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here's the thing you will not
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become a consistently profitable trader
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if you do not have
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a systematic approach to your trading
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and that is why in today's video i'm
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going to be teaching you how to build
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a systematic strategy how to build a
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trading strategy
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that is rules based we're going to be
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doing that together but before we get
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into that
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i would be willing to bet that the last
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time you placed a trade
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it was based on one of these three
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factors factor
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one it was based on a signal you got
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from a trading guru online
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or worse than that it was based on a
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signal you got from a telegram group
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full of traders that are probably worse
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than you are factor number two
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was based on a gut feeling some kind of
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emotion greed or fear
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you thought to yourself i need money
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right now so i'm gonna buy the forex
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market
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buy the stock market you click the
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button and you hope and pray
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that the market goes in your direction
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and number three
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is something i call t-o-t which stands
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for
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tons of technicals you saw a ton of
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technical factors coming together and
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you thought to yourself
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there's no way this does not work out
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look at all these technical factors but
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the problem is
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you're not consistent with which
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technical factors you use you have no
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systematic approach to this
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you're not disciplined you have no risk
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management because of that
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you're still consistently losing trades
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now is this really how you think
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professional and consistently profitable
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traders
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place trades no the top
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five percent of traders place trades
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consistently based on a full
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trading plan that is rules based and
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systematic and that's why today's entire
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video
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will be dedicated to teaching you
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exactly
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how to do that so with that said i'm
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gonna let the intro and disclaimer roll
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while i do make sure you go ahead and
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subscribe
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by clicking the button down below the
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video to the right hand side that is red
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and says subscribe
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click the notification bell so you're
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alerted about more educational content
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we come out with each and every week
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make sure to go and click that like
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button for me to help out with the
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youtube algorithm
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and i'll catch you on the other side of
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the intro and disclaimer
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just kidding
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[Music]
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so before we get started talking about a
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rules-based and systematic strategy
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there's a lot
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we need to discuss first starting with
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what separates
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a losing trader from a winning trader
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let me draw this graph out for you
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subjective
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objective this tends to be the
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difference
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between a losing trader
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and a winning trader and don't worry if
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you don't know the difference between
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the two yet
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i'll be talking about that momentarily
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so what does an objective
