I Teach an Unprofitable Trader How to Trade | €1,000,000 Trader Battle Episode 3

Somehow, I've always been drawn to gold.

Can I be blunt? In my eyes, you're being very reckless with your time and your money. 4 traders are competing against each other today for €1 million and a free spot in my mentorship program, which is valued at €50,000. At the end of every episode, I'll choose who moves on and who goes home. And I'd like to take you along for that. Out of 15 traders, only 7 will remain at the end with a chance to win the prize money.

My name is Walter. I'm from southern Germany and have been trading for 5 years now, on and off with swing trading, and for half a year since Christmas full-time intraday trading. NASDAQ opening range breakout in the New York session, that is my strategy. When the 30 minutes in the New York session have passed, which is 4 PM German time, then I wait for a breakout to know whether I should look for long or short entries accordingly. And then I wait for the pullback and for the area of the Delta Profile, which is then confirmed via big trades, absorption, or rewarded big trades. And that's my entry. I have a fixed risk-reward ratio of 1:3. That's my take profit. I'm not profitable yet, but I'm in good spirits.

Hello, Tom.

Hi, good to see you.

Good to see you.

So let me briefly summarize what you just presented. So, you currently prefer NASDAQ. You love open-range breakouts, if I understood that correctly. If I got that right, you have an average risk-reward ratio of 3 to 1, but I'm missing a crucial number: the win rate. How high is it?

At this current moment, it has not been fully backtested yet, so we are still working on that.

Let's paint a picture. Market opens at 15:30, You wait until 1600 and do nothing.

During that time, I carefully look at the cash volume profiles and analyze the market activity to see exactly what is happening. See whether the market is falling or rising according to the value areas and the POCs, or if we're in a range, to get a clear picture.

Do that beforehand.

I do that beforehand to know exactly where we stand. So the context is also important to me at that point. Just to have the context for the session, which, which then starts for me at 1600.

You define the top and bottom via the value areas, and does VPOC play a role too?

Actually, not really.

Okay, good. So you've successfully identified your key support and resistance levels. Now you also know whether the market is currently opening within a balanced, consolidated area, or if it is actually opening up outside of that range. This distinction is really important for your trading.

Exactly.

Right. And now that we have that set up, you are going to want to look to play the Open Range Breakout as it develops.

Exactly.

Now, that could happen right here. It could happen here, or God knows where.

Exactly.

How does the information from your analysis help you there? In what way is it useful to you?

If I see, for example, that the Opening Range is happening in this area and we're going long, I'm more cautious if, for instance, the last 3 days were already rejected in this area. Then I'm careful about whether the whole trade can really continue to go long. Whereas if we're in a long trade, meaning the last few days were all long-oriented with rising value areas and rising POCs, then I'm more inclined to take long trades there. So I'm trying to increase the hit probability using the context of the cash session volume profiles.

Now let's take the following. Here is the value area from the previous day, the value area low from the previous day, and the market opens here. Your context is currently balanced, just assuming. And here is your risk now, and your risk-reward ratio of 3 to 1 would be here. Those are the static numbers that you just mentioned.

Exactly.

Do you take the trade or do you not?

I would definitely take the trade, although I personally wouldn't set the risk, the stop loss, at the UAB low. Instead, I would naturally place it on the pullback, right? It just feels like a much safer and more logical approach to manage the position.

Ah, so you wait for the pullback here and then you enter?

Exactly. I have a breakout, see accordingly that there's a swing, then I would pull up the Delta Profile and see if there are any significant levels in there. If I don't see anything unusual there, then I might look at the high-volume nodes in that area. And if the pullback is there and I see confirmation via big trades, meaning for a long trade it would be a Absorbed sellers or rewarded buyers—that would be an entry criterion for me.

So, how exactly do you go about finding those big trades? I see them via deep charts.

Yes, I look at the NQ future and trade in the micro.

Are you also interested in the market speed at which these trades occur?

Speed of tape, if that's what you mean.

I haven't looked at that so far. Okay, the big trades are trades, larger trades that have been routed from individual addresses, and if they've taken place. somewhere here and you're waiting for the pullback, then do you go long via this corresponding balance, or what is the path you choose?

I would look for an entry here in this area at the trend reversal, and only if I— you can see it in the candles— plus, um, big trades. And of course, an A+ setup would be if this pullback turns at the level where I have a delta profile with a positive swing.

How many trades like that do you find on average per week?

It is actually turning out to be almost 1 per session, if you can believe that.

And if we now consider the big trades without market speed, because we don't even know if an exchange game took place or if it's a positioning, we don't know if they went in or out. That's always the big risk that you have. Now I'm curious, do you put your stop loss under those corresponding big trades? Did I understand that correctly?

Exactly. It would be right here. This is where I'd enter, below this area, and the stop loss would be under the swing.

Okay. And now from this point on, you have your risk-reward ratio of 3.

Exactly.

Great. No matter what's in the way here?

You already know that I just do it mechanically so that I can make it reproducible. What I've also seen before, I'm thinking a bit about reducing the risk-reward ratio to 1:2, simply because I very often see that it runs to 1:2 without And 1 to 3 is just kind of like it needs to take another breath, and that's naturally extra time and extra beads of sweat on your forehead wondering if the trade will work out or not.

