with the amount of frequency. Because obviously if you're scalping, you can't be looking at 50 instruments, it's just going to be impossible to do. But likewise if you're position trading, you're going to have to look at more than One instrument, right. Otherwise you're going to be sitting on your hands for a long time. So play around with that depending on your personality, what you're doing, and find the sweet spot. Generally, most people kind of day trading, so I would say narrow your focus, look at one to three pairs, couple of setups, specialize on that before you start looking. All right. More opportunity does not necessarily equal more profit. It's another common mistake that I definitely see. Alrighty. You started to build out your plan. You've got systematic rules. Now it's time to test it to collect data. So back testing is the process of testing your trade plan on historical price action. Okay. Past results can give an indication of expected future returns. Right. Find a repeatable pattern, look at it in the data. Does it have a positive expectancy? Do you have systematic rules you can, you can implement? Yes. Over time as you see, ways to improve it, tweak and refine. This is what we're doing the whole time. Testing is a big part of collecting more data to prove that you have the expectancy and to improve your rules if you need them to. So the way to do that in TradingView, I believe you will need a paid version is you will click bar replay. Okay. And you can bring price back in time. I'm not going to actually run through an example of this, but essentially you would do your mapping, you would start to look for your trade ideas, right. And you would start to pay price through as price starts to give you a trade idea, you can put it on, see if it plays out and then you want to track the data over time. Again, not going to cover all of that in this video. We can do this another in depth one if there is demand for it. So once you've done your back testing, you can collect your data within here for whatever strategy. Build a spreadsheet that suited your strategy. We have one that's specifically designed for our members for the stats that we want to see. Obviously you can dive into so many different things within here, how you want to have that and have the full breakdown. The other thing that we built within here as well is for the fixed star approach, you can put certain metrics within here which will tell you the exact impact on what will happen depending on what fixed our target you want to use and what mechanical stop loss buffers you want to use. And the stats will alter for that, showing you what impact that's going to have on your strike rate and your overall total return. Because obviously, you know, having those bigger targets is great, but your Strike rate is typically gonna dip, so you wanna find that sweet spot that works for you. So, yeah, definitely key to collect backtesting data that is relevant to your approach and what you're trying to do. Don't skip backtesting. It's something that you need to do. Amateurs assume they don't need to practice. Beginners practice until they get it right and professionals practice until they cannot get it wrong. Right. If you want to become an outlier, then repetition is your friend. Backtesting is the quickest way to get experience. It does not replace live market experience, but it's the quickest way to collect data and prove you have a statistical edge. Now, one thing I will say as a word of caution, don't just jump into backtesting if you don't have a clear trade plan, if you don't know what you're doing and you don't understand what you're doing, because otherwise you're just going to be collecting data, that's meaningless. I see this a lot with people jump into a community, they learn a strategy, but they don't yet have full grips of what they're doing. So that's where I would say forward test, which is track things in the live market until you fully understand what it is you're doing. Or at least you have very clear, simple rules that you can start with as a starting point so you can collect data that is reliable. If you don't really know what you're doing and you start back testing, it's going to be overwhelming, the data is meaningless. So you need to spend more time refining what you're doing and having clearer rules and having a true understanding. Okay? So choosing a broker. Now remember, sport FX market is decentralized, okay? So there's a lot of different brokers that you can pick from and a lot of different ways in which this is set up. So I kind of quickly cover over how this takes shape. So essentially what you have are called liquidity providers. Okay? This is where there are tier one banks, hedge funds, market makers. They will trade with each other and they provide or a starting point, let's say, are providing liquidity to the market. You will then have liquidity aggregators which will take in the liquidity from those different providers and pull them into one level. And that's essentially what you can kind of call the FX market is now US as retail individual traders and investors don't really have direct access to these liquidity aggregators. And this is where brokers come into play. So you have different types of brokers, ECNs, STPs, DMAs, B bookers. I'm not