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The ULTIMATE Smart Money Concepts Guide (Full Course) — Transcript

by Lewis Kelly · 8,976 words · 1,273 segments · language en · Watch on YouTube

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0:00If you're tired of losing trades, tired
0:03of second-guessing all of your entries,
0:05and tired of searching for something
0:07that actually works, then this video is
0:10for you. I'll be breaking down the
0:12ultimate smart money concepts guide.
0:14These are the exact concepts that helped
0:17me go from a regular losing trader to a
0:20confident, consistently profitable
0:22trader who trades hundreds of thousands
0:24of dollars. So, here's what you can
0:27expect in this video today. I'm going to
0:29walk you through three core lessons that
0:32are at the heart of mastering smart
0:34money concepts. And they are as follows:
0:37liquidity, supply and demand, and market
0:39structure. And then I'm going to piece
0:41it all together into a stepbystep
0:44trading strategy and walk you through a
0:47live trade example so you can see how it
0:50actually works in action. By the end of
0:52this video, you're going to be able to
0:54look at the markets in a way that you've
0:56never seen before. I follow a principle
0:58that I call KISS. Keep it stupid simple.
1:02And this one idea might be the very
1:05thing stopping you from becoming a
1:07profitable trader. You see, we're taught
1:09that anything powerful must be complex.
1:13The best paying jobs in society,
1:15doctors, surgeons, lawyers, years of
1:18study, difficult exams, highlevel
1:20expertise. So, it's natural to believe
1:22that trading should be complex. And
1:25that's where 99% of traders go wrong.
1:27The truth is building a trading strategy
1:30is the easy part. And I didn't believe
1:32that when I started. I over complicated
1:34everything. I thought that more
1:36knowledge, more indicators, more tools
1:38would help me win. But it just made me
1:39confused. And I know that you felt that
1:42too. You follow these gurus who teach
1:44you 57 ways to analyze one chart and
1:47then wonder why your mind's fried every
1:49time you open Trading View. What
1:51actually works is simplicity. And that's
1:54what I'm going to be teaching you today.
1:55As a profitable trader, your only goal
1:58is to understand how smart money move.
2:01These three core concepts, liquidity,
2:04supply and demand, and market structure,
2:05they're not based on retail gimmicks.
2:07They're built on first principles. The
2:10problem with most retail traders is they
2:13focus on effects instead of causes. Take
2:16something like a moving average. It
2:18shows you what has happened, not what
2:20will happen. But the market doesn't
2:22reward you for knowing the past. It
2:24rewards you for understanding intention.
2:26And when you really start to grasp why
2:28price moved, not just that it did,
2:31everything will change. As a retail
2:33trader, your job is not to move the
2:35market. You can't. Your job is to read
2:37the battle between the big players, the
2:39real money, and then align yourself with
2:42the side that's going to win. Because
2:44when they win, you win. So, let's dive
2:47in to lesson number one. It all starts
2:50with this one concept, liquidity.
2:53Because until you understand what
2:54liquidity is and how it's used, you'll
2:57always be the one getting stopped out of
3:00your trades, not the one who understands
3:02what's happening. When I first started
3:04trading, I thought the market was fair.
3:06I thought it rewarded logic, that good
3:08trades won, and that bad trades lost. I
3:11was completely wrong. If you've ever
3:13felt like the market knows exactly where
3:15your stop loss is, you're not crazy.
3:17You're just finally starting to see the
3:20game for what it truly is. This market
3:22isn't random. It's engineered. And at
3:25the heart of that engineering is one
3:28powerful force, liquidity. Let's strip
3:30it back. What is liquidity really?
3:33Liquidity is fuel. It's what
3:36institutions, the real players, need to
3:39enter and exit massive positions without
3:42moving the market too much. If you're
3:44trying to move $500 million into the
3:47market, you can't just hit buy like we
3:49do. You need a counterparty interest. In
3:52other words, you need other people to be
3:54on the wrong side of your trade. And
3:57that's where manipulation comes into
3:59things. Other traders are so obvious and
4:02predictable in their behavior. You have
4:04to understand that you're not the target
4:06because you're wrong. You're the target
4:09because you're needed. Imagine this.
4:11Price is pushing up into a key area of
4:14resistance. Everyone online is calling
4:16for the short. It looks perfect
4:18textbook. And then boom, one final spike
4:22up. Everyone gets stopped out and the
4:24market melts in the original direction.
4:27What actually happened? The market
4:29grabbed liquidity to fuel the real
4:32positions. Once you actually understand
4:34this, you can stop trading with the
4:37herd. You stop looking at the chart like
4:39a retail trader and you start asking the
4:41right questions. Where is the liquidity
4:44and who needs it? Because the market
4:46doesn't move on your signal. It moves on
4:49their intention. Let's use this price
4:51chart in front of us to understand where
4:54the key most common areas of liquidity
4:58can be found in the market. Let's start
5:00with the simple things. How about old
5:03highs and old lows? Very very easy
5:05stuff. What you want to be understanding
5:07is that everybody, including myself and
5:11other traders, they use old highs and
5:14old lows as areas to protect their
5:16positions and areas to take their
5:18profits. It's what most people use to
5:21use for their take-profits and also
5:23their stop- losses. So, what you can
5:24understand is that every old high or old
5:27low that you see sticking out of price,
5:30you can bet there is a bunch of
5:32liquidity at those levels. And why is
5:35that? Simply put, to understand
5:37liquidity, all it really means is fuel,
5:40as we've already covered. So, if you
5:41look at a position, liquidity is money
5:44in the market. So, every time that you
5:47get tagged into a trade, that liquidity
5:50flows into the market. Every time that
5:52your stop-loss gets hit, that liquidity
5:54from closing that position gets flooded
5:57into the market. Every time your takerit
6:00gets hit, that liquidity of buying or
6:03selling that position gets flooded into
6:05the market. Those are the points where
6:07liquidity enters the market. So, it's
6:09not about just every trade you take.
