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Trading Was Hard, Until I Understood These Two Concepts — Transcript

by PB Blake Trades · 8,379 words · 1,155 segments · language en · Watch on YouTube

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0:00Day trading used to be extremely hard
0:02for me. I used to blow thousands of
0:03dollars worth of accounts. I would
0:05constantly get stopped out on trades
0:06that I thought looked good. I would
0:08target lows and highs in the market that
0:10wouldn't get hit. And then when I look
0:11back on every single loss that I take,
0:13there was always one common thread. One
0:15thing I did wrong on almost every single
0:17trade. And these two concepts fixed it.
0:20It fixed the way I viewed the market.
0:21And it finally turned me profitable. And
0:23those concepts are understanding the
0:25difference between high resistance
0:27liquidity and low resistance liquidity,
0:29protected stop- losses, unprotected
0:31stop- losses. By the end of this video,
0:33you're going to learn how to filter out
0:35bad trades that are blowing your
0:36accounts. And in turn, that will lead
0:38you to having a higher win rate. You're
0:40going to learn how to put your stop
0:41losses in area of high resistance
0:43liquidity, having protected stop-
0:44losses. And finally, you're going to
0:46learn how to target liquidity that
0:48actually gets ramped. So, that being
0:50said, let's get into it. First off, I
0:51want to give you guys a quick foundation
0:53on what liquidity is. I know a lot of
0:55you guys watching this video probably
0:56already know what liquidity is, but just
0:58give me a minute of your time because
0:59everything after this depends on you
1:01seeing it my way. So, liquidity, simply
1:03put, is where the money in the market is
1:05resting. Think about it this way. Every
1:07single time a trader enters into a
1:09position, they have a stop-loss. That
1:11stop-loss is a resting order. And stop
1:13losses oftent times rest in obvious
1:15areas, right above highs and right
1:17belows. And that's the entire game. The
1:20market literally just moves towards
1:22where the money is. Now, looking at this
1:24chart here, swing highs and swing lows.
1:26First off, what even is a swing high and
1:28swing low, Blake? Swing highs and swing
1:29lows are three candle patterns. So, a
1:31swing high is a high. We then have a
1:34higher high right above that previous
1:36high and then we have a lower high. Now,
1:38why is it called buyside liquidity?
1:40Well, a lot of times when people are
1:42entering into short positions, they put
1:44their stop losses at the swing high.
1:46These swing highs have a lot of orders,
1:48right? have a lot of buy stops. So this
1:50is considered buyside liquidity and the
1:53market oftent times goes towards this
1:54buyside liquidity to seek it out to then
1:56move the market in the opposing
1:58direction that they actually wanted it
1:59to go to. And then we have another form
2:01of liquidity being sellside liquidity.
2:03So this is when we have a swing low and
2:05that's in the form of a low, a lower low
2:07and then a higher low. Now why is it
2:09called sellside liquidity? Well, a lot
2:10of times when people are entering into
2:12buy positions, they have sell stops.
2:14They have a stop-loss resting at this
2:16low. So this is considered sellside
2:19liquidity. And the same thing, the
2:20market oftent times hunts this sellside
2:22liquidity to then send the market in the
2:24opposing direction. And that is
2:25literally all what liquidity is. But
2:27that's not why I'm making this video.
2:29Everyone talks about liquidity, but what
2:30nobody tells you is that not all
2:32liquidity is the same. Some liquidity
2:34pools get taken and some don't. And
2:36knowing which is which between high
2:37resistance liquidity and low resistance
2:39liquidity is what fixes your entire
2:42trading. Now again, high resistance
2:43liquidity and low resistance liquidity
2:45literally turned me profitable. So what
2:47is it? High resistance liquidity is a
2:49high or a low that took out already
2:51another high or another low. So that
2:53swing high or swing low already did the
2:55work. It already swept something. So
2:57it's going to be hard for the market to
2:58then target that swing point again
3:00because liquidity was just swept. That's
3:02why it's called high resistance. The
3:04markets have to work hard to get through
3:06it for a second time or in some cases a
3:09third time or a fourth time. And low
3:10resistance liquidity is a low or a high
3:13that hasn't swept out a previous low or
3:15high. It is unswept. It's bunched up in
3:18these clean formations of swing points.
3:20So that level is going to be a magnet
3:22for price. It is easy for the market to
3:25run there. It is low resistance. Nothing
3:27is standing in the way of those swing
3:29points. So here's the whole video in one
3:31sentence. You target low resistance
3:33liquidity. You put your stop loss at
3:34areas of high resistance liquidity. Do
3:36that and you fix your win rate. So now
3:38let me show you on an actual chart. All
3:40right guys, so I'm going to show you a
3:41drawing really quick. But this is high
3:43resistance liquidity. Simply put, we're
3:45going to look at an example of buyside
3:46liquidity, but this is when we have a
3:48swing high, a pool of liquidity that
3:51already got taken by the market. Okay?
3:53So, we have a swing high here. The
3:55market then trades down and then we go
3:57back up. We take out this liquidity.
3:59Boom. We then start trading lower. And
4:02at this point in time, this is no longer
4:04a good target for price to go to. It's
4:07going to be pretty hard for the market
4:09to go back up towards this high and take
4:11it out. This is not a good level of
4:13buyside liquidity because again, the
4:15market already swept it out. So, it's
4:17going to have a really hard time going
4:19back up to this high without the market
4:22generating more stop-losses. And you'll
4:24typically see that happen after the
4:26market already takes out some form of
4:28liquidity. We typically don't run
4:30towards this high again and again and
4:32again and again. Maybe if we're really
4:33really bullish, but a lot of the times
4:35we're going to generate liquidity, then
4:37go back lower, maybe take out some
4:39sellside liquidity resting down here.