going to cover all of this. Go utilize ChatGPT. There's a lot of content out there that can help you. Okay. But essentially these are the brokers that give us access to and cheaply to these liquidity aggregators. You will then connect your trading terminal to one of these brokers. Most People use MetaTrader, MT4, MT5, some use Ctrader, or nowadays you can directly connect to your broker through TradingView. Okay? So trading terminal is basically where you place the order that goes through to your broker. Your broker is giving you price data from the aggregators and that's where those then get executed. Okay? And obviously then you are the trader at the front of that. So not affiliated with any brokers. Do your own research. Look at all of these points here. You know, geographic restrictions, regulation, leverage, pricing, minimum deposits, all of those things. Okay. I personally like to keep my tech analysis separate. Like I said, I chart on Trading View and I use Metatrader for my execution. Maybe I'll link a couple of brokers that I use in the description. There will be affiliate links. If I do do it, I will get a small rebate kickback. If you do sign up with them, I'm not affiliated with them. Do your own research. Pick who you want. There's a lot of information out there that can help you, but generally you just want to pick a regulated broker that is legal in your country. Okay? Trading costs. Obviously you want to understand this. There are costs to trading. It is not free. The main costs are your commissions, spreads and swap. Okay? So the more liquid a market is, the cheaper generally it's going to be to trade because that spread is thinner. Right? So that transaction cost is made up of a commission. So a flat commission when you take the trade and what the current spread is that you have to cross when you enter. Okay? And it's going to be a function of how much volume you have on the trade. So for instance, if your broker offers you a commission of $3 per lot, right? And you've got a 0.6 pip spread and you put 10 lots on the trade, that's your PIP value is going to be $100. Okay? So your commission, if you've got 10 lots on 10 times $3, it's $30 in a flat commission fee. Your spread is 0.6 pip. So you have to pay that in spread. But what's your PIP value? Well, it's $100 with a 10 lot trade. So $60 in spread. So your transaction cost on that trade is $90 on euro dollar assuming you have a US dollar account. Okay, so again some of this is confusing. I highly recommend using we're in the world of AI now. Use ChatGPT, throw in your brokers commissions in there, put in a typical trade example with your own.

Currency account and all that good stuff and I'll explain it to this to you in depth. I know I'm running through this a little bit quickly now. I just don't want this to be a nine hour video. So, swap and rollover. So swap. If you hold your trade overnight, okay, you have to pay the, or receive the, well let me read it. Interest fee that is either credited or debited from you at the end of each trading day if you hold a trade into the next day. So rollover is a procedure of moving your open positions from one day to the next. So the end of the market day is 10pm UK time. Obviously that changes an hour with daylight savings time, but that is when you get the daily rollover. Okay? So if you're holding a position over overnight, you will receive interest on the currency pair that you belong and you will pay interest on the currency pair you are short, okay? And you will either pay or receive the net difference. So if you are short pound dollar, right, you can see here that you will pay 4.5% for the pound, but you will receive 5% interest because those are the current interest rates. If they are the current interest rates for those currency pairs, the net difference is 0.5%. So actually in this case, because you are long a currency that has a high interest rate than the currency you are selling, you actually net that half percent interest rate difference and you will be paid to hold that position on that interest rate. Okay? Now do not enter positions between 9 to 11pm UK time because that's when the rollover is. That's when a lot of liquidity is pulled from the market and that's very often when spreads blow out and you can get prematurely stopped from a trade. Okay? So summary transaction cost. The main thing is just the commission and spreads and those will be a function of obviously how much size you have on the trade you will be charged or received swap depending on the interest rates of the currencies that you are trading if you hold a position overnight. So obviously this can really add up if you're holding long term swing positions. And rollover is a procedure of open your position from one trading day to the next. Spread hours. Bit of a dumb Name. But it's those hours around that daily row over time. Just don't be trading around, then it's really not worth it. Now, in terms of executing a trade, you guys should know now from the very start, a market order instantly buys or sells at the best ask a bid price. So you have to cross the spread. And this is where you can experience some slippage. A buy limit is those passive orders in the order book where you are buying or selling at a better price than the current market