Mastering Price Action Trading with Supply and Demand (Institutional Order Flow) | Deeyana Angelo | Skillshare

Mastering Price Action Trading with Supply and Demand (Institutional Order Flow)

Deeyana Angelo, Derivatives Trader

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6 Lessons (2h 13m)
    • 1. Lesson 1 Basics of Supply Demand

      22:41
    • 2. Lesson 2 Guide to Mindful Trading (don't skip!)

      22:00
    • 3. Lesson 3 Q Points© (systematic swing extremes)

      18:51
    • 4. Lesson 4 Developing a Successful Traders Mindset

      23:04
    • 5. Lesson 5 Supply/Demand Formation Types

      16:51
    • 6. Lesson 6 Determining Systematic Strength of Zones 2019 EDIT

      29:06
18 students are watching this class

About This Class

  • Supply & Demand Institutional Order Flow Trading for most financial products including Forex, Commodities and Cryptocurrencies
  • How to identify Supply/Demand Areas on the chart correctly
  • How to determine whether S/D areas are strong or weak
  • Q Points© - proprietary method and missing link to S/D trading
  • Basics of Swing Trading

This course will teach you how to start  Supply/Demand trading concept and its application in the live markets.

My courses are a result of trading the markets over the last 11 years. Seven of those years I've traded professionally for three different prop trading companies. In the last couple of years I've been creating mechanical trading systems as a managing director of a small fintech startup called Blahtech where I collaborate with a team of three elite developers who come from bulge bracket investment banking background.

This course represents the first several lessons of 40 lectures in our Market Stalkers: Professional Trading Development Series. In this course you'll learn to recognise 'footnote' Supply/Demand levels around which you will plan the direction of your trades. I also teach you Q Points© which is a missing link to S/D trading and an invaluable tool for weeding out non-relevant areas. Q Points© are my proprietary trading concept - you won't come across it anywhere else.

This particular course aims to wean you off bad habits and wild-man scalping, steering you away from retail lagging tools to teach you how to view Supply/Demand levels that matter and apply real-time price action reading to these institutional Supply/Demand levels. I also set you on a path to determine whether your trade will have enough 'space' for a statistically correct risk/reward ratio (the amount you risk vs the expected amount of taking profits).

The reason why S/D levels on large timeframes are efficient is partly because there is so much trading information over long periods of time but also because institutional traders need deep liquidity pools to execute huge institutional orders that go into thousands of lots (we're talking positions in excess of 300-500 million). In order to save on execution costs (to ensure the order is filled in as little trades as possible), institutional trades will move the market by using some of the allocated funds to bring the price up or down to the levels where the huge several thousand lots orders can be filled efficiently. I teach you how to spot these big players.

This course is about swing trading basics through a systematic analysis of large timeframes (the birds eye view). It creates a solid base for an organised trading mind and a systematic, repeatable approach to finding trade locations at levels where institutions trade.

This methodology can be applied to most markets, including soft commodities such as gold and crude oil, forex, equity indices, individual stocks and cryptocurrencies.

Requirements:

You must have some previous trading experience and a very good skill of candlesticks reading. While this course may be used by beginners, it is best suited for those who have already traded for a while (ideally 1 year+) and are looking to advance their skills to a more serious level by adding an analytical approach to their trading performance. This will require patience and persistence but also tweaks to your own behavioural psychology in most cases.

Trading is neither simple nor easy and while it has the potential to bring windfalls to certain individuals who are emotionally resilient and analytical enough to keep going, it remains one of the toughest jobs around due to the sheer amount of information you must remember and cross-check when the opportunity presents itself.

If you're looking for a get-rich-quick, "simple" trading system then my courses are not for you. And I would highly advise you to stick away from any kind of trading altogether with that kind of mindset. You'll save yourself a lot of trouble.

Who this course is for:

  • Traders who are struggling to reach profitability
  • Traders interested in supply/demand institutional trading strategies
  • Swing traders