Well, I think the concept is fundamentally not bad. I would like to add the following points to the concept we are discussing. First of all, I think we should consider the extension of the first 30 minutes of the session. Which would allow us to cover much more ground effectively.

As—

I hinted at earlier, is the range very large, the open range, or is the open range very small? That gives you information. Is it more likely to be trending today, or is it more balanced? I would definitely take that into account. The second thing I would add to the whole thing would definitely be to determine a different set of statistics. And you have to start with that now.

And—

The statistics look like this. Option 1, open range breakout with all the information you have there, up to a risk-reward ratio of 2. Option 2, up to a risk-reward ratio of 3.

And—

And now we arrive at the option that I personally prefer, which is to wait for the price to move up to the next interesting Predefined price range.

It is all based on our current market profiling.

Exactly. And then you have the possibility that you sometimes have a risk-reward ratio of 2 and sometimes 4.8. That way, you suddenly earn much more and avoid the pullbacks you get with a risk-reward ratio of 3 when the market has potentially reached a predefined area. It's important that you keep these statistics for all 3 options. It's important that you don't just do this for 100 trades, but it has to be well over 300 trades. That's a lot. And now comes the really important part. We currently have a market that is very bullish. You absolutely must also analyze this in a phase that is very bearish and sideways phases. And that is the most crucial thing. You also have to analyze the whole thing in sideways phases, and you have to include that every single time.

And?

Then you'll have a conceptually super smart concept where the following will happen. You're going to find out which of the variants is the most valuable in which structure. Then you'll find out that while the Nasdaq is a nice market, you can use the same concept with 10 markets. Then we'll build an algorithm on top of it. And then we'll have an all-in-one solution. That sounds too good to be true, right? No, it's not a problem. It's easy. You just have to do the test beforehand. And as for how to build an algorithm like that, I have my people for that. And that's an approach that I think is really cool. But what I can definitely say is that you'll be able to use many more concepts like this even after the open, once you can categorize the markets better. But always one step at a time. Because the idea, the risk-reward ratio, the analogy to the different market phases, that's always a killer concept. That's cool so far, and it makes sense.

Yeah, I'm just a bit overwhelmed by the 300 trades.

I know. The stock market is a dynamic concept where you just always have to define things for yourself outside the box.

Would you still recommend including Speed of Tape in the backtesting?

Absolutely not. I specifically asked that to see if you were doing that too. Don't do it.

Alright.

It might increase your hit rate, but it will also prevent many trades from happening because you can't read it well enough. And when we do something like that, we read the speed in the S&P and trade the NASDAQ.

That's already like next generation.

Exactly. Now let's first make sure we get into the major leagues.

Definitely.

Cool. Great.

That was a really quick summary, and it is a truly great concept. I think it's very important to examine it mathematically to see what's truly effective to trade, and it's always crucial to see which which market phase I backtested it in, and whether I can then apply that concept to various market phases or not. And then you'll definitely have a great edge where you know if you can apply it multiple times in all market phases, or only in bearish or bullish ones. And in the large sideways ranges, I'll notice from the stop losses that occur that something is changing, and then it'll be fantastic.

Can't wait for it.

Thank you.

Many thanks, Tom.

You are welcome. I'm Florian, 28 years old. I've been active in trading again for 2 years. I started in the market about 5 years ago with employee shares back then. I was with neo-brokers and lost a lot of money there. But now I want to do it seriously. I'm back in trading. I'm currently following the SMC approach. I'm active in markets like the NASDAQ and the S&P 500. And try to place my trades during main trading hours or peak liquidity, which is basically the New York AM session. I target time and liquidity-based levels, trying to identify the liquidity grab at this point. Based on that, I want to see a fair value gap, and I want to see that retested afterwards. I want the fair value gap to be inverted to get a good entry and trade the reversal accordingly. My goal is actually to set the stop loss at the liquidity grab, so basically the corresponding extreme at the low, and I try to trade a risk-reward ratio of 1 or ideally 2 to 1. It works for me, but unfortunately, it's not profitable.

Hi, Tom. So, I will summarize it briefly. You use the Smart Money Concept as far as you like the New York session. Then it is important for you to look at so-called liquidity levels to see what happens there.

Exactly.

Liquidity levels for you are, for example, previous day high, previous day low, or also the highs and lows from the pre-session.

Correct.

Okay, let us take the following scenario. Okay, so this is your market here. You have got real power, let us say. For those who do not know what you are talking about, maybe explain briefly to people what a fair value gap is, or I can do it, whichever you prefer.

You're welcome to take that over.

So, a fair value gap is nothing more than a market that accelerates very strongly upwards and has no retest anymore. In the end, it is the same as a single print area in market profiling, except that fair value gaps target the previous candles and have seen a strong acceleration from there. What happens at such fair value gaps? There is usually an explosive amount of energy in there, and the market no longer tests these price ranges. And it is generally said that such price ranges are very often useful later on as support. Right? So far, correct. Now, in the next step, you have risk-reward ratios of 1 to sometimes 2. That is what you want. And the first 30 minutes are usually very high risk. Why do you not just leave them out?