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or a winning trader have that a losing
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or subjective trader
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does not have and what's keeping this
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subjective trader from being able to
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create a consistently profitable
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trading career well it starts with the
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number one thing which is
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subjective traders tend to have no
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rules in their trading at all and
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because of this
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it leads them to trading based on
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emotions
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it leads them to being confused
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constantly
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leads them to being inconsistent and
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frustrated
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and right now if you feel any of these
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three things
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then what i'm gonna do throughout this
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whole video is teach you how to stop
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feeling these
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these these emotions stop feeling
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confused stop feeling
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inconsistent and stop having no rules
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key thing here is we're going to create
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rules okay rules are the reason these
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things happen
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so what's the difference then well an
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objective or winning trader
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has a set of rules that they follow
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every time they place a trade
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they have no emotions
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they are confident instead of confused
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because they have put in the work
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to make sure the strategy they're
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trading that's rules based makes money
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over time and they
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are consistent while they trade
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so the first step of fixing the problem
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with if you are
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being a losing trader is to start
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with a set of rules and that's exactly
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what we're going to dive into right now
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i'm going to do a weird funky transition
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on the screen and i'll be right back to
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talk to you about
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the rules based systematic strategy
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we're going to be trading
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and you're going to be learning today in
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this video
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so first off i'm going to tell you a
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strategy i want you to tell me
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is it objective or subjective is it
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something a losing trader would use
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or a winning trader would use so let's
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say i'm using the 20 moving average in
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the 50 moving average
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and in order for my trade to happen i
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need to see
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the 20 above the 50
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ma for a bullish trade and i trade
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breakouts
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in the bullish direction when that
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occurs
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is that objective or subjective there
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are rules here so so tell me
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write in the comments below this would
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be
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absolutely subjective
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there are so many pieces to this puzzle
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that are not in place right now
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that if a if i told you to go out here
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and try to trade this
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i told a dozen people to try to trade it
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a dozen people may trade it completely
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differently
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than one another that is the opposite of
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objective and the opposite of what
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winning traders do
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winning traders have enough rules in
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place where i could tell 12 traders to
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go trade a strategy
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a dozen and they would go trade it most
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of them would trade it exactly the same
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so now let's take a look at the opposite
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of this and how we can make this same
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exact strategy
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and the questions we need to ask
