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The Trading Strategy I Invented That Got Me Funded - Categorical Trading — Transcript

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0:00this is the strategy I invented called
0:02categorical trading and because this is
0:04sped up these could be 5 minute or even
0:0630 minute candles a. 1% move or a 2%
0:09move try to guess the time frames of
0:11these charts because whether you're
0:12trading on a 20 second 5 minute weekly
0:15or 2minute chart we can use categories
0:17to determine logical high probability
0:19wins and losses depending on whether
0:21price action is consolidating or
0:23directional it might be the simplest way
0:25to learn price action and to find what
0:27style of trading you're best at and I
0:29created it through pure experimentation
0:31with no outside influence at the time of
0:33this video I'm funded by trade day Who
0:35currently has the best evaluations in
0:37the Futures Trading industry the
0:38fundamentals of categorical trading is
0:40that all price action exists on a
0:42spectrum of extremes somewhere between
0:44consolidation and Direction everything
0:46else exists along this line and every
0:49condition has clearly defined high
0:50probability wins and losses in
0:52consolidation price is more likely to
0:54stay where it has already been in
0:56Direction price is more likely to go to
0:58a new area it sounds simple because it
1:00is but there's a reason this video is so
1:02long and remember that all strategies
1:04except for algorithms are just
1:06perspectives to learn price action
1:07through how I personally Implement
1:09everything is later before I show you my
1:11actual trades in these various
1:13conditions I'm going to keep it as
1:14simple as possible with just a drawing
1:16the high probability win is to have
1:18profit targets inside and stop losses
1:20outside every trade should be
1:21fundamentally based on expecting what's
1:23happening to continue the extreme high
1:25probability loss is to go long at the
1:27top and short at the bottom so obviously
1:29the reverse of that is shorting at the
1:31top and going long at the bottom the
1:33only reason you should be wrong on a
1:34trade is if conditions change okay let's
1:37see this in action during my live stream
1:39now notice that I'm actually following
1:40the candles for the most part and I'll
1:42get into the various risk reward ratios
1:44of how to do this later I'm not timing
1:46breaks above or below where price has
1:48been I'm targeting the same areas I'm
1:50not going long at the top and short at
1:52the bottom I'm also not asking much of
1:54price action there is no structural
1:55change required to make any of these
1:57traits work because I'm trading the
1:59action within the the action this video
2:00is difficult to make because every time
2:02I say something I want to talk about 50
2:04other reasons for why I'm saying the
2:05things I'm saying but just trust me
2:07every topic will be covered when price
2:09action is directional we take the
2:10opposite approach in these conditions
2:12price is more likely to go to a new area
2:14than it is to stay where it has already
2:16been Direction means flipping your
2:18entries to Target new areas and now
2:20having the stop loss inside the high
2:22probability loss is going against the
2:24direction for a pullback we'll cover
2:25this later but you might find yourself
2:27being naturally inclined to just one of
2:29the price action Types on screen you are
2:31now looking at a very simple directional
2:33trade and this is just an example to
2:35illustrate the concepts I'm just
2:36following Direction but here's the thing
2:39price action doesn't stay as
2:40consolidation or Direction forever so
2:42this is the toughest part of the
2:43approach if Direction turns to
2:45consolidation and you're still targeting
2:46new areas with stop losses inside of
2:48where price has been you're going to
2:50lose you would be trading high
2:52probability losses no trade will work
2:54every time but this approach gives an
2:55edge if you adapt correctly with that
2:57being said and within reason the only
2:59reason and a trade shouldn't work as if
3:01Direction turns to consolidation or vice
3:03versa that's out of your control but
3:05what is in your control is adapting to
3:07these changes to make sure you're taking
3:08the right trades regardless of what time
3:10frame you're trading you will lose all
3:12your money if you're doing mean
3:13reversion in direction or targeting new
3:15areas in consolidation it's easy to
3:17forget to constantly be aware of whether
3:19price is consolidating or directional
3:21but I'll get into the reminders that I
3:23use to combat this later as well as how
3:24to find which conditions you're best at
3:26you don't need to adapt and trade
3:28everything you can just wait until you
3:30get the conditions you thrive in but
3:31more on that later see that chart on the
3:33top right pretty good mix between
3:35consolidation and direction and you
3:37could maybe call it consolid Direction
3:39which was one of the first ideas I had
3:40for naming the strategy but I quickly
3:42abandoned it after realizing it sounded
3:44too much like solid erection so where
3:46should he actually put the profit Target
3:48this is incredibly important because the
3:49foundation of this approach is not about
3:51predicting anything major you're not
3:53trying to figure out where price will be
3:54way into the future you're not doing
3:56analysis on 70 different time frames
3:58with 400 indicators the strategy is to
4:00ask the least of price action possible
4:02taking the most reasonable and simple
4:04possible trade you were using the
4:06categories of price action as your Edge
4:08to make it so that a trade is more
4:09likely to hit the profit Target before
4:11the stop loss over a large series of
4:13Trades and remember that everything
4:15applies regardless of the time frame
4:17because trades are based on the current
4:18size of the candles so all you do is
4:20adjust the Target and stop- loss to
4:22match those conditions let's say these
4:24are 30 minute candles and each one is 25
4:27points let's go with a 10-point Target
4:29and stock loss which means you're
4:30targeting just under half the size of
4:32the recent candles for a perspective
4:34that rectangle I put in the middle is 10
4:36points from top to bottom this visually
4:38represents the idea of not asking much
4:40out of price action if your profit
4:42Target is bigger you need a more
4:43aggressive entry and I prefer to not
4:45have it be too big so that I can follow
4:47consolidation when it looks like it's
4:48turning around rather than trying to
4:50time mean reversion at the most extreme
4:52points by that I just mean not trying to
4:54call the tops and bottoms so my stop
4:56loss and profit targets are small enough
4:58to just play around in the middle
4:59however going against the direction
5:01inside this consolidation once you start
5:03getting to the extremes is an equally
5:05valid approach there is no rule like