4:41And then once we have stacked up highs,
4:43which I'm going to talk about next, this
4:45is then going to be a better target. But
4:46again, this right now is a bad area of
4:48liquidity to be targeting. Now, there's
4:50two things that will make this level of
4:51high resistance liquidity even stronger.
4:54The first thing is if this area is
4:56inside of a higher time frame bearish
4:59for gap, this level is going to be
5:01extremely high resistance. And then the
5:03other thing that makes this level really
5:05high resistant is if it's alongside of
5:07the higher time frame trend. So if we're
5:09higher time frame trending bearish
5:11towards external liquidity, this is
5:13going to be a lot more high resistance.
5:15So using these for value gaps, using
5:17these swing points, make sure it's on
5:19the 5minut time frame and above. And to
5:21again make it even stronger, make sure
5:23it's alongside the trend and with fur
5:25value gaps. So again, this high can be
5:28pretty high resistant, especially if
5:30this gap was already previously
5:32mitigating this for value gap and then
5:34we swept it out. This is called an
5:36internal high or an intermediate high.
5:38But if this ITH then sweeps out this
5:41high, this is really good. But then of
5:42course there's also times where we
5:44simply just tap into the F value gap
5:46like that. And this is completely fine.
5:48This high can be very high resistance as
5:50well, especially if it's alongside the
5:52trend. So remember, stay alongside the
5:54trend. Try to make sure it's inside of
5:56value gaps on the 5minute time frame and
5:57above. And for that extra extra level of
6:00high resistance liquidity, if the gap
6:02was already mitigated and then we get
6:04another sweep on that high and
6:06displacement from there, this is going
6:07to be a very high resistant high. So
6:10let's take a look at the charts really
6:11quick and I'm going to show you guys
6:12some examples. All right, guys. So I'm
6:13on the charts right now and I'm going to
6:14show you what high resistance liquidity
6:16may look like. Okay, so looking at this
6:18right now, it looks like on the hourly
6:20time frame, the 15-minute, it looks like
6:22this chart is trending up. So a lot of
6:25the times if we are trending up high
6:27resistance liquidity is going to be in
6:29the form of swing lows inside of bullish
6:31for value gaps right because if we are
6:33going to be bullish a lot of the times
6:35swing lows will form inside of bullish
6:37gaps. We will then have price respect
6:39those gaps get displacement up and then
6:42those lows will stay protected until we
6:44hit some sort of other level of buy side
6:46liquidity. Um we then want to go lower
6:48and start a sell model. Right? But a lot
6:50of the times these swing lows will stay
6:51protected. So we can look at the market
6:53right now and we see we have this
6:55bullish for valley gap. Price trades
6:56into there. We get a really good candle
6:59closure above that previous candle
7:00there. We end up going higher and we
7:02have a beautiful draw on liquidity being
7:04this buy side liquidity resting here.
7:06And this is a great swing point. This is
7:08a really protected low. We could
7:10consider this honestly high resistance
7:12liquidity. And we keep doing the same
7:14thing. We trade into this bullish gap
7:16here as well. And then we trade up to
7:17this. And then we can look at this
7:19example. Uh we have Tuesday here. We
7:21have a low inside of a feral gap. And at
7:24this time, it's going to be a little bit
7:26sketchy at this point to be trying to
7:28take a trade because you have an unswept
7:31level of liquidity right here. This is
7:33now pretty low resistance. Why? Because
7:36after we already take out some level of
7:38buyside liquidity, you can consider this
7:40a little bit low resistant. You don't
7:41want to be taking trades now after this
7:44move has already printed towards the
7:46opposing direction and this gap already
7:49took out some levels of buy side
7:50liquidity. So, at this point, I'd now
7:52want to see these lows get hit for me to
7:54take along. Or maybe we keep displacing
7:56higher, we open up new for valley gaps
7:58that we can target new liquidity with,
8:00right? But at this point in time, I'd
8:02need to see these lows get taken or
8:04maybe one of these lows to get taken.
8:06So, these levels are no longer low
8:08resistant. So, we can play out this
8:10candle right here. You can see that this
8:12next hourly candle ends up sweeping out
8:14this low. This is a low that was resting
8:17inside of a higher time frame hourly
8:19fair value gap. We can look and we can
8:21mark out this gap right here. And at
8:23this point in time, once we get price
8:25sweeping out this low, this this called
8:27an intermediate low inside of a gap.
8:29This low becomes pretty high resistance
8:31until what? Again, we hit a new level of
8:33buyside liquidity. Now, at this point in
8:35time, we can keep looking at price. It
8:38ends up chopping around. We end up
8:40forming a new swing point, another level
8:42of buyside liquidity resting here. And
8:44it looks like we're trending towards
8:46these lows here. Now, we can look at the
8:48market like this. Since we are bullish,
8:50I'm going to look for levels of high
8:52resistance liquidity. Now, where would
8:54high resistance liquidity be created? It
8:57would be created inside of for gaps and
9:00after we sweep out the lows inside of
9:02those fali gaps. So, at this point in
9:04time, I wouldn't consider this low to be
9:06very high resistant because it looks
9:08like we're trending towards it and it
9:10looks like we already just took out some
9:11liquidity on the way up. So I would say
9:14that the market could trade towards
9:15there. The same way with this low. This
9:17low isn't very high resistance because
9:19again we already had a really good move
9:21after this. And what we can do now is
9:23mark out the 50% also for even more
9:26confluences of this range. And you can
9:28see at 0.5 here we have a low resting
9:31within this gap. We can then see that
9:32the market ends up going up here. And is
9:34this level high resistance liquidity?
