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STEAL The 1-Minute Strategy That Made Him $1.8M+ (Works EVERY Session) — Transcript

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0:00I started with about $5,000. First month
0:02I made $17,000. Second month another 20
0:04and then 40 and then 60 and then 80 and
0:06then 100.
0:06>> So these are, you know, the two setups
0:08that you've used to achieve over $1.5
0:10million in payouts. No indicators, pure
0:13price action and in essence really
0:14simple.
0:15>> I studied quantitative finance in
0:16college. Basically just applying it to
0:18the charts in a mechanical way. If you
0:19can follow a bias on props, you're going
0:21to make a ton of money.
0:22>> He is the world's number one youngest
0:24quant trader with over $1.8 million in
0:27total payout so far. Introducing JJ
0:30Simon. There is going to exist a
0:32statistically optimal risk and take
0:34profit for every single trade you take.
0:36First, the draw down that you have
0:37available, the rules of the account.
0:39Lastly, your win rate. If I'm taking
0:41like a one to four risk-to-reward, then
0:43my bias only needs to be right about 20%
0:45of the time. Pair that with optimal risk
0:46and you can be incredibly profitable.
0:48Low risk, low reward is not going to get
0:49you anywhere. [music] You have to
0:50utilize the proper capital that they're
0:51giving you. So, in my opinion, high
0:53risk, high reward is the way to go. But
0:54in this episode, JJ shares his exact
0:56strategies which led him to such insane
0:59payout numbers. He goes through the
1:00exact rules dependent on the prop firm
1:03rules.
1:03>> If I buy an eval, I have a 91% chance of
1:06getting nothing. Nine times out of 10,
1:08you lose $100. Basically, optimize for
1:10your take [music] profit first. The stop
1:11loss on the other hand is going to be
1:13essentially random.
1:14>> Do you ever find though with that
1:16methodology that price could take you
1:18out and still the whole bias and
1:19everything still be intact?
1:21>> 100%. But thankfully I have 45 accounts
1:23and I'm ready to enter again. I'll start
1:24with one. I'll get the payout, reinvest
1:26that payout. Now I'm going to run five
1:27funded accounts and go for max payouts.
1:28>> He goes through how he manages multiple
1:31prop firm accounts and he shows his
1:33complete system with live trading. This
1:35is the episode you've been waiting for
1:37to see a true want trader trading prop
1:40firms and exactly the system behind it.
1:42>> If I'm trying to trade reversion and I
1:44lose three in a row, then I'm done. It's
1:46just a market that's most likely not
1:47going to revert according to my
1:48statistic. The sessions are 90 minutes
1:50long that I trade. Okay. [music] So, you
1:51just focus on that 90 minutes.
1:52>> Yeah. First 90 minutes of every single
1:54session. New York, Asia, New York TM.
1:56>> Okay. So, every
1:57>> every session. Okay.
1:59>> A very easy way for literally anyone
2:01watching to automatically check if
2:02they're going to make money on proper
2:04before they buy a single account is to
2:08>> JJ, thanks for being here with us today
2:09and I'm super excited to dive into this.
2:11I know that the people are probably
2:13super interested into you know exactly
2:15how you've been doing everything that
2:16you've been doing and achieve such
2:18incredible results on prop firms in such
2:19a short amount of time. Um you know
2:22where where's best to begin?
2:23>> Yeah 100%. I think we should start with
2:25the strategy
2:26>> and then I'll show everyone how you can
2:27adapt the strategy to run on prop firms
2:30specifically.
2:31>> Perfect. Let's go. Let's do it.
2:32>> So the strategy that I use is called
2:36fair pricing
2:39theory.
2:40Now, I studied quantitative finance in
2:42college and this is sort of some stuff
2:44that's taught there. Uh, basically just
2:46applying it to the charts in a
2:47mechanical way. You have a theory which
2:49creates a bias and if you can follow a
2:50bias on prop firms, you're going to make
2:52a ton of money. So, this is the main
2:55theory behind the strategy. Now, fair
2:58price is what I'm trying to use to price
3:00the NASDAQ futures. And NASDAQ futures,
3:03we're trading companies because it's the
3:05NASDAQ. And what that means is I'm only
3:09looking at external factors that impact
3:12the price. So pretty much just news and
3:14session opens. So I'll give a little
3:17demonstration here of a session open and
3:19how I would use fair pricing theory to
3:21trade that open. So if you assume price
3:24is coming in at whatever level and then
3:27this down here would be 9:30
3:30a.m. EST. So just the normal New York
3:32session. Mhm. From here, there's going
3:34to be an influx of volume from overnight
3:36orders being executed and institutions
3:38entering. This is going to create an
3:41initial unfair move. So, coming into the
3:43session, this is going to be my fair
3:46price, just the opening price of the
3:489:30 a.m. session. Now, the first trade
3:51that I'll take once a day, every single
3:53session that opens, I will take a
3:54continuation trade. pretty much it's
3:58just going to be in the direction of the
3:59opening candle assuming it aligns with a
4:01high time frame bias that I have and
4:03high time frame bias is just for
4:05reversion. So pretty much just inverting
4:07whatever happened for the previous 6 to
4:0912 hours. But the main entry signal that
4:13I use is literally just the opening
4:14candle. It allows me to get in a
4:16slightly plus EV trade on a proper
4:19environment. Then when you pair that
4:20with optimal risk, you just want to take
4:21as many trades as you can with your
4:23bias. So the first trade literally the
4:25color of the first candle as long as it
4:27breaks structure of the previous candles
4:29then I'm good then I'm good to enter and
4:31I will do a 38 point take profit and a
4:3525point stop-loss for this trade. If the
4:38opening candle is larger than 25 points
4:41I'll just simplify it. Cut my contracts
4:43in half. That would make this 76 and
4:45that would make this 50. But that is
4:47literally it for the first trade. Just a
4:49very quick continuation of the opening
4:51move trying to capitalize on an unfair
4:53displacement. After that though, what
4:56I'm looking for is reversions to the
4:58opening price. Okay?
5:00>> Again, opening price just 9:30 a.m. The
5:02initial move, whichever way it goes, it
5:04doesn't matter to me. All I'm looking to
5:06do is revert back towards what I claim
5:08to be the fair price, which is sort of
5:10what fair pricing theory is, just a
5:12return to the opening price. And in
5:15terms of the entry, there's a few
5:17different entries that you can do. The
5:19first one is a displacement candle. Now,
5:21what I use for a displacement candle
5:24means the body of the candle must be
5:29larger than the body of the previous
5:31candle.
5:33And it also must close below the wick.
5:35So in this example, it's a slight
5:36displacement candle because it closes
5:38below the wick of the previous candle
5:40and the body is larger. So that is the
5:42first and uh the easiest entry signal.
5:45Very mechanical, literally only two
5:46things to look at. If you're getting a
5:48displacement towards the fair price,
5:50then I would take a short.
5:52>> Which time frame would you be, you know,
5:54looking for that candle on?
5:55>> Only the one minute time frame.
5:56>> Everything. So everything we talk about
5:58will be on the one minute.
5:59>> Yeah. Everything here is 1 minute. The
6:01only thing I'll do on the 5 minutes is
6:02look for my high time frame bias.
6:04>> But you could also just look at the one
6:06minute for 12 hours previous and then
6:07still get that same bias. Um, that's
6:10pretty much what that's used for. But
6:11anyways, displacement candle will tell
6:13me to send the first entry in. And
6:16displacement candles are it's the first
6:19entry requirement. The second one is a
6:20breakup structure. Now, for breakup
6:22structure, it is pretty similar to a
6:25displacement entry, but it's slightly
6:27more profitable. The reason why I take
6:29displacements, even though they're less
6:31profitable, is because I have so many
6:32profit accounts that I'm trying to trade
6:33daily. Mhm.
6:34>> So, if I'm trying to get through 40
6:36accounts, I want to spread my risk
6:38across all of my accounts and then take
6:39as many trades as possible with a slight
6:41bias towards a fair price.
6:43>> Okay.
6:43>> Now, for the break of structure entry,
6:45it's similar to the displacement, except
6:48it's just the traditional definition of
6:50structure. When there's a wick down here
6:52that is lower than the two candles
6:54previous, the candle before and the
6:56candle after. If the wick is lower and
6:58then a candle comes in here and it
7:00breaks the structure, then I will take a
7:02short position. just a standard break of
7:04structure entry. Now, the interesting
7:07thing about this with prop firms is you
7:10can see if I was to enter here, then I'm
7:12getting however many points this is in
7:15my favor towards a fair price. It could
7:17be 50, it could be 25, it could even be
7:20100 points just depending on how far the
7:22market moved in the initial
7:23continuation.
7:24>> So, when it breaks structure, I have it
7:26on my chart marked out exactly how many
7:29points I'm looking to see in a return to
7:31the market open price. Okay,
7:33>> based on that, it's going to be a value
7:36near these. Like most of the time, I
7:38will choose a different prop firm
7:39account based on the rules that the prop
7:41firm gives me. Some prop firms, it's
7:43better to have 100 point take profits.
7:45Some it's better to have 50. Some it's
7:47better to have 25. So I'll optimize in
7:50this prop firm specific way by taking
7:52funded accounts based on exactly how
7:53many points are in my favor.
7:55>> What are the sort of differences that
7:58would then dictate that? So like what
7:59are the specific rules that prop firms
8:01might have that then make you make this
8:02decision
8:03>> 100%. So the way I trade profits is
8:05using static risk
8:07>> Mhm.
8:07>> and static take profits. So every single
8:10trade or not every single trade but a
8:12majority of the trades that I take the
8:14risk is going to be something like this
8:16with a 1 to 1.5.
8:18>> And this is great for an evaluation. The
8:20reason why is the evaluation has a
8:22$3,000 profit target and then a $2,000
8:26max loss. This in and of itself is a 1
8:28to 1.5. So if you separate your trades
8:30into a 1 to 1.5, you're automatically
8:32going to have a higher pass rate just
8:33because of how the draw down trails. But
8:35then for these funded trades up here,
8:37I'm going to choose to take the 100
8:39point trades on funded accounts that
8:41don't have consistency.
8:42>> Basically, if I can let let an account
8:44run for 100 points with one contract,
8:46two contracts, three contracts,
8:48whatever, the larger win, I'm able to
8:50realize all of that expected value if
8:52the prop firm does not have a
8:54consistency rule. Same if the prop firm
8:56does not have a strict policy where they
8:58move you to a live account.
9:00>> If you get moved to a live account,
9:01usually your SIM capital gets reduced
9:02and then you have a smaller live
9:04account. So there's no point in going
9:05for like 20 $30,000 wins when your live
9:08account is going to be a fraction of
9:10that.
9:10>> Mhm.
9:11>> So basically these optimizations here is
9:13built on a proper specific environment
9:15to maximize the expected value of a
9:17funded account and then in the
9:18transition to live account make sure
9:20that I'm being moved to the live account
9:22in a way that's going to benefit me.
9:24either taking a payout at the end or
9:25getting a large enough live account to
9:27make it worth my time trading it.
9:28Evaluations always going to be a 1 to
9:301.5. It's going to be 2538 or change the
9:34contract size to make it 5076.
9:37Evaluations as well will be all of my
9:38displacement candle entries. Funded
9:40accounts I like to save for the breakup
9:42structure just because it's a much
9:44stronger entry.
9:45>> But evaluations, I'll send as many of
9:47them as I possibly can off displacement
9:48candles. Anytime I see a displacement
9:50towards fair price, I have a bias. I
9:52have an entry and I have optimal risk.
9:54And that's what I'm going to do on my
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10:49Now, let's get back to the episode. When
10:51it comes to the firms that do have a
10:52consistency rule, how does that then
10:54differ? How does what changes do you
10:55have to make when when in that scenario?
10:57>> Yeah. So firms with consistency rule,
11:00just like the evaluations, the
11:01evaluations have a 50% consistency rule.
11:04So automatically when I'm assigned a
11:06consistency rule, I'm trying to limit my
11:09winners. If you win too much, then you
11:10have to win even more and more and more
11:12and your chance of getting that payout
11:13decreases because your profit target
11:15increases by way too much. So what I'll
11:17do is I'll take a one to 1.5
11:20risk-to-reward on consistency accounts.
11:24It's very simple. Same reason as
11:26devaluation. Sometimes I'll do a one to
11:28two, but this is mostly based on the
11:31firm and the profit targets that they
11:33assign you to reach for payouts. But
11:36these entries are better for
11:37consistency. And then you can even do
11:39one to three, four, five, even six,
11:43>> as many points as in your favor towards
11:45fair price on the non-consistency
11:47accounts.
11:47>> Close. Yeah.
11:48>> All right. So now let's talk about news
11:49events because like I said in the intro,
11:51fair pricing theory is mostly determined
11:53by news events. The open is kind of an
11:55event in and of itself just because
11:56there's an influx of volume that creates
11:58an initial unfair move. After that
12:01though, and during times when it's not a
12:03session open, by the way, the sessions
12:04are 90 minutes long that I trade.
12:06>> Okay. So, you just focus on that 90
12:08minutes.
12:08>> Yep. First 90 minutes of every single
12:10session.
12:11>> New York, Asia, New York PM. Oh,
12:13>> okay. So, every
12:14>> every session. Okay.
12:15>> Yep. I just want to realize my bias as
12:18many times as possible with an optimal
12:19risk. Now, let's talk about news events.
12:27The reason fair pricing theory works is
12:30because you're trying to have a bias
12:32towards what a fair price of the future
12:34should be. If you can get your bias
12:36right, then you're going to be
12:36profitable on prop firms. That's it.
12:38Now, the way news impacts futures is by
12:41changing the fair price. There's two
12:43types of news. There is expected
12:48and then there is unexpected.
12:52So the expected news, this is 8:30 a.m.
12:55Red folder news EST. Unexpected is stuff
12:58like tweets, speeches, things like that.
13:00You don't know what's going to come out.
13:03My favorite trade to take is the
13:04expected news reversion. Basically, what
13:07that means is if we have news coming out
13:10here at 8:30,
13:12the price is coming in 8:30, you are
13:14going to see a huge candle coming off of
13:17news. It could be multiple in a row, it
13:19could just be one, but it's going to be
13:20a very large candle. If the news is
13:23expected, meaning it's the 8:30
13:25scheduled red folder news, usually
13:28happens twice a week, CPI, PPI,
13:30whatever. This is already priced in. The
13:34price action that's happened for the
13:35previous 6 to 12 hours is moving the
13:39market up or down to a fair price
13:42because the news is priced in.
