[0:00]All right guys, welcome to our very last episode of path the profitability where we put everything together, um, and give you guys the strategy that you guys have been waiting your entire lives to learn the strategy that's gonna make you a million dollars. Just kidding. It's not true. Okay, so before we get into the actual strategy, that's this is what we need to preface beforehand. Just because you know the step-by-step of how to enter a trade, does that mean you're instantly going to be able to make money from trading? No. Second thing, just or sorry, the second thing is that even though you have the strategy, we need to have risk management and we need to have psychology in check in order to be a profitable trader because again, we need all three skill sets in order to be profitable as a full-time day trader. We need strategy, we need risk management, and we need good psychology. Okay, without all three of those, we are unable to be a full-time profitable trader. Now, another thing that I want to preface, and this is something that I'm going to do a little bit differently than I have in the past. Most of the time when I do these strategy videos, I'm like, this is step one, step two, step three, step four. And then I'll go ahead and I'll post like a trade recap and, you know, granted that those other strategy videos are pretty dated and whatever, like my strategy is changed since then. Um, people will be like, hey, well, you didn't wait for this to happen in your strategy or hey, you skipped over this step. And that's the problem, um, with when mentors get on here and teach you guys their day trading strategy that helps them make money. We are trying to make it in like the easiest and most digestible way possible. In reality, a lot of strategy and a lot of trading comes down to like just overall like market experience. So there could be some times like for the most part, I'm following the same steps every single time, but there might be one day where I instead of scaling down to the five minute, I scaled down to the one minute and I try and take a lower time frame trade. Or instead of waiting for this confirmation, I wait for another confirmation. And that's like more of the discretionary side of this because in reality, if we wanted to just make some sort of like trading bot that automated our strategy that like in if that strategy actually gave us like 100% profitable results, um, over a long period of time, then awesome, everybody would be able to get rich. And that's kind of the last thing that I wanted to talk about before getting into this, just because you have this strategy, doesn't mean that, you know, you're just instantly going to be a profitable trader. Trading is a lot more than that. It comes with a lot of market experience. It comes with watching the charts for hours and hours and hours, over and over and over from market open to market open. And there's a lot of variables that go into being able to predict when price price action is good, being able to predict, um, or, you know, like decide whether to size up in your risk management, whether to size down. And all of these things are factors that play into whether or not you actually end up being a profitable trader or not. And really the only thing that is going to be able to give you that skill of discretion and that skill of market experience is quite literally putting in the time and effort required to be able to earn that skill, which is just looking at the charts and getting repetitions in. Because again, this is like I've I've relate these series and, um, like these YouTube videos to like a, let's say LeBron James made a basketball pre-training guide, right? And he gives you every single tip and trick required that he did when he was growing up to be able to become the best basketball player in the world. Just because he gave you guys that blueprint, does that mean you're able to sit down, watch those videos, not take any action, and then end up becoming like LeBron James? No.
[4:22]What needs to happen after you watch the videos? Well, you need to actually go out and do the exact same amount of work and put in the exact same amount of effort to even one have the possibility of getting close to him in terms of skill. And then there's a whole bunch of other stuff that's involved like whatever genetics and just real like basketball IQ and it's the same thing with trading. Right? So like I can get on here and I can explain my strategy and I can tell you, hey, you need to do this, you need to do this, you need to spend this amount of hours doing this. You need to make sure that you understand this concept, this concept, this concept, and then you need to put a shit ton of time into the charts. And that's how you're going to be able to make money from trading long-term. I I've already done that, um, and I continue to put in hours on the charts, but for you guys, it's like just watching these YouTube videos and just digesting the content is not going to make you a profitable trader. It's one step. It brings you, it gives you the knowledge required, but once you get the knowledge, you need to act on the knowledge that you got, and then you start making more mistakes, and then you learn from those mistakes. So getting the info getting the correct information is one thing, but then going from, okay, now I have the information to actually taking action on the information that was given to you, that's a whole other thing.