9:36Okay, we formed this swing low. Is this
9:38high resistance liquidity? No. Why is
9:40this not high resistance liquidity?
9:41because we didn't sweep out this swing
9:43low. So, this is not high resistance
9:45liquidity yet, but boom, we sweep out
9:47this low that was inside of this feral
9:48valley gap. And then you see that the
9:50market gets a really good reaction. You
9:51can base how good the reaction is based
9:53off of fair value gaps getting inverse,
9:55based on chain of state delivery, based
9:57on those confluences, based on a breaker
9:59block getting formed. All of those
10:01concepts if you guys want to learn about
10:03those beginner concepts are in my free
10:05course. So, you can watch that video on
10:07my PB Blake YT channel. But again, after
10:09this, this low is going to be extremely
10:11high resistant. It is a low that just
10:13swept out another low inside of a foral
10:16gap. So for price to go back down to
10:19this low, it's going to be extremely
10:21hard without taking out some sort of
10:23liquidity or if price was already in a
10:25bearish model, right? But to see a
10:27reaction like this on the 4hour time
10:30frame and on the 1 hour time frame, such
10:33a good reaction, this low is going to be
10:35really hard to go back to again at this
10:38very moment. And a lot of people got
10:39cooked trying to take a short here, but
10:42I'll get into that in a second. And I
10:43didn't because I simply understand this
10:45concept of high resistance liquidity. So
10:48now you guys have a good brief
10:49understanding of high resistance
10:50liquidity. I'm going to go more in depth
10:52with this later in this video so you
10:53guys can get a complete understanding of
10:55how to actually utilize it when trading
10:57with your stop losses and your
10:59takeprofits of course. But now I'm going
11:00to show you guys what low resistance
11:02liquidity looks like. Okay, guys. So now
11:03we're on the charts. I just did this
11:05little drawing, but this is low
11:06resistance liquidity. This is simply
11:08highs or lows that haven't swept out
11:10other highs or lows. So what does this
11:12mean? Okay, we have a level of buyside
11:14liquidity resting here. This is just a
11:16normal level of buyside liquidity. But
11:17then when we create these relative equal
11:19highs where price gets a little bit
11:21close to this high but it doesn't take
11:22it out. We haven't swept out previous
11:25highs or previous lows in the market.
11:28This is going to be low resistance
11:30liquidity. And you guys are going to see
11:32that this is a common theme that the
11:34more times that we create these swing
11:36highs that don't sweep out other swing
11:38highs like let's say we go back up again
11:40and we don't take out this high. This is
11:42going to be again another level of low
11:44resistance equity. is going to be super
11:46low resistant liquidity versus for
11:49example if we already swept out this
11:50high and then we sweep out this high
11:52again and again this is going to be a
11:55more and more uh stronger level of high
11:58resistance liquidity right so that's
12:01what I want you guys to know is like the
12:02more the marrier with these types of
12:04concepts when it comes to low resistance
12:05liquidity and high resistance liquidity
12:07but simply put this is going to be a
12:09level of low resistance liquidity when
12:11it happens once when we have a higher
12:13low that doesn't sweep out another
12:14higher this is considered a lowresistant
12:17level of liquidity. It's going to be
12:19very easy for the market to run these
12:21stop losses, right? So, yeah, the same
12:23thing when it comes to high resistance
12:24liquidity is that this is going to be a
12:27lot better of a level if it's for one
12:30stacked up like how I just explained.
12:32And of course, with every other concept
12:34that I teach, it's going to be way
12:36stronger of a level and you're going to
12:37have a much higher win rate using this
12:39if it's alongside the trend. If you are,
12:43for example, higher time frame,
12:45extremely bullish, and then we get a
12:47move that looks like this, and we start
12:49stacking up these highs, this is going
12:51to be way easier for the market to
12:52continue breaking through this because
12:54the higher time frame is bullish, right?
12:56So, you got to make sure you're
12:57alongside that higher time frame,
12:59hourly, 4hour trend. Now, let me show
13:01you guys what it looks like. Okay, so
13:02we're on the charts right now and I'm
13:04going to show you guys what low
13:05resistance liquidity looks like. Okay,
13:07so looking at this chart, you can see
13:09here that we have a low right here in
13:11the market and then we also have a low
13:13right after that that didn't sweep out
13:15this previous low and it got pretty
13:17close to that. Right? This is low
13:19resistant because there are stop losses
13:22not only resting here, but there's now
13:23also stop losses resting here. So the
13:26market is going to have a really easy
13:27time getting through this. This is going
13:30to be very low resistant, easy for the
13:32market to get through, right? And now
13:34that we already know kind of what high
13:35resistance is, look to the buy side now,
13:37guys. Literally look up where is high
13:39resistance liquidity resting. Oh well,
13:41we have a swing point that just got
13:43taken here. Then another swing high that
13:44got taken here. And another swing high
13:46that just got taken here. And this is
13:48inside of what? A higher time frame
13:50bearish or rally gap. And then look at
13:51this higher time frame. We're kind of
13:53trending bearish. Okay. So this is going
13:55to be a level of high resistance
13:57liquidity. And this is going to be a
13:59levels of low resistance liquidity. And
14:01now we can play this out. You can see
14:02that the market does trend towards this
14:04and does take out these levels of low
14:06resistance liquidity. Now, we can
14:07literally just look right before this.
