How I Won the Monthly World Trading Championship at 26 — Transcript

Full transcript

1. 0:00This is how I won the World Cup trading
2. 0:02championship for July. 100% in a single
3. 0:04month, but the strategy isn't the part
4. 0:06that's interesting. Now, I've had
5. 0:08multiple five-figure [music] months in
6. 0:09payouts with prop firms. I've even had a
7. 0:1131-day win streak where I took a 50k
8. 0:14account and I pulled $40,000 in profits
9. 0:16from it in a month and a half. Here's
10. 0:18the thing though, that's how I trade
11. 0:19normally. That's not how I traded to win
12. 0:21this competition. So, what I'm going to
13. 0:23do today is I'm going to walk you
14. 0:24through both, how I read the market,
15. 0:27where I look to participate, and then
16. 0:29how competition trading actually works.
17. 0:32Why it's built for growth instead of
18. 0:33survival and when you're actually
19. 0:35allowed to trade that way. [music] And
20. 0:37by the end of the video, you'll
21. 0:38understand the difference between adding
22. 0:39size and adding risk. Most traders think
23. 0:42that those are the same thing and
24. 0:43[music] that's the exact reason why they
25. 0:45keep blowing their accounts. So, two
26. 0:47parts, but let's start with the way that
27. 0:49I prepare for a session. So, what I'm
28. 0:51about to show you is what I do every
29. 0:53single day regardless if there's a
30. 0:55competition or not. This is the part
31. 0:57that doesn't change. Now, before I
32. 0:59actually get on the chart and start
33. 1:00looking at any individual level or start
34. 1:02trying to identify key areas or key
35. 1:05levels, I first want to know what type
36. 1:08of day am I likely walking into. Now,
37. 1:10when I say that, I don't mean direction,
38. 1:13I mean environment. So, that's where
39. 1:15gamma comes into the picture here or
40. 1:16gamma exposure when I'm preparing for
41. 1:18the session. And I'm really looking at
42. 1:21this and asking myself one thing. Is
43. 1:23this a day where price may get pinned
44. 1:25and pushed back into a range or is this
45. 1:28a day where it's potentially allowed to
46. 1:29run? And is it likely that we see faster
47. 1:32price action or more volatile violent
48. 1:34price action or a quieter tape for the
49. 1:37morning or maybe potentially some
50. 1:38compression? So, I'll get on the charts,
51. 1:40I'll open up the gamma profile. I
52. 1:43currently use Tanuki Trade. Now, when I
53. 1:45look at these levels and they're on the
54. 1:47chart, this is what I'm looking at. This
55. 1:49right here is the highest volatility
56. 1:51level. Above it, in a positive gamma
57. 1:53environment, well, moves could tend to
58. 1:56be dampened depending on the actual
59. 1:57distribution of gamma. And below it,
60. 2:00they can get amplified being in a
61. 2:02negative gamma environment where it's
62. 2:05not about direction, but it's about
63. 2:06volatility and how violent a move may
64. 2:09actually be. Now, in this case, we're
65. 2:11currently sitting underneath the gamma
66. 2:14flip zone or the highest volatility
67. 2:16level. And currently, net gamma is
68. 2:18negative. So, when I see this, this is
69. 2:21not going to be a day that I walk into
70. 2:23where I'm going to fade every extension
71. 2:25at the open and expect a snapback. This
72. 2:28could potentially be the type of day
73. 2:29where if we do get going, then we
74. 2:31actually really get going and we can see
75. 2:33follow-through in the movement. Now, I
76. 2:35do understand, or what I like to look
77. 2:38at, is I do want to look at the
78. 2:39distribution of the gamma, how positive
79. 2:42gamma is being distributed along the
80. 2:44profile, as well as the negative gamma
81. 2:46and how it's being distributed along the
82. 2:47profile as well. Now, I do want to
83. 2:49understand where the call wall is
84. 2:51sitting, where that gamma flip zone is
85. 2:54sitting, or the HVOL is sitting, and I
86. 2:56do want to understand where the put wall
87. 2:57is sitting. But really, at this stage,
88. 2:59that's all I'm looking at. I'm not
89. 3:01predicting anything. I'm just setting
90. 3:04the rules of engagement for everything
91. 3:06that comes after. Now, if you want a
92. 3:08deeper video about gamma and the
93. 3:10mechanics behind it, that's its own
94. 3:13separate video, and I already have a
95. 3:14video like that on my channel. So, you
96. 3:16guys can go watch that if you want to.