6:12People think that liquidity is only
6:13where people's entries are. That's not
6:15entirely true because you also enter the
6:17market when you take profit or when you
6:21take a loss. you're buying or selling in
6:24those moments and that liquidity flows
6:27into the market. So, think in terms of
6:29entries, yes, but also think in terms of
6:32stop- losses and take profit levels. Old
6:35highs are key areas where many traders,
6:39including institutions, place their
6:41stop- losses, place their entries, and
6:44place their take profits. Think about it
6:46for a second. If you're looking at this
6:48market right here, the buyers who are
6:50trying to buy in these regions are
6:53likely to have their stop losses
6:55protected at maybe this low or maybe
6:57this low, making this a large liquid
7:00area. The same as for sellers. When
7:02sellers are stepping into the market in
7:04this region, they're probably putting
7:06their stop losses above this high or
7:09this high in here. Again, making these
7:11huge areas liquid. And then you have
7:14breakout traders, right? The types of
7:16traders who are identifying lows and
7:18highs like this. And what happens is
7:20when price trades through this level,
7:22they execute sell positions in this
7:25scenario because they think that price
7:26is going to continue going lower. So
7:28they execute their sell positions when
7:30price breaks through this level. That is
7:32also liquidity. And when they're selling
7:34that position, where do you think
7:36they're putting their stop losses?
7:37They're probably putting them above some
7:39highs like this. And then the same for
7:41the buyers, right? When you have
7:43breakout traders who are looking at this
7:45high here to be an area of resistance
7:47that if traded out of, they will use as
7:50a confirmation to go long. Well, they're
7:52going to be buying above this high. And
7:54where do you think they're placing their
7:56stop loss? It's probably going to be
7:57below this low, below this low, or below
8:00this low. And this is happening on all
8:02time frames at all times. So highs and
8:05lows are key liquidity areas, especially
8:09when you start to understand context.
8:12It's one thing to understand that a high
8:14and a low is liquidity. It's another
8:16thing to understand what liquidity is
8:18going to be there. Who is looking at
8:20that level and whose liquidity is
8:22available, entries and exits. When you
8:25could start understanding who's there
8:27and what they're looking at, that will
8:29take you to another level. Many traders
8:31with smart money concepts make the
8:33mistake of just spotting patterns.
8:36They're taking the same retail thinking
8:38of trying to find head and shoulders
8:40patterns or trend lines and applying it
8:42to smart money concepts, order blocks,
8:45equal highs. They're using the same idea
8:47as pattern recognition. That's why most
8:49SMC traders also fail. The reason is
8:53because they are using pattern
8:54recognition. What we use is context. We
8:59understand why this is happening. It's a
9:02huge difference. So now we understand
9:04highs and lows are extremely liquid in
9:07this market. We can also go into
9:09something a little bit deeper. How about
9:11other types of entries? Let's look
9:14example at support and resistance. So
9:17what we can see here on the same chart,
9:20the same price action are different
9:22types of mines. Look at this level here
9:24for example. This area here you can see
9:27we trade through it, we come in, we test
9:29that level, we trade out of it, we come
9:31back, we test it again, we start trading
9:33out of it. So at this area right now,
9:35this is a key area of resistance, right?
9:38We have this high comes across this high
9:41comes across this high. Traders are
9:42looking at this as an area that price
9:44isn't willing to trade above. Therefore,
9:46that's a sell signal for them. So, we
9:48understand there are perspectives in
9:51this market that are looking at this
9:52area as a perfect opportunity to sell.
9:55And so, maybe they're already selling.
9:57Maybe they're getting ready to get in
9:58sales. What that simply means is we
10:00understand that this area here is highly
10:03liquid from sellers. So, where are they
10:05likely to put their takerits and where
10:08are they likely to put their stop
10:09losses? They're probably going to be
10:10putting their stop losses up here and
10:12maybe they have their take profits down
10:14at this low or maybe down at these lows
10:16in here. On the other hand, you actually
10:18have the buyers who are seeing that this
10:20is actually an area of support. You can
10:22see that we come into this level, we
10:25trade out of it with a large wick. The
10:27body closes up in here. We come back to
10:29this same area in here and we respect
10:32it. We trade out, we come in, we trade
10:33out, we come in, and now we're back in
10:35here. And looks like we're getting a
10:37little bit of a bullish reaction. There
10:38is probably also going to be a lot of
10:41buyers who are sitting at these regions.
10:44And where do you think they are looking
10:46to place their stop loss? Probably under
10:48a low like this. Where are they going to
10:51be looking to take their profits?
10:52Probably at the highs here or above here
10:55or maybe even above here. So there's
10:58another lens of understanding large
11:00clusters of behavior. The thing is is
11:03there aren't that many strategies to
11:05trade. There's support and resistance,
11:07trend lines, equal highs, candlestick
11:10patterns, and obviously some indicators.
11:12And indicators will also be displaying
11:15this same information. There'll be
11:17people that will be looking at their
11:18EMAs or their RSIs and still be seeing
11:21the same things as these support and
11:23resistance type of traders. So, what we
11:25want to be understanding is the context
11:27around the market that we see. This is
11:29essentially knowing what's going on,
11:32knowing where everybody's positioned. We
11:34haven't even got to smart money yet. At
11:36this point, we're only at liquidity.
11:37We've got two more layers to go. The
11:40final piece of liquidity that's
11:41obviously available here is the trend
11:44line liquidity that is forming across
11:46these highs. Right? Very obvious to see.
11:49We have a high, another high, another
11:51high, another high, another high that
11:53are progressively getting lower with
11:55each respect of this trend line. More
11:58traders flock to get involved in this
12:01move. Then what happens? Well, as price
12:03gets into this level, now we understand
12:05that sellers are going to be getting
12:06involved. So there's a huge pocket of
12:08liquidity here. We have equal highs. We
12:11have an area of resistance. We have
12:14trend line traders that are all looking
12:16to short the market in this level. On
12:18top of that, we also have the buyers who
12:21are going to be looking at this level as
12:23a potential profit target. Now, let's go
12:26one step deeper. Let me show you another
12:28form of liquidity. And in my opinion,
12:31one of my favorite forms of liquidity.