14:09Okay, let's scroll back a little bit to
14:11here. Okay, let's just remove all of the
14:13drawings on the chart and we look to the
14:15left of us here. Where is low resistance
14:17liquidity resting in the market? Okay,
14:19we see all of these swing lows right
14:21here, right? All these lows that didn't
14:23sweep out the previous low. This low. We
14:25have this low. Did this low sweep out
14:27this one? No. Did this low sweep out
14:29this one? No. Did this low sweep out
14:30this one? No. Right. So we have lows,
14:32lows, lows. We have another low resting
14:36here. Okay. So we have this low, this
14:40low, and this low down here, and this
14:44low down there, this low here. We also
14:46have this low here. This is super low
14:49resistance. You see how all these lows
14:51are just kind of bunched up in a way.
14:53Then we also look to the left of us
14:54here. Another un level of unswept lows.
14:57Another level of unswept lows. Right
14:59above that, even more low resistance
15:01liquidity, even above that, more low
15:02resistance liquidity. So, when you start
15:04seeing the market start stacking up
15:06these swing lows like this in this form
15:08of low resistance liquidity, you're
15:10going to get a really fast move. Okay?
15:12The market is typically going to just
15:13hunt this these liquidity pools really
15:15quickly. Okay? And you see we just dump
15:18through all of this and we take out all
15:20of this liquidity right here. And we can
15:21look even further. I'm going to give you
15:22guys one final example here, but this is
15:24another level of low resistance
15:25liquidity, right? We have swing high
15:27here. Then we look at the previous swing
15:28high. Another level of unswept
15:30liquidity. Another level of unswept
15:32liquidity. Then we keep doing that. Even
15:34another swing high that didn't take out
15:36that other swing high up there. And we
15:38just keep marking out all these highs.
15:39And look at this. Look how much
15:40lowresistant liquidity we have. Look at
15:43all of these highs. This would be high
15:44resistance if what if these highs swept
15:47out this one. And then this one swept
15:48out this one, right? But it's not. We
15:50are stacking up all these highs. So, we
15:52have a bunch a bunch of short stop
15:54losses, a bunch of buy stops resting
15:57here, buy stops resting here, buy stops
15:59resting here, here, here, all these buy
16:02stops and the market just absolutely
16:04rips through all of these levels of low
16:06resistance liquidity. Look at that.
16:07Ready? And bang, just runs through all
16:11of them. So, great great targets you can
16:12have there. Then we even look above us.
16:14We even have more targets, levels like
16:17it just goes on and on. You can just
16:18keep marking this out. So I want you
16:20guys to do this not only with the buy
16:22side liquidity but also sell side um
16:24high resistant and low resistance.
16:25Really just focus on that. So now I want
16:27to talk a little bit about bias. How are
16:30we going to actually use this in our
16:31trading? Every single morning I ask
16:33myself this one simple question and it
16:36is where is the low resistance liquidity
16:38resting the buy side or the sell side?
16:40And where is then the high resistance
16:42liquidity resting the buy side or the
16:44sell side? Because that is where the
16:46market wants to go. The simple formula
16:49is if low resistance liquidity is
16:51resting on the buy side and high
16:53resistance liquidity is resting on the
16:55sell side, then I'm going to be bullish
16:57because the market is most likely going
16:59to expand towards those highs. That's
17:01where the market wants to go. Doesn't
17:02want to go lower. It just swept out all
17:04those lows. It wants to go towards
17:05unswept lows, towards new liquidity. And
17:08then the same thing for bearish bias,
17:10right? If we have low resistance
17:12liquidity resting at the sell side and
17:14we have high resistance liquidity
17:15resting at the buy side, then what's
17:17going to be my bias? Bearish towards
17:19that low resistance liquidity. And if we
17:22have that low resistance liquidity, but
17:23we don't have high resistance liquidity
17:25yet formed, I'm going to wait for the
17:27market to then put in that high
17:29resistance liquidity and then that'll be
17:31my bias and then I'll take a trade. And
17:32if we have high resistance liquidity at
17:34both sides, I'm going to wait for low
17:36resistance equity to get formed on one
17:38side. Right? But you see how I'm just
17:40always waiting for that formula. That's
17:42how you have to view the market. And it
17:44sounds so extremely simple, but I'm
17:46telling you, it works. And that one
17:48question forms your bias faster than any
17:51indicator, any moving average, any of
17:53that. Let me just show you really quick
17:55two examples of how I would form my bias
17:57in the morning using these two concepts.
17:59So, I know I just showed this example,
18:01but this was literally a couple days
18:02ago, but this was how I form my bias on
18:05Wednesday. Okay, you can see here that
18:07we swept out this low again inside of a
18:09higher time frame for valley gap and we
18:11got a really bullish reaction out of
18:13this. We ended up getting a lot of
18:15displacement out of this level. You can
18:17see that we also swept out this low
18:19here. We got a lot of displacement out
18:20of this level and from here I ended up
18:23just being bullish when 9:30 was
18:24opening. I was just simply bullish
18:26because then I look above us and what do
18:29we have? Low resistance liquidity. We
18:31see we have highs here. I can do this
18:33all day, dude. Highs, highs, highs,
18:35highs, highs, highs, highs. All of this
18:38low resistance liquidity. Okay. So then
18:39the question I'm asking myself, where is
18:42the low resistance liquidity resting and
18:43where's the high resistance liquidity
18:45resting? Okay. High resistance liquidity
18:47right now is resting on the sell side.