97. 3:18Now, once I understand what this is
98. 3:20looking like, I want to start zooming
99. 3:21out. Now, when I'm zooming out, I'm
100. 3:23looking at how value has been migrating
101. 3:25over time. Now, what we did here is we
102. 3:28ran from 27,400
103. 3:31up to 30,400 in the span of a couple
104. 3:34weeks. And that entire move built this
105. 3:37profile that's on the side here, which
106. 3:40is the composite profile. Now, if we're
107. 3:42paying attention to how the auction is
108. 3:44actually forming, and what I'm looking
109. 3:46at, well, just so you guys know, these
110. 3:48are the regular trading hour and
111. 3:50extended trading hour profiles. This is
112. 3:53the weekly profile and then this is the
113. 3:55composite profile on the right. Now,
114. 3:57when we did make that move up, we were
115. 3:59currently auctioning higher. So, we're
116. 4:01seeing us build value higher, we're
117. 4:03accepting higher prices, and then as we
118. 4:05start making our way into here, we start
119. 4:08balancing out sideways. If you notice
120. 4:10this weekly profile, we built value
121. 4:12here, the following week we basically
122. 4:15built value in the same area, we tried
123. 4:17to auction higher and we failed and now
124. 4:20over the course of the previous week or
125. 4:22the week that we were trading, we
126. 4:24started auctioning lower. Where you have
127. 4:27the regular trading hours and the
128. 4:28extended trading hours finding value
129. 4:30lower and lower and lower day after day.
130. 4:33And as we built value in here, as we
131. 4:36spent a lot of time in this area, well,
132. 4:38we have done a lot of business here.
133. 4:41Lots of transactions have actually
134. 4:43happened here and it's causing us to
135. 4:45have this high volume node on the
136. 4:47composite profile. And this is also
137. 4:49essentially where the value area is of
138. 4:52this entire move to the upside from
139. 4:5427,400.
140. 4:56My entire goal when I'm looking at
141. 4:58something like this over a broad view is
142. 5:00I'm trying to understand how value is
143. 5:03migrating over time. How we go from
144. 5:06being in an imbalance state where we
145. 5:08currently start searching for value
146. 5:10higher to then being in a balanced state
147. 5:12where we are now balancing out sideways
148. 5:15to the failure of the buyers to search
149. 5:17for that value even higher and for us to
150. 5:20start auctioning lower. So, when I'm
151. 5:22paying attention to this and we're
152. 5:23heading into a day like the day we're
153. 5:25about to go over, well, my mindset or
154. 5:28the way that I'm thinking is potentially
155. 5:30looking towards the downside if we can
156. 5:32actually stay below prior value areas.
157. 5:35So then, what do I mean by that? Well,
158. 5:37then I go look at this chart. Now, what
159. 5:39this chart is is this chart is the
160. 5:42regular trading hours. This is the
161. 5:45extended trading hours and they are
162. 5:47volume profiles. And again, the same
163. 5:49thing that I'm trying to determine here
164. 5:51is how value has been migrating over
165. 5:54time. Now, in this case, since it's just
166. 5:56the prior sessions, well, what do we
167. 5:58see? Well, we see is building value in
168. 6:00this area, and then we start searching
169. 6:02for value lower and lower, accepting
170. 6:04lower prices. And that continues all the
171. 6:07way up until the regular trading hour
172. 6:10session that we had for last Friday.