12:33If you've been following me for some
12:34while now, you know how often I use
12:38session liquidity. Very important for
12:40me. So days, weeks, and sessions highs
12:44and lows have massive amounts of
12:46liquidity in them. So what we can see
12:47here to be very brief with you is in the
12:51blue box we have Asia session. In the
12:53green box we have London session and in
12:56yellow we have New York session. This
12:58isn't the entire London, isn't the
13:00entire New York session. These are the
13:01main windows that I like to trade.
13:03Sometimes I would take a trade a little
13:05bit later than this specific session.
13:07For example, this closes at 10:00 a.m.
13:10Eastern Standard Time, but we understand
13:11that New York session still has a lunch
13:14session and a PM session that can still
13:16be traded. But I'm always looking at
13:18these specific levels. So, what you can
13:20see here is not only do we have this as
13:22an area of resistance, right? This
13:25overall area here is not only an area of
13:28resistance, it is also an area of
13:31session highs. We have London high from
13:34today and we have the highest point of
13:36New York session from yesterday. So many
13:39sellers that were getting involved in
13:40New York session, this is where they
13:41were getting involved in and this is
13:43likely now where their stop losses are
13:45going to be. Then also on the high here
13:48we have a London high. Here we have a
13:52New York high and then all the way up
13:54here we have another New York high. So
13:56we have a bunch of session highs. We
13:59also have a bunch of daily highs, right?
14:00Highs of day. So we have a the high of
14:02Monday here. We have the high of Tuesday
14:04currently being formed in this region as
14:07well. So a lot of liquidity just in
14:09understanding this one simple price
14:12chart which if you were to look at this
14:13before you may not have even seen these
14:16levels of liquidity or may not even
14:18understood how to think like smart money
14:20because by understanding all the
14:23different personalities all the
14:24different styles of trading and then
14:26understanding what they are likely to be
14:28looking at in the market you're able to
14:30see where everyone's at. And that's the
14:33biggest edge that smart money have. They
14:35also understand that most traders often
14:38act obviously and repeatedly with the
14:41same behaviors and therefore they
14:43understand where the liquidity is. Now,
14:46why is this important? Well, smart
14:48money, like I already said, if they want
14:49to trade a $500 million position to go
14:52long, they are going to need a lot of
14:56sellers. And sometimes to get those
14:58sellers, if they aren't already
15:00available, they will manipulate price
15:03and they may push price into an area
15:05where that they know there's going to be
15:07a lot of sell liquidity, either taking
15:10profits and selling a position off,
15:12inducing sellers into the market or
15:14hitting some form of stop- losses.
15:16Depending on the context, all of these
15:18events can provide sellers liquidity
15:20into the market, which then smart money
15:22can gobble up all of that sell liquidity
15:24and match it with their buy liquidity.
15:26Why do they want someone else to take
15:28the other side? Why not just push the
15:30price higher? That could be a good
15:31question. Let me ask you a question. If
15:33you were trying to long the market from
15:34here, would you prefer to get all of
15:37your position filled at this price point
15:39or would you prefer to get 10% filled
15:42here, 10% filled here, 10% here, 10%
15:45here, 10% here, 10% here, and so on. So
15:48your average buyin price is all the way
15:51up here. So this is where you wanted to
15:53long and by the time you get your full
15:55position in the market, this is where
15:56you actually averaged your entire order.
15:59That is a huge spread difference. And
16:01you see institutions, they don't want to
16:03take that spread. So what they do is
16:05they will use other people's liquidity.
16:07And when there isn't any, they will
16:09create it. Now that you have a good
16:11understanding of liquidity, the fuel
16:13behind every move, we need to look at
16:16where those moves begin. This is lesson
16:18number two, supply and demand. And we're
16:21going deeper than retail concepts. We're
16:24going into the actual footprints left
16:26behind by smart money. I'm talking about
16:29order blocks and fair value gaps. You
16:31hear these terms all the time, but what
16:34do they actually mean and how do you
16:36actually use them? An order block is the
16:38last point of accumulation or
16:40distribution by smart money before a
16:42significant move. It's where
16:44institutions place large orders, often
16:46disguised as consolidation or
16:49indecision, right before launching price
16:51in a direction. These zones show up
16:54typically as the last bullish candle
16:56before a heavy drop or the last bearish
16:59candle before a heavy rally. And they're
17:01powerful because price often comes back
17:03to these zones to rebalance or
17:05reaccumulate. Now, right next to any
17:08good order block, you'll often notice
17:10something called a fair value gap or
17:12FVG. This is the imbalance created when
17:15price moves so aggressively that it
17:18skips over levels of fair value. In
17:20simple terms, it's a gap between wicks,
17:23usually between candle one and candle
17:25three, where candle 2's body
17:28aggressively displaces price. Something
17:30you have to understand is that the
17:32market's primary objective is fair
17:34value. The more accepted a price level
17:36is, the more liquidity that is traded in
17:39that level and therefore the more money
17:41that a market maker makes. So when price
17:43creates imbalances, fair value gaps, the
17:46market has a tendency to fill them in
17:49certain conditions. And here's the
17:50beautiful part. Order blocks show us
17:53where smart money is positioned. Fair
17:55value gaps confirm their presence. One
17:58is the base of the move and the other is
18:00the trail. When price breaks structure
18:02and leaves behind both an order block
18:04and fair value gap, that's your high
18:06probability level. This is where you
18:09want to be looking for trades in the
18:10space between cause and effect. between
18:13intent and reaction. The problem with
18:15most traders is that they chase price or
18:18wait for indicators to tell them what's
18:20already happened. But smart money leaves
18:23clues in real time. If you know how to
18:25read those clues, you don't need a
18:27thousand tools. You just need a clean
18:29chart, a sharp eye, and an understanding
18:32of intent, imbalance, and supply and
18:35demand. Think of it this way. When a
18:37whale makes a splash, you don't always
18:39see the whale, but you do see the
18:41ripples that it leaves behind. Order
18:43blocks and fair value gaps are the
18:45ripples. They're evidence of a presence.