13:44Basically, that means there's a forecast
13:46and 90% of the time it's going to be
13:48very very close to the forecast
13:50>> in a way where if there is an initial
13:51move is extremely unfair. So basically
13:54the theory is that news is priced in it
13:56is forecasted. If the outcome is
13:58extremely similar to the forecast, then
14:01you can trade a reversion because this
14:02here is a fair price. So I use the exact
14:05same entry model as previous just to
14:07trade these reversions.
14:08>> So that same premise really and same
14:10philosophy behind the trade.
14:11>> Yep. Now of course there is also
14:14unexpected news that would mostly be
14:16Trump tweets, speeches, Fed chair,
14:17whatever. Example for this would be the
14:20price is here and then out of nowhere
14:23Trump tweets something extremely
14:24positive for the economy and then it
14:26goes all the way up here. Instead of
14:28trying to revert like I would here this
14:31is actually changing the fair price of
14:33the futures.
14:34>> The reason this one doesn't is because
14:35it was already expected what the result
14:37would be. So the initial move is unfair.
14:39This one completely unexpected. No one
14:41expected him to tweet this or that. So
14:42it's going to change the fair price of
14:44the futures. After the fair price has
14:46changed. I will use the most recent
14:48consolidation as the new fair price
14:50going forward. So this would be my new
14:52fair price. You are allowed to do two
14:55different types of trades with
14:57unexpected news.
14:58>> The first one is a continuation. If you
15:01are able to get in somewhere here,
15:03you're going to have a slight positive
15:04expectancy in terms of news drift.
15:06>> News drift is basically a common studied
15:08phenomenon where if news is positive is
15:10more likely than not, just very slightly
15:12to continue upwards just over the next
15:14few hours. So if you're able to get in
15:16as soon as you see that tweet, soon as
15:18you see the chart having a huge jump,
15:20then that slight positive EV, then
15:22follow it with optimal risk. Of course,
15:24after this, you could also take a
15:26similar type of news drift. There's
15:27consolidation here. So if it breaks
15:29structure up, then I would take another
15:31news drift trade long. On top of that, I
15:35would trade a reversion. So consider it
15:38keeps going up. After that, I would
15:40revert back to the most recent
15:41consolidation. Okay,
15:43>> this consolidation is what I determined
15:44to be the fair price because it is where
15:46the price has stagnated after an
15:48unexpected news event.
15:51>> So these are pretty much the only ways
15:53to trade my strategy. Continuation,
15:55reversion,
15:56>> continuation, reversion, continuation,
15:58reversion.
15:58>> In terms of the the drift side of
16:00things, like how do you determine your
16:02take profits in those scenarios? Because
16:04it's probably going into more of a price
16:06discovery area. Y maybe not like within
16:09alltime highs or anything but just
16:11generally speaking in comparison in
16:13these trades you're targeting the fair
16:15value in the reversion here you're
16:16targeting the fair value but the drift
16:18is obviously very different it's heading
16:20in a in a direction where you might not
16:22have a fixed target
16:23>> exactly yeah so continuations are always
16:25a little bit worse than reversions just
16:27for me and in general because you don't
16:29know exactly where the fair price is if
16:32for some reason it's up here and you
16:33don't know how far it's going to
16:34continue reversion so easy you just mark
16:36out that exact price the market open at
16:38and just revert to that. But like you
16:40said, the continuations are hard. What I
16:42will do for continuations is give myself
16:45the largest possible stop-loss.
16:47>> Okay.
16:48>> And the reason why I do that is if you
16:50have a slight positive bias, so a slight
16:52linear drift that you're expecting the
16:54chart to go through, there's a ton of
16:55different equity curves that the price
16:57could go through on its way to complete
17:00this positive equity curve.
17:02>> Mhm. So pretty much you're realizing a
17:05bias and you want to have a stop loss
17:07large enough to where a small amount of
17:09these random simulations of price come
17:11down to stop you out.
17:13>> So most of the time I'll take these on
17:15funded accounts and that's because if
17:17you have a bias that small percentage of
17:19edge in your favor is much more valuable
17:21to capture on a funded account than an
17:23evaluation because obviously you don't
17:25make money on the eval funded account
17:27gets you the payouts. So that's where
17:28you want to realize most of your bias,
17:30which is why I take the strongest trades
17:31here and these trades here with a very
17:33large stop-loss and a strong bias.
17:36>> Understood. So in terms of the large
17:38stop-loss in this scenario, for example,
17:40would that look to be below the sort of
17:42previous consolidation?
17:44>> Yeah. Okay. It's a very simple
17:45mechanical optimization. I assume on a
17:47live account even more optimizations
17:49would exist, but it's very important to
17:51simplify your strategy as much as
17:52physically possible for a prop firm
17:54environment. And with this one as well,
17:56in terms of the target, would you still
17:57be looking at your sort of 1 to 1.5 as
17:59an average or would you literally just
18:01wait until price starts to consolidate?
18:04>> I'll do two different things. First, I
18:07won't have a profit target.
18:08>> And it is a continuation trade, so
18:10obviously you don't know how far it's
18:11going to go. But if it's on an uptrend
18:14in my in my favor in a continuation and
18:16it's forming structure on its way up, if
18:19it ever breaks structure against me, I
18:21will exit.
18:21>> Okay. Will you trail the stop or you
18:23just manually be monitoring?
18:24>> I'll just manually monitor and exit
18:26whenever it breaks structure because
18:27sometimes it could wick and then
18:28continue up and that's technically not a
18:30break of structure.
18:31>> So it's really important.
18:32>> So do you wait for a candle close?
18:34>> I will. Yes. Always waiting for candle
18:35closes on displacement and breakup
18:37structures.
18:38>> Understood. Yeah. Perfect.
18:40>> And then so these are, you know, the two
18:42setups that you've used to achieve over
18:44$1.5 million in payouts.
18:46>> What's so interesting about this though
18:47is that there's no indicators, pure
18:49price action. And in essence really
18:52simple yeah when broken down you know
18:54and would you say though that there's a
18:56real need to understand these numbers
18:59and I guess that leads to a question of
19:00like what was your process to get to
19:02this point where you have these very
19:04specific models specific numbers that
19:06you follow specific time windows how did
19:09you build you know that sort of really
19:11detailed
19:12>> approach y you know what led you to do
19:14that obviously you mentioned you know as
19:16we came into this episode like having
19:18that uh degree in quant finance Is that
19:21something that has helped and and sort
19:23of pushed you in this direction?
19:24>> Yeah, 100%. I think just studying a lot
19:26of math, statistics and uh finance of
19:28course helped me develop this approach.
19:31Um but I think for people watching the
19:33most important thing to do is try and
19:36find the optimal risk for prop firms.
19:38>> There is going to exist a statistically
19:40optimal risk and take profit for every
19:43single trade you take. And that's based
19:44on a few factors. First, the draw down
19:47that you have available. the rules of
19:49the account like consistency, winning
19:51days, whatever. And lastly, your win
19:55rate, basically your risk-toreward and
19:57how often you win that trade.
19:59>> So, if you have a very high win rate,
20:02meaning very small risk-to-reward, maybe
20:04like a one one.
20:06>> Mhm.
20:06>> Then it is okay to risk more.
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22:00Trader Apex today. Let's get back to the
22:03episode.
22:04>> If you have a very low win rate, like
22:06you're targeting 1 to six, you'd want to
22:07risk less.
22:08>> Yeah.
22:08>> And the reason the reason for that is
22:11within the proper environment, you want
22:14to make sure that a trailing draw down
22:16does not impact your expected value.
22:18>> Basically, anytime you make profit, a
22:20draw down trails up. Yeah.
22:21>> You're losing that because if you make
22:23$1,000 and it trails up,
22:25>> then you still only have $2,000 worth of
22:27draw down. At least you're $1,000 in
22:28profit, but you didn't make any new draw
22:30down to trade with. So basically the the
22:34way that I made money on prop firms is
22:37finding a good risk-to-reward for the
22:39evaluation which is is probably just
22:41going to be 1 to 1.5 for everybody if
22:43it's a minus 2k plus 3k and then on
22:46>> what account size is that all
22:47>> that's a 50k
22:48>> that's a 50k
22:49>> yep and this is all futures NASDAQ only
22:51is what I trade
22:53>> but the funded account is where it gets
22:54a little bit more difficult to model
22:57expected value pretty much if you're
23:00technically savvy
23:02You could code simulations basically
23:04imitate the prop firm rules combined
23:06with your exact risk-to-reward and exact
23:08win rate and from there you'll know
23:11exactly what is the optimal amount to
23:12risk on every trade and the optimal
23:14amount to have a profit target on every
23:15trade if you're modeling for the
23:17expected value of the prop firm. Now
23:19obviously it's a little bit difficult to
23:21simulate things like this. Even AI can't
23:22do it. I tried to have it simplify some
23:25things for me but it's it's unable to
23:26which is unfortunate. But a very easy
23:29way for literally anyone watching to
23:31automatically check if they're going to
23:33make money on prop firms before they buy
23:35a single account is to back test in a
23:38prop firm environment.
23:40>> I see everyone online back testing these
23:42equity curves for live accounts and then
23:44okay it went up good equity curve over
23:46time the strategy works then they're
23:48going to try it on a profit account and
23:49they're going to get confused why they
23:50keep hitting the max loss. Mhm.
23:51>> It's because prop firms are designed in
23:53a way where those positive equity curve
23:55live account strategies don't work. And
23:57what you should do is go into your back
24:00test and pretend you have 10 accounts
24:02with tops of lucid whatever you have 10
24:05funded accounts. From there you're going
24:07to trade the same risk-to-reward on
24:08every single account, every single trade
24:10on the evaluation. From there you can
24:12determine your pass rate. All you need
24:14to do is back test for your pass rate.
24:16And don't back test for your equity
24:17curve. Your equity equity curve like
24:19this one that doesn't matter on a prop
24:20firm. Hm. All you need to find out is
24:22your pass rate. And from there, I have a
24:25nice little formula where you can find
24:27how much it cost you to get a funded
24:28account. That would be the cost of a
24:31funded account, an evaluation like $100
24:34divided by your pass rate. If your pass
24:37rate is 25%, that means you pass one out
24:39of four. So, it cost you $400 to achieve
24:41your funded account.
24:42>> Mhm.
24:43>> From there, you simulate that a bunch of
24:45times to find your exact pass rate.
24:47Divide it from the cost of your
24:49evaluation. you'll know exactly how much
24:50it cost you for a funded account in the
24:52long run. Assuming you're assuming you
24:54follow the same strategy and risk in the
24:55actual market.
24:56>> From there, once you have this value,
24:59all you need to do is make sure your
25:01expected value of your funded account is
25:03larger than this. That means you're
25:05going to make money.
25:06>> The expected value of a funded account
25:09is pretty much how much you can take out
25:11of the account in its lifetime.
25:13>> Only payouts, that's the only thing that
25:14matters.
25:15>> Yeah.
25:15>> Hitting your max loss, all you lose is
25:18$400. you don't lose the $2,000 of SIM
25:20capital or whatever. So, you only lose
25:21400. So, take that same exact back test
25:24and now pretend that you have 10 funded
25:26accounts. Same exact thing. Try
25:28different risk-to-rewards. See which one
25:30of the risk-to-rewards in terms of, and
25:32by risk-to-reward, I mean static
25:34numbers. I don't mean only do a 1 to2 or
25:37only do a 1 to 1.5 based on your
25:40account, your rules, the strategy. You
25:42should be following a static risk. And
25:44one static risk must be theoretically
25:47optimal. if there's so many to choose
25:49from and it's applied to these specific
25:51rules.
25:52>> So again, same thing with the eval back
25:54test to find your expected value of the
25:56funded account. Basically, if you were
25:57to have a 100 funded accounts over the
25:59course of a year, how many payouts in
26:01total would you get with what specific
26:03risk-to-reward? One of them will be
26:05optimal and that's the one you should
26:06choose. And then your expected value
26:08should be greater than your average cost
26:11to get a funded account.
26:12>> From there, you automatically know your
26:14strategy is profitable. All you have to
26:16do is follow it in the actual proper
26:18market.
26:19>> Would you say though using that model is
26:21there limitations or things to sort of
26:24be aware of especially with these sort
26:26of changes within the futures industry
26:27that we're seeing well futures prop firm
26:29industry that we're seeing over recent
26:31months and probably going to continue to
26:33see going into the future as well.
26:34>> Yeah, 100%. The two things to be aware
26:37of. The first one is variance. 100%.
26:40Anyone who trades should be aware of
26:41variance. 100% basically just means how
26:43lucky you are or not. And you need a
26:46sample size large enough to where
26:47variance is not going to be a problem.
26:49>> I'd recommend 50 evaluations.
26:51>> Back test 50 evaluations. At that point,
26:54you'll have a good estimate of your pass
26:55rate. If you only try three and you lose
26:57all of them, it's not because the
26:58strategy doesn't work. It just has a
27:00slight draw down period. You shouldn't
27:01change after that because again, you
27:03could have a very positive equity curve
27:04on your valuations and you just hit a
27:06little draw down and you stop.
27:08>> That's not going to it's not going to
27:09get you that positive bias over time. in
27:12terms of what you were saying with the
27:13futures profer environment changing is
27:15very true. Rules are changing day-to-day
27:18live accounts are being introduced more
27:20often to traders. So the same expected
27:23value could be lower
27:24>> or it could be higher and most of that
27:27is based around the live accounts. Um
27:30it's every trader's goal obviously to
27:31get to the live account on a prop firm
27:33and then scale their capital. So you
27:35need to be aware of how that would
27:36change your expected value. Now,
27:38thankfully, it is a pretty easy formula
27:40to find your expected value of a live
27:42account. Assuming I had a $10,000 live
27:45account, the expected value of this
27:48account is $10,000.
27:49>> Mhm.
27:50>> If I have a funded account with $2,000
27:52worth of draw down, maybe it's a,000,
27:54maybe it's like 1,200, whatever I can on
27:57average get in payouts. Live account,
27:59very easy to find the expected value.
28:01Assuming you're a break even trader, it
28:03would just be $10,000 because you start
28:05at 10K and then you have equity curves
28:07that pretty much oscillate around
28:09$10,000 in the long run. You do pay some
28:11fees which can decrease your equity
28:13curve a little bit, but assuming you're
28:14slightly above break even and you
28:16wouldn't be profitable on a live account
28:18on your own. That's why we're trading
28:19prop firms, then you would have $10,000
28:22worth of expected value in the live
28:23account. So, as you're simulating, be
28:26sure to understand if you run up a huge
28:28SIM balance, you're likely going to get
28:29a live account worth 10,000 or whatever.
28:31So, you need to definitely definitely
28:33include that in your expected value
28:34calculation.
28:35>> And when it comes to these particular
28:37models, would they be something you can
28:39replicate on the live account or is this
28:40specifically modeled around prop firms
28:42only?
