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The 4 Steps Behind My Trading Strategy (Bias to Entry) — Transcript

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0:00In this video, I'm going to go over the
0:01four steps that I follow under every
0:04single trade that I place. And this is
0:06something that is so important because
0:07it's a layered approach that covers
0:09every single aspect of what a system
0:11should have. It keeps you out of the
0:13unnecessary losses. It controls your
0:16overall trading and gets you on side
0:18with highquality frameworks. This is
0:20also a process that is repeatable in the
0:23market. So after you understand it from
0:25this video, you can go out on your own
0:27and seek these opportunities for
0:29yourself. Getting right into this, we're
0:31going to start with an overview of these
0:32steps. And the first one is going to be
0:34framework. This is where we're looking
0:36to use a higher time frame alignment to
0:39set a bias and a idea that we think the
0:42market can move directional on a certain
0:44day. That's going to start with using
0:46the daily time frame. I don't go above
0:48that to the weekly or the monthly
0:49because I feel those are too high of a
0:51time frame in terms of short-term
0:53trading because we're looking to capture
0:55an intraday opportunity. And when you
0:57think about the weekly or the monthly,
0:59if you're trying to make an assumption
1:01on that time frame, you could be trading
1:04in the wrong direction or with the wrong
1:05bias for a week or for a month. And that
1:08is pretty damaging for an intraday
1:10approach. So, when we use the daily
1:12chart, that is the time frame that we're
1:14looking to focus on because we can go in
1:17and out each day as the market develops,
1:19take in new information, and adjust if
1:22needed. I'm also not going to drop below
1:24the daily time frame because then we're
1:26getting too much detail that's not
1:28giving us the full picture of what we
1:30should really be focusing on because the
1:32goal here is to capture expansion daily
1:35candles. Once we're on the daily, I'll
1:37show you what I use to actually navigate
1:39that time frame and how I'm setting the
1:41direction and rules around which days
1:43and which side of the market I'm looking
1:45to trade. The second step is
1:47confirmation. This is where we've set an
1:49idea previously from that daily chart.
1:52Now, we're looking to confirm it inside
1:54of the day we're potentially going to
1:56put on a trade. Confirmation is one of
1:58the most important steps because it
2:00separates idea from execution. And we
2:03all know that when it comes to your
2:05results, the execution and the actual
2:07decision you make on that idea is what
2:09truly matters. So framework is setting
2:12the idea, not predicting the market, but
2:15saying this is in a framework that can
2:17deliver this move, but I need a
2:19confirmation. If the market develops in
2:22this way and I use daily profiles as the
2:24confirmation, then that's saying the
2:26framework is being aligned. The market
2:28wants to move in that direction and I
2:30will then consider executing on that
2:32trade. The third step is entry. This
2:34means we have a framework off the daily
2:37that we know is confirmed by a daily
2:39profile. So an idea has turned into
2:42something that is actionable because the
2:44market has confirmed and said I'm going
2:46to move in this direction. because of
2:49that confirmation, I now want to seek an
2:51entry to position inside that market
2:53because the edge was presented to us.
2:55The final step is management. And this
2:57is where a lot of people make mistakes.
3:00Your management is how you're making
3:01profit on your trades. It has to be done
3:03in a way that allows your trades to work
3:05out, but also is protecting the downside
3:08in the cases that you are incorrect. So,
3:10I'll share with you exactly what I look
3:11for, a process to avoid micromanaging
3:14trades, because that is the number one
3:16mistake that most traders make. and show
3:18you how I'm bringing my trades to a
3:20profit target to maximize the value.
3:22Here, we're going to walk through these
3:24steps with a real example of a trade
3:26that I took from this past week. And
3:28it's going to start with the framework.
3:29Like I mentioned before, that is step
3:31one. Framework is going to be focused on
3:33the daily chart, which is what we have
3:35here. This is Monday's daily candle. And
3:37I personally let Monday go and allow
3:39that to provide context because what
3:41Monday does within the current week
3:44tells me about what Tuesday should do.