price. Okay? And a buy stop is basically where you want to kind of trade those breakouts. Whereas an order placed above price if you're buying or a sell stop is below price, okay, you will use these for these for your stop losses too. Those are not placed in the order book. Your broker holds onto them and then as price reaches those levels, it places it as a market order. And that's why on limit orders, you shouldn't get negative slippage. But on buy stops, you, you often will get a little bit of negative slippage depending on the liquidity and your trade size. Okay, so this is typically how you would size a trade if you wanted to sell. When the price is below you put your sell limit and then your stop loss will be a buy stop and vice versa. If you are shorting, okay, But a lot of your brokerage platforms, they just make this very simple and easy for you when you're placing the order, particularly if you use a trade assistant. Okay, so you've started executing your trades in a live market. Now you need to track your progress. And this is where, where journaling comes in. Almost no one does this. And this is the single, probably the biggest differentiator between those who make money at this long term and those who don't. Journaling is a process of recording and reviewing your trades, right? There's two main ways for this. The quantitative side, where you essentially are putting in a spreadsheet, it's kind of like accounting the key metrics, the numbers, crunching it like that. But then there's the qualitative side. And this is very important. This is where you need to visually go back, take screenshots of your trades, analyze them, try and spot commonalities of the patterns between your losers and your winners. What rules can you change to potentially reduce some of your losers without affecting the number of winners that you're catching? Things like that, right? Repeat patterns and the mistakes you're making, psychological things. And you want to go, right. What's the performance discrepancy between if I, you know, Executed my plan perfectly and what I actually did. And you want to try and figure out how you can close that gap as much as possible. Okay? So quantitative, do that in spreadsheets. Qualitative, have a journal like notion, okay. Have a journal like notion where you can keep track of all of that. So here in Ocean, we give this to our members, right? Where we've got a trade journal. And you can have a full trade journal table in here. Entering the more qualitative side of your.

Trade stats, then you can have it as a calendar view. And then you want to have your reviews at the end of each month, okay? Where you can ask certain questions. Improve it. Track the individual stats of all of your trades, okay? Then you do it at the end of the quarter and then a big annual review, okay? This is where the magic happens. This is where you go back through everything. You've collected all of the data. That is how you improve year upon year, finding your blind spots in your own performance and in your strategy. It's tough work, but it's where the magic and the gold dust is found. So really, when you're reviewing your trades, there should only ever be four types and the way you can categorize them. The first is that it was a winning trade and it met your rules. This is great. Save them in your trade plan examples and burn them into your subconscious. The second is if it's a valid trade, it meets your rules, but it was lost. That's still a great trade because it was valid, just down to probabilities. You want to celebrate those losses because you are executing and analyzing with consistency. The third, this is where you want to be careful because it's a winning trade, but it did not meet your rules. It is not part of your edge. Okay? You got lucky. So be careful because these trades are usually not within your plan right? Now, obviously, if you keep taking winning trades that clearly have an edge, but they're not in your plan, we just need to include them in your plan, right? In case someone, some smart ass says that, right? Last but not least, you took a losing trade and it didn't meet your plan. Big learning opportunities, right? There's usually a fundamental problem in your analysis or your execution or you have some psychological errors that you really need to solve here. So whether a trade won or lost does not determine whether it was good or bad. Whether it meets your plan or not, that's what determines it, okay? So you can use this flowchart here to help you with that. Short term profit and loss does not. A Reflection necessarily of whether you're taking good decisions. Okay, you could be on a losing streak and losing money, but you're actually trading really well because you're following your plan and it's just that random distribution playing out. Likewise, you could be having really good P and L. That doesn't mean you're being a good trader or making good decisions because you're not following a plan and eventually that's going to bite you in the ass and the random distribution of that will catch up with you. Okay, Training is really hard. Short term. P and L is not a reflection of your skill set. Okay, Zoom out. Focus on the process and follow your rules. Like I said with the trading, you want to be journaling so you can see what