28:43>> All of this stuff with a specific profit
28:45targets and riskreward is proper
28:47specific.
28:47>> If I was to trade a live account, I
28:49would only trade reversions first of
28:51all. Okay?
28:51>> I would only trade breakup structure.
28:53Second of all, okay, and third, most
28:55likely only trade expected news
28:57reversions.
28:58>> Those are the strongest of the trades
29:00that I take. That's why I risk the most
29:02on them in my funded accounts. Um, but
29:05in general, on a live account, you would
29:07not want to do a static risk and a
29:08static take profit. You would want it to
29:10be discretionary based on what the
29:12market is showing you. But in a proper
29:13environment, static is 100% the way to
29:15go. M and why why is it that the
29:18expected sort of news reversion is the
29:21sort of A+ setup for you,
29:22>> right? It's because news every single
29:25time is priced in. There's always a
29:26forecast for it. You can see it on Forex
29:28Factory. Like 99% of the time it's going
29:31to be very close to that forecast.
29:33Sometimes it's going to be an outsider
29:35and the outsiders are pretty obvious to
29:36tell on the chart. Basically, it's just
29:37going to go up and it's going to keep
29:38going up. You won't even see a short
29:40entry. So, you don't even get concerned
29:41with losing that sort of trade. Um, but
29:43the expected ones are 100% the strongest
29:46since the initial candle is 100% of the
29:48time unfair. The reason why the market
29:50open is a little bit worse is because
29:52sometimes this initial continuation
29:54could be going towards a fair price that
29:56is up here.
29:57>> Mhm.
29:57>> The market open is not fair 100% of days
30:00at that exact price. Yes,
30:01>> it's just a very strong bias that you
30:03can use on profirms. But with news, I I
30:06can't say 100%. But I'd say a very good
30:08portion of the time the pre-news price
30:10is going to be fair. And with these two
30:13models and and well examples that we
30:15have in front of us, they're obviously
30:17showing sort of a bullish example with a
30:19reversion to the downside. I'm guessing
30:21the exact same would be the if it was to
30:24flip. If we were to have obviously the
30:25sort of push aggressively to the
30:28downside and the reversion upwards, it
30:29would just be the same principle just
30:30flipped over.
30:31>> Yeah, exactly. I'll take reversions
30:33continuations anyway that the chart is
30:35showing me.
30:36>> Cool. So as we move on to the sort of
30:38the next question which would be in
30:40regards to when you've seen people
30:42trying to implement this
30:44>> you know what has been if you were to
30:46sort of really think about it what would
30:48be the the key struggles or hurdles
30:51because no doubt you probably have
30:53people coming to you who have been
30:54trying your ICT strategies even maybe
30:57orderflow strategies or price action
30:58based or indicator based and now you're
31:01really taking them I won't say out of
31:03their comfort zone but really just
31:04showing them hey here's a mechanical
31:05ical system and a lot of the time with
31:07those other systems you can make it
31:09mechanical but most people are obviously
31:10using a lot of discretion um
31:13>> and probably unfortunately a lot of
31:15people don't actually have an edge or an
31:17expected value they just have a a a
31:19particular set of sort of rules and
31:22concepts that they're using
31:23>> and they might even be using them you
31:25know day-to-day in a random sort of uh
31:27combination y
31:28>> so when it's come to actually you know
31:30using a mechanical system you backed by
31:33data something that you've used yourself
31:35And now you've seen success with other
31:37people as well of course.
31:38>> But what has been sort of that that
31:40hurdle if you if any if any you know
31:43that stand out to you when sort of
31:45making that transition making that
31:46change uh to trading in this this
31:49manner?
31:49>> Yeah 100%. I think the thing most people
31:51get wrong about my strategy there's two
31:54things. The first one is that for
31:56whatever reason people are going to try
31:57and back test it on a live equity curve.
31:59They're going to pretend that they have
32:00a live account and they're going to back
32:01test for that equity and they're going
32:03to be surprised. Why am I not making
32:04money? Well, you're using a static risk
32:06and using a static riskreward that's
32:08optimized for prop firms. If you
32:10personally want to optimize this bias
32:11for live accounts, go for it. But prop
32:14firms right now are so incredibly
32:15profitable where you should only be
32:17trading prop firms. So basically what
32:19I'm saying is please back test in a prop
32:20firm specific environment. Find your
32:22pass rate, find your expected value.
32:24Don't be surprised when you use a static
32:25minus 500 plus 750 when it doesn't work
32:28on a live account because it's optimized
32:29for a prop firm. That is more of a macro
32:32thing that most people are confused
32:33about and get wrong. But in the specific
32:36strategy, something most people are
32:37struggling with is the adaptation of
32:39fair price. For example, we think the
32:41open is fair, so I'm going to trade
32:42reversions to the open. It's not going
32:44to win every day. The days that it
32:46doesn't win are days where you don't
32:47want to keep shorting into a bullish
32:50market or keep buying into one that's
32:51absolutely dumping. So, I try to adapt
32:54fair price if my trades are losing. So,
32:57I won't keep trading back towards the
32:59market open if it's trending heavily in
33:01one direction. That's a little a little
33:03optimization that you can do. It does
33:05unfortunately change the strategy from
33:07very step-by-step mechanical to a little
33:09bit discretionary.
33:10>> But as you get better at it, you can add
33:12your own discretion. Of course, everyone
33:14has stuff that they know, stuff that
33:15they've learned, some of it might work.
33:17You should try to use the bias of fair
33:19price. Maybe you have a different entry
33:20model than mine. Maybe you have other
33:21confluences, but if you're on a prop
33:23firm, at least use the bias. The bias is
33:26what is so incredibly profitable and
33:27that's why I take so many trades per
33:29day.
33:29>> In terms of that, that was one of the
33:30questions I was going to have in terms
33:32of like do you have certain rules around
33:35the number of trades you take? Um do you
33:38have to have put some sort of control or
33:39limits because even though it's
33:40mechanical
33:41>> obviously that human nature element of
33:44you know maybe taking quite a few number
33:46of trades, maybe having a number of
33:47losses. Y
33:49>> how do you find
33:52one the
33:54focus on the discipline side to make
33:56sure that each trade is alongside your
33:58mechanical system um versus you know
34:01maybe taking a handful of trades that
34:03were with the mechanical system but
34:06taking losses
34:07>> y
34:07>> and then in the process of going on tilt
34:09and then overtrading because you know
34:12that you're taking a large number of
34:13trades in a day but then suddenly does
34:16that open the door to you going off
34:18system and going off your mechanical
34:21>> playbook.
34:21>> 100%. Just with the opportunity to take
34:23so many trades throughout the day, I
34:25guess it could be very easy to fall into
34:26that gamblers mindset of I just want to
34:28enter. I don't really care where it's
34:29going to go. But there's a few things
34:31that I could say regarding that.
34:32Personally, if I'm trying to trade
34:35reversion and I lose three in a row,
34:36then I'm done. It's just a market that's
34:38most likely not going to revert
34:39according to my statistics. So, I'm just
34:40done at that point.
34:42>> Second, tilt on prop firms is a very
34:45interesting thing to talk about. Most
34:46people attribute all of their losses on
34:48profits to going on tilt, but it's not
34:50actually as bad as most people think.
34:52>> It's actually a completely random entry,
34:54which should be break even expected
34:56value. The only thing that changes is
34:58you're introducing a bunch of unneeded
35:00variance. You can have the possibility
35:02to blow your account or possibility to
35:03have huge wins. The problem with huge
35:05wins is they're usually capped because
35:06it's a prop from environment. But going
35:09on tilt is not really a problem for me.
35:11Uh, I think just because I have such a
35:13statistical approach where I know if I
35:15follow it step by step, I'm expecting to
35:17make X amount per month and I don't
35:19really get mad at a loss because I know
35:20it's just part of the system. It's part
35:22of a positive equity curve of my
35:23bankroll that can have down moments at
35:25some time. The most important thing
35:26though is to simulate back up your
35:28confidence that you know it's going to
35:29make money in the long run. An
35:31additional thing that I'll tell people
35:32with tilting, and like I said, it's not
35:35that bad because it's just break even if
35:37you're randomly trading, and it's not
35:39the worst thing, but if for some reason
35:41you feel you're going into tilt and you
35:43have an account that's at $2,000, you're
35:45going to get a payout from it soon. If
35:47you're on Tilt, do not trade that
35:49account. You're risking $2,000 of your
35:52account to win whatever. So, it's break
35:54even. But if you go on Tilt, you buy 20
35:58new evaluations for $100 each. That's
36:00the same $2,000.
36:02>> It is much more fun and it will get you
36:04off tilt way faster to trade all 20 of
36:07those evaluations correctly. Instead of
36:10just gambling and coin flipping your one
36:11funded account, it's about to get a
36:13payout. You can risk the same amount,
36:15have more fun, make more money, and then
36:18your downside is capped because if
36:20you're trading 20 evals individually,
36:21your risk will spread across all of
36:23them. Worst case, you have a really bad
36:25pass rate because you're gambling them
36:26and it's like 30, not 30%, 20%, 15%,
36:30whatever. At that point, you're not coin
36:33flipping $2,000 worth of expected value,
36:36your variance is extremely reduced
36:38because it's spread across 20
36:39valuations. So, if you ever go into
36:41Tilt, do it on the eval, not the funded
36:43accounts.
36:43>> Mhm. Would you say as well when you're
36:46trading these accounts as you say about
36:48individually is that individually in
36:49terms of per firm or do you mean
36:51literally each account even if let's say
36:53you have five or one firm are you
36:55trading each of those account
36:56individually or you trading say the five
36:58set at this firm five at this firm get
37:0120 at that firm whichever it may be like
37:03how do how are you doing that are you
37:05sort of treating them as an individual
37:07firm set of evals or individual accounts
37:10>> yeah so let's talk about how I'm able to
37:12place 30 trades throughout the day.
37:14Yeah.
37:14>> I'll just simulate everyone a random New
37:16York session. I'm just going to draw a
37:18random curve, a random chart. It could
37:20even go like that. Like it doesn't
37:21matter where it goes.
37:22>> This is just going to be a New York
37:24session. I'm going to trade it from 9:30
37:25until 11. And the way I'm getting 30
37:29accounts in is I see this is the fair
37:31price. I'm just going to trade toward to
37:33and from it the whole session. And
37:35there's a few different entries that I
37:36could take. Obviously, the displacement
37:38entry is going to give me a bunch of
37:39entries. And if it's coming back down,
37:42like 95% of the time, there is going to
37:44be a displacement. Sometimes it reverts
37:46in one candle. So, I can't really catch
37:47that. But most of the time, I'm gonna
37:49have a a reversion there, there, there,
37:52there, there, there. Just so many
37:54reversions throughout the day. And what
37:57I do is I notice how many points are in
37:59my favor on this one, how many points
38:00are in my favor on this one? And then,
38:01of course, trade the different account
38:03based on that because it's optimal to do
38:04so. But in terms of getting that many
38:07trades throughout the day, um days like
38:09this are actually harder.
38:11>> Days where it's going up and down,
38:12staying near the fair price is much
38:14harder. Another example of or like a day
38:17where it's only going one direction. So
38:19it go like this, it won't revert. It'll
38:22continue going down. Maybe it'll stay
38:23stagnant and continue going down like a
38:25non-reversion day. Obviously, those are
38:27worse for me because I have a bias back
38:28towards 9:30 here. Yeah.
38:30>> And it doesn't revert. So most my trades
38:31are going to be losers. Not all cuz I
38:33get in here and maybe I hit take profit.
38:35Get in here, maybe it wins, maybe it
38:37doesn't. But that's three entries and
38:40when it's stagnant, I'll usually take a
38:42trade in the stagnation.
38:44>> The reason for that is again I do have a
38:45bias and if my bias is correct, then
38:47it's slightly profitable to take that
38:49trade with an optimal risk. Now days
38:52like this, I do what's called layering
38:54evaluations. I don't really want to copy
38:56trade because it just gives me extra
38:58variance that there's not really any
38:59need to take if I'm able to get in a
39:01bunch of different trades. Mhm.
39:02>> So, what I'll do is I'll send one
39:04account in here and if there's some
39:06structure here and it breaks structure
39:08again, I'll send another one.
39:10>> But basically, I'll enter on
39:11displacement really early and if it
39:13breaks structure, I'll get in again on
39:15another account. So, these moves here,
39:17they give me basically two entries, but
39:20the same exposure.
39:22>> Okay,
39:22>> just reducing variance through a little
39:24bit of a
39:24>> And would it matter if it's on the same
39:26firm or or different firms? It doesn't
39:28matter as long as the accounts and you
39:30know the rules are
39:31>> right. as longable to your system.
39:32>> Yeah. As long as you've optimized for
39:34the risk-to-reward and the specific
39:35rules, it doesn't matter which prop firm
39:36you traded on. It does make it easier
39:38just to do all within the same one
39:40because my evaluations are mostly
39:41static. Even if I see 50 points to a
39:44fair price, I'm not going to go for 50
39:45points in the eval. I'm only going for
39:4738 because 38 is optimal according to my
39:49static risk-to-reward.
39:50>> Mhm. And then in terms of uh as you
39:53mentioned the sort of free loss rule
39:55that you have
39:56>> would is that per session because as you
39:58mentioned like you'll do this particular
39:59session obviously probably one of the
40:01more popular trading sessions the New
40:03York open but then as you said the
40:04lunchtime Asia you say London as well.
40:07>> Yep. Works for London.
40:08>> So when you have the free loss rule is
40:10that for that session then you stop.
40:12>> Yeah it's three losses in a row in one
40:14session
40:15>> in a row.
40:15>> Yep. In a row. Three in a row. It should
40:17be pretty clear that the price is
40:19trending in one direction and just not
40:20reverting.
40:21>> But days like this where it's a little
40:23choppy, maybe it could still come back.
40:24These days, I'm just going to keep
40:25taking trades. It's just these right
40:27here where I lose three attempts all
40:29very quickly.
40:29>> And you can see price moving away still.
40:31>> Yeah.
40:32>> Okay.
40:32>> At that point, there is something that I
40:34don't know.
40:34>> For some reason, the fair price is up
40:36here.
40:36>> I don't know something. So, I'm not
40:38going to trade anymore.
40:40>> And when something like that happens,
40:41let's say,
40:42>> and then it moves on to the next
40:44session.
40:44>> Yep. is your fair value then this let's
40:46say in this scenario this area here y
40:48>> um which then again you would mark out
40:51and then be waiting to see what price
40:52does in the next opening session.
40:54>> Yeah, exactly. So going into following
40:56sessions the new fair price would be up
40:58here.