5:07doing a 50% Target based on the size of
5:09the previous candle it all just comes
5:11down to personal preference and I prefer
5:12to lean more on the side of the brackets
5:14being smaller and by brackets I just
5:16mean the stop loss and profit Target
5:18okay now here's the beautiful part about
5:20this applying to all time frames nothing
5:22fundamentally changes you just change
5:24the bracket size let's say these are now
5:2630C candles and 9 points each The Profit
5:29Target and stop loss would look exactly
5:31the same as before except maybe now
5:32they're fourpoint targets and stops the
5:34time frame does not matter because we're
5:36trading price action and adjusting the
5:38Stop and profit Target to fit the
5:40structure of the recent candles it's
5:42consolidation so we expect price to stay
5:44where it has been and you don't try and
5:46Target the extremes of each side this is
5:48because consolidation is never this
5:49perfect I'm just using a drawing to
5:51illustrate the basics you can see that
5:53in action here but of course it's not uh
5:55it's not quite as uniform and probably
5:57the best example is this trade here just
5:59targeting Four Points going long here
6:01with a profit Target there where to put
6:03the profit Target in direction is where
6:05it gets more tricky it's incredibly
6:07obvious in consolidation because you are
6:09literally confined to a box direction is
6:11where it gets a bit mysterious but at
6:14the same time no it's not I drew a blue
6:16entry going long green is the profit
6:18Target and red is the stop loss just to
6:20cover the basics The Profit Target is
6:22about half the size of the previous
6:23candles so it's still following the same
6:25idea as the consolidation trades and
6:27again these could be 5 point or 20 Point
6:29candles but the trade brackets are going
6:31to look exactly the same since we adjust
6:33them to fit the structure I'll talk more
6:35about Direction and my personal
6:36preferences later now in order to assist
6:39with all of this I use ATR but not in
6:41the traditional way it's used if you add
6:43ATR the default period setting is 14 and
6:46if you want to see the exact size of
6:48each candle from top to bottom set the
6:50period to one this is a helpful tool to
6:52glance at to see what size the candles
6:54are which helps in knowing what your
6:55Target and stoploss should be eventually
6:57you're going to start memorizing whether
6:59vol volatility is normal or higher or
7:01lower than usual ATR is just a tool for
7:03quantifying volatility and volatility is
7:06different throughout the day it's high
7:07as that market open slows down and then
7:10picks back up a little before the market
7:11closes in regular trading hours so each
7:14period of time will have its own typical
7:16range of volatility which you can read
7:18quickly through ATR now the following is
7:20exactly how I use it I like a very
7:22specific range of candle size for my
7:24trades in the morning for now I'll use a
7:2620 second chart if volatility is high a
7:2830 second chart if it's average or a
7:3040-second chart if it's low but why do I
7:33do this because I'm artificially
7:34changing volatility and the size of each
7:37candle until I get the exact size of
7:38candles that I want if you really think
7:40about it nothing is actually changing
7:43but you're filtering out or adding more
7:44information on the chart depending if
7:46you go higher or lower which makes the
7:48candles bigger or smaller since you're
7:50lying to yourself if you think you can
7:51accurately distinguish between 20
7:53seconds versus 40 seconds or 5 and 10
7:55minutes by only looking at the candles
7:57all we did by changing the time frame
7:58was 4 forcing the chart to appear with
8:00the volatility conditions that we like
8:02for trading everything I'm describing
8:04here is about adapting as well as
8:05controlling the variables you can in
8:07order to play to your strengths and
8:09specific approach ATR quantifies
8:11volatility but we can also make slight
8:13adjustments to the time frame of the
8:15chart to artificially increase or
8:17decrease that volatility this is all
8:18just part of being better at adapting
8:20the a part of cat trading categorical
8:23trading I don't know on the screen you
8:25can see a visual representation of how
8:27stupid the retail obsession is with
8:28finding the perfect time frame time
8:30frames are just about how much
8:31information you want to see and it
8:33changes nothing about how price moved
8:35which is particularly obvious if you're
8:37watching in real time now here's an
8:39amazing cheat code that I thought of
8:41just a couple weeks before making this
8:42and every time I make one of these
8:44breakthroughs I'm always in disbelief
8:45that I didn't think of it earlier so I
8:47kept scrolling through some charts and
8:48zooming in until atrs range down there
8:51was exactly where my preferred ATR
8:53conditions are about 6 to 14 points for
8:55each candle and then I adjusted it just
8:57a little bit in order to turn off ninja
8:59Trader's Auto adjusting feature by
9:01holding the mouse on the axis thingy on
9:03the right underneath that F letter this
9:05makes it so much easier to see exactly
9:06what volatility is this fixes the issue
9:09of having some outlier candle completely
9:10skew atrs range and make it difficult to
9:12see what's actually going on so yeah
9:14scrunch that bit up to fit what you like
9:17and then you can keep adjusting the time
9:18frame when needed to get ATR higher or
9:21lower into the conditions you like I'll
9:23swap between time frames a few times
9:25during my 17-minute trading session and
9:27sometimes I won't change anything at all
9:29you really have to pay attention to that
9:30or else you'll take terrible trades but
9:32I'll cover how to make your best
9:33reminder document later and if you're
9:35wondering why I don't want to see
9:36outlier candles that won't show up below
9:38or above the ATR range I set I think
9:41you'll understand after reading the
9:42definition of outlier here's another
9:44neat little trick that doesn't
9:45necessarily show anything that wasn't
9:47there already but it helps reinforce
9:49whether price is consolidating or making
9:51directional moves these horizontal lines
9:53seen here on ninja Trader are just for
9:55context and perspective not something I
9:57added but I like to use them to
9:59determine the bracket size I'll go for
10:00your trading platform should have some
10:02version of this maybe if candles are
10:04going through these Sixpoint intervals
10:06pretty easily maybe I'll Target Five
10:07Points if they're only going through a
10:09little or not at all I'll probably
10:11Target Four Points they'll change
10:12depending on how zoomed in or out on the
10:14chart you are because they'll
10:15automatically adjust and if the
10:17intervals are 15 points then obviously
10:19we've got some serious Direction and SL
10:21or high volatility going on the price
10:24intervals are a good way of seeing how
10:25much you should ask out of a trade ATR
