By doing this simple little exercise, you are going to learn more about price action than you will if you just drone on going through videos and videos and videos and trying to learn new things that I teach.
Just pick one of these and start, but work towards doing all of them and make this a primary function of you every single day.
I promise you, I absolutely guarantee you, you will be able to read price so much better without that fear of missing an understanding or not knowing what you're looking for.
You'll know what it is you're doing.
The work of actually doing these things is what you get the benefit from, not just simply Netflix and show watch ICT videos.
This is not one of those videos.
This is all you rolling up your sleeves spending about 20 minutes a day.
It's all it's going to take 20 minutes to do all three.
But so the first primary thing I want you to understand is you don't have to have everything I teach.
In fact, the worst thing I see happen is new students come and they try to learn as much as they can as fast as they can.
And they try to get through everything in a short span of time, only to find out they haven't learned anything.
They've wasted time trying to rush.
So I'm going to give you three things to start with.
It does not mean go in every single day looking for all three for the first one or two weeks.
Just pick one of these.
After two weeks, add another.
Do that for two weeks in addition to one of the phenomena I'm going to teach.
And on your fifth and sixth week.
Add the final third one and then make it a steady diet of looking for these things, logging them every single day, because it's a phenomenon repeats every single day.
By doing something like recording price action, annotating your chart in a way where you'll see.
These things tend to repeat.
They tend to repeat around a specific time.
They tend to repeat in a specific fashion.
And you'll begin to develop a pattern recognition mindset.
You'll also be conditioning yourself to look for these things, which is the end result by studying it in the past.
So having an understanding of what it did for many days in the past.
And also them studying it going forward.
You have the best of the best in terms of training your eye.
Learning to seek the pattern, learning to seek the regime behind every one of these characteristics I'm going to cover.
There's a method that's being employed all the time, but you're not going to fully understand it until you see it multiple times.
Six weeks, okay, two weeks for each one.
Now, if you're a little bit more advanced and you've been under my tutelage for a little while, but you still can't find your groove.
Then you don't have to spend six weeks doing one for each two weeks interval.
You can go in and do all three because you know exactly what it is you're trying to do, but you probably never did this part of the growth process, which is essential.
So the first one I'll talk about is the pre-market hours, phase, and its relative equal lows and relative equal highs.
So by having a very specific focus on a specific time of day, every single day, every single trading day, every single trading day, with the exception of Sundays.
Every single trading day has a pre-market session time between 7 a.m. Eastern time and 9 a.m. Eastern time.
So by looking at that little window time, the way you want to annotate your chart is take a vertical line and annotate 7 a.m. and 9 a.m., not hard at all is it?
Then inside of those two vertical lines, you want to study what the highest high and the lowest low is in between those two hours.
By having that drawn out like this and encapsulating it, you want to highlight that as well.
So that way when you do screenshots, and this is the whole premise of what we're teaching here, you want screenshots of everything that I'm going to cover today.
It's very simple. Three screenshots per day. It's not hard. It doesn't take very much time. And if you can't do that, I promise you, you can't stick to trading roles to follow a model at all.
Because this is simple and this is how you get better at reading price action, anticipating, not reacting to specific things that's going to lead to high degree of precision in reading the tape.
Meaning, where's the market going to go next? How will it go there next?
So inside these two vertical lines, you're going to be studying whether or not the market is trending, consolidating, or reversing.
So we can look at that through the lens of two options. Is it trending or is it not trending?
To make it very simple for you. If you're brand, brand new, never been around me at all, you can strip it down to is it trending or is it consolidating?
Now, an example of what consolidation would look like is what the price is doing here. See how it's just going sideways like that?
Here, we started at a low and we moved all the way up here to a high. That's trending.
So what I want you to do is this thing in terms of, is it going in a small little range?
Or is it moving in a trend? Now, it can trend higher like it does here or it can trend lower. Either one, it's a trend.
If it's consolidating, that's important because that means you're likely to see at 9.30, the market provide this type of behavior after 9.30 Eastern time when River Trading Hours opens up.
And you're going to record how that market books.
You also want to include any relative equal lows like we see here. This low is relatively equal to that one.
And you want to record the highest high and the lowest low by having these two types of pools of liquidity annotated and you find them in between 7am and 9am.
How hard is that? It's not complex, is it? You're finding the very specific pools of liquidity and you're trying to determine if inside these two vertical lines, if price action is consolidating, range bound,
or is it expanding or trending? If it's doing those types of things, then you're going to expect consolidation.
Well, here we have it. It trended between 7 and 9. At 9.30, we had a little bit of expansion, but then what happened the rest of the day? Consolidation.
So it's a precursor. It's like a crystal ball, if you will. The proverbial crystal ball determining what's the strong likelihood of how the market's going to book after 9.30 Eastern time.