173. 6:13Now, this is the part that a lot of
174. 6:15people skip, and it's the part that
175. 6:18tells you what's actually going on. The
176. 6:20goal is to understand where the market
177. 6:22has been doing business. Now, each one
178. 6:25of these is a session's worth of volume,
179. 6:28and the fat part in the middle, or the
180. 6:30fat part in the middle here, is where
181. 6:33most of it actually traded. Now, look at
182. 6:35the direction of this, right? Every
183. 6:38session, that fat part, or the value
184. 6:40area, is getting lower and lower. That's
185. 6:43the market repricing lower day after
186. 6:45day, and it's important information to
187. 6:47understand. So, now when I'm coming into
188. 6:49the day, I understand two things.
189. 6:51Environment says that moves can
190. 6:54potentially extend today rather than get
191. 6:56pinned. The auction is saying that
192. 6:59acceptance is lower. Now, that doesn't
193. 7:02mean that I'm going to head into the day
194. 7:04and only look for shorts and just short
195. 7:07everything regardless, but I am going to
196. 7:09understand the path of least resistance,
197. 7:12and where I start to build scenarios of
198. 7:16if this then that statements, meaning I
199. 7:18will have levels drawn out where if we
200. 7:20do start accepting above it, then maybe
201. 7:22I'm not looking for shorts anymore. But
202. 7:24if we respect the areas above, or those
203. 7:26ceilings above, to then continue this
204. 7:29auction lower,
205. 7:30then we can look for short opportunities
206. 7:32during the day. So, then what do we do?
207. 7:35Well, then at this point, we drop down
208. 7:36to our normal candlesticks, our normal
209. 7:38chart. Now, this here is a 5-minute
210. 7:41chart, okay? If we're heading into the
211. 7:44open here, well, what do we see it's
212. 7:46doing? We make this move down where we
213. 7:48go from imbalance to balance, then back
214. 7:51into an imbalance to a balance for us to
215. 7:54then start coming up here prior to the
216. 7:56market open. So, what do I want to be
217. 7:59looking at? Now, what I will typically
218. 8:00do is when we transfer from a balance to
219. 8:03an imbalance, I will look at the swing
220. 8:06points that caused the move or started
221. 8:08the move to the downside, and I'll draw
222. 8:10off fixed range volume so what would
223. 8:12that look like? Well, it looks something
224. 8:13like this from the swing point that
225. 8:15started the move to the downside or
226. 8:17started this impulse down to the swing
227. 8:21point where it stopped, okay?
228. 8:23And I'll extend it over to where price
229. 8:25is going. Now, I want to look at this
230. 8:28and I understand to myself, well, here
231. 8:30is value area. We have value area low,
232. 8:33we have the POC, and we have value area
233. 8:35high. In this case, anything above this
234. 8:38area is going to be premium. For us to
235. 8:41have the best opportunity in terms of
236. 8:44location for a short, well, we're going
237. 8:47to want to sell in premium. And for the
238. 8:49opposite, buy in discount. But in this
239. 8:51case, we're auctioning lower, we're
240. 8:53looking at premiums. So, this is a
241. 8:56pretty large area for premium from a
242. 8:59fixed range volume profile. So, what am
243. 9:01I exactly looking at? And how do I
244. 9:04determine where I want to do business?
245. 9:06This is where I start drawing Fibonacci
246. 9:08retracements. And I'll go from that same
247. 9:11swing point above down to the swing
248. 9:13point below as we start moving into this
249. 9:16area. I'm watching to see if we're
250. 9:18actually going to stay below. Now, let's
251. 9:21talk about what the actual fib levels
252. 9:22are cuz I know you guys are going to ask
253. 9:24what they are. It's the 0.5 here, just
254. 9:26understanding the midpoint, the 0.62,
255. 9:30the 0.705,
256. 9:310.788,
257. 9:33and the 0.886.