40:58>> Understood.
40:58>> 9:30 is not a target after 11:00 a.m.
41:02>> Okay.
41:02>> It is just a high time frame bias for
41:04reversion because in the long run
41:06markets are reverting. Markets are
41:07reverting on the 1 second, the 1 minute,
41:09the 10 minute, the 1 hour markets are
41:11reverting. And the reason why 930 is
41:14only a high time frame bias is because
41:17it's too far in the past for it to still
41:19be considered a fair price. If for some
41:21reason 930 was fair and it was all the
41:22way up here, when volume is introduced,
41:24it would 100% come back down to 9:30.
41:27>> Mhm.
41:27>> But obviously it's not. So I didn't
41:29pretty much disclassify 930 as a fair
41:31price going forward after 11.
41:33>> Okay. So you won't there wouldn't be a
41:35scenario where you're using say on that
41:37day uh the 9:30 or previous days sort of
41:40fair value prices. is always based on
41:42what the latest most recent session open
41:45and where that fair value been placed in
41:47or news related wise where that's been
41:50placed in right now.
41:51>> Yep. And fair value could change
41:52throughout the New York session if for
41:54some reason there's an unexpected tweet
41:56or something like that. Yes.
41:57>> And you get a very quick move up then
41:58you 100% have to adjust fair value to
42:00the consolidation after that tweet.
42:02>> Understood. Okay. One last thing about
42:04fair price and different sessions is a
42:07little bit discretionary, but you can
42:08try to apply it as best you can. Between
42:1011 to 2 p.m.
42:13there is basically no volume. It's kind
42:15of a dead time in the market. So, it is
42:19possible, slightly possible for price to
42:21be trading at an unfair price between 11
42:24and 2 p.m.
42:25>> Mhm. Then when the 2 p.m. session opens,
42:27which is another session that I trade,
42:29if 2 p.m. opens down, I will try to
42:32trade it all the way back down to 9:30.
42:35>> Okay?
42:36>> Basically just using the influx of
42:37volume from the 2 p.m. session as a
42:39continuation trade and a reversion trade
42:42back towards what could possibly be a
42:43fair price. Again, it's a bias. And if
42:46I'm taking like a one to four
42:48risk-to-reward,
42:49>> then my bias only needs to be right
42:51about 20% of the time. And it should be
42:53pretty easy to have that bias especially
42:55on a prop firm. Then just pair that with
42:57optimal risk and you can be incredibly
42:59profitable.
43:00>> When it came to separating the accounts,
43:02you know, with uh different consistency
43:04rules for example, do you just find when
43:06it comes to say large trades like this
43:08example, would you just purely take
43:10those only on evaluations or funded
43:12accounts that don't have the
43:13consistency?
43:14>> Yes. or is there a world where you know
43:17even if it has a consistency you would
43:19just make sure that every trade is
43:20fitting the similar R. So in terms of
43:23this you know particular example one to
43:24four you would just have to keep hitting
43:26one to fours on that account so that
43:28consistency sorts itself out or would
43:29you purely just say make it easier for
43:31yourself by saying okay let's just take
43:33them on no consistency either.
43:36>> So I'll add some little space here to
43:37talk about this
43:39>> um with a 1 to four on a consistency
43:41account you should never do that. Mhm.
43:43>> The reason why is in order to pass, if
43:46it's 20% consistency, then you need 20
43:50RR. Basically, 20%* 4
43:53>> gives you 20 because it's five trades of
43:55four riskreward to be up 20.
43:57>> Mhm.
43:57>> Now, it is going to take you most likely
44:013 to 6 months in order to keep doing 1
44:04to four once a day. It is going to take
44:06about 3 to 6 months to get your 20 RR if
44:09you're doing minus 1R plus 4R once a
44:12day. And the reason for that is because
44:14of oscillation. So assuming you start
44:16here at zero and your goal is 20, we'll
44:18even assume you're a very profitable
44:19trader with this strategy. If you go up
44:21four, down one, up four, down one, it is
44:25not possible to continue that exact same
44:29profitability all the way up to 20. Mhm.
44:31>> Realistically, you're going to win four,
44:33lose 1 2 3, win four, lose 1 2 3, win
44:37four, lose four, win four. Like, you're
44:40going to have you're going to have a
44:41positive equity curve if your strategy
44:42is good. But it's going to take you
44:43absolutely forever to reach 20.
44:46>> That is another reason why I prioritize
44:48the lower risk-to-reward of like a one
44:50one or a 1.5 on the consistency
44:53accounts. It's because I'm much I'm
44:56getting to the goal much faster because
44:57the goal here if I'm doing one one is
44:59only to hit five R. And with a one to
45:01one I am still going to oscillate and
45:03it's going to take a little bit of time
45:05but significantly faster than getting
45:07all the way up to here.
45:08>> And your win rate naturally will
45:09probably be higher as well.
45:11>> Yeah, the win rate definitely is higher
45:12if the lower your profit target is.
45:14>> And the higher your win rate, the faster
45:16you're going to pass the valuations and
45:17get towards payouts.
45:19>> And what would you say in terms of uh
45:20the limitations that you face? Is there
45:23like you are at 1.5 million right now in
45:25under 18 months which is incredible but
45:28would you say there's like almost a cap
45:30when it comes to trading in this manner
45:32which might be around that sort of
45:33figure 1.5 maybe 2 million etc. Y
45:36>> um obviously there's more futures firms
45:38that are coming out every single day for
45:40better or worse.
45:41>> Y
45:41>> like what what is your mindset when it
45:43comes to saying okay
45:45>> these you know the top five or top 10
45:47firms I've already sort of you know
45:49maximized my return and sort of moved to
45:51live. So the opportunity cost might not
45:53be there anymore. That expected value
45:54might not be there anymore for the
45:56system,
45:57>> but now you have a lot more options that
45:59might be available.
46:01>> Yeah.
46:01>> You know, what does that look like for
46:02you when it comes to okay, making that
46:04decision of okay, maybe we have to go to
46:06some of these newer firms. How do you
46:09look at that? How do you sort of observe
46:10that and make your calculations
46:12accordingly? Or is it just a risk you
46:14have to take in terms of okay, yes, the
46:16rules might be similar, but then you're
46:17not sure about, you know, achieving
46:18certain payout amounts.
46:20>> Right. It is it is a little bit of both.
46:22I think the most important thing to do
46:24is understand how your expected value
46:26changes as you move to a live account.
46:28>> Every single pro firm in their help
46:29center will tell you exactly when they
46:30move you to live exactly what the rules
46:32are on live. So you could simulate that
46:34as well. Find out the expected value of
46:35that proper specific live account.
46:37>> Okay?
46:37>> As well as if you have five funded
46:39accounts with whatever balance,
46:40understand that when you go live,
46:42they're removed and they become the live
46:44account. So any profit that you had
46:45there is no longer your profit. Mhm.
46:47>> So what I do now is mostly optimize my
46:50approach around the live accounts. When
46:52I first started, it was only optimized
46:54for the funded accounts because like a
46:55year and a half ago, there was basically
46:57no risk of ever going live. But now
46:59everyone goes live on prop firms. As
47:00soon as you make a little bit of money,
47:01they're trying to move you live so that
47:03everyone can make money. And it's a good
47:05thing, but you need to be aware of how
47:06your expected value changes and then
47:08optimize that as well. Basically, the
47:10way I structure my approach to firms
47:11that move me to live is I want to only
47:14go live when it's going to make me
47:16money. So, I see the requirements for
47:18going live. I know if I go live with
47:19this firm, I'm getting a $15,000
47:21expected value account. So, what I'm
47:23going to do is I'm going to keep my SIM
47:24funded balance below $15,000.
47:27>> I'll I'll trade in between 13 and 14K.
47:30If I go over 15K, like I run it up to
47:3220K and I get moved live, then I lost 5K
47:34in expected value. So, I optimized for
47:36how I'm getting moved live and the
47:38expected value there. So, then my
47:40approach specifically will only make me
47:42money if I go live.
47:43>> Understood.
47:43>> There's also a bunch of different firms
47:44coming out like you said, and I
47:47definitely love trading with new firms.
47:48Um, new firms have very good payout
47:52policies because they're trying to
47:53compete and get into a very difficult
47:54market.
47:55>> If it's a new firm, they also have to
47:57pay you out or else the reputation's
47:58gone and then they can't grow. So, these
48:00new firms are actually kind of a little
48:02gold mine because they have really good
48:03rules and they have to pay you out or
48:05else their company's not going to make
48:06it.
48:06>> So, I like to get into these new little
48:08firms and I'll only trade one account at
48:09a time.
48:10>> Okay,
48:10>> I wouldn't grab five evals, get five
48:12fundeds, make $10,000 on all of them
48:15just in case, right? I'll start with
48:17one, I'll get the payout, reinvest that
48:19payout. Now, I'm going to run five
48:20funded accounts and go for max payouts.
48:22>> Understood. And in terms of the let's
48:24say breaking down the numbers that 1.5
48:25million, what's the sort of cost um to
48:28make that sort of amount so far for you?
48:30>> It's about 400,000.
48:32>> Really?
48:32>> Yeah.
48:32>> Okay.
48:33>> So, it is quite expensive, but I started
48:34with about $5,000. You
48:36>> started with 5,000. Y
48:38>> first month, I made $17,000.
48:40>> Second month I believe was another 20
48:42and then 40 and then 60 and then 80 and
48:43then 100. And it unfortunately is
48:46getting a little bit lower. So, I'm not
48:48able to stay above six figures every
48:49month. It's mostly like 100, then 75,
48:52then 60, then 100.
48:53>> Is that because of like sort of the
48:54changes in terms of moving to live,
48:56etc.?
48:56>> Yeah. Expected value is getting a little
48:58bit worse because prop firms are
49:00increasing their prices. Just just
49:01straight up. Um, but it's still very
49:03possible to make six figures a month,
49:04especially if you're new. If you're new
49:06to prop firms, they're not going to try
49:07and limit you and send you live until
49:09you've proven profitability.
49:10>> So, if you were to just come on to Prop
49:11FMS today, you could 100% hit a few six
49:14figure months in a row before eventually
49:15it would come down to about 50, 75, 100K
49:18a month.
49:19And would you say that obviously this is
49:22a an amazing opportunity you know and
49:24and you've achieved such a great success
49:27with the changes. Would you say that
49:29your mindset is to develop something for
49:33a live account and develop something
49:35that you would whether it's a live
49:36account on a firm or just your own
49:37personal live account now that you've
49:39achieved these figures for yourself and
49:40and have this return. Is that where your
49:43sort of mind goes next?
49:44>> Yeah 100% profits were an excellent way
49:46to build the bankroll. M
49:47>> um I do have a bunch of money in my
49:49funded accounts right now.
49:50>> So if I was to stop spending and only go
49:52for winning days and just withdraw all
49:53of that, I'd probably get about 250k
49:56back.
49:56>> Okay.
49:57>> So if I just totally stopped trading
49:58profarmms right now and just only did
50:00winning days, I could get about 250k
50:02back more. So then it's like 400k spent,
50:051.75 million in profit, which is a
50:07really good amount to start your own
50:08live account, obviously like seven
50:10figures. But my main goal right now is
50:12to get to a $5 million net worth and
50:14then open a hedge fund. So I want to
50:16trade strategies like this and capture
50:19inefficiencies in the market on a live
50:21account but with profit specific live
50:22accounts. You can take a similar
50:24approach where you're optimizing
50:25expected value. The reason for that is
50:27they're not traditional live accounts. A
50:28traditional live account is $10,000 in
50:30your balance. You grow it. Whatever your
50:32payout is, you can take it whenever just
50:33like it's a normal brokerage account.
50:35The proper specific live accounts still
50:37have a bunch of rules. Thankfully they
50:39do have bonuses but they have draw down
50:41limits.
50:42>> They have payout limits. They have
50:43payout splits. But the bonuses are the
50:45best part. So when I move to live, I
50:47will optimize for my chance to receive
50:49that bonus. A quick little example with
50:51Lucid or Tradeify. If you make $4,500
50:55on a 150K live, then you get a $4,500
50:58bonus, which is great because if you're
51:01essentially you start with zero and you
51:03have a $4,500 max loss, if you reach
51:05plus400, you get an extra $4,500 added
51:08to your account. So the expected value
51:11there is basically doubled because if
51:12you make 4.5k then you get a 4.5k bonus.
51:15So I will optimize for my chance of
51:17getting that bonus and the instant I hit
51:194.5K in the account I'm not going to
51:21trade it again just because I want to
51:23get to that bonus and I want to receive
51:24it. If I'm at 4.5K and I'm risking that
51:274.5K try and like double it again and
51:30get it to 9K. Most people think okay I'm
51:32trading with lot of capital. I want to
51:33grow it. But you need to wait until the
51:35bonus hits your account. And the reason
51:38for that is if you're at 4.5K worth of
51:41account and you have a 4.5K bonus that
51:43should be coming in in a few weeks once
51:45you qualify for it
51:46>> and you still risk that. You're actually
51:48risking 9K when 4500
51:50>> when your account only has 4,500 in it.
51:53So there's a few ways to optimize around
51:54the profit specific live accounts.
51:56That's mostly what I'm doing right now.
51:58But in the future definitely the goal is
52:01to run my own hedge fund.
52:02>> Understood. Would you say that a large
52:04part of this in terms of being able to
52:07be disciplined, stick to the mechanical
52:09edge is understanding what a mechanical
52:12edge actually means uh in terms of
52:14you've done the data, you know the
52:16numbers and that only by sticking to it
52:18and following that process will the
52:22again as you say you can't say
52:23guaranteed in trading but this is closer
52:27to a guarantee or at least a
52:30understanding you know how they say you
52:31know trade statistics understand your
52:33numbers. That's essentially what you're
52:35doing when you're trading mechanically
52:37>> and it may be a bit of a leap or change
52:40in mindset that a lot of traders
52:41probably have to do. Like, have you
52:43always traded this way or did you trade
52:44more discretionary before? I have always
52:47traded with the statistically optimal
52:50proper approach. The strategy has pretty
52:52much been the same for 16 months. When I
52:54first started out, I was kind of messing
52:56around with the strategy. Um, but the
52:58risk-to-reward, how much you risk per
53:00trade, what your profit target is per
53:01trade, that must be statistically
53:03optimal or you're not maximizing your
53:05potential on the prop firms.
53:07>> Understood. Well, now we're going to go
53:08over actual trade examples from the
53:10charts. Right. Let's take a break for a
53:12minute there, guys, cuz a quick word
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54:02back to the episode. All right, so there
54:05is no news this week. So I'm going to go
54:07over Tuesday, July 14th, and then
54:10Wednesday the 15th because those were
54:12the red folder days of last week.
