STEAL This 7 Figure Liquidity HACK for Your Trading (Any Asset & Timeframe)

If you are a novice trader, someone who's stuck in the break even hamster wheel or unprofitable hamster wheel, you are mimicking what a trader does, but you do not have the complete picture. This is, I think what separates proficient traders from novice traders is novice traders do things that mimic trading. They open up their brokerage account, they open up a chart, they might know how to draw lines and then they start clicking around and taking orders. All things that proficient traders do, but.

Introducing the 15 year trading veteran, also known as a traveling trader, Z. In this episode, Z will break down this strategy step by step, keeping it simple, repeatable and universal. Regardless of time frame or asset class.

Day trading, you are always in survival mode. Always, always, always, always. And for a new trader, this is horrible.

I think people turn into pattern traders. They're just looking at IFPG or an FPG and thinking that every single one means something, most of them mean nothing. Because you have to align yourself with.

You will no longer be randomly pressing buttons. After this strategy breakdown, you will be able to tell a story market that would allow you to have edge.

Regardless of whether you're trading options, day trading, swing trading, whether you're optimizing long term investment, you need to be telling a story. So what does that story consist of? That story consists of.

Welcome everyone back to Chart Fanatics, the go to channel for all the very best strategy and concept breakdowns with the best traders in the world. Talking which today we are here with a very special guest, someone I'm very excited to shoot with. We shot a podcast about over 18 months ago and ever since I've been trying to get him in the studio again and we finally did it here in New York City. He's a true trading veteran of over 15 years. He has worked on Wall street, an incredible trader. He is known as the Traveling Trader, AKA Z, or the other way around, Z, AKA the Traveling Trader. But today he has a phenomenal playbook to share with us. Today it's the universal playbook, meaning this is a framework that you can use on any asset, any timeframe, any style of trading to be able to create a narrative. And then we're going to talk and go deeper into it in terms of risk management, in terms of fundamentals. I'm super excited. I know you are as well. Without further ado, let's take it over to Z.

Thank you for having me. Man, it's good to be back. So when you asked me to be on on this podcast, I thought about coming here with my day trading strategy. Right. Day trading is something you do every day. You do it for hours on end a day. It's the, the model that you're most familiar with. Right? I know it like the back of my hand. However, I know that you've already had guests on here some killers in the day trading space that trade some form of ICT or SMC derivative. Obviously they've created their own models within that. But when I'm day trading, I'm using very similar models, even though I've created my own model around that. But I didn't want to bring yet another SMC or ICT derivative to the show. And I'm sure you will have more ICT SMC traders in the future. You're familiar with my channel, maybe some of your audience members are not. But we do a lot more than just day trading. Right. We trade options, obviously, trade futures, do option selling, optimize long term investing. And I talk a lot about macro. And I talk about macro within the framework of trying to find trades and optimized investments. Right. So then I started thinking about what is it that I can bring to, to the table when I'm looking at all these charts daily, weekly. I'm looking at futures, I'm looking at options, I'm looking at stocks. What am I approaching the chart with? I'm looking for something every time I'm looking at, at a chart, but I've never really wrote it down. And I've been trading like you said, for over 15 years. So it's something that I really had to sit down and monitor my thoughts and document while I'm looking at a chart, what the hell it is that I'm actually doing. And this is a universal playbook. This is my playbook for how I approach every single chart. So should we, should we start?

Of course, yeah. Where's best to begin?

Okay, so here is the Universal Playbook. And we'll dive into, please excuse my handwriting, but we will dive into the charts later. I have some examples of trades that I'm currently in, trades that, that I've taken and there's, we could dive into the charts in a minute. But let's get into what is the, what are the basics of the Universal playbook? Right. So anytime that you're looking at a chart, you are trying to tell a story. I don't care whether you are day trading, whether you are swing trading, you are trying to tell a story. And this is, I think what separates proficient traders from novice traders is novice traders do things that mimic trading. They open up their brokerage account, they open up a chart, they might know how to draw lines and then they start clicking around and taking orders. All things that traders do, that proficient traders do, but these are just, you are likely, if you are a novice trader, someone who's stuck in the break even hamster wheel or unfortunately the unprofitable hamster wheel. If you're just starting out, you are mimicking what a trader does. But you do not have the complete picture right? And proficient traders, even if they're day trading and they don't know it yet, they are telling a story. They have conditional statements that they're looking for. If this happens and this happens and this happens and I have this confluence and then I enter a trade here with a stop limit that makes sense and a take profit that, that makes sense. That is a story. No story, no trade. So regardless of whether you're trading options, day trading, swing trading, whether you're optimizing long term investments, you need to be telling a story. So what does that story consist of? That story consists of, number one, a liquidity, what I call a liquidity catalyst. This is number one foremost thing that you are looking for. So when I talk about liquidity, I don't mean liquidity, just in the ICT term, right? Like a buy side, sell side liquidity or fair value gaps or whatever. I mean liquidity includes everything. It includes old highs and lows, it includes.

Key levels.

Now these key levels can be, you know, obviously if you have a support zone that has been tagged multiple times, right? This is a key area of liquidity. Why? Because you expect there to be quite a few buyers and, or sellers at that level, right? You might be trading a bounce from that level. You might be trading a break and retest of that level. This is a key liquidity level. So old highs and lows, key levels, you obviously have the, the SMC framework, you have trend lines. This is also a form of liquidity. So I don't care what strategy you're using, right? You were trying to tell a story around liquidity, that is all you're doing, right? The next thing that you want to see, once you have a liquidity catalyst, you want to see one of the things you're looking for is a big move. Now when I say a big move, I don't mean that you need a big move in order to formulate a trade. I'm saying in your story, one of these things, one or more of these things is, is what you're looking for, right? So if price is trending, for instance, and you're looking at a chart. There's really nothing for you to do here. Yeah, Let me just. There is no trade here, right? You, you do, you don't have something that is catching your eye. Now, what if price does this? Obviously your mind is going to be per. Your thoughts are going to be percolated, like, oh, there might be something for me to do here.

Yeah.

Right. So a big move is obviously a catalyst that you might be looking for. When we dive into the charts, this, this will make a lot of sense. But you were looking for a big move.

Another thing that, that you might be.

Looking for as well is market structure shift. Right? This is all part of this liquidity catalyst, right? A market structure shift is a liquidity catalyst. So when you have a trending market that is making higher highs and higher lows, right? What happens when the last higher low is breached? That is a market structure shift. Right. Similarly, when you are in a downtrend and you are making lower highs and lower lows, what happens when the last lower high is breached? That is a market structure shift.

Right?

These are all catalysts that your eyes are looking for. Otherwise, if again, if you are just in a trending market and you're looking at this and you're like, what trade can I take today? You can't. Nothing has happened for you to react to. So you are looking simply for a liquidity catalyst. Right. That regardless of what strategy you're trading, you were looking for a liquidity callous in order to alert you of something. Right. A big move obviously will alert you to something. And this usually happens. This usually happens towards or from a major liquidity level. Right. Big moves don't typically just happen out of nowhere. So it's either going towards an area of liquidity.