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ourselves to turn it from
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a subjective strategy to
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an objective strategy
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so let's keep our bullish strategy here
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and just talk about some of the nuance
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rules that we need to put
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in it for it to become objective instead
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of subjective
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well for starters what classifies as a
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breakout
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and at what point do we need to trade a
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breakout
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let me show you the exact way that i
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personally
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create objective strategies every time i
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create one
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i call it the c-e-s-t c
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e s t what this stands for
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is conditions
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i might have screwed myself on the huh
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bear with me
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entries
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stop placement and target
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placement this is how you create
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any strategy that you want to create and
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make it rules-based and systematic
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use c-e-s-t conditions entries
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stops and targets again on that last
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slide we had
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the subjectivity there is you don't know
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where you put your stop or your target
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that is completely subjective you need
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an objective
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place you're putting your stop an
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objective place you're getting you're
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hitting your targets
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otherwise you may stay in a trade too
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long and let it run against you
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you may make the mistake of taking
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profits early because you don't have a
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designated area for your stop-loss for
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your target excuse me
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and that's not something you want to do
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so let's start with conditions what are
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our conditions
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of the strategy we were talking about a
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second ago well we said we're gonna keep
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it bullish
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for a bullish trade we wanted to see
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that the 20
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moving average was above the 50 moving
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average
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okay that is condition number one that
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equals
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the trend that we're trading with let me
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write c
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e s t up here to make it easy for you
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guys to remember
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so that is our first condition is we
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need the market to be in trend
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we define trend by 20 ema above the 50
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ema with that being the case let's
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actually take a look on a chart and see
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what that would look like okay
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so here we are we're sitting on the five
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minute chart of the aussie dollar this
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is a trade i'm actually about to show
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you a live
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entry on that we took earlier today and
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hit some pretty nice profits on
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what we're what we mean by this 20
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moving average above
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the 50 moving average is by the way my
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black line
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is the 20 moving average and my blue
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line
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is the 50 moving average okay with that
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being the case all i need to see is that
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the black lines above the blue line that
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gives me my first condition
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let's dive back over to the laptop so if
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that's condition number one
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now what do we need to see well for a
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breakout i want to see some type of
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pullback so the rule i'm going to say
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is that the market must touch
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the 20 moving average
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before i place a trade that is going to
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give me my pullback