That is my experience. It is sometimes the case that exactly in these 30 minutes, a lot of liquidity simply enters the market. That means for me, of course, I can get into the trade and out again relatively quickly. However, getting out is then in most cases unfortunately the stop loss. That is why I have a small problem here.

Let us assume simply that this is the previous day high, okay? And you are trading now at the New York open at— the market accelerated strongly, left a fair value gap, runs up here, and up here the market pushes across briefly. Now is the moment where you say to yourself, there is something for me to do here, right? Okay, what do you do now?

At that point, many orders were ultimately triggered, so the stop orders became market orders. I then simply try to see at that point how the market reacts, because that is ultimately an important liquidity level, especially from the previous day high or possibly also from a session high. And I then see that the market reflects the reaction to me accordingly in the form of a strong counter movement, ideally with a large fair value, which I then ultimately Pay attention to in order to find my entry for this trade as much as possible.

So you believe that many stop orders are triggered here? Yeah. Who told you that story?

That's a good question.

That's just how I was taught. That's how you were taught. Okay. Trading craft. Yeah. Well, I can tell you the market is moved, especially during the opening phase, by let's say 97% institutional players, and the vast majority of institutions don't use. They can't at all because their positions are just way too large. Now we have 3% left from traders, and usually even less, and they're the ones who have stop losses here. Do you really believe that's what causes the market to shoot up so explosively?

Unlikely with just 3%, yeah.

So let's just go ahead and dismiss that story for a moment, and instead say there is simply a real need for large market participants to take action. Whenever the market moves above that level. Now, there are various logics behind it that we don't need to chew through in depth, but they usually have a readiness to act up here when a market shoots past the previous day's highs. What's much more important to me is where the market opened and how the market opened, because if the market makes extreme moves right at the start, which is why you often have issues in the first 30 minutes, it means there's a lot of imbalance in the market at the open. But that means many large traders can't define fair prices for themselves at the start of trading. Large traders want to conduct their business calmly, unless there's some news that causes them to start firing off immediately. Then you usually won't get a pullback anymore. That means 2 things for you that I can definitely give you as a huge benefit. Watch the open. If you see at the open after 30 minutes, thereby negating this problem here that the open is relatively narrow, then you can assume the market will likely trend after that. Why? Everyone was able to take their positions and is now moving business to the next levels where they think it looks good.

Yeah, okay.

If the market starts explosively right away, like here, you often get a counter-up here because the market will try to find fair prices, which are usually found back near the opening range, since many large participants couldn't even do their business yet. This is very, very important. That means simply distinguish When you get into actionism and want to go and you see it's running immediately, do I stand against a moving train or do I wait for a nice counter setup and then go in? But try not to follow the trend at first. Uh-huh. Do you understand so far?

Yes, understood.

But if you see, for example, the market broke out of a range at 4:15 PM and is now coming to the previous day's high and leaves you a fair value gap here, then you suddenly have a great idea to make a long trade.

Uh-huh.

Yes, now you've saved a complete trading education, because this is really essential. The most important thing, especially if you want to trade such things in the New York session at the market opening phase. Regardless of that, Fair Value Gaps, as you might be noticing, are only applicable in specific market phases. In market phases characterized by high acceleration, these setups can be incredibly beneficial for your trading, provided that the acceleration has a solid fundamental basis. However, in market phases of immediate rapid acceleration, you must be cautious, as fair value gaps are very often closed again shortly after, which can unfortunately kill your position if you are not careful. Okay. And that's why the most essential thing that you have to understand as a trader first— so the real question is, how can I categorize this? Will it be more of a trend day today, or are we looking at a balanced day instead? I really need to figure out which one it is. And once you've made this categorization, you can derive in the next step, do I use these mechanical patterns from the Smart Money Concept more for counter or more for trend continuation?

Yes.

And that is exactly what most traders lack, the ability to recognize with what probability we have trend structures or balance structures today. And if I may give you a huge tip?

I'd love that, yes.

Stop trading in the first 30 minutes of the New York session, and secondly, look at how big the open range is and learn from what results from that. And you will be able to change your whole business. But it will only work if you have yourself under control. And if you're not in a state of over-wanting and get annoyed when things turn out differently.

Yes, that's true. That's also a problem of mine. When I've really said, okay, actually only one trade per day, but I've hit a stop loss that day, then it's just that I quickly get into overtrading, overtrading, and then place a second and third one just to get my daily loss back. And that's very, very bad for a challenge because I quickly end up in a drawdown.

But then your positions are too large for your strategy.

That's too correct.

Maybe another topic that's generally very important, position sizing, especially when you're doing prop trading, leads to many people wanting to achieve something quickly. And now it's like this: if you have, for example, a $100,000 account in prop trading and you're allowed a maximum 7% stop loss, then the challenge is over and you failed. And for the day, how much are you allowed to lose per day? I don't know that.

Depends. Let's say 1% for this example.