18:48And in trading, that's more valuable
18:50than prediction. Let's take a look at
18:52this same price action to understand
18:54here supply and demand. First, let me
18:57kind of explain something to you
18:58theoretically. Imagine now, for example,
19:01you have a bullish market. Market is
19:03bullish. price comes down into this
19:05level and then it begins ranging, right?
19:08So, what happens in this range is it
19:11provides the perfect opportunity for a
19:13smart money entity to get involved in
19:16price. Like I said before, if you want
19:18to buy $500 million worth of Euro
19:21dollar, you can't just buy because it
19:23will take price all the way up here and
19:24you'll get in your average order
19:26somewhere in here. That's less than
19:28optimal. So, these institutions have
19:30strategies and one of them is
19:32partitioning their positions. So they
19:34spread them out. Imagine taking $500
19:36million and then spreading it down into
19:38very small receivable orders. Maybe
19:41they're little $5 million fragments,
19:44right? And a hundred of them, for
19:45example. Well, now what you can do is
19:47when you see the opportunity where price
19:49is beginning to range, what essentially
19:51is happening here is a battle between
19:52buyers and sellers. This is what we call
19:54fair market value. This is an area of
19:56price where both buyers and sellers are
19:58clearly agreeing on price. And there's a
20:00lot of trading volume in this level and
20:03yet the price isn't going higher and it
20:05isn't going lower. That's the perfect
20:07area for smart money to get involved.
20:09And here's what they're then able to do
20:11to position it. So what happens is is
20:12when the market is ranging like this,
20:14all of these sellers, right, that are
20:16trying to push price lower, their
20:18liquidity comes in and then this person
20:20who's trying to get all of their orders
20:22in, when this sellside liquidity comes
20:23in, they absorb it. They match it. So
20:27you know, imagine $20 million worth of
20:29sellers coming to the market. This one
20:31institution can sit there and gobble up
20:33all those $20 million worth of sell
20:35orders and match them with buy orders
20:36because every buyer needs a seller. And
20:38then they filled 20 million of their
20:39position. And then what happens is those
20:41sellers that sold there, they become
20:43exhausted. So the buyers begin to take
20:45back control of the market and then
20:47sellers step back in again. A new batch
20:49of sellers, maybe the same sellers, they
20:51go again trying to take out these lows.
20:53It's a battle. Maybe another $20 million
20:56comes back into the market and that same
20:57institution is there absorbing all of
21:00those orders. So now they've got $40
21:02million without having to move the
21:04market. And then what happens is once
21:06all of those orders have been taken,
21:08they've been absorbed, there's no more
21:10sellers. So the sellers become exhausted
21:12and then buyers step back in and maybe
21:14sellers go again. And this is why you
21:16get this rangebound price delivery
21:17because the market isn't going in any
21:19direction. And the likelihood is is that
21:21one side of the market is trying to take
21:22price lower and there's an institution,
21:24an entity somewhere who's just absorbing
21:27those orders to get involved in the real
21:30move. They're positioning themselves
21:31because they have a bias of some nature
21:33that price will eventually trade higher.
21:36And so they absorb all of those orders.
21:38And then what happens is at some point
21:40in time when it's clear to see the
21:43sellers are becoming completely
21:44exhausted. Nobody wants to attack the
21:46lows anymore. That is where smart money
21:49will essentially enable the market to go
21:52and it will stop trying to position all
21:53of its buy orders in there. Or maybe it
21:55will position some of its buy orders in
21:57there to take out this high level in
21:58here so that the sellers become
22:00absorbed. Nobody looks at the market now
22:02and believes that they should be selling
22:04and at the same time the market flips
22:06its sentiment and all the buyers come
22:08rushing to price and everybody now is
22:10extremely bullish on the market
22:12sentiment. And so what happens is
22:14nobody's selling but a lot of people
22:16start buying and so obviously price goes
22:18higher. That's why sometimes it can
22:20take, you know, $50 million to do a 100
22:23pip move and $500 million to do a five
22:27pip move. The reason isn't that more
22:30money equals more distance. No, it's
22:32imbalance. How much more buyers are
22:35there than sellers? How many more buy
22:36orders are there than sell orders?
22:38That's what moves price, not how many
22:40people are active or how much dollars
22:41are traded. Supply and demand. The more
22:43buyers, the less sellers, the higher
22:44price. The more sellers, the less
22:46buyers, the lower price goes. And so
22:48always understand that sometimes you can
22:49get an aggressive move like this and you
22:51think that some huge institution is
22:54moving the price. Some context that may
22:56be true. It could also be that there's
22:58nobody willing to sell, right? And
23:00that's what they do. They will absorb in
23:02these areas and this is where you see
23:04them positioning. And then after this
23:06positioning, that is ultimately when you
23:08see them move. Another example of this,
23:10what they'll do a lot of the time, the
23:12same scenario. They're trying to absorb
23:14all the sellers, but let's say for
23:16example, there isn't enough sell orders
23:18coming into the market. Well, what they
23:19can do is they will just remove their
23:22buying for a moment, allow sellers to
23:24push price down or even push price down
23:26themselves into an area like this that
23:29will make the rest of the market start
23:31being aggressively bearish looking for
23:33lower prices, which does what? Floods
23:35the market with sellers and then it
23:37absorbs all of those sellers when they
23:39come into here and then they go. And so
23:41if you have a retail trader or you've
23:43traded support and resistance before or
23:45equal highs and equal lows and you've
23:47seen these moves where there's an area
23:49of support here and you're buying in
23:52here and your stop loss is below here
23:53and for some reason the price just
23:55trades directly into your stop loss and
23:57then rockets in the opposite direction
23:59and you're left there just feeling like
24:01you've been abused by smart money.