[5:43]And that's where most people end up fucking up and that's where most people end up going wrong is like, they get the information and then they get it in like this edutainment format where they're like, oh, life is so great. I just learned the best strategy that's going to turn me profitable. So now I don't have to do any work and I don't have to practice this, I don't have to back test, I don't have to journal, I don't have to do anything, um, and I'm just going to take one trade a day every single day on market open, um, and hope and pray for the best. And it's like, you're going to suck at trading for your entire life, uh, if you do that, you need to put in the hours required to be able to drill out this strategy, to be able to understand the strategy correctly, um, and to get yourself in the right head space to genuinely just like be good at trading. Um, you need to put the hours in. Uh, there's a, there's a rule. It's like the 10,000 hour rule. If you want to be a master of something, you have to put 10,000 hours into it. Um, you know, and the more the better. Like I'm like if you think about Kobe Bryant, like he was rest in peace, um, he was one of like the best to show and prove that rule.
[7:07]Um, he showed up, put in well over 10,000 hours worth of work and became a master of his craft. It's the exact same thing with trading and it's the exact same thing with anything that you're trying to pursue. Right? You can't just say, hey, I'm going to sit here and watch a couple YouTube videos because guess what? This YouTube video, you know, by the time the year is up, we'll probably have well over 100,000 views. But you really think that 100,000 people are going to watch this video and then proceed to put in the 10,000 hours that's required to end up becoming a profitable trader? Probably not. So, if it was easy as just sitting here and watching a YouTube video and then boom, we're all millionaires, I wish that was the case, but it's not the case. I need to be open and honest with you about how this shit works, and that's the truth. It's one thing to get the information. That's this that's what this video is here for for you to get the information required to be able to build a good strategy to be able to build maybe some sort of discretionary trading plan. But then from there, it's up to you to actually trade and make the mistakes, learn from those mistakes, grow from the mistakes, make mistakes, learn from those lessons, ideally never make them again, and then that's how we become a better trader. So, for me, I learned this strategy. I taught myself this strategy based off these confluences that I've learned from a bunch of other people in the space, and then kind of made this into my own strategy that has worked for me and has made me a profitable trader. Um, and I've put in the hours required to be able to test this and then to be able to actually make money from this. Uh, you guys need to do the exact same. So whether you guys learn the confluences and then maybe want to twist this in a little bit of different way, um, and then that's the last thing. I'm not going to give you like I was saying like a step-by-step, hey, this, this, this, this, this. I'm just going to give you the overall ideations of how I'm going to be looking at trades. So what I'm looking at when I'm looking for my daily bias, what I'm looking at for when I'm looking to enter and how I'm using the certain confluences that I've taught you guys throughout this entire series, to be able to make those predictions and to be able to make, um, highly probable decisions within the market on a daily basis, because that's our goal with trading. Um, because again, from what I've found in the past is like, you give people like, hey, step one, step two, step three, step four, then I do a trade recap and then they're like, hey, you skip this step. Is this a new strategy? And it's like, like no, that was just like literally five years plus of trading experience, telling me, hey, I've seen this ship before. We should probably scale down to the lower time frame and take a shorter time frame trade, instead of waiting for a higher time frame confirmation, because there's a bunch of draws on liquidity that are about to get hit. So I know that there's not going to be a high time higher time frame confirmation, so I'm going to scale down so I can at least get into this trade so I can make some profit. Right? Like that, that thought process only comes from being able to put, that thought process will only be built by putting the time required by seeing market open so many times and by seeing these candlesticks print for years and years and years, for hours and hours and hours, for days and days and days.
[10:11]Um, that's literally the only way that you're able to be able to make adjustments like that. And then at the end of the day, when you really get down to think about it, it's like, okay, so what was the trade taken off of the strategy, or was it taken off of discretion? And that's the big kicker with all of this. And I don't want to ramble, but I just really want you guys to understand this, where it's like, what I'm going to teach you today is the ideation and the thought process of how my strategy is constructed. Okay? We go from orders being filled to change in order flow to continuation of the new trend, and I'm looking to enter, and I'm looking to target other draws in liquidity or internal draws in liquidity. Because in my head, it's orders have been filled or orders have potential to get filled. How do we know orders have been filled? We see a