10:27is telling you the exact toal size of
10:29each candle but that's just a number and
10:31using the price intervals with that
10:33helps because you are seeing a visual
10:34representation of exactly how much your
10:37trades are asking out of the candles
10:39again just a helpful thing I like to
10:40look at and it makes it easy to choose
10:42the right brackets it just reinforces
10:44what ATR is telling you in the future
10:46when you're ready for a prop firm which
10:48is when you pay to take a trading test
10:49to get funded and trade on a company's
10:51account I'm personally funded by an
10:53affiliated with trade day firms are an
10:54excellent transition from a SIM account
10:56to eventually trading your own money and
10:58it's a cheap way to desensitize yourself
11:00to trading meaningful size if you use my
11:02code I in trading 20 for 20% off the
11:04lifetime of your evaluation that
11:06supports the work I do at no extra cost
11:07to you so thank you there's a link in
11:09the pinned comment and I would only ever
11:11support a product that I personally use
11:13ideally the perfect Trader would have a
11:14different stop-loss and target for every
11:16trade because they would be making
11:18constant adjustments to match which
11:20Target stop-loss and risk reward ratio
11:22makes the most sense in each individual
11:24moment to match the unique conditions
11:26for the direction to consolidation
11:28Spectrum on which prices located sounds
11:30complicated yeah same so I don't do that
11:32except I actually did for a while and I
11:35only now know that I'm 100% incapable of
11:38consistently doing well with that level
11:40of adaptation it took a long time for me
11:42to finally discover the best risk reward
11:44ratio for me and that might change in
11:46the future but I'm going to explain why
11:48this is an amazing way to initially
11:49start doing this strategy or really
11:51anything that's just pure price action
11:53you will probably end up finding
11:54something better for you personally as
11:56you progress but starting with a on
11:58toone risk reward ratio is something
12:00that I've wanted to make a video on for
12:01a while this just means the stop loss
12:03and profit Target are the same amount of
12:05points or percentage away from the entry
12:07you were doing a coin flip on if the
12:08trade Works meaning there's a 50% chance
12:10it'll get stopped out or hit your profit
12:12and that means you only need a small
12:14Edge to flip that coin in your favor
12:16obviously easier said than done but hold
12:18on if you want to hear my ideas about
12:20how it's possible to achieve consistent
12:22unprofitability you might get some great
12:24ideas for your own trading if you click
12:25the video in the top right because
12:27regardless of if you're consistently
12:29profitable or consistently unprofitable
12:31before fees you are managing to get
12:33non-random results from the markets and
12:35that's impressive when you pair a coin
12:37flip with this system that categorizes
12:39price action into objective conditions
12:41that can be logically analyzed for high
12:43probability wins and losses bang that's
12:45the edge obviously remembering
12:47everything being disciplined not
12:49hesitating switching trades when
12:50necessary to adapt avoiding fomo
12:52following your rules and every other
12:54psychological issue makes it so that
12:55knowing what to do doesn't mean you can
12:57do it immediately but we'll we'll do
12:59psychology later I recommend just
13:01starting with a 1:1 ratio because
13:03remember risk reward ratios on their own
13:05mean nothing until an edge is introduced
13:07to make it non-random go to my page in
13:09the pinned comment to see every resource
13:12that helps with this approach including
13:13a video dedicated to this topic and that
13:15brings us to maybe the most important
13:17part of all of this almost none of you
13:19are going to trade like me you're going
13:21to use different risk reward ratios
13:23prefer different types of price action
13:24do well in some areas I sit out do
13:26poorly in conditions I do well in and
13:28more variations of every single other
13:31possible combination of the aspects of
13:32this system fundamentally we are just
13:35categorizing price action but the way
13:37you approach the actual trading is going
13:39to vary if you do poorly in directional
13:41action for a week and then write a note
13:43that says avoid Direction you could ruin
13:45your entire chance at ever succeeding
13:46without getting boring you cannot make
13:48important and concrete conclusions about
13:50what you'll do without a representative
13:52amount of data now one week is not
13:54enough to find your best max daily loss
13:56whether you adapt to all price action or
13:58wait for specific specific conditions or
13:59to set various rules about Target size
14:01stop-loss size or your Preferred Risk
14:03reward ratio you will never be able to
14:05make objectively smart and helpful
14:07decisions unless you're basing those
14:09decisions on representative data so how
14:11long exactly should this experimental
14:13phase be and how long is it going to
14:15take for you to perfect your own unique
14:17approach to the same fundamental
14:18concepts that I'm using well it took me
14:20about a year to finally know all of the
14:22variables I use and guess what maybe in
14:25the future something will be different
14:26maybe not you definitely don't need a
14:28year so here's part of why it probably
14:30took me longer than it should have and I
14:32bet you will recognize some of my
14:33mistakes in your own trading I mean also
14:35the part that I had to make all of this
14:38but still it shouldn't have taken that
14:40much time here's be quiet hold let's
14:42continue we want success we want results
14:44right now but nobody is consistently
14:46profitable longterm in a short amount of
14:49time here's another thing for months my
14:51max daily loss was too high I knew it
14:53was too high and I left it where it was
14:55partially due to outside influence which
14:56was done by me but also because I just
14:58ignored the data since it was suggesting
15:00something I didn't want to do every
15:02single aspect of how I apply categorical
15:04trading is based on objective data and I
15:06made a mistake by ignoring the data and
15:08having my max daily loss too high for
15:10months right now I'm taking less trades
15:12in a week than I used to do in a single
15:14day and my results have never been
15:16better so anyways don't put yourself in
15:17a box too early because how else are you
15:19supposed to know what you're good and
15:20bad at if you don't take enough trades
15:22and give yourself the chance to
15:23experiment eventually you will have to
15:25decide whether you constantly adapt and
15:27really focus on one condition change or
15:29be like me and just patiently wait until
15:31you get the conditions with your Edge
15:34you won't even experience fomo while
15:35candles go on without you because you'll
15:37know that your trading performance