54:14>> Mhm.
54:14>> This was CPI. This is 8:30 a.m. red
54:18folder news. Like I said earlier, it's
54:19priced in. So this right here is the
54:21price before news. Obviously, green
54:23candle means it started here and ended
54:24up there. So this is going to be the
54:26fair price going forward. Now in terms
54:29of the entry, of course, every entry is
54:31going to be short just back towards this
54:33fair price here.
54:34>> Now what I'll do is I'll wait for a
54:36displacement candle or a break of
54:37structure. Now we can analyze them one
54:40by one. First, this is not a
54:42displacement candle. Two qualifications
54:44needed. The body must be larger and it
54:46must close below the wick. This one only
54:48the body is larger. So no displacement
54:49here. Then we do get a break of
54:52structure right here. This is obviously
54:54structure because it is a wick lower
54:56than the two candles next to it.
54:57>> Okay.
54:58>> From there breakup structure and my
55:00target is going to be all the way back
55:02down here towards the fair price.
55:04>> When you say the the wick side of things
55:06>> is that with the understanding that on
55:08the lower time frame. Yeah. Because
55:09normally structure for people, you know,
55:11the if you will the conventional way or
55:14how people observe it is
55:15>> they observe it like lower lows, lower
55:17highs, etc., right? And then that being
55:18a break here below the previous low.
55:21>> So is it just taking the mindset of
55:23without having to go into the seconds
55:24etc. that that would in this essence be
55:27low lower high and then that broke.
55:29>> Yep.
55:30>> Uh and then obviously the next candle
55:31obviously trying to break and then it's
55:33broken through.
55:34>> Yeah, exactly. So, I'll just use these
55:36little intra intra candle structures
55:39like normally structure obviously stands
55:41out a lot more and the more it stands
55:43out the stronger it is.
55:44>> Gotcha.
55:45>> I just would use these because it's
55:47going to give me a pretty easy entry
55:48>> and it's just something I can
55:49mechanically say the instant it closes
55:51below this when I classify structure
55:53then I'm just going to short. Got
55:54>> there's no thinking is it going to go
55:55down? I don't know. I'm just going to
55:56enter. So having speed and having kind
56:00of a an aggressive approach is very
56:02good. And what would you need to do in
56:03terms of uh execution? Are you executing
56:06off a phone? You got to trade on Trading
56:08View. Like what's going to allow you to
56:09have that speed?
56:10>> I've just traded on this computer for uh
56:12all 18 months.
56:14>> Really?
56:14>> Yeah. I have a desktop. I have Trading
56:15View and Forex Factory open. And I have
56:17all my prop firms on this computer. Um
56:19I've just always done it. Didn't really
56:21want to switch away. Um but one
56:24important thing that I will add for the
56:25entries is you can look down here at the
56:27bottom right. You can see the clock.
56:28Right now it's 11:40 and then 50. As
56:30soon as this hits 51, then you're
56:33noticing like it's the next second. So,
56:34as soon as it's going to hit 60 and then
56:3661 or like the next minute, you know
56:38that the candle closed. So, I'm just
56:40watching the clock and then boom, next
56:42minute I check over here to see if it
56:44closed and then enter. So, it's like
56:45split second. Did it close below? Yes or
56:47no. So, just very easy aggressive entry
56:50style that I take.
56:51>> So, in terms of this one, stop loss goes
56:52above the structure. I guess
56:54>> there's actually a few different options
56:55for the stop loss.
56:56>> Okay. basically optimize for your take
56:59profit first.
57:00>> Okay,
57:00>> on a proper environment. So, I'm seeing
57:03170 167 points in my favor.
57:05>> Now, what I'm going to do is I'm look at
57:06my dashboard, which is just coded to
57:08tell me the optimal risk for all of my
57:10accounts, and it's going to say you need
57:12150 points on this one, 200 on this one,
57:14175 on this one. This is closest to 175.
57:17So, my profit target is just going to be
57:19175 points. After it hits fair price,
57:21it's essentially random.
57:22>> Okay? But in this case, it's close
57:24enough to my take profit where I don't
57:25really have a problem letting it run for
57:26an extra seven or eight points.
57:28>> Now, the stop loss on the other hand is
57:31going to be essentially random. It's
57:33going to be static, but again, optimized
57:35based on a prof. Because if my profit
57:38target down here is 175 and it's telling
57:41me to use one contract or whatever, so
57:43it's going to make me exactly 3,500 or
57:45whatever with one contract. Then the
57:47stop loss, if my account is telling me
57:49to risk 500, then it's going to be at
57:52that amount of points be at 25 points.
57:54if okay
57:55>> with one contract because my profit
57:57target is what I'm really optimizing for
57:58>> like it's just going to be 3,600 for the
58:01specific account based on the expected
58:03value of it
58:04>> okay
58:04>> then the stop loss is just going to be
58:06whatever the reciprocal of the take
58:08profit is basically um so it's going to
58:10be completely random I guess in a way
58:12where the takerit is more important
58:15>> that's interesting very interesting
58:17because obviously you know a lot of
58:18people will take the the opposite
58:20mindset with it sort of focusing on the
58:22stop loss
58:23>> and normally the conventional rule being
58:26you know an invalidation point right
58:27>> so this kind of goes against that in the
58:29sense that you're focused on the takerit
58:30and then optimizing that
58:33>> so which then will then dictate the stop
58:35loss accordingly uh for for the dollar
58:37amount
58:38>> right exactly because there's a bias my
58:40bias is all the way reverting down
58:41towards a fair price
58:42>> do you ever find though with that
58:44methodology that price could take you
58:46out then still the whole bias and
58:48everything still be intact
58:50>> 100% but thankfully I have 45 accounts
58:52I'm ready to enter again Okay. Okay.
58:54>> Every entry in the direction of my bias,
58:55win or lose. So, this would just be the
58:58first and kind of the only entry in
59:00terms of the reversion towards the
59:01pre-news price.
59:03>> But there's also a bunch of entries
59:04within this move down that I could layer
59:07in on more funded accounts or
59:09valuations.
59:10>> Here's a really good example. There's a
59:11bunch of structure here. 1 2 3 four
59:13wicks that have not broken this level.
59:15So, it's outstanding structure. And this
59:17candle, very strong breakup structure,
59:19obviously. And then this one here, it's
59:21giving me 94 points. Okay,
59:24>> with this trade. So, this one seems like
59:25it'd be fine to go for 100 because I
59:27have some that need 75, some that need
59:28100. Okay,
59:29>> usually it's like split up by 25 points.
59:31Just I guess that's how the the
59:33optimization turned out. But this one's
59:35going in for 100 and then the stop loss
59:37is going to be exactly whatever the
59:39account says. Um, the most common stop
59:41losses that I end up seeing from my
59:43optimization is 25 points.
59:44>> Yeah.
59:45>> 37.5, 50, and 75. So, a few different
59:49options, but again, you have to optimize
59:51it for your specific account. So, stop
59:53loss is just going to be what it's going
59:54to be. I don't really mind if I lose
59:56here.
59:56>> Mhm.
59:57>> It totally could have been possible. I
59:59had a 50 point stop. Totally could have
1:00:00been possible. I had a 25 point stop. I
1:00:02don't really remember and it doesn't
1:00:03really matter. Um, all that matters is I
1:00:04traded according to my bias.
1:00:06>> Okay.
1:00:07>> Then, as it continues farther down, up
1:00:10and down, up and down. Um, you have
1:00:12outstanding structure here, which gets
1:00:13wicked but not broken. So, I would not
1:00:15take a trade here. In terms of that
1:00:16trade, would that be on a different
1:00:18account?
1:00:18>> This one?
1:00:19>> So, the first trade?
1:00:19>> Yeah.
1:00:20>> Okay.
1:00:20>> Yep. So, every trade is on a different
1:00:22account. They're all getting layered in
1:00:23short because I want to capitalize on
1:00:24the bias.
1:00:25>> How do you have to put a system in place
1:00:27for you to manage, you know, to make
1:00:28sure that you don't accidentally, you
1:00:30know, put a second trade on the same
1:00:32account?
1:00:32>> Yep. So, I use trade of eight.
1:00:34>> Okay.
1:00:35>> Because I'm able to open literally 10
1:00:37trade of eight tabs.
1:00:38>> Okay.
1:00:38>> And I just start on one prop firm, start
1:00:40sending them all short, go to the next
1:00:41one, sending more short as long as the
1:00:43bias is short, obviously. But another
1:00:46thing you can do is take evaluations. So
1:00:50as these two funded trades are still
1:00:51running short, you can take an
1:00:53evaluation trade here. And the reason
1:00:56for that is it's still a break of
1:00:57structure. So it's a strong entry.
1:00:58>> Yeah.
1:00:59>> But if I felt I had too much exposure to
1:01:02this trade where I had like a funded
1:01:04account.
1:01:04>> Exactly. I'd already seen a very nice
1:01:07reversion for 100 or so points. I might
1:01:09think I don't really want to short the
1:01:11bottom on more funded accounts because I
1:01:13am getting a bias. I'm getting an edge,
1:01:15but this one is way more of an edge
1:01:17because I've entered way higher. So,
1:01:18more points in my favor. So, maybe I'm
1:01:20getting a little concerned. I have too
1:01:21many funded short right now. It's a
1:01:23little bit too much exposure. So, I'm
1:01:24going to send evals in. And evaluations,
1:01:27like I said earlier, it's going to be
1:01:2838.25.
1:01:30So pretty much at least half of my
1:01:33trades would be 38.25.
1:01:34>> Interesting.
1:01:35>> And the other half obviously would be
1:01:36the funded accounts going as close to
1:01:38fair price as the risk on the account
1:01:39says. So this one would be 38 points for
1:01:42evaluation. It loses but whatever.
1:01:45>> Then here comes 930. Now this is a
1:01:48really important one.
1:01:48>> But does it lose or does it
1:01:51>> I guess that one won.
1:01:52>> It ends up taking profit and then
1:01:53>> Yeah, I didn't even notice. I guess that
1:01:55one won.
1:01:55>> Mhm.
1:01:56>> But here comes 9:30 which is very
1:01:58important. Now, if you mark this out and
1:02:01say this is my fair price cuz it's 930,
1:02:04unfortunately, you're going to be wrong.
1:02:06And the reason for this is because when
1:02:09the market opened, the volume came in
1:02:11and it's going to move to a fair price,
1:02:13which is the pre-news price.
1:02:15>> So, it instantly comes down and taps the
1:02:16pre-news price. If for some reason it
1:02:19opened up in like maybe like a
1:02:21continuation of the news, if the news
1:02:23was so green, like more green than the
1:02:25the forecast,
1:02:26>> Yeah. then the open would be fair. So if
1:02:28it continued up, I'd only revert to the
1:02:30open instead of the pre-news. But
1:02:32>> okay,
1:02:33>> when trading news, the news price is
1:02:35stronger than the open, especially when
1:02:37it opens and comes right back down to it
1:02:39because there's an influx of volume here
1:02:40and it's able to get towards that fair
1:02:42price. From here, I would delete this
1:02:44one. No longer look at the open at all.
1:02:47I'd only look to trade to the pre-news
1:02:49price. Now, in terms of the entries,
1:02:52you're not going to get much unfunded
1:02:54here just because it's really close to
1:02:55it. Yep. So, the only thing you can
1:02:57really do is take displacement candle
1:02:59entries towards the fair price. I don't
1:03:02have any funded accounts that need 33
1:03:04points. Mostly it's going to be larger.
1:03:06Sometimes I do, maybe 25 points, but
1:03:08this looks like a great example of an
1:03:10evaluation trade. It's giving 38 points
1:03:12or so in your favor. So, it seems pretty
1:03:14strong for a 3825 eval trade. After
1:03:17that, I would continue to revert towards
1:03:20this price here. There's nothing that
1:03:22has convinced me that fair price is
1:03:23anywhere else. Mhm.
1:03:24>> I would need a huge volume spike in one
1:03:28direction. Like if there's there's a
1:03:29good amount of consolidation here and
1:03:30consolidation is usually what I confirm
1:03:32to be a fair price.
1:03:33>> So would you say that consolidation
1:03:35almost might even be the fact that you
1:03:37had your 930 price and then you had your
1:03:39news price and we sort of just trapped
1:03:40in between
1:03:41>> 100%. So what I'm going to do is just
1:03:44I'm going to stick to my bias.
1:03:45>> Yeah.
1:03:46>> As strongly as possible trade towards my
1:03:48bias of the previous news price down
1:03:50here. But if it broke structure up, see
1:03:52there's like 1 2 3 4 5 6 7 8 9 10 wicks
1:03:55or whatever. It's just not breaking back
1:03:57up. If it broke structure up, then I
1:03:59would adjust there price to right here,
1:04:00which is the most recent consolidation.
1:04:03>> But it breaks down right here. Breaks
1:04:05this structure. Another nice Eval trade
1:04:07for 38 points back towards the pre-muse
1:04:10price. There's also a few other entries
1:04:12in here. This seems like another good
1:04:14one. I believe I took just these three
1:04:16entries on this day, but it's only 10:00
1:04:19a.m. and I've already won a bunch
1:04:21shorting back to the pre-news price, but
1:04:23the pre-news price is still fair. So,
1:04:26I'm going to trade back towards it from
1:04:27the other side. I'm just trying to get
1:04:29through as many accounts as I can every
1:04:31single day.
1:04:32>> Now, this is not an entry. None of these
1:04:35are displacement candles,
1:04:36>> okay?
1:04:37>> Because none of them are closing above
1:04:39the wick. Even if it did close above the
1:04:41wick, I wouldn't take it cuz it would
1:04:42already be back at the price. Yes, this
1:04:44one is a displacement candle, though.
1:04:47This one's not because it didn't close
1:04:49above the wick, but this one clearly
1:04:50closes above all three of these wicks
1:04:52and the body is much larger. So, another
1:04:54nice trade. This one's giving 65 points.
1:04:56So, it could be possibility take it
1:04:57unfunded for 50 points if I have a
1:04:58funded that needs 50, maybe 75. Um, I
1:05:01tend to go lower if it's like in the
1:05:03middle of two.
1:05:04>> Yeah,
1:05:04>> because as soon as it gets back towards
1:05:06this fair price right here, it's
1:05:08essentially random.
1:05:09>> So, I don't really want to be exposed to
1:05:10that. So 50 would probably be a little
1:05:11bit better than a 75 point target in
1:05:13this example, but nonetheless very good
1:05:15for an evaluation giving 3825.
1:05:18>> Do you ever take both on an evaluation
1:05:21and a funded or do you you know hard
1:05:24rule one account per trade?
1:05:27>> I try and do one account at a time.