Transcripts

1. Lesson 1 Basics of Supply Demand: welcome to the market. Stoker's course on supply, demand trading. My name is Diana, Angela and I will be your instructor for the duration off the course. I have been a professional few GIs, traitors since 2013 although I have been trading since 2000 and nine these days on the managing director of a software house called Blah Tick, which is the company behind the popular plastic indicators. Blackjack also has a small, proprietary trading department, so I'm also the head trader. I'm also risk guardian and a occasional shoulder to cry on for our traitors when their psychology gets in the way, well, their goals to help you on this difficult journey to learn how to trade well consistently, I'll start by teaching you how to read supply demand levels properly. Supply demand is the backbone off the market. Stalkers methods in our primary way off determining good trade entry locations. It's not the only way, but it's definitely the backbone. Reading supply demand areas correct. Luna charts is important because thes areas represent institutional order flow. What's that? Well, it's where the large institutions, such as banks and hedge funds, have their pending orders waiting to execute. These orders are incredibly large, causing certain moves in the market toe happen once they are executed, and these levels of visible on the charge if you know where to look. I'm talking about historical levels, particularly those where the large move originated from, which means that the banks did actually have their inventories at those levels at one point , which caused these large moves away to happen to begin with. As you move through the course, you will realize that we are not looking at just any supply demand levels, but instead will be looking for very specific looking levels that have a number of conditions under some pretty strict rules that need to be satisfied. In order for a level to be valid as your zone of interest, I'm gonna start by pointing out the difference between your traditional support resistance idea and supply and demand. The very first difference is that supply and demand is a way to look at the institutional order flow without actually having the their order book. Because, let's face it, even if you're working for a bank, you can only see the order book of that one institution. So, for example, If you're working for Morgan Stanley, it's not like Goldman Sachs is going to let you walk into their office is to take a little guy 100 to their order book to see what their orders are right, So there must be a different way to do this. And there is so how well in stores. By looking at the moves from large timeframes and very specific price action formations, it will soon become very obvious where the interest off the large institutions really is. So here is a weekly chart of all the dollar that perfectly illustrates the issues when you're trying to trade through support resistance. So in theory this looks great, but let's drill a little bit deeper. So when it comes to practical execution attended to just trade from pure support resistance without looking at how price action formed at the level as you will see, it's incredibly difficult getting any kind of trains that actually work out. So here number one is where your support was first created, then it number two. You see it's sliced through it, and in theory it looks like it bounced from it. But you would have needed like a 300 Pip stopped lost, even trade this. So that's not very realistic right there and then a number three again, it gets somewhere near the key level. But you know, again, you don't get a film because it never touches it. And then a number four, the support breaks and according to the traditional idea, it support turns resistance, does it? It kind of goes way past it, and then a number six, you don't get a Phil again. So as you can see, it's not that great, really. But if you apply supply and demand to discharge just by looking for certain conditions to be satisfied, before you even decide to blindly place a Trade Basinas support area, then you'll find that it's not about one single price. It's not about just one single price key level, but that the support or resistance are really very specific looking zones that in a lot of the cases can be treated successfully at least once, maybe twice. So let's go through the same chart, but I'm going to start putting little demands on it if I point to this little circle. This is a reaction from the lower time for him to remember looking at the weekly chart. It's a pretty big level, and you would have been able to see this buying Wick either on a daily charge or even a four hour charge so this particular trade would have yielded 1400 pips. It's not a miss type. It's not 140 pips. It's 1400 pips over just over a month and then like not to mention that there's another reaction here, so this will be your second tests. But let's leave that for now and move on to that second example where it's sliced through the support here it is. So when something slices through the support slices through the candle by supply and demand rules, that level does not exist. In this case, this wouldn't actually be tradable wedded first happens, however, the price goes back to test it, and then again, you have a rejection through a very clear bullish engulfing. Both of these trades would have given you over 600 pips profit Now, just to make things perfectly clear, Marcus Talkers Method We don't trade from a weekly chart. We look at monthly and weekly areas for a directional intention and then we mark these areas as potential zones where, for example, on this charge, you know that when the price reaches this area, you want to be a buyer, Okay, because you can recognize that there is a weekly demand. They're going forward. We will also make the distinction between weeks dollars and strong zones again through a very specific, systematic way of looking at levels. So now I'm gonna take it to the process of finding supply demand zones. You will always start on a large time frame. There's so much less noise on massive time frames, and I look at the monthly charge every single week. I also look at the daily chart every single day. Regardless, the weather I'm trading in Judeo swing. And by starting your analysis from the very large time frame and then working downwards, I refer to This is the top down approach. There is one thing that is very similar to support resistance because we're also looking a charge in a horizontal way. So you're not going to be looking at the chart vertically through trend lines from not cheese gan fans and all of that. But instead you're literally looking at the horizontal chart, going back to see which levels have not been traded through. So you're looking for price action that is already on the chart. You know, making up levels, which again is the case with things like favorite trace mint and, to some extent, timelines as well. We'll begin by looking for obvious swink eyes and swing lows. But one very important thing is that with these swing highs and lows, you cannot cut through candles. So starting from the current price, wherever you are, you start looking to the left of the chart to see what happened. Historically. Now, traditional support resistance involves price that cuts through candles. And I never really liked that, because if the price goes through a low or high, if you apply some common sense, it means that the higher or lower is invalidated. So there's no level there now. If a price then goes and creates a brand new level in its place, then you will have some new information in a fresh level that is treatable. But not until the price goes back to that area. So it needs to move away and then come back when you're looking for your obvious highs and lows, you also need to look out for consolidating patterns just like you will see on this, George. So here's the Euro dollar monthly chart. Here's one consolidation. Here's a sort of a massive bearish and golfing. Here's another consolidation in another and another and another. But let me talk you through all of these obvious highs and lows. Like I said, we're going to start from the current price and work backwards. We begin to look to the left off the charts, and you're looking for obvious highs and lows that don't cut through candles. Were you trying to do with this process is to find originating points off all of these swings. Okay, so going back here is one high, and if I keep going, there's a high. That's obvious, but unfortunately, this price traded through it, so therefore it's invalid. Then I reached this low, and then if you keep going backwards, this high is valid. Then there's another high but again not valid because this one traded through it. This is a valid low. There's developed high and so on and so on. Now you want to practice this. So let's start by opening up a charge. So go to your trading platform, which one you're using and open something that's traded quite quite a bit like your dollar was a dollar or something like that. And then start looking for these obvious highs and lows. Once you've located your obvious highs and obvious lows, what you want to do is extend these rectangles back to the right and see what happens. No, notice that some of these rectangles have actually overlapped with one another and you will notice that some of these zones are originating zones. For example, this one isn't originating area and you have some other is like this one here is actually just overlapping. This originating zone on its high is just kind of popping into the area off this zone and then reacting from it. This means that this originating areas are reactive. I they are zones of interest to a vast majority off institutional market participants that are causing these moves away to move the price on a large time from like this, you need some like some very deep pockets. And that's how you know that these moves that resulted from these areas are made by central banks, hedge funds, etcetera. Now I'm gonna kind of remove these overlapping rectangles. Just clean up the chart a little bit. So now that I've done that, what remains is the supply demand zones. Supply zones are where your highs are, so they're kind of equal to resistance their areas where you will be looking to sell to become a cellar. Demand areas are equal to support. So that's where you would become a buyer. Some homework for you. So, somewhere on this page, depending on where you're watching this, you'll find a download link to a ZIP file with some homework charts. These air naked charts with a particular task. And then you will also find another document in their entitled answers that that contained correct analysis so that you can see how well you did and whether you missed anything. And now let's move on to how to draw the zones correctly. I'm gonna introduce a couple of new terms here to distinguish between the proximal area and distal area off the zone, kind of like port and starboard on boats, so that there's no confusion of where the trade entry will be so the draw the zones correctly. Let's first use two lines. There's the two candle demands. Pretty simple, created from a bullish engulfing. So this is the bush and golfing I'm referencing. Now when you have a simple two candles own the open off the previous candle will be your contar Minnis line. Contaminants line is an area where you will be looking to enter you trade as this is a demand that means that you would be looking to enter a by trade a k a long trade contar Minnis as a word means to have something in common. And the reason why I chose this term is because these two candles at one point had a common price point when the price stopped moving in the same direction which happened when this candle started. At one point in time, these two candle bodies looked identical. So the second white candle then continue to turn around crossing this common price point to eventually close higher and that created the engulfing candle. But by going higher, the buyers took control and therefore created the Contaminants line, a k a. The common price point contaminants line will become your first area of interest when the price pulls back to visit. This demand contaminants line therefore, represents an area where the price first faltered. It stopped moving in the same direction and then started to turn the other way. So in other words, contaminants line is a key level where the other side to control of the price. Now the absolute edge, the distal area off the zone. I'm gonna name a borderline. The borderline will be used to place the stop loss, but not exactly on the borderline. Instead, you will be placing a stop loss a few pips below it. Borderline is the edge off the zone. In this case, it's a demand, so it will be where your low is located. So let's have a look at some supplies. Here is a supply that has several candles. It's slightly different than the two candle example. So think about how the contaminants lines created is the first area where the price faltered. So if you have a number of candles that come after that first candle failure, where will be your contaminants line? It's going to be at the first black candle in this case, which is this candle here. And then you have another three candles off arranged sideways movement before the actual move away happens. So the contaminants line in this case, when you have several candles, will be the clothes off the first candle that faltered. Now this is an example of a supply. Therefore you will be looking to sell. So in that way it's similar to resistance. Your boy. The line is going to go at the obvious high, so the stop loss will be based on your borderline a few pips above, because the supply you're looking to sell. Here's another example of a multi candle area, but this time it's a demand. So here's your obvious low, you locate it, and this white candle is the first candle that stopped moving the same direction. Therefore, this first white candle is going to become your contaminants line where you want your pullback entry to happen. Now I want to show you some other examples just to make everything really clear. Here. I have an example off to demands that are moving in an option right. You're not supposed to trade the middle's so with supply and demand, ultimately we will be looking to trade the swing extremes. But recently, with the unity course, we've had a number of people asking what happens when you have a demand in the middle of a swing? Where does the continuous line go? Where does the borderline go? So here's unexamined, all of two demands moving in an uptrend. So in this case, you have to bullish in golf things, and the rules are exactly the same. So you will have the open of the previous candle that becomes your continuous line and you're border line goes below the obvious low. If you're looking at this area, is your obvious low. Clearly aboard lines here, your continuous line will be at the open on the previous candle, so it's all the same thing. But, um, generally want to avoid trading middles. So, really, if you're looking at a chart, you're only going to be interested in this particular demand here. Now, let's go back to this Eurodollar chart for a minute. If you remember some of these zones with the ones where the initial moves originated from, but then you have these over labs that represent reactions from those originating zones. So here was one of them and here was another one. Now the zones where the move originated from. I refer to those owns as parental zones, as in parents, mom and dad, the overlapping areas that are reactive. I like to refer to them as offspring zones, as in Children. Now, offspring zones can sometimes have another third reaction from