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so now i have a rule for the pullback
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the amount that i need
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and let's go ahead and take a look on a
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chart to look at that as well
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so on the chart that just means that i
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would need a market
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to make a new high and then pull back
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and at least touch
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the 20-period moving average but wait
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wait wait
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what if this market goes way lower than
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that it starts printing candles down
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here
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below the 50-day moving average am i
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still the 20 hasn't crossed yet does
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that mean i'm still
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in a bullish trend okay so i need a rule
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here what's the rule going to be
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well my rule is going to be that the
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candles
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cannot close
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below the 50. okay so now i have
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my remaining in trend another trend
289
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condition
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i have that i can't see we'll go back to
291
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the charts we can't see
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00:09:47,760 --> 00:09:50,000
the market start closing below the 50
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ema
294
00:09:50,880 --> 00:09:52,560
with candles if we start closing below
295
00:09:52,560 --> 00:09:54,240
it it invalidates the trade and i can't
296
00:09:54,240 --> 00:09:55,360
look for a trade
297
00:09:55,360 --> 00:09:57,040
this is how specific you need to start
298
00:09:57,040 --> 00:09:58,720
getting i'll speed this up a little bit
299
00:09:58,720 --> 00:10:00,800
what do we classify as a breakout well
300
00:10:00,800 --> 00:10:02,800
for me we'll stay on the chart for a
301
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second
302
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i classify breakout as a break and close
303
00:10:06,880 --> 00:10:10,240
above the highs of this previous
304
00:10:10,240 --> 00:10:12,959
swing high so if that's the case then i
305
00:10:12,959 --> 00:10:14,000
know that i have
306
00:10:14,000 --> 00:10:17,839
my conditions set these would all fall
307
00:10:17,839 --> 00:10:19,279
under the category
308
00:10:19,279 --> 00:10:22,640
of conditions okay now for an
309
00:10:22,640 --> 00:10:25,040
entry what did we just say my entry is
310
00:10:25,040 --> 00:10:26,079
going to be
311
00:10:26,079 --> 00:10:29,440
a close above
312
00:10:29,440 --> 00:10:32,640
highs of previous swing high so a close
313
00:10:32,640 --> 00:10:34,560
above the highs is my entry so now
314
00:10:34,560 --> 00:10:37,200
what have i done now i have my
315
00:10:37,200 --> 00:10:38,399
conditions i have
316
00:10:38,399 --> 00:10:40,720
my entry all that's left to do is create
317
00:10:40,720 --> 00:10:42,240
an objective rule
318
00:10:42,240 --> 00:10:44,160
for stops and targets this is how you
319
00:10:44,160 --> 00:10:45,600
create a completely
320
00:10:45,600 --> 00:10:47,920
objective strategy there's no more
321
00:10:47,920 --> 00:10:48,959
guesswork here
322
00:10:48,959 --> 00:10:50,399
i don't have to guess when i'm supposed
323
00:10:50,399 --> 00:10:53,279
to take a trade any longer because now
324
00:10:53,279 --> 00:10:55,600
i have this set of rules that i can
325
00:10:55,600 --> 00:10:57,839
follow a systematic rules-based approach
326
00:10:57,839 --> 00:11:00,480
to every time i want to place a trade
327
00:11:00,480 --> 00:11:01,839
and that is what i'm going to show you
328
00:11:01,839 --> 00:11:03,040
right now i'm going to show you a live
329
00:11:03,040 --> 00:11:03,519
trade
330
00:11:03,519 --> 00:11:06,079
i took on this pair earlier today let's
331
00:11:06,079 --> 00:11:07,920
take a look at that i'll be right back
332
00:11:07,920 --> 00:11:09,200
what's up guys i wanted to give you an
333
00:11:09,200 --> 00:11:10,560
example of a live trade using the
334
00:11:10,560 --> 00:11:12,480
strategy you're learning here today we
335
00:11:12,480 --> 00:11:14,000
have our resistance level
336
00:11:14,000 --> 00:11:16,320
looking left right here the market has
337
00:11:16,320 --> 00:11:18,160
in fact made a brand new high
338
00:11:18,160 --> 00:11:21,600
pulled back touched our 20 period moving
339
00:11:21,600 --> 00:11:22,000
average
340
00:11:22,000 --> 00:11:24,720
right here and we have not closed below
341
00:11:24,720 --> 00:11:26,320
our 50 period moving average right here
342
00:11:26,320 --> 00:11:27,440
with that being the case
343
00:11:27,440 --> 00:11:28,880
as soon as we get a break and close
344
00:11:28,880 --> 00:11:30,240
above this level of resistance we have a
345
00:11:30,240 --> 00:11:30,959
valid trade
346
00:11:30,959 --> 00:11:32,320
i'm actually getting in a little bit
347
00:11:32,320 --> 00:11:33,440
better because we're seeing this
348
00:11:33,440 --> 00:11:34,560
pullback right now
349
00:11:34,560 --> 00:11:36,000
so let's go ahead and click the buy
350
00:11:36,000 --> 00:11:38,320
button on this trade and we are
351
00:11:38,320 --> 00:11:38,800
currently
352
00:11:38,800 --> 00:11:40,640
involved so i'll keep you guys updated
353
00:11:40,640 --> 00:11:42,160
as this trade plays out and we'll watch
354
00:11:42,160 --> 00:11:42,560
it
355
00:11:42,560 --> 00:11:44,160
as the market moves either hit our
356
00:11:44,160 --> 00:11:46,000
stop-loss or target
357
00:11:46,000 --> 00:11:47,519
so here we are looking at this trade
358
00:11:47,519 --> 00:11:49,120
once more we're a little bit in profit i
359
00:11:49,120 --> 00:11:50,800
was really hoping to get about 18 pips
360
00:11:50,800 --> 00:11:52,000
out of this trade so i'm not gonna close
361
00:11:52,000 --> 00:11:52,399
it out
362
00:11:52,399 --> 00:11:54,399
yet but i'll keep you updated as this
363
00:11:54,399 --> 00:11:56,800
trade plays out what's up guys we just
364
00:11:56,800 --> 00:11:58,480
took profits here on the breakout trade
365
00:11:58,480 --> 00:11:59,279
we took live
366
00:11:59,279 --> 00:12:02,000
earlier we ended up with about 18 pips
367
00:12:02,000 --> 00:12:04,160
on this five-minute chart which is not
368
00:12:04,160 --> 00:12:06,399
bad at all something like actually about
369