24:04You're not all that wrong. It was
24:06intentional designed to take liquidity.
24:09Now, is there someone there sitting and
24:11understanding that Joe's got his stop
24:13loss there? No. It's just common sense.
24:15If I understand it, I'm sure the
24:17smartest minds in the world know exactly
24:19what they're doing. And so, that's why
24:20sometimes you see these ranges,
24:22manipulation, and then expansion, right?
24:25So, that's what we really want to be
24:26looking for. That's the key point that
24:28we want to be identifying. So, let's
24:30take a look at the current price in
24:32here. And let's kind of come out of this
24:33and kind of we'll go back into price
24:36like this. So, imagine that this is
24:37where price is. price was aggressively
24:39overbought and then what happens? Price
24:42comes into a range. A range can be
24:44identified when price is just sitting
24:46stagnant in one area of price. This is
24:48where you can see the loadup phase. This
24:51is where it's perfect for whoever wants
24:53to sell the market short in here, right?
24:55Whoever's selling price short is able to
24:58when all of the buyers because the
25:00market is bullish, all the buyers are
25:01coming in and they're trying to take
25:03price higher. Well, these sellers just
25:05absorb those orders. Absorb them. Absorb
25:06them. absorb them until there's no more
25:09buyers left and then it's only sellers
25:11in the market and then price goes down.
25:12But what we want to identify is these
25:14ranges that occur just before the
25:17aggressive move that comes down. You can
25:19see that we have one big bearish candle.
25:22That's our sign. When you see a range
25:24and then a very aggressive sell move in
25:27here, that's your sign that smart money
25:29has entered the market. Now, not every
25:31order block and every fair value gap is
25:32going to work. That's a huge thing you
25:34need to understand. So many traders just
25:37try random order blocks or random fair
25:39value gaps. The key is context. That's
25:42why we're going to put in everything we
25:43learn into a strategy because this
25:45information alone is useless. I can sit
25:48here and give you this all day long and
25:50you will still need me because you will
25:52still need to understand how it all
25:54works together. It's like a big machine.
25:57It doesn't matter if you have one part
25:59of the puzzle or two parts. It doesn't
26:01matter if you have nine out of 10 parts.
26:03If you don't have it all and then you
26:05don't know how to assemble it in the
26:07right way, it's useless to you. And so
26:10if you're someone right now who you feel
26:11like you've got a lot of these tools,
26:13you understand order blocks, you
26:14understand fair value gaps, you
26:16understand liquidity, you've got a good
26:18idea of a lot of it, but you're just
26:20missing on how to put it all together or
26:22it just doesn't seem to work for you. I
26:25believe I can help you. Essentially,
26:26what I have is a mentorship program. I
26:29teach people not only this, but way
26:31deeper than this. and not only the
26:33individual details, but putting
26:35everything together. In this video, I am
26:37going to be sharing with you a trading
26:38strategy, but this is just one of the
26:40trading strategies that I have. So, if
26:41you're interested in taking your trading
26:43to the next level, and you think that
26:44you just actually want the handson help
26:48from someone who's doing it day in day
26:50out. I have one student, Ralph, who just
26:51made $50,000 in the last couple of
26:53months on FTMO verified with the QR. You
26:56can check it yourself. And he's been
26:57with me for 6 months because I'm handson
27:00with my clients. We have mentors inside
27:02of the program who are hands-on with our
27:05clients as well and we get results. So,
27:07if results are what you're looking for
27:08and you're serious about becoming a
27:10profitable trader, then below this
27:11video, I'll leave a little link. You can
27:12book a call with one of our team members
27:14and we can understand where you are and
27:16see whether or not we think we can help
27:17you. But let's get back to the video.
27:19So, this is the range and this final buy
27:22move in here right before the aggressive
27:24sell. That's our order block. And the
27:26fair value gap is simple. We have one
27:28bullish candle, another bearish candle,
27:30another bearish candle. So the low of
27:32this candle right here and the high of
27:37this candle right here, that is our fair
27:40value gap. So we have a fair value gap
27:42and we have an order block. That is what
27:43it looks like in real time. But
27:45remember, just understanding a fair
27:46value gap or an order block alone isn't
27:48going to do anything for you. You need
27:49context and we're going to be getting
27:51into that point. But for now, let's just
27:52go step by step. So there would be an an
27:55example of a bearish order block. And
27:57how you do this, whether you use this
27:58candle, whether you use the the entire
28:00range, that can be up to you, right? We
28:02have frameworks for that, but I won't go
28:03into the specifics here. I don't want to
28:05overconfuse you. It can be stupidly
28:06simple. If we just play price out, price
28:09comes into this level and then the
28:11likelihood is is this level is going to
28:13now act as an area of resistance. If
28:15it's contextual, just because you have
28:18order blocks does not mean they will
28:19always work. Please, please, please
28:21understand this. Even look at this right
28:22here. We have a range. Price is
28:24aggressive and then it goes one candle,
28:26two candle, three candles into this
28:28range phase. Look what happens just
28:30before the expansive bullish move here.