Yeah, let's take 2% as the maximum daily loss you're allowed to reach. Then it's like this. Then €2,000 is what there is to distribute across your risk. And if you don't know your key figures now because you don't track them in a clearly structured way, namely trend trades, sideways trades, or breakout trend continuation setups, counter trading setups, then you have a huge challenge. If you now start to track them differently, specifically choosing to track these two distinct trading strategies separately, and you eventually find that for your counter trades I have a 39 percent While for your trend-following approach I have a 65% win rate, then you absolutely must determine your position sizes according to these specific win rates. Do you understand that? Or perhaps you see why this distinction is so critical for your overall portfolio management.

Got it, yes.

That means if you have 65%, you can of course take more size than at 39% because you'll be stopped out more often in a row. And now you have to go and simply define mathematically how many stops in a row lead to me losing €2,000. And now you'll realize suddenly you can no longer take 2% risk per trade, or 1%, but only 0.3%. But if you then make 2 or 3 trades a day with this 0.3%, and they also work out, and you suddenly have a risk-reward ratio that is larger because you're working smart, then you earn the same money and suddenly have no risk anymore. That is the most essential thing. And look at the rest again in peace and write it down, and then you'll understand conceptually better what I mean by that.

All right. Um, okay.

You're welcome. A short summary of that, perhaps. I think it's very important, especially if you want to use Smart Money Concepts or such structures and strategies for yourself, that as an alpha, you can first evaluate what it looks like, what I can expect for the day. And unfortunately, it's usually the case that with the Smart Money Concept, you have no chance to analyze the whole thing and therefore have to use other things to help you localize what is to be expected today— trend structures or sideways structures. And to do that, you should educate yourself and look into market profiling or other concepts that give you more insight. The second thing that's just super important in that regard is the market opening. How is it structured? And that gives you so much more information than any support and resistance levels from some fair value gaps. Because those might hold or they might not. And if you suddenly know what's likely to hold and what isn't, then you have an edge. And that is really cool. Thank you.

My pleasure. Before we get back into it, a quick notice. World Class Edge just launched. And if you want to know How really institutional traders and market makers actually trade? Click the link below and secure your spot at World Class Edge. All right, back to it.

My name is Maxi. I'm 33 years old, and I've been trading for about eight years now. Since this year, I've been trading more in gold, specifically the GC gold future, and I trade the fakes on the five-minute structure of the highs and lows with a con. context that I analyze beforehand. For this, I use the previous day's high and low points of the previous day's range and then wait or check in the morning if there was a fakeout at the previous day's high, for example, or a breakout during the night or the London session. A fakeout at the previous day's high, for instance, is when the market enters the new price range compared to the previous day And doesn't accept this price range above and immediately dives back into the balance or the previous day's range, accepts prices there, and then trades through them relatively quickly. I have a fixed risk-reward ratio of 1:3 for myself unless there's a naked POC still ahead of me that within this 1:3, yeah, crosses my path, and then I close it at Hello, Tom.

Good seeing you.

Nice to meet you. Hi.

That was really interesting what you were saying there. You have a lot of expertise.

Okay, that sounds good to me.

But you're just not applying that expertise effectively. You clearly stated that you mostly trade gold futures. Now I'm wondering, why gold?

Somehow I've always been drawn to gold. Well, I also see in my research that it works well with gold, let's say, because with gold you don't have a US cash session cutting in and just destroying the whole trend of the day. And that's why I've kind of stuck with gold.

Okay, so just to make sure I understand correctly, you are interested in market-independent products, is that right?

Yeah, you could say that.

If I tell you there are about 800 stocks a day that give you these setups, what do you think about that?

That I've only focused on one for a long time? Exactly.

Not bad. Can I be blunt?

Please.

Okay, 2 things. In my view, you're mismanaging your time and your money. Otherwise, you wouldn't be playing around like that, knowing it only happens once a day at most, or twice if you're lucky and the volatility is there. Why do you do that?

Because I used to overtrade quite a lot. I found myself spending so much time glued in front of the charts. Morning, noon, and night, and honestly, even late into the night as well.

And?

So I really wanted to discipline myself to only take trades when the probability is at its highest. I found through my research that the probability is simply highest when we're above the previous day's highs or lows and there's pressure, so the market picks up speed.

Or?

Or the other way around. If it fakes, it quickly runs through the previous day's range.

To?

To then find balance below the previous day again. I just noticed that when I trade too much, I start seeing too much. I think every trader knows that. We try to—

So let's keep it brief. Previous day's high, previous day's low. That's your first premise where you wait to see if the market gives you that impulse. You say, okay, it keeps going up, then you look for a trend continuation, right? Or the market fakes through and then runs back again. Those are the 2 options that you're considering. Okay. And now you're trying to tell me that this works particularly well with gold?

From what I've found, yes.

How did you find that out?

By taking a moment to do some careful research.

Over what time horizon did you do this research?

It was back in the year 2025. I tested through the entirety of last year, and I journaled 161 trades there.

I had a Positive expected value.

Exactly, a 38% win rate.

Now I've got it. Now let's look at the gold price. And I think we both agree that it's gone roughly like this since 2000 and whatever, right? Here we have 2004, '24, '25, '26, and then this one came along. So this is the gold price as a daily chart. So if you have journaled from this section here, you have likely found that it works quite well for you. It really is a helpful way to organize your thoughts and see your progress.