them. But in a lot of the cases, the price will go all the way back to the parental zone. In that case, offspring zones such as the one you see here have a slightly lower probability of working out or getting you that bounce that you're looking for. And this is also because, technically, by the time the price tests the offspring zone, it's already that second test off the area, which means that there may not be enough orders to provide enough volume and momentum for another bounce. Of course, I'm talking about institutional orders, not retail orders. So all supply demand zones or, ideally, valid for trading the first pull back into the zone and then any subsequent Pullbacks into the area generally weakens the zone. Here are several other things that you should keep in mind when drawing the zones. The 1st 1 is that the move away from the high or low for the consolidation that you've seen , it should ideally be a big move. The bigger the move, the stronger the zone. Number two is that the prices should stay away from the zone for extended period of time if they come back to it after that one big move, and then there's no follow through. There's no second candle that goes in the same direction. This signals that the zone is not that strong. So ideally, you're looking for at least two candles. Move away from that faltering area slash consolidation. And finally, you need to look at the profit margin off the zone. Profit margin means how far did the price move away from the initial zone? I'm going to cover each of these points in the coming lessons. So this was lesson number one. Let's recap what we've learned today. So I showed you the difference between the traditional support, resistance and supply and demand. Then we were looking at how to locate the zones first by looking at highs and lows that don't cut through candles. A K with price hasn't traded through them. Then we looked out drawing supply demand. Zoe's correctly, along with contaminants lines versus the border lines. And finally I was mentioning parental offspring zones. So offspring zones can also be called the pivotal area pivotal zones because they pivot from the previous existing supply demand area For your final homework, I would like it to get any chart from anything that's already widely traded something like your dollar, Aussie Dollar, GBP and so any widely traded instrument that has plenty of liquidity. And I then want you to keep going through this process of finding untraded highs and lows, drawing the contaminants and borderlines and then marking which stones off Parental A K originating zones and which ones are offsprings, owns a k a pivotal zones, and this concludes lesson number one on supply demand. 2. Lesson 2 Guide to Mindful Trading (don't skip!): this lesson will be about trader psychology and how to put yourself on the past two. Mindful trading. I know some people find trader psychology extremely boring, and they're like a no snooze. Let's skip. But please don't skip past the psychology lessons because psychology is the reason why over 90% of people fail to make it as traitors. Sure, you need good strategy. Of course, you need good risk management. But if you don't have your psychology and check or both of these are basically going to suffer, So what I'm gonna be talking about here, it's gonna go way beyond. Just leave your emotions at the door because a lot of the trading companies out there kind of loosely throw this fact out. But even when you're working at a prop trading company, the psychology troubles are not really discussed. You are expected to walk into the office in the morning like Buddha incarnated, and then whoever has done any kind of trading with real money, you know how hard it is to just remove emotions from the picture entirely, especially if life gets in the way or when trade simply don't work out for an extended period of time. But no one ever mentions that that thes thes processes that start to happen on a physical level can actually be disrupted and stopped. But to do that, you need to understand how our bodies work and how our minds work. So first things first. Humans are animals, and I won't be getting into, like, religious beliefs and debates here because that's not what this is about. But we can all agree that humans experience fear now. Fear can hinder your trading decisions incredibly, whatever your belief is, humans are highly evolved animals now by saying that I'm not trying to diminish in any way what we've accomplished as a species in such a short amount of time. But as much as we're capable of creating amazing things from like bridges and airplanes and space flight right down to like KitKat chocolates and pole dancing, we still have the side of our brain that is primitive, an instinctual. The primitive brain resides in the area called the limbic system, and it used to play a huge part in our survival the way that our primitive brain operates. It's also called monkey brain by some people, so the way it communicates is through emotions, and usually it communicates a times when the monkey brain decides you're in a situation that somehow threatens your survival. And then it sends out an emotional response, which is an instinct. OK, emotions are instinctual. They're not a product of your rational mind. And of course, we have the other side of the brain where most of us hold our proceeds sense of self. So that's a rational side, which resides in our pre frontal cortex. But a rational sides easily gets overridden by the monkey brain in situation that the monkey brain perceives as a threat. Now, whether the threat is physical or psychological, the monkey brain cannot tell apart. I'll come back to that points. No, I said that the primitive brain communicates what needs to be done to escape the threat. Three emotions and every emotion that we have used to serve a purpose in the evolution. Fear tells us that a potential threat of death may be upon us and then prepares the whole body for survival. Instinct for fight or flight response. Releasing excess amounts of adrenaline and redirecting the blood from the brain to your muscles. Love on the other hand, evolved so that we could procreate and pass on our genes, ensuring the survival of the species. So every single emotion that you feel is simply a product off that primitive brain. So remember that as soon as you feel any kind of emotion, by the time you feel it, it's way too late because you're unwanted. Friend. The monkey brain has taken over, so you can forget about any rational decisions because the monkey brain doesn't know anything that your rational brain knows. It operates purely on instinct, and that's why things go wrong. When you start trading live, your monkey brain takes over and starts trading for you. It's not a good thing Now, if you really don't believe that the emotions are simply a product off instinct. Just Google animals from Galapagos Islands, Galapagos Islands are very isolated, and because of this isolation, all of the 13 islands have no predators. So the animals there where they're birds or lizards, they seem to have forgotten how to be afraid. I mean, you can literally walk up to the Guan is up close and and they just kind of look at you and same with the birds, and the reason seems to be that most animals there simply live in harmony with each other. Lack of predators means that fear was no longer necessary for survival, so evolution got rid of it. Now humans be humans. When the Galapagos Islands first go discovered, they actually shot some animals up close like they would literally walk up to them with with a gun and shoot them. And the funny thing was that the rest of the animals which is standing there, you know how usually birds just fly? Well, these these guys were just standing there waiting to be shot. There was no fear whatsoever. So the fight of flight not existent. But going back what I just said a minute ago, when you already feeling in the emotion, it's too late and you're animal brain has already taken over. Whatever that emotion is, whether it's elation, fear, happiness, overconfidence. I'll get to overconfidence in second because it is an emotion. But it kind of stimulates a different part of your brain. Eso If you have any of these emotions, it doesn't matter what it is. If you're feeling it, it's way too late. You need to stop trading now. There is a way to fight it. I will delve deeper into this, but it may involve a lifestyle change for some of you. So let's have a look at the main emotion that can be manifested in two different ways. Either is over trading or as hesitation, depending on what, what kind of a personality you have the basic emotion that that messes everything up a sphere and the first way that the fear is manifested in the large majority. So traders is actually over trading. So if you think about this from irrational point of view, if someone has already lost some money or a lot of money, why do they keep trading in? One answer that I get over and over is, well, I'm trading to get my money back. So as soon as you start thinking like that, it means that your rational brain is no longer in control. But fear comes in many forms, so the seconds caught most common manifestation of fear is hesitating, so being unable to press the button to enter a trade. But what's really behind the hesitation? It's fear of losing fear off being wrong, which is same as over trading. Really, When you think about it, they both have the same underlying issue. It's fear off something fear of the unknown. It could be fear of missing out desire to make up your losses. It could be fear of inadequacy not being good enough. It could be a fear or failure or fear of success and also fear off stepping outside of your comfort zone. But with fear in particular. There's a very specific thing that happens to your body physiologically and it's again. It's very dangerous for traders. And that's the fight or flight response or the survival instinct. When it comes to our monkey brain, it's really not very clever. It's instinctual, It's primitive, and sadly, it cannot tell the difference between the actual death threat in a simple psychological discomfort off losing some money. So in order to cope with that, it thinks that the market conditions are a death threat and it starts to prepare your body for final flight. So tell me this. How many of you have experienced fear when trading live and how many of you have felt your heart rate increasing in your heart pounding in your chest, and how many of you have you kept trading after that happened? For those of you who are thinking this is not really that important, so what? My heart was just pounding a little bit. I control that. Here's one little fact about fight or flight response. It actually happens automatically once your heartbeat reaches 170 beats per minute, and there's nothing you can do when it happens. If we have new traders starting with us, we have an emotional checklist that they need to go through before they even start trading , and it's to make sure that the body isn't going into an emotional response. Going through. This kind of a checklist is especially important if you're going through a difficult period of your life, anything that can throw you off. Even if you had an argument with your partner that day, it can throw you off if you've not trained yourself how to recognize the fight or flight response. So to help with that, these are the signs usually starts with an emotion, so you will get some kind of fear or something going on, and then your heart rate increases. Your breathing becomes more shallow. Suddenly you get tunnel vision. Someone recently asked me What's tunnel vision was like, Really? So for those of you who don't know, tunnel vision is when you I cannot perceive anything else apart from whatever is in front of you. It's like a horse with blinkers, right? So all you can see just price moving up and down and up and up, and you get obsessed with nothing else exists. That's tunnel vision. Your muscles started Titan than in some cases. You might also start feeling really hot, really warm. Now you cannot escape your emotions entirely. Were human beings. Most of us will have emotions, but what you can learn to dio is learn how to manage them to fight or flight response, something to be very, very aware of. Now here's another one. Overconfidence. This is another emotion that kills accounts. Now this particular emotion deals with something different. So when you start getting profitable or you get your winning trades, the pleasure centre off your brain gets stimulated, so this causes you to think that you could do no wrong, and then this job is easy. But never make that mistake. Overconfidence is also a product of a primitive mind, and it clouds your judgment. Typical signs, often overconfident. Traitor is when they stopped writing the trading plan, they stopped doing the premarket prep. They start putting entrees that have no strategy behind it because you know you cannot lose , and then eventually the trader starts suffering losses, puts more trades on, doesn't keep to the risk positioning for your sets in monkey brain rains in all of that. So it Zaveri vicious circle that leads back to fear. Trading is ultimately a performance skill. So it's, I always say this. It's kind of like being a concert pianist or a professional football player. When the game is on, you have to do everything in your power to mentally and technically prepare yourself so that when the time comes, when the moment comes, you're ready to take the shot. So before a trade is done, it should be more like accountancy. It's not exciting discipline. It's looking at levels looking a prices, comparing distribution curves, balances and imbalances, validating supply and demand zones, finding cue points, and they're following a trading plan day by day to a market prep. Every single day I do it now. I mean, after what, 10 11 years of trading? I still do my market prep. It's quicker for me because I've done it so many times now. But I always review what's happened the evening before and how far I've come where I am in the week, how much loss I'm sitting at. If I've had a loss for the beginning of the week. How much more? Um, weekly limit. If I got how many trades of Don versus how many number of trades I've still got left in the week, so it's not just like get up, come to drain desk click unit trade. It's not like that. Before that click happens. A whole bunch of stuff needs to happen up here and in your training one. But anyways, I want you to start thinking about steps to successful trading, which means knowing your strategy well, knowing the biology of your emotions, eventually knowing how to disrupt those as well come to that and knowing how to deal with pressure. And then we're mindful trading. You need to start observing our emotions, learning to manage them and questioning the beliefs that are causing your emotions and causing the negative internal dialogue that a lot of people have internal dialogue is is actually a whole separate lesson. And I have a lesson, a limiting beliefs later in the program and how these might be preventing you from reaching your goals, because your thoughts and your beliefs are another Pandora's box that you need to pay attention to. So how do you keep emotions at bay? Some people know girl like this next life exercise, So this is the first line of resistance resistance being the operative word. If you're constantly struggling with emotions. So I'm not talking about, like light 10 minutes kind of walking on the treadmill, you actually have to start doing weight training. The reason why cardio doesn't really work for keeping emotions at bay is because you need at least 40 minutes or fairly challenging cardio to get rid of the glycogen. 