258. 9:35Now, in the event that we push up and we
259. 9:37start getting above the 886 and we start
260. 9:41really pushing it back to the upside,
261. 9:43then at that point I'm not going to be
262. 9:45looking for shorts anymore. But, until
263. 9:47then, while this value down structure is
264. 9:51still intact, well, this is a great area
265. 9:53or a great location where I'd like to
266. 9:55start looking for shorts. Now, I
267. 9:57understand that this is hindsight. Of
268. 10:00course, we're talking about this
269. 10:01hindsight, but the purpose is just to
270. 10:03explain how I'm kind of looking at these
271. 10:06things, right? So,
272. 10:08in the morning, what you may see on my
273. 10:10chart is you may see me draw out a
274. 10:13Fibonacci retracement. And I'm looking
275. 10:15in this golden pocket essentially as
276. 10:18location or one of the places of
277. 10:21location for me to try and do business.
278. 10:23The idea behind this is that if we are
279. 10:25value down in terms of structure, that
280. 10:29if we have a failed auction to the
281. 10:30upside, that we would be looking for us
282. 10:33to take advantage of that failed auction
283. 10:35to look for shorts in premium to bring
284. 10:38us back down to continue the higher time
285. 10:40frame structure lower for the time
286. 10:42being. So, then as we get closer into
287. 10:45the day, well, this is where scenarios
288. 10:46start being formed, right? This is where
289. 10:48we're sitting pre-market. I'm starting
290. 10:50to form if this then that scenarios in
291. 10:52my head. I understand where we're at. I
292. 10:55understand the environment that we're
293. 10:56in, and I understand where I want to
294. 10:59actually participate, and if we start
295. 11:01coming out of this area of location,
296. 11:03then we can potentially look for
297. 11:05continuation lower. Now, there's certain
298. 11:07areas that I'll mark out on my chart to
299. 11:10help me determine that. Now, what do I
300. 11:12mean by certain areas on my chart? Well,
301. 11:15typically, I'm going to be marking out
302. 11:17prior days extended trading hour value
303. 11:20area high, value area low, regular
304. 11:23trading hour value area high, value area
305. 11:25low. I'm looking at the gamma levels, if
306. 11:28the call wall is sitting in a premium,
307. 11:30if value area high of a prior session is
308. 11:33sitting in a current premium, I want to
309. 11:35know where those are at. Now, let's say
310. 11:38we're doing this move up during the
311. 11:41overnight, okay?
312. 11:42And we're pushing up into premium. And
313. 11:45we've been building this context around
314. 11:48what we'd want to see and where we want
315. 11:50to see it happen. Well, now we're here
316. 11:53and we're starting to push down
317. 11:54pre-market right before the open. And
318. 11:57what do we start doing? Well, I pay
319. 11:58attention to market structure. Just very
320. 12:00basic market structure. We start making
321. 12:03a move down, breaking the structure
322. 12:06that's been grinding up during the
323. 12:07overnight session, and it's coming out
324. 12:10of premium. So, in this case, I'm
325. 12:13getting ready to start looking for
326. 12:14shorts. And then this is where I start
327. 12:17watching order flow. I start watching
328. 12:19the individual candles themselves. And
329. 12:22what's happening inside of those candles
330. 12:25in terms of effort versus result. All
331. 12:28right, real quick, let's take a quick
332. 12:30>> break to talk about the sponsor of this
333. 12:31video, IQ Capital. Everything I'm
334. 12:33showing you in this video, or in fact in
335. 12:35any of my videos, only matters if you
336. 12:38actually have the capital to trade with.
337. 12:40And losing thousands of dollars of your
338. 12:42own money is one of the most expensive
339. 12:44ways to learn in trading. Now, a prop
340. 12:46firm fixes that part. You trade their
341. 12:49capital, you build the skill, and when
342. 12:51you take those lumps early on, you're
343. 12:53mitigating the risk on your end. And IQ
344. 12:55Capital is one of the firms that I use.
345. 12:58Right now, they're running an 80% off on
346. 13:00all of their products. And when you get
347. 13:01your first account with IQ Capital, it's
348. 13:03only $9 using code Thrax. So, if you
349. 13:06want to test out an IQ Capital account,
350. 13:08check the link in the description below.