1:05:28Sometimes I will copy trade like in this
1:05:31first trade I would copy trade that just
1:05:33because it's such a strong setup. It's
1:05:35the breakout structure which is the
1:05:36stronger of the two and it's right after
1:05:38news.
1:05:39>> Yeah. such it's almost the peak high.
1:05:41>> Yeah, it just it stopped going up. It
1:05:43broke structure down. So, I'm really
1:05:45excited to revert that to the pre-news
1:05:47price.
1:05:47>> Another thing an optimization that
1:05:49people could do here's probably a good
1:05:51example of it actually is using some
1:05:55sort of an ATR and that would be for
1:05:57your your stop-loss perspective, but of
1:05:59course keeping it static. So if I'm
1:06:02doing 25 and 38 with one contract of NQ
1:06:08features, this is -500 plus 760.
1:06:12>> Mhm.
1:06:13>> If I wanted to keep the same static,
1:06:15which you should do on the Eval, always
1:06:17do the same static, whatever works best
1:06:18for your strategy, then you can if if
1:06:23for some reason I was going to enter
1:06:24here. It's just a nice displacement
1:06:25candle. So this is kind of an entry that
1:06:27I'd see. This one's giving me 76 points
1:06:29in my favor. Yeah,
1:06:31>> if you double this and double this,
1:06:34>> now you have a 50 point stop loss
1:06:37and a 76 point take profit. But what you
1:06:39should do is you cut your contract in
1:06:40half.
1:06:41>> So instead of using one contract, now
1:06:42you're using five micros.
1:06:44>> Yeah.
1:06:44>> And it's going to be the same.
1:06:45>> The dollar amounts remain.
1:06:46>> Exactly.
1:06:47>> The same dollar amount is the most
1:06:48important thing to do on prop firms
1:06:50because it's optimal.
1:06:51>> Mhm.
1:06:51>> So this is a slight little optimization
1:06:53people could do. Obviously a little
1:06:55discretionary, but the reason why I like
1:06:57doing trades like this sometimes is I
1:06:59can take this entry here and then I see
1:07:01there's structure here. So if it breaks
1:07:03structure here, I could layer in another
1:07:05trade. Just get in here off this break
1:07:07of structure. This one's giving 60
1:07:08points. So I'd probably just go for 38
1:07:10here. So now I'm in two evaluation
1:07:12trades short. A little bit of different
1:07:14entries, but the same bias, different
1:07:16risk exposure because one stop loss all
1:07:18the way up here. The other is pretty
1:07:20close. So
1:07:21>> interesting. A little bit of
1:07:22optimization can allow you to get more
1:07:24accounts in.
1:07:25>> I used to do that, but now that I have
1:07:27so many accounts,
1:07:28>> that little 1% optimization that I can
1:07:30find in a few different places isn't
1:07:32really worth it.
1:07:33>> All I want to do is 3825 and get through
1:07:35as many accounts as I physically can.
1:07:37So, I get through one here, it breaks
1:07:39structure again, displaces here, I'd get
1:07:41another one in there. I'd get as many
1:07:43accounts as possible in the direction of
1:07:45my bias. And like I said earlier, the
1:07:48only time where you would try to do a
1:07:50different one of the actual 76, like
1:07:53when you should actually do 76 instead
1:07:54of 25 or when I'll do it is on the
1:07:57opening candle when it's more than 25
1:07:58points. This opening candle is 43
1:08:00points. And I guess we didn't even go
1:08:02over this continuation, but it is a
1:08:04continuation. The opening candle was red
1:08:06and we even thought the fair price was
1:08:08down here. So it's kind of a
1:08:09continuation and reversion in one, which
1:08:10makes a really strong trade. Probably
1:08:12one that I'd take on funded. Usually
1:08:14evaluations are continuations are only
1:08:16for evaluations,
1:08:18but I'd kind of classify this as both
1:08:20because the fair price is down here. So,
1:08:21it's kind of a reversion in itself.
1:08:25Then it seems to have hit 11:00 a.m.
1:08:28right here. There's no entries to take
1:08:31on this move up because there's no
1:08:32displacement candles, but that was the
1:08:34CPI day last week. Very strong reversion
1:08:37multiple times. Even went farther down,
1:08:39reverted, went back up, reverted. So,
1:08:41really nice day there. Now I'll go to
1:08:44Wednesday for PPI. All right, here is
1:08:47PPI. So like I said with CPI, you can
1:08:51take continuations of the news if you're
1:08:52getting in here. I don't really like to
1:08:54do it. It's
1:08:55>> sort of an aggressive tactic to pass
1:08:56evaluations quickly. Um but I sort of
1:08:59stay away from that mostly. Now all I'm
1:09:02going to do is try to revert towards the
1:09:04pre-news price and again stop after
1:09:06three losses. So let's look through to
1:09:08see what sort of entries there are. This
1:09:10one is not a displacement because it
1:09:12didn't close below the wick. Yeah, same
1:09:13with this. Same with this. But then we
1:09:14get a break of structure.
1:09:16>> This one would be my first entry short.
1:09:18Stop loss seems like it'd be about 25
1:09:21just because there's not too many points
1:09:22in your favor. But probably something
1:09:24like 50 point take profit, 25 stop loss.
1:09:27After that though, there is no
1:09:29displacement here. The reason for that
1:09:31is a displacement also has to displace a
1:09:33candle of the opposite color.
1:09:35>> Okay?
1:09:35>> You can't really displace a red candle
1:09:37because it's still going down. And
1:09:39unfortunately, nothing displaces this
1:09:40candle because the bottom's all the way
1:09:41down here.
1:09:42>> So, no entry there. Same. No
1:09:44displacement here. It didn't close below
1:09:45the wick. Same here. Then we get the
1:09:47first displacement right there.
1:09:48>> Yep.
1:09:50>> That seems like a pretty strong entry.
1:09:52The stop loss is what it's going to be.
1:09:54I don't really do less than 25 points. I
1:09:56don't think ever in the New York
1:09:58session. Actually, I guess I could say
1:10:00never. Never. Never less than 25 points
1:10:02in the New York session. And then 104
1:10:04points in my favor. seems pretty strong
1:10:05to send for about 100 points if I have a
1:10:08specific account that needs that. Uh
1:10:10this was a displacement entry which is
1:10:12fine to take on funded but it is a bit
1:10:13weaker. So ideally you would wait for
1:10:15this entry here which is just a break of
1:10:17structure
1:10:18>> right there. Structure gets broken
1:10:19pretty much same trade all the way back
1:10:21down towards the pre-news price with the
1:10:25market open though didn't really give
1:10:27the best entries this day. It kind of
1:10:29chopped around wicks every single
1:10:31direction. No real displacement to the
1:10:33downside until this candle here.
1:10:35>> Yeah,
1:10:35>> first displacement candle down.
1:10:37Definitely just going to short back
1:10:38towards the pre-news price. Um,
1:10:41unfortunately, I lost this one. I was
1:10:43going for 3825 and then barely stopped
1:10:45me out before unfortunately going to
1:10:47take profit in one candle. So, couldn't
1:10:48even re-enter really.
1:10:50>> Uh, I try not to enter midcand. I'll
1:10:52wait until the close. It's just
1:10:54>> more confirmation. Um, after that
1:10:56though, it does drop even further down.
1:10:58So, um I will trade back towards this
1:11:00price here instead of trading back
1:11:02towards the open just like the previous
1:11:04day. I'm only trading back towards the
1:11:06pre-news price because when it opened,
1:11:07it came down to the pre-news price. On
1:11:10non-news days, the open is going to be
1:11:12fair most of the time, like 95% of the
1:11:13time. But just on these news days, which
1:11:16news reversions are the strongest of the
1:11:18trades, that's why I'm showing them. Um
1:11:20this pre-news price is going to be fair.
1:11:22Now, definitely could just buy all the
1:11:24way back up towards it. So, in terms of
1:11:26the entries, pretty much same thing as
1:11:28the other. There's a nice displacement
1:11:29candle. Same thing with a takerit, I'd
1:11:32probably go for about 75 if I have an
1:11:34account that needs that. And the stop
1:11:35loss, honestly, just is what it is based
1:11:37on the account optimization. Could be 37
1:11:39and a half, could be 50, could be 25.
1:11:41Um, I don't really care what the the
1:11:42price action is doing in terms of stop
1:11:43loss. I'm just trying to enter as many
1:11:45positions in my favor as possible. That
1:11:47one loses, but then you get a nice break
1:11:48of structure. So, this one is the
1:11:50stronger entry and this is the one that
1:11:52ended up winning. Um, interesting thing
1:11:54here, about 76 points. So, you can do
1:11:56those five micros and do a 50 point
1:11:59stop, which gets it below that low.
1:12:01Probably more likely to win just because
1:12:03uh the stop loss is much larger. So,
1:12:04you're able to realize more of your
1:12:05bias.
1:12:06>> Mhm.
1:12:06>> But again, 76 points in your favor. And
1:12:09as this one's going up, I could layer in
1:12:11more evaluations on its way up through
1:12:14more displacement or breakup structure.
1:12:15So, this one would go for 38 or
1:12:17something like that with a 25 point stop
1:12:20loss.
1:12:21After that though, uh, it dumps all the
1:12:24way down here for whatever reason. I
1:12:26bought here off displacement trying to
1:12:28get it all the way back up to the
1:12:29previous price, but lost for the first
1:12:31time. Then this is not displacement
1:12:33because it's not displacing the red
1:12:34candle. Then entered here off breakup
1:12:37structure. Eventually lost this one as
1:12:39well. Uh, and then I was done for the
1:12:40day because it hit 11 a.m. right here.
1:12:42So unfortunately, two losses to end off
1:12:44the session, but pretty good reversion
1:12:46here. And then of course, very good
1:12:48reversion of the news. So again, just
1:12:50getting the bias in.
1:12:52>> Even though you're trading mechanically,
1:12:54do you find yourself just being human at
1:12:57times? Like let's say this session in
1:12:59particular, had some wins, had a few uh
1:13:01losses, finished with losses. Do you
1:13:04ever find yourself frustrated or or
1:13:06feeling heightened in any way? Or do you
1:13:09are you you at this point is it become
1:13:11more of a a part of the process and you
1:13:14just kind continue to move on? Yeah, at
1:13:15this point it's honestly just part of
1:13:16the process. But when I first started,
1:13:18it was definitely getting at me more and
1:13:20more if I was losing. The good thing
1:13:21about trading this many accounts and
1:13:23taking one trade at a time, all with a
1:13:25bias, is on average, you're going to be
1:13:27making money. Basically, the reason why
1:13:29a bias is so good on prop firms is
1:13:31because you're utilizing the whole loss
1:13:33limit. Even if you only risk a fourth or
1:13:35a half, if you do it across multiple
1:13:37accounts through a bunch of different
1:13:38entries like here, here, here, and here,
1:13:40then you're essentially getting exposure
1:13:42to the entire max loss that they give
1:13:43you. So with a bias, more often than
1:13:46not, combining up all the money across
1:13:48all of your accounts, the end of the
1:13:49day, you're going to be up.
1:13:50>> Plus, you're only risking the valuation
1:13:51fees. So your bank account is really
1:13:53going to be up as soon as you get the
1:13:54payout. So sort of just looking forward
1:13:56towards those payouts and understanding
1:13:58losses are 100% part of the game and
1:14:00nothing you can do to avoid them. But
1:14:02the numbers lie in your favor as long as
1:14:04you have an optimal approach.
1:14:05>> And would you say, is there a bare
1:14:07minimum that you would think is best in
1:14:09terms of starting this approach? as you
1:14:11said like you started with $5,000 you
1:14:12said like is that optimum or is there a
1:14:15particular number that you think hey if
1:14:16you don't have this this is probably not
1:14:18the right approach until you do
1:14:20>> yeah um I was definitely thankful to
1:14:21start with 5k I just made my money
1:14:23playing poker at the casino so I was
1:14:26very thankful to have a a larger
1:14:27bankroll that means my ruin was very
1:14:29small um but if you're taking an
1:14:32approach like this where it is a little
1:14:34bit high risk high reward that's kind of
1:14:35the only way to make money on props low
1:14:37risk low reward is not going to get you
1:14:38anywhere you have to utilize the prof
1:14:40capital that they're giving you.
1:14:41>> Um, so in my opinion, high risk, high
1:14:43reward is the way to go. But
1:14:44>> you need to calculate your risk of ruin
1:14:46and you want it to be below 5%. Ideally,
1:14:48it's below 5%, but obviously you need a
1:14:50larger bankroll. Um, but the way you can
1:14:53calculate your risk of ruin is take your
1:14:55pass rate, maybe it's like 33% or 30%.
1:14:59Take your payout rate, meaning your
1:15:01chance of getting a payout on the funded
1:15:02account. Multiply these two together and
1:15:05then you'll know, okay, so if I buy an
1:15:07evout, I have a 0.09% 09% chance of
1:15:09getting a payout, which means if I buy
1:15:11an Eval, I have a 91% chance of getting
1:15:13nothing. But remember, even with these
1:15:16rates, it lies in your favor because
1:15:18you're spending $100 and then nine times
1:15:21out of 10, you lose $100. So you lose
1:15:23900, but that time you win and you do
1:15:25get that payout, it's likely going to be
1:15:27about $2,000 or more,
1:15:29>> okay?
1:15:29>> Because you still have expected value in
1:15:30your account after taking a payout. So
1:15:32net, you're making a bunch of money, but
1:15:34per EVA, it's a 91% chance to make
1:15:36nothing. So basically do 0.91 to the
1:15:40power of 10. If you have $1,000 in your
1:15:43bank account, that will get you 10
1:15:44evaluations. So that would be your
1:15:46chance of losing everything.
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1:17:02your monthly subscription. Let's get
1:17:04back to the episode.
1:17:05>> What is up, chart fanatics? Coming to
1:17:07you live with some live market trading
1:17:09after we finished up that whiteboard
1:17:10session. Excited to get into it. I am
1:17:12trading on Tuesday, August 25th. So,
1:17:16let's see what we can do today. Here we
1:17:18have the chart. Haven't had any
1:17:20positions yet on my funded accounts.
1:17:22There was one continuation just off the
1:17:24second candle from open, which is a
1:17:26pretty nice win, but I'm only here to
1:17:28show you funded accounts, which is the
1:17:30most important part. So, still waiting
1:17:31on a funded setup. Market has barely
1:17:33moved. It's just been reverting uh
1:17:35around fair price split as I'm recording
1:17:37this. We are getting a nice move up. So,
1:17:39we'll be looking for funded account
1:17:41shorts back down towards what I think to
1:17:43be fair. So, definitely excited for
1:17:45that. The reason why I think this blue
1:17:47line here is fair is this is the chunk
1:17:49of consolidation right before the market
1:17:51open. Now, I know market opened down
1:17:53here. But when it opened, it went
1:17:55straight up to this consolidation and
1:17:58then even farther beyond. So, open not
1:18:01likely to be fair. most likely this
1:18:02consolidation here. So I am going to be
1:18:05looking for a short reversion back to
1:18:08this consolidation fair price.