28:32We also get aggressive bearish candle
28:34that breaks down below these two lows
28:36like this. And then we have the
28:38expansive candle. This is again another
28:40perfect order block, right? And also has
28:42a fair value gap. The high of one and
28:44the low of three, they don't meet each
28:46other. So that would be a fair value gap
28:48in here like this. There's another
28:50perfect example of an order block and a
28:52fair value gap in motion. You get the
28:54expansion, price comes back, respects
28:56it, and then continues, right? Again,
28:58context. It's not enough just to
29:00understand them. You have to understand
29:01how to use them. And like I said, that's
29:03what we will be getting into. So, let's
29:05play price out. What do we have again
29:07here? As price comes into this level,
29:09what happens? Price stops. We start
29:11ranging. We get into this lower range
29:13phase. We have an aggressive buy here,
29:15which does what? above these equal highs
29:17which induces buyers so that what? So
29:20that smart money the ones who are in
29:22control of price as of right now they
29:24can absorb all that liquidity because on
29:26a lower time frame when price is running
29:27aggressively buyers are flooding to the
29:29market they can absorb that liquidity
29:31and then use it and then that there also
29:34becomes another area of supply and we
29:36can see the fair value gap is the first
29:38candle the second candle and the third
29:39candle the first and the third have a
29:41gap in between them that's a fair value
29:42gap right same thing again so that's
29:44again another example of a bearish order
29:48block right you can see price comes into
29:49this
29:50respects it and then begins trading
29:52lower. And so lesson number three, we
29:55come to the king of context, the missing
29:58key that most traders never truly
30:00understand, and that is market
30:03structure. And honestly, it molds
30:06everything together. You can understand
30:08liquidity. You can mark out beautiful
30:10order blocks and fair value gaps, but if
30:12you don't understand the direction of
30:14the war, you'll win a few bowels, but
30:16you'll always lose your account. Market
30:18structure is how you read the narrative
30:20of price. It's how you know whether
30:22smart money is accumulating or
30:24distributing, expanding, or contracting.
30:27It tells you what phase the market is
30:29in. So you know exactly when to be
30:31aggressive, when to wait, and when to
30:34get out. At its core, market structure
30:36is built on one simple idea. Price moves
30:39in swings, highs and lows. An uptrend
30:42creates higher highs and higher lows. A
30:45downtrend creates lower highs and lower
30:47lows. A breaker structure confirms a
30:50continuation. A change of character
30:52hints at a reversal. These are your
30:55breadcrumbs. They show you how smart
30:57money is shifting gears. Let's say
30:59you've identified your liquidity above
31:01some equal highs. You see an order
31:03block. You mark your fair value gap.
31:05That's all great, but here's the thing.
31:06If the structure isn't aligned, then the
31:09trade isn't valid. structure is what
31:11tells you whether or not you should be
31:13entering this trade. It's your
31:15confirmation that smart money is moving
31:18in that direction and now you can move
31:20in that direction at the right time with
31:23them. Market structure is like your
31:25direction and your liquidity in your
31:26order blocks is like your areas of where
31:29you should execute and when you should
31:30execute. Most traders are blind to this.
31:33They're caught up in single candles,
31:36indicators, and signals. But price is
31:38telling you a story every day. And when
31:41you understand the structure of that
31:42story, you can stop reacting and start
31:45anticipating. Market structure gives you
31:48the when, the where, and the why. And
31:50once you have all of that, your strategy
31:53finally becomes complete. So, let's dive
31:55into this. and then let's take all of
31:57what we've just learned and put it into
31:59a stepbystep stupidly simple trading
32:02strategy that you can take away. So,
32:04here we are on the same charts that
32:06we've been looking at this entire time.
32:08It's time to finally start understanding
32:11what the market is really telling us. In
32:14this example, actually, market structure
32:16is overly simple. If you just zoom out
32:19of price like so, what you'll
32:21essentially see is a very obvious
32:24bullish move. And what we're seeing now
32:28is basically the pullback of this price
32:30leg. So, what you can see here is an
32:32obvious low of price. Here is a swing
32:36low, right? We broke an old swing high
32:39that came from a macro event and then we
32:42go and expand and we put in a new high.
32:44So, basically, we're contained within
32:45this range. We have a swing high up here
32:48and a swing low down here. If we go to a
32:5030 minute time frame, it's exactly the
32:53same. Swing high is here. Swing low is
32:55here. Swing low becomes here. We break
32:58this high. This is our swing high. So
33:00our bias, our directional structure is
33:02bullish. Now that is again like I said
33:05why this is so so important is because
33:07you can know it all. But unless you
33:09understand which direction smart money
33:11is trading in, you're done for. So by
33:14understanding that the market is overall
33:15extremely bullish now we can apply
33:18everything we just learned to understand
33:19whether or not we should be looking to
33:21sell or looking to buy. So now we can
33:23take everything we've understood and we
33:25can start mapping out our liquidity.
33:27Again you can see here we have the
33:29buildup of the highs in here. We have
33:31this overall swing high all the way up
33:34here that we can use as a target as
33:36well. And then we have our internal
33:39levels. So we have London high equal
33:41highs of New York. We have our area of
33:44resistance, right? So, this is going to
33:46be a resistance level. A lot of
33:47liquidity above here. So, we have
33:50another old high in of itself. We have
33:53another old high in of itself, right?
33:55And then a bunch of other highs. So, all
33:56of these areas are liquidity. And we can
33:58map them out just like this. Liquidity,
34:04liquidity, liquidity. But we also have
34:06our sellside liquidity. We can't
34:09underestimate that. We clearly have
34:11these equal lows in here that
34:13essentially act as an area of support.
34:17So we have supportbound liquidity as
34:19well. So this is liquidity as well. We
34:21also have if you can kind of see it
34:23clearly an obvious order block in here
34:26right that has already been partially
34:28mitigated. So for the purpose of this
34:30it's not really that important. Then
34:31what we can begin to understand is our
34:33little internal swings. So we go to a
34:3515minut time frame. Now we can
34:37understand that again if we zoom out
34:39we're looking at the same picture low to
34:41high and then price coming down bearish
34:44like this and then what happens price
34:47comes high low high low high low high
34:51low high. So we shift from being
34:54internally bearish to internally
34:57bullish. So now we have our external
35:00bullish, our internal bullish and pretty
35:02much we are looking and ready to go
35:05long, right? Everything tells us long,
35:07market structure tells us to go long.
35:09All of this liquidity can be used to be
35:11targeted because liquidity can also fuel
35:13a move, right? You have to understand
35:15that if there are sellside stop- losses
35:18in here or breakout buys in here, if
35:21smart money wants to buy the market,
35:24then once it gets to certain areas, it
35:26doesn't want to keep buying price
35:28higher. It wants everybody else to do
35:30the work for them. And so all of this
35:32extra liquidity, all these buyers that
35:34step in, they are the ones that push
35:36price higher. And with the sellers being
35:38scared and exhausted, they stop selling.
