Original subtitles

Alright guys and now we're back at it for the confirmation

entry. This is the second video of the three part series for

entry types. So let's dive into what exactly a confirmation

entry is and how we can utilize it in our trading and as well

as the benefits of it compared to a risk entry. So the

confirmation entry is basically a fractal version of the risk

entry. Locating the initial entry criteria repeated on a

lower time frame to confirm the validity of the point of

interest or order block. So fractal basically means the

same pattern but on a smaller scale. Okay so what that mean

is if I find a break of structure and a retracement

break of structure retracement auto block mitigation on a

higher time frame such as the 1 hour or the four hour the

confirmation entry is simply finding that exact same pattern

but in a fractal version so on the one minute or the 5 minute

preferably okay so as you can see here this is the the same

diagram that we used in the risk entry lesson but in this

scenario I just have an arrow pointing to the higher time

frame POI explaining that zoomed in on a one minute or

five minute time frame you'd be looking for this exact same

thing. So basically we tap into the higher time frame POI which

is right here. We then create a smaller break of structure. A

small solidified high. Another solidified low breaking

structure once again. Let me just

annotate that so that line there is the the fractal break

of structure right so we tap into the POI the higher time

frame POI and then we start to create that same pattern once

again and as soon as that small break of structure happens on

the 1minute or five minute you then look for a lower time

frame POI okay or order block so what was the point of origin

for that minor break of structure okay so we locate

that the point of origin and then we simply set our order

for the retracement and mitigation of that okay it's

very simple now what are the benefits of using confirmation

entries well they're useful if you are questioning the

validity of your order block or POI right so if price is is

headed towards your POI very aggressively maybe not in a

corrective manner and you're not sure if it's going to hold

or not and you're too weary to use a risk entry then this is

where the confirmation entry comes in handy because you can

wait for price to tap into the higher time frame POI and then

instead of hoping that it holds, you can go to the lower

time frames and look for confirmation that it is

holding, okay? So, if you see this fractal pattern on the

lower time frames, that's a confirmation that the order

block was valid to begin with and your analysis was correct

and then, you can start looking for entries, right? So, number

two here, if you have time to be on the charts, you can have

a safer, more calculated entry, okay? So the risk entry

benefits were that or one of them at least was that you

don't have to be on the charts all the time. Um if you have a

busy lifestyle or if you work a nine to five job you can set

and forget your trades right? But if you do have the time if

you have the luxury of being able to sit on your charts at

your desired trading session and truly wait for the best

opportunities. Then that's where mastering confirmation

entries can really level up your trading. Okay. So number

three can achieve tighter risk reward by utilizing the lower

time frame structures and what this means basically is that

for example if you were to set a risk entry here on the higher

time frame POI set your stop loss just above it

let's say you're you know you're left with about seven R

for your potential position well if you utilize the lower

time frame structure and look for this fractal pattern then