Yes.

Mhm.

But now we've entered a structure like this, and I promise you that what you journaled there, which worked in that time frame with strong trend stability, will suddenly spit out completely different metrics in this time frame.

Okay.

Do you believe me?

I believe you, yes.

Good. And now the question is whether what you found there for yourself from your fake ideas can even work globally, Because that's just a premise you tested over a period X. Now I'm wondering, what did you do in the 7 years before that?

All sorts of things.

Everything? Okay.

I really traded all sorts of things, from trendlines to MACDs, Smart Money, ICT, all sorts of things. And then 2 years ago, I got into order flow. So where you then also, or where I then focused more on what is supply and demand. Where are prices accepted, where are they rejected?

What is that?

Yeah, that the market simply has a supply and demand character where prices are accepted, prices are not accepted, prices can become fast or even be in a balance phase for a day.

I can speak plainly, right? What do you want from me today?

I want you to— well, yeah, I think I really need to—

Let me show you the perfect strategy for you, okay? It looks like this, like this. It has a handle here, and you can boil eggs in it, and someone should hit you over the head with it. It's called a frying pan.

Okay.

Why am I saying this? I know you can handle the humor, otherwise I wouldn't do it, because your focus is no longer where it belongs at all. You've totally lost your way and are doing a thousand things, and what you actually need is to boil it down and focus on one strategy, And one concept where you don't get bored. Does that fit?

Yes, indeed, I need a framework, I need guidance.

Exactly what you did there is certainly not stupid. The question is, depending on the current market phase, is it even a game that makes sense? So, to get started with that, the very first thing you absolutely have to learn is how to properly locate yourself within the system, because you really need to understand exactly where we are currently standing before you can move forward. By that I mean, is the major market phase trending, or is it more sideways-oriented? That's the first alpha that you have to find out. Now you like fakes, and now it must be clearly said, in such a market phase, you will find many counter trades, meaning against the trend, like here. In a trending phase, you'll just tend to have more success mathematically with these trades. It's inherent, probably logical for you too. So now just imagine you do the following. I tell you, from today on, you're not allowed to trade gold anymore because you're biased there. Since you say, yeah, it works so well there. And I'll just name 10 markets for you in which you either trade with the trend in trending phases, or else in balance phases, sideways phases, you only do counters. Counter-breakouts. Which of those would you prefer to do?

To be honest, I'd like to trade the breakouts during trend phases, but at the same time, I don't want to do nothing during balance phases, but rather try to trade the reversals there too.

Okay, let's move on.

This is a predefined market.

This is some profile we used to predefine it, and the market is just playing around here. And now we started here at 9 o'clock, and now it's 11:30. So, and now it's finally going up here. What do you do now?

Well, wait up here to see if prices are accepted at the Value Area High, if maybe an absorption takes place.

And look, we didn't do that again, and we checked, what should we even expect here? Should we expect balance, or should we rather expect a trend continuation? And if you ask yourself this question, what answer would you give now?

A reversal. We have a D-profile here, a balance day, and I would then—

Okay, but that's also a false assumption because it could be that we already had really strong rising profiles before. So it could also be that a trend is emerging here. So that means the preparation for the day is actually the decisive factor. Now do the following. Now you take a few more markets, let's just say 6 futures markets that are not closely correlated with each other. And you need to set up your trading signals right here. And until those specific signals actually arrive, you do God knows what, but absolutely nothing at all. Just stay patient. And only at the precise moment when the market finally lets you know, saying, I have arrived here now, do you then wait for a clear result to confirm your next move.

Are these the previous day's value area zones or from the current day?

I'll teach you that then. How to cleverly define the value areas or these zones, that varies. It's not always just weighted on the previous day. It can also be other processes such as merged profiles where there was a sideways phase. That's called merging. You probably know that.

And—

Then you have different results. Or with trend stability, it can also be the POC if it's a corresponding trend profile or whatever. For me, it's much, much more important that you use your time more efficiently and wait for the market to let you know, yes, Now I'm somewhere where we even need to look if there's something to do. Now, of course, it could also be that this happens in 3 markets at the same time. Do you have the skills to do that for yourself in 3 markets, or would you rather say, I'll choose one then? That's a very important question.

I think I would rather concentrate on one then.

Exactly, that's very good. That means I would still analyze the 6 markets and, for the sake of the work, make this pre-definition and then see if I get a signal. And when you get a signal, you take the first signal you get and not the signal from your favorite market. Okay? Right? That's very important.

Yeah.

So since you're also well-versed in software, you can, for example, use a replay function to play through the whole thing. And then you play through, first of all, how do I even determine what kind of structure we have? Trend structure or balance structure? The second thing you determine is, where is resistance and support? The third thing you determine, and now comes the crucial part, what setup do I expect here or here? Because you suddenly have a different idea.

Mhm, yeah.

And only if a counter setup or a trend-following setup occurs do you make a trade. And now comes the last part, and if you don't do that, I won't work with you for a single second. Now you do a journaling of this process, and then I'm absolutely sure you'll make money with it. Because the stock market is that simple.

