All language subtitles for Lesson 2 - Forex _ Currencies Megatrades EN

Okay folks.

Welcome back.

This lesson is specifically dealing with
futures and Forex and options on both.

And it's important that you
take a second look at this.

Disclaimer, as a reminder,
everything I'm teaching you here

is for informational purposes only.

Okay.

Lesson to ICT mega trades.

This topic is dealing
with Forex and currencies.

Alright, quarterly shifts.

And we'll talk about mega trades.

Mega trades are a little bit
longer-term type of trade.

They're not day trades and not
short term trades they're in between

a swing trade and a position.

Uh, they can go for a lot longer than
we reasonably expect in the beginning.

Um, and it can also go much farther
than we expect them to go, but they

all hinge on the concept that I.

As it relates to quarterly shifts.

Now the impact of quarterly cycles in
the markets as a whole, they can never

be overstated every three months or so.

The market will tend to form an
intermediate term turning point.

Now by itself, it doesn't
give you directional bias.

That's the other concepts yet you
have to use to get to the out.

And it's going to be basically
institutional order flow, but the

overlapping of mega trade conditions
coupled with this effect, that is the

quarterly shift is crucial to finding
the next explosive market moves.

The next portion of this mega trade
recipe is seasonal tendencies.

Now seasonal tendencies are important
for mega trade selections as well.

Obviously, otherwise they wouldn't
be in this recording now one day.

Nope.

We've covered all the salient
seasonal tendencies for each

market and asset class up till now.

So, you know exactly when I believe
that the specific currencies are going

to rally or decline based on seasonal
effects and historical data, they are not

panaceas, they're not the be all end all.

So they're just roadmaps again.

But I like to use them as precursors to
what I believe may unfold in an actual.

Now this seasonal tendency may or
may not be a factor on all explosive

moves, but most tend to be in
alignment with this market phenomenon.

And what do I mean by that?

Sometimes you may have
a seasonal tendency.

That's implying that a particular currency
is supposed to decline this time of year,

maybe even for several months, but the
market internals are suggesting otherwise

and technicals are in align with.

And other supporting factors
would support that analysis.

Then you really can't force the trade
idea based on seasonal tendency.

You have to look at what the technical
is as a whole and at collective some

whole of analysis than just one portion
or partial component to the overall

conditions that lead to and make a trade.

So seasonal tendencies are important, but.

Don't bet the farm on the fact
that it has to unfold based on

the seasonal seasonal tenancy.

Ideally, the conditions are
even better when the seasonal

tendency is in alignment.

That's what I'm getting at.

The U S dollar index.

Now, obviously I have preached this
long and hard ever since the first day I

came down on the scene as a Forex guru.

Now every significant mover in the Forex
or currency markets will have its roots in

the price action of the U S dollar index.

That means if it's going to be a
significant price move, it's going to be.

In the dollar index now while on the
very short term, and especially when it

comes to intraday trading, the dollar
index can consolidate and we can still

see currencies that are in foreign in
nature, trade stronger or weaker against

it while the dollar index stays and
consolidation the search for mega trades

and currencies will depend on the support
of the trade idea in the dollar index,

or it is not a qualified mega trade.

An example, if we believe that the
British pound is going to go higher as

a mega trade, the dollar index should
be in a cell condition and vice versa.

If the dollar index is poised to go higher
and we believe the Canadian dollar is

going to go lower as a mega trade, we have
to see that bullishness in the dollar.

Focusing on the majors.

Now, whether you'd like to trade the
majors or the crosses, you need to focus

on these majors for mega trade selections.

Those are the Euro dollar or fiber
pound dollar or cable Aussie dollar.

Or as we refer to as Aussie
New Zealand dollar or key.

Dollar swissy dollar cat or loony
and dollar yen, or as we refer to

commonly as just simply the Inn now,
all major moves can be determined

with these seven pairs and they
are all you ever need to trade or.

Now, I know some of you want these
bigger range pairs, these, these

beasts like pound yen and Euro
again, and all these crosses.

And some of you may not even ever like
to trade the majors because they can be

potentially be small range environment.

Pairs have to look at them
to get a basis on where the

next mega trade's going to be.

The mega trade can occur in a.

