FULL GUIDE for Key Levels and Order Blocks for Daytrading — Transcript

Full transcript

1. 0:00So,
2. 0:01first things first,
3. 0:03um an order block, this gray or I'm
4. 0:05sorry, this green rectangular box. Where
5. 0:07would I How would I find an order block?
6. 0:09What is an order block? An order block
7. 0:10is just an area, as you see this is a
8. 0:12zone, it's not an exact level. It goes
9. 0:14from 24108
10. 0:16up to 24116, so it's an eight-point
11. 0:18zone, but it's a zone I can use to
12. 0:20identify if price is going to respect
13. 0:23that area. Usually, this is based on
14. 0:24some type of volume. You can use volume
15. 0:26session profile, you can use
16. 0:29um
17. 0:30volume footprint charts, you can watch
18. 0:32in real time how price reacts at that
19. 0:34level on an order book, you can use book
20. 0:36map. There's a plethora of tools you can
21. 0:38use to
22. 0:39see
23. 0:41the orders happening within the candles
24. 0:43in this specific area.
25. 0:45Now, this was an order block I threw on
26. 0:48the chart today, like after we got this
27. 0:51100-point trade, right? And then it came
28. 0:52back to entry, we're stopped out at an
29. 0:53entry on the remaining amount, the 10%
30. 0:55we had left. Um we found this order
31. 0:57block.
32. 0:58So, the main thing I was looking at here
33. 1:00cuz we started seeing price consolidate.
34. 1:03Price started Let me change this, it's
35. 1:04too bright.
36. 1:06Price started um selling through here
37. 1:08and then pushing to the upside,
38. 1:11right? And then it's kind of you're kind
39. 1:13of sitting here going, I don't know what
40. 1:14price wants to do, I can't really tell.
41. 1:16And that's what I told people right
42. 1:18here. Right here, I said I can't really
43. 1:20tell what price wants to do. Volume is
44. 1:22not really painting me a picture. Why?
45. 1:25Because I have volume We have this big
46. 1:27volume spike, right? This one right
47. 1:29here, that's why it dumped so hard. Big
48. 1:31volume spike, engulfment of previous
49. 1:33candle, right down back to below our
50. 1:36level.
51. 1:37But then the previous candle, we have
52. 1:38lower volume. We have lower volume and
53. 1:40we have another red candle.
54. 1:42Well,
55. 1:44in my mind, that's an exhaustion move,
56. 1:46right? That that's a um I'm I'm now
57. 1:48concerned that this is this move is
58. 1:51getting exhausted, hence the low volume,
59. 1:53and it's just going to completely
60. 1:54reverse.
61. 1:56However, do I feel confident just
62. 1:57reentering at my original level for
63. 1:59calls? No, I don't. Because it's not
64. 2:01like
65. 2:02this reversal here, it's not like this
66. 2:04candle is high volume either.
67. 2:05This candle also has lower volume.
68. 2:08So, I'm sitting here just looking at
69. 2:10this going, I can't tell what price
70. 2:11wants to do.
71. 2:13And I'm sure
72. 2:14not to sound rude, but I'm sure a lot of
73. 2:16you guys feel that way all the time.
74. 2:19You just look at the charts and you're
75. 2:20like, I have no clue what to do. I'm
76. 2:21just going to do what James does.
77. 2:23Or I'm just going to yolo it. Right? I'm
78. 2:25just going to send it at this level and
79. 2:26see what happens.
80. 2:28This is where
81. 2:29watching volume is going to play a big
82. 2:31role. Sorry, I got to raise my desk a
83. 2:33little bit. This is where watching
84. 2:34volume is going to play a big role in
85. 2:36this, okay? So,
86. 2:37when I'm watching this play out right
87. 2:38here, all I'm telling myself is, okay,
88. 2:40let's do a deep dive. I'm going to make
89. 2:43both of these charts really big now so
90. 2:45we can just focus on these two.
91. 2:48Okay, hold on a second here.
92. 2:52All right.
93. 2:58Sure.
94. 3:03Let it load.
95. 3:08So, this is that volume footprint chart.
96. 3:10So,
97. 3:12what I was telling everybody, okay, at
98. 3:13the time, okay, we can see the same
99. 3:15candles are lining up here.
100. 3:18At the time, I'm telling them that first
101. 3:20is how to find this order block, okay?
102. 3:22We can't really tell what price wants to
103. 3:24do. We have no idea. We got a point of
104. 3:25control here. We got a point of control
105. 3:27to the upside. We got a point of control
106. 3:29right there and a point of control all
107. 3:29the way down here. It's all over the
108. 3:31place.
109. 3:32That now I'm looking at this, this to me
110. 3:35is now no man's land. It's all over the
111. 3:37place. I don't know what's going on.
112. 3:39All I can tell is this area is being
113. 3:41respected. That's all I can tell. Point
114. 3:42of control here, point of control there,
115. 3:44okay? We can determine that 58096 or
116. 3:48this uh 24068 is support. All right?