40 minutes is the bare minimum. It's more likely to be 60 to 75 minutes of cardio. It's too long. Okay, I don't have time for that. You don't have time for that. We all have busy lives. The whole point of doing weights training is to get rid off the excess glycogen stores because this prevents fight or flight response on a physiological level. So think about a situation where somehow a lion starts chasing you. So would you just stand there and look at the line coming at you? Probably not. You're not from the Galapagos Islands Still have that fear response. So what do you do? You run as fast as you can, right? But back here in the Western world, where death by lion can only happen, is a freak accident in a zoo. It's highly unlikely that you will be able to run as fast and as hard as you need Teoh to make a difference to your glycogen reserves. But through weight resistance and weight training, it gets very easy. So once you're depleted those reserves your body just doesn't have enough fuel to kick off the fight or flight response. It's It's like a bio hack, so therefore your body will surrender control back to your prefrontal cortex. No, I know that we have some women students as well. And if you are a woman, don't worry. Lifting weights does not make people bulky. It will not make your demand. He will not grow an extra piece of body parts on unintentionally because women have way too little testosterone. Teoh grow super big muscles. Even if you're a woman with a reasonably high testosterone. And if we're gonna be honest, even men don't get that big. And if they did, everyone would be going around looking like Jay Cutler. I've been doing bodybuilding for a few years now, and I've won fitness competitions for multiple federations. I enjoy it. I've been an athlete my entire life, but I really started doing weightlifting for for some health issues that I had at the time . And then I discovered this weird connection between trading and black or fight or flight. So I started doing it more often, and same goes for a diet. If you want your brain to function at its peak, you cannot starve it. You have to feed it, and you have to feed it the right foods. Try to limit intake of process foods to once a week, maybe even less if you must eat junk. But during the week when your trading, I will ask you to put some good stuff in your body and start using some supplements to also help your brain because it's a lot of information in here going forward. My own died these days is mainly ketogenic, which is fairly high fat, low carb, low, low carb and moderate protein. You don't have to go key toe, but try to eat real foods. Now. I also like to use certain supplements. Um, but I guess the most most useful ones are omega three. Very important. I also used was virtual every once in a while. Some kind of a multi vitamin doesn't have to be every day with the multivitamin, but like once or twice a week just to make sure you're not vitamin D deficient, which is the worst thing when it comes to any kind of, um, motivation. Little Mindy is the culprit for those people who are interested in the brain boosters. I actually find them really useful because since I've been running this company, I have to do so many things all it wants, and I had a slight brain injury last year, so So I needed something to help me out. Eso I used Genco. I used Jin Sang healthy and then, of course, caffeine. Who doesn't use caffeine? And then this is new, um new. It's a supplement, but it's I think it's kind of a little bit more than a supplement, so it's actually being controlled in certain countries, so it's not a drug, but it's not exactly a supplement either. But it's definitely a lot more than Ginko engine sing. So you know, if you want to try it, please do your research first. So dealing with emotions. Let's wrap the lesson up. If you experience a loss and you feel it emotion, you need to stop trading and go through the checklist. I will have the check lists in the download section. So not to worry. The second part is to destruct emotion with exercise, although if you are struggling with emotions, I would suggest that you do your weight lifting first before you even sit down in trade. That way, any emotion that might come is already halted, so disrupt emotion with exercise. I suggest having some free weights around you and immediately do some reps. If you don't have that, if you are working for prop trading company, you can always run up and down the stairs or, you know, do push ups, press ups, anything to challenge your body with weight resistance, and you will be able to feel your rational mind coming back. So only when you are depleted enough there's a site calmness that comes over you. It's a very difficult thing to explain unless you have experienced it. But you need to challenge the muscles enough to deplete the glycogen, in which point that feels a certain way. The more you do it, the more you know what that return to rationality feels like. If you feel that you have been done by the fight or flight in spite of whenever you drive, consider taking elite a couple of hours break before coming back to the screens. Okay, so homework. I already mentioned that there is a download, so you you will find a pdf off mind four trading quiz. So this is your checklist for your emotional state before you trade live. I highly suggest that you use this checklists at first every day to get used to the process and to get used to introspectively observing what is going on inside of you. And then, as you get better and better at managing your emotions, you can slowly start to phase it out because, like anything, this introspection will become a habit. Eventually 3. Lesson 3 Q Points© (systematic swing extremes): in this lesson, we're gonna go back to some basic market structures. Cue points are confirmed swings, and they are my proprietary concept. Que points came about from my needs to explain to a computer through codes systematically, what is a swing extreme Now a lot of traders get caught up in complicated strategies, looking at their, you know, e amaze and our size and Mac D divergences and all the other, like, 1,000,000 lagging indicators that promise a lot. But in the end, a lot of traders tend to neglect looking just the basic market structure. What does that mean? It means when you're looking at swings and how they were formed, can you identify where that move came from? That is what constitutes you. Swing extreme. Okay, so the question is, how do you determine when a swing is actually done? Market will kind of we've up and down, creating smaller waves. But there is such a time when the price has made an obvious high in an obvious low. But the question remains. When is it safe to call it a confirmed swing? And that's what this lesson is all about. It's a concept that I came up with, and it's called Q points, which stands for quartile points over a period of 12 months. I worked with the software architect and a small team of developers to create algorithms based on some my strategies. So I had to explain this concept of swing extremes in a way that a computer would understand it because I could intuitively see where it ISS. But at that point I had no way off systematically teaching others how to do it. Although I did mentor other traders, they also had the humanized, so they were obviously able to find their swing extremes, and most were pretty good at that's just using their eyes. They didn't need anything else but trying to explain that to a computer, and it just makes no sense. The algorithm needed a systematic way to locate the swing extremes, just like of human. I would see them. So after banging our heads over that, I think it was like good five months. It was frustrating beyond belief, and we finally had a breakthrough, but I had to re analyse how I look at swings as well, so I noticed that I wasn't always buying and selling exactly at the mark zones. In fact, I sometimes use market profile to get in on trains that were kind of in and around the extremes and supply and demand zones. A lot of the times Price would be reacting Teoh, maybe a much larger timeframe. So one day I was listening to ran Squawk service, and they were kind of banging on about Q one and quarterly earnings in Q three. And I suddenly had this, like an idea that maybe I can use the quarter files to see if that's the stuff that's reacting to my my zone. So I went back through all of my trades and I realized that I was indeed using. These quarter, I'll points to find my my trade locations. So what are? They are a systematic way of finding trade locations with the highest reward and lowest risk. And 1/4 points are really nothing more than a swing from eight to be divided into four equal pieces. But you know, there is more to it than that. Okay, so here's a silver chart with my, uh, my hacked FIM tool on it. It's just like a normal fib tool. It's how I used to do things before blah tick. So here I'm only mocking the high and the load. The question waas When does this swing become a confirmed swing and not just a downward move that might create a lower, low and and then another low and then another low? Well, we came to a conclusion that the best way to determine a confirmed swing is when the price crosses back the other way more than 50% off the move. So what does that mean? You're using the 50% crossover to trigger the top quartile in the lower courts ill. Okay, you're not trading the 50% mark up until this happens. Up until the 50% retrace happens, there are no que points. They don't exist. So once the price retraces over 50% off the move, you then and only then have the top and bottom cue points, which then become your zones of interest, your Zoey's. So let's expand this chart mawr to see how the price is going to react to some of these. Right? So you see that I'm now marking the old way My cue point high and cue point low as you can see here. Okay, now let's expand this charge and add some supply and demand zones to see how the price reacts to cue points and to supply demand areas. So on this chart, I'm a marking a supply zone. This is a supply deep inside the top Q point, right? It's quite high into it. And then I also have this demand on the bottom. Now, supply and demand here are both reasonably strong, okay, and more in the strength of zones in upcoming lessons. But look at this topic, you point and how the price kind of pops into it that begins to consolidate everything, gets a bit choppy and then goes back to the cue point kind of meanders back into it. And then suddenly you have this massive rejection that rejects the cue point and closes vastly outside of it, bringing the price almost instantly down to the que lo. And this happens all the time. You know, it's not just like all pulled one chart out now. Cue points served two purposes. 1st 1 is to avoid trading the middle's off swings, as one of the trader said to May. Yeah, I got it. don't diddle in the middle. I get a lot of supply and demand traders coming from all over the place from different, you know, trading providers, educational providers and such. They even, you know, come some of that come across my olds for its factory thread. And then, um, usually they complained that supply and demand those don't work. But one glance in their choice, and I see they're trading middles of swings like constantly. Now let me make something perfectly clear, which is a question that kind of keeps cropping up. Trade is a bla tick and Marcus stalkers. We use the daily cue points for swing entries. The row off, not trading the middle's it really Onley means not trading outside of the daily cue points . It's entirely possible Teoh have a look at the weekly chart that is in the middle of nowhere and, um, is or even a month a joint. You know you can have this massive timeframe so you don't have to be in at the swing extreme. You don't have to be at a weekly or a monthly Q point to trade, but what you do need to have on these large, large timeframes is to at least have some kind of engulfing pattern or a supply and demand area that might be reactive. And that's where you would then drop down to your daily chart, which should be either your, um, your main trade after location a two very least or a four hour charge as well. But the daily chart really needs toe. Have a que lo or Q high for your trade entry. Now, of course, if you come across an area off a weekly cue point or monthly Q point because it's such a large time frame, don't ignore it because that time frame will then take precedence. In practical terms, this will mean that when you've arrived at a large time for him, cue points and you notice that the price action has either slow down or even showed your price actual rejection already. If on the daily charge, you then run into an opposing cue points, don't trade it. So to summarize quickly, you can be in the middle of a swing on the weekly and monthly charts. As long as your daily chart is finally reaching a dedic, you lower que high. All right, let's move on now. The second function off cue points is to locate these naturally high reward and low risk areas. Sometimes you will have thes thes massive supply demand zones that you that you kind of want to trade like you can see that things were happening and you're about to like, position yourself. But just to place a stop loss and then an entry based on that usual idea of supply and demand you would need like a humongous stop loss, which is it's not practical, it's not consistent, and you generally don't want to do that. So, for example, here's a daily consolidating pattern that happened at a weekly supply area. But this pattern would take you like 220 pips of stop loss to use. Because it's such a huge range, you could see the consultation. You know, this is gonna go the other way. But, you know, the stop loss required is too much. You know the direction you don't have the entry. But if you look at this this new move from low to high, which then creates the consolidating pattern and then it also by doing this move, it also falls below that 50% retracement. You don't get a creation of a daily cue point, and this vastly reduces the stop loss. But by finding that quarterly high area instead of entering at the bottom of the consolidation, which would have been somewhere here, you wait until the price touches the newly formed que high and position yourself accordingly. Another use of Q points is when you have a daily cue point already done and dusted. But then you notice that the supply demand zone is either the very top or the very bottom off the swing. So that's not ideal, either, Like in this example that the actual supply is all the way up here. Okay, it's It's very, very deep into the the whole move. And yes, sometimes the price may go all the way up here, kind of poke into it and quickly pick up some orders. But I found that in many of these cases, the cue point itself is just as reactive. So, in this case, you know, if you don't know about Q points, you actually would have missed this in time. Move down. So as a traditional supply demand trader, you would have your limit order waiting up here and you know it would never have triggered . But actually the price consolidated in my cue point and offered went, and I see this quite frequently. You know, it usually means that there's, Ah, there's an even higher time for areas such as maybe a continuous line from, or weekly or monthly chart that most people you know, they don't even realize it exists. And when something like this just happen, you know, they're, like, baffled and confused to say, You know why it is the price reacting there and then they kind of attribute that to some, like wizardry of central banks. When in reality, if I could mark this area with a red