1:18:17All right, in the first position just
1:18:19wanted to get in a little bit early. Uh
1:18:21we had a nice wick rejecting longs. Um
1:18:23basically it broke structure long but it
1:18:25did not continue farther up. Uh, so
1:18:28we'll just be looking for shorts back
1:18:29down to the open right now. Bit of an
1:18:32early entry, but ideally this account
1:18:34would be winning 3,000. Unfortunately,
1:18:36it is a little bit too close to the
1:18:37open, so I have to get in early to get
1:18:39as close to my $3,000 target as
1:18:41possible. So, it's looking like 2520 as
1:18:44the profit target on this trade.
1:18:49Of course, would be fine to let it run
1:18:51for 3,000.
1:18:55Actually, I'll just be letting it run
1:18:56for 3,210.
1:19:00Just checked my dashboard and 3210 is
1:19:02the exact profit target that this
1:19:03account wants to win and it's got at
1:19:06least 80% of that in its uh pursuit down
1:19:09towards what I think to be fair. So,
1:19:10that should be fine. Basically, what I
1:19:11mean is like if I want to target 100
1:19:13point win, then I need at least 80
1:19:15points in my favor to take that trade.
1:19:16If I only have like 40 points to fair
1:19:18price, there's no way I should let a
1:19:19trade run for 100. 80% 75 if I'm getting
1:19:22a little bit greedy is sort of the mark
1:19:24that I continuously go off of. So we are
1:19:27in shorts. Just going to hold it all the
1:19:29way down for 3210 because that's what my
1:19:31account needs to win. All right, I will
1:19:33be entering on a second account here
1:19:37just because we're getting more
1:19:38confirmation. Another wick rejecting
1:19:40longs and looks like it's about to
1:19:42displace this green candle. Uh it's a
1:19:44little bit 50/50 but strong enough for
1:19:47me to be taking another position.
1:19:50I guess I guess this one's bugged, but
1:19:53still just taking shorts. Um, this
1:19:56account has a different target.
1:19:58Let me check. This one needs 1500. So,
1:20:02we'll be letting this one run for 1505.
1:20:06Not sure why this is saying that here,
1:20:07but I guess you can see the profit down
1:20:09here.
1:20:11All right. So, just hit profit target on
1:20:13the $1,500 funded trade. And then let's
1:20:15see about the 3200 if I can get it.
1:20:18There we go. So, two funed trades in
1:20:21first reversion of the day. Perfect
1:20:23setup so far. Now, I'm just going to
1:20:25chill a little bit. Needed to move away
1:20:26from fair price so I can take another
1:20:28reversion. Um, but that is two accounts
1:20:32down and got a few more to do. Also, the
1:20:34one that won 1500, I will be trading it
1:20:36again. Uh, 1500 was just the first
1:20:39profit target of that account uh for
1:20:41today. The reason why is if I go back to
1:20:44it, you see the trade was pretty much
1:20:46from here to here. Uh, like I said, I
1:20:48like to have 80%. Technically, it needs
1:20:50a larger profit target on the day. Uh,
1:20:52just according to my dashboard, which is
1:20:54which is optimized for that. It needs a
1:20:55larger profit target on the day, but I
1:20:58couldn't send it for like a 100 points
1:20:59all the way short because as soon as
1:21:01price gets below fair price, its bias is
1:21:04going to be back towards it. And I don't
1:21:06want to be trading away from the bias
1:21:07for too long. I'll let it go for like,
1:21:09like I said, about 80%. Um, so this blue
1:21:11line here would be 80% if my full take
1:21:14profit is 100% if that makes sense. That
1:21:16is the most that I'll be willing to or
1:21:18the least I'll be get willing to give
1:21:19away. Um so very nice trades there.
1:21:22Layered in this one here just because
1:21:23there was a wick that failed to break uh
1:21:26failed to displace long basically. Um
1:21:29obviously you can have two short
1:21:31confluences, you can have actual
1:21:32displacements and you can have failures
1:21:34to go long. The reason why it's not like
1:21:36too technical is because it's a bias. Um
1:21:38and with a bias the entry doesn't matter
1:21:39as much. Anyways, just gonna wait for
1:21:41another move away and then I'll be
1:21:42looking for more reversions on this
1:21:45account number three that I had just
1:21:47taken the win on. Account number one,
1:21:49which I took a continuation win on and I
1:21:51forgot to record. Sorry about that. Uh,
1:21:54account number two,
1:21:56which we took the big win on. I'm done
1:21:57for today. And then account number four.
1:21:59So, four fund is coming in today. We're
1:22:00going to work on all of them. See if we
1:22:02can get them all up into a good amount
1:22:04of profit, but definitely need to wait
1:22:06for a move away. All right, I'm looking
1:22:08for longs back to the open. We just had
1:22:11a huge wick rejecting shorts failing to
1:22:12break structure. Now I just need a green
1:22:14candle to print and that will be enough
1:22:16for me to get in. It is pretty close. So
1:22:20not going to have too large of a profit
1:22:22target, but oh thankfully it's going to
1:22:24drop down farther. So we'll get another
1:22:26opportunity here once it moves away a
1:22:30little bit farther. So we have a larger
1:22:31profit target on our funded, which is
1:22:32always more fun.
1:22:35But it did technically just break
1:22:36structure short. So, I think it might be
1:22:38a little while until we see our long
1:22:40position opportunity.
1:22:44I would not be taking this green candle
1:22:46even though it is a little bit looking
1:22:47like a displacement just because it did
1:22:49break structure short, which is the
1:22:51opposite of what I want to see if I want
1:22:53to go long. All right, I'll be taking
1:22:56another position long right now. Huge
1:23:00wick rejecting shorts
1:23:02as you can probably tell. Uh anyways,
1:23:05we'll just be trading this one back up
1:23:06to the open. First one unfortunately
1:23:08lost because of whatever the hell that
1:23:09is.
1:23:11This one then is going to go for a
1:23:12little bit more profit because obviously
1:23:14we just lost some money. But second
1:23:16attempt, final attempt for the day most
1:23:18likely because if I lose then it will be
1:23:20essentially breaking structure short and
1:23:22then it's just going to drift um likely
1:23:24all the way back down towards 6 p.m. So
1:23:25I will just be done. Um but good start
1:23:29to the day. Hopefully we get a nice end
1:23:31to the day right now with this trade.
1:23:32All right, just broke structure short
1:23:34and stopped me out. That is it for
1:23:37today. So, quick little summary. We had
1:23:39continuation long on open, which I
1:23:41forgot to record. Uh, this one won me
1:23:431,200. Then first attempt at reversion,
1:23:46wick rejecting longs, half a
1:23:48displacement candle was enough for me to
1:23:49get in onfunded. This one was 3,200.
1:23:53Then another wick rejecting longs. I
1:23:55think I got in on this candle. Something
1:23:57like this for another trade for 1,500.
1:24:00And then unfortunately bad way to end
1:24:02it, but that's just how it goes. Two
1:24:04more attempts at longs. First one off
1:24:06double displacement. Uh this one also
1:24:08tried to be off double displacement. Got
1:24:09in a little early. Uh if I didn't get in
1:24:11here, I would have gotten in here and
1:24:12then lost anyway. So it's fine. Just
1:24:14trying to revert to the open, but it is
1:24:15not going to be reverting today. Um two
1:24:18losses is fine because it's minus 2Kish.
1:24:21I think the account lost at 2K. I don't
1:24:23know why it's so low, but minus 2K plus
1:24:275.7 or something like that. So net up on
1:24:30the day. Also good when I lose a funded
1:24:32because I only lost the evals that it
1:24:34cost me to get there. Uh so kind of only
1:24:36lost like three or 400 bucks here
1:24:38because the eval um got like 33% pass
1:24:41rate. So pretty cheap to take these
1:24:44losses which is why I'm just so
1:24:45aggressive with them as long as you're
1:24:47getting amount of points in your favor
1:24:49that you need. And these ones are all
1:24:52going to be realized in payouts pretty
1:24:55soon. I just need to get a few more
1:24:57winning days, but the expected value is
1:24:58there. So, pretty strong day today. Few
1:25:01wins, few losses, but
1:25:03I'll take it. So, we'll be on to the
1:25:06next day. What is up, chart fanatics?
1:25:07This is day two of live trading. Today,
1:25:10you can see on my accounts, I have three
1:25:12new funded accounts to trade with Blue
1:25:15Sky. They're on the buffer phase, so
1:25:16basically funded accounts. And then over
1:25:18here, FXI, I have two funded accounts to
1:25:21trade. I've got different size accounts,
1:25:23150ks here and some 50ks here. I'm going
1:25:25to be looking for $1,000 profit on these
1:25:27three to end the day. And then these two
1:25:29is going to be $6,000. So obviously very
1:25:32large difference in that optimal profit
1:25:35target for these different accounts. So
1:25:38we'll see how we can get through those.
1:25:39The continuation I'm going to be taking
1:25:41on blue sky accounts.
1:25:45Got a nice 25 point trade here. If I use
1:25:48two contracts, it'll make me thousands.
1:25:50Just going to wait for the close of the
1:25:52candle just to confirm it does actually
1:25:54break structure and then uh we'll be in
1:25:56for 25 point take profit.
1:26:01Um I definitely need to wait for the
1:26:02close of the candle.
1:26:08All right, in continuation shorts. Bit
1:26:10of a bad fill, but nothing you can
1:26:12really do about it. Obviously lots of
1:26:14volume at the market open. Um barely
1:26:18broke structure, but nonetheless it
1:26:19counts. It broke this and it broke this.
1:26:21So was going for a 25point profit
1:26:23target.
1:26:25Uh we'll see how this one plays out, but
1:26:28feels like a pretty standard trade. The
1:26:29opening candle wasn't too biased. There
1:26:31were pretty large wicks on both sides,
1:26:32but uh opening 1 second was red. Higher
1:26:35time frame bias. The short opening
1:26:37candle was red. Brookke structure. Um a
1:26:40little bit weak displacement. Okay,
1:26:41TP.edge, but I don't care. A little bit
1:26:43of a weak displacement, but no way. I'm
1:26:46not taking this, right? Uh, so we'll let
1:26:49this one play out.
1:26:54All right, there's take profits.
1:27:00We'll be entering another one
1:27:03soon as this candle displaces. I can
1:27:04just use a limit actually.
1:27:07Just looking for it to go below the
1:27:09previous close
1:27:11and I'll just take another continuation
1:27:13short.
1:27:14Um, I usually limit my continuations to
1:27:16the first five minutes.
1:27:20So, uh, we'll let this one play. Um,
1:27:23there is no real displacement for it to
1:27:26revert. So, um, I'm basically short
1:27:29biased until proven otherwise with
1:27:31displacement or breakup structure long,
1:27:33in which case then I would flip and then
1:27:35start going long
1:27:41and uh, just these short account
1:27:43positions. No, no huge account positions
1:27:45yet.
1:27:51If we get two green candles, it's enough
1:27:53for me to classify as displacement. So,
1:27:55I would start looking for longs. It is
1:27:57kind of hard obviously to displace this
1:27:59one huge red candle. But, if we get two
1:28:02green ones in a row, it's a little bit
1:28:03more confirmation, but of course, still
1:28:05holding shorts. Uh, risking about a one
1:28:07because if this candle were to turn
1:28:10green, then it would be above this one,
1:28:11which is why my stop is above that one.
1:28:13Uh stop losses don't really matter on
1:28:14prop firms. It's all the same EV. The
1:28:17profitari is where the EV is generated
1:28:19or lost. So um that's why I care a lot
1:28:21more about those specifically.
1:28:24We'll see what happens with this trade
1:28:25though. It might be a longer one. Uh the
1:28:27initial volume seems to have died out a
1:28:29little bit. First trade was great though
1:28:31just as usual continuation. So if this
1:28:33one loses then I will be entering on
1:28:37account number 567 which is my long
1:28:40biased account. But of course, we'll
1:28:43hold. We'll wait. See what ends up
1:28:45happening with this one.
1:28:49Seems to have hit its short resistance.
1:28:51Okay. So, I'm longing now. It is
1:28:53midcand. So, bit of an aggressive entry
1:28:55as well, but
1:28:57uh clearly shorts are getting rejected
1:28:59by this huge red candle. Um so, I'm long
1:29:01biased back up towards the open. Got a
1:29:03nice two contract trade for about or
1:29:05exactly 25 points.
1:29:08Um because the open is here. Possible
1:29:10fair price.
1:29:12There's a few. Obviously, the bias is
1:29:14long, so that's why I'm in longs. Um,
1:29:17for now, I'm just thinking it's near the
1:29:18open. Possibility it's all the way up
1:29:20here, but lots of consolidation at this
1:29:23level throughout the night. Would
1:29:24definitely be interesting to consider.
1:29:26Uh, it's also where Asian session
1:29:28opened. I am on PSD right now, which is
1:29:30why you see the PST times,
1:29:34but
1:29:36yeah, just going to hold longs for now.
1:29:37back to the open and
1:29:42we'll see. Could obviously layer in more
1:29:44accounts here on this candle.
1:29:46We'd wait for a little more
1:29:47confirmation. Then I'll get in with
1:29:49number 542 as well. All right. This one
1:29:52specifically needs a larger win
1:29:54obviously because it just lost a,000 on
1:29:56the first trade.
1:29:59All right. So, first account hit take
1:30:01profits. Second account I'm holding for
1:30:0250 points. Um the target was 25. I lost
1:30:05basically 25 points on the first trade.
1:30:07trades and now I need 50 points. So I'm
1:30:09just holding this one up to the
1:30:10consolidation above the open. Always
1:30:13possible the open is fair. Usually at at
1:30:1525 after there is sometimes a volume
1:30:17spike which creates an unfair move. So
1:30:19instead of having the open price is
1:30:20fair. I'm looking more towards that uh
1:30:2324 after candle which is just what it
1:30:25looks like today. Obviously you can see
1:30:26the 25 after candle has pretty large
1:30:30volume. Uh anyway it's just going to
1:30:32hold
1:30:34once it takes here. Once it takes the 24
1:30:37candle, I could go break even. Yeah, it
1:30:39seems fine to go break even now because
1:30:41if it dumps,
1:30:43since opening candle was red, there is a
1:30:45slight short bias, at least for me. Uh,
1:30:48so when it wicks, what could be fair
1:30:50now, I'm just wanting like less exposure
1:30:51to that position. So that's fine. Break
1:30:54even. But anyways, definitely a good
1:30:56trade to hold.