15:39longterm is terrible in those conditions
15:41and why would you feel fomo if you know
15:42you'd be losing money but again you're
15:44going to absolutely ruin your chances of
15:46success if you set hard rules for
15:47yourself too early on that same topic of
15:50adapting to everything or waiting keep
15:52in mind that you don't have to trade
15:53every day or every moment that is a
15:55completely irrational decision we make
15:57either because trading is fun because
15:58you just want to make as much money as
16:00possible and so you force trades or a
16:01plethora of other reasons that end up
16:03doing more harm than good but again
16:05before you actually decide which
16:07conditions to sit out and to push it in
16:08you need to trade in all conditions to
16:10determine what you're good and bad at if
16:12you trade for a while look back on
16:14everything and realize you'd be
16:15consistently profitable if you avoided
16:17Direction which is what I realized then
16:19obviously avoid Direction just make sure
16:21all decisions are based on
16:22representative data AKA lots of trading
16:25sessions overtime overtime so what time
16:28should you trade I know most of you want
16:30a simple answer but I'm not here to sell
16:32you a course with the illusion that you
16:33can shortway your
16:35cut that you can shortcut your way to
16:37profitability personally I trade from
16:399:33 to 950 a.m. EST at the market open
16:43that might change but that's what I'm
16:44doing right now oh why so specific I man
16:46what if there's a good setup at 963 o00
16:49because I started by trading the entire
16:51day then started at 10 then tried the
16:53open then went back to 10 traded long
16:55short and medium sessions and then I
16:57went back to the open and that's that's
16:58where I stayed because the data said to
17:01I tested everything different charts
17:03markets time frames time of day session
17:05length risk reward ratios and every
17:07other possible variable I've discussed I
17:09Implement these Concepts through
17:11scalping and if you lived in my head and
17:13understood what life is like to me you
17:14would too the intensity and pace is
17:17where I thrive in college I could get
17:19more work done in 2 hours than I could
17:21in 20 hours if I waited until the last
17:23possible moment of an assignment due
17:25date to start the pressure and intensity
17:27allows me to concentrate to the ability
17:29of probably a normal person you might be
17:32best at trading after the first hour of
17:34Market open right up until close going
17:36the whole day or maybe you like the
17:37lunch hours because volatility dies down
17:39or maybe pre-market maybe something else
17:41maybe you like the so-called chaos of
17:43when I trade maybe you like when it
17:45slows down so you can be more analytical
17:47and patient everyone is different you
17:49are bringing a unique biological
17:51predisposition to trading and what works
17:53for someone else might not work for you
17:55you're going to hear robots in the
17:56trading world without a single ounce of
17:58self-awareness or ability for
17:59introspection tell you that you're
18:01trading wrong or that you should be
18:02doing something different but remember
18:03that these people forgot to unlock the
18:05ability at 3 years old to understand
18:07that other people experience the world
18:08differently from themselves so off with
18:11your unsolicited advice and keep on
18:13taking trades because a prolapsed turkey
18:15a Candlestick pattern showed up on the
18:1714-minute time frame showing a
18:18Divergence from the chicken wing Market
18:20in your 17 trade flawed discretionary
18:22back test is telling you to go long
18:24anyone who is truly trading this
18:26strategy will be following the same
18:27fundamentals of categorization where it
18:29differs is how you choose to implement
18:31everything and that's good don't force
18:33yourself to trade exactly the same as
18:35someone else unless they're your
18:36biological twin or clone I'm terrible
18:38with this in Direction and on higher
18:40time frames in the same way that you
18:42might struggle in areas I excel we are
18:44all using the same tool but everyone
18:46will have variations in the way that
18:48tool is used same Foundation slightly
18:50different applications let me ask you
18:52something if price action keeps
18:54switching from direction to
18:55consolidation and you're having a hard
18:57time reading it what type of trade
18:58should you take none you're guessing how
19:01are you supposed to take a trade based
19:03on categorizing price action if that
19:04category keeps changing too fast and you
19:06know I think this is um this is maybe
19:08one of the parts that people struggle
19:10with the most I'm just yapping Off
19:11Script but I got to I got to say this
19:13what percentage of people are even
19:14willing to go an entire day without
19:16taking a trade all right we we force
19:18things we want to make money you will
19:20know over time whether you're just
19:22guessing or if you're actually following
19:24the price action
19:25category I know because I am you I I
19:28still do it every once in a while all
19:30right okay back to the script if action
19:32is too chaotic you should not be taking
19:34a trade because categorical trading has
19:36no chance to work if consolidation is
19:38turning to Direction and vice versa too
19:40quickly again that's easier said than
19:42done and it's hard not to take a trade
19:44no strategy is going to work in every
19:46condition and regardless of your
19:48approach forcing trades every day is
19:49going to destroy you which I say from
19:51personal experience and probably taking
19:53too long to realize that and truly
19:55implement it so keeping it simple
19:57consolidation trades should only fail if
19:59it turns to Direction and directional
20:01trades should only fail if price pulls
20:03back and slor turns to consolidation
20:05which it would have to pull back to do
20:07obviously nothing will always work so
20:09here's the important thing to always
20:10remember regardless of your strategy was
20:12it a good trade that didn't work a good
20:15trade that worked a bad trade that
20:17didn't work or a bad trade that got
20:19lucky and worked this approach is not
20:21just guessing and hoping it works when
20:23you look back on your trades you should
20:25immediately know if the entry was good
20:27if the Target and stop size were good if
20:29it was the right trade to take based on
20:31the action and more here's something I
20:32bet you'll relate to how many times
20:34would you have done well if instead of
20:36trying to predict when something changed
20:38you just followed it I bet many of you
20:40are like me and are naturally inclined
20:42to want to time reversals time the
20:44breaking of consolidation and time
20:46pullbacks this is part of how we can
20:48achieve consistent unprofitability the
20:51desire to time change instead of trading
20:53according to the current price action
20:55conditions on my website for this thre