Yeah.

That's the bad part. If you're too smart, you have to use the frying pan concept. Do you know how it really works? Plan, set signals, hit yourself over the head with the pan, and just wait for a signal to come, then press and wait. It really is like that, because it's so mindless and boring in the end once you've planned out all the processes. And finally, if you want, we'll take a look at your noggin, why you might have lost your seriousness a bit, and what I also I also believe that the passion eventually fades away too. When you do it for so long, you get so full that you really have to defractionate first, focus on one or two things, and then you're welcome to let your experience flow in if you want to use appropriate setups and structures for entry or have empirical values.

Oh yeah, okay.

At such and such a time on such and such days, this and that often happens. Integrate that into the market or whatever. You can let that flow in, and then you'll get much, much better at it.

That's very good. Yeah, definitely.

What I see here is a typical trader who has encountered many concepts and at some point picked out one concept for himself where he says, yeah, I think that's cool. In this case, it was gold futures with the corresponding fake structures. Those are things we traders love, when something is exaggerated in one direction or the other, and then looking for trades accordingly. The problem, of course, is that we can find very few trades using this concept in a single market, and then you just start doing something because you want to make money. And what I think is most effective now is to simply negate those things and limit yourself to a new concept with, of course, the connections and all the empirical values, and then use this concept long-term and say, I'm implementing it now, and I'm doing it, and I'm journaling it, because he didn't really feel like doing that anymore. Thanks.

Thanks, Tom.

Great.

I'm Dominik. I'm 30 years old, and I've been trading for exactly 3 years. I trade the NASDAQ exclusively, so my trading approaches are actually only breakouts and rejections. When one of my zones is reached, my zones are mostly value areas or volume profile edges. Yeah, I always pay close attention. Are we in an accepted price range, or are we moving into an unaccepted price range? Yeah, then I trade the breakout, or if we stay in this balance, then I trade the rejection. Either I enter at a Volume Profile edge at the bottom, yeah, and trade through the entire volume, or I reach a fixed set risk-reward ratio of 1:2, for example. Yeah, I actually always have a fixed risk of $100, yeah, per trade, and I always stick to that strictly. I'm not profitable yet. I don't know exactly why it's not working. What I've noticed in the past was that Often, before I go to the market, my analysis is fine. But then, after a few minutes, 15 minutes, I get a bit lost in the market. Yeah, and from everything I see there, I just don't know exactly anymore. Where am I right now? What should I maybe pay attention to now? The volume nodes shift and change over time, and then everything else that follows is really just a form of gambling.

Hi. Hello, Tom.

Sounds exciting so far. Only NASDAQ because your first coach told you that you should focus on just one market.

Exactly.

How did you end up with NASDAQ? Because that is by far the wildest market of all the markets.

That's true. Well, in training only the ES was traded, but it was too slow for me, and so I thought I'd switch to the NASDAQ because it's just a bit faster and I always get an answer right away as soon as I enter the trade. Usually, and it's stuck with us since then.

And you trade both breakouts and rejections, I read that correctly, right?

Exactly.

Okay, great. Then you predefine your price levels. How exactly do you do that?

Right, right. So I first look at the previous day, maybe even 2 days before.

How has the volume changed? Is it okay if I jump in with a question?

I'd love that.

What do you mean by volume change? So which indicators, which options do you use to locate that? Volume profile. Exactly.

Sorry. So I always use the volume profile. I still trade by volume profile. I just look at how the volume of the last few days has been or what the volume looks like. Is it shifting downwards? Are we accepting lower prices? How does it look today? Are we maybe on a range day? Or what does today's volume simply look like? And then I always draw in the value areas and daily high, daily low, and the value area from the previous day.

Exactly. Now we come to the current day. The first thing we have is a market opening, and there you relate it, or there you've determined a relationship to the previous day, or how do you do that? Let's assume here is the market opening, and this is the previous day, this is the day before that. Here is the top. Sorry, let me draw it a bit nicer. So here would be the market opening. Now, what would be the first thing you do now?

The market opening of the current day, or the market opening of the cash session of the current day.

It's very nice that you say that. You only trade during the cash session, only cash. Very good. Which open do you use to locate what is interesting for you today?

The daily open, actually.

So the 24-hour open?

Exactly. I just look at where we closed yesterday, where the market closed yesterday, where we opened today, logically to get a little bit of a premonition what could happen today. Did we maybe open above the main volume of yesterday or below it? Exactly, so that I can just determine the bias a little bit.

The profiles that you analyze, are they cash profiles or are they 24-hour profiles, value areas?

24-hour profiles, that's for the respective days.

Okay, but keep in mind that you really only want to be trading during the main market hours, or what we call the cash session, which runs from 15:30 all the way through to 22:00 hours and just a little bit more. Is that correct? Exactly. Why?

Because that's just where the most momentum comes in, and in the first few years when I started with the Nasdaq, I only backtested during that time. That means as soon as I trade the London session, it's all way too slow for me. I might also have a bit too little patience, and I can't deal with that. I'm so deep into this cash session; that's why I just trade it.