00:12:06,399 --> 00:12:08,720
16 pips we ended up with about 16 pips
370
00:12:08,720 --> 00:12:10,320
not too bad considering our stop-loss
371
00:12:10,320 --> 00:12:11,040
was around
372
00:12:11,040 --> 00:12:12,880
six to eight pips so we did get a 2-1
373
00:12:12,880 --> 00:12:14,320
risk reward out of this trade i just
374
00:12:14,320 --> 00:12:15,839
wanted to show you the results of that
375
00:12:15,839 --> 00:12:16,399
trade
376
00:12:16,399 --> 00:12:17,760
all right so there was our trade and the
377
00:12:17,760 --> 00:12:19,600
results of that trade
378
00:12:19,600 --> 00:12:21,200
it ended up working out for a profit it
379
00:12:21,200 --> 00:12:22,560
won't happen like that every time that's
380
00:12:22,560 --> 00:12:24,320
the importance of testing there is so
381
00:12:24,320 --> 00:12:25,279
much more that goes
382
00:12:25,279 --> 00:12:28,480
into a profitable trading plan than just
383
00:12:28,480 --> 00:12:30,560
the strategy but the very first step
384
00:12:30,560 --> 00:12:32,959
that you have to take is creating an
385
00:12:32,959 --> 00:12:35,040
objective way you're going to trade
386
00:12:35,040 --> 00:12:36,880
with no subjectivity or as little as
387
00:12:36,880 --> 00:12:38,399
possible and that's going to be the
388
00:12:38,399 --> 00:12:39,440
hardest part that's why i wanted to give
389
00:12:39,440 --> 00:12:40,560
you the strategy today
390
00:12:40,560 --> 00:12:41,680
we're going to go through and actually
391
00:12:41,680 --> 00:12:43,360
i'm going to explain the strategy in a
392
00:12:43,360 --> 00:12:44,720
second but let's first talk about the
393
00:12:44,720 --> 00:12:46,320
mindset you must have
394
00:12:46,320 --> 00:12:48,079
a strategy you could learn as many
395
00:12:48,079 --> 00:12:49,360
strategies you want to
396
00:12:49,360 --> 00:12:51,279
if you're not willing to put in the work
397
00:12:51,279 --> 00:12:53,040
to back test that strategy so you can
398
00:12:53,040 --> 00:12:53,440
gain
399
00:12:53,440 --> 00:12:55,120
confidence in it if you're not willing
400
00:12:55,120 --> 00:12:57,120
to put in the work to create a risk
401
00:12:57,120 --> 00:12:58,639
management plan that you're comfortable
402
00:12:58,639 --> 00:12:59,120
with
403
00:12:59,120 --> 00:13:00,959
then you watching all these youtube
404
00:13:00,959 --> 00:13:03,440
videos is completely useless
405
00:13:03,440 --> 00:13:05,200
you're not going to get anywhere if you
406
00:13:05,200 --> 00:13:07,600
don't put in the work that is necessary
407
00:13:07,600 --> 00:13:08,639
you're not gonna get anywhere if you
408
00:13:08,639 --> 00:13:10,639
don't have the patience to wait for your
409
00:13:10,639 --> 00:13:11,200
trades
410
00:13:11,200 --> 00:13:12,639
don't just jump in the market and be
411
00:13:12,639 --> 00:13:15,279
greedy you need to wait on the perfect
412
00:13:15,279 --> 00:13:16,240
situation
413
00:13:16,240 --> 00:13:18,320
every time for you to be able to place a
414
00:13:18,320 --> 00:13:20,320
trade and that perfect situation
415
00:13:20,320 --> 00:13:24,000
only aligns when all of your rules align
416
00:13:24,000 --> 00:13:25,760
outside of the strategy you have to have
417
00:13:25,760 --> 00:13:27,760
a risk management plan in place
418
00:13:27,760 --> 00:13:29,680
that keeps you comfortable that keeps
419
00:13:29,680 --> 00:13:31,920
you from blowing your account completely
420
00:13:31,920 --> 00:13:33,360
because guess what if you do that
421
00:13:33,360 --> 00:13:35,360
you just joined the 95 percent we were
422
00:13:35,360 --> 00:13:36,959
talking about
423
00:13:36,959 --> 00:13:39,199
and the way you don't do that is by
424
00:13:39,199 --> 00:13:40,800
having an objective
425
00:13:40,800 --> 00:13:42,959
rules-based way to trade a strategy that
426
00:13:42,959 --> 00:13:44,480
provides an edge over the market
427
00:13:44,480 --> 00:13:46,560
and not risking your entire account
428
00:13:46,560 --> 00:13:48,560
because you're trying to get rich quick
429
00:13:48,560 --> 00:13:51,040
4x is not a get-rich-quick scheme forex
430
00:13:51,040 --> 00:13:52,720
will not make you rich in the next six
431
00:13:52,720 --> 00:13:53,120
months
432
00:13:53,120 --> 00:13:55,600
i promise there's no way unless you're
433
00:13:55,600 --> 00:13:56,160
starting
434
00:13:56,160 --> 00:13:57,920
with a huge account and you're a genius
435
00:13:57,920 --> 00:13:58,959
so you're gonna learn how to do this in
436
00:13:58,959 --> 00:14:00,560
a week
437
00:14:00,560 --> 00:14:02,880
then maybe but outside of that weird
438
00:14:02,880 --> 00:14:03,760
scenario
439
00:14:03,760 --> 00:14:05,600
forex will not make you rich over the
440
00:14:05,600 --> 00:14:07,680
next six months
441
00:14:07,680 --> 00:14:09,120
i know that hurts and i know it sucks
442
00:14:09,120 --> 00:14:10,560
and if that if that's what you wanted
443
00:14:10,560 --> 00:14:11,680
you can go ahead and click away from the
444
00:14:11,680 --> 00:14:14,000
video
445
00:14:14,399 --> 00:14:17,360
but if you want to learn how to trade
446
00:14:17,360 --> 00:14:18,720
properly if you want to learn how to
447
00:14:18,720 --> 00:14:20,560
become a consistently profitable trader
448
00:14:20,560 --> 00:14:22,000
that is exactly what i'm teaching you
449
00:14:22,000 --> 00:14:23,760
right now it starts with an objective
450
00:14:23,760 --> 00:14:25,199
strategy let's take a look at the chart
451
00:14:25,199 --> 00:14:25,680
here
452
00:14:25,680 --> 00:14:27,680
and talk about this strategy let's go
453
00:14:27,680 --> 00:14:28,800
ahead and dive deep
454
00:14:28,800 --> 00:14:30,079
into the rules that we've already
455
00:14:30,079 --> 00:14:31,360
discussed take a look at a couple
456
00:14:31,360 --> 00:14:33,199
examples this was a bullish example
457
00:14:33,199 --> 00:14:34,959
and let's see how these rules played out
458
00:14:34,959 --> 00:14:36,880
okay objectively
459
00:14:36,880 --> 00:14:38,320
we're waiting on the black line to be
460
00:14:38,320 --> 00:14:39,920
above the blue line to put it simply
461
00:14:39,920 --> 00:14:41,519
that's the 20 moving average above the
462
00:14:41,519 --> 00:14:43,360
50 moving average we are then
463
00:14:43,360 --> 00:14:45,760
waiting on the market to pull back and
464
00:14:45,760 --> 00:14:46,880
touch at least
465
00:14:46,880 --> 00:14:48,880
the 20 moving average that happens here
466
00:14:48,880 --> 00:14:50,560
right completely objective
467
00:14:50,560 --> 00:14:52,480
we cannot see any candles close below
468
00:14:52,480 --> 00:14:54,720
the blue line do any candles close below
469
00:14:54,720 --> 00:14:55,600
the blue line
470
00:14:55,600 --> 00:14:57,440
absolutely not so that is an objective
471
00:14:57,440 --> 00:14:59,760
rule that is met we then need the market
472
00:14:59,760 --> 00:15:01,519
to break out of
473
00:15:01,519 --> 00:15:04,639
the last swing high the close of that
474
00:15:04,639 --> 00:15:06,079
candle is going to be our
475
00:15:06,079 --> 00:15:09,120
entry so we have this candle here
476
00:15:09,120 --> 00:15:11,920
that breaks out we have the close of
477
00:15:11,920 --> 00:15:13,440
that candle right here i entered a
478
00:15:13,440 --> 00:15:14,639
little bit late so i got to enter a
479
00:15:14,639 --> 00:15:15,600
little bit lower
480