20:58on my website page for the strategy in
21:00the pinned comment I will include videos
21:01that are dedicated to some of the topics
21:03discussed here I'm man trading. org
21:05anyways if price action can't be
21:07categorized because it's too chaotic
21:08this approach won't have an edge and you
21:10should join me as I stare at the charts
21:11with no desire to take a trade because I
21:13know I'd be flipping a coin with no Edge
21:15on my side or maybe I am taking a trade
21:17and then I'll I'll cry later come cry
21:20with me since we've already covered that
21:22this is just about categorizing price
21:24action it's applicable to any Market I
21:26like Futures I think they're the best to
21:28trade and since I'm personally scalping
21:30I trade the NASDAQ but for higher time
21:32frame applications of this the S&P 500
21:34is probably a better option for its
21:35liquidity and potential to largely scale
21:38the size that you're trading but as with
21:39everything search for what you like and
21:41do some experimentation if you're
21:43looking for a full introduction to
21:44everything on Futures I made one that's
21:46less than 10 minutes long and I'll link
21:47it in the top right if I haven't hit the
21:49maximum card limit yet it honestly blows
21:52my mind at the amount of people who want
21:53to succeed at trading yet won't put in
21:55just a tiny amount of effort into the
21:57most helpful tool that exists to assist
21:59with the learning process which is
22:01journaling and honestly just recording
22:03your trading sessions I journaled like a
22:05maniac in the beginning just because I
22:06was trying to create all of this but now
22:09I hardly do it at all unless I find some
22:10new underlying issue or annoying mistake
22:13so you know every couple of weeks let's
22:14say you traded poorly for a whole week
22:16and you're going I don't know what I did
22:17wrong well guess what if you took 10
22:19minutes out of your day to organize and
22:20make sure you were screen recording your
22:22whole trading session it would then take
22:2420 minutes to find out exactly what you
22:26were doing wrong by analyzing the trades
22:27in your recordings it is an
22:29astonishingly small amount of effort
22:31with the greatest return possible it's
22:32like a 1 to million risk reward ratio
22:35with a 99% win rate and if you still
22:37don't know what went wrong after
22:39analyzing a set of sessions that tells
22:40me that the approach isn't fully
22:42understood I know I'm unloading a ton of
22:44information on you but every trade is
22:46either good or bad and that has nothing
22:47to do with whether it worked or not for
22:49this approach you either weren't trading
22:51direction or consolidation correctly or
22:53you were taking the right trades that
22:54happen to get stopped out due to
22:56conditions changing in that case Cas
22:58they weren't bad trades they were just
22:59part of a normal distribution of losses
23:01and if that's not the case then you were
23:03probably trading when you shouldn't have
23:04been in the recordings you'll also see
23:06if you were forcing trades trading in
23:08conditions you should have sat out and
23:10so much more the only thing that can
23:11show you whether you were following your
23:13Edge or not is through recording so you
23:14can watch everything back looking at
23:16each individual trade and overall
23:18trading session from that day is where
23:20the real learning happens and once you
23:22really understand this approach you
23:23should be taking the same trades in your
23:25head when watching back the recording if
23:27you're watching the candles in a
23:28recording and you go long but in the
23:30recording you go short that disconnect
23:32indicates an issue maybe you were taking
23:34a trade in chaotic price action that
23:36couldn't be categorized or maybe you
23:38took the incorrect trade or maybe your
23:40entry was bad I don't know this is
23:41something I realized when watching back
23:43my own recordings months ago I wasn't
23:45taking the same trades in my head but
23:47now I'm almost always mentally taking
23:49the same trade in price action before I
23:50see the trade I actually took in the
23:52recording of
23:53course that's only if I'm following my
23:56rules and not just taking a complete
23:57guess due to a lack of discipline to
23:59wait for my ideal conditions
24:01additionally this is a good time to
24:03analyze the quality of the entry did you
24:05wait a little too long did you get in
24:06too early or was the timing great doing
24:09this is how I made slight changes to how
24:10I implemented all of these Concepts and
24:12variables for example I don't take
24:15trades when price action is at the low
24:16or high of day that seems like a weird
24:18rule it's still price action sure but
24:21guess what I consistently lose money
24:22while doing that so now it's part of my
24:24reminder document and I avoid it
24:26entirely and once again and all the
24:28things I'm saying might be slightly
24:29different in the future in fact I can
24:31almost guarantee it journaling is the
24:33entire reason behind the creation of
24:35this system but I explained exactly how
24:36I did that in the very long trading
24:38guide video in the top right in the
24:40journaling section that video is a whole
24:42whole Guide to Everything on trading how
24:44to learn not how to do it how to learn
24:46it which is very different you will have
24:49to do that if you want to make your own
24:50strategy but if you're following mine
24:52then that means a lot less work for you
24:54the most recent example I can give of
24:56the benefits of journaling and recording
24:57is is when I was analyzing some
24:59recordings and realized I wasn't trading
25:00with the correct bracket size I was
25:02asking too much out of price action and
25:04I never would have realized that if I
25:05didn't have something to look back on
25:07and watch play out in real time this is
25:09what led to the whole section about
25:10adjusting the time frame of the chart to
25:12artificially create the volatility
25:14conditions you like more on journaling
25:16and the reminder document I use that
25:18keeps me focused on everything later
25:20just remember if you really want to
25:21actually solve problems and make real
25:24progress record your sessions I use OBS
25:26it's free why a 5 minute tutorial on
25:29YouTube to set it all up save the
25:31recordings by date and how much you made
25:32or lost that way you can go through
25:34everything later particularly you can go
25:36through the worst performances and I
25:37almost guarantee that you'll find a
25:39common denominator linking them all
25:41together that's how you solve your
25:42problems and make progress make
25:44adjustments to the variables and
25:46determine the best max daily loss for
25:48yourself that amount is going to be
25:49different for everyone think of it as
25:51the point of no return that brings us to
25:53a very important lesson that you need to
25:54remember just because you know what