line, you can see that. So let's switch to the weekly chart and then see where this movie is. And there it is, is a nearby weekly supply and contaminants line right around the area where whether move happened. So this means that the entire cue point area that I'm marked from the daily chart was already touching that supply on the weekly. Funny that now I'm gonna go through ah, some examples for you so that you kind of get an idea off this process. Okay, so here's a chart of your dollar daily chart. So I want to find the most recent swing extreme high end alot that has started to retrace back the other way. So that would be this high in this low again. This is just a modified fib toll on the way I do this. I erase all of the levels and start again. So zero and one is your high and you're low. And then if I want to see whether something is crossed over 50% mark, I would add another level of 0.5, which would then tell me that the cue points would have only been triggered here. So it's put another sort of vertical line there. Okay, so now I'm gonna add the cue points, and the way I do that is again adding another level here, So 0.25 and 0.75 because you're splitting it into court tiles. So the entire move is now split into four equal sections. Now you're zones of interests are obviously not the middle. We've established that already. So let's delete the middle and see where the price reactive. Very interesting, isn't it? So here's a cue point and the price reacts from a cue point straight back down. So that would be a process for finding cue points like, obviously, you want to keep an eye out on the charts so that you don't miss the fact that the cue point has been tested. Luckily, um, blah tick supply demand. If you don't want to do this manually, we do have logic as d doing all of this for you. And, um, with blah tick, you can press a button and you get your cue points. And if I do a back test, you will see that the cue points were created here. There's the blotter backed up, By the way, it's a awesome feature. You can have a look at the levels and how they reacted. So going back in time, here's another one. He was a day like you high and then going back here he was a data que lo, which is also reactive. And then you get new cue points created when this high becomes relevant, thanks to the retracement. And then you get another daily cue point, which is reactive, so as you can see it's a It's a much better way to look at things because you even if you miss the first move from let's say from a supply that's a move has already happened. As the price is creating new highs and new lows and subsequently brand new cue points. It gives you brand new areas to work from, even if there are no good supply demand zones going forward because, like I said in the intro, Supply and demand is just like a backbone of the system. And this is why I Q points are considered the missing link to supply and demand. So hopefully we're kind of getting an idea. Let's get another charge. Take it through this whole hola, Perot says. Again us, the yen weekly charts. You find the high and the low and then find the retracement. So in this case, the most obvious one is this one and that one. And obviously the retracement was made when the price dropped down and the price moved up. Hit the cue points, not the supply. This is exactly what I was saying, made a consolidation and then dropped. So this is why it's important to know where your cue points are, as well as which supplies and demands are inside the Cube points homework, right? Somewhere on this page, either in resource is section or just below the video player depends on where you're watching this. You will find a downloadable ZIP folder. That's that's marked Lesson number three, which contains the exercises with four naked charts where you need to locate cue points. And again there's another file inside named Answers with the correct answers. Once you've done those, I then watch to do exactly what I've done to go to your charging platform and drag out as many uh, instruments as you possibly can and just practice practice practice. It's very important to immediately start putting all of this into practice to make sure you take it slow. Don't rush. So once you've done all of that practice and you're finding cue points visually with these , then you can go and rent or purchase the blotter KSD, which makes all of that automatic and much quicker. All right, that's it for Q points and zones of interest wars 4. Lesson 4 Developing a Successful Traders Mindset: developing a successful traders. Mindset is quite possibly the most important aspect off becoming consistently profitable. A trader can have the best strategy in the world. But if you not trained your mind to cope with the pressures of life, trading than successful forever be out of reach. And there are several reasons why traders failed to replicate the results from a simulated environment once they go live. And these reasons, of course, involve emotional trading. But they can also involved your own self limiting beliefs. Most people don't even realize they have these self limiting believes until they start training. So as it turns out, we don't just have limiting beliefs. But limiting believes, end up having us, and that's what we're gonna try and explore in this lesson now, in one of the lessons when I started talking about trader psychology, we dealt with the reasons behind emotions what they are, where they come from. But here I'm going to talk about the biology of emotions. I'm going to talk about monitoring your thoughts and then also exploring your current beliefs. If you want to become good at trading, you really need to understand yourself a lot deeper most people are not actually aware why emotions happen in the first place. So in that first psychology lesson, you learn about the types of emotions and how all the emotions come from the limbic system rather than the prefrontal cortex. But did you also know that your thoughts are nothing more than the products off those emotions? They're not actually a conscious effort of you trying to think about a particular thing, quite the opposite. They just random things that sort of pop into your head driving that internal dialogue. Now the internal dialogue is a funny thing because it's directly related to our internal beliefs internal believes are not created when you're an adult there, created when you're still a child, depending on your personal circumstances. So these beliefs that we have as adults going into adult hood they were shaped by how you viewed the world's before you even able to speak. So to become a success in trading, you need to start exploring those beliefs, and most of us have some sort of limiting belief, and this is potentially the hardest part of trading. This is a journey of self discovery, and this is why you need your body to function at peak levels so that the rational brain is as accessible as possible when your trading to remind you little revision of that first psychology lesson. Once your emotions are in full force, your rational brain becomes inaccessible. Once the emotion is in full force. You don't have a single rational thought in your head. No. In some other jobs, survival instincts can actually work in your favor. So when we were Children, most of us are taught that if things were going wrong, you just need to keep pushing. You need to keep working harder. You need to do longer hours, and then success will eventually come while trading is the exact opposite of this. So instead, off the survival instinct and fight or flight working in your favor, it becomes this like a personal crusade, with the markets fear being obviously the first thing that drives the bad train decisions and the generally leads to revenge trading, anger, frustration. Some people hesitate if they have that risk averse nature, and then eventually a lot of people end up with these psychological dramas and even more limiting beliefs. They start thinking that they're not worthy that they have the sense of inadequacy. They start feeling like victims. They start having doubts and a myriad off other negative feelings towards yourself. Now this can lead to even more problems until eventually people give up and convince themselves more than anyone that trading is not for them. But don't get me wrong. Trading definitely isn't for everyone. I've said this over and over. However, if you've come from a particular background and you've had lots of success in your life, especially as a software developer or a pro athlete or semi pro athlete or a highly skilled musician, then the only reason why you might have failed to succeed in trading up until now will be the psychology and the lack of observation of your own thoughts that ultimately end up driving the trading decisions in a live environment. So 90% of people do fail as traders, not just because of lack of strategy and lack off reviewing the previous performance, but also because they never learned how to master the fear. They never learned how to control it. And until you can master how you respond to fear, fear will block any development. The problem with with fear is because it comes from such a primal side of us. The brain. The primal brain cannot tell the difference between actual death threats and a simple psychological discomfort to the primal brain. It's exactly the same thing. The first steps to mastering your emotions is to label your fear. What is it that you're actually afraid off? So here's a list of some of the most common reasons. When you're going through this process, you have to learn to be very honest with yourself, and you have to really pin down what is your biggest fear? Write it down, Run a journal, Write it all down. Think about your past decisions and results in trading. So go over them in your mind and remember the outcome. I then want you to examine What is it that was driving your behavior focused most on the trades that went horribly wrong because you need that extreme experience to really understand yourself and where you coming from. So write down what it is that you fear most. Being aware off where your fear comes from will help you going forward to learn how to control it. Now keep in mind that your thoughts in your beliefs are not you. Okay? They come from that. That primal side of you and you are a separate being from whatever randomly pops in your head. When you're a trader, you really do start stepping outside of yourself and then objectively observing what is going on up here. Now I want to give you this practical formula, this proactive formula to be proactive with your thoughts, emotions and with your internal dialogue as well. So let's say you start your trading day. You've done your market prepped, you know which level you're looking at. But new information comes into the markets, and suddenly everything starts moving in front of you. Ah, lot of the people feel a rush of excitement and the need to get involved in impulse to jump in. And then the heart rate increases. So now you had risk and fight or flight response kicking off. Now, once you either feel your heart rate going up or your first feeling emotion, your emotions starts to rev up. Please go through these six steps. First step and this is the hardest part. Stopping yourself in the moment in the heat of the moment to control whatever is happening next. The number two is to observe your own reaction. So you step outside of yourself and you pretend that you're looking from the outside in. Step three is to question which emotion this reaction is coming from. I don't want you to write it down in your journal and then stop trading, move away from your trading desk and disrupt emotion with exercise. You have to keep doing the exercise, the weight lifting until the emotion has completely disappeared. Only then you can resume trading. Now right up there with fear is our beliefs. They are what forms our thoughts, our believes are formed. When were still toddlers, believe it or not, based on the world around this. Now I myself, I came from a very loving home, right. My parents were wonderful. I have one older sister, but But when I was very young because my sister was so much older than me, I kept getting told by my parents that my older sister is just better at everything. And of course, she was just 10 years older than me. But in my little young head back then, this actually led to a sense off inadequacy as an adult, and this turned me into an overachiever. So whatever I do, I never do halfway somewhere down the line. I don't know when this happened, but somewhere down the line it all stopped being about the competition with my sister. And yet I carried on pushing myself with everything that I do. And to be honest, the sense of inadequacy never really became evident to me or anyone around me. I was just an overachiever is just how I waas. But then I started trading and you gotta hit me across the face and four force. So here's some of the most common self limiting beliefs. Um, the 1st 1 is sense of inadequacy. The thought patterns that usually come with sense of inadequacy is usually I'll never be smart enough on there would be good enough and then trading specific my losses on my reflection of how how bad I am at everything. The 2nd 1 is feeling like a victim, so it's not your fault. It's somebody else's fault. Is the markets fault is the partners falls, and nothing I do ever makes a difference. I'm not responsible for my own actions, then the 3rd 1 is sense of not being important. So you have thoughts that you have to do very well in life to prove that you're worth something, and uh, frequently comes with self loathing, self deprecating thoughts and all of that. It finally does feeling unworthy. Some of the thought patterns that come with this particular belief is that you have to do well in life or no one else is going to respect you, and that you will have no value to the society and no meaning to your life if you don't do well. Now, on top of all of these self limiting beliefs, as if it's not hard enough, we also have our inner critic that never shuts up, and it loves to put us down. So it's that voice inside of you that's constantly judging you, criticizing, sometimes tempting you, predicting doom and gloom and all that. Some psychologists will tell you to try and turn the volume down in your head off this voice. But that really didn't work for me. So the way I deal with it is to imagine the in a critic talking in a really ridiculous voice, and I used to be a fan of Muppet Show when I was a child. So, um and does this one particular individual that I never took seriously? Not that I took any of them seriously. But you know, there's this one particular Muppet that sounds utterly ridiculous. And, ah, it's beaker. And if you don't really know who it is, because you might be a little bit younger than me, this is the beaker is the way he sounds? It's literally, that's all, he says. So any time I have an inner voice saying, You cannot do this, what do they who do you think you are? And I imagine it going, What do you think? And it works. It's great, like the inner voice loses. All hold over me and then on the other side, off the negative internal dialogue. There's your ego. It's completely to the other side of your inner critic, and we all have it. Maybe some spiritual people have managed to minimize it to the point of it being perceived as non existence. But trust me, everyone has an ego, so an ego involves the needs to always be right. So in trading This usually leads to marrying your possessions, which means not wanting to let go over trade doesn't matter how bad it turns, and it's already gone through. Your plan stopped lost. You keep increasing the stop loss. We're still stubbornly holding