happens with my results. If I execute my strategy perfectly and where are my results and how can I close that performance discrepancy to 0% as much as possible. So measuring your progression, judging a trade by one trade, the outcome of that is completely irrelevant, right? Try your best to avoid recency bias week to week. You know you're going to make mistakes, you're going to have mistrades. It's not the end of the world. At the end of the month, look for patterns in both the strategy and your performance. You know, are there things that you're spotting here that we can prove potentially to your results? Don't necessarily do it straight away because you probably don't have a large enough sample size. And that's why we do it at the end of the quarter when you have three months worth of data, there's usually some statistically significant amount of rules that you might be able to tweak or adjust, but maybe not. And at the end of the year, this is where those biggest improvements to both your strategy and personal performance are going to come. Doing those annual reviews and trading psychology, right, that juicy topic. Because remember, successful trading is those three things. You now have a profitable strategy, you now have strict money management, but you need to execute your rules consistently. But trading sounds pretty simple enough, right? Because all I have to do is find a profitable strategy and use strict risk management and just consistently follow the rules. Then why isn't everyone banking money? Why isn't everyone doing it this way? And as Mike Tyson said, everybody has a plan until they get punched in the mouth. We are literally caveman that have evolved to fight Japanese candlesticks on our charts. And when you're in a high pressure environment of risky money, your primitive survival instincts are going to take over your decision making in those critical Moments because your brain cannot distinguish between uncertainty and probability and risk from real life Sabertooth tagging tigers, you know, coming at you threat, it can't tell the difference. So your brain short term survival orientation will compromise your need to take a long term perspective, right? In order for your edge to work in the heat at the moment. What does that mean? You take three losers in a row, the fourth tray comes in, you're probably going to pussy out and not take it, right? Because your brain is trying to protect you from that potential loss. But actually the right long term decision is to take the trade, to let random distribution play out to try and get to the law of large numbers. And that's why trading is so hard. When emotion goes up, right, your decision making goes down. We are not wired to be traders. It's something we have to practice because otherwise you know your psychological blockages are going to get in the way from your performance being anywhere near what your strategy potential is. Okay? Normal does not make money in this market. You need to have a very special relationship with both winning and losing. Okay? Don't get excited when you win, don't despair when you lose. Just execute your rules. It's all part of the game. Try and flip it in your mind where you view losers as just a cost of doing business. Just like in a conventional business here, right? Your supplies, your rent, your wages and insurance is the exact same thing as you're losing trades right at the end. Just focus on your net profit or following your plan. Now when you are beginning, psychology really isn't that important. Don't spend too much time on it because what matters is that you actually have a, you develop a proven strategy that you know how to execute. Okay? Once you've got that and you've proven it and you know it and you're doing it and you're and you understand it, then it's all about psychology. Because now you just need to get out of your own way. You need to deal with the pressure of trading, you need to deal with the pressure of trading bigger capital and whatever else, okay? So don't spend too much time on psychology at the start. Prove you have an edge. Then once you realize it's you who's stopping your edge from paying out, that's when you need to dig deeper into this. The secret is having those realistic, balanced and empowering expectations. Focusing on the process rather than short term outcome. Every beginner is doing the exact opposite. So next steps, do not just watch this video, you know, park it away and not take any action. Get a systematic strategy, whether it's from me, wherever else, do it yourself. Prove you have an edge that will give you the bulletproof mindset that will allow you to consistent execution leads to consistent results that is unsustainable. Then you can scale rather than just messing around. Okay, so like I said, last plug to the free training. There is unbelievable amount of source in here. I go way slower, way more in depth. You can save and download the cheat sheets with all of the diagrams on there. Honestly, so much use in there. I can't believe it's for free, actually. And like I said, we've had people literally passing funding challenges and then joining us from this. So get in there. I hope you took some value from this. That was a long one. Watch as many times as you need and I'll see you next one. Cheers guys.