117. 3:51Then
118. 3:52I will keep my original bias I had,
119. 3:54which is I cannot go short unless I am
120. 3:58willing to take a break out of this
121. 4:00level here or wait for a break of
122. 4:01structure below the trend line we drew
123. 4:03out and below our support level down
124. 4:04here at 41
125. 4:06in order to avoid a fake out, right?
126. 4:08So, with that being said, now that I'm
127. 4:09watching this the upside, okay, let's
128. 4:11see let's wait for candles to close and
129. 4:13let's see where point of control shifts.
130. 4:15Let's just see. Cuz obviously if we if
131. 4:17we reject this level again, we can
132. 4:19determine that this is resistance, we're
133. 4:21just forming lower highs, and we're
134. 4:22trying to sell through. We formed a
135. 4:24downtrend after the big push.
136. 4:26So, as this candle closes, got it. This
137. 4:29candle closes. Now this candle opens.
138. 4:31I'm telling myself two things.
139. 4:33I'm betting on price respecting this
140. 4:36level now cuz previously it respected
141. 4:37this level, 24,069.
142. 4:39Now I'm betting on it respecting 24,085,
143. 4:42right? So,
144. 4:45if it can respect 24,085,
145. 4:48we could be interested in an entry for
146. 4:50calls at 24,120.
147. 4:53Just no order block yet. Just based on
148. 4:55levels alone. Just looking at okay,
149. 4:57there was a push with a massive
150. 5:00liquidity grab, and now we're trying to
151. 5:02make a move back to the upside. Why why
152. 5:04would I be looking for upside? Well,
153. 5:06because we're above the support level. I
154. 5:08am biased for calls cuz I'm above the
155. 5:10support level. As long as I'm above
156. 5:11this, my direction is north. If if we're
157. 5:14below this, all right, my direction is
158. 5:16south. I will change my priority. If I
159. 5:18don't have some type of a priority, I'm
160. 5:20just going to be chasing trades all day.
161. 5:22Chasing trades all day. There's nothing
162. 5:24wrong with having a bias.
163. 5:26I I actually had a student uh last week.
164. 5:30They I don't think they were trying to
165. 5:31make fun of me, but they just made a
166. 5:33statement um and that day we had a long
167. 5:36trade for about 60 points,
168. 5:39and then we had another long trade for
169. 5:40about 85 points,
170. 5:43and then, you know, the market um it it
171. 5:46pushed again,
172. 5:47and I kept saying like, "I'm biased for
173. 5:49shorts. I'm biased for shorts. I feel
174. 5:51like the market's going to have a really
175. 5:52big move to the downside based on my
176. 5:54technical analysis."
177. 5:55And the student was like, "Dude, what
178. 5:57are you doing? You're missing out on all
179. 5:58these calls because you're so biased for
180. 6:00the shorts."
181. 6:02And I'm sitting here like, "It's okay.
182. 6:03He doesn't know yet. I'll just wait till
183. 6:05the market plays out and then I'll
184. 6:06interact with him again."
185. 6:08And that was the day the market sold off
186. 6:09like 600 points. It was a massive
187. 6:11massive sell-off. It was huge. What it
188. 6:13was that was massive dump regardless.
189. 6:16So, I went back after the facts where I
190. 6:18had some some basis to use and I said,
191. 6:20"Dude, now see why I was biased for
192. 6:21shorts?" Like, "I understand in the
193. 6:23morning session there was a 120-point
194. 6:26move that we did not capture and that's
195. 6:28probably why you feel that type of way,
196. 6:29but hopefully now you can see why my
197. 6:31bias played out rather well. If you can
198. 6:34have the correct bias, in my opinion,
199. 6:36that's a good chunk of the battle you're
200. 6:38taking out of the game cuz that's one of
201. 6:39the biggest problems people have. They
202. 6:41don't have a bias. They just show up and
203. 6:43they just go, "Well,
204. 6:45I'll just see watch for the market to
205. 6:47rip in one direction or the other."
206. 6:48Right? Most traders, they don't trade
207. 6:49the open. They think it's gambling and
208. 6:52even TradeZella, which is a wonderful
209. 6:54company, they even I saw they posted
210. 6:55that. They said, "You're trading the
211. 6:56noise if you trade the first open." I
212. 6:58mean, come on. Really?
213. 6:59The open's great, right? I do it every
214. 7:01single day. But, a lot of traders will
215. 7:03do that. They will let the open pick a
216. 7:04direction and then they just enter
217. 7:07thinking that because the market decided
218. 7:10to go calls 120 points, it has to keep
219. 7:12going. And that's why most traders out
220. 7:15there take massive losses because you
221. 7:18just don't know what you're doing. You
222. 7:19don't know how to read volume. You're
223. 7:20just assuming the trend is going to
224. 7:21continue.