As listed it here, or it could be in
a cross, but to find it in the cross,

you have to understand these majors.

So this is probably one of the most
important lessons out of all the

mentorship, because while I don't
actively trade a lot of the crosses,

there are instances where we want to
take a look at them because they're

going to provide us avenues at which we
can trade mega trades for Forex pairs.

Focus on the futures.

Now the majors have futures contracts
that trade respectively and this

aids further in our analysis.

We're searching for the marketplace
to provide us Xplosive market.

Those respectively are your
dollars, British pounds, Australian

dollars, New Zealand dollars,
Swiss francs, Canadian dollars in

Japanese Yens futures contracts.

There may be something in the price
action of the underlying futures

that leads to an opportunity that
ultimately unfolds as a mega trade.

The next area of study is.

Relative strength analysis.

Now there's two approaches to
performing relative strength analysis.

As I define it, the first is to
use the underlying futures, price

action, comparably, measuring
respective highs, and lows.

What I mean by that?

Well, if we're looking for a bullish
scenario based on a weak dollar, so if

we think the dollar is going to be going
lower, lower greenbacks should send

higher prices than foreign currencies.

We could start going through all of
the underlying futures contracts,

the Australian dollar Canadian
dollar British pound Euro, New

Zealand, dollar, Japanese yen.

So shrimp comparing the lows
of all of those individual

currency futures contracts.

We want to focus on the markets
that have a willingness to go high.

And also hold their lows have a higher,
low, that's going to be relative strength.

We also want to be looking at the
ability of these, these futures

contracts to be able to break
through old highs or premium arrays.

So the markets that are able to
trade through premium arrays and

hold higher lows, they are by
default, a relatively strong.

Market or relatively strong currency.

Not all of the currencies are
going to create that condition.

Some of them will falter and go lower.

Some of them will fail the
breakthrough premium arrays.

That's giving you underlying weakness.

You want to cross those
individual markets out.

If you're looking to be a buyer
of a foreign currency, The second

application is you want to be looking
at the overlay toll that you can use

for the empty for, for four X markets.

And you're gonna be measuring the
respect of highs and lows as a

result of looking at the overlay.

So by overlaying multiple pairs
on one chart with the empty four

platform, you can start seeing where
there's accumulation based on SMT dot

divergence across all of the payers.

Again, if the weak dollar is expected,
we can be looking for pairs that have.

Higher lows.

As long as the base currency is the
foreign currency and the quoted price

is in dollars, no words, Aussie dollar
Euro, dollar pound dollar Kiwi dollar.

Uh, they have the dollar as the second
in the name of their parent's name.

That's the quoted they're quoted in
dollars, but base currency is the

first currency in the name of the.

You have to reverse it now and you have
to invert it when you do the overlay

for dollar based crosses against
the quoted pairs, like dollar again.

So dollar yam it's being
quoted in yen dollar cat.

It's being, it's being quoted in
Canadian dollars dollar swissy it's

being quoted in Swiss Switzerland.

And that would look like this.

So you'd have all of the overlays on top
of the chart and it looks rather busy.

I know, but I put them on just
to give you a contrasting view

of looking at what looks like.

Yeah, spaghetti mess
on a, on a price chart.

If you understand what you're looking
for, this gives you a mountain of insight.

And I actually go into detail
about this in the month of August

when we break down top down.

So we can go through examples of
it then, but there's two approaches

to looking at relative strength.

And again, it's pure looking at highs and
lows with a candle stick or open high,

low, close bar chart or using a line.

Perspective with an overlay with
empty for, they will both fare it out.

The significant movers.

You won't miss a mega trade
by doing one or the other.

It's just a matter of
which one you prefer.

I've done both interchangeably
throughout the.

And sometimes, uh, there's going
to be market conditions that really

require you to use the actual
underlying futures contract chart,

and compare the highs and lows there.

And other times the overlay concept
will be very clear and obvious.

Okay.

But the best world for you to reside
in as a trader is to kind of like

both use both of them, blend them
together, and hopefully they should

agree with everything you're expecting.

And if they do chances, are you
probably got that tiger by the time.

Okay.

Seeking mega trades.

Now the simple process of beginning
to end in very, very simple terms.