18:49We just swept out a low resting inside
18:52of a for valley gap. 50% of the range in
18:55the higher time frame narrative and draw
18:56right now is bullish. We just got a
18:58really good reaction off that. I know
19:00that this low is protected. I know that
19:02this level is very high resistant now
19:04and I look to the buy side and what do I
19:07see? Stacked highs. I see a lot of low
19:10resistance liquidity. So what is going
19:12to be my bias? Bullish. That is
19:14literally how I form my bias. And if we
19:16look at ES, same exact thing. Swept out
19:18this low inside of an hourly for gap and
19:21the market just absolutely rips up
19:23towards previous day high here.
19:25Beautiful draw on liquidity, beautiful
19:27bias. And that's that. Now let's show
19:28another example. All right. So now I'm
19:30going to look at this example. So my
19:32bias for this day was bearish coming
19:34into this day. It was around 8:30 and I
19:36immediately had a bearish bias. How did
19:38I do this? Literally using the concepts
19:40of low resistance and high resistance
19:42liquidity. I look above me and where do
19:44I see that the market first off is
19:47trending towards? Okay, let's go on like
19:48the hourly chart. Where are we trending?
19:49It looks like we're trending bearish.
19:51Now where is high resistance liquidity
19:53resting and where is low resistance
19:55liquidity resting? Well, if I look on
19:57the sell side, I see that we have a low
20:00here. Okay. Now, let's see. Do we have
20:02other lows that haven't swept out
20:04previous lows? Yes, we do. Look at this
20:05low here. Then look at this low here.
20:08And then we can keep doing this. We have
20:10lows here. Then we have a low here. And
20:13then when I look on the buy side, what
20:15do I see? High resistance liquidity.
20:17Why? Because this is a high that swept
20:19out another high inside of what? A
20:22higher time frame. bearish for valley
20:25gap. It's a little hard to see there,
20:26but this is a higher time frame. Bearish
20:29for valley gap. We can draw this out
20:30with a bearish rally gap sign. There we
20:33go. Right higher time bearish gap. A
20:34high that swept out another high. We
20:36have this intermediate high sweep and
20:38then boom, we're starting to get massive
20:40displacement from there. So, the buy
20:42side, this is a level of high resistance
20:45liquidity. Market's going to have a hard
20:47time going for this. And it looks like
20:49we're trending bearish. And then the
20:50sell side has levels of low resistance
20:53liquidity. The market is going to have a
20:55great time going for these lows. Yes, I
20:58like this. Right. So that's literally
21:00simply put how I find my buys. Very,
21:02very simple, very, very easy. And we can
21:05look at 9:30 open and we just absolutely
21:07dump towards all of those levels of
21:09sellside liquidity. Eventually, these
21:11final lows do get ran right around
21:13there. But yeah, this is a great example
21:15of that. And now again guys like we can
21:18keep looking at this a final final
21:20example before I get into the entries.
21:22But after we sweep out all these levels
21:24of liquidity, what does this low then
21:27become? Pretty high resistance, right?
21:29And we can wait for more confirmation
21:31throughout that by waiting for you know
21:33those inverse parall gaps. But now what
21:34do we see above us? Levels of low
21:36resistance equity. This is literally
21:38just like a buy model and a sell model.
21:40But this is levels of low resistance
21:41equity. Low resistance, low resistance,
21:43low resistance. There it is. And now we
21:45look at the market and where is the
21:46market now going to trend towards these
21:48levels of low resistance equity. Right?
21:50So that's how you have to be looking at
21:52the market in these very very simple
21:54contexts. And again it's going to be a
21:56lot higher probability if you pair this
21:58concept with fair value gaps and if you
22:00pair it with displacement and
22:01understanding the higher time frame
22:03trend all of that. So now I want to talk
22:04to you guys on how to actually use this
22:06with your entry model. understanding
22:08what makes up a protected stop-loss and
22:11what makes up a really good and
22:13unprotected target because that is the
22:15most important thing in your trading.
22:17You see me talk about it all the time
22:18and this is how I get really good
22:20discretionary trades where maybe I'm not
22:23following too much in the entry model
22:25but I understand that my stop loss is so
22:27protected and I understand that my
22:29target is so low resistant that just
22:31enough confirmation and I'm willing to
22:33take that setup. And I used to have this
22:35problem when I first started trading is
22:37that I would not have my stop losses in
22:39areas of high resistance liquidity. And
22:41my stop losses were never really
22:43protected. And I see it happen with so
22:45many beginner traders. They put their
22:46stop losses at levels of low resistance
22:48liquidity and then they wonder why price
22:50gives them a stop before running to
22:52their TP. You need to stop putting your
22:54stop loss at the target. Again, always
22:57remember that stops go at high
22:59resistance liquidity and your targets go
23:00at low resistance liquidity. I cannot
23:02emphasize that enough. And before I get
23:05into the entry section of this video,
23:07understand that price is fractal.
23:10Meaning, what's happening on the higher
23:11time frames should be happening on the
23:13lower time frames. And you zoom in and
23:15you zoom in and it's just a puzzle
23:17working inside of another puzzle. That's
23:19how you have to view the markets. These
23:21concepts that I'm teaching you guys work
23:23on all time frames, the hourly, the 4
23:25hour, the 15-minute, the 1 minute. And
23:27that's why this concept is so powerful
23:29because you're not learning a strategy,
23:32something so mechanical that you can
23:34keep replicating. No, you're learning
23:35how to actually view the markets. And
23:38once you view this once, I promise you
23:40guys are never going to be able to unsee
23:42this. So, let's get into the entry part.
23:44I'm going to show you guys how I use
23:45this alongside my entry model. All
23:47right, guys. We're on the charts now.