your entry is going to be much much tighter so technically you

will be a little further away from the initial point of

interest maybe down here or something but your stop loss

instead of for example like five or six pips could be one

to two pips actually so even though you're a little further

down you can achieve a much much higher risk reward ratio

and that's why when you see mastering the confirmation

entry sometimes they walk away with 20 R trades, 30 R trades,

40 R trades, sometimes even upwards to 100 R trades which

most people think is impossible but once you really master this

technique anything is possible. So those are the basic benefits

of confirmation entries. Now let's go over how to best

utilize the confirmation entries. So basically you

patiently wait for price to enter your POI as I already

explained right? You sit and wait for price to tap into your

higher time frame POI, okay? Now, once that happens, this is

where we head to number two, okay? So, the first break of

structure represents the best risk reward ratio but waiting

for the second break of structure is a safer trade,

okay? So, what do I mean by that? Well, if we look at our

zoomed in diagram here, we first tap into the POI, we

trade away from it, we retest or sorry, we we create a new

solidified high, we then bray that structure of the previous

solidified low right we break the structure creating a new

low and then we enter off of this right here so this is

technically the first confirmation this is the first

break of structure that occurs and we are entering our trade

based on the first lower time frame order block that we can

find okay the point of origin for the first break of

structure now what that triggers is a second break of

structure right there so if you want a safer option and you're

really patient okay this requires a lot of patience

because sometimes it won't always play out like this but

if you have the patience then you can wait for the second

confirmation alright so upon this break of structure there

is of course a point of origin for it let me hide this for a

second whenever there's a break of structure there is a point

of origin okay so we have to locate that and so that zone

there the second point of origin would be our second

confirmation right that would be the the confirmation entry

in its final form basically so there's the first confirmation

and the second confirmation the first will represent the

greatest risk to reward right because both both zones are

going to represent basically the same stop loss size roughly

so your stop loss size will be about the same but the first

one is of course you know closer to recent price the

further down you get you know your targets are going to have

to be basically the the overall risk reward is going to be

vastly different right so the the higher you get in in a sell

position the better okay so like I said the first break of

structure presents the best risk reward but waiting for the

second break of structure is a safer trade it's just added

confirmation right the more confirmation we have the better

it gets now if you just sit on your hands too much and you're

just waiting and waiting and waiting for the third confirm

fourth confirmation then eventually the move is going to

exhaust itself and you're not going to have there's not be

enough selling pressure left to to reach your take profit,

right? So, you do want to pull the trigger. You want to

execute on either the first or second confirmation, alright?

Now, number three, this one's really important. So, don't be

greedy with your stop loss size, alright? If you see

somebody on social media or something flexing that they got

in with a half a pip stop loss or a one pip stop loss, just

don't pay any attention to it. It's completely unnecessary.