3:46And this pairs alongside my approach
3:48with relevant swings. Relevant swings
3:51are the understanding of which daily
3:52highs and lows in the market are
3:54meaningful. And the idea around them is
3:57that we're looking to pull from the
3:59extreme highs and lows on the daily to
4:01the point that where if price engages
4:03them, there is not another daily high or
4:05low in close proximity that I have to be
4:07concerned with. So I know that the
4:09reaction there is truly meaningful and
4:12that is telling me about what I should
4:13expect for price going forward. So where
4:16are the relevant swings on this chart?
4:18Looking left here from Monday, we can
4:20see we have a relevant high that was
4:22engaged. And I can say this is a
4:23relevant swing because there is distance
4:26to this next high here. And then off the
4:28lows, we have that same idea of a daily
4:31swing point that has a large separation
4:33from that next daily low. So when price
4:36engages here, that is relevant, that is
4:38meaningful in the market. And what is it
4:40showing me? because I can pull from
4:42these two ideas the two separate ways
4:45that the market and these daily candles
4:47engage with relevant swings. And the
4:49first is going to be a manipulation. And
4:51that's what we're seeing in the previous
4:53week close. This is Friday's daily
4:56candle from the previous week. We traded
4:58down into that. And you can see in the
5:00wick of that daily candle that's
5:01reflection of a manipulation because
5:03we're closing aggressively back into the
5:06range after manipulating what is a
5:08relevant swing. that there is a
5:10signature for me to assume a reversal
5:13and Monday is confirming that idea for
5:15two reasons. One is because Monday is
5:17expanding higher that is confirming that
5:19we have manipulated this low and are in
5:21the continuation but also because this
5:24is a relevant high. How did price engage
5:27there? We didn't have that manipulation
5:29signature because we didn't wick and
5:31close back into the range. We had a deep
5:33daily candle closure through that
5:35relevant high and that is signaling at a
5:38continuation. When the market fails to
5:40manipulate, we assume the continuation
5:42at a relevant swing. So that following
5:45day, if Monday expanded and put in a
5:47low, we have a manipulation from the
5:49previous week, a continuation signature
5:52of that relevant high. Then on Tuesday,
5:54I can assume another day of
5:56continuation. Here we'll have this in
5:58text so you can see it visually. The low
6:00is a manipulation that signals a
6:03reversal. The relevant high that we
6:05engaged is a close through and that
6:07shows a continuation. We can also bring
6:09in the fact that we have these highs
6:11above that is acting as its own relevant
6:13swing. But we have failure swings up to
6:16that point. So we want to see the price
6:18draw into failure swings because we're
6:20trading away from manipulations trading
6:23into failure swings. So this becomes a
6:25target. We now have something to trade
6:27away from. We have a reason to assume
6:29the continuation and we also have
6:32something to trade into which are these
6:34daily highs here. This here is showing
6:36my expectation for what I'd want to see
6:38on that following day. So think about
6:40when I was talking about framework, it's
6:42an idea. I know because the market did
6:45this that I should assume and expect the
6:48following day to do this, but we're
6:50going to be looking for our
6:51confirmation. So, it's going to be a
6:52Monday putting in a low continuing
6:55Tuesday continuation up into these
6:56highs. And 50% here is from the low to
7:00high of Monday's candle, that entire
7:02daily range. And I want to see Tuesday
7:04put in a shallow opposing run, a small
7:07wick in respect to 50%. Because that is
7:09going to hint at supporting the
7:11expansion move into these highs. So,
7:13that's my invalidation point. Wanting to
7:14see a low of day on Tuesday form above
7:17that level and then we can look to trade
7:19up into those highs. So this is the
7:21idea. Now we move on to confirmation. As
7:24you just saw in that analysis post, our
7:26ideal development of this day is seeing
7:28that shallow opposing run from the daily
7:30opening price and then going into New
7:33York seeing if we have a bullish daily
7:35profile aligning with our bias that we
7:37can then say this idea is being