1:30:58Definitely not not ex like I personally
1:31:00am not going to exit early. See, it I
1:31:02thought fair price at 24 and it just
1:31:03wicked it. Um people would definitely
1:31:06consider having their profit target at
1:31:07fair price. Um but it is much more
1:31:11valuable to have a specific profit
1:31:13target based on the prop firm
1:31:14environment. So not based on what the
1:31:16market is showing you. It is much better
1:31:18to have those static ones like I talked
1:31:19about in the previous live video. Um
1:31:22even though obviously based on what the
1:31:23chart is showing, it would have been
1:31:24nice to get out there, but no. much much
1:31:28better much higher EV to have your
1:31:30profit targets set out for the prop
1:31:31environment specifically which is why
1:31:33I'm going to hold this one but
1:31:34definitely break even is is a good
1:31:36opportunity because again it's
1:31:38essentially random in my opinion once it
1:31:40wicks what I think to be fair which as
1:31:42you can see it did so let's hope the
1:31:44randomization is in our favor still
1:31:46generating positive EB though because it
1:31:48is the firm's draw that I'm trading with
1:31:50and uh profit targets optimal so all
1:31:53right started up the recording again
1:31:54it's like one point from take profit
1:31:55didn't want to jinx it But figured might
1:31:57as well capture it. U so still just in
1:32:00the same position.
1:32:02Had a nice displacement long.
1:32:06Okay. It filled one out of the two
1:32:08contracts. Oh man. So we got a little
1:32:10while maybe longer to wait because it
1:32:12just filled one out of the two. Anyways,
1:32:16just going to hold. This is a one to two
1:32:17trade. One to two R by the way. Um
1:32:23so we'll give it some more time. All
1:32:25right. There we go. So, Blue Sky is done
1:32:28for today. These three accounts down
1:32:30here, well, they're supposed to win
1:32:31a,000, I guess, that fills, but
1:32:33nonetheless,
1:32:351,000 was profit target on these. Um,
1:32:37they're not eval. They're like, it's a
1:32:40buffer phase where you got to make some
1:32:41money on the buffer before going to
1:32:43funded account. So, it's technically
1:32:44funed account, expected value. Um, so
1:32:46pretty good of 3K to start. Now,
1:32:49hopefully we get another nice move away
1:32:51because I do have these accounts here.
1:32:53Um, with these accounts here, I'm
1:32:56probably going to be targeting
1:32:59I'll just target this area here as fair
1:33:01just because on its way up it
1:33:03consolidated here for a little bit. Um,
1:33:04it could obviously be like here, but
1:33:06I'll extend it a little bit just cuz
1:33:08when I'm looking to short, oh man, it's
1:33:11going to be a long trade. 100 point
1:33:12trade. I could obviously size up and get
1:33:15a 50 point trade. Like I could just
1:33:16double the contracts. So, we'll see
1:33:19exactly what market gives. Uh might have
1:33:21to be back to you guys in a while
1:33:23because it's going to take a while to
1:33:24move away um from from fair for
1:33:26reversion. All right, I'm in a six
1:33:28contract short onfunded. Uh the reason
1:33:30why is I have $6,000 profit target and
1:33:33with 50 points that would be six
1:33:36contracts. So that's the reason for
1:33:37that. Just trading a one to one here. Um
1:33:39just thinking reversion is more likely
1:33:41than longs. And I just had a limit 50
1:33:44points away from a fair price just to
1:33:46make it a pretty easy entry. So we'll
1:33:48see exactly what happens with this one.
1:33:50It is very aggressive. I will admit. Uh
1:33:54plus or minus $6,000 is quite
1:33:55aggressive, but
1:33:58uh the expected value is definitely
1:33:59there. So, I'm in shorts quite early.
1:34:02Just my limit order got tagged.
1:34:03Unfortunately, the candle didn't
1:34:04actually displace. So, bit of a weak
1:34:07entry. Could obviously get out, break
1:34:08even, and wait. Uh but it sort of long
1:34:13sort of gave up
1:34:15now. Just looking for shorts back to the
1:34:17open.
1:34:22All right, getting a nice displacement
1:34:23short. So, I will get back to you guys
1:34:26when this trade finishes. I'm definitely
1:34:28not going to be altering anything mid
1:34:29trade. I'm just going to be holding all
1:34:31the way back to the open. No break evens
1:34:34because I think fair is at the open. So,
1:34:35obviously not going to really go break
1:34:37even. So, we'll just let it play out.
1:34:39I'll let you know what happens. All
1:34:41right, we're back. Been holding for a
1:34:42little while. Uh, but trade is looking
1:34:45good. But it never broke structure up.
1:34:46So there was no reason for me to exit.
1:34:48Had a nice break of structure short. I
1:34:50considered setting the other account in.
1:34:51But uh okay. Okay. I considered setting
1:34:55the other account in but uh it would
1:34:57have been a little bit too close. I
1:34:58would have need to use like 10 contracts
1:35:00which is probably a little bit too
1:35:01aggressive. Um anyways, why is that
1:35:04twice happening now?
1:35:06Oh man.
1:35:09Anyways, just gonna let it run. I was
1:35:11hoping I could catch it on camera, but
1:35:12now I got to commentate a little bit
1:35:14longer. We'll see.
1:35:16Um,
1:35:18just standard reversion trade. Um, I saw
1:35:2150 points in my favor and I knew 50
1:35:24points, six contracts at $6,000, which
1:35:26is just the profit target for my
1:35:27account. Um, if it had gone up 100
1:35:29points, then I would use three contracts
1:35:30because three contracts 100 points,
1:35:32$6,000. So, it's all about the profit
1:35:34target on the account. And then, of
1:35:35course, you want the profit target to be
1:35:37as close to fair price as possible. So,
1:35:38you can adjust your contracts in that
1:35:40regard. But again, profit target is the
1:35:42most important part of all of this.
1:35:46Now, actually could be an opportunity to
1:35:47go break even just because it wicked
1:35:49essentially wicked what I think to be
1:35:51fair, which is my take profit, but
1:35:54okay, another one contract filled. Um, I
1:35:56guess I could go break even, but it's
1:35:58probably not going to Okay, there. It's
1:36:00not going to matter.
1:36:04All right. So, that is one, two, three
1:36:07of these smaller ones done and then one
1:36:09larger one done of 9K. Um,
1:36:13could have layered in another one here.
1:36:15Probably should have. Uh, 6K is like a
1:36:17lot though. Like $6,000 plus or minus is
1:36:19kind of a lot even for me. Uh, so one
1:36:22account at a time is probably a little
1:36:23bit better to reduce variance. I'm just
1:36:26going to wait for another move away and
1:36:27then obviously another reversion. So, I
1:36:31will be back to you guys when we see
1:36:32another move away and then another entry
1:36:34on this account here. Whether it's 50
1:36:36points for six contracts or 100 points
1:36:38for three just cuz I need to win 6K. All
1:36:41right, there is news coming out at 7
1:36:44a.m. PST. So, 10 EST, the dude is
1:36:46speaking. So, probably not going to be
1:36:48taking any trades at 10:00 a.m.
1:36:51afterwards or 7 my time obviously
1:36:53afterwards. And it seems a little bit
1:36:55too close to fair price. So, probably
1:36:56just done for the session. four for four
1:36:59on our accounts. 6K 111. So up 9K, four
1:37:04for four. Uh pretty good result today.
1:37:06Obviously reversions played out once,
1:37:08twice, continuation played out once. Uh
1:37:10second continuation lost, but uh
1:37:13reversion made it back. So I guess four
1:37:14for five, whatever you want to call it.
1:37:16So anyways, done for today.
1:37:19Uh here were the trades from the other
1:37:21days because I recorded the previous
1:37:23session was on Tuesday and then this one
1:37:24was on Friday. So, I figured uh I can
1:37:27show you guys what happened on Wednesday
1:37:29and Thursday as well. Um I was waiting
1:37:32for a really trendy day. I wanted to
1:37:33find a trendy day because those are
1:37:34obviously worse for me version. I wanted
1:37:36to find a trendy day. Um but anyways,
1:37:38here's Wednesday. Wednesday I couldn't
1:37:40live for you guys because I was live
1:37:42trading for my students. But anyways, uh
1:37:44we have pre-news price here at 8:30 a.m.
1:37:47EST. That creates an untra move away.
1:37:49And then on the open, I'm just buying
1:37:50midcand because the opening 1 second was
1:37:52green. You can see there's no wick here.
1:37:54Uh so it opened up and you could just
1:37:56take a very nice funded trade or EBS
1:37:58whatever you want. Uh back to the open
1:38:01after that consolidating here at
1:38:03pre-news price. Uh news is priced in. So
1:38:06just looking for reversions back to the
1:38:07pre-news price. Maybe you catch
1:38:08something here. Uh if not definitely
1:38:10catch something in here. Great
1:38:11displacement here. So just trading back
1:38:13towards there and then it jumps all the
1:38:15way back down here. Displacement here.
1:38:17Break structure here. Whatever you want
1:38:18to enter on. All seems great. So uh
1:38:20Wednesday was a pretty good day. just
1:38:22reverting to the pre-news price. Um,
1:38:25again, it's priced in this move is
1:38:27unfair. So, just looking for a reversion
1:38:29on open. Could also definitely get in
1:38:30reversions here. Like, it's it's fine.
1:38:32Just make sure you're break even when
1:38:33market opens. Um, consolidation at the
1:38:36previous price. Just confirming that it
1:38:37would be fair. Slight reversion here,
1:38:39slight reversion here, great reversion
1:38:41here. Now, Thursday was
1:38:44uh another decent day. Lots of
1:38:46reversions on Thursday. Here's the open.
1:38:48Continuation trade loss. It is what it
1:38:50is. Uh but then you get a nice break of
1:38:52structure back to the open here. Nice
1:38:54displacement reversion here. Nice
1:38:55displacement reversion here. Um I took
1:38:58one two losses in here and then I took
1:39:00another trade here which lost. Um here
1:39:03another one lost and then where was it?
1:39:05Final ones was one two three four five
1:39:09that won. So ended net very positive on
1:39:11this day. Um I usually don't go past 11
1:39:13a.m. EST unless I haven't finished
1:39:16trading a majority of my accounts. This
1:39:17was a day I hadn't done a lot because it
1:39:19was like one, two, three losses and like
1:39:20you saw earlier in this trade. Today
1:39:23when I lost, I took another one. Um,
1:39:25just cuz I like my accounts to either be
1:39:26at profit target or gone. So, I'll take
1:39:28multiple trades on them throughout the
1:39:29day. Um, so when I take one, two, three,
1:39:31three, or four losses in here, um, then
1:39:33I'm obviously going to take more trades
1:39:35because my accounts are down, but
1:39:36they're not done yet. So, um, if you
1:39:39lose, like you need to win that back
1:39:40plus more. Kind of a weird mentality,
1:39:42right? But it's what works for me. Uh, I
1:39:44just like speed on prof. know, caught
1:39:47this entire reversion. Um, I was hoping
1:39:49today would be a trendy day. Uh, so I
1:39:52could show you how I trade reversions in
1:39:53trend, but unfortunately it was not. So,
1:39:56this whole week tried to give it a a
1:39:57good try for the live recording. No
1:39:59trends and that dude's speaking now, so
1:40:01probably going to be done. But, hope you
1:40:03enjoyed the video. Um, definitely was
1:40:06happy to talk with Riz about my
1:40:07strategy, talk with you guys about the
1:40:09strategy. So, show us some live. Um,
1:40:11most important thing you should take
1:40:12away from this and a of my content is
1:40:14that focus more on the proferm rules,
1:40:16uh, like like you probably saw with my
1:40:18profit targets being like static versus
1:40:20what the market is showing. It'd be a
1:40:22little bit more discretionary if it's
1:40:23based on what the market's showing,
1:40:24targeting the exact area stop-loss a
1:40:26specific place. A lot more static for
1:40:28the prop firm specific environment. But
1:40:30thank you so much for watching and I'll
1:40:32see you in the next one.
1:40:33>> So important really, you know, off the
1:40:34back of this entire episode is knowing
1:40:36your numbers. Yeah, you know,
1:40:38>> regardless of whether you're using this
1:40:39strategy or not, that really is a a
1:40:41fundamental
1:40:43thing that every trader should have an
1:40:45understanding of their numbers and and
1:40:46therefore, you know, when people
1:40:48complain about psychology or even uh
1:40:50their discipline and so on. Really
1:40:53having that understanding of numbers, it
1:40:54doesn't fix things straight away, but it
1:40:56definitely helps to to really trust your
1:40:58system. And in this particular case, you
1:41:00have to really understand your numbers
1:41:02and trust your numbers to follow a
1:41:04mechanical system in the first place,
1:41:05but then also to understand, you know,
1:41:07the model that you're trading these prop
1:41:10firms with. Um, and to be able to then,
1:41:12you know, bankroll accordingly.
1:41:14>> Yep.
1:41:14>> And know what that looks like, you know,
1:41:16the reality of that process.
1:41:18>> Yeah, JJ, it's been absolute pleasure.
1:41:20You know, I'm sure it's very eye opening
1:41:21for the people at home as well. probably
1:41:23the first time that they're getting a
1:41:24real deep insight into the, you know,
1:41:26full process and the data behind it all.
1:41:28And I thank you for breaking it all down
1:41:30and then being so transparent as well in
1:41:31terms of your journey as well. And uh
1:41:34well, everyone at home, drop a comment
1:41:35of your biggest takeaway from this
1:41:37episode. you know, something very
1:41:38different. But as we said at the very
1:41:40beginning, a proper money-making
1:41:42machine, uh, if done correctly, and
1:41:44that's something we want to really
1:41:46highlight at the end of this is to, you
1:41:47know, really don't just look at the
1:41:49numbers that we talked about in terms of
1:41:51payouts or payout amounts or, you know,
1:41:53in the time that it's been done. More so
1:41:55understand exactly what JJ went through,
1:41:57which is the numbers of, you know, your
1:42:00expected value. uh understanding the
1:42:02numbers in terms of you know the exact
1:42:04ones we just broke down right now in
1:42:06terms of your you know win rate and uh
1:42:09pass rate and so on. Those are the
1:42:11things that you have to do the work on
1:42:13you know links for JJ will be in the
1:42:15description below so make sure you check
1:42:16those out as well. Other episodes are on
1:42:18screen right now. Make sure you hit
1:42:19like. Make sure you subscribe and until
1:42:21next time everyone this has been Cha
1:42:22Fanatics. Take a

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