00:15:15,600 --> 00:15:18,720
the stop loss was one atr below my entry
481
00:15:18,720 --> 00:15:20,720
candle if you don't know what an atr is
482
00:15:20,720 --> 00:15:22,959
it's called atr's average true range it
483
00:15:22,959 --> 00:15:24,399
shows you the average of the last 14
484
00:15:24,399 --> 00:15:24,880
candles
485
00:15:24,880 --> 00:15:26,639
so you can place a stop loss based on
486
00:15:26,639 --> 00:15:27,920
the volatility of the market i'll put a
487
00:15:27,920 --> 00:15:28,320
link
488
00:15:28,320 --> 00:15:30,079
to a video i did all about the atr
489
00:15:30,079 --> 00:15:31,920
indicator in the top right hand side of
490
00:15:31,920 --> 00:15:32,720
your screen
491
00:15:32,720 --> 00:15:34,160
after that happens let's go ahead and
492
00:15:34,160 --> 00:15:35,920
pull out our position tool
493
00:15:35,920 --> 00:15:39,120
we enter we have a stop loss below
494
00:15:39,120 --> 00:15:43,440
our entry candle about right there
495
00:15:43,440 --> 00:15:44,959
and the market pushed up i ended up
496
00:15:44,959 --> 00:15:47,519
exiting this trade for about a 1.5
497
00:15:47,519 --> 00:15:50,480
to one risk reward a little later on in
498
00:15:50,480 --> 00:15:50,959
the day
499
00:15:50,959 --> 00:15:52,160
so what we'll do now is i'm going to
500
00:15:52,160 --> 00:15:53,440
bring it back over we're going to talk
501
00:15:53,440 --> 00:15:54,000
about a
502
00:15:54,000 --> 00:15:55,360
bearish example and we'll just scroll
503
00:15:55,360 --> 00:15:57,360
the chart back i have not looked at this
504
00:15:57,360 --> 00:15:59,360
whatsoever let's scroll the chart back
505
00:15:59,360 --> 00:16:01,440
find a bearish example of this
506
00:16:01,440 --> 00:16:04,639
so first off would this be
507
00:16:04,639 --> 00:16:07,040
an entry this big red candle right here
508
00:16:07,040 --> 00:16:10,079
would you be entering on that candle
509
00:16:10,079 --> 00:16:11,759
hopefully you said no the reason is
510
00:16:11,759 --> 00:16:13,759
because the black line
511
00:16:13,759 --> 00:16:16,560
is above the blue line therefore we are
512
00:16:16,560 --> 00:16:18,560
not in a downtrend according to our
513
00:16:18,560 --> 00:16:19,440
objective rules
514
00:16:19,440 --> 00:16:21,120
you don't jump into trades because you
515
00:16:21,120 --> 00:16:22,959
feel like it you don't jump into trades
516
00:16:22,959 --> 00:16:24,079
because you're greedy and you just want
517
00:16:24,079 --> 00:16:25,600
money right now that's not how forex
518
00:16:25,600 --> 00:16:26,000
works
519
00:16:26,000 --> 00:16:27,680
the market does not care if you want
520
00:16:27,680 --> 00:16:30,320
money right now you can lose your life
521
00:16:30,320 --> 00:16:31,519
savings in a
522
00:16:31,519 --> 00:16:35,759
snap of fingers with this market
523
00:16:35,759 --> 00:16:37,360
the way you avoid that is with risk
524
00:16:37,360 --> 00:16:38,800
management and a rules-based approach
525
00:16:38,800 --> 00:16:39,680
that keeps you
526
00:16:39,680 --> 00:16:41,360
from being greedy and just jumping in
527
00:16:41,360 --> 00:16:43,199
because you feel like it if you haven't
528
00:16:43,199 --> 00:16:44,079
heard by now
529
00:16:44,079 --> 00:16:46,320
emotions do not belong in trading
530
00:16:46,320 --> 00:16:47,600
whatsoever
531
00:16:47,600 --> 00:16:50,399
and 95 of traders use emotion retail
532
00:16:50,399 --> 00:16:50,880
traders
533
00:16:50,880 --> 00:16:53,199
use emotion and that's why 95 percent of
534
00:16:53,199 --> 00:16:54,000
traders fail
535
00:16:54,000 --> 00:16:55,040
i don't want you to fall under that
536
00:16:55,040 --> 00:16:57,199
category so right here would not be an
537
00:16:57,199 --> 00:16:58,240
entry
538
00:16:58,240 --> 00:16:59,839
where would be our first entry well we
539
00:16:59,839 --> 00:17:01,360
can't see one on the chart yet right
540
00:17:01,360 --> 00:17:03,040
would this be an entry if we close below
541
00:17:03,040 --> 00:17:05,359
here no we closed above
542
00:17:05,359 --> 00:17:07,679
our 50 moving average that tells me that
543
00:17:07,679 --> 00:17:09,280
the market might head higher i don't
544
00:17:09,280 --> 00:17:10,079
even want to
545
00:17:10,079 --> 00:17:11,760
deal with a breakout situation in that
546
00:17:11,760 --> 00:17:13,599
case so i'm not i'm not willing to place
547
00:17:13,599 --> 00:17:14,799
a breakout trade
548
00:17:14,799 --> 00:17:17,760
right then what about now now we have
549
00:17:17,760 --> 00:17:19,280
the market pulling back down
550
00:17:19,280 --> 00:17:22,319
creating a low pulling up touching
551
00:17:22,319 --> 00:17:25,280
our 20 moving average not closing above
552
00:17:25,280 --> 00:17:26,480
our 50
553
00:17:26,480 --> 00:17:31,039
can i place a trade below this low
554
00:17:31,039 --> 00:17:34,559
if i get a breakout hopefully you
555
00:17:34,559 --> 00:17:37,039
said yes absolutely why because all of
556
00:17:37,039 --> 00:17:38,000
our rules are met
557
00:17:38,000 --> 00:17:40,240
we have a market pushing down the black
558
00:17:40,240 --> 00:17:43,280
line is below the blue line right
559
00:17:43,280 --> 00:17:45,039
we have a pullback that touches the
560
00:17:45,039 --> 00:17:46,960
black line or 20 moving average
561
00:17:46,960 --> 00:17:48,799
the pullback does not start closing
562
00:17:48,799 --> 00:17:50,480
above my 50 moving average
563
00:17:50,480 --> 00:17:52,240
telling me that that 50 is providing
564
00:17:52,240 --> 00:17:53,760
resistance and this market's likely to
565
00:17:53,760 --> 00:17:54,640
fall
566
00:17:54,640 --> 00:17:57,360
we then see a close below candle right
567
00:17:57,360 --> 00:17:57,840
here
568
00:17:57,840 --> 00:18:00,720
that closes below the latest swing low
569
00:18:00,720 --> 00:18:01,520
before
570
00:18:01,520 --> 00:18:03,919
that pullback which is right here in
571
00:18:03,919 --> 00:18:05,280
that situation
572
00:18:05,280 --> 00:18:07,919
my trade would look like this i would
573
00:18:07,919 --> 00:18:09,120
have a
574
00:18:09,120 --> 00:18:12,400
entry at that candle this the atr here
575
00:18:12,400 --> 00:18:14,799
is three pips so we have three plus
576
00:18:14,799 --> 00:18:16,799
three about a six pips top loss that
577
00:18:16,799 --> 00:18:19,760
does not get hit
578
00:18:20,640 --> 00:18:22,559
and we look for i personally look for
579
00:18:22,559 --> 00:18:24,720
about a 1.5 to one risk reward
580
00:18:24,720 --> 00:18:26,720
it needs to be objective but set targets
581
00:18:26,720 --> 00:18:28,559
however you feel like it i personally
582
00:18:28,559 --> 00:18:31,120
like to do about a 1.5 to 1 because most
583
00:18:31,120 --> 00:18:32,240
of the strategies i trade
584
00:18:32,240 --> 00:18:34,080
went at about 60 that gives me a really
585
00:18:34,080 --> 00:18:36,160
good advantage over the market
586
00:18:36,160 --> 00:18:38,240
over a long period of time and over a
587
00:18:38,240 --> 00:18:40,640
large sample size so that was a bearish
588
00:18:40,640 --> 00:18:41,840
version of the strategy
589
00:18:41,840 --> 00:18:43,600
super simple strategy you can go back
590
00:18:43,600 --> 00:18:44,880
and read through the rules that were on
591
00:18:44,880 --> 00:18:45,679
the laptop
592
00:18:45,679 --> 00:18:48,080
but again i want to dive into the fact