Okay.

It's not the complete approach,
but overall, it's you look for

strong and weak currency futures.

Okay.

You start at the futures contracts,
and you look there and you look at the

institutional order flow of those current.

And then you study the
Forex pairs respectively.

So if you are seeing a small group of
currencies in the futures market that are

showing relative strength, that's bullish,
um, and say, one of them is the Euro

and one of them is the Canadian dollar.

Obviously you need to know what they are
in the pairs, Euro dollar in dollar CAD.

You're also going to be
conferring with the dollar index.

So you need to be looking at what
direction is the dollar index?

Is it supporting the idea you think
is going to unfold in the strong or

weak currencies, then you're gonna
be using relative strength in each

currency to make sure that you're
getting the very strongest of the

currencies that you're trading.

Just because you may have a collection
of three or four that are relatively.

Strong with institutional order
flow and a dollar may be supporting

that idea in a conversed manner.

You still want to break these down
and relative strength analysis by

seeing which of that smaller group
of currencies is the actual strongest

and which one is the actual weakest.

You're gonna be filtering
leadership currencies by doing this.

So that way, what you're doing
is you're getting the strongest

and the weakest separating.

You want to find the weakest of the
weakest and the strongest of the

strongest, the strong ones are going to
have an ease of going through premium

arrays and the what's going through
bare, shorter blocks, breaking through

old highs and finding support at
discount arrays and making higher lows.

Weak currencies are going to have
very easy, um, abilities to go

through discount, arrays and other
bullish, short blocks and old lows.

And there'll be supportive.

Price going lower at resistance at
premium arrays and having lower highs.

So having this will help us go through
a overall approach to filtering

out what's the strongest and what's
the weakest of all the currencies.

And once we arrive at that, we try
to narrow it down to one or two

currencies that fit that criteria.

Once we have a weak currency and a
strong currency defined with relatives.

Then we can go into
two different purchase.

We can trade the underlying futures
contracts, or we can use the options

to trade those futures contracts, or
we can use the Forex approach and widow

out a mega trade by using the crosses.

Now, obviously this is an overview
and it will be further refined

in detail on August the PDF files
from the commodity top-down.

Okay, so let's take a quick look
at a few of the hugest charts.

Okay.

Here we have the Australian dollar and
you see in recent weeks we've seen the.

So off and the Australian dollar
has been in a really nice uptrend

from a relative strength standpoint.

Australian dollar has been very strong.

It's been finding support
at discount arrays.

It's been creating higher highs.

It's had no problem breaking through
old premium arrays and finding

support at discount erase expansion
moves are the strongest on the

upside and shallow retracements low.

They're all hallmarks to relative
strength and institutional order

flow, suggesting Australian dollars,
obviously a higher moving currency.

The next is a Euro.

And while this has been
moving up, uh, we've had, uh,

short-term little consolidation.

That's been, uh, Plaguing the Euro for,
uh, for a couple of days here, but overall

the price has been from, to bullish.

So this is a relatively
strong currency as well.

The British pound, this
has been an arrange.

Um, but we did call it higher
based on other technical analysis,

but I wouldn't call this.

Relative strength leader on the upside.

Uh, it's been an arrange
has been rather sloppy.

So this would not be one of those pairs
that we would look for, make a trade in.

The Japanese yen has been in a, somewhat
of a, a larger trading range, but it

did meet some resistance in the month
of June and sold off after filling a

fair value gap at the 92 big figure.

And the Swiss wrong.

We had a, basically a similar
situation with the Euro, all

it's firmed up to bullish.

Um, it's not terribly exciting on
the upside, so I don't believe this

would have met any criteria for a.

The Canadian dollar, uh, has
been in a wonderful uptrend.

On the futures standpoint, it's been
finding support at discount arrays,

breaking through old highs, smashing
through all of the premium raised.

It would be in its way and all the
expansion and big moves are only upside

small, shallow retracements on a downside.

So this is a.

Futures market on the upside as a
bias it relatively speaking, this and

Australian dollar are really good.

Okay.

New Zealand dollar.

This has been a strong
bull bull market as well.