25:56you're doing wrong and just because
25:57because you know what you're supposed to
25:59do it doesn't mean you'll do it we're
26:01humans right we're irrational and
26:04trading is unlike anything else in the
26:05world I'm getting much better at this
26:07but I'll still make mistakes right after
26:09reading a reminder that specifically
26:11says not to do whatever I did over time
26:14we get better at this especially after
26:16we've proved that not following
26:17reminders makes us lose money in the
26:19long run but remember that figuring out
26:21a problem and knowing what you're
26:22supposed to do is only half the battle
26:24it's much easier to follow your rules
26:25once You' spent enough time Trading to
26:27realize how good at trading you'd be if
26:29you stayed disciplined the desire to
26:31make money and not lose it then becomes
26:33the main motivation to follow the rules
26:35that you have a hard time not breaking
26:37and slowly over time emotionally based
26:39issues are solved with logic why would I
26:42feel fomo in this uptrend I know I'd be
26:44losing money see what I'm saying anyways
26:47nobody's perfect especially not me
26:49people want a shortcut and for me to say
26:51something that will fundamentally change
26:52someone that's not how it works put in
26:54the work in the hours and you'll
26:56eventually defeat those goblins or at
26:58least you know rain them in a little bit
27:00keep them lock them lock them up uh put
27:02a leash on them you know they're still
27:04there they're always going to be there
27:05but you'll get better at it better again
27:08you figure out a problem through
27:09journaling and recording you make a
27:11reminder to address it and then comes
27:13the difficult part of actually following
27:15those reminders on the day I'm adding
27:17this particular note which is December
27:195th I broke my rules about stopping
27:20trading at 942 when there are 9:45 news
27:23announcements which I check every day on
27:25forexfactory.com my rule is to stop
27:28there but regardless of the varying
27:30contributors as to why I did this I
27:32broke my rules and took two losing
27:34trades to hit my max daily loss cool
27:36just because you know what you're
27:37supposed to do it doesn't always mean
27:39you'll do it that's what I mean when I
27:40talk about the disconnect between
27:42awareness of a problem and actually
27:43having the discipline to always follow
27:45your rules and guess what here I am 2
27:48days later after realizing that making
27:49this video has completely ruined my
27:51ability to focus only on the very
27:53specific price action that I wait for
27:55and then trade I have reverted to my old
27:57mistake AK of trying to trade every
27:59category because explaining all of the
28:00ways this system can be implemented has
28:02made me lose focus on the way that I
28:04personally use it this approach has a
28:06ton of ways that a person can
28:07personalize it and I only use a tiny
28:10portion of its potential because that's
28:12what works for me this has been an
28:13expensive lesson to learn and I
28:15basically wiped out all my progress you
28:17know when I was talking earlier about 2
28:19weeks all all green
28:21days yeah that was fun so now I'm taking
28:23a break from Trading until this is done
28:25oh well everything is a Learning lesson
28:28some just hurt more than others shout
28:29out to those who know the guy who who is
28:31the who the guy is in this picture wrong
28:33answers only wealthy Kevin all right so
28:36like what do I do first remember
28:38consolidation or Direction have the
28:40rules memorized look at the candle size
28:42base targets and stop losses on what's
28:44reasonable from the recent candles
28:46without asking too much out of price and
28:47take some one toone risk-reward ratio
28:50trades we've covered everything about
28:51the strategy and here's something really
28:53important that I only recently realized
28:55a lot of people mistake this for just
28:57being complete guessing obviously every
28:59strategy involves predicting but there's
29:00also a very clearly defined approach to
29:02take depending on the price action type
29:05type and we covered when the edge isn't
29:07going to work which is very important
29:09you should be focusing almost everything
29:11on whether it's consolidating or
29:12directional test it out for a couple
29:14weeks see if you're naturally inclined
29:15towards it maybe you love it maybe you
29:17hate it remember everyone's different so
29:19you know do whatever take lots of Trades
29:21and record everything if you don't
29:23record it so you can look back later and
29:24determine if the trades were following
29:26the system you're depriving yourself
29:27with the most beneficial learning tool
29:29and you're going to make progress at a
29:30faction at a fraction of your potential
29:33at a fraction of your potential and I'll
29:35have a reminder document for you later
29:37that you can copy an approach should be
29:39very clearly defined and mine is but
29:41there's a lot to remember so that
29:43document will help okay so how do you
29:45know when you shouldn't trade this is
29:47the last section before I explain
29:48everything I possibly can about how I
29:50personally Implement all of what I've
29:52talked about over time once you truly
29:54know your strength and weaknesses you
29:55will intuitively know when you shouldn't
29:57be taking a trade you're going to feel
29:59it but to start and this is only after
30:01you've determined all of this
30:02information through representative
30:04amounts of data you should have a
30:05reminder document with pictures of the
30:07price action you're bad at this is so
30:09simple but it removes all of the
30:11ambiguity on whether price action is
30:12good or bad for you if the current
30:14action looks like the pictures you have
30:16up then sit it out over time after
30:18enough repetition of watching price
30:20action and checking that reminder you
30:21will just know whether or not your
30:23approach has a chance to work as it was
30:25for me this will be an exciting
30:26realization for you you'll calmly do
30:28nothing because you know you'd be losing
30:30money long term and there will be no
30:32ambiguity on whether you should trade or
30:33not of course as I said earlier uh me
30:36writing this in the future once I
30:38started making this video and getting
30:40deep into all the aspects that I don't
30:41use anymore that whole thing got
30:43completely removed from my brain and now
30:45I'm taking a break from Trading until
30:46this is all finished so I can go back to
30:48trading the only parts that I'm good at
30:49but I had to cover everything in this
30:51video to show you all the possible ways
30:52that it could be implemented which was
30:54necessary to do because we're not the
30:55same person and could have polar
30:56opposite performances which means I got
30:58to show you the the whole the whole pie
31:01even though I only use a little slice
31:03but explaining how to use the whole pie
31:05made me start using slices I don't like