593
00:18:48,080 --> 00:18:48,799
that
594
00:18:48,799 --> 00:18:51,520
this is not all you need you might lose
595
00:18:51,520 --> 00:18:52,880
three or four in a row
596
00:18:52,880 --> 00:18:54,080
using this and you've probably been
597
00:18:54,080 --> 00:18:55,600
through this situation before and if
598
00:18:55,600 --> 00:18:56,160
you're new
599
00:18:56,160 --> 00:18:58,160
please don't fall into this category
600
00:18:58,160 --> 00:19:00,000
there's so many traders that learn from
601
00:19:00,000 --> 00:19:01,520
someone online and then
602
00:19:01,520 --> 00:19:03,280
go out and expect that strategy to win
603
00:19:03,280 --> 00:19:04,799
every single time because they learned
604
00:19:04,799 --> 00:19:05,760
it from someone
605
00:19:05,760 --> 00:19:07,760
who has half a million subscribers on
606
00:19:07,760 --> 00:19:09,120
youtube
607
00:19:09,120 --> 00:19:10,240
that doesn't mean it's going to win
608
00:19:10,240 --> 00:19:12,720
every time i'm not psychic i've never
609
00:19:12,720 --> 00:19:13,760
found a strategy
610
00:19:13,760 --> 00:19:16,080
that wins over about 70 of the time and
611
00:19:16,080 --> 00:19:16,799
to get that
612
00:19:16,799 --> 00:19:18,960
70 percent i had to go below a
613
00:19:18,960 --> 00:19:21,520
one-to-one reward to risk ratio
614
00:19:21,520 --> 00:19:23,840
so don't expect magic out of any
615
00:19:23,840 --> 00:19:25,360
strategies another thing you have to
616
00:19:25,360 --> 00:19:26,000
remember
617
00:19:26,000 --> 00:19:29,200
is to lower your expectations a little
618
00:19:29,200 --> 00:19:30,880
at least you're not going to get rich in
619
00:19:30,880 --> 00:19:32,160
six months and you're definitely not
620
00:19:32,160 --> 00:19:33,760
going to find a strategy that wins 100
621
00:19:33,760 --> 00:19:35,440
of the time so if you learn a strategy
622
00:19:35,440 --> 00:19:36,080
like this
623
00:19:36,080 --> 00:19:39,039
it is your job i can't do it for you i
624
00:19:39,039 --> 00:19:40,400
can teach you a strategy
625
00:19:40,400 --> 00:19:43,520
in 20 minutes that is proven to make
626
00:19:43,520 --> 00:19:44,960
money over time
627
00:19:44,960 --> 00:19:47,200
but i can't go out and back test that
628
00:19:47,200 --> 00:19:48,080
strategy for you
629
00:19:48,080 --> 00:19:49,840
so that you have the confidence to keep
630
00:19:49,840 --> 00:19:51,840
trading it through drawdowns when it
631
00:19:51,840 --> 00:19:52,320
starts
632
00:19:52,320 --> 00:19:54,160
losing three or four in a row but
633
00:19:54,160 --> 00:19:55,760
inevitably it comes back
634
00:19:55,760 --> 00:19:57,280
afterwards you won't make it through
635
00:19:57,280 --> 00:19:59,600
that drawdown because you
636
00:19:59,600 --> 00:20:02,400
have not decided to take the initiative
637
00:20:02,400 --> 00:20:03,440
put in the effort
638
00:20:03,440 --> 00:20:05,760
and back test it yourself that is so
639
00:20:05,760 --> 00:20:06,480
important
640
00:20:06,480 --> 00:20:07,919
after you back test by the way i'm just
641
00:20:07,919 --> 00:20:09,600
going to break down the exact steps you
642
00:20:09,600 --> 00:20:10,320
need to take
643
00:20:10,320 --> 00:20:12,159
back test this okay take it through
644
00:20:12,159 --> 00:20:14,320
historic data test 100 trades
645
00:20:14,320 --> 00:20:16,720
on your favorite pair try pairs that
646
00:20:16,720 --> 00:20:18,559
trend a lot pound pairs trend a lot
647
00:20:18,559 --> 00:20:20,320
yen pairs trend a lot why don't you try
648
00:20:20,320 --> 00:20:22,000
the pound yen probably be a pretty good
649
00:20:22,000 --> 00:20:22,640
idea
650
00:20:22,640 --> 00:20:25,919
so with that being the case you test
651
00:20:25,919 --> 00:20:28,159
that for 100 trades in the past guess
652
00:20:28,159 --> 00:20:29,760
what if it didn't work
653
00:20:29,760 --> 00:20:32,640
out of the past 100 times that you
654
00:20:32,640 --> 00:20:33,360
tested it
655
00:20:33,360 --> 00:20:35,200
on the pound yen let's say and what i
656
00:20:35,200 --> 00:20:36,960
mean by didn't work is that
657
00:20:36,960 --> 00:20:39,039
out of those 100 if you didn't win over
658
00:20:39,039 --> 00:20:40,640
55 of them
659
00:20:40,640 --> 00:20:42,240
if you didn't win over 50 of them with a
660
00:20:42,240 --> 00:20:44,480
1.5 to 1 risk reward
661
00:20:44,480 --> 00:20:47,440
then it's not if it didn't win over that
662
00:20:47,440 --> 00:20:48,320
period of time
663
00:20:48,320 --> 00:20:49,440
why would you want to trade it in the
664
00:20:49,440 --> 00:20:51,600
future this is why you have to test
665
00:20:51,600 --> 00:20:52,320
things
666
00:20:52,320 --> 00:20:54,720
that you learn from me or anyone else it
667
00:20:54,720 --> 00:20:55,679
doesn't matter
668
00:20:55,679 --> 00:20:57,360
just go out and test it yourself to
669
00:20:57,360 --> 00:20:59,200
ensure that it's profitable and to give
670
00:20:59,200 --> 00:21:00,400
yourself the confidence that you
671
00:21:00,400 --> 00:21:01,280
inevitably need
672
00:21:01,280 --> 00:21:03,120
to get through drawdowns that will
673
00:21:03,120 --> 00:21:05,440
happen so that's the back testing part
674
00:21:05,440 --> 00:21:07,200
after you backtest in order to gain even
675
00:21:07,200 --> 00:21:09,600
more confidence you need to go through
676
00:21:09,600 --> 00:21:12,320
and demo trade to make sure you can
677
00:21:12,320 --> 00:21:14,080
accomplish this strategy
678
00:21:14,080 --> 00:21:16,799
on your schedule with your daily job
679
00:21:16,799 --> 00:21:18,559
with your daily obligations whatever
680
00:21:18,559 --> 00:21:19,919
they may be
681
00:21:19,919 --> 00:21:21,760
and it also is going to help you build
682
00:21:21,760 --> 00:21:23,440
confidence people constantly ask me
683
00:21:23,440 --> 00:21:24,799
stephen how do you become patient
684
00:21:24,799 --> 00:21:26,559
how do you get more discipline those are
685
00:21:26,559 --> 00:21:28,000
the two steps you take
686
00:21:28,000 --> 00:21:29,360
stop trading with a lot live money
687
00:21:29,360 --> 00:21:30,799
you're not going to get more patient or
688
00:21:30,799 --> 00:21:31,600
be more
689
00:21:31,600 --> 00:21:33,120
disciplined if you're constantly losing
690
00:21:33,120 --> 00:21:35,200
money you're just not
691
00:21:35,200 --> 00:21:38,400
so the the plan of action needs to be
692
00:21:38,400 --> 00:21:41,440
that you take and test a strategy
693
00:21:41,440 --> 00:21:43,039
you then demo trade that strategy to
694
00:21:43,039 --> 00:21:44,960
prove to yourself you can actually do it
695
00:21:44,960 --> 00:21:46,320
with all the obligations you have
696
00:21:46,320 --> 00:21:47,440
outside of trading
697
00:21:47,440 --> 00:21:50,480
in life and then you can consider
698
00:21:50,480 --> 00:21:52,960
going in the markets with real money
699
00:21:52,960 --> 00:21:54,559
only after those things are done
700
00:21:54,559 --> 00:21:58,080
because guess what as always we have
701
00:21:58,080 --> 00:22:00,400
any anybody that's a professional trader
702
00:22:00,400 --> 00:22:01,280
has mastered
703
00:22:01,280 --> 00:22:03,679
these three things i i do this a lot and
704
00:22:03,679 --> 00:22:05,200
it's because this is one of the most
705
00:22:05,200 --> 00:22:06,000
important
706
00:22:06,000 --> 00:22:07,520