7:39confirmed. We can then move on to
7:41entries. This is a representation of
7:43that daily opening price for the day. We
7:45have that shallow move from the daily
7:48open and establishing a low that was
7:50traded off of in respect to 50% of that
7:53previous day range that we set in
7:55Monday's daily candle. That means this
7:57is supporting the idea that we can see a
8:00sustained expansion move through that
8:02daily opening price into the upside and
8:04into our target at the highs. The logic
8:06behind this is that shallow opposing
8:09runs create expansion candles. When you
8:11look at your chart on the daily, when
8:13you see these large range moves, they're
8:15going to start with a shallow run from
8:17that daily open versus when we see these
8:20large wicks, indecisive days or small
8:22range days, you're going to have these
8:24really large moves from that daily open
8:27and then intraday you get this range
8:30slow, indecisive price action that ends
8:33up closing back in the range. The way
8:35the price moves from the open of that
8:37daily candle is telling you and giving
8:39you hints at how the rest of that daily
8:41candle will print on the chart. So, when
8:44I'm opening my charts in the morning
8:45into the New York session and I'm seeing
8:47that shallow opposing run forming a low
8:49and trading off of it, I'm viewing it as
8:52the wick of this daily candle is
8:54established. And now I'm looking to
8:56position for the body and the expansion
8:58to take place up into my objective.
9:00We're also going to be pairing this with
9:02the daily profile. we see the London
9:04session made a low and reverse price
9:07expanding off of that low. And then
9:09during the New York session, we're
9:10seeing the development of a potential
9:12continuation. So the London reversal is
9:15one of the three daily profiles that I
9:17look for. And to me, it is an ideal
9:19daily profile because it sets the New
9:21York session as a continuation. We're
9:23confirming this idea of the bullish
9:25London daily profile by looking left in
9:27price first. Starting at that low of
9:29day, we have downclosed candles forming
9:32the low. We go back up to that opening
9:34price. Draw that out. We have the close
9:36above. That is the change in state of
9:38delivery. That's our reversal
9:40confirmation of the low of day. We
9:42expand off of that point into the New
9:43York session. We've run out a short-term
9:45low, formed opposing closed candles, and
9:48then we are looking for price to get
9:50that continuation signature because I do
9:52not enter on the reversal. I don't need
9:53the high. I don't need the low of day. I
9:55want to capture the continuation and be
9:57on side for the expansion. Think of the
9:59body of that daily candle. So, this is
10:02the signature that I'm most focused on.
10:04And since it's not yet confirmed, we
10:06need the closure above this series of
10:08downlosed candles. We know that that
10:10next candle is at 9:30. So, we're being
10:12led into the 9:30 open, which is not an
10:15issue, but we understand volatility is
10:18going to be hitting the market at that
10:19time. that can even act as confluence if
10:22we do end up getting that closure above
10:24which is going to provide us the entry
10:26signature that we're looking. So we'd
10:27have the framework, we'd have the
10:28confirmation in the daily profile and
10:30we'd have our entry signature where we'd
10:32be protected in that market placing our
10:34stop loss and setting ourselves along
10:37for that ride for that daily candle and
10:39that bias to play out. Now we can
10:41introduce each pair across the indices
10:43market. We have ESQ
10:45and YM before the open comes through in
10:48the market. My focus is solely on ES and
10:51NQ. This is where I'm setting the
10:52framework, getting my confirmation. This
10:55is how we're staying one-sided in the
10:57market. I know I'm looking for the
10:58upside and I'm pulling that directly
11:00from ESNQ. However, when we get post
11:03open because we're being forced into
11:05that to seek the continuation entry,
11:07which was not yet confirmed. Now I can
11:10introduce YM because this is a time of
11:12the day right at the open where YM can
11:14provide us extra context for which pair
11:17is stronger, weaker, which one I should
11:19be focused on, which one is providing
11:21confirmation. It's giving me an idea
11:24that I want to see after the open.