31:08Beyond identifying types of price action
31:10to avoid which is direction for me as
31:12you see in this picture you might find
31:14yourself noticing specific areas within
31:16price action that you lose your Edge or
31:18just you know perform poorly in I have
31:20poor trading performance at the high or
31:22low of day and at pivots so guess what I
31:25don't take trades there anymore where
31:27whether it's psychological or something
31:28else the result in the data shows me
31:30being very bad so I don't care about why
31:32that is a thing exists I don't have to
31:35fix every issue to trade every possible
31:37second I just need to be good at what
31:39I'm naturally inclined towards and to
31:41have the discipline to do nothing in
31:42price action conditions and specific
31:44areas where I lose my Edge I wanted to
31:46bring this up as an example of something
31:48that you might want to keep in mind
31:49within the overall conditions you like
31:51it's important for you to keep in mind
31:53other smaller additional factors I also
31:55avoid taking a trade after a High
31:57volatility candle because I find that
31:59for me it's just a 50/50 guess on what
32:01happens next but in retrospect after
32:03writing that it makes a lot of sense
32:05because a huge candle is a break of the
32:06recent structure and is therefore the
32:08start of a new price action category or
32:10lack thereof we don't know what category
32:13it is until we get a couple candles SO
32:15trading at that moment is a 50/50 guess
32:17on whether you expect it to continue or
32:19pull back okay like yeah obviously but
32:21there's no Edge on your side to flip
32:23that coin in your favor all right maybe
32:25I chose a bad picture for this but if I
32:27was following my rules then I shouldn't
32:29have taken a single trade on this day
32:31does not taking a trade for a couple
32:32days suck maybe a little but not really
32:35because I know I'd lose money in this
32:37and I don't like losing money the
32:38reminder document I have up on my left
32:40monitor is different than it was 3 weeks
32:42ago 1 month ago and blah blah blah
32:44reminders are little simplifications of
32:46more complex lessons which I'm
32:48elaborating on for the first time in
32:49this video reminders are personalized
32:52the issues you struggle with are
32:53different from mine maybe you hesitate
32:55too much maybe you overtrade whatever
32:57this document is going to change a lot
32:58over time as you solve old problems and
33:00encounter new ones to start your
33:02reminders should be how to trade
33:04Direction vers consolidation because you
33:06need to really internalize the system
33:07I've explained I made I made one of
33:09those for you though so it's coming up
33:11later I made you a document I love you
33:14now here's another amazing tool that
33:15took me way too long to get an idea for
33:17I found a YouTube video that's
33:19completely silent except every 3 minutes
33:21a bell goes off when this happens I
33:23analyze all of my reminders think about
33:25each reminders think about each one a
33:27little bit to make sure I'm not just an
33:29autopilot and then I look right back at
33:31the charts with some reinvigorated focus
33:33and attention on the right aspects if my
33:35mind is blank I'm just going to take
33:37random trades and not follow the system
33:39so this is very important for me and it
33:41probably will be for you too it will
33:43take you some time to create the
33:44reminders that address your unique
33:46challenges so be patient after you've
33:48made some progress and know what you're
33:50good and bad at I recently added a
33:51picture to my reminders of my best price
33:54action type and it's another stupidly
33:56obvious thing I should have have done
33:57earlier if price action doesn't look
33:59like this I'm not trading unless I break
34:01a rule of course I also used to have a
34:03picture of price action to avoid but now
34:05I just know when not to take a trade so
34:06I don't have that up anymore that's an
34:08example of how your reminders will
34:11evolve also just kidding me from the
34:13future here guess who will be adding
34:15back pictures of action I avoid because
34:17my brain can't separate my Approach from
34:19the possibilities of all approaches me
34:22me it's me if you didn't guess it's me
34:24but at the time of writing that I really
34:26did that that issue uh well at least
34:29temporarily solved until I started
34:30working on this video and everything
34:32just melted into one thing in my
34:34head mistake reversion is the name I've
34:36given to the problem of overcoming an
34:38issue only to end up doing it again at
34:40some point in the future this is where
34:42journaling and keeping your old reminder
34:44documents comes into play because if
34:46you're currently experiencing an issue
34:48you might end up finding that you were
34:49doing the same thing two months ago I
34:51myself did
34:54this I myself did this in regards to mov
34:56moving profit targets and stop- losses
34:58and going for trades that were too big
35:00my eyes burn so much right now this is
35:02taking forever to record my throat hurts
35:04I kept reverting to making the same
35:06mistakes which led me to making a
35:08separate document specifically for those
35:10problems that kept coming up for me this
35:12defeated that vicious cycle now my
35:14Approach is very rigid without any
35:16freedom I do not move profit targets
35:18further go for bigger trades try to time
35:20when the low or high of day will break
35:22or anything else of course you're going
35:24to constantly find new mistakes that you
35:26repeat just like I do I know the system
35:28the hard part is all the little stuff
35:30that your brain does to make trading
35:31difficult oh God here's a neat little
35:33trick that I now use to take advantage
35:35of me being inherently bad at trading
35:37and internally controlled by a goblin
35:39that wants to gamble reverse it bang
35:41easy I want to go long at the top of
35:44consolidation because timing that break
35:46right makes my brain light up like a
35:47gambler at a slot machine so I say haha
35:50nice try you I will now short the
35:52high probability losses based on the
35:54different conditions are exactly what my
35:56brain ow always wants to do and so I
35:58realized
35:59hey let's use that to my advantage I'm
36:02incredible at being consistently
36:04unprofitable so now I focus on what the
36:06high probability loss would be based on
36:08the conditions and I reverse that for me
36:10it's easier to focus on what wouldn't
36:12work as opposed to focusing on what
36:13would work would work I bet a lot of you
36:16were like me in that sense although I
36:18bet you didn't buy scratch tickets
36:19instead of food when you were 18 for
36:21many of you who are like me focusing on
36:22what not to do and taking advantage of
36:24your brain's idiocy can be a major
36:26strength you're still focusing on what
36:27to do and how to do it just from a
36:29different perspective hopefully that