Is it going to be expansion? Is it going to trend or is it going to chop around and go sideways for a while? You find that out with the clues that the market gives you between 7 and 9.
It's not a panacea. It's not going to work all the time, but it's important for you to log it every single day and annotate what you observe here.
Any relative equal lows, and then how did those relative equal lows get traded to? If at all. Here you can see it used it there. It swept below it, and then we rallied higher.
If you looked at the market just trading below here and then aimed for the opposite end of the range between 7 a.m. and 9 a.m. Eastern time and just aimed for that high from there to there, that's a bread and butter setup.
Very, very easy. Once you hit that, it would hit it right here. You're done for the day. Go and do something else. Then come back when the market closes and study and look at past price moves.
This is the first pillar. It's not complex. I do this every single day myself, and I've been trading this November 34 years. I do it all the time, all the time.
Now, while I don't do screenshots, because I don't journal by electronic means, I write down the actual numbers of the high and the low, and I write the condition or phase that the market was in. What type of state the market was in? Was it in trending expansion or was it in consolidation?
Then I record the actual raw numbers where there's relative equal lows, the highest high, the lowest low, and where that market was referred to back to those specific price points.
Then I write the time it did that. In this case, it would be here. You would annotate that time. How much time did it take before starting at 9.30 before it reacted off of a key level that's determined by the liquidity pools, which are relative equal lows or relative equal highs?
And the highest high or the lowest low? Very, very simple, very simple process. You're not left looking at all of this price action and trying to determine what's the most important high? What liquidity pool am I looking for?
You see how it completely strips away all that ambiguity.
The second pillar in understanding what a new student should be doing with logging. This is not back testing. This is just simply screenshotting things that you want to study by getting a large sample set of these types of things.
The second one is we're going to be looking at regular trading hours, opening range gap and its consequent encroachment delivery.
Now, what we're doing is we're looking down in the right hand corner of your chart on trading view. When you load up your one minute chart, it has to be one minute, by the way, you want to toggle.
It may say ETH, which is electronic trading hours. If it says that, click it and then you'll see an option and says RTH or regular trading hours. You want to make sure you're highlighting that and you'll find that in the lower right hand corner of your chart.
Once you're toggled to regular trading hours, you're going to see if it exists between the previous day at 4.14 PM Eastern time, the final print.
That's the closing price on that very one minute candle.
And then you'll see if it's 9.30 or after Eastern time, AM, that opening price there is the regular trading hours opening price or the beginning of regular trading hours for the new trading day.
Now, when you have that, all you have to do is simply draw a rectangle out on your chart like I'm doing here.
When you do a rectangle on trading view, and I have my little favorites down here, I have it set to always include this little mid level.
It's an option when you draw the rectangle out, you'll see it's there. It's very simple. It's in the options portion of it. Always include that.
So that way you'll know where the middle of that range is, what range, the regular trading hours opening range gap, the difference between where we stopped at 4.14 PM Eastern time
to where we start trading 9 AM the following day Eastern time.
That difference is your regular trading hours opening range gap.
By having the rectangle split its range in half, which is in the options of using this little tool down here, it may appear over in the left hand side.
Highlight it here, regular trading hours opening range gap, C, period, E, period.
It means this is a fancy name for middle of the range or inefficiency.
You want to look at this segment of price action and how does price pull back to half the range?
It does it immediately here on the second minute after 9 30 and 9 31 we open we trade rate down to it immediately.
I want you to keep track of how often it takes the market to get back down into half of its gap and you're going to find that there's a 70% likelihood that it gets to it by 10 AM.
Don't hold me to that number. Don't hold me to that.
I want you to follow along every single day and you keep record of that.
And then at the end of the year, do a number on the statistical probability of that having happened for the year previous.
And you'll see there's a recurring phenomenon that you could take advantage of.
What is that? Well, if you're looking for lower prices here, you can just simply anchor a target to that and take any old fair value gap or bearish order block.
Once you learn what they are and just target that and you don't have to do anything else.
You don't have to look for an entire closure of the very trading hours opening range gap is your logging screenshots.
And then don't just take pictures like I'm showing you here.
You want to fill in all the empty spaces that you allow for by zooming and centering the chart.
So that way you can write in information that's important to you observations that you're you're seeing over here.
You might include that this is like the third time this week that it went right to very trading hours opening range gap consequence encroachment by 10 o'clock.
And it afforded me an opportunity to see a short from something up here that may be a bearish idea using an inversion fair value gap up here and selling off down to consequence encroachment of the opening range gap seen by regular trading hours.
All right, the final and third one. See how painless this is very, very simple.
Don't overcomplicate it by overthinking what I'm explaining is to start doing it and you'll see on a Saturday or Sunday or the markets not trading go through your screenshots.
You may miss something when you were doing the screenshot and annotations and writing down the observations you made.
Give yourself time away from the market's booking price real time when the markets are static and not moving.