35:41That's what enables price to go higher.
35:43And that's really what they're trying to
35:44create. So essentially what we want to
35:46be doing is waiting. Step one of our
35:48strategy. Identify directional bias.
35:50When we come to the markets, we want to
35:52know are we bullish? Are we bearish?
35:54Overall, we are bullish. So our bias is
35:56to trade long. We want to trade long
35:58with smart money. Then I want to get
36:00down into my intraday. I want to
36:02understand what's likely going to happen
36:04today, what's likely going to happen
36:05tomorrow relative to this overall story.
36:07I want to identify all my liquidity
36:09points and price. And then I want to
36:12wait for key liquidations against me. So
36:14I don't want to be the trader who sees
36:16everything that looks amazing and then
36:18tries to long here and puts my stop
36:20losses down here when I understand that
36:22there's a bunch of liquidity in this
36:24level. I don't want to put my stop
36:25losses with that level of liquidity
36:27because I know the probability the data
36:30indicates that price will take that
36:31level. So you just need to essentially
36:34wait for price. Price starts running
36:35higher. We come into these equal lows
36:37again, right? price trades straight
36:40through those levels once this sellside
36:42liquidity has been taken and as long as
36:45price is respecting this order block in
36:48here or this fair value gap in here as
36:50well. Once price is respecting this
36:52level, the liquidity has been taken now
36:55we can look at expecting higher prices
36:57and for confirmation really what we want
36:59to look for is a clear displacement. So
37:02you can see now that price has got into
37:03this level. It's having a reaction. But
37:05we want to see a real bullish move that
37:07leaves behind a obvious fair value gap
37:10that we can then look at trading from.
37:11So if we look at this from let's say a
37:1330 minute time frame. Here's what it
37:14looks like. You can see here we have a
37:18bearish fair value gap. So I want to see
37:20the invalidation. Again another very
37:23very important point to understand is
37:25that when price wicks a low. So you see
37:29here
37:29price trades below this level and then
37:32comes back above that level. That is a
37:35clear sign of a reversal. Every time you
37:37see a high manipulated with an
37:40aggressive wick, the price reverses. You
37:42can look at it over and over again,
37:44right? You can see here we had some
37:46highs. We have a wick of a high. Price
37:48then obviously reverses again. Heavy
37:50wick on the buy side followed by a
37:52reversal. You can look at this time and
37:55time and time again. I could show you
37:56multiple different variations of where
37:58price liquidates a high and then
38:00reverses. And I broke it down in other
38:01videos as well. When you see this
38:03sellside manipulation and a close above
38:06it, that's already a good sign. But I
38:08would like to see some kind of fair
38:09value gap, a displacement of this level.
38:11So, we're holding this level. As you can
38:13see, this becomes a little bit more of
38:14an accumulation phase. Right? We're
38:16holding this level. We continue holding
38:19this level. We're ranging at this point.
38:21Now, what do we have? Now, we have the
38:24aggression. So, if the next 30 minute
38:27candle maybe leaves a fair value gap of
38:29some kind, right, like this, there you
38:31go. There's your sign. Our overall
38:33direction is bullish. We're in a key
38:35area. We've taken the liquidity. Now,
38:37the liquidity is up here. So, the price
38:39is going to go from one area of
38:41liquidity to another area of liquidity.
38:43And if you see all of the liquidity is
38:45on the other side of the market and you
38:48are aligned with that direction
38:50structurally, you have an A+ setup. You
38:52just need to figure out how to get into
38:54that price action. And so what you can
38:56see here is very obvious. So we have our
38:58accumulation in here. We have our order
39:01block in here. We also have our fair
39:02value gap. So we want to be looking at
39:05entering basically we can look at this
39:07range in here. And then we can also look
39:09at the fair value gap. So we want to be
39:11looking at entering in this fair value
39:12gap. This is also a inverted fair value
39:15gap. So we've traded and displaced the
39:16previous fair value gap. We just want to
39:18be getting ourselves in the market.
39:19That's what we care about. Our stop loss
39:21is going to go at the low because a stop
39:23loss should always be an invalidation
39:25point. If price breaks down this low,
39:27then the old idea of going long from
39:30here is invalidated. And if this low
39:31goes, this low is going as well. And
39:33then I don't know where we're going to
39:34see price go higher. But currently, this
39:36low is what's in control of price. So
39:38I'm expecting that this low puts in this
39:40high. It comes back and we go and put in
39:41a new high. That's essentially a good
39:43area that we could look at taking a bit
39:44of our partials. One to three
39:46risk-to-reward. But overall, if you're
39:49looking at this price, where do you
39:50think price is heading overall? Price is
39:52heading overall toward this high, it's
39:54going to clear out all of this liquidity
39:57and target this high because that is the
39:59structural understanding of price. That
40:01is why we understand that this is where
40:03we need to trade towards because that
40:05there is our understanding of price.
40:08That's the structure and that's what
40:10essentially gives us the finer details
40:12of our target. That's where the market
40:14is heading to. It's so clearly obvious.
40:16We just needed to figure out how to get
40:18in. That's where the small details of
40:20the liquidations and understanding where
40:21the liquidity is and understanding the
40:23order blocks because we already
40:24understand where they're going. We need
40:25to now understand how to get in. And so
40:27this is one way to perfectly confirm how
40:30you can look at getting involved in the
40:31market. And so you can set fair value
40:33gap cover stops at lows. And really what
40:35you want to be targeting is the highs in
40:37here because all of this in here is a
40:40massive amount of liquidity ready to be
40:42rinsed and taken away. So you can see
40:45price pulls back again, mitigation of
40:48fair value gap. That's perfect reaction.