It's incredibly risky. Um especially with with spreads to

do with your brokers like you don't want to have that type of

a stop loss. It's just unnecessary. Uh it's it's just

ridiculous. In my opinion. So for me personally a three pip

minimum is a good rule of thumb. Um sometimes I go to two

to two and a half pips. It really depends on the

situation. Um especially for pairs like Euro USD and AUD

USD. Those have really good spreads. So it's easy to get

away with two to two and a half pips. But just as a general

rule of thumb a three pip minimum is good. Okay. Um and

the next thing I want to mention is it's really

important to check the highest time frame that like the next

highest time frame to ensure your stop loss is not too

tight. So that means if we're on the one minute time frame

and we're setting our entry parameters. Just before you do

so maybe check the five minute time frame and just make sure

that you're not ignoring some sort of actual important

structure. Okay. I've done this in the past two and I still

make that mistake from time to time. I'll set my you know two

to three pips stop loss on the one minute time frame. Not

realizing that there's a you know an area of supplier demand

that needs to be tapped into on maybe the 5 minute or even the

15 minutes sometimes and I'll get stopped out just for price

to go in my favor anyway so can't be too you can't be too

greedy with stuff like that okay so three pip minimum is

very good and yeah that's about it so that sums up what I have

annotated here in this diagram now I'd like to move on to an

actual chart example okay so we're on Euro USD on the one

hour time frame let me find where I was at okay so here we

go so clear bearish order flow we're in a downtrend and we

have a very recent break of structure a very clear break of

structure right this was a solidified low solidified high

price push right through that previous low to create a new

low so that's where our break of structure is formed so once

we have that break of structure mapped out we locate the point

of origin in this case I've already done so it's again

we're on the one hour time frame so this is a 1 hour order

block this candle right here is the point of origin that is the

last point in time where buying pressure was valid prior to the

bearish sentiment taking over so that's the order block or

point of interest we're now waiting for price to reach that

point of interest and instead of taking a risk entry like

this where your stop loss would have to be you know at least

ten pips

So instead of taking a risk entry like that what we're

going to do is try and achieve a better risk reward and a

safer trade on the lower time frame such as the one minute or

the 5 minute. So let's see what happens here. Let's play price

forward. Okay so we tap in right there now this would be

scary if it was a risk entry okay if you had a risk entry

placed here whether it works out or not in the long run this

is intimidating like I said in the last video that's kind of

like stepping in front of a moving train right this is a

huge momentum candle to the upside so it wouldn't be very

smart or wise to place a sell limit order here and hope for

the best right because there's no telling if price is going to

respect this supply right? This order block and continue to the

downside or if demand is going to take control and just

push right through this and head towards clearing liquidity

somewhere else, okay? So there's really no telling

what's going to happen and that's when we can start

utilizing the confirmation entry. So let's do just that.

Let's drop to the let's drop to the five minute time frame. Uh

now I don't always go immediately right down to the 1

minute. If the five minute gives me the information that I

desire then I will stay on the five minute time frame. So as

you can see we are tapped in to our higher timeframe 1 hour

order block okay it looks like we've actually mitigated 50% of

it as well so that's a good sign now let's see what happens

so actually before I dive into seeing what happens it's

important to note we had a high right here this is a solidified

low we've now created a new high okay so the confirmation

entry would begin if we can see a clear break of structure of

this low I know it might be hard to see but that's only

because this candle was so impulsive and filled with so

much momentum that you know we don't have the typical like

diagonal movement that we see in the market this was just

such a high momentum candle but regardless we made a high here

and then price came back down to create this low so that is a

high and a low alright so we're looking for this level to be

broken. Let's continue to play Price Forward and see how this

plays out. Okay? So, that's a break of structure.

Quite impossibly. Didn't continue very far but it's

still broke and closed with a full body candle.

So that's our break of structure. And that would be

the first break of structure right? So if you really wanted

to you could target the point of origin which was here okay

so if we were to get an entry here we'd have a very tight

stop loss just above that wick to be safe which allows us a

three pip stop loss which is my minimum and then we could

target recent lows for just over 38 pips that would give us

just under 13 R okay, so that's fantastic risk to reward now

here's the thing I mentioned previously the second break of

structure would be the safer bet right the first break of

structure can achieve you the best risk reward like 13% if

you're risking 1% that's fantastic but it's a little bit

riskier and also one of the things to keep in mind is that

often times it will not even be triggered right so Sometimes

you set a limit here for the first break of structure and

price never makes it there. Okay so the the second one is

definitely a safer bet but it's always good to be aware of the

first one and get in if you can and maybe since it is a little

bit higher risk of the first break of structure you could

use half a percent capital risk instead of the full 1% that I

recommend right so that would be a good way to mitigate the

risk a little more but As you can see, this is fantastic risk

reward ratio. Let's see if it gets triggered in.

Nope. So because of this this is another break of structure

right? So that kind of invalidates this whole order.