on to it and just the wall ago. So that's That's your ego. There's no doubt about that. The second type of ego manifestation is caring. What what others think of you. Most other people are so self involved and they don't care. They don't care about other people. So relax. Do what everyone entitlement is the next one. Huge problem with millennials this. They've come into corporate environments. If you want to be a trader, you have to actually deal with this because markets don't know you anything. You cannot have profits just because you want them. And because it's not fair and stuff like that, it's just how it is right. Life is life. Life is largely not there. And unfortunately, because of the way we formed the society over the last 20 years, you have adults that are now starting jobs in corporate environments that are very cold, and yet they don't deal very well with this. You also have some people come from extremely privileged backgrounds and their experiences toddlers, was that most of the things you wanted were simply given to you then the next ego manifestation is being offended with someone criticizes or offend you. There's constructive criticism, obviously, which you should take on board and not take it as a personal attack. But then, if somebody really does end up offending you, the insults are always on Lee, a reflection off a person who's doing the insults and always remember that if you do react , it solves nothing. In fact, it makes the bad situation worse. So instead of making everything worse, try to take that step back. Maybe used the proactive formula even in real life, when a challenging situation comes up, stop, take, take a minute to reflect and then decide how you're gonna respond. Then you have the needs to defend yourself in a conversation argument kind of similar to being offended. And this side of ego in people comes up quite a lot and trading, especially when they break the risk parameter rules. And this is why trading for prop trading company is an entirely different game. It really puts you in your place like it shows you some some some humility. Then the next one is feeling good about yourself. When someone praises, You know, this is not necessarily, Ah, bad thing, but in trading it can translate into overconfidence. So feeling great about your trade winds because obviously it has the pleasure centre and then strokes. Your ego is well, and that's a very slippery slope. You're not supposed to be happy when you're winning a trade. Celebrating trade winds would be exactly the same as celebrating every time you get a salary from paycheck. Now, when it comes to pep talk, it's not another thing. See, sometimes traders have really bad days. And, um, you know, it was a risk manager. If someone doesn't have a bad day, I'm not gonna make it worse by telling them how crap they were that day. So they had a bad day. I usually start by asking them. Okay, what happened to tell me? And then I give them a chance to kind of just talk pouring their soul out usually, especially in the beginning. You know, you will make rookie mistakes. You might make a mistake on stop plus size. Or, you know you didn't realize that level is not quite right or you know things can happen. So I'm usually quite lenient in the first sort of +34 months of a trade of working with us . And the next one is, Ah, similar. So feeling very good about yourself. Eventually, in some people leads to feeling above everyone else. The next ego manifestation is trying to be someone. This one is a bit of an odd one, because it usually stems from a low self esteem, and then they want other people to recognize their worth. But, um, I would really start by recognising your own self worth before asking for validation from others. And in the last one is also a niego thing where you keep reliving the past in your mind a dangerous one, especially when it comes to psychological traumas and stuff. Because, let's say, look at the trade and you got a big panicky So you take the trade off the table, identified the cause behind why you did it and let it go. If you just decide to put the you go in there and just go. It's how I am. I cannot control it. It's nonsense. You can always control it. You can always change yourself. You can always strive to be the better version of you know. One is that set in their ways to not be able to change themselves. No matter how old you are, you're only set in your ways up here. Okay, so now that we've been through your emotional state, negative thoughts, self limiting believes in a critic ego manifestations. And once you're now able to understand some of that, you can start to develop the positive, deliberate thoughts and actions. So random thoughts of bad, deliberate thoughts are good and some of the things that you will strive to develop his courage to obviously face your fears and deal with them. Self discipline. Big one in life in general. But in trading especially, so that's to be able to stop yourself from taking action that resulted from negative, irrational side of you objectivity. Also a big one in trading because you have to be objective in your trading decisions. If you're wrong, you need to recognize that you are wrong. Okay, You cannot just keep going. And of course, the vinyl want itself Compassion to forgive yourself to give yourself a break. Don't beat yourself up. Don't identify yourself worth through your trading performance. The really to achieve any kind of long term change. There are five steps to successful trading. Controlling your emotions, being mindful of your internal dialogue, disrupting your self limiting, believes actively minimizing your ego and inviting a deliberate thought process that eventually all lead to an organized trading mind. And that's what the end goal is. Markets are not a threat, that not a battlefield. There's no lion out to get you and the markets with a large part. They're not even aware of you. So next time you said it your training desk leave your stored above the mantelpiece, you won't be needing it. In fact, it's quite the opposite. You really need to create your Zen when you're trading, and that brings me to the next slides. You're trading desk. Please don't trade casually from so far, especially refuse. First starting out. You know, maybe once you've been in the game professionally and you've had years and years and not put curve Yeah, you can execute trades from a self up when you lap toe But until such time, please designate a place a quiet place to put your trading desk without the TV without the distractions. Consider this a serious job. Okay, Not to mention that you know, if you have young Children or pets, they can walk over your laptop and accidentally execute Ah, 100 lot drains. So don't do that. So 11 thing that I noticed quite a lot is traders to work remotely. They are quite keen to take care of Children, and babies watched their trading, and we've had a number of times when this resulted in accidental trades that went into the ridiculous model losses. Then we had another person who, whose whose child spilled their juice all over the keyboard. So the buttons were working properly, so they couldn't close a trade. And he didn't put a stop loss on because he just executed a trade again. Total mess. And when it comes to eating and drinking at the table, I generally try only to have water, and I try to stay away from all sticky drinks. If I must have something, I will make sure that the lids are on because I also had a bad experience. I was eating breakfast and I spilled my lot all over my keyboard and accidentally executed a trade. There was 10 times the size then I meant to execute because zero got stuck. My total loss for that day was quarter of a £1,000,000 so don't do that. And then if you throw emotions into the mix along with your life savings that you're trying to trade, and then see whether you'll be able to do it from your so far, while the spouses shouting the rest of the Children were trying to soothe screaming baby or cooking, we're trying to train the dog or shouting at the dog or even asking the questions such as, Hey, how's draining going? So you know, if you have a chaotic environment at home dry to designate apart off your home exclusively for your trading area as far away from the distractions as possible, I'm being very, very serious about this. You'll need a lot of determinations to make trading work, but eventually trading should become Zen like many successful people tend to have an aura off confidence around them. It's because we're not working from a fear based mindset, so If you want to become a successful trader, entrepreneur or generally good business person, you have to work on yourself to get their trading. Is a job so very serious job with that as well, So please respect it and treated as such. 5. Lesson 5 Supply/Demand Formation Types: this lesson is about recognizing zone formation types, and this is important because learning how to spot these zones will give you a great idea off which areas you should really focus on for your trade locations. You need to practice this whole concepts to be able to make a distinction between the types off formations, but I'm never going to quiz you on zone types. However, the end goal is to have this skill become second nature, being able to locate and name the zone formations quickly. All right, let's get into it right away. There are three types of supply and demand formations, but really there's three for supplies and 34 demands. So here are the supply types rally based, drop, drop based drop and normal formation. And then we have the opposite for demand types, which is dropped based rally, rally based rally and normal formacion. Don't worry, I'll go through each of these one at a time. So back to those supply types, the 1st 1 I mentioned rally bass drop formation. So here it is. This is what it looks like. So, with desk formation, the price tends to keep going up. And then At some point it consolidates making this base, making it a little little rectangle. And then it proceeds to reverse direction, creating the drop. Hence rally face dropped, and it can be said that rally based drop looks to me quite a lot like the Devil's Tower from Close Encounters of the third Kind. See, I always thought that rally based drop belly based it's like quite a bit of a mouthful. So when I was, um, learning about it, I was always reminding myself off different objects and things that these formations remind me off. You can refer to rally based drop as Rally bass Drop or R B D or Devils Tower. Whichever one will help you visualize the formation. Better use that. The second type of supply is what the's supply demand community calls a drop bass drop skin a bit of a mouthful. Some people shorten it to D. B. D. If I compare this drop based drop Teoh the rally bass drop, you will see that rally based drop really looks at how the price arrived at that base area , where, as with the drop bass drop, they're not really interested in how the price arrived, but instead how the price left the area. So how did you do that? Well, it made one drop. Then it consolidated and then made another drop. Every time I was looking at these formations, to me, they looked a lot like staircase formations. So if you imagine this is price movement, you have a drop. Then you have a base, and then another drop with the drop based drop formations. Some people will argue that you can trade the base as, ah potential area of interest rather than using the originating area. Bit of a slippery slope because if you're on anything lower than the daily chart, especially a low time frames using something that isn't an originating area, it's It's, ah, again, a bit tricky and I wouldn't really advise it. So for me, if I'm one of four hour charred one hour charge, 30 minutes 15 minutes, I will always refer to the originating initial area where the drop came from. But if you do find these drop based drop formations on the daily charge in special cases, if a cue point happens to line up with the based every out, then you can use it for trading as well, because usually the drop when it happens, it sort of takes the whole price away from the initial cue point. So you know you can use it for trading, but use some caution or at least confirmation entries. If you're going to use the base anything smaller than a daily time frame, just go for the originating area and finally the third type off the supply. I call these the normal formations because they're usually comprised of only two candles and there's no real base to speak off, however, just by the fact that you have this, um, like, for example, this 1st 1 is doing golfing pattern. The 2nd 1 is a moral oven inside bar and then turned into three. Inside down was the variation oven inside bar. When I'm talking about these formations, I'm obviously expecting you guys to spot these areas on larger timeframe. So for our daily weekly monthly, so if you see all of these formations or low timeframes, they will not have the same accuracy and same probability of working out as the formations that you see on the daily charge. When you see these lower timeframes, they're usually not strong enough to assume that a trade will work out from a limit order Doesn't matter how high they score. But just by the fact that the formation is on a low time frame, it weakens the probability of the zone. Normal formations haven't even lower probability of working out on low time friends because they're only comprised off to candles. If they are on a daily chart, then obviously, two candles is quite a lot of trading information, but not on anything lower than one hour. Okay, including the one hour Now, if you look at this formation, that was, um there was made through an inside bar, which then turned into three inside down pattern by creating this big black candle. If you go down to investigate what actually happened in this black little candle that created the inside bar, very likely you will find a base in there. So although this might be a normal formation of the launch time frame, when you drop down, you will get some kind of a base in a different formation. It might be a rally based drop, for example. Furthermore, when you're looking at these areas, these levels really need to be inside the swing extreme inside a top or bottom cue point. This rule is incredibly important for swing trading, mainly because if you pick stones that are outside of the cube points, you cannot really expect the trade to survive longer than about a session or two. In order for a swing trade to really survive more than one session, two sessions or even one day, the value of its location has to be really high, which means it has to be at an extreme of a swing so that you have any chance off a mean reversion trade. If you're trading away from the swing extreme, you could be correct on the overall direction that eventually takes over. But you'll have a terrible location that will mean that your trade will not survive for very long. It's entirely possible to be correct on the trades direction, but to have a really terrible trade location, which is why you keep losing trades. As I said, these are two candle formations. Let's focus on this left one. It's a two candle normal formation comprised of a bearish engulfing candle. Anytime you see an engulfing pattern in general, the pull back to the contaminants line off this newly formed supply is an excellent area for a trade entry. Sometimes people freak out if they miss the move, but actually I love trading from Pullbacks to the continuous lines from engulfing patterns . It's one of my main main ways to enter a trade. So instead of chasing the move, you will notice that quite a lot of the time the price pulls back to the contaminants line and then