23:48I'm going to show you two to three
23:49examples of good trades you should be
23:51taking using these two concepts and then
23:53also two to three trades that you
23:55shouldn't be taking using these
23:57concepts. First, I'm going to show this
23:58short setup. Now, I saw a lot of people
24:02take this and I guarantee there's there
24:05was this was honestly a decent trade.
24:06All right, I'm not going to bash this
24:08trade so much. I think it was decent. It
24:10was good. A lot of beginner traders took
24:12this and I wouldn't beat yourself up if
24:14you took this trade. Um, but as someone
24:17who's again very experienced in the
24:19markets, I'm not trying to glaze myself
24:20here, but I've taken a lot of losses
24:23looking exactly like this. Like this
24:25exact trade I've taken so many losses
24:27on. And I'm just here to help you guys
24:29because I've journaled and I've
24:30journaled and I've journaled and I've
24:32seen over and over again these types of
24:34trades failing. And it was literally
24:36just using this concept of high
24:38resistance witty and low resistance
24:39witty, you can just fade setups like
24:40this and in turn you can have such a
24:42higher a much higher win rate. Okay. Um,
24:44it's how I literally had almost, bro, I
24:46had like an 100% winner for the past
24:48month, um, in June and I was on just a
24:51super hot streak, me and Pat both. But
24:53again, let's just get into it, right?
24:55So, same concept. I keep showing this
24:57example, but it's a really good example.
24:59We have this low, right? Swept down
25:00another low inside the gap. You guys
25:02have already seen this example, but
25:03you're trying to take a short here, and
25:06you're trying to target high resistance
25:08liquidity, right? Your target is
25:10essentially all the way down here.
25:12You're trying to target this low, right?
25:15Is this low going to be an easy low to
25:17target? No. Now, you can make the
25:19argument that your stop loss is
25:21protected and is at a level of high
25:24resistance. Why? Because we did just tap
25:25into a 4hour bearish for valley gap,
25:28right? We look here. We also this could
25:30be an intermediate high, but we did just
25:32sweep out this high inside of this for
25:34valley gap. Okay? So, you can have that
25:36argument where okay, well, my level is
25:38protected. we get a good inversion. But
25:41you need all these things to align,
25:43right, to take a good setup. Remember
25:45what I was just talking about with your
25:47bias, how if you don't know if there is
25:49low resistance equity at the at the sell
25:51side and there is maybe high resistance
25:53equity at the buy side, but it's not
25:55aligning perfectly, wait for that low
25:58resistance equity to get formed, right?
25:59Wait for a really good swing low to get
26:01put in place on the higher time frame
26:03and then you can target it. You see it
26:05literally happen today. like we put in
26:07that swing low and then later on today,
26:09I think it was during like Asia session
26:11on Thursday today, we end up going for
26:13that low. But trying to target this low
26:14right now is going to be really, really
26:16hard. And I always see people making the
26:18argument of, oh well, we had an unfilled
26:21gap right here. This unfilled gap
26:23doesn't need to get traded into. Why?
26:25Because a lot of the times after we
26:26already had manipulation on the higher
26:28time frame, higher time frame is
26:29everything, guys. We already had
26:31manipulation on the higher time frame.
26:32we already had that rebalance of the
26:36market. A lot of the times guys, this is
26:38going to be an expansion and the market
26:40doesn't continue to rebalance and give
26:42you those perfect 50% rebalances of the
26:44range. That just isn't how the market
26:45moves. We usually just manipulate and
26:47then we have really strong distribution.
26:49So you will a lot of times guys see
26:51these types of trades fail. So please
26:54stop trying to take trades where the low
26:56resistance and the high resistance
26:58doesn't align and I'm telling you your
27:00win rate will start going higher. And
27:02now while we're here on this same day,
27:03I'm going to show you guys an example of
27:05what a good trade looks like. Okay, just
27:07showed an example of what a bad trade
27:08looks like using these concepts. Here's
27:10what an example of a good trade looks
27:12like. Okay, we look on the lower time
27:14frame and we see we have a lot of
27:15bunched up highs. So, I'm asking myself
27:18right now, where is the low resistance
27:20liquidity resting? And then where is the
27:22high resistance liquidity resting? Okay,
27:24if I go on the 15-minute chart here, I
27:26see that we are inside of a bullish
27:28rally gap. I see the higher time frame
27:30is bullish. I see that the higher time
27:31frame has high resistance liquidity down
27:33here and low resistance liquidity up
27:35here. Okay, so higher time frame, this
27:38model is looking the same as when I zoom
27:41in to this model, right? You see how
27:44it's like aligning? It's a puzzle, guys.
27:46You have to be zooming in. If you're
27:48bias and the higher time frame chart is
27:50looking the same as the lower time frame
27:52chart, that is what makes up an A+ up.
27:54Okay? You want your higher time frame to
27:56be aligned with the lower time frame.
27:58That is literally what makes up that A+
28:00setup. And again, we traded into this
28:0215-minute gap. And then we look on ES.
28:03What makes this trade even better is
28:05that we have an SMT with this internal
28:07low. This is a low that was resting
28:10inside of this 15-minute gap. This is
28:11your intermediate low. We end up
28:13sweeping it out. And then we look on NQ.