It's real important for you to look for things that are details that you may have missed and over time you'll start seeing a little bit more detail that you didn't pick up the first few months.
And then you'll get a pattern recognition mindset where you see real time price action and you can almost see what it's trying to do before it does it.
The third one is the silver bullet first presented fair value gap after 10 a.m. Eastern time.
Now, if you don't know what that is, it's very simple.
What we're looking for is 10 a.m. Eastern time.
You're going to look at 10 a.m. Eastern time and beginning at that minute marker 10 a.m.
That candlestick can be a fair value gap.
Very simple rules. I'm making a streamline for you.
So as soon as that candlestick closes at 10 a.m. Eastern time on a one minute chart.
A fair one minute chart.
Once that forms, you can see if there's a fair value gap on that particular candle or immediately after that.
And the first fair value gap that forms inside of that 10 o'clock hour, that's the one you're going to look for.
Here, you can see that we have 10 a.m. and the very next candle 10 o'clock hour.
We have a cell sign of balance by sign of efficiency.
So there's a little bit of a gap there.
By having this little volume and balance, you have to know what that is.
So when the bodies don't meet on candles that are considered a potential fair value gap, you have to include that.
So draw that down like that and extend that to the right.
Now you can do the setting on your rectangle, which is down here.
You can set it to extend to the right or you can just drag it out a little while.
In the beginning, I want you to click to extend to the right.
But then when you do your annotation, turn it off and then drag it to the first time it returns back up into it like it does here.
So the market creates the fair value gap, drops lower again after 10 a.m. and it creates a short-term low here.
See that?
Then it rallies back up to it there.
And then it goes from this point of the fair value gap down below that low where cell sign would exist.
So a setup that you're training your eye to see, a very small, simple little fluctuation in price action that tends to repeat every single day.
Now, when you get real comfortable with seeing things that repeat every single day, you're not going to be more prone to chase things that you don't understand.
You're going to stick to the things you understand.
And by looking at this, it gives you a complete model.
It tells you what time it's going to form, how it's going to form, and then all you have to do is determine where the high and the low is that it may aim for.
In this case, we see the market came far from this high down here, rallied up.
We broke these lows and these lows here, and then we trade a rate back up.
You're not trying to determine if you're right about picking the direction of here to here.
You're recording it after the fact.
You'll get to the point where you'll be able to see these form and then you'll know where it's going to go, the cell side or the buy side.
But in the beginning, for at least a pattern of four to six weeks, submit to that, do it every single day.
And then by recording what's already happened, what you're doing is you're recording subconsciously a picture of something that you've never seen before.
And if you've seen something every single day in various formats, slight little subtleties that are just a little bit different, but they generally look the same all the time.
Your understanding about this principle will be greatly enhanced.
And that experience is something I can't give you as a student.
You have to earn that.
And by going through price action, looking for things like this that repeat on a day by day basis, you will see why there is no reason for you to chase price action.
There's no reason for you to just system hop, jump around.
You don't need to consume every one of my videos right away.
You can take your time and grow in an understanding of three primary pillars and smart money concepts.
It's very visual.
It isn't going to hide from you.
Everything is time based.
So that way you're not looking at, you know, in the afternoon, looking at something, you're not looking in Asia, you're not looking at London.
If you're brand new, I don't care if that's the time you intend to trade.
Do this.
Because everything that you do here can be transposed to any time frame or any session you're trading.
I promise you, but do the work like this.
Spend time doing this very thing every single day.
Record the time.
The fair value got formed.
In this case, it would be 1001.
Eastern time.
AM.
And then how long it took, how many minutes?
Okay.
Did it take before it came back up and offered the setup to sell off to take out the short term low between where it returned to the fair value gap and where the fair value gap formed?
How much of a range did it form from this return back up into it down to here?
How many handles is that you determined that over here?
Okay.
So whatever the highest highs on that, whatever the lowest low is.
That's your total range.
That's how many handles over here.
The movement was.
And you want to see this every single day, but doing these things over and over again, every single day, going back through what we just created today, but you need to go back.
Six weeks worth of old data and do the same thing, but you have to walk forward every single day for the next six weeks.
So at the end, what you're going to have is you're going to have 12 weeks of data.
You're going to go through at your leisure as far back as six weeks in the past with one market, NASDAQ.
Just one market.
I don't care if you don't want to trade NASDAQ when you get to be trading, just do it with NASDAQ.
Because it'll be easy for me to refer to certain things.
And then what will happen is when I talk about NASDAQ, things will start resonating with you more because you're in tune with this market.
You've seen it doing certain things.
And then what you've accomplished is a measure of understanding and experience that you can't purchase.
You can't buy it.
And it'll prove to you that these things absolutely work.
They repeat.
And just because you can't recognize it real time, it doesn't mean you can't recognize it six weeks from now.