225. 7:22So, as we relate back to this, that's
226. 7:24why in this particular session right
227. 7:27here, at this moment in time, even
228. 7:28though we had this massive double top
229. 7:30rejection dump followed by high volume,
230. 7:32right? Even though we had that, I'm
231. 7:34still biased for calls because I have
232. 7:37picked an area we literally went in the
233. 7:40pre-market, drew out a trend line, I
234. 7:41said, "Look, at the end of the day, I
235. 7:43love how this is being respected." And
236. 7:45that's what I posted on my Instagram
237. 7:46reel. I said, "As long as we can The
238. 7:48perfect move would be this break and
239. 7:50retest in the pre-market. We just bounce
240. 7:53off of this and rocket to the upside."
241. 7:55Word for word, that's what I said before
242. 7:57the market opened. And that's exactly
243. 7:59how it played out. Literally. It's It'd
244. 8:01be like I had a crystal ball. I I I
245. 8:03couldn't have done any better if I could
246. 8:04have seen in the future.
247. 8:06So, with that being said, okay, now
248. 8:08we've We know we're looking for calls.
249. 8:10How would I determine this entry, James?
250. 8:12Am I just entering blindly at 24 120?
251. 8:14Absolutely not. No, no, no.
252. 8:16So,
253. 8:17I want you to pay attention to one thing
254. 8:18here. Once this, right, this smaller
255. 8:21green candle closes. So, you have the
256. 8:22red candle right here, right? You have
257. 8:24the red candle right there.
258. 8:26Green candle right here.
259. 8:28Green candle right here. Okay? When you
260. 8:30see that point of control close,
261. 8:33so this point of control, this candle
262. 8:35had just opened. This one right here was
263. 8:36just opening.
264. 8:38Um which is right here at 24 121. That's
265. 8:41where I said,
266. 8:43"If you're wanting to go long, this
267. 8:44would be it based on the point of
268. 8:45control hold of this order block that
269. 8:47it's formed." And then I drew the order
270. 8:49block. At that moment in time, I drew
271. 8:51that order block.
272. 8:52So, as I'm watching this, that's what
273. 8:54I'm telling So, picture before the
274. 8:56candle is closed, this point of control
275. 8:58right here.
276. 8:59Uh I don't know if it'll let me draw it.
277. 9:04It was I just want you to picture it was
278. 9:06right here. Okay? That's where it was,
279. 9:09right there.
280. 9:10So, since it was right there, the point
281. 9:11of control just formed, I'm telling
282. 9:13myself, "Okay,
283. 9:14I bet that we are going to form a
284. 9:18another higher low, right? Like the
285. 9:19bottom of this candle is high is going
286. 9:21to be higher than the previous one,
287. 9:23right? That's what keeps happening.
288. 9:24Higher low, higher low, higher low,
289. 9:26higher low, and it's trying to move to
290. 9:27the upside."
291. 9:28That's what I was banking on happening
292. 9:29based on this order block, which I only
293. 9:32identified
294. 9:33with the confluence of okay, we're
295. 9:35holding my little zone down here. We can
296. 9:38clearly see we're holding this. That's
297. 9:39very obvious. That's already happened.
298. 9:42So we can determine okay, the support
299. 9:43for the day is right here. 24,070
300. 9:47basically to 85. A 15-point zone is
301. 9:49support. And as long as we're above
302. 9:50that, we're pretty valid for entries as
303. 9:52long for calls as long as it doesn't get
304. 9:54too far away. We don't want it to get
305. 9:55too far.
306. 9:56And that's one of those things you boom,
307. 9:58take the entry. 20-point stop loss, let
308. 9:59it rock and roll. As you can see, uh it
309. 10:02went through a little bit of drawdown,
310. 10:03right? Nine points of drawdown and then
311. 10:04it took off. And it took off quite well,
312. 10:07quite well. This ended up um I updated
313. 10:09you guys as it went, but ended up going
314. 10:11up to 232 points.
315. 10:13The last trim was at 200 points profit
316. 10:16cuz we were going for 250. So we didn't
317. 10:17get that last trim. 200 points, you
318. 10:19would have been stopped out somewhere in
319. 10:20profit, right? But hey,
320. 10:23pretty pretty clean entry if you think
321. 10:25about it, right? It's not um it's not
322. 10:27like a picture-perfect super easy trade
323. 10:30like the one I called out right here,
324. 10:32but it's still very nice in the terms of
325. 10:34it's a healthy push to the upside.
326. 10:36There's It's not like it pushed up,
327. 10:39you know, 180 points in the blink of an
328. 10:40eye and then dumped 300 points and then
329. 10:42pushed back up again. It just followed a
330. 10:44nice trend to the upside. Good healthy
331. 10:46pullbacks on the way up.
332. 10:48Um
333. 10:49but using volume like this, that's how
334. 10:52you're going to find those order blocks.
335. 10:53You have to use volume. You don't just
336. 10:55draw an order block on the chart
337. 10:57just because there it looks like there's
338. 10:59a level, but you don't know the exact
339. 11:00level, so you're going to draw a zone.
340. 11:01No, no, no.