28:15This low has not been swept out yet. So,
28:17this is what a bullish SMT. A lot of
28:20people think, oh, this is a level of low
28:22resistance liquidity because we swept we
28:23didn't sweep out this low. But because
28:25it's a bullish SMT, this low does not
28:28need to get traded back into. This is
28:29even more high resistant. We have a low
28:32that swept out another low inside of a
28:33gap with an SMT. We now get an
28:36inversion. This is displacement from
28:38this key level. And this right here is a
28:41really, really A+ setup. You can put
28:43your stop loss there, target up there,
28:47and the market just absolutely prints
28:49towards all of these highs. Really,
28:51really nice setup there. All right. So,
28:53this is an example, guys, of a really,
28:55really good short setup that happened on
28:58Monday. Okay, July 20th of last week.
29:01Um, let's get into it. So, higher time
29:03frame, what are we doing? Right, we're
29:04trending bearish. Okay, so if I'm
29:06forming my bias, what am I asking
29:08myself? Where's the high resistance
29:10liquidity resting? And where's the low
29:11resistance liquidity resting? Well,
29:12looking on the hourly chart right now,
29:14we have a lot of low resistance
29:16liquidity resting here, right? Okay, we
29:17have a low here, and then we have
29:19another low, then we have another low
29:21that didn't sweep out the previous low,
29:23another low that didn't sweep out the
29:24previous low. We can just keep doing
29:26this over and over again and we have all
29:28of these stacked swing lows on the
29:30higher time frame. Then we look on the
29:31buy side and what do we have? High
29:33resistance liquidity. We have a high
29:34that swept out another high that traded
29:37into an hourly bearish for gap right
29:40here and then we got a really good
29:41reaction. So what is this high
29:44resistance liquidity on the buy side and
29:46then we have low resistance liquidity on
29:49the sell side. So my bias is going to be
29:52bearish. Now we can wait for 9:30 opens.
29:55We trade up into this gap and then we
29:57start getting really good structure out
29:59of this hourly fair value gap. We look
30:01right here and look at this guys.
30:03Doesn't this look exactly what I was
30:05like exactly what I was just showing you
30:07on the higher time frame where we have
30:09all of these stacked lows, all of this
30:11low resistance liquidity right here. And
30:13we go on the hourly chart and it looks
30:14the exact same like the exact same
30:16model. That's what you want to do in
30:18your trading. I see it with so many
30:20people. they don't see this concept that
30:22I'm teaching, but if you can just stack
30:24confluences and models inside of models,
30:28that's how you have to be viewing the
30:29markets. But that's literally it. And we
30:32go here and how I would take this short
30:33is I would just wait for the highest
30:35time frame inverse. That's just my
30:36strategy. We have a two-minute ifg here.
30:38You can take this and then you can put
30:40your stop loss here. Okay, your stop
30:42loss here is super protected. Why?
30:45because you have all of this low
30:47resistance liquidity here, high
30:48resistance liquidity up here, and then
30:50of course it's a higher time frame PDA.
30:52You have all these targets below you and
30:54this is just what makes up that A+
30:56setup. And this is how you know then
30:58after you get your inverse, after you
31:00get your displacement, whatever you
31:01want, your train stay delivery, right?
31:02after you get your entry model from this
31:04POI, but you know that your stop loss is
31:07super protected at this point and that
31:09your takerit is very low resistant based
31:11on everything, the bias, the key level,
31:13and you can just see that price just
31:14absolutely delivers beautifully to your
31:16takerit. Now, for the final example, I'm
31:19going to talk about [laughter] a very
31:21controversial setup that was literally
31:24going all over social media. Like,
31:26everyone was talking about whether or
31:27not this trade was valid, whether or not
31:29it was invalid. I couldn't even like put
31:31my brain power in it and make a video
31:33because I was honestly cringing at all
31:35this. [laughter] Like bro, it was just
31:36so funny though at the same time. But
31:38I'm going to talk about this setup and
31:40I'm going to talk about this day and
31:41what I think is the best trade just
31:44based on these two concepts that I
31:45taught you guys in this video. Okay, so
31:47the setup that was going all over the
31:50internet was this short setup here and
31:52whether or not it was valid or invalid.
31:54Now, there was an argument for whether
31:56or not this setup was valid because you
31:58had low resistance targets. Okay, we go
32:00on the 4hour chart and what do we have?
32:02We have low resistance liquidity. We
32:04have a low here. We then have another
32:06low here and then we have another low
32:08here. All these lows haven't swept out
32:10other lows. And then as well as this is
32:11a monthly for valley gaps. This is a
32:13really low resistance target. It's very
32:16obvious we're going to this low
32:17resistance liquidity guys also is in the
32:18form of those unfilled gaps, right?
32:20Unfilled gaps are great targets. So we
32:23have [snorts] a really really strong
32:24draws on liquidity. Now for this to be
32:26valid you need to have two concepts
32:28being high resistance liquidity at the
32:30buy side and low resistance liquidity at
32:31the sell side. In my opinion there is
32:34not enough high resistance liquidity
32:36that is formed at the buy side on the
32:38higher time frame. If we go on the
32:395minut chart we end up taking out this
32:42rally gap. We trade into this for rally
32:43gap but to me we still have all these
32:46stop losses that are resting here here
32:50and then on the 15inut chart also we
32:52have an unfilled fal gap. So there's too
32:55much there's too much narrative for
32:56price to go and hit your stop loss. You
32:59can definitely make the argument based
33:01on this displacement based on this
33:02candle that you know we can leave this
33:04low resistance liquidity. We don't have
33:06to take it we can go to this first and
33:08then we can save this for later and then
33:10go up back um to this buy side liquidity
33:12later. Right? So there's definitely an
33:13argument for that. But I think if you're
33:15trying to take the highest quality setup
33:17possible and you're trying to have the
33:18best win rate possible, this is not the
33:20type of trades that you guys should be
33:22taking. Right? So let me show you guys
33:24what the A+ setup would have been.