351. 13:10Now, let's get back into the video. So,
352. 13:12let's talk about what that actually
353. 13:14looks like. Now, let's say here we are
354. 13:16in location. We're looking for shorts,
355. 13:19right? We're we're trying to find
356. 13:21confirmation of shorts. So, what do we
357. 13:23want to see? Well, we want to see the
358. 13:25aggression from the buyers come in and
359. 13:28fail. This is an example of something
360. 13:30that we would be looking at. Inside of
361. 13:32these candles is a volume profile. Now,
362. 13:35in this volume profile, in this area,
363. 13:37what do we see happen? What's happening
364. 13:40here? Well, we have all this
365. 13:41participation building at the extremes.
366. 13:44We have participation building here. We
367. 13:46have participation building here. The
368. 13:48POC is up here, and then there is also a
369. 13:50large amount of buyers here. Now, when I
370. 13:52see this happen on the chart, when I'm
371. 13:54watching this live on a footprint chart,
372. 13:57I'm watching the effort being put in
373. 14:00from the buyers, and I want to see the
374. 14:01result. Are we actually going to have
375. 14:04price progression from that effort, or
376. 14:06are we going to potentially see
377. 14:08absorption, or if we're going to watch
378. 14:10participants get trapped at an extreme?
379. 14:13And so, what am I looking at? Well, I'm
380. 14:14looking at this volume profile, but I'm
381. 14:17also looking at a delta profile. So,
382. 14:19yes, we do see that there is
383. 14:22participation happening in the extremes,
384. 14:25or participation happening in the
385. 14:26extremes, but who's actually
386. 14:28participating here? Well, on this delta
387. 14:30profile, we can see that it's buyers.
388. 14:33Now, if buyers are participating
389. 14:35aggressively at the extreme of this
390. 14:37candle, and it's not resulting in any
391. 14:39type of price progression to the upside,
392. 14:41then potentially there are passive
393. 14:42sellers here absorbing all of that
394. 14:44pressure, and if we start seeing
395. 14:47dominance begin shifting to the
396. 14:48downside, and those sellers actually
397. 14:50stepping in and getting that
398. 14:52follow-through, then that could
399. 14:54potentially be our confirmation for
400. 14:56shorts. Now, if it confirms the idea,
401. 14:58then I'm in. I'm taking a short. If it
402. 15:01denies the idea, let's say that we're in
403. 15:03premium, we're in an area I'm looking
404. 15:04for shorts, but all we see are buyers
405. 15:06aggressively stepping in and getting
406. 15:08rewarded with that price progression
407. 15:11upwards, and there's no sign of us
408. 15:13slowing down or stopping, then I do
409. 15:16nothing, and I just move on, and I don't
410. 15:18take this trade, even though the context
411. 15:20was there, the location was there, but
412. 15:23there was no confirmation. They all have
413. 15:25to be there. And that's the whole
414. 15:27trigger really for a trade, but the
415. 15:30entry that everybody obsesses over or
416. 15:33the setups or the entry models, right?
417. 15:36It's like the last 5 to 10% of the
418. 15:38trade. Everything that I showed you
419. 15:39beforehand is the other 95%. Now, of
420. 15:42course, I'm just going through a very
421. 15:45basic example of this on the chart and a
422. 15:47recent example of it and there's plenty
423. 15:51of different scenarios, there's plenty
424. 15:52of different edge cases, and there's
425. 15:54different ways that we can actually have
426. 15:56confirmation to enter the trade. But,
427. 15:58the concept remains the same, right? We
428. 16:00understand the environment that we're
429. 16:02sitting in. We see what the market has
430. 16:04been doing. Are we balanced? Are we
431. 16:06imbalanced? Where is value actually
432. 16:08being created? Are we in a value up
433. 16:10structure? Are we finding value lower
434. 16:12and lower? And then, where is premium
435. 16:15and discount? We want to participate in
436. 16:17premium if we're looking for shorts. We
437. 16:19want to par- ticipate in discount if
438. 16:21we're looking for longs. And once we
439. 16:23actually get into location and it aligns
440. 16:25with the rest of the context, we then
441. 16:27watch for effort versus result when it
442. 16:29comes to the actual order flow of buyers
443. 16:32and sellers to try and confirm or deny
444. 16:34our idea. Now, it's very important that
445. 16:36when you're creating a a trade plan or
446. 16:39you're creating a plan for the morning,
447. 16:41that you're not necessarily married to
448. 16:43that bias. We we really do not know what
449. 16:46the market is going to do. There could
450. 16:47be a catalyst, there could be an event
451. 16:49that happens. I mean, even a Trump
452. 16:51tweet, right? Nowadays. So, you always
453. 16:53have to have an invalidation of that
454. 16:57trade idea. Now, depending on the trade
455. 16:59idea, there's different types of
456. 17:01invalidation points or different types
457. 17:03of scenarios that would make it so it's
458. 17:05a no trade or that it's a scenario where
459. 17:07you just sit on your hands or
460. 17:09potentially even a scenario where you
461. 17:10flip your bias in the other direction.