starts to move away in the other direction. So what I like to dio if I'm going to use any kind of a limit order, is to actually place the limit order on the contaminants line off the engulfing. So these were supply formations, and now we have the exact equivalents for the demands to remind you hear, they are so we have dropped based rally, rally based rally and normal formation, starting with drop based rally. This is what it looks like, so the price drops, creates a base and then rallies the other way. Hence the name. I like to call these the U Shape. Sometimes I refer to them as bucket shaped because it sort of looks like a bucket, but any any of these names will do so you can either call it drop based rally or DBR or U shaped or buck information. However, it's easier for you to memorize, So this one is the exact opposite to the rally based drop from the supply. So now it's the other way around, so you have a drop base rally. And here's another example of a U shaped formation, or DBR, where the price drops, creates a little base in the form of this morning star and then rallies the other way. And as you start to learn more and more about price action patterns about supply and demand , you will see that they're all very much intertwined. They're all methodologies that complement each other now, just like we had the drop based drop for supplies. We also have the opposite version for the demand, which is called a rally base rally. I also called this staircase so you can refer to it However you like the whole point off. This formation is that the price rallies creates the base and then rallies again, just like the supply version. If these are located on the daily charge, and above the base areas or possibly valid for trading, but only if they overlap. Acu points, however, on very low timeframes, the base trading is absolutely a no. You will be looking at the originating area off the entire formation. Next, normal demand formations, just like for the supplies. These air to candle demands usually comprised either from an engulfing candle or an inside bar. I also using golfing patterns or this sort for intraday trading to when they are located at a larger timeframe, supply and demand area. But to trade like that, you need a number of things to line up, and obviously it implies knowledge of the normal trading day. It also helps if if you know how to read market profile. And here's another one choppier version. But if you can see here, is that tests off the contaminants line off the demand, which brings another move in that new opposing direction. To wrap up this lesson, I'm gonna give you some homework, so your homework is going to be to open up your charging platform, whichever one you're using, and to find as many off these formations as you can. I didn't create a specific exercise for this for you to download because I believe that by now you should already start using your own charts to locate these areas yourself without me drip feeding you some relatively easy examples that are kind of textbook. But I will open some charts now just to show you how skilled you really to become in finding these formations that really needs to become second nature to you. Okay, so here is a chart of European. It's a daily chart. So right here I can see the normal formation. And here's that test of the continuous line and a, uh, a nice moving the other direction. Then we have a drop based rally. Then we have a drop based drop and then another drop base rally. Then here's another rally based drop at another Valley based drop. Let's go to the weekly charges. See, was going on there lots of normal supplies if you can see. But this looks like it might be a rally base might be a drop. So this is where speculative skills off these formations can come in handy. So here I don't have a finished drop yet, but because I know what the formations look like it's likely that the drop is going to follow after this base. So you have a rally base and a possible drop right? So that gives me a direction for my trading plan. For the next week or so, maybe a couple of weeks on the large timeframes. You will get a number of those normal formations. So here's a normal formation here. Here's another one there and another one here and another one here. This is an inside bar, bearish and golfing again. Look, a testicle continuous line. So, in case you don't see that, I'm gonna market you. See that test off a normal formation supply and almost an immediate reaction from it. Okay, let me get another chart. Now let's wish to the daily timeframe. Here's a nice, very obvious rally based drop and then again, rally based drop. Then you have a drop based drop. This is a drop base rally now drop based rally. Let's switch to the monthly charts because you will see my point about two candle formations, the normal formations. So here's one. It's a bearish engulfing supply. Here's another one. Demand normal formation again. Inside bar and another normal formacion. So as you can see on large timeframes, you get a lot more off those two candle normal formations, which is why I decided to include them and let's get another another instrument that is not four x pair, and this is a gold chart. So this is entirely different asset class. So it's not for X, its gold, its commodities. Let's see how different these are. So obviously candles a little bit choppier because gold is a little bit crazy because it's quite volatile. But you can still see drop based rally. Then you also have this normal formation that causes another reversal than before that it was preceded by another drop based rally. Here you have a drop based drop. Okay, so it's all the same thing, like the points off me showing you the commodities chart is the fact that all of these formations will happen in vast majority off different asset classes is not just for X and um, for that, let's have a look at crude oil as well. Why not now? Crude oil test to go on these interesting, um, trends, as you can see, and in a way, it's kind of easy to traded sometimes because you only need to be like one sided. In fact, some of the money that I made as a prop trader was made during the massive bear run that happened in crude oil. And it was just a case of wake up, Wait for Nymex open an hour after the market makers have settled down, executed a cell, and that was pretty much it. So, as you can see, I'm going through all of these formations without thinking. So I'm not going. Who? Which one is this? Is it valley, or is it the other one? Or is a drop bass drop? So I'm not doing that because in my head I can tell you in the split of a second what information is you need to get to that level of skill which will help you to locate the areas that are tradable just 6. Lesson 6 Determining Systematic Strength of Zones 2019 EDIT: this lesson is about determining the strength or weakness off the supply demand area. I will be taking you to the process of scoring the zones in hope of qualifying them for your trade entries. The whole point off supply and demand is that very few supply demand areas will actually be tradable. This means that the zones ideally have to satisfy a number of conditions before they're deemed acceptable for actual trading. I prefer to trade through confirmation entries done my way. So not waiting for, like, a huge move to happen and then go in. I have a better way of doing it by looking a developing price action. But before you can even start to do that, you need to learn how to score the zones so that you understand what potential issues might be. If you're planning on trading them To identify potential issues with your supply and demand zones, you need a number of conditions to be satisfied and have sent before that supply and demand in tactically work in both directions. Trying to trade supply demand both ways is the pitfall of many new traders who, um, kind of stumble across supply demand on some forums well, and then read through all the forums on the weekend and then attempt to trade through supply demand come Monday. So it was that easy, just, you know, identify drop base, rally and then place the trade. Obviously, everyone would hear about supply and demand, and it would be amazing to trade, even if you don't know anything about it. So obviously it's much trickier than it looks. So why would you score the zones at all now, when you first start with supply and demand, scoring the zones will put you on a path to recognizing potential problems around the zone , especially on the way to your potential targets. But then also, there's a condition that says that you need to look at how many times the zone has been touched. If you remember from the first lesson, I say that zone is usually reactive upon a first pullback, maybe second pulled back by the time the area is touched for the third time in the fourth time, it's very unsafe to trade it because possible, but you are expecting a break off the area. So obviously the more times the zone has touched, the less orders you have lying at the level which in turn weakens the area. Now, in case have not made this completely clear by now, supply demand traders. We look for the pull back into older existing zones. We're not going to randomly guessing where the price is going to turn. There's always a price action event that we're basing our decisions on now, before I continue. I'm also going to say that the scoring table is an excellent educational tool, but, um, further down in the pro development program, there is a another strategy that I explain as a way to position yourself based on supply and demand, but without the scoring, because some weak zones or large time frames can be reactive, especially if they're located at a cue point area. But anyways, moving on when it comes to supply and demand scoring, keep in mind that this process will exclude most off the zones, so you're not expecting to trade every single supply and demand zone that comes along, but only very few of them to begin with. I will say that there are six conditions that need to be satisfied before you would even qualify the zones as tradable levels there three filters and three odds enhancers filters. If any off these three filters are not there, the level will not be suitable for limit orders. Now it might still be tradable, but through confirmation entries the market stoker's weight, which means looking at the developing price action at the level. But if you're only trading through supply and demand for now, let's stick to these rules. So if any off the filters are present, the zone is automatically excluded as a tradable area through limit orders. And, of course, I mentioned the odds enhancers as well. Now, odds enhancers probability enhancers there obviously slightly different meaning that if some off the odds enhancers are not there, the level might still be tradable. But you can decide whether you're gonna executed through a limit order or through developing price action, a K confirmation setups. So let's go through each of these conditions separately. We're going back to filters. Here are the three filters. You have the strength off the initial move away. If you remember the first lesson, I said that the larger the initial move away, the stronger dissolved. So this is obviously a very, very important thing. The second filter is that you're looking for a sufficient profit margin when you're looking at his own. Obviously, that zone will have a number of pips to it. So the zone can have, like 60 pips 70 perhaps 35 pips, and the profit margin will be determined. How many times away did the price move from it? So it could be twice the amount off initial zone zone size. So if you have a zone of 35 pips than 2 to 1, profit margin means that it's 70 Pips. Having a sufficiently large profit margin will ensure that if you do enter a trade, you can then have enough space between your trade entry and the intended target without running into any opposing supply demand areas. And finally, the third filter is the presence off some kind of a base or consolidation. Now, obviously, this pertains more to the daily charge four hour charge one hour short because, as you've seen in one of the previous lessons, if you have a very launch time frame, they will likely have a two candle formation, so the normal formation rather than a proper base. So let's start with the strength off the initial move away, the bigger than move, the stronger the zone. This implies that there is a lot of interest in the level, So when the price comes back to retest the area, there should be some large institutional orders waiting around. So at that point, it's not actual inventory, but it's pending orders for those who are wondering. Some people say that all there's a lot of spoofing and stuff, but do remember that the level that was there originally, where that caused the initial move away. That's when the institutions actually had inventory there, right? So those were really orders at one point, which caused the initial move away to happen. Now, along with this initial strong move away, the price also needs to stay away from the zone for an extended period of time if they come back to it after just one move without any follow through candles, meaning you don't have a second candle in the same direction. That means that the zone is really not that strong, especially if the price returns to the zone immediately after the the initial move away. So it affected the failed move away Ideally, you're looking for at the very least two candles away from the consultation, moving on to the profit margin. How far away to the price move before coming back to it? Now? Something to keep in mind is that the profit margin in your own reward risk ratio on your trade are not the same thing. The profit margin off the actual level could be 23 times the size of the level. Let's say, just for argument purposes that you have a level that's 10 pips wind. So you're looking at a supply demand zone that's comprised of 10 pips from the contaminants line to the border line. If the price that moves away from that level 23 times that means it's moved away 230 pips. But that is just the profit margin of the level, which is 23 times. It's not your own risk reward ratio, which should really be at the maximum 4 to 5 times, but he should already think of booking your trays once you trade crosses over two times reward risk. So the point being is that if the prophet marginal, the level is massive, you're not supposed to hold your trade, do or die until it reaches the 23 full max percent. Because you don't you don't need that. You just need your statistical edge Now, back in the day when I say back in the day, I mean about 78 years ago, the market conditions were a little bit different, so you had a lot more momentum so you could get in on a trend trade, and then the momentum would just keep going and going and going for days on end. Those kind of moves don't really happen anymore, which is why I wouldn't advise going for the four and five times reward risk as your default. In fact, I would say Keep it about 2 to 3 times if you happen to develop your own trading to be able to use a smaller star. Plus, you may think about increasing that, but there's definitely been a lot of change in the market conditions. So when I first started trading, I could run one euro dollar trade for 23 weeks. Where's nowadays? First of all the daily ranges of all dwindled? What happens these days is that there's small daily ranges, so you get maybe about 50 pips in a day in the daily range, and then the market moves away and that comes back to the level than sort of moves away, comes back to the level, and it's all in this really tight range of about 70 80 pips. And then if the market does move, it does so through one candle, maybe over an