33:26Right? So we wait then for everything to
33:29be aligned for not only there to be low
33:31resistance liquidity but also high
33:33resistance liquidity aligned. Okay? Just
33:35because you have low resistance
33:36liquidity and it doesn't just simply
33:38mean that you can just take this short.
33:40In my opinion I would rather much rather
33:42wait for my stop loss to be in an area
33:44that is protected to me. So we wait. We
33:46wait. We wait. Price then trades into
33:48what? This monthly for value gap that we
33:50had marked out. Beautiful. And now I'm
33:52just waiting for proper displacement
33:54because at this point in time, what do
33:56we have? We have a highresistant low
33:58that's probably about to get put in
34:00place very soon. Not yet, but once we
34:02get Oh, look at this AMD structure. We
34:04get an inverse of this inversion leg.
34:07But what do we get here? We get an
34:08inverse here. We get a chain of state
34:10delivery. We get good bullish structure
34:12here. We have a low high, lower low, and
34:15we're about to form this higher high. So
34:16we are forming now high resistance
34:19liquidity at the sell side and low
34:21resistance liquidity on the buy side
34:24and then we look on the higher time
34:26frame and it kind of looks pretty
34:28similar, right? We have this form of
34:30equal highs up here. This is pretty low
34:33resistant and then as well as we have
34:35swing highs here, here, here, here. Good
34:38amount of low resistance to wait for the
34:40market to go to. So it's aligning on
34:42both the higher time frame picture and
34:44also the lower time frame picture. So
34:46now all that being said, you wait for
34:48this to get inversed
34:50and then price absolutely flushes to
34:53your takerit. And to me, this is the
34:55setup that you should have taken for the
34:56day. And this is the best setup because
34:58not only now do you have that high
34:59resistance liquidity again, you also
35:01have low resistance liquidity. And just
35:03literally viewing the market like this
35:04guys is going to increase your win rate,
35:06make your stop losses be so much more
35:09protected and way better and have your
35:11TPS actually get hit. And while we're
35:13here, I also then want to show some
35:15examples of short setups here that I did
35:18see some people take. Right, we ended up
35:20trading up. We swept out liquidity on
35:21the buy side and then boom, we get an
35:23inverse here on this 30 second. I did
35:26see a lot of people take, you know, the
35:27short here. It's a little small 30
35:29second, but we got a 30-cond inverse. We
35:31also had a one minute change in state of
35:33delivery eventually. And a lot of people
35:35took this setup. Okay, you can say maybe
35:36that your stop loss is high resistance
35:38because we just swept out all this
35:40liquidity. But what is your take profit,
35:42guys? it is not low resistance. So, this
35:44is not a valid setup. Again, you need
35:46those two things to be aligned. Your low
35:48resistance equity and your high
35:49resistance liquidity. If they're not
35:50aligned, then the setup is going to be
35:52lower probability and it's most likely
35:54going to fail. This target is really
35:56high resistance. It just swept out and
35:58traded into a monthly for gap. We then
36:00just got massive displacement from this.
36:02Stop trying to fade the trend here. Why
36:03are you trying to target this? Don't
36:05target this. And then this absolutely
36:06just gets ran through. We can do the
36:08same thing. Another short setup presents
36:09itself. We get a one minute inverse
36:11here. I saw a lot of people taking a
36:13short here after we got boom. We get an
36:15inverse for valley gap. We just also
36:17swept out this high that's resting
36:18inside of this gap. Oh my god, this
36:20looks really good. I should be taking
36:22this short. No, you shouldn't be taking
36:24this short. Why? Because you don't have
36:25low resistance liquidity yet. You don't
36:27have any stacked lows here or you don't
36:29have a good target. I would only take
36:31this short if we had both things aligned
36:33being again the buy side was high
36:35resistant and there was enough
36:36displacement from this and then we had a
36:39level of low resistance liquidity. At
36:41this point I would probably take a setup
36:42that looks more so like this if this did
36:44play out. This would be way higher
36:46probability than just trying to short
36:47the top here and hoping that this level
36:49is now low resistance because you don't
36:51know that at this point in time. This is
36:52still very high resistance even though
36:54we get this inverse. But that's really
36:56that. I'm going to stop yapping. I know
36:58this video has been pretty long, but I
36:59just wanted to cover all of the examples
37:01of what a good setup looks like and what
37:04a bad setup looks like and how easily
37:06you guys can just determine your bias
37:08and how easily you guys can filter out
37:10good trades and bad trades just using
37:12these two concepts I've taught in this
37:13video. With that being said, thank you
37:15guys so much for watching this video.
37:16And if you guys want to work more
37:17directly with me inside of my 1%
37:19mentorship where we have students like
37:21my boy Gus hitting his first 10K month
37:23from trading or my boy Auggie who's made
37:25$45,000 this year from trading payouts,
37:28then hit the first link in the
37:29description below where we do live calls
37:31six times a week. I'm in chat with the
37:32students every day answering their
37:34questions and it's just overall an
37:35amazing community if you want to become
37:37a profitable trader. So again, link is
37:39in the description below for that. Thank
37:40you guys so much for watching this
37:42video. Don't forget to do your homework.
37:43Mark out your low resistance liquidity.
37:45Mark out your high resistance liquidity
37:46on your charts and ask yourself that
37:48question of where is it resting on the
37:50charts. That's how you're going to form
37:52your bias and that's how you're going to
37:53form A+ setups. Thank you guys so much
37:56for watching and I'll see you guys in
37:57the next video. Peace out.

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