462. 17:12But, that's the read and it's the same
463. 17:14process whether I'm trading a funded
464. 17:17account or I'm trading in a trading
465. 17:19competition. But what changes and what's
466. 17:21actually important and the difference
467. 17:23between the two of them is what changes
468. 17:25once I'm actually right. So to
469. 17:27understand that, let me take you to a
470. 17:30whiteboard and let's talk about it for a
471. 17:31moment. Now the main focus of a funded
472. 17:34account is survival. Now it's because
473. 17:37you have rules, drawdown limits, in some
474. 17:39cases you even have consistency, and the
475. 17:41goal is basically to keep the account
476. 17:44alive. So it keeps paying So it keeps
477. 17:48paying you, so you can take payouts, so
478. 17:50you can get more funded accounts. But
479. 17:52let's talk about a competition account.
480. 17:54Let's talk about competition trading
481. 17:56because it's a very different type of
482. 17:57game. Now in competition trading, you're
483. 18:01not scored based off of survival most of
484. 18:03the times in most competitions. You're
485. 18:05scored based off of
486. 18:07return on investment. Now this return on
487. 18:10investment for a competition trading
488. 18:12account is scored based off of a fixed
489. 18:14time window. Now it's the same market.
490. 18:16You're having the same reads, but of
491. 18:18course you're forced to be more
492. 18:20aggressive, right? Now this doesn't mean
493. 18:22to just full port the account. Half of
494. 18:24you guys probably think that, you know,
495. 18:25the way that you win a competition is
496. 18:27you just go and you full port the
497. 18:28account. No, that's not what you do. So
498. 18:30you do need to be aggressive, but that
499. 18:32doesn't mean that you just go add size
500. 18:35to an unproven trade idea, right?
501. 18:38Because that is what is called full
502. 18:40porting. Now when we think about
503. 18:43competition trading and we want to be
504. 18:45aggressive and we want to have a large
505. 18:47return on investment, but we don't want
506. 18:49to full port, well what do we do? Now a
507. 18:51lot of traders will usually do what?
508. 18:54They dollar cost average.
509. 18:57Now what that typically means is that
510. 19:00they will sometimes or traders will
511. 19:02sometimes add into a losing position
512. 19:04because they want to have a better
513. 19:06average entry. Do not do this.
514. 19:09I don't do that. I never add to a loser.
515. 19:12I don't believe in it. I don't think
516. 19:14it's a good idea. Maybe if you're
517. 19:16long-term investing, it's a good idea,
518. 19:18but that's a totally different game.
519. 19:20We're intraday trading, and a lot of the
520. 19:22times when you're actually taking
521. 19:24trades, think about it like this. Our
522. 19:26best trades that we take, being intraday
523. 19:28traders where a lot of our trades are
524. 19:31typically lasting less than an hour,
525. 19:33let's just say, you find out pretty
526. 19:35quickly if you're going to be right or
527. 19:37wrong. So, instead of dollar cost
528. 19:39averaging, what do we do instead? We
529. 19:41don't add into the losers, but we add
530. 19:44into winners.