hour or two, and then it stops, comes back to the level, so it's very frustrating. If you're a swing trader looking to get a large risk reward, it just doesn't really happen as much these days. And because of that, I decided to modify this part. So really 4 to 5 times is quiet, a large risk reward for today's market conditions. As soon as you're around 2 2.5 just think about booking your trade. Now when you're looking at your own targets, let's say you have a profit margin of the level only five times, which is absolutely fine. It's very likely that there will be another opposing area on the way to your target, so really, you need to ensure that you have enough space from your trade entry to your intended target without running into any opposing supply demand areas. Okay, and the final filter is the presence of a base or a consolidation. So a level that you're looking at and you want to execute through a limit order has to have a base or a consolidation somewhere. If you're looking at a large time frame, then obviously you will run into normal formations. You may be able to trade it, but then drop down to the daily chart and look for the base inside that whole area to find a nested level. But remember that usually for the limit orders. If you don't have a base, you don't have a trade because this is a filter. Next up, our odds enhancers odds enhancers are concerned with primary trends. I take my primary trend through reading off three time frames, four hour chart daily and weekly, and for me, two out of three off those reference timeframes need to match. And not only that, but it needs to be two adjacent timeframes. So if I only get four hour and weekly showing the uptrend, but then daily is a downtrend to me, that's that's not really enough to help with the trend reading without going too much into how to read trend through supply and demand. You can get our blah tick supply demand indicator from the medical marketplace and it takes out the pain off. You having to learn yet another strategy to supply and demand how to re trend. The second odds enhancer is retracement, which is how many times the zone has been touched. This odds enhancer. It looks at whether the zone has been tested before and also how many times so, ideally, you want your supply demand zone to be fresh and untouched. Ah, lot of the times you will see a zone that looks strong. But really it has a first test of the zone really early on, like maybe two or three candles after the price left the level. If you miss ah little pop into the zone early on, it means that the zone is weakened. And finally, the third odds enhancer is how the price arrives at the zone. Now, at the time off, you first scoring the zone. This is usually an unknown parameter because you don't know how the price is going to arrive at the zone right. But what this does is it looks at whether there's any congestion areas once the price has reached the level. So anything that that got creator on the way towards the level becomes very relevant. So here's an example of a strong zone that satisfies almost all of the conditions. So the price moves away pretty strongly. By the way, the 1st 1 way doesn't have to be done all in one candle. Now, once the price has moved away from the level, the drop actually achieves more than 5 to 1 profit margin. And then if I'm looking at the formation off this area, there is a little Doje there. So on lower timeframes, there's bound to be some kind of a base that created the Doje. This zone was also with the primary large trend taken from three time frames, and it was also inside a que high inside a high I Q point area. Now I said that their zone almost satisfied all conditions. So what is the problem? The problem is how the price arrived at the level so far points to this area. You will see that there's a little demand like a little speed bump that got created before the price finally reached the area. That means that this small area might put a wrench in the works. It caused the price to go higher, so there was a little bounce from it. You see these wicks, the buying wicks. So not only that there was a little reaction from it, but it took some time for the price to go back the other way. But the zone the whole zone scored high enough Teoh to be qualified for a limit order. Now here's one zone that had half of the conditions and therefore wasn't immediately qualified to be a limit order. But instead it was more of a confirmation trade, which means that we would be looking for a specific developing price action after the price arrives at the level. So what do you have? You do have a strong move away, but the profit margin is Connors is barely 321 There is a presence of a base. It's a very nice base. So when it comes to filter conditions, it's all good. However, odds enhancers primary trends. Well, at the time of creation, the zone was clearly against the primary trends so it gets marked down. There is a way to trade against the trend through my established cue points, but again, it's a very advanced way off trading, supply and demand. So for the purposes of scoring this supply, because it was against the prevailing trend, it got marked down. Next up is rich race mons. So the zone waas fresh at the time when the price first came back to test it. And then the last odds and answer is the arrival at the level. Arrival was pretty clean. So does not much congestion right underneath the area. But the zone scored lower on the profit margin and on primary trend, so it had to be a confirmation entry. So what do I mean by confirmation entry? Well, let me show you what happened when the price arrived. At the level you see the barest in golfing that happened after the touch. Well, that's your developing price action. So that would justify you going into a trade on the basis of a confirmation. I elaborate this further in the professional development program, but for now, that's all you need to know. So you would be using a candlestick pattern at the level to look for a rejection as a confirmation trade. And here is a bit of a unicorn zone that has all the conditions. So initial move was a strong drop bass drop or staircase supply. Remember I said that on staircase formations, you need to look for that originating area higher up. So this wasn't a slightly lower timeframe. And instead of price reacting from this base, it went all the way up to the originating supply profit margin on the level massive presence of a base where you have a drop of base to drop. So naturally there is a base by defaults and primary trend. It was with the primary trends, and it was also inside a cue point Retrace mints. So zone was fresh. And then we have the arrival, as you can see arrival clean as a whistle. Nothing to stop it on the way down. And sure enough, with not much in the way the price moves all the way down. So if you can see that if the arrival is clean, the price will reach your targets quicker. If you have something on the way, it's not to say that it's not going to work out eventually, but it Any zone that you come across in the opposing direction adds more time, once your trade. And obviously that's not what do you want? Some examples off weak zones? Because I don't like Teoh to talk about one side of the story. So here's an example where there's a gradual move away, so it's not a strong move. Away is just like price of meandering. There's a lot of chopping airs up and down, up and down, and the price eventually just slices through it. Here, I have to supplies. Both of these are very weak. So the one of the top, it has multiple tests into it. So that's what I was talking about when it comes to Retests Zone gets created, but the very first candle goes back into it. To be fair, it doesn't even leave the level up until this candle. And what do I mean? Leave the level. It means that no candle, um, is touching the supply area. So if you have this kind of ah situation, the top of the candle, the high is inside the supply, so thereby that's a retest and the price is not really left the level yet. It's still messing around in the same area. Now here's an example of overnight trading in your dollar during Asia to very weak areas, both the demand and a supply. The main take from this particular short is that if an instrument doesn't like, your daughter doesn't normally trade with much volume during the Asian session. So by default you shouldn't attempt to enter any new positions because not only that the profit margin is entirely non existence in this case, but you'll be working all night to grab three ticks there 56 there and you constantly have a negative risk reward. So you get hit once and all of that work goes right out the window. So then you've spent an entire eight hours off Asia trying to trade your dollar for nothing , probably for a bit of loss, as it usually turns out. But then when London kicks in and I'm gonna show you the next slide, So this is no London. It just obliterates all of the levels it slices through the denial, slices through the supply and just shoots up. And that's how new traders get caught out there kind of thinking, Oh, it's easy. I'll just trade for a few ticks here and there, you know? Doesn't matter. I want to grab four takes in the market and that will be enough. But in the spot markets in cash markets, you have something called the spread as well, unless trade futures and the spread is usually anywhere from about one to about four pips on top, off the normal price. So attempting to kind of scalp with a very small retail account and not having a futures account is just completely pointless. Now I do scalping and Marcus talkers, but I don't take four pips out of the market. I take between 20 and 60 pips, and that's the guy's scalping that you want to aim for. Not this nonsense of taking two and four pips. Okay, so exercises for this lesson, you have some homework. Somewhere on this page are either in the exercise of section or below the video player somewhere again. Depending on where you're watching this, you will find a downloadable file off the scoring table that will help you determine strength of zones. And this is what it looks like so it's very simple, too Simple Table probability Filters. 123 probably enhancers. 123 I will explain what it looks like when the zone scores 21 or zero for each of these. So for strength off move. These are the kinds of moves away for supplies, so you can have a decent over way, but not terribly strong. However, it then picks up momentum, or you can have the initial momentum with a less violent follow through. So both of these examples they would score a two so maximum scores on the strength of move for the demands. Similar. So you can have the initial move that eventually picks up speed. Or you can have initial large rally, which is then slightly less violent. But so this is what a score of one would look like for supplies. So as long as the price kind of keeps advancing in the same direction without too much choppiness, Um, it's ah, it's kind of going away from the level confidently, but maybe not the most violent move. It's a score of one and again similar for demands. Same thing. Price keeps pacing upwards. And now let's take a look at what week moves look like. So this is a very, very gradual meandering away from the level price, not really advancing anywhere. But it's kind of messing around and almost in a range. So that's a score of zero and similar thing for the demands. Lots of stopping, going back choppiness up and down, up and down so convincing moves, even they're not sure which way they're going now here is what kind of score you look for with a profit margin. So this one is pretty self explanatory. I sort of mentioned this already, but let's just having a nice visual. So however many pips the zone is comprised off that becomes your reference for the profit margin. So profit margin that has over four times reward risk is a score off to if the profit margin on the level is three times risk reward, but not quite four. It will score a one and finally a profit margin of less than three times scores a zero. Okay, so now I'm gonna show you what we're looking for when it comes to arrivals. And this time, let's use real charts. So when you can see here my zone of undress was where this blue rectangle it's so that's my demand that I was looking as, ah zone of interest. But before the price reached the zone, there are two miners supplies in the way these red rectangles. And that means the arrival is not clean. You have to supplies in the way so that gets a score of zero every time you haven't unclean arrival. Whenever the price hits one of these opposing areas that even if it works out, it will add time onto your trade. And it might actually mean that the price is not done with going the other way. So obviously it puts your trade in danger. The arrival, ideally, should be clean. You will have trades that are so much easier if you look for those that Onley have clean arrivals. But I will be honest. I do sometimes trade these coming from que points because I know that when I'm looking for clues off whether there will be a change of trend, One clue is going to be that if you do have an unclean arrival and the price breaks through it, it means that an opposing area has been taken out thereby new direction is probably the right call. But in general, if you're not skilled enough, and if you've not lived through those kind of trades enough times, these kind of little speed bump areas are are very bad for the life off the trade. So expectancy of the duration of how long you want to stay in a trait. So the more there are of these opposing zones, the longer it will take for your trade to reach the target because the price has to battle all of this congestion. Right? So this is why this is a score of zero when it comes to arrivals. Remember that I said, when you're scoring the zones first, arrival is unknown because you don't know how the price is gonna arrived at the level. But as the price nears, your area of interest, your zone of interests or Zoey's, as I like to call them, I like my abbreviations. You should ideally have, like an alert just before the zone is reached so that you can have a look and re score, and maybe adds to the score that you've done before to see whether the arrival is clean or not okay. Finally, for the clean arrival, this is what it would look like. My zone of interest is this blue area. So there was a limit order there waiting. And when the limit order kicked in, I looked to see whether there any opposing areas. As you can see, the price went straight to the zone in a very clean way. And sure enough, because the arrival was clean, there was very little in the way and onto my profit target, and it actually ended up going all the way back to the first supply. And this is why it makes a difference when you have that clean rival versus unclean arrival . If you have come to a point where you understand how these zones work and you can spot them yourself, it's time to get a tool that alleviates and automates this process that you can get the blood supply and demand indicator to automate the tasks that take a long time and become tedious. So it's not there to replace your brain and your trading decisions. It's just there to automate certain mundanity off, scoring the zones searing where, whether the arrival is clean or not, so we have code that does all of that for you. And finally for the homework? No, in that same section where you found a download of the scoring table, you will also find some exercise charts with with some particular zones marks on them, where the task is to score the zones properly. And of course, there's the file with the answers so that it can see how well you've done. And this concludes the strength of zones lesson.