In contrast, you can see that the
New Zealand dollar has moved into a

trading range versus what we saw the
price action in Australian dollar,

which was much more dynamic on the
upside higher lows and higher highs.

So while New Zealand dollar was a
relatively strong currency pair,

uh, if we're going to be comparing
apples to apples and oranges to

oranges, um, they, New Zealand
dollar compared to the Australian

dollar Aussie is much stronger in its
institutional order flow for upside.

So it, we would have to cross
out the New Zealand because

they're closely correlated.

So our leadership currencies, our
Australian dollar for strong upside.

Canadian dollar for strong upside.

And then we had the Japanese
yen as a weak currency.

So now how can we use this information?

We fared it out to currencies, Australian
and Canadian, and we also fared it

out where the weak currency was.

That's the Japanese yen.

So, what we're going to do is we're
going to blend the two and we'll come

up with a mega trade idea using Forex.

Now you can go long on the Canadian dollar
in the futures market, and you can go long

Australian dollar in the futures market,
do options long calls on both of those.

Or you can use this information
if you don't ever want to

trade the futures market.

And that's fine, but the way you use
this information is do you want to

find a mega trade in the Forex market?

This is how it's done.

You find a strong currency, which we
elected to use the Canadian dollar,

which has been in a strong uptrend.

Um, we've been talking about this
Canadian dollar going lower as

a dollar CAD pair for months.

Now, the reverse or inverse
relationship to the hugest market is

the Canadian dollar would be going up.

We can clearly see that here
in the chart on left hand side.

And we can contrast that with that or
the weak currency or to Japanese yen.

We can see the second week or so
of June, the Japanese yam went up

close closing a fair value gap at
92 and ultimately fell over and

went to a weaker stance for trading.

At the same time, the Canadian dollar
was finding its new legs higher

and rallying up rather strongly.

So what we're doing is we're blending
these two together to get a pair.

So, what we would have to do is go through
the Forex market and figure out which

pair makes these two currencies a cross.

It could, you'd have to start,
obviously looking to see if there's

a Japanese against the Canadian
or Canadian versus Japanese shin.

And as it were, we see that there
is a Canadian dollar versus the yen.

And this is the result of blending,
a strong currency with a weak

currency, and then finding a.

To trade that you can see the second week
of June, 2017, the market makes a low

and rallies aggressively all the way up
to a high of 845 pips as a price swing.

Now, I don't talk about crosses a lot.

I don't do that because you have to
understand this information to do it.

If you're treating crosses just for
the sake of trading across it, because

you expect a big volatility all the
time, they can, they can hurt you.

But if you understand what we're looking
at on a more of an intermediate term

basis, the crosses will serve you
better when we use this approach, okay,

this is how the banks break it down.

This is how large institutions
work through the currency board

to find out how the crosses are
going to work as a market maker.

This is how they manipulate the
majors to unfold in the cross.

Another example would be the strong
currency of the Australian dollar versus

the weak currency of the Japanese yen.

And that would be in the pear found
in the Forex market as the Aussie Ian.

Again, the second week of June makes
a low and price rallies aggressive.

And a tune of 630 pips.

Now, if you think about what you've
been taught here, it does not give

you a day trading perspective.

It doesn't give you a short term
trader specific perspective either.

It doesn't give you, um, you
know, a scalping mentality

it's giving you real big move.

Blast off type moves where
the moose are not lethargic.

They're not wimpy.

They're not slow.

They're in a hurry to go somewhere
and they are growing quickly.

And what you're doing is you're
pairing a very strong currency against

a weak currency and vice versa.

There's going to be times
when we were looking for a.

A stronger dollar.

That means foreign currencies are
going to be looking to go lower.

What we will collectively see is all the
foreign currencies will be gone lower,

but there'll be one currency that's
trading against that and being strong

and we will be doing the opposite here.

We would be pairing up that
strong currency against a weaker

currency, and that would give us
the criteria for another trading

opportunity for a mega trade.

As you can see here.

800 and 600 pips versus a few
hundred pips in the Euro and the

cable as we've been falling in our
mentorship, it pales in comparison.

So if you're looking for big,
big moves, this is how it's done.

This is how the banks do it.

And now you know how to do it
as well until the next lesson.

I wish you good luck and good trading.