341. 11:02Look at the volume. You can You can try
342. 11:05to find an area first based on that. So
343. 11:08here's an example. I'll do a fresh
344. 11:09chart.
345. 11:11Um
346. 11:12why can I not There it is.
347. 11:15Let's do a fresh chart here. Let's do um
348. 11:22Trying to find a stock that we can all
349. 11:24benefit off of for having some extra
350. 11:26levels on.
351. 11:30Did I not have JP Morgan? There it is.
352. 11:34All right, let's do this.
353. 11:38All right, so
354. 11:39first things first, if I'm going to try
355. 11:40to draw some levels
356. 11:42Oh, goodness, that's too much.
357. 11:44I want to start in the daily, right?
358. 11:46Quick quick levels lesson here.
359. 11:49I want to start in the daily.
360. 11:51Daily time frame, by the way, that's
361. 11:52what this is up here. Start marking
362. 11:54levels that are relevant.
363. 11:56I don't need to go all the way down here
364. 11:57and be marking these levels. Those are
365. 11:58not relevant right now.
366. 12:00So, first I just want to draw the high
367. 12:02and the low of the current area we're
368. 12:04in.
369. 12:05All right, let me blow this up a little
370. 12:06bit more.
371. 12:08Now that I have determined this area,
372. 12:10actually this might be a little bit
373. 12:11valid, too, just in case we bust through
374. 12:13that level.
375. 12:14That daily zone, it's right there.
376. 12:16That's where I'm finding that.
377. 12:18So, what I do is look for multiple
378. 12:20touches. Where we're at right now,
379. 12:21actually, take a look at that. Look at
380. 12:23that. See how clean that is?
381. 12:26All right, I can see
382. 12:28another one. This is a little uglier,
383. 12:30but it's still a clean daily level.
384. 12:34Um
385. 12:36I don't care, by the way, if there's
386. 12:38candle bodies or wicks. I don't really
387. 12:40care. I know a lot of trading gurus
388. 12:42online, they do care,
389. 12:44but they don't have the same win rate I
390. 12:46do, so I'm not going to listen to them.
391. 12:51Uh and then right
392. 12:53that's a little So, if I'm looking at
393. 12:56something like right now, I was going to
394. 12:57draw a level here, but I'm like, that's
395. 12:58a little kind of kind of ugly.
396. 13:02This is where I'll just drop into the
397. 13:044-hour. Clean it up.
398. 13:05Let's go in the 4-hour.
399. 13:11Get a better read on this.
400. 13:13Little bit more accuracy with drawing
401. 13:14these levels out.
402. 13:19Now I choose the 4-hour time frame
403. 13:21because I've noticed during heavy FOMC
404. 13:23sessions
405. 13:26Ooh, that's that's rough. I've noticed
406. 13:28during heavy FOMC sessions or where
407. 13:30there's extreme news, there's heavy
408. 13:33volatility, I'll notice that 4-hour time
409. 13:36frame levels get respected very well,
410. 13:39very very well. So, those are things
411. 13:41I'll pay attention to.
412. 13:43Um
413. 13:44God, that's a
414. 13:52This is cleaner for right now.
415. 13:54It's cleaner on this side, this level.
416. 13:56It's okay right there. A lot of wicks
417. 13:57right below it, but every single wick
418. 13:59was reclaimed.
419. 14:01All right.
420. 14:03Then I'll jump in on the hourly
421. 14:05just to confirm. I don't have to draw
422. 14:07levels in the hourly, just to confirm.
423. 14:09Maybe I have shift something around to
424. 14:10clean it up a little bit more.
425. 14:16Okay.
426. 14:20I can I can add to up here on the
427. 14:23hourly.
428. 14:26Basically, that zone right there.
429. 14:29That zone right there.
430. 14:32And then you go on the 5-minute to
431. 14:33trade.
432. 14:34Boom. Now you have key levels. These
433. 14:37will all be considered key levels
434. 14:39cuz they were found on larger time
435. 14:40frames. They were all found on larger
436. 14:42time frames. Now, let's say I see a
437. 14:43level on the 5-minute cuz you got to
438. 14:45remember, now this is more relevant to
439. 14:47the current time. There's a glaringly
440. 14:49obvious level right here at 293 on the
441. 14:505-minute.
442. 14:52Bounce here, bounce here, reject there.
443. 14:54Pretty darn obvious last few days. That
444. 14:57is a relevant level. Just because I drew
445. 14:58it on the 5-minute does not mean it's
446. 15:00trash. It's still a good level and it
447. 15:03just means that's that's more pertinent
448. 15:05to the immediate time frame. What what's
449. 15:07actually happening in front of us right
450. 15:09now.
451. 15:09Um
452. 15:12and then uh right here.
453. 15:16All right. So, now that I've drawn out
454. 15:19my levels, okay, I got some levels. I'm
455. 15:21ready to day trade JP Morgan tomorrow.
456. 15:23Now, I would do myself a favor and I
457. 15:25would just jump into this volume
458. 15:27footprint really quick.