Because we have after this break of structure we had a new

solidified low. We had a new high. Now we broke that

structure to create a new low. So like I said that kind of

invalidates this now but we can still leave it there just in

case. But let's go ahead and map this out too. As a break of

structure because it is valid. Okay so I'm going to hide this

for a second. I'll hide the parameters but I'll keep the

Fibonacci tool up here just to represent that that is still a

potential entry. Okay? But now the new potential entry would

be this small indecisional bearish candle okay that would

be the second confirmation of the confirmation entry okay

that is like the complete structure of the confirmation

entry because we had a clear break of structure with an

impulsive candle okay so we now have two breaks of structure so

this is less risky than just the first break of structure

however there is something to keep in mind this level here

could be used as basically a liquidity grab or inducement

right we could induce traders into believing this is valid

just to push higher clear any liquidity from resting orders

just to trigger this entry and then fall from that point on so

it could be used as inducement that's something to consider

for sure and another reason to potentially risk half a percent

instead of 1% if you're unsure okay if you're fully confident

go for the 1% if you any doubts whatsoever go for half a

percent it can't hurt so this would be the second

confirmation entry so let's see how that goes I'm going to set

parameters for here as well at the 50% mark because that gives

us a better risk reward ratio we could go two and a/ 2

percent sorry two and a half pips here that still leaves us

some room above this little range and if we target recent

lows that gives us almost 11% so you'll notice now the first

parameters were about 13 R and this is just under 11 R okay so

there is a big difference there like I said in the in the tips

up here somewhere okay never mind I'm not going to find that

right now anyways I mentioned in the in the text up there

that the first one would give you the better risk reward

ratio but the second one would be safer okay so you can see

that it was just under 13R this one is just under 11 R so big

difference let's play price forward and see what happens

let's see if we get triggered into this trade so we're still

pushing lower still pushing lower now I'm not going to like

I said I'm not going to go for the third confirmation fourth

confirmation fifth confirmation because then it's just getting

very tricky right and you're almost certainly going to get

induced into the wrong trade if you're chasing that so I stick

to the first and second confirmation I'm not going to

go much further than that so so no I wouldn't be targeting this

as an order block even though I broke structure here that is a

valid break of structure but you know I'm not going to be

targeting this as an order block it's too close to my

actual point of interest and we still have this point of

interest up here okay so let's play price forward

Do we get tapped in? It's getting close. Okay, there we

go. Oops. There we go. So, let's adjust this. Okay, so now

we're triggered into this trade, right? Price reached the

50% of our order block. This is a full confirmation entry in

effect, okay? We've had the first break of structure. Price

has not reached the first order block that caused that first

break of structure but we created another clear break of

structure and we're now targeting that order block and

we have just been triggered into the 50% of that order

block, okay? So, let's play it forward and see how this one

goes. Now remember before I play it forward too much what

we're looking for to gauge the health of this trade is another

break of structure right here. Okay so if price can show me

that it has enough selling power to break through that

level then this one's basically a wrap you know like that shows

the health of the trade. So let's see if we can achieve a

break of structure again. Now that we're triggered in.

Looking good so far. Little bit of a pullback.

Okay. There we go. So actually a minor break of structure

here. Showing intent.

Right? It's showing bearish intent. But then we have our

proper break of structure. Right here so at this point my

stop loss would almost certainly be moved to at least

break even but most likely a little bit in profit because

this is our new high okay this candle represents our new high

so my stop loss could comfortably be just above that

high and you know at this point what is it like yeah it's like

six and a half R floating floating profit so at that

point I would more than likely remove 50% of my position or

maybe not 50%, but a a good amount just to secure profit

and again moving my stop loss to a little bit in profit as

well so that if price decides to reverse and trigger my stop

loss I still walk away with a win but regardless let's see

how this goes

Just barely missed. He's going to

Let's pick up the pace here.

I mean I assume that would have been full take profit like I

didn't set these parameters too carefully but let's see if it

fully goes through

okay anyways let's just drag it on anyways I hit the take

profit I set this very arbitrarily typically I rounded

anyways to to zero but anyways that's almost an 11 hour trade

and that's a pretty great example of the confirmation

entry right we had the first break of structure price never

made it to the point of interest that caused or sorry

the point of origin that caused that break of structure and

that's okay I would have certainly had an order set here

and you know once whole thing took place I would have just

deleted the first order so it's no big deal so again once the

second break of structure occurred we located our order

block that was responsible for it we set an entry at the 50%

of that order block because that gives us a better risk

toward ratio obviously rather than entering at the at the low

we entered at the 50% okay price tapped in beautifully

basically no draw down whatsoever just little wicks

tapping into it and then it took off from there we had a

minor break of structure showing bearish intent in the

market and then we had a full proper break of structure of

the most recent solidified low and then it just took off

towards the take profit from there. So really overall a

beautiful trade and a perfect representation of the

confirmation entry. So I hope you guys enjoyed this. Uh let

me know if you have any questions. I'm always happy to

help and stay tuned for the next one.