parts of trading and it's one of the
707
00:22:07,520 --> 00:22:09,840
things that allowed me to become
708
00:22:09,840 --> 00:22:12,720
profitable and that is what i call the
709
00:22:12,720 --> 00:22:15,280
triangle of trading success at any point
710
00:22:15,280 --> 00:22:17,200
that you become profitable the reason
711
00:22:17,200 --> 00:22:18,799
will be because you mastered
712
00:22:18,799 --> 00:22:21,280
these three areas of your trading that
713
00:22:21,280 --> 00:22:23,120
what i call the triangle trading success
714
00:22:23,120 --> 00:22:24,400
in the middle of this triangle is you
715
00:22:24,400 --> 00:22:27,039
making money on the outskirts of this
716
00:22:27,039 --> 00:22:27,840
triangle
717
00:22:27,840 --> 00:22:29,520
number one is exactly what we talked
718
00:22:29,520 --> 00:22:30,880
about at the beginning of the video
719
00:22:30,880 --> 00:22:33,360
it's this this strategy that's rules
720
00:22:33,360 --> 00:22:34,720
based and easy to follow
721
00:22:34,720 --> 00:22:38,000
it is your strategy that is the first
722
00:22:38,000 --> 00:22:40,000
step in anyone becoming a consistently
723
00:22:40,000 --> 00:22:40,960
profitable trader
724
00:22:40,960 --> 00:22:43,760
is finding a strategy that makes money
725
00:22:43,760 --> 00:22:44,960
over time
726
00:22:44,960 --> 00:22:48,559
second is a risk management plan
727
00:22:48,559 --> 00:22:51,200
that keeps you from blowing your account
728
00:22:51,200 --> 00:22:52,159
initially
729
00:22:52,159 --> 00:22:53,679
you can't blow your account because then
730
00:22:53,679 --> 00:22:54,960
what are you going to trade with right
731
00:22:54,960 --> 00:22:56,480
but you want a risk management plan that
732
00:22:56,480 --> 00:22:57,280
doesn't really just
733
00:22:57,280 --> 00:22:58,799
keep you from blowing your account it
734
00:22:58,799 --> 00:23:00,960
also keeps you from getting hyper
735
00:23:00,960 --> 00:23:02,080
emotional
736
00:23:02,080 --> 00:23:04,000
during your trades from freaking out if
737
00:23:04,000 --> 00:23:05,200
you lose two in a row
738
00:23:05,200 --> 00:23:06,480
you need a risk management plan that
739
00:23:06,480 --> 00:23:09,600
keeps you from doing that you also
740
00:23:09,600 --> 00:23:12,720
need the discipline
741
00:23:14,000 --> 00:23:15,840
to follow these other two parts of your
742
00:23:15,840 --> 00:23:17,520
trading plan the way you get that
743
00:23:17,520 --> 00:23:18,159
discipline
744
00:23:18,159 --> 00:23:20,240
is through back testing and demo trading
745
00:23:20,240 --> 00:23:21,280
i hear it all the time
746
00:23:21,280 --> 00:23:22,960
back testing's irrelevant it's just dumb
747
00:23:22,960 --> 00:23:24,799
to do back testing is what gives you
748
00:23:24,799 --> 00:23:25,440
confidence
749
00:23:25,440 --> 00:23:27,520
and ensures that you're trading some
750
00:23:27,520 --> 00:23:28,799
kind of systematic
751
00:23:28,799 --> 00:23:31,200
rules-based strategy that's made money
752
00:23:31,200 --> 00:23:31,919
over time
753
00:23:31,919 --> 00:23:33,360
this is the only it's the only measuring
754
00:23:33,360 --> 00:23:35,039
stick we have we can't predict the
755
00:23:35,039 --> 00:23:36,480
future so if you're not going to predict
756
00:23:36,480 --> 00:23:37,520
the future and you're not going to look
757
00:23:37,520 --> 00:23:38,080
at past
758
00:23:38,080 --> 00:23:39,919
historic data how are you going to learn
759
00:23:39,919 --> 00:23:41,760
how to trade
760
00:23:41,760 --> 00:23:44,159
then what right that's why i always harp
761
00:23:44,159 --> 00:23:44,799
so much
762
00:23:44,799 --> 00:23:48,159
on back testing and on demo trading to
763
00:23:48,159 --> 00:23:49,279
improve
764
00:23:49,279 --> 00:23:52,320
discipline of any trader out there
765
00:23:52,320 --> 00:23:53,840
if you're having trouble with that those
766
00:23:53,840 --> 00:23:55,520
are the things you need to
767
00:23:55,520 --> 00:23:58,159
do that said i hope at this point you
768
00:23:58,159 --> 00:23:59,919
have everything you need to take
769
00:23:59,919 --> 00:24:01,600
a strategy whether it's this one or not
770
00:24:01,600 --> 00:24:03,600
make it rules-based as possible
771
00:24:03,600 --> 00:24:07,440
with the cest system that we have right
772
00:24:07,440 --> 00:24:08,159
here
773
00:24:08,159 --> 00:24:11,200
make it as rules based as possible
774
00:24:11,200 --> 00:24:13,039
and start to become a systematic
775
00:24:13,039 --> 00:24:14,720
objective traders that you can start
776
00:24:14,720 --> 00:24:16,640
your journey today
777
00:24:16,640 --> 00:24:19,919
to a more profitable tomorrow i sound
778
00:24:19,919 --> 00:24:20,320
like a
779
00:24:20,320 --> 00:24:22,480
sci-fi movie or some kind of like weird
780
00:24:22,480 --> 00:24:24,480
commercial but seriously if you start
781
00:24:24,480 --> 00:24:25,360
doing this today
782
00:24:25,360 --> 00:24:26,880
it'll increase your chances of becoming
783
00:24:26,880 --> 00:24:28,559
a profitable trader dramatically
784
00:24:28,559 --> 00:24:29,840
and that's why i wanted to push this
785
00:24:29,840 --> 00:24:31,520
video out to you guys if you enjoyed it
786
00:24:31,520 --> 00:24:32,000
click that
787
00:24:32,000 --> 00:24:33,840
like button if you would like some more
788
00:24:33,840 --> 00:24:35,360
advanced training and know
789
00:24:35,360 --> 00:24:36,960
the strategies that i come up with and
790
00:24:36,960 --> 00:24:39,200
use on a daily basis that we just added
791
00:24:39,200 --> 00:24:40,480
a new piece to the eap
792
00:24:40,480 --> 00:24:42,480
training program it is called the
793
00:24:42,480 --> 00:24:44,320
strategy lab which means i'm going to be
794
00:24:44,320 --> 00:24:44,880
putting
795
00:24:44,880 --> 00:24:46,880
all of the pudding it almost sounds like
796
00:24:46,880 --> 00:24:48,400
i said pudding that you eat
797
00:24:48,400 --> 00:24:50,240
i'm going to be placing all the
798
00:24:50,240 --> 00:24:52,400
strategies that i create
799
00:24:52,400 --> 00:24:54,400
over the next six months year however
800
00:24:54,400 --> 00:24:57,039
long that i create into the strategy lab
801
00:24:57,039 --> 00:24:58,640
that way you'll have a chance to see the
802
00:24:58,640 --> 00:25:00,320
newest strategies that i'm working on
803
00:25:00,320 --> 00:25:01,760
i think that's a very powerful tool if
804
00:25:01,760 --> 00:25:03,600
you want to get more info on the
805
00:25:03,600 --> 00:25:04,960
advanced training it is linked in the
806
00:25:04,960 --> 00:25:05,760
description
807
00:25:05,760 --> 00:25:08,400
labeled eap again i hope this video was
808
00:25:08,400 --> 00:25:09,600
valuable if it was please click that
809
00:25:09,600 --> 00:25:10,320
like button
810
00:25:10,320 --> 00:25:12,400
comment below if you last until the end
811
00:25:12,400 --> 00:25:13,679
it was a 30 minute video
812
00:25:13,679 --> 00:25:16,240
good job if you last until the end can't
813
00:25:16,240 --> 00:25:17,520
wait to see you guys
814
00:25:17,520 --> 00:25:19,679
in the next one with that said i'll talk
815
00:25:19,679 --> 00:25:21,600
to you very soon wish you good luck and
816
00:25:21,600 --> 00:25:23,039
good trading
817
00:25:23,039 --> 00:25:26,559
see you then
53510
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