459. 15:29Uh you can't you can't go back too far
460. 15:31on volume footprint, by the way. If you
461. 15:33try to go back too far on volume
462. 15:34footprint, they'll kind of be sporadic.
463. 15:36It'll be all over the place. Uh so,
464. 15:38don't freak out if you're trying to do
465. 15:39that. Um especially if you drop it in on
466. 15:41a 1-minute time frame, it'll it'll look
467. 15:44kind of crazy.
468. 15:45So, now all I kind of want to look at is
469. 15:48where all the point of controls are.
470. 15:50Um don't have to do this in a 5-minute,
471. 15:51either. I can do this on an hourly, per
472. 15:53se.
473. 15:55I can do this on an hourly, and I can
474. 15:57see
475. 15:58Okay, holy moly, we got a lot in this
476. 16:00zone. So, if I wanted to find my first
477. 16:02order block,
478. 16:05I could say, "Well,
479. 16:07starting out from here to there."
480. 16:11That's my first order block right there.
481. 16:18All right, so that is almost a dollar
482. 16:20range on JP Morgan,
483. 16:22but
484. 16:23I see point of control 1 2 3 4 5 6 7 8 9
485. 16:2810 11 12 13 14 15 16 17 18. 18 POCs
486. 16:35just since March 25th. That's good.
487. 16:37That's good. That's almost right where
488. 16:39we're at right now, too. So, I can use
489. 16:41that to my benefit, and I can go into
490. 16:43tomorrow
491. 16:44and tell myself, let me go back on a
492. 16:46normal
493. 16:50So, now I can tell myself going into
494. 16:52tomorrow, I can say, "Okay, I got a
495. 16:53level here, and this is an order block
496. 16:55zone."
497. 16:56I can use that as my bias for tomorrow
498. 16:59and say, "We stay above this, I'm
499. 17:01looking for calls on JP Morgan. We get
500. 17:03below this, I'm looking for shorts."
501. 17:05Right? If we if price pushes if JP
502. 17:07Morgan's price pushes,
503. 17:09i.e. right here,
504. 17:10let's say this is what happened today.
505. 17:13Price
506. 17:14breaks above, I go, "Okay, didn't catch
507. 17:17the breakout. I'll watch for a pullback.
508. 17:19I'll see if it pulls back into my order
509. 17:20block and if it bounces, I can get into
510. 17:22calls cuz it's confirming." Do I know
511. 17:25how far it's going to go? No.
512. 17:27Definitely not. Can I just use a
513. 17:29previous level to determine if it'll
514. 17:30reject? Sure.
515. 17:32All right, price bounces my order block.
516. 17:34Boom, I'm in calls right here. I can
517. 17:36stop out 20% stop loss or 20 Yeah, 20%
518. 17:40for options contracts. Let it rock and
519. 17:41roll.
520. 17:42Okay, I can scale out pretty heavily
521. 17:45right here at 297.50 cuz that's my next
522. 17:47level. I don't know if it's going to
523. 17:49reject. That's just my next level, so I
524. 17:51scale out there. I would leave a portion
525. 17:54behind. I would target high of day for
526. 17:56my next scale out. I would have my stop
527. 17:58loss at entry. I wouldn't get to high of
528. 18:00day. The rest of my position would stop
529. 18:02me out at entry. Good trade.
530. 18:05Right? That's realistic.
531. 18:07That that that what you watch, that's
532. 18:09what we did today for that trade that
533. 18:11did end up going to high of day and
534. 18:13beyond.
535. 18:14You don't You don't have a crystal ball.
536. 18:16You don't know if the trade's going to
537. 18:17fly. Okay, that's a really silly
538. 18:19question people will ask. How do you
539. 18:21know if a trade's going to keep going?
540. 18:22Do you think I know? Do you think anyone
541. 18:24knows? Nobody knows.
542. 18:25Nobody knows. The whole point is you
543. 18:26position yourself to take advantage of
544. 18:28it if it does. And if it doesn't, and
545. 18:30you start to see the reversal happening
546. 18:33in real time, well, scale scale out some
547. 18:35more.
548. 18:36There's no harm in that. If you see a
549. 18:38reversal working against you, I've been
550. 18:41using 20% stops for 2 months now.
551. 18:45Guys got to pay attention.
552. 18:47Um
553. 18:48If you If you see price working against
554. 18:51you in real time, like right here, let's
555. 18:53say. Let's say you get that first candle
556. 18:55close.
557. 18:56Closes below your level and you're like,
558. 18:58"Hmm, this is a concern because
559. 19:01price pushed above. We had strong
560. 19:04volume, as you can see right here.
561. 19:05Volume increased. However, we still
562. 19:07closed below the level and we closed
563. 19:09red, right?
564. 19:11That that's a That's a big red flag cuz
565. 19:13now we're below the level and we close
566. 19:15red.
567. 19:16Okay, now I can make a decision. I can
568. 19:18say on the next 5-minute candle because
569. 19:21remember clean bounce moves are clean
570. 19:24healthy moves, they don't take forever
571. 19:26to break through a level.
572. 19:275-10 minutes we get through that level.
573. 19:29You start hanging out at a level for
574. 19:31more than 15 minutes, odds are it's a
575. 19:32reversal. Odds are it's a reversal.
576. 19:35And as you can see here we do. You hang
577. 19:36out up there for 20 minutes 25 minutes.
578. 19:39Right? 5 10 15 20 25 before you actually
579. 19:42dump the level. So you have 25 minutes
580. 19:44of watching price come all the way back
581. 19:46up here to be like, ah, you know what?
582. 19:49I'm just going to scale out of either
583. 19:50the whole thing or
584. 19:52you know, just I'll sell some more just
585. 19:54in case. I scaled out at 60% of my
586. 19:56position. Let's scale out 90% so we only
587. 19:59have 10% left in case this puppy pulls
588. 20:01back. It pulls back stops you out. Same
589. 20:03concept to the downside. I didn't catch
590. 20:05any of those cuz I I slept in and just
591. 20:06showed up, okay? But I've got a point of
592. 20:08control here on JP Morgan. Price looks
593. 20:10like it wants to flush the level. Great.
594. 20:13If we break below the order block, I can
595. 20:15either take a break out of that order
596. 20:16block or I can watch for a retest of the
597. 20:19order block. What a coincidence. Price
598. 20:20broke below, retested the level.
599. 20:23Boom, all the way back down. I could get
600. 20:25my entry for JP Morgan puts. Boom, heavy
601. 20:28profit. What a coincidence. Where did JP
602. 20:30Morgan's price bounce?
603. 20:32At the level we literally just drew. I
604. 20:34just drew this all in front of you. At
605. 20:36the level we just drew, okay? What a
606. 20:38coincidence. Now it's bouncing this
607. 20:40again.
608. 20:41Same concept again, right? So you just
609. 20:43you just use the order block to
610. 20:45determine your bias. It doesn't have to
611. 20:47be a signal for entry. It doesn't have
612. 20:49to be where you get in. It can just help
613. 20:51you picture, you don't know which
614. 20:54direction the wind is blowing. Picture
615. 20:55you're Well, a lot of you probably
616. 20:57won't. Whatever. You're you're a sniper,
617. 20:59okay? You have a you have a long gun.
618. 21:01You're trying to shoot someone 800 yards
619. 21:03away.
620. 21:04You need to know which way the wind is
621. 21:06blowing. Right? Everybody knows that,
622. 21:08even if you play Call of Duty, you know
623. 21:09that. You got to know which way the wind
624. 21:10is blowing. Picture an order block
625. 21:13is the flag planted in the ground. So,
626. 21:16now you have a marker to watch. You can
627. 21:18tell which way the wind is blowing.
628. 21:19That's how That's my analogy for an
629. 21:20order block. It's very valuable, very
630. 21:23valuable, cuz it just helps you pick a
631. 21:24direction. Okay?
632. 21:26Um
633. 21:28and I do recommend leaving them there.
634. 21:31Just because my day is done trading does
635. 21:32not mean I delete this.
636. 21:34I would only delete this if one day it
637. 21:36was just completely invalid.
638. 21:38Then I would delete it, or if I have to
639. 21:39shift it around. But, I like leaving
640. 21:41things like that there, just in case.
641. 21:43Okay?
642. 21:45Um
643. 21:46so
644. 21:48Hopefully that will help.
645. 21:49Um
646. 21:52basically
647. 21:54finding levels from the higher time
648. 21:56frames to the smaller time frames
649. 21:58if you're on the daily like I was and
650. 22:00and it starts to look a little messy,
651. 22:01you're like, "Ah, this looks a little
652. 22:02bit of a messy level." That's when you
653. 22:04drop down to the next time frame. Zoom
654. 22:05in a little bit. Okay, 4-hour. All
655. 22:07right, hourly. Okay, let's go into the
656. 22:105-minute. Let's see if there's anything
657. 22:11super pertinent to the immediate week.
658. 22:13Cuz on the 5-minute time frame, you'll
659. 22:15find those like weekly levels, you know?
660. 22:17What's really pertinent in the week.
661. 22:19Okay?
662. 22:22Um
663. 22:23the other thing you have to remember is
664. 22:24none of this matters if you can't hold a
665. 22:26winning trade. None of this matters.
666. 22:29I see it every day in my community.
667. 22:31I'll do some I'll do really hard work.
668. 22:33I'll prep the whole day. I'm getting
669. 22:35ready for everybody.
670. 22:36I taking on this burden of trying to
671. 22:38call out a winning trade. I'm like,
672. 22:39"Let's go. Let's try to get this done."
673. 22:42Give everybody a 100-point trade. I have
674. 22:44people selling for 15 points profit. I
675. 22:45have people selling for 20 points
676. 22:47profit. All of this is invalid if you
677. 22:49can't even hold a simple winning trade.
678. 22:52Um
679. 22:53a good rule of thumb to leave you with
680. 22:55you need to look at your journal
681. 22:57entries.
682. 22:58If you've been trading, I would say for
683. 22:59more than 2 years, and your
684. 23:01risk-to-reward ratio is not over a 2:1
685. 23:04R, that's where that should be your main
686. 23:06priority is working on the
687. 23:08risk-to-reward ratio, not necessarily
688. 23:10working on your win rates, not trying to
689. 23:12be green every single day. That's a
690. 23:13great feeling. Um but, I would challenge
691. 23:16you to try to let your winning trades
692. 23:18breathe. Let them run. If you don't have
693. 23:21the ability to scale out of a trade
694. 23:23properly, if a trade um if a trade rips
695. 23:27for uh like today, let's say, you know,
696. 23:29I'm using I'm going to use today as an
697. 23:30example cuz I watched it happen. It's
698. 23:32very frustrating.
699. 23:35If a trade like this rips, and you can't
700. 23:37even get to 40 points profit, if you're
701. 23:39selling the whole thing at 20 points
702. 23:41profit,
703. 23:43you know,
704. 23:44and you've been trading for more than 2
705. 23:45years, I'm talking to people who have
706. 23:47been doing this. Seriously, shame on
707. 23:49you. That's not good. You need to give
708. 23:52yourself a shot. Have some confidence in
709. 23:54your trade.
710. 23:55Have some confidence. You went through
711. 23:56the hard part. The hard part was taking
712. 23:59the entry. That's the hard part.
713. 24:01Finding a decent spot to take an entry
714. 24:04is the hardest part of a trade. For
715. 24:06beginners, the hardest part is holding a
716. 24:08winning trade. That's the hardest part
717. 24:10for beginners. Beginners got no problem
718. 24:11buying. They'll buy all day. They'll buy
719. 24:14all it's good here. It looks good here.
720. 24:15It looks good here. The issue is,
721. 24:17instead of sitting through this
722. 24:18100-point trade and scaling out, they'll
723. 24:20say, "All right, let me sell some at
724. 24:21seven points cuz I'm nervous. Ooh, 15
725. 24:24points, let me sell almost the whole
726. 24:25entire thing. Okay, I got one running
727. 24:27contract. Let's see 100 points. Oh, it
728. 24:29pushed up to 30. Oh my gosh, it's come
729. 24:31back to 10. I'm out. Boom. Not dealing
730. 24:33with this. Gone. I'm done." And then
731. 24:35they look at their P&L, and they would
732. 24:37have been better off just doing a 1:1.
733. 24:39They would have been better off just
734. 24:40saying, "20 points stop, 20 point take
735. 24:42profit. I'm going to leave it alone."
736. 24:43Uh and people that trade like that, they
737. 24:45do, they have less than a 1:1
738. 24:46risk-to-reward ratio. So, if the shoe
739. 24:48fits,
740. 24:50um a good rule of thumb that I've seen a
741. 24:52lot of success with is people can just
742. 24:55go for a 2:1 R.
743. 24:57See if you have the mental fortitude and
744. 24:59willpower to not micromanage your trade.
745. 25:01Try two weeks. You could try it for two
746. 25:03weeks. All right, I got a lot of people
747. 25:05that are doing this right now and they
748. 25:06love it. They love it, they're
749. 25:07successful with it, they're enjoying it.
750. 25:09Two to one risk to reward ratio, set and
751. 25:11forget. You take your job is taking your
752. 25:13entry, yes. The entry's the hard part.
753. 25:15You do all the hard work, all the prep,
754. 25:17take my entry, boom, I'm in the trade.
755. 25:19All right. Now this is coming coming to
756. 25:21my entry. I've clicked buy. Now I'm just
757. 25:24going to wherever your stop loss is.
758. 25:26I'll use an example for myself. Let's
759. 25:28say I have a 20-point stop loss. That
760. 25:30means I have an ATM function or an
761. 25:32automatic stop loss and take profit that
762. 25:34enters the second I hit buy. If this
763. 25:36hits 20 points, I get stopped out. If it
764. 25:38hits 40 points, I take my profit. If the
765. 25:41trade needs to be adjusted for some
766. 25:42reason, let's say you plan on taking an
767. 25:44entry at 85 and let's say it slips your
768. 25:46level and you get filled at 95, okay?
769. 25:49Instead of taking two trades today,
770. 25:51I my stop loss needs to make sense. Just
771. 25:53because I choose 20 points, the market
772. 25:55doesn't care. I need to pick a level
773. 25:57that makes sense. So let's say I'm like,
774. 25:58well, I was banking on Let's say I was
775. 26:00banking on 69 or on 70 to hold my level.
776. 26:03That's why I was entering at 85 so I can
777. 26:05have a 20-point stop loss. So I had five
778. 26:07points of wiggle room below my support
779. 26:08level to hold. Okay, but I got filled 10
780. 26:11points later. Well, sadly now I need to
781. 26:13adjust my stop loss because there's a
782. 26:15possibility this pulls back 20 points,
783. 26:17stops me out. Trade is still valid cuz
784. 26:18it would be above your support and then
785. 26:20it takes off. Okay? Well, I don't want
786. 26:22to get stopped out of a trade blindly.
787. 26:24There needs to be a reason I'm getting
788. 26:25stopped out of the trade. That's why how
789. 26:27I base my entries. My entries need to
790. 26:29make sense. Most of my entries are timed
791. 26:31around 20 points within the next key
792. 26:34level I have. So that key level, if we
793. 26:35get some drawdown, can hold as support.
794. 26:38All right?
795. 26:39So cuz I don't want to listen to the
796. 26:41excuse of, "Ah, well, you know, I got
797. 26:43wicked out." We can't be getting wicked
798. 26:45out of trades. Can't be getting wicked
799. 26:47out of trades. Just ask yourself, what
800. 26:48Where does this trade become
801. 26:49invalidated? If I was trying to go long
802. 26:52right here, to me the trade becomes
803. 26:53invalidated if we slip below 24,070.
804. 26:57We slip below that, I don't want to mess
805. 26:58with this. Okay then, that's where I'll
806. 27:00stop out at. Keep it simple. Let it rock
807. 27:03and roll. 40 points.
808. 27:05Take profit, 20 points stop loss. Good
809. 27:07example for a data perspective, since I
810. 27:08know a lot of people are terrible at
811. 27:10journaling.
812. 27:11Uh one of my one-on-one students who
813. 27:12adopted this back in February, in March
814. 27:16they had three losing trades and 24
815. 27:20winning trades. Two to one risk to
816. 27:22reward ratio. All right?
817. 27:25Um just to be transparent, they were
818. 27:27taking my call outs. They were taking my
819. 27:29call outs. Um so, but still, three
820. 27:32losing trades and 24 winning trades
821. 27:36and a winning trade makes double your
822. 27:38loss,
823. 27:39the math, guys, the math is on your
824. 27:41side. It's impossible to lose like that.
825. 27:43It really, it's mathematically
826. 27:45impossible to lose.
827. 27:46You can be very successful that way.
828. 27:48Extremely successful that way.
829. 27:50So.
830. 27:52Um
831. 27:53just something to think about. All
832. 27:54right?
833. 27:56Um
834. 28:00I am not going to do any questions
835. 28:02tonight just to keep it short.
836. 28:04So, just mainly wanted this to be
837. 28:06educational. I'll upload this to YouTube
838. 28:07as well. But um
839. 28:10yeah, just just use this to your
840. 28:11benefit, okay? Use the whole
841. 28:13finding some good levels, finding a good
842. 28:15order block, and
843. 28:16being a critical thinker and formulating
844. 28:18your trades around this. This will help
845. 28:20you tremendously taking your own trades.
846. 28:22It's going to help you tremendously.
847. 28:24Even if it's just something as simple as
848. 28:26premarket prep. You know, premarket
849. 28:28prep, you come in, let's say you drop
850. 28:29into that bigger time frame, you pop
851. 28:31open that volume footprint chart, you
852. 28:32start evaluating the levels, and you're
853. 28:34like, "Oh, look at this. There looks to
854. 28:36be a good order block here. Let me draw
855. 28:37it out. Let's just see if it gets
856. 28:38respected." Let's say you see it get
857. 28:40respected for like 2 days in a row.
858. 28:43I would leave that guy there. That's
859. 28:44probably a solid an block then. Just
860. 28:46leave it there. Let's see how it plays
861. 28:47out.
862. 28:48All right.
863. 28:50Um
864. 28:51So, for those of you that subscribe to
865. 28:53my levels, I'm always going to leave QQQ
866. 28:55on the volume footprint chart. That way,
867. 28:57you guys can use this to your advantage,
868. 28:59as well.
869. 29:00Okay?
870. 29:01So, um
871. 29:02something to think about here. You can
872. 29:04literally you can just open up You got
873. 29:06my link. You can just open this up, and
874. 29:08you can do it yourself, right? You can
875. 29:09just change it, and go back. Okay, let's
876. 29:11see
877. 29:12Let's see, you know, where most of these
878. 29:13point of controls lie, and I can try to
879. 29:15find an order block. You know, what a
880. 29:16coincidence. James drew an order block
881. 29:18here. What happened later in the day?
882. 29:20Bounce.
883. 29:21Wow. Who would have guessed, right? So,
884. 29:25good things you can use to your
885. 29:26advantage.
886. 29:27All right, everybody?
887. 29:29Crush it.
888. 29:301% better every single day. Short class
889. 29:33today. Keeping it sweet. Get you back on
890. 29:34your way. This will be on YouTube later,
891. 29:36so you're more than welcome to reference
892. 29:38this at any point you'll ever need. All
893. 29:40right?
894. 29:41Have a blessed day, everybody.
895. 29:43See y'all later.