11:26Before it I'm not as concerned, but once
11:28we get after open, this is where I'm
11:30starting to bring this idea in. And what
11:32we see here is extremely important. What
11:35we had on ES is we're looking for this
11:37closure above, but post 930, it's not
11:40getting that closure, which is not
11:42validating the idea. So, it did trade
11:44above, but we're waiting for the candle
11:45to close, which it didn't. We have NQ,
11:49we're bullish, being the weakest pair,
11:51coming back down into that intraday low,
11:53while we see YM all the way to the right
11:56is providing that closure on the
11:58signature exactly as we were looking for
12:01on ES initially. This is giving me an
12:03idea on a few things. The first is that
12:06ES is not validating the idea. So, I'm
12:08not entering there. But I'm also looking
12:10at NQ as the weakest pair across the
12:12indices. The framework and the bias is
12:15still bullish. That is not going to
12:17change because of some intraday price
12:19action. But what I'm seeing here is when
12:21NQ is the weakest pair, that intraday
12:24low is meaningful. That's a relevant
12:26swing on an intraday basis. There is
12:29nothing below that intraday low that the
12:31weakest pair needs to run out before
12:34reversing back higher. So, we're
12:36manipulating a very important low in the
12:38market on that weakest pair while the
12:40strongest pair is validating that
12:42signature. That's telling me two things.
12:44One is we're creating a divergence and
12:47expecting that because the framework is
12:48bullish, NQ will then start to turn on
12:50the weaker pair. And because it's going
12:52to start to turn, we have that
12:53divergence on YM. We have it stronger.
12:56So, we assume better followthrough, but
12:58I can position on YM because if the
13:00weakest pair is reversing, the strongest
13:02pair is going to expand and that's
13:04protecting my stop loss when I'm going
13:06to look to enter on this and place it at
13:08this opposing swing. This is where we
13:10can compare NQ and YM together, lower
13:13low on NQ, higher low on YM. This is
13:17validating the idea, getting that
13:19closure above. That's the entry
13:21signature and the pair because it's
13:23stronger that we're looking to position
13:25on. Finally, we have that confirmed
13:27closure. 930 acts as a confluence. So, I
13:31like to see that 930 is supporting that
13:33idea, getting the closure above. Once
13:36price gets that new candle open,
13:38confirming this closure, I am then
13:40taking that as an entry stop-loss on the
13:42other side of these down close candles.
13:44And I'm looking to position for that
13:46expansion move up into the highs. One
13:48important thing to note here is that I
13:49am taking my entry right on the open of
13:52that next candle. I am not waiting for
13:54the retest of these opposing candles
13:57because there is not a guarantee that
13:59that is going to happen. This is a good
14:01example that it does retest. But there's
14:03also going to be times where that's not
14:05the case and I'm not going to allow a
14:07few points to be the decision maker if I
14:09take a winning trade or not. I've done
14:11all this work on the daily the daily
14:13profile waiting for the right entry
14:15choosing the right pair. This is not
14:17going to be the difference between that
14:19trade or not. I'm willing to give up a
14:21few points if the risk-to-reward still
14:23makes sense on the open of that new
14:24candle. I am taking that entry ensuring
14:27my position in the market because this
14:29is not a guarantee nor does it change
14:31the probability of the outcome. So I
14:33want to get inside that market and
14:35position for the move. The fourth and
14:36final step is trade management. We have
14:39the framework from the relevant swings
14:41manipulating the low continuation
14:43through the high a draw of failure
14:45swings above. We have the confirmation
14:47of a London reversal daily profile. We
14:50have the entry signature after open with
14:52confluence and choosing the right pair.