Exits. How do you define them?

Well, so normally, whenever I enter a trade, I look at what my risks are along the way. For example, Value Area Low. We're moving up. What could be the dangers along the way? High-volume nodes, edges, and I pay very close attention to those. That means I either trade through the whole volume or I see something happening at that edge. Then I'll exit the trade earlier.

Have you recorded any mathematical metrics for your trades?

None that are current.

How do you feel when you have a trade like this, for example? Let's say, here's the market open, the market runs down here, here's an old value, here's the VPOC, and the market runs down here. What is it that you say then? Yeah, now I'm looking for a trade.

Where would you look for a trade there now?

Feel free to just point out a price range.

Here.

Here?

Right after the pullback. So I wait for the market to move into this previously accepted price range, and then I see, okay, is it accepted again?

Or is it rejected?

How do you determine if it has acceptance or not?

By the speed. For one thing, I always pay special attention to velocity in the order flow. Does the market slow down? Does something change? Does buying come back in so that we break out of this balance? It's a bit difficult. So, I know roughly what to look for, but it still doesn't work that often.

Good. So, for now, you don't have any mathematical metrics for this process. It's obviously extremely important that we determine those, right? And now there's a huge issue here in the analysis. You can't say, I only trade the cash session, but then refer to 24-hour profiles. Why? That's inherently quite meaningless. Why? I'll give you a quick explanation now, and then you'll understand it too. Now let's draw an hour profile. It looks like this, and into this 24-hour profile, I'm now drawing yesterday's cash session. Okay, so that is definitely cash, right? And the other is the 24-hour profile. Okay, so in this case, we might even have the VPOC at the same level. That's just a coincidence. Good, but now the following happens. In this specific cash session, we saw approximately 6 million contracts being traded. When we look at the entire period, period, including the after-hours trading session combined with the cash session, the total volume reaches 6.5 million contracts. Now observe how the value area shifts significantly along with the equilibrium point, the value area low, and the value area high. To clarify, this section highlighted here represents the cash session alone, during which exactly 6 million contracts were traded. And now that shifts, however, because you're looking at a larger range to these price levels, for example. Now all of a sudden, and this is the crucial point, I mean, in, in your trading, which we're starting here now, you're referring to value areas that have a mathematical calculation based on 24-hour volume, but where far too little volume has occurred for you to have a meaningful relationship To the actual main trading volume, and so you'll very often run the risk of the market reaching price areas that are actually very uninteresting for it because there wasn't enough liquidity there for this mathematical calculation of 68.2 or 70% to even make any sense. Do you see what I mean?

Yeah.

So that's why conceptually it's not smart. It would be smart to say, for example, if I trade in the morning, I use the 24-hour session just to have some reference. Because the big players, the ones who traded the 6 million here in the cash session, they couldn't care less about what happened up here and down here, because these traders wanted to achieve the following during peak liquidity: to build up and wind down their positions as effectively as possible, right? Why? Because out of those 6 million, what percentage were day traders?

Maybe 2%?

Yeah, and the rest of them don't give a damn about the value area anyway. It's just a ratio, a reference point. This is roughly where the market had the best transaction opportunities, where the big players could set up their hedging deals, and so on. And that's why the concept, as you just explained it to me, is absolutely not logical to me, because it refers to a period that isn't fair to consider at all? That's one thing. The second thing is, if you trade both breakout and rejection, you will naturally— and now let's look at a pure cash profile where we'll claim that's better for us because we only trade during cash hours and say, here's value high, here's value low, and here's the point of control. So here is the equilibrium. Now we're claiming, just to show this here again, that this would be the unfair price range from the cash session, this one, Yes. Unfair. And everything in here is initially to be evaluated as fair or equilibrium. And now comes the really big leverage. What you are seeing here is currently configured as a standard balance profile.

Yes.

Now, it could be that in the pre-session, the market moved out of this balance profile because it opened up here and then ran down aggressively the day before, forming a balance profile down here. Now, this can take on the appearance of a trend profile. Do you understand?

Yes.

But it's not a trend profile at all. And if you were to use a trend profile, the Point of Control suddenly becomes a very important reference point if the market opens elsewhere.

Yeah.

In a balance profile, however, I couldn't care less about that, and I'm only interested in the equilibrium levels.

Okay.

Do you understand that?

Yes.

And that's why, if you only trade during cash hours, please only refer to the cash session. Unless you have special strategies again, where you say, I know the market likes to test the London session open again, the market tests the Asia session value high again, or whatever. But from a supply and demand perspective, with fair price valuation, this here is the most essential thing.

So in the end, that means that in the cash session, what happened before isn't important?

If you will.

No? Okay.

For example, you'll see one strategy very often there, gap closes. That sounds so simple now, but if you examine the gaps only from the cash session, so 10 PM and a bit, then you'll see that this close is much, much more important than, for example, a gap close from midnight. Nobody cares about that because there was no liquidity at all. Because what happens at the end of the cash session? All the ETFs have to enter their positioning in the closing auction, a huge trading volume that is still being Right, yes. At midnight, they're all gone. Nobody cares. Why should large market participants be interested in that?

True, yes.