531. 19:47Now, adding into winners is almost like
532. 19:49an art form, okay? Because you have to
533. 19:52be very careful about how you actually
534. 19:55add into winning positions. Now, why do
535. 19:57we want to add into a winning position
536. 19:59instead of adding into a losing
537. 20:00position? Well, it should be pretty
538. 20:02obvious. The market is proving that your
539. 20:04idea is potentially correct. And when
540. 20:07you're right about something, well,
541. 20:08that's when you want to hit the gas.
542. 20:10Why? Because we have to get a good
543. 20:12return on investment in a short, fixed
544. 20:15time period. Now, when you add into a
545. 20:18winner, it's very important how you
546. 20:20actually add into that winner. Now,
547. 20:22let's say that we take a trade, okay?
548. 20:24And in this trade, when we started out,
549. 20:27we were willing to risk
550. 20:29$100.
551. 20:31And And let's say we wanted to go long.
552. 20:34So, market comes down, starts coming up.
553. 20:37We enter somewhere here. Our stop loss
554. 20:40is down here, and here
555. 20:43is our stop loss, where we're risking
556. 20:45$100 in our account. The goal when
557. 20:48you're trying to be aggressive is not
558. 20:49necessarily to just full port the entire
559. 20:52account and, you know, risk all of your
560. 20:54available capital to try and be
561. 20:57aggressive and win a competition. No,
562. 20:59because you don't want to lose the
563. 21:00money, especially if it's your actual
564. 21:03money, and it's not just like some sim
565. 21:05environment competition trading. And so,
566. 21:08what do we do? Well, as the market
567. 21:10begins to prove that you're right, on
568. 21:12the pullbacks or as the idea
569. 21:15continuously gets proven that you're
570. 21:17more likely right than wrong, then we
571. 21:20can add in size. And when we add in
572. 21:22size, well, our average entry, which is
573. 21:25sitting here, is going to slowly make
574. 21:28its way up. Now, when the average entry
575. 21:31is moving up rather than moving down
576. 21:33when you're dollar cost averaging into a
577. 21:35losing position, we have to be aware of
578. 21:38where that average entry is going to
579. 21:40move to. Because, let's say that you
580. 21:42enter in here initially with one
581. 21:45contract on NQ or one contract on MNQ.
582. 21:49If price pulls back and starts pushing
583. 21:52back up and you enter into that trade
584. 21:54with another contract, well, your
585. 21:56average entry is going to move to
586. 21:59basically 50% of wherever your entry was
587. 22:02to where you just entered again. Now,
588. 22:04you're adding more size on the table,
589. 22:07but when you're doing this, you're
590. 22:09making sure that your average entry is
591. 22:13allowing it to be in a place where you
592. 22:15can move your stop-loss to break even.
593. 22:18And if this trade begins to run and you
594. 22:20continuously pyramid into this position,
595. 22:23then at the end of the day, you really
596. 22:24only risked $100, but now you're adding
597. 22:28into this winning position while the
598. 22:29market's proving that you're right, and
599. 22:31it can result in a very large win. Now,
600. 22:35what might end up happening when you do
601. 22:37this a lot of the times if you don't do
602. 22:39it the right way or even if you do it
603. 22:41the right way, right? You might get a
604. 22:43bunch of break evens. Okay, that's fine.