Yeah.

Or it's coming away from an area of liquidity, targeting the next area of liquidity. Now, the other thing that I want to know is, is price trending or not? And that's it. If you don't have one or more of these things, right, you need a liquidity catalyst, a price, a price move towards or away from one of these highs, one of these highs and lows, key levels, a big move, market structure shift. Whether price is trending or not. If you don't have one of these things, I don't care what your strategy is, you do not have a story. If you don't have a story, you don't have a trade.

Right?

So this is essentially the framework for what you're looking for. Now, when you enter a trade, when you enter a trade, the next thing you're looking for after being triggered.

Yeah.

Is a retracement. Now, there are breakout traders, and I'm not one of them. I particularly don't really like breakout trading. Meaning if you have a certain level and that level has been breached, you will find people that will then enter a short here in order to continue it.

Right.

I don't particularly favor that because regardless of whether you are trading, and I'll show you this on the chart, we'll see how this plays out in real time. Whether you are trading trend lines. Right. Say you have a trend, that trend has been broken.

Yeah.

You will typically see a revisiting before that happens. Right. Whether you're trading break and retest. It's in the definition of the name break and retest. It's not break and take a trade, it's break and retest. Right. You break this, you're waiting for the retest. Even a lot of IC ICT type concepts, right. You have like the 2022 model when you have consolidation. Right. Manipulation.

Yeah.

And then you have a break of structure and you are waiting for a retracement into a fair value gap. Right. Retracements are very optimal because if you are wrong, let's say that you're wrong and I'll show you some examples of how I was wrong on, on some of these trades. Right. If you are wrong and let's say you're, you're playing a break and retest. If this breaks and it retests and you enter here and your stop limit says above this high. Say you enter here. The distance between this and this is not very far. Right. If I entered here and now, I'm going to suffer this entire retracement back, including my stop limit. That could be double or triple the distance that you're looking for, which translates into hundreds or thousands of dollars. Right. So I'm looking for a retracement after a liquidity event. And then the last thing I'm looking for is confluence. And confluence can be technical. And I'll talk about some technical confluences that I use, and it can be fundamental. And I'll talk about how to get better at fundamentals. This right here, maybe because of the nature of my channel, is one of the number one questions I get. How do I get better at fundamentals? What books do I read? You are not going to get better at fundamentals by reading books. Right. Like, I have a finance background. I'm not really relying on what I learned 20 years ago. In order to look for fundamental catalysts today. Now I may understand thing. I may be able to interpret or ingest that data easier because of the finance background. But I will show you a way, an instant way in how to get better fundamentals that nobody talks about or thinks about. This right here is the playbook, right? I don't care if you're trading trend lines break and retest ict, you are doing this. This right here is what you were doing and this is your story. This is the universal playbook that works on every time frame, every asset class. It does not matter. You are doing this and without this you do not have a trade. You are just clicking buttons. You are just messing around.

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No, so true. And and so to your point, as you mentioned at the very beginning, the story is what separates those novice traders from those more proficient traders. Because without the story you're essentially gambling. Like you're just picking certain confluences probably that you've learned online or from some mentor that you may have gotten and just honestly trying, you know Just trying things versus the story is essentially the context, right of what you're looking for on the chart. What is the story you're getting from the markets. And then you know, to be able to tell that story using these concepts right here. And a lot of them go hand in hand, right? So like the liquidity catalyst, for example, can create the market structure shift which might have taken, which then puts you into a trending market, for example, which starts off a big move, right?

That's exactly it.

I'm on it.

That's exactly it. And when we get into examples on the charts, exactly what you said is what you're going to see on the chart.

And then like you said, that's phase one, right of the, that's the foundation. From there you can then look for your retracements in terms of like optimum execution points. And then of course having your confluences from a technical and I would say very importantly the fundamental perspective to then have a lot more confidence behind your trades, to be able to execute your trades, manage your trades. Because to your point in terms of the retracement, you know, the people who are, you know, you got price and it breaks fruit, people say, oh, I execute here because sometimes price doesn't come here, right. And I think that goes back to your point about the story is that it's about you trying to tell the best story possible of why is it better for you to enter here. And even on those times where price doesn't get back, I think the point to highlight is that it's not your story then, right? Your story is not the, it's not going to play out every single time. The whole point of creating that context and that story is that it's creating a higher probable trade for you, a better risk to reward model for you versus okay, yes, a part of the story is played out at this point down here. Yes, you could execute here, but have such a skewed risk to reward that it probably takes away from that story and that context really changes and over time probably in terms of execution wise, maybe not got as much profitable edge, maybe even just more break even over a longer period of time. And I get the hesitation of people of like, you know, I'd rather enter and not miss a trade. But in reality the amount of times you will get that retracement is going to be quite high, I would imagine. And the times you missed it, missed the trade, I think that's like a good misconception is like you haven't missed it because it Wasn't your trade, it wasn't your story in the context you planned out. So you haven't missed anything. It literally was not the trade for you, like the one that you had actually planned. I think that's a problem where most traders are constantly trying, or at least the novice side is they're constantly trying to get every single move the market makes and things. That's what trading is. When in reality it's about, as you say, creating your story and then following. The whole point of doing this process is that you created a narrative that you're then looking to execute on. And if the narrative doesn't come through, it's just not a trade for you and that's absolutely fine, you just move on to the next one. The beauty of this, you know, this playbook, the universal playbook here is that as you say, doesn't matter about your timeframe because if you're scalping, you're doing the exact same process. If you're day trading, same process, swing trading, same process, doesn't matter whether it's futures, options, forex, crypto, doesn't matter. Like the same principle has to be followed 100%. Yeah.

And you got it definitely with that. Like, like you, yeah, you hit the nail on the head. Fearing that you're going to miss a trade is not going to work out for you. Well in the long run. Like if you, if you actually back tested the times that you entered something early, your win rate is drastically cut. Right. And you are also entering more trades. What people don't understand is every trade is its own risk proposition. Right. And so the more trades you enter, you're opening up yourself to risk every single time. Right. And people don't, don't really get the context of what it takes to be a profitable trader over the long term. Most elite traders will hover in the 50 to 55% win rate range. Yeah, right. And you, you, you're focusing more on your R multiple, you're not focusing on, on your win rate, which we're dealing with a very high frequency industry. Right. I make this, this, this metaphor all the time. But take basketball for instance. Thousands of shots are put up by the same player every single season. Right. An elite three point shooter shoots 40% from the three point line. That person is elite. Right. An elite trader will trade 50, 55%, some 60, but usually over the very long term, you're hovering in that range, you know what I mean? It's very different than surgery, which is not a high frequency environment. You were doing one Surgery a day, sometimes one surgery a week depending if what body part you're working on. Right. It's very precise and slow. If a surgeon had a 50 win rate or success rate, they'd be out of a job. If a trader or a poker player or a basketball player, if they, if they're shooting 50%, they're elite. And it's the, it's, can you stick with that over the course of years?