40:50That's exactly what you want to look at
40:52seeing into your fair value gap, out
40:54from your fair value gap. That's
40:56indicative of a solid area to be trading
40:58from. And then you just want to see
41:00where you can go from there. You want to
41:01be looking to get your stop loss at
41:03break even at some point. Whichever
41:05point makes sense, right? For me
41:06personally, I'm looking at moving my
41:08stop losses to break even when we can
41:09logically shift highs. So, that's a good
41:12indication. Boom. There you go. Now I
41:14can put my stop loss at break even
41:15because I understand that price
41:17shouldn't be coming back to my level.
41:18Now if price is going to return to my
41:20level now, it's going to be going
41:22through this level because now the new
41:23liquidity is at these lows because guess
41:25what? Everybody who's missed this move,
41:28guess what they want to do? They want to
41:29get in later. So now that this is the
41:32area of new support and the liquidity
41:34exists below these lows, which is what
41:36where my stop loss is. Yes, I can also
41:38be liquidity. That's why I have to make
41:40sure that I'm not there when the
41:44liquidity is available. I need to be
41:46already out or already moved to break
41:48even at the best. And so new liquidity
41:50forms here and people are waiting to get
41:52in. But there's also the people that are
41:54fomoing into the market at this point as
41:56well. That's what's enabling price to
41:57trade higher. So you can see price
41:59continues to aggressively move higher.
42:00We have somewhat of a pullback. This is
42:02I won't get into too much detail in this
42:04video, but this is where a lot of
42:05traders go wrong with psychology, right?
42:08is like when they start seeing price
42:09coming back and giving them handing them
42:11over some of their profits, they look to
42:13want to be getting out of the market.
42:15New York session opens. You can see we
42:17breach this high. Now, we failed to
42:20break above this high. So, we've
42:22liquidated this high, which at this
42:24point is pretty indicative that we may
42:28be looking to come and take out this low
42:30down here. And if we're coming to take
42:32this low down here, then price may start
42:35to pull back. At this point here, I want
42:37to be locking in some partial profits. I
42:40want to be closing some of this position
42:41just in case price ends up coming all
42:44the way back down, right? But not off of
42:46an emotion, off of logic, off of
42:48understanding how price is delivering
42:50itself. We've come into a lot of
42:51liquidity on the buy side. This entire
42:54move hasn't stretched all the way up to
42:56this specific price level in here. So,
42:58I'm able to take off three risk-reward
43:01at this specific price point just in
43:02case price starts coming down towards
43:04here. Because if price comes all the way
43:06down here, maybe it's going to end up
43:07coming back to my break even point. My
43:09break even point is inside of this
43:11level. So if we kind of just go down to
43:13a lower time frame, see how things start
43:15playing out. You want to always have
43:16eyes on as well because is that low?
43:20This low goes down. Okay. So now what
43:22we're seeing is price is aggressively
43:25moving down here. This is going to be
43:27some kind of macro event. Let's take a
43:28little
43:31look. Cool. So, what we can see is we're
43:34about to have FOMC at 2 p.m. So, what I
43:39want to be cautious of at this moment in
43:40time is what happens during this FOMC
43:44event. I've already taken my profits, at
43:47least half of my position. I still have
43:50some profits left over, but at this
43:52point in time, I have no risk on the
43:54table. I'm break even on my position. My
43:58uh original stop loss is down here. I
44:01only have half the amount of risk on
44:02now. So, as price is approaching this
44:05level, I want to look at seeing how I
44:08can approach this specific price point.
44:10I would like to make sure that my stops
44:12stay at break even because of FOMC and
44:14not trying to be forcing myself into
44:15this
44:16position. So, there's FOMC and during
44:19FOMC, I get taken out of that position
44:22at break even. So, half of my position
44:24comes off here. The other half comes off
44:26with no win, no loss. So, we take half a
44:28position, which is fine. It's risk
44:31management. We're still kind of hovering
44:33around this area. So, you can see now
44:34we're starting to range in this new area
44:36of price. Still ranging in this area of
44:39price. So, we we haven't taken out this
44:41low yet. So, it looks like we are
44:43respecting this area. Everything is
44:44still on. We still have this hourly fair
44:46value gap that's being
44:48protected. Price is ranging. Okay, cool.
44:51Now, we have some expansion. The thing
44:53is is this is an Asia session, so I'm
44:56never going to be trading this session.
44:57If I want to get back in this move,
44:59which could continue trading higher, I
45:01want to see what London session has to
45:03offer. London session opens with a very,
45:07very nice reaction. What does the next
45:08candle give us? The next candle gives us
45:11a nice fair value gap. We can try and
45:13get ourselves into the market inside of
45:15that fair value gap. Where can we put
45:17our stops? We're going to want to put
45:18our stops at a logical low and just
45:21continue riding this to the highs in
45:23here. So, 1 to
45:252.35 riskreward. O want to expand this
45:28at least a minimum of a 1 to three
45:31riskreward. This needs to be at least a
45:321 to three to make any sense. Continue
45:35playing price out. See price continues
45:38trading and at that point it no longer
45:41makes sense to place that order. And so
45:43that position comes off the table and
45:46there's the overall target hit. Now was
45:49this a perfect trade? No. We didn't
45:53capitalize on the whole thing. But
45:55that's the reality of trading, right?
45:57Not every single trade is going to be
45:58textbook. There are going to be times
46:00where you maybe only get half of your
46:02position off the table and then the rest
46:04you tag out at break even and then
46:05continue trading higher. The thing is
46:07and what you don't do is you don't then
46:09get emotional and start deviating from
46:11your plan, which is what 99% of traders
46:13do. So the reality of trading is it
46:16isn't perfect. It's about doing what
46:17I've just done, managing risk, assessing
46:20situations, making decisions that
46:22actually make sense. If you want to be
46:23able to do this consistently and do it
46:25with me every single day, then check the
46:27link down in the description, speak to
46:29one of my team members, and we'll see
46:31how we can get you to where you want to

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