36:31helps the tiny amount of you who are
36:32actually still watching this video is a
36:34big shortcut on everything I had to find
36:35for myself so basically one year of me
36:37trading every day but there's still a
36:39huge amount of work on your end all the
36:40work is about how you're personally
36:42going to implement everything my eyes
36:44they burn so bad I've already talked
36:47about this a lot so I'm not going to
36:48linger here but not trading is just as
36:51important as trading how many of you
36:52would be consistently profitable if you
36:54eliminated forcing trades and conditions
36:56you don't do well in that was quite a
36:57shocker when I realized that myself you
36:59don't need to trade every day we've been
37:01wired to think that you're supposed to
37:03work every day cuz you know that's what
37:05normal normal people doing normal jobs
37:07do but this isn't a normal job if you
37:09don't take a single trade in a session
37:10you know you do poorly in you should be
37:12proud of yourself come
37:14here don't touch me discipline
37:17is something you should celebrate more
37:18than a green day or maybe the same
37:20amount I just I don't know because it
37:22doesn't matter how well you do on Monday
37:24if you then Force trades and bad action
37:25for the rest of the week and lose
37:27everything know that when you aren't
37:28trading in conditions you've identified
37:30as having no Edge for you personally you
37:32saving yourself from losing lots of
37:33money this is a recent problem I was
37:35facing right before making this video
37:37because I feel a lot of pressure on my
37:38funded account right after making that
37:40breakthrough with the time frames
37:41volatility bracket adjustments and
37:43overall just adapting better in the
37:45moment I started doing very well and
37:47believe I'm on two weeks without a red
37:49day hey it's me from the future ruined
37:52all that progress after making this
37:53video threw me out of the zone of
37:54trading really good and going back to
37:56random guesses and conditions I avoid
37:58not going to trade until I finish this
37:59video anyways I started getting a bit
38:01anxious about how I'd perform in the
38:02mornings as I laid in bed trying to fall
38:04asleep thankfully I almost immediately
38:06realized why it literally means nothing
38:09one day one trading session that means
38:11nothing at all the only thing that
38:13matters is how you do over a couple of
38:14weeks a month even longer that defeated
38:17that part of the pressure for me we all
38:19want to do well and it's difficult to
38:20not get caught up in the moment but if
38:22how you trade today doesn't matter in a
38:24year then does it really matter but
38:25don't don't think about that too much
38:27cuz nothing really matters the answer is
38:28no it doesn't what matters is how you do
38:30over the long run but again analyzing
38:32each individual session's recording
38:34after you're done will'll tell you if
38:35you're taking the right trades or not
38:37because this approach is very clearly
38:38defined and a lack of understanding
38:40about whether it was a good trade or not
38:41indicates a lack of understanding about
38:43the approach maybe that's partially my
38:45fault in not explaining everything
38:46correctly but I do believe that I
38:48couldn't be more clear on exactly what
38:50I'm looking at so anyways losing a win
38:52streak doesn't matter the individual
38:53session doesn't matter pressure is a
38:55madeup thing by your brain and based on
38:56an irrational fixation on short-term
38:58results and emotions all right me time
39:01reminders change as you solve old
39:02problems encounter new ones and then
39:04revert to making the same old mistakes
39:05every once in a while just to really
39:07remind yourself why they exist in the
39:08first place so moving from top to bottom
39:11I start every trading session by
39:13clicking on that video that plays a bell
39:14every 3 minutes for me to check my
39:16reminders again and I check to see if
39:18there's any economic news releases
39:19during the session forexfactory.com I do
39:22that so I'm not in a trade at the time
39:23of a release this document also shows
39:26you recently I started adjusting the
39:28time frame in order to get the
39:29conditions I like since it's still a
39:31reminder rather than just a habit I'll
39:33always do with no need to be reminded
39:35about there's only a few main important
39:36focuses which is about ATR price
39:39structure and making sure I'm using a
39:40bracket size that doesn't require any
39:42change from Price action to work with
39:44follow Direction and do mean reversion
39:46and consolidation and having that note
39:47about the high probability loss was
39:49explained earlier in the video also what
39:51the heck I just adjusted this document
39:53to ignore Direction I don't care what
39:55I'm supposed to do in Direction cuz
39:57guess what I'm not going to do it I wait
40:00for consolidation or do nothing
40:02hypothetically also it's easier for me
40:04to focus on what not to do because it
40:06keeps the goblins from taking over in my
40:07brain and just going for low probability
40:09trades as explained earlier reminders
40:11are little simplifications of more comp
40:13one trick to make sure you're actually
40:15paying attention to these reminders is
40:16to think deeply about each one before
40:18moving on to the next adding more
40:20information and reflection in your head
40:21in response to each one that ensures
40:23you're actually thinking about it while
40:24devoting your attention energy and focus
40:27okay oh my God we covered an insane
40:30amount of information and there's maybe
40:31seven people in the world with freak
40:33memories that can actually retain
40:34everything to the true extent of each
40:36Topic's complexity so unless all of you
40:38are one of those seven people you might
40:40need to rewatch certain sections here's
40:42a little cheat sheet or even a well not
40:45even it is here's a little cheat sheet
40:47SL reminder document SL starter for your
40:50own reminder document about this
40:52strategy I made this in like 7 minutes
40:54so any updates will be on my website
40:56where you you can copy it into your own
40:57document and make adjustments it's on my
40:59website go go there it's free it's all
41:01free it's a good starter that covers
41:03basically everything websites in the pin
41:05comment I would go through everything
41:06here right now but I honestly just never
41:08want to have to look at this PowerPoint
41:09or script ever again remember to check
41:11my website in the pinned comment which
41:13has resources for everything but
41:14particularly more information about this
41:16strategy I live stream every morning
41:18during my trading session at the market
41:20open on my second Channel IM man trading
41:22live thank you to my patrons for helping
41:24support my mission and the work I do
41:25here on YouTube I appreciate you so much

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