And those are the basic fundamental thoughts that unfortunately aren't consistent in your concept as you just presented it to me due to this time variation.

Makes sense.

Without going deep into the setups now, the alpha already doesn't fit.

Very interesting. Yeah, well, it works. I did collect my data too. It's not like that. I've backtested many, many hundreds of thousands of trades, but just not lately. And it does work because you can see in the past that the market already reacts to such areas.

You'll rarely have such wild market phases as we've had now due to the geopolitical conditions. Absolutely, yes. And especially then you have gigantic shifts between the profiles. What doesn't shift gigantically, however, is liquidity, because liquidity still traded a much larger volume in the cash session than Yes. Even if the markets have gapped like crazy. Most of the volume ran in the cash session, and that's what interests market participants.

Okay, I see. Uh-huh, that makes sense.

And that's why, for example, in normal market phases you don't have such big nuances, but when the markets get higher volatility, the nuances are gigantic.

Uh-huh.

Yes, and you absolutely have to be able to evaluate it that way. Does that help you a bit? Definitely, yes. Yes, and maybe entries and exits. What kind of patterns do you use there?

I like to see consolidation, especially after a strong move, that the market consolidates first, ideally with a fake out, and then in you go. Stop below the consolidation. But I don't always do that because the risk reward ratio doesn't fit again. Yes, but exactly. That's actually the best, right? If the market is already starting to move, that it just retests the area, be it a consolidation, then I'm twice as safe, so to speak. Exactly, mostly that.

And you locate these setups predominantly at these interesting price levels or also somewhere in the middle?

Well, the plan is to only do it at the levels. That works for the first 2 trades too, but as I said, at some point it all changes. There's a lot, a lot of movement in the market. So then the volume changes too. The value area starts to move. Exactly, exactly. And I often lose myself there, and then I realize afterwards, man, now I've somehow taken trades in high volume because the zone fit before, but now at this point in time, an entry is simply not possible there.

Unfortunately, exactly what you love happens in the NASDAQ too. There's often speed there. Why is that so visible in the NASDAQ? Because to find liquidity, the market jumps around a lot there and has to go back and forth quickly. And if you were to map the whole thing in the S&P, you would see that it runs nicely there too, but it runs much more orderly, and that triggers your actionism. Therefore, you will certainly often trade where the Point of Control is in the end.

That happens too.

Yes.

Even if I— and that's rule number 1, don't trade at the POC. But even then, I think to myself, I'm smarter than the market again. My setup works here too, but it's just not like that. Then you get upset. So I'm often aware of the mistakes, but—

Can't change it?

Not always.

Good. I think 2 things are important. The first thing is, when you trade cash timeframes, please also use the cash session profiles, because they can change. You can have a trend profile in the 24-hour chart, and in the cash session the day before, you suddenly have a balance profile. Yeah, because the guys were directly interested in what happened in Asia. That's just how it is. And so you have completely different information about what you can expect for today as well. That's the first thing. The second thing is, as you quite rightly say, you then tend to overtrade. But there are also emotional stories behind that which we don't need to go into in detail here. I think that wouldn't make much sense either. That would go very, very, very far afield. The third thing is, and I can only highly recommend this to you, even if you don't like the S&P because it's too slow for you, We should investigate what's behind the fact that you need such speed. Or aren't there other mechanisms that could lead to you still having high speeds, but being in a market that also gives you better, significantly better risk-reward ratios in the end? And they definitely exist.

Sounds good. Yeah.

Thank you very much.

Thanks.

So first of all, thank you very much for being here today, for giving me your time, and for also speaking so openly about your strategy. That's really great, especially in this trading space. It's very often the case that people think the strategies are all secret and otherwise it won't work anymore afterwards. And as you know, I'm totally open about it. I have zero stress with it. I actually publish everything because I know that to learn the profession of a trader sustainably, you need much more than just a strategy. You I need the common thread for you as a personality. And that is the reason and the path I want to take with you to achieve that. Good, good, good. So I definitely want to take you with me because you're such a math freak, because you're such a cerebral developer.

I couldn't believe it.

Gratitude, happiness, joy, responsibility, because it was clear to me then that this place I'm now taking, that I want to, will, and would like to obtain, appreciate it simply against the background of really using this opportunity.

That's totally challenging for us, and I want to face that challenge. I'd also very much like to take you with me because you're certainly someone who can be incredibly disciplined, who's biting and moves forward.

I am just so deeply grateful for the incredible opportunity that Tom and his team have given me to get this life-changing chance to really turn things around. It honestly means the world to me. And yeah, I am just so overwhelmed right now. I truly don't even know what to say.

And to everyone else, and just like the other group, you all get the course from me, from Trade the Traders, our mentoring program that has a value of €5,000, which isn't bad at all. It's very cool, including everything that goes with it. I think everyone's gained a lot from this. I have all your stories in mind. I didn't choose I don't choose based on personal reasons, but rather on factors that are important to me. So I know we'll get a huge benefit, and I'll also manage to get at least half of everyone here into profitability during this time. I thank you from the bottom of my heart and look forward to everything that's coming. Thank you so much.

Thank you.