14:54Now we need to manage that trade, allow
14:56it to work and bring it to our profit
14:59targets and maximize the value that
15:01we're being offered. The first and most
15:03crucial part to trade management is I
15:05want to get out of the way of the
15:07market. The biggest mistake and the one
15:09that I was referring to earlier is
15:11micromanagement of positions before they
15:13either work out in your favor or stop
15:15you out at the invalidation point that
15:17you set. One way to do this is by
15:19setting a risk-to-reward threshold,
15:21whether it's 1 R, 1.5R, and saying if
15:24the market does not reach to that
15:26objective or does not stop me out at my
15:28initial stop, I am not touching that
15:31position. I need to be either proven
15:33wrong or I need the market to start
15:35working to some extent before I start
15:37touching that position so I don't knock
15:39myself out before this begins to play
15:41out fully. We have a relative example of
15:43that here where the market ranges around
15:45my entry for around 20 minutes. And this
15:48is what I'm talking about where a lot of
15:49people may see that as this trade is not
15:51working out. I need to exit this and
15:53then suddenly it's working right in
15:55their favor. We want to completely avoid
15:58that as a possibility. As this starts to
16:00break, my initial target is a
16:02risk-to-reward based. I want to see 2R
16:05on my trades. That is a baseline for
16:08what I'm looking for. I'm a lower
16:09frequency trader, so one to four trades
16:12per week. I want to be reaching for 2 R
16:14because I want to be rewarded for that
16:16patience. That's where I'm going to take
16:18my initial scale. So, when we make that
16:20little bit of a retracement, that move
16:21back up, this is not concerning to me.
16:24But once we get there at 2 R, that's
16:26going to be my majority scale. meaning
16:28I'm taking 50% or more off of that
16:31position, but I'm going to let some run
16:33because my trade management is not
16:35fixed. It's dynamic. Meaning, in this
16:38context, I'm assuming that even past 2,
16:41there's room on this trade because we're
16:43thinking back to that price objective.
16:45We still have those all-time highs open.
16:47I'm on the leading pair in strength. So,
16:49I want to see that continued
16:50follow-through to get to this high,
16:52which you can see here, we eventually
16:54did. That is my final take-profit
16:57because this in itself is a relevant
16:59swing. It's an extreme of the market.
17:01There is not another high above that in
17:03relation to price that I need to be
17:04concerned with. So once this is reached,
17:06I'm using that as a profit target and
17:09closing fully out. This is that full
17:11trade example here. We get that two R
17:13scaling out initially trailing that stop
17:16because we formed an opposing candle in
17:18that continuation that was closed
17:19through. So I can protect risk allowing
17:22the rest of those contracts to play out.
17:23And now I'm out fully at that high, that
17:25all-time high target that we set in the
17:28previous day saying price should draw
17:30here. And because that's a relevant
17:31swing, I don't have any expectation
17:33beyond that. Once that strongest pair
17:35hits that target, I'm getting added
17:37value beyond my 2R because my trade
17:39management is not fixed and I'm taking
17:41that extra profit, closing it out, and
17:43that is the end of that trade. With an
17:45overview of the four steps and the trade
17:47recap out of the way, you now have an
17:49understanding of what a real system
17:50should include. those four core
17:53principles that have a real purpose and
17:55intention behind them. Now, what I want
17:57you to do is go back into your own
17:58charts. Start on the daily, look for
18:00those relevant swings, practice
18:02identifying them, and see what the
18:04reactions are there and what that means
18:06for price going forward because that's
18:08your first step in setting the
18:09framework. Then once you have a bias,
18:11look for a small wick opposing run on
18:14that daily candle in alignment of a
18:16bullish or bearish daily profile because
18:18that's saying my idea is working out and
18:21the market wants to move in that
18:23direction. If you have a confirmation,
18:25then you move on to entries. The key
18:27with this here is in an expansion daily
18:29candle, which is what we're trying to
18:31capture in that continuation, the
18:33expansion move, opposing candles that
18:35are closed through are going to be
18:37respected in the continuation. That is
18:39the idea that you really want to note.
18:41Then when it comes time to manage that
18:43trade, you want to remain mostly hands
18:45off until you're either stopped out or
18:48you reach a certain risk-to-reward
18:49threshold. You're targeting 2 R, but
18:52there's potential for more on that trade
18:54based on what that day and what price is
18:56telling you. And through time and
18:57repetition in doing that, you're going
18:59to find a lot of consistencies both when
19:01looking back in price, but also in a
19:03live market. And that's going to play
19:04into how you execute trades going
19:07forward. With that said, that is
19:09everything I have for you in this video.

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