Kai Davis breaks down a $4,000 losing trade on ES and NASDAQ futures, explaining the liquidity draws and fair-value gaps that guided his entry and why the market didn't respect the expected pattern. He stresses treating each trade as independent and avoiding revenge trading, regardless of the outcome.
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Welcome back to another video. Now today I took a losing trade and I would do it again tomorrow. This is going to be a full trade breakdown because I do not only show you the wins, I show you the losses. Because at the end of the day, if you take these trades consistently over a long period of time, you will make money, you will quit your 9 to 5, you will never have to worry about money again. So let's jump straight into today's recap and The bias was not very clear, but the draw on liquidity was. So I was more bullish today, the reason being we had news highs resting above and we had a very nice swing high. So we had two very strong draws on liquidity. The higher time frames overall just look a bit more bullish because of all this displacement after inverting these bearish FVGs to the left. Okay, there's nothing more to it. I wanted long positions, we had news highs. Was I open to shorts if we got them? Yes, if we got nice short positions, I'm open to taking shorts if we got a high quality play. Starting off. Oh, I definitely need to have ES open. So by the way guys, if you're trading and you're not looking at two charts, then you're not trading, you're gambling. You need to make sure you're using NASDAQ and ES, okay? It's very, very important. Firstly, we had this potential inverse at the start of the day. I stayed out of this. I know most of the Discord stayed out of this one as well. The reason being, it's— this type of trade is, it's a trap trade, okay? It's a trap trade. I feel like people— which I want to touch on more in this video as well— is today we had a lot of discussion. By the way, make sure you join the Discord, live streaming every single day, links in the bio, launching April 16th. But yeah, we spoke a bit about it today on the stream. If you've had a slower week or if you've had a bad trade yesterday, for example, you cannot go into the markets today with a mindset that, oh, you need to make the money back, you need to revenge trade. You need to go into every single day with a fresh mindset. You need to go into every single trade with a fresh mindset. Every single trade that you take is a new trade. Focus on the trade that you're taking and the results will follow. Okay, damn, I just had a really, really, really cool quote on the end of my tongue, but I forgot what I was going to say there. So yeah, you just need to go into every single day starting fresh. Stop worrying about the candles, stop worrying about the results. Just if you see your model, enter into that trade. So the reason why this wasn't a super, super clean trade was it wasn't really reacting from anywhere. We had an SMT, but we was not respecting the FVG, the 1 or 2. We're still respecting bearish FVGs on ES as well. So overall, just no trade to take right here. But there was a very, very similar trade that was just a bit cleaner, which was this inversion fair value gap here. Now the difference between these two plays are just a slight, slight difference. For example, right here we know— bless me— we swept sell-side liquidity We swapped outside liquidity, we have a bullish SMT, we have a singular 1-minute bearish FVG, we have a nice candle close above that FVG. That's the entry right here. Keep it simple. Trading is meant to be simple. Look how simple and obvious this entry is. We enter on this candle close, our take profit is simply the news high, our breakeven point is this high there, or if we get to this breakeven point on ES. We had no, we had no fair value gap on ES, so there was no need to take it. The quote that I was thinking of earlier, it just came back to me: go into every single day not expecting to take a trade and only take a trade if you see that trade in the market. Okay, that's my famous Louis quote right there. Anyway, these long positions are very simple. SMT, swept south side liquidity, bearish fair value gap that has got inversed. We enter on the candle close, take profit at the high. Yep, this one hit our stop loss. It's trading, it's going to happen. Not every single trade will be a winning trade, and this just happens to be a bit of consolidation here. There wasn't any trades after this. If you're looking to enter into trades like this, that is simply revenge trading. It's such a lower version of this 9:39 long that we got. Don't overtrade and enter into those trades. Then price comes down. Now, a trade that I did not take, which I would have been interested in if we got a bigger FVG, was this trade. It's just too much— too small of an FVG to take, in my opinion. Yes, we sweep sell our liquidity. We also have some very nice trendline liquidity on ES as well. But again, just a bit too small of a fair value gap, but very clean display placement, and sadly there is no entry there. Remember, keep in mind I want long positions. I think the draw on liquidity was these highs, and yeah, sadly we just came up. I did actually call out in the stream some potential light plays only being this 3-minute, because again, I did think that the draw was up here. So I'm sure some people entered this 3-minute that I called out on stream to this news high. Nothing for me. I would have wanted just another light play Uh, sorry, not a light play. I would have just wanted a 1-minute play to those hides, but that ends up working nicely. And yeah, after that, there sadly wasn't anything again, and that was the end of the session. We keep these videos very short, very straight to the point. Click the video, click the link in the description. The 8 launch is happening April 16th. If you found this video useful, make sure you subscribe with notifications on. There's gems dropping here basically daily. I'll see you guys in the Discord. Let's go!