And a big part of that is then the discipline to the process. Right. Because even the, the elite basketball players, for example, they'll, a lot of people won't notice that. They won't notice the stats, they'll just remember the, the good times, the, the game winning shot etc or like the really record breaking game that they had versus you know, I think there's a, I can't remember who the stat was with whether it was Michael Jordan or, or Kobe Bryant. I think it was Michael Jordan, if I'm not mistaken. It was like he's, he had failed more shots than he actually made over his career. But people just don't, they don't look at that, they don't look at that stat. And I think it's important as you say, like when it comes to win rate, it's a fluctuating thing. There's going to be times where even if, let's say your average is around that 50, 60 mark around there or you know, I always say to people maybe your average will probably look at 40 to 60 within that range, but there'll be times where it'll be as low as 30.

Right.

But there will also be those times where it's as high as 80, but that might be for a week, a month.

Right.

Maybe if it's a really hot streak, two, three months, but it always balances back out again. Normally that 80% is followed by that 30 and vice versa. Exactly, exactly.

Yeah. There are periods of variance, but then it tends to smooth out over time.

Always. Yeah. And that's where the long game comes in.

Right.

But by having that this context right here is so important. I think that's where you know, as you say, the confluence, especially your technical fundamentals come in. Especially if you consider it this year in particular, you know, with the change in sort of the market conditions and cycles, you know, the people who didn't have the fundamental knowledge or awareness or know where, what to look for or what it means very much so blame the market a lot of the time because of their lack of knowledge and awareness. They'll say the market's changed, the market's choppy, the market's no good, when in reality it's just a knowledge gap, you know, an awareness gap that needs to be filled. Where do we go from here? That would you say? So this is the foundation. Where do we move on from here?

All right, so why don't we do just a quick visual of what this can look like, right?

And I'll clear it off. Sure, sure, yeah, sure.

People can take a screenshot and follow along.

Exactly. Yeah, yeah.

One of the confluences that I like to use is divergence, right? Divergence between pairs. Now, this is not going to be applicable on everything you trade, right? But if you're mainly trading NASDAQ and S&P 500, and I'll show you the swing trade that I currently have open since April, since the beginning of April is on the Nasdaq, right? So one of the confluences that, that I like to use is divergence. Now we had the S P500, right, rallying from the election. This right here is a very. For those of you that were long the market, right, this is a very fundamental, we could say fundamental catalyst, But it's going to rally from a, a technical level, right? So if we hit, for instance, a, an an old support level and this is where we begin the rally from. We rallied into the inauguration, right? Now, when we rallied into the inauguration, another fundamental catalyst that we see is seasonal weakness after the inauguration in the first year of a presidential election. Now, you would only know that if you actually did. And I'll show you how to do research on this stuff. You don't need to read books. You don't need to subscribe to Apollo or Carson or Bloomberg or any of these firms that, that cost thousands of dollars a year. You could do your own research and start asking questions like what happens typically after the inauguration on the first year of a presidential election? Oh, you tend to see seasonal weak February, right? So we have this trend line and we broke. This now becomes all time high, which is a key level, even though it didn't exist before because it's a new high. But now that's established, that is an all time high level. So we broke that trend line and we retested it, right? And we went down on the S&P 500. We went down to one of these old lows. This is where we stopped at. Now the distance between here and here, and I'll show this to you on the chart was minus 10%. This is another fundamental catalyst. If you look at the history of the S P 500 or the, or the NASDAQ, mainly the S P 500. The NASDAQ's a bit more volatile, but it tends to stop at these psychological levels. Minus 10% bounce, minus 20% bounce. You see this all the time. And I'll show this to you on the chart. This is not something I'm making up. So this right here was a, a protruding low. What we call an internal low is a form of liquidity. And this is where the market rejected off all time high fundamental catalyst retested the trend line, right? And we dropped to that 10 level. This is the example of how you can use fundamental catalysts to tell your story. The break of the trend line in and of itself is a liquidity catalyst. The all time high is a liquidity catalyst because we put in a fresh high. And here, by the way, on this trendline break, we also had a. Let me do it in a different color. We had a market structure shift. So I don't care if you, if you are trading trend lines and you played the retracement into the trend line or you're trading market structure shift like sort of like an ICT 2022 model and you retra and you are trading the retracement back into an order block or fair value gap, right? You are using the, the same, you're really using multiple strategies to tell the same story.

Exactly. It could be a head and shoulders, it could be Fibonacci. Yeah, yeah, but it's all, as you say, the context of it. And back to your point, the story of it remains the same. If you boil it down, right, if it doesn't matter the labels and the type of strategy you're using, whether it's ict, sfc, whether it's, you know, technical patterns or Fibonacci even, there could be indicators that are around the same point. But as long as you have the context and the story, as you mentioned, which comes, derives from like understanding the trend you're in, what liquidity has been taken. The fundamental catalyst is very helpful in this case in particular. A lot of the time the larger moves, and I would say a lot of the time the cleaner moves may not feel like it when you, that one minute candle is just printed or some sort of news has just broken. But in reality, when you take a kind of a little step back and observe everything that's happened, a lot of the time the catalyst has been from a fundamental perspective. And as always, well, as always, but majority of the time the technicals and the fundamentals Sort of align. It's just kind of getting, I think as we talked about earlier, having that knowledge gap is the problem. Because if you don't know what's going on or why something's happened, even if it's not a case where in the moment you knew, as long as you're able to sort of, as you say, like, be able to research and ask the right questions, you can get the answers. And by just having that gives you a lot more peace of mind or at least more clarity on the markets. Because when you have that knowledge gap and that happens, let's say this whole scenario has taken place, you could just be giving into a lot of panic and a lot of emotional fear from reading headlines or reading tweets when you don't actually know what's going on or why something's taking place. And as you said, a lot of this can be seasonal. A lot of these things, you know, can be just literally looking at past data from these seasonal events and being able to. I like this one in particular, like the minus 10%, you know, the amount of people who started reaching out to me when we had this sell off, saying, oh, what do I do? You know, do I sell my stocks, do I sell my pension, et cetera. And I'm like, why? Like this is very normal. Like, if anything, these are the best points to potentially buy, you know, And I struggle, I try not to say it just because, just in case you get, as you say, a 20%. Yeah, right. Which can easily happen. And if I tell them to buy 10, the next thing that's going to happen is they're going to message me more at 20. So I try not to. But in essence though, I'm not panicking because again, you look at the history. But I'll let obviously you go into that in more detail, but I love.

The 100% and in terms of like. Because one of the things we do is also optimize long term investing. So most people, when they invest right, they're putting a dollar cost amount, average 10% of their paycheck or whatever, and that's perfectly fine. But you can supercharge your investing. Like you said, people that reached out to you about the minus 10% or minus 20%, anyone that's in the stock market knows family and friends that will reach out to them. What do I do now? I hate giving people advice and not because I don't believe in my analysis, but because I know they can't react to it. Well, you know what I mean?

As a prime Example, right, so if it's 10% down now, they're wondering should I sell? And if you're. Then if I. Let's say I'm mentioning it's probably a good time to buy. It's always a good opportunity where you could buy some more, right? If you have a long term view, they then buy drops another 10. They don't understand that that's another great opportunity, you know, or at least it's not something to panic about. As you say, they don't have that time horizon, you don't know their time horizon, you don't know their situation. So it's actually really difficult position to be in because you spent all this time building this knowled. So when people do ask you, you have sound knowledge to give but it's just when people don't have that knowledge themselves or awareness of the markets, they. You don't know the time horizon, you don't know how, you know diverse they are in terms of how much money they build, capital they've put in, etc plus a lot of the time the whole reason they've hit you up is because they've seen a headline on the news or on Twitter or some someone's text them saying it's all over, it's chaos now. So then they're not really in the most stable mental position to receive advice as well I think.

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Now let's get back to the episode.

I agree.

Yeah.

And I'll show you a way in which I do fundamental analysis as well. But, but to your point, and this is kind of going off on, on a, on a tangent, but if you look at all the major crashes and corrections, right, that 2008, 2020, whatever. If you just bought the high and you did nothing, right? Or if you just sat on your stocks and you panicked on the way down and you did nothing, then we eventually get to that high. 20 2008. I think it took six or seven years before we hit that high. What do you think is the result of someone who bought in 2008 or 2009? Not only are they profitable immediately, it is a stupid amount of money. I tell people this all the time and I'm very honest with my audience. I've made way more money swing trading and investing than I have trading. Trading to me is just an income. It's a way to generate income. It's not a way to generate wealth. You cannot beat the compounding effect of the stock market. You cannot beat the fact that you don't have to manage your risk super tight like you do in a day trade. Right. Like if, if I buy, if, if Apple falls to, I don't know, say Apple falls to 120 and I buy Apple 120, do you think I'm setting a stop limit there? I don't care. I'm going to hold that for 10, 20 years and it compounds and compounds. 800 billion dollar companies become one and a half trillion dollar companies. They become 2 trillion $3 trillion companies. Now we're knocking on four. You cannot beat that type of effect with day trading. So day trading can get you a nice income. That income, you throw that into the stock market. And using the same principles that we're talking about here, you can optimize your long term investments. Like someone who is telling a story through their trading. Right. Like I'm, I'm not a dollar cost averager. I go in heavy at certain points when certain things happen. Using these, these concepts.

Yeah, definitely. Well, let's talk about the pros and cons of the, the universal playbook and then jump straight on the charts, I think.

Okay.

Yeah, yeah.

Now in terms of, of cons, there are, there are some cons depending on what it is you're trading.

So for instance, I recently took a.

Loss on, on a, on a trade I actually had to roll, roll the option. So not necessarily a loss, but more of a loss than I wanted to. It was on Uber and we can, if we have time, we can go into that. I do want to share some more charts before that. But the, the, the difference between swing trading and day trading. Right. So here swinging and here's day trading. So we could say where's the pros? And I'm not going to include investing here because you're just essentially buying and holding at the lows.

Right.

So the pros with, with swing trading more deliberate.

Right.

You are, you inherently have more time to make decisions. You are less prone to panic. Now one of the consoles of using this model with, with swing trading. Sure. One of the cons with, with using is that because you're trading derivatives that usually only trade during market hours. So say you were trading options.

Yeah.

Right. And this is a play that I recently took a loss on even though the setup was a plus is you have no control in the after hours. Right.

So if, if I take a position on.

So Uber was a just traditional break and retest, so made a high. There was A level here, a very, very, very strong level. And I was playing a bounce right off of this level. Uber ends up tanking in off hours. So when it opens, it opens here. Now, if you are trading options, you don't have control over that and you can bake it into your risk to reward. But when you are trading options, you have to provide yourself a cushion when trading, when swing trading options, because a lot of time, not a lot of times often, or can be, what happens is price opens up below where you were going to set your stop. Right. Now you, you cannot really set stops and options. Yeah, right. I don't know if you've talked to options traders before. You can, but it's not ideal because options pricing is so erratic.

Yeah, yeah.

That it's not exactly like size, size for zero.

Right.

I, I typically don't size for zero, but I allow myself a cushion. So I'm not going to set a stop limit based on the price of the option.

Okay.

I'm looking at the chart, at the stock chart in order to determine whether my play is still valid.

Right.

But it can open up below the level that you were expecting to sell at and say it opens here and now instead of being down, if you have roughly calculated it to be down 25 or 30%, now you're down 45% and you have to build in this cushion. And this is one of the biggest mistakes that I see novice options traders make, is they size for zero and they take a big size. Right. Or they take a bigger size and they don't account for the possibility of this happening because you have no control in, in the after hours. Right. Now, this relates to options specifically, but pricing is not exact. So with stocks, with futures, you know exactly how much you, you'll be, you'll be up or down, Right. Because it's just absolute based on the level. If you sell here and you buy back here, you know exactly how much you made. If I bought a spy put here and I sold it here, I don't know, did I make 15, did I make 30%? You don't know. It's based on Greeks. Implied volatility, theta decay, expiration date, strike price, et cetera. This is why, as a side note, it boggles my mind that people get into options trading before futures trading. And then when they approach futures, they're like, this is confusing. I'm like, how is that confusing? You can only long or short it with options. You have to pick strike price, expiration date, et cetera. Right. So those are the cons and then another con that I, that I think affects novice traders, not proficient traders is this aspect of more time gives people more time to get in their own way.

Yeah.

So a lot of times your play is in play when you're looking at a chart, but because it hasn't made the move yet, you are more likely to act prematurely.

Yeah.

You have that patience and wait, you're.

More likely to act prematurely. And so the pros with day trading is that you, you are going to close your position within in the same day so you don't really have no after hours risk. Right. The cons is that it's the fastest form of trading, it's by far the hardest form of trading. More panic, the fight or flight system in your brain is triggered. Whereas with swing trading, it isn't right. When I'm swing trading, when I open up a position that I plan to hold for weeks.

Yeah.

I don't have fight or flight. The survival part of your brain is not kicked off yet. Day trading, you are always in survival mode. Always, always, always, always. And for a new trader, this is horrible. Right. Like you should be paper trading. Now we have prop firms. Thank God when I started we didn't. Right. You were going to blow tens of thousands of dollars trading before you actually learn.

Yeah.

So yeah, a lot that goes into it, especially if you're trading multiple asset classes.

Definitely.

Yeah, yeah.

But this, that's what I would say are the pros and cons of swing. If you're swinging options as well. Versus, versus day trading.

No. Perfect. I think now is a perfect time to go into the charts and look at some, some examples and take it from there.

Yeah, let's do that.

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So now we're going to go into the actual charts and see prime examples of, you know, that context building and the universal playbook that we just went over.

Yes. All right, so let's start with the S&P 500 chart, right? And then I'll get into some of.

The trades that I.

That I've taken using these concepts. So the S&P 500 chart. And here's where I'm. I want to showcase to you that narrative and story is much more important than. Than your actual trading strategy, right? And we're going to tie in everything that we just talked about. So let's say that you have the S&P 500 chart here, right? And let's just remove the time frame. This is daily, but let's just remove the time frame out of the picture. Let's forget about that for a second. And let's remove fundamentals out of the picture, right? You have the S&P 500 here, and you have a trend line. Let's say that again. This is a form of liquidity. And imagine that you took a long here, right? Would you be wrong in taking along here? Now, you could say we did hit all time high. And so what's beyond that is unknown.

You wouldn't necessarily be wrong if you.

Were bullish on the market, whether you.

Take a loss or not.

Again, as I say, it's not really the important part. You're.

What you're trying to do is achieve.

A disproportionate win versus the loss that.

You take with your stop limit. But you still want to build a narrative, right?

But let's say that you, whatever, either you took that long or you took an L on that long, right? This right here, when we talked about Liquidity catalysts, that break of that trend line. If you, if this is the first day that you see this chart, are you going to react?

Are you going to feel like you.

Might have to react soon? Yes, this is a liquidity event. We broke major support. Right. This is after the election, after the.

Beginning of the year.

We broke major support. So can you take a trade from here? Right. We broke support and remember we want to see a retest. So let's say that, that you want to take a retest of that trend line. Where are you targeting? Don't we have this low right here? Yeah. Okay. You have that low right there. You have a low right here. You may be taking multiple contracts, you may be able to take partials there. Take TP2 here. My point is now you have a narrative, you have a liquidity event, you have a trend line and you are going to play the retest of that trend line. What else do we have here? If, if you were a, a moving average trader, right. You have the 21 EMA right there as well. Let's say that your entry hit, you're targeting there. This is an example of, of having the complete picture. Now again, I don't want to go into technicals or, sorry, I don't want to go into, into fundamentals. But like I said, there is that, that seasonality surrounding the first year of an election cycle that you could have also used like if, if I knew that in the back of my mind and I'll show you how to get better instantly at your, at your fundamentals. But if I knew that in the back of my mind and I see this trade here. Yeah. I might be more bearish biased because can we sweep this liquidity and come back up and this be a swing failure or a fake out or stop hunt or whatever people call it.

Yes, it can.

You're not guaranteed that this is going to retest and drop. It can retest and come up.

Right. But if you also have the fundamental picture in your mind that we are.

We tend to see seasonal weakness in February after an election that can help you with your story. Now if you are a, say you're not a trendline trader, right. And you are, I don't know, you trade SMC concepts or whatever or you, you are looking for market structure shifts in this.

Let me remove the EMA real quick, the 21 EMA.

But in this series of higher highs and higher lows, you have a market structure shift right there. Yeah, right. This right here is an internal low. So what if the way that you traded, took into account this drop below here and you said to yourself, I'm going to take a trade at a retest of that level. Yeah, you would still be right. This is why, like I. It really boggles my mind, actually. It more.

It annoys me when people get hung up on strategy.

There are many ways to skin a cat, right? And again, you're looking at a liquidity event. I don't care if you trade trend lines smc. If you do it proficiently and manage.

Your risk in a way where you're telling your story, you will have a.

Decent win rate and for sure a decent R multiple because you are taking.

Disproportionately winning trades then, then you're losing ones.

Right? So this is an example of what I'm talking about. Now I'm going to show you a trade that I've taken that I'm still in. I'm still in a QQ long that I bought at 42857 in April. Right. This is still open to today. I took the screenshot right before here, June 6, and that swing is in shares and it's currently still up 24%. Right. So I'm going to walk you through my exact playbook of, of how I took that. Let me just delete all this stuff.

All right?

I bought it near this area here, right?

And I bought it on qqq, which.

Is the Nasdaq and not S and P only because as I said before.

NASDAQ moves disproportionately to the S&P 500. It's more tech heavy. So coming out of corrections, it tends to move higher, it has more violent moves.

Right? So whether you bought it in the S and P or the Nasdaq is fine. But here I'm going to show you how I instantly improve my fundamentals if I know nothing about fundamentals. Okay? If you remember, April 2nd was Liberation Day. This is where Trump announced the tariffs, right? So we had that. What I was showing to you on the board earlier, this right here was a 10% move and we had a bounce from here, right? And it was also, yeah, Liberation Day, right. We tanked on Liberation Day and we dropped to this level. Now, if you measure this here to the close, because in order to determine a bear market, it.

The definition of a bear market is a 20% drop. Not at the wick, at the close.

Okay?

Right.

So we did drop more than 20%.

But we ended up closing 19.4%.

Right. So if you remember this, a lot of people you Said people in your life were asking you, but if you.

Turned on CNBC or something, people thought the world was ending. The tariffs were way worse than people thought. Hundreds of percentage points on Vietnam and Cambodia and whoever.

Right.

And it was seen as a potentially stagflationary event that would wreak havoc on the economy.

So you were not wrong to think.

That we could have, you know, fallen worse than this. Yeah. Right. But when you see this again, what we were talking about earlier, a big move.

Is this a major liquidity level.

So I, I pulled up the chart here, and the reason that I sent out this trade and, and I'm still in it to this day is because of this thought process. I'm looking at this and I took.

A look at something. Where did we drop?

And I, I told you that I, that I used the level from three years ago. This was the top of the bull market after Covid. Yeah, this was Covid. This was the top of the bull market, right? Yep. Okay. So we dropped to that level. Cool. Doesn't mean that we're gonna, that we're gonna stop there. And by the way, I'm not trying.

To, I'm not trying to say that.

That I, I'm Nostradamus and I knew the exact bottom of the market.

I'm trying to say, do I have a story to take a trade and make money? That's it.

Right now this right here was the 2022 bear market. Yeah.

What is this?

This is the top of the 2020 bull market.

Insane.

So I was like, wait, is this a freaking trend?

What is this?

This was the bottom of the COVID lows. This right here was the all time highs. Before the 2015, we didn't have a bear market. We had a correction. Covid stopped at the previous all time highs before the correction. Right. 2022 stopped at the 2020 highs before the COVID lows, and 2025 stopped at the 2021 highs. Insane. Now we talk about confluence and I use, I use fibs quite a bit. Right. The bottom of the bear market to the top of the bull market. What is that?05. The bottom of the bear market to the top of the bull market. 5. Now, how do we get better at fundamentals? Right. Remember I told you this was a 19.4% drop?

Yeah.

If now I have this context. I have my fundamental confluence. I definitely have my technical comp. This is wild to me. Bottom, top, bottom, top, bottom, top. Right. You have your fundamental confluence. You have your technical confluence.

How do you not take a Trade, would you be more stupid to see.

This and not take it or to.

See this and take it, you know what I mean?

So, so I ended up taking this in Q. Q. Q. Again because I think NASDAQ is more not I think it is more has.

Bigger disproportionate moves to the upside after corrections and bare markets. So I ended up taking it in.

Nasdaq and that trade is still open. Mind blowing.

Yes. Yeah. And just shows you how like it doesn't have to be complex either. You know, you get to choose your style. And again it shows not only from the sell off perspective and the trade example we showed there, but then also the long and more sort of more swing, slash position trade or investment how it's still the same principles. The principles don't change. But I definitely love obviously the example of fundamental side of things being able to get data written up for you. Very quick, easy reading. These are one of the prime examples of how innovation and technology changes the landscape for retail traders. You know, because even if you want to spend the thousands, even that data is not collected and put into a format that is necessarily easy to read or at least personable.

Right.

And versus obviously using Grok or ChatGPT where you can request for the information in particular different styles or ways that would make sense to you or allow you to resonate with it. So you have all this freedom and all these tools that are available now that were never available before. And so therefore the excuses hopefully will get more limited, limit the excuses that are possible. But it does boil down to just at the end of the day making sure to use the tools necessary and to be able to take action on the things that you know are going to help you progress as a trader.

100%.

Yeah.

And I think that you know, that's why it gets in and I'm sure you, you experience this too. But being on social media, being in.

The trading space, when people start asking you questions like oh, what does this mean? Type that exact question here and then learn.

Yeah.

The only way to get better at fundamentals is to start building a, a knowledge base. Right. And to those people that say, you know, fundamentals don't matter when, when you're day trading. No, they do try day trading fomc, you know, try day trading a jobs report. If you don't know that that stuff is there, you're not going to understand why the, the there will be wicks, why you're going to get stopped out. As a matter of fact one of the best ways to Trade fundamentals, while day trading is to wait for the fundamental news to drop, look for the manipulation, and then trade the other side to the next area of liquidity.

Yeah, because that's what you'll find with a lot of fundamental news is that it will spike or drive into a, a key level, into a higher level, higher time frame, sort of a liquidity sweep. And then that's why a lot of the time you'll see that reaction away. If that hasn't happened and it does end up pushing in one direction and continuing that direction. What is usually the case is that that liquidity was taken before the news. So therefore it then sets up for the news to be able to then drive in the opposite way. But either way, if you look at, and again, this is something that you can quite simply just go on the chart, look at the days that these news releases are taking place. If it makes it easier for you, using the exact method you've shown, you can type in what were the dates of the last 10 NFPs.

Right. Exactly.

And then go to those dates and be able to essentially back test or at least just observe the story. And I think if you go back to that context that we started with, that's essentially the exercise you can begin with rather than trying to do it live. Your beginning exercise can literally be whether it's using the fundamental side of things or just going back to particular dates and starting with the framework of what was the story on this day based on what was yesterday's closure, like what areas of interest or liquidity areas are nearby, and then building your story in context and then letting it play out and just kind of training yourself to be thinking in that way, because it is a simple way as well. That's the beauty of it. It's not like it's a. You're training yourself to read a whole new language. You take even the most novice and basic and beginner trader who knows the basics can implement that thought process and, and that process of looking and observing the charts in terms of building that context from day one. And it's a much more powerful technique because it's going to allow you to really have an understanding, regardless of strategy, where you be, where you should be positioning and where you shouldn't be. And most of all, even if you miss a trade, even if you lose a trade, because that's all of those things are going to happen, at least you know you did it from a perspective of planning your trade out, having context behind your trade, and therefore if you're wrong It's, I would imagine, harder to be annoyed at yourself or to be as emotional because, you know, you, you built a context and story around your, your trade. And a lot of the time if you are wrong is normally because potentially you missed a step, didn't observe something that would have added that context and that, that sort of story for you to understand. And a lot of the time it's just being able to go back and review that.

Right.

Again, it's not a case where you're trying to strive for perfection, where you get to a point where 100% of your trades are winners. It's just allowing yourself to consistently learn and sort of learn from mistakes or learn from things that didn't work out so that the next, your, your ability to create context in the story improves over time. For sure. Yeah.

I mean, and that's why, like the way that I approach trading with the, the universal playbook is it, to me, it is, you know, it's, it's the best way to, to, to approach the charts because like you said, you're not aiming for perfection. So I'll share with you a trade that, that I, I took a loss on, right? And you could see immediately how this trade can be misinterpreted, right? So on the s and P500, and remember that, that 10% drop that, that I told you about, how the S and P tends to react from these 10% drops. Here's the 10% drop. And we got a reaction right now.

We didn't know Liberation Day was coming here.

We knew it was coming.

We didn't know what it was going to be.

Right? If you looked at this and you see these equal lows right here? Oops. What the hell? My bad. You see these equal lows right here? We breach below it. This looks like a liquidity sweep, right? And we pop back above it. And now we're retesting it. This is a major level, clearly. I mean, you have a high. A high, a low, a low. It's a clear support, resistance level. If you said to yourself that I'm going to long from here. Yeah. Which I did, long from here. Right. You would have got stopped out on this trade. But guess what? I had a story, a narrative that made sense, a framework. And I don't really care that, that, that this stopped me out because what am I doing now? Right? The next thing I'm doing is saying, oh, shit, that didn't work out. Maybe what's going on is this trend line here, which some people will call a bear Flag. I don't care what strategy use. These are all the same concepts. This is a bear flag right here. Yeah, right. I missed the, the long from here and now I'm looking at a bear flag and I'm like, oh, maybe the trade is actually a breach of this. And now I'm going to wait for a retest of the bear flag. And I think we are now targeting.

These equal lows here.

So I do have another trade, I.

Do have another story.

And what's really one of the pros that I talked about swing trading is.

You have a lot more time, right.

And the other thing is that I didn't write that I should have.

You are less prone to revenge.

I cannot revenge trade. If I'm looking at, and I'm not saying swing trading is better than day trading, I'm just saying one of the pros and cons, I cannot revenge trade.

If I'm, if I'm swing trading, I.

Can'T like miss that trade and then.

Immediately enter one because these candles need.

Days to play out, right? So when you're day trading, it is.

So much easier to get caught up in, oh, shit, I gotta enter again, again, again, again, again. You could fake yourself out. You can enrage yourself into continuing to enter trades. Right? That's why I think beginners should really be paper trading. Trade with a prop firm. Do not waste your own capital trying to day trade, especially derivatives like futures or options. These things can maximize your losses and really get you into a cycle that you're not, your brain isn't used to working with yet. You know what I mean?

So, yeah, that is definitely one of the pros and cons that I didn't talk about is that swing trading, you're much less prone to revenge trading and you can easily see where you were wrong. And then the next couple of days.

Set up another trade, tell another story.

Work within that, set up your risk within the, the pages of that story.

Well, I think again to your point, because even traders who are, say, not as novices, but they're not you still utilizing really that concept of a story. And even on a swing trading perspective, I think that that missing gap of not having context or a story that they're working off and a lot of the time maybe just using patterns or just how they feel or however they're operating, but missing that context is even when they're meant to be swing trading, they will still make that mistake of say, getting stopped out and then entering, entering, entering again because they're not working or operating Off a story they're operating off. This is what I think, you know, maybe using certain technical confluences or strategy and when they lose even on a swing trading perspective, they just end up falling into that trap of let me get back in because it's going to go my way, maybe it was a fake out, et cetera, et cetera. When, when you have that story in context, when you're wrong, it allows you to, hopefully you're going to repeat the process, right? That's part of the whole point of, you know, creating your trade ideas is to go back then to your context and story. Like what is that now? Has that changed? Which nine times out of 10, especially from a swing trading perspective, if you are getting stopped out, more than likely something has shifted or changed. So then when you go back to the drawing board, either one or two things, I would say if you're a bit more new and a bit more of a novice, maybe you won't automatically be able to figure out the new context and then execute the opposite way in this particular example, let's say. But if you have built your experience and been able to go through some of these rep and repetitions, then that's what the process should be. Then you create your new context based on the new information that's been provided, both from a technical standpoint in this example, but also the fundamental perspective as well, based on the tariffs for this one and then execute accordingly.

Right.

And that's why I think, yeah, like the Universal Playbook is a great name for it because it is truly, you know, that framework of building context around your trade ideas is necessary I think regardless of, as you say, like what type of trader you are, what you trade without that, missing without that. If you're going to be just using just a technical edge, for example, or just a technical strategy, you are missing out on a lot of, of information and I would say even the psychological aspect as well, because by having that context story it allows you to build confidence within your trade. Because you know, you've put together this thesis based on multiple information, right? Multiple information from the technical fundamental perspective.

Everything.

Rather than as we say, just using technicals by itself and not really creating any context more so just like, oh, you know, especially in the sort of SMC ICT world, it's very easy for people to, even if they have a swing trading strategy in mind of that's where their thesis begins, find themselves just getting sucked into lower time frames. You're marking out any sort of lower time frame high and low and removing all context Removing all sort of story and really acting off emotion and probably the need to try and win a trade.

For sure. Yeah, I think that also with day trading, especially if you're using a model like SMC or any model for that.

Matter, you are much, much more prone to take what I call look alike trades so that they look like trades. You might have a fair value gap, you might have what you think is a market structure shift.

But without the context of high time.

Frame doesn't make sense for price to go there based on the hourly candle. Does it make sense for price to go there based on the four hour candle? You are still building a story and it is a much more like I said, complex. Quick fight or flight is involved, panic is involved, immediate feedback is involved. You don't have time to sit there and think about your plan for the trade. And you're more prone to revenge trading. But yes, for sure, I think that people go to the lower timeframes because it's a timeframe that offers the most would be entries and they cannot stop themselves from sitting on their hands until their story develops. Now your mind has to work a lot faster.

Like the way that I broke down again, I was using the daily for reductive sense.

Obviously I use weekly four hour, one hour. And I start building my story around other confluences on other time frames as well. I'm not just a daily chart, daily chart trader.

But imagine what I did here.

Imagine I had a few seconds to do that. That is what day trading is like. And I don't think that that people really understand how much time it takes to get in the right mind frame to understand that you need to build a story even on the lower time frame and you have to stop. Moreover, you have to stop yourself from impulses which when you are swing trading there is a lot more deliberate performance that is just baked in. I cannot enter a million swing trades a day because these candles move very slowly. If this is a 1 minute chart, I can enter 15 times in the same hour. You know what I mean?

No, so true. And I think you know a big part of that as well is if you are going the day trading route, which is no problem with this understanding that there will be a process of training yourself to be able to react and take in information. First of all, take in information quickly, decipher that information, build your context and then react accordingly. Which as you say, you know, for example a trade idea on that time frame, you might be coming in with a particular context and bias. But as the relevant information is then taking place, maybe a market structure shift or some sort of liquidity sweeps taking place and that reaction is taking place in the real time within a few minutes. You're then having to take that information, make sure it's aligned with your context, that you've hopefully pre planned if you're doing it the right way, and then be able to execute and manage and plan your trade in terms of your stop loss, your take profit, et cetera within those few minutes, which is no problem. But again, giving yourself the time to build your level of skill set and your ability to decipher information in a fast manner rather than just jumping into it. I think a lot of people, they, they jump into it without sort of having any sort of practice building any sort of reps, training themselves to be able to think and act in a faster manner and therefore sometimes it might work out and they're the times that reinforce them to do it again in the future. Right. But a lot of the time it won't work out. But again they won't understand why.

Right.

Because they haven't allowed themselves the time to build, build up that skill set, if you will, of speed and, and being able to decipher information at speed when again the daily time frame. The interesting thing is you look at the daily time frame and we've just done examples on that and you get, that's easy.

Right.

But then as soon as most people don't really have the discipline to stick to just one timeframe of trading, for example, so they start to go lower of course, but then things change that the actual patterns stay the same, the concepts stay the same, the context stays the same in that sense. But the one, obviously now you're adding layers to your trades and I would say your one hour, you need to remember your context from your four hour and your daily, so you're adding layers to your story. And then obviously on that timeframe that you're actually executing on, you have to then be able to decipher all that information. So it's a interesting task and I think there are pros and cons of course to each one in terms of like day trading versus swing trading, you know, and people can easily make arguments for which one's better or, or worse, but it's more so just making sure to understand as long as you planned your trade according. Yeah. So if you've planned the swing trade, you shouldn't then be day trading that plan.

Right.

Vice versa.

Yeah.

I mean honestly this is, this is what gets me about watching financial news like cnbc.

If you watch like cnbc.

It'S, it's.

So funny because they talk about events that happen today with such fervor and panic. But most of their customer base are older people that have, you know, retirement funds. And so it's like I, I always find it funny. It really reinforces bad habits that, you know, the most of their customer base are long term investors. But the way they talk about the markets is what's happening today. Our interest rates going to go to 15%. Are we screwed? And I'm just like, who, who is this for? You know what I mean?

But, but yeah, you're, you're 100%, right? But I mean like, yeah, even here if you look at the NASDAQ chart, right, there's so many fair value gaps. And, and now IFVGs, people are really into IFEGs, which is great, but I think people turn into, into pattern traders, meaning they're just looking at, at an IFEG or an FPG and thinking that every single one means something. Most of them mean nothing. Most of them mean nothing because you have to align yourself with the high time frame, right? Like right now on the hourly chart on nasdaq. This is an hourly fair value gap. Does it make sense for price to, to be moving up? Yes, it makes sense for price to be, to be moving up. But if I'm on the lower, lower time frame and you know, I might see a fair value gap, I might be, I know kind of what a.

Fair value gap is. I know what a lookalike trade is.

And I might want to enter short from here just because there's a bearish fair value gap right there.

You know what I mean?

But if you, if you look at the hourly, are you moving along with hourly flow at the moment? And I think that that context is missing. And again, it goes back to building a, building a story.

And it's just very hard to do if you don't know how to build a story. And you were trying to come into day trading without your mind being trained to think of things as, as a, as a story. You are just trying to enter these false signals time and time again and.

You'Re going to blow your account that way.

And that's what it goes back to, right? To spend the time necessary to just develop your, your eyes and develop your ability and skillset of building that context. And the truth is it doesn't take that long, but it's just making sure to put it in and going back to your original analogy that is the difference between Your elite, your basketball players, elite professional sports players and poker players and traders is that they have done enough iterations and reps in training so that when it's game time, even then as, as you said with the, with the basketball examples like even game time, the strike rate, if you will, and the performance rate is still on an average, it's not like 100% or 80%. But they're still only able to do that because they put in those reps then training, that's it.

And, and they understand the variance. So because I'm a data guy, like.

One of the, one of these stats that I really love is say your win rate is, is 50, right. Even if you're a 2R trader and your win rate's 50, you're profitable. But within the span of a hundred random trades, what do you think is the probability that you lose five trades in a row? In, in the span of 100 trades, what do you think it would be?

I would say it's quite High.

Yeah.

95% probability that at one point within a hundred trade sequence you will lose five trades in a row, four trades in a row, it's a hundred percent.

Really.

100% statistical probability you will lose four trades in a row. Now if you are a seasoned trader and you are just trading your model every single time and you have your stats to back it up and you know you are a 50% to our trader, right. You are not really going to bat an eye at that. It might make you feel bad by the fourth one. It would probably make me feel bad by the fourth one. I'm like, there's something going on here. Yeah, but you've done it enough times and you understand variance. Whereas someone who isn't seasoned doesn't have that context, doesn't have the mental training, doesn't have the, the ability to tell their story, doesn't know that, not confident in their framework. Five trades in a row would demolish somebody who doesn't have the question everything.

And then move on to the next strategy. You know, they blame that rather than understanding that it's a one, you know, understanding statistics. That is a very high probability. Because even then I bet the number for 10 trades in a row is probably higher than what people assume. And especially if you're doing it over, rather than 100 trades doing it over a thousand.

Right.

Because I always say to people as well, like what's the reality of you having a losing month or quarter through a 10 year trading career? Right. Or 20 year trading career? What's the chances of that. The chances are quite high. You're going to have one.

Yeah.

At least. Right. Yeah.

I've had, I've had a losing year.

Yes.

And most people will. You can't say that if, if you're trying to build a perfect image on, on X.

Right, exactly.

Yeah.

And then the reality of facing that, because it's one thing saying it, but then the reality of, okay, as a trader, especially if you've been consistent, say for six years and then you have a losing year, the toll on the psychology to make sure you continue and stay on process and you still build do all the right principles to make sure that you stay on track because you know you did everything right. Yeah. There might have been some learning things and some mistakes within that year, of course, but regardless, that's where, you know one of those moments where it's like you're either going to make it or, or you're going to end up going backwards.

Right.

Because a lot of traders will probably have that, even if it's not as dire as having a losing year. Even if it's, let's say year one was 100k, year two was 250, year three was 500 and then for some reason year five was 100k again. But you're still profitable. But you've gone essentially in your head, you've said you've gone backwards again. These moments are really where the true test for traders comes in. A lot of traders won't actually get there, unfortunately. Right. Because they won't actually put in these foundational things we've talked about today.

They won't. Yeah, they won't. And, and I think, I think another thing that, that people misunderstand. Not you, because you, you talk to.

A lot of seasoned traders, but a.

Lot of times, especially when, when it.

Comes to positional trades, like swing trades where you were trading your own capital, not talking about prop, right now, really throughout the year, you, you will remember the two, three trades that have made your year.

Yeah.

You will remember that, right? Like, yeah, sure, you know, enough, like you are seasoned enough not to get yourself in trouble. You maybe are having winning month after winning month and they're probably modest by your standards or, you know, they, they may be more than average. But then you have that one trade that comes around where the fundamentals and the technicals meet and you know, like Liberation Day for instance, or yesterday. I know a lot of people that traded Tesla yesterday. Right. Because of the spat between Elon and, and Trump after broke below a major level and retested that level. There was a huge drop thereafter. Right. I think it was down like 5% and by the end of the day was almost 15. So, you know those types of trades, you'll have a few of them and they will make your year. And I don't think that I. I think people don't understand that con. People that are new don't understand that concept.

Yeah.

And they want to be profitable, super profitable on every trade immediately. So they oversize. You know what I mean? But yeah, even for seasoned traders, really, two, three trades make up your entire year of a good year, no?

So true. We've seen this now as a common theme since you're doing our tour and sort of interviewing professional traders and verified traders is that's the common theme, you know, when it comes to dynamic risk sizing. But then also understanding that, yeah, a small number of tickers or stock or pairs or whatever you want to call it is going to make up most of your year and most of your P L. And then a small number of trades will also make up the most of your P L. And then the argument or the rebuttal from people would always be like, why wouldn't you just take those trades? But then it's like, well, if, let's say it's like ring rust, right? If I'm a fighter and I'm out of the ring for a year, I wait only for the McGregor fight, right? The big fight. By the time I get in there, I'm going to be so rusty and I'm not going to perform well. I'm probably going to lose that fight. You haven't given yourself any edge or sharpness. And also, really importantly, that's really where you get that dynamic size from because you then have the house money from the base hits. So the majority of trades that then make up maybe a smaller part of your P L, but because of that, they allowed you to then have the capital necessary to increase risk on that trade that came comes along. You know, the beauty is. And we can finish up with this, but like to your point, they happen few and far between. But I think that is why a lot of traders are so excited to have Trump in office, because he essentially is manufacturing more of these moments that usually you, as you say, get maybe two a year on average, like when Biden was in, probably got way less.

Right.

But when Trump's in, you end up having, you know, we were almost six months into the year and we probably already had three or four.

Right.

Which isn't normally the case. So that's why like the, you know, professional traders and traders like yourself are actually very much tuned in knowing that there's going to be more opportunity available to a seasoned, well prepared trader. So to be able to take advantage. Because it's in these moments that might not happen again in our lifetime where you get someone who comes into to office who's providing these sort of liquidity events and these sort of volatility within the markets to present these opportunities. And really our job isn't to say try and capture every single one. All you need is one. Really. Yeah. And if you manage to get two or three, then incredible, right? And I think again, yeah, it goes back to what we said. Like the traders who are constantly trying to be perfect and get every single move and 100 strike rates. It's just not the reality of actual trading. But we are regardless though universal, you know, playbook. Incredible. And it's universal not only across, you know, different asset classes or time frames, but it's universal in terms of it will never change either in my opinion. Like 100 years from now, whatever the markets look like, whatever technologies come in, it's the same context and story that will be needed to trade. And if anything, you know, people might talk about algorithms, for example, that's the same thing. The algorithms need context and stories and sort of if, if and then statements to be able to operate and transact.

They are based on if then statements.

Exactly. Yeah, exactly. Well, Z, I really appreciate you breaking down this model for us today and everyone at home, drop a comment of your biggest takeaway from this episode. Any questions you have on the model, then drop them in the comments below. Me and Z will take a look at that for sure. But links for Z will be in the description below. Make sure you go check that out, especially if you want to really accelerate your knowledge on the fundamental perspective as well and being able to use macro into your trading. Z does an incredible job with that on his YouTube channel. So check the links out there. But this has been char for Nix. Other episodes are on screen hit like hit subscribe and take care of.