605. 22:46There's nothing wrong with that because
606. 22:48our goal here in competition trading is
607. 22:51to get a very large return on investment
608. 22:54in a very short period of time. It's
609. 22:56different than the funded account,
610. 22:58right? Where the funded account, we are
611. 23:01trying to grow that account. We're
612. 23:02trying to keep that account. We're
613. 23:04trying to pull payouts and abide by the
614. 23:07rules. Now, what are some rules where
615. 23:09this doesn't make a whole lot of sense
616. 23:10to constantly take break evens? Well,
617. 23:13for example, one of them is the fact
618. 23:15that a lot of firms you're going to need
619. 23:17like 5 days of $200 in profit. Now,
620. 23:20let's say I'm trading a competition
621. 23:21account. All I need is a couple of these
622. 23:23to really have momentum for a couple
623. 23:26environments to really have that follow
624. 23:28through when I'm trading it for it to
625. 23:31make up majority of my profits. So, to
626. 23:33everybody thinking that you just go and
627. 23:36full port an account to win a
628. 23:38competition, that's not necessarily the
629. 23:40way to go about it. Now, do people try
630. 23:41and do that? I'm sure they do, but as
631. 23:44you pyramid into a position and you
632. 23:46manage your stop loss and you manage
633. 23:48that trade and you make sure that you're
634. 23:50not being reckless in how you're adding
635. 23:53to a position, which this is a whole
636. 23:55video on its own on how you pyramid or
637. 23:58add into a winner, you're creating a
638. 24:00larger position without risking more
639. 24:02money. Now, let's say in the beginning,
640. 24:05right? Let's say this trade I entered
641. 24:06here on the initial position size and it
642. 24:08didn't work out. Well, we only lost
643. 24:10$100. But, if we do get that momentum
644. 24:12and it does continue in our direction
645. 24:14and we do pyramid into it and manage the
646. 24:17stop accordingly, well, then it can
647. 24:18result in a larger win that will then
648. 24:20make up for all of these losses. Now,
649. 24:22the psychological part when it comes to
650. 24:24competition trading is important. Also,
651. 24:27if it's your own money, right? Because
652. 24:31let's say it's a SIM competition
653. 24:33account. Well, yeah, you can obviously
654. 24:35go and just full port it because if you
655. 24:37lose that money, it doesn't matter
656. 24:39because the money's not real. But, if
657. 24:41it's real money in a real brokerage
658. 24:43account, well, you probably don't want
659. 24:44to just full port it. You're going to
660. 24:46end up losing a bunch of money. For
661. 24:48what? For a competition? Doesn't make a
662. 24:50lot of sense. The way that I trade
663. 24:52competitions, right? Is I am willing to
664. 24:56give back open profit to find out
665. 24:59whether or not I'm in one of those
666. 25:00trades that's going to find that
667. 25:02momentum and that's eventually going to
668. 25:04run. On a funded account, that is a bad
669. 25:07habit that is going to get you cut. In a
670. 25:09competition account, that's exactly how
671. 25:11I trade it to win a competition. So,
672. 25:13it's two different styles of managing
673. 25:16positions, but it's the same framework,
674. 25:18it's the same strategy, and it's the
675. 25:20same read on the market. It's just
676. 25:23managing the positions is different.
677. 25:25That doesn't mean you go on full port in
678. 25:26account. Again, I'm just willing to take
679. 25:28break evens, I'm willing to give back
680. 25:30open profits for the trades that
681. 25:32eventually end up running and making up
682. 25:34for all of it. Now, this is not how I
683. 25:36would usually manage a funded account.
684. 25:38Now, everything I showed you today is
685. 25:40basically the broad picture of the
686. 25:43framework. Obviously, you know, there's
687. 25:45a lot to be said. This video can end up
688. 25:48being hours and hours and hours of
689. 25:50content, but I'm just trying to give you
690. 25:52an idea on what it is that I'm looking
691. 25:54at, how I'm framing my morning, how I'm
692. 25:57looking to get into trades, and how I'm
693. 25:58managing positions. Now, I will get
694. 26:00further into detail about some of the
695. 26:02specific parts of my framework in future
696. 26:05videos. And what I'm also going to be
697. 26:07doing is I'm going to be running a
698. 26:08master class or a webinar where I'm
699. 26:10going to go through a lot of this stuff
700. 26:12in more detail, and you guys can
701. 26:13actually ask me questions on the spot.
702. 26:16Now, spots are going to be limited in
703. 26:18the webinar, so if you want to join or
704. 26:20you want to sign up and join me for a
705. 26:22free master class, click the link down
706. 26:25below in the description. So, other than
707. 26:26that, I'll catch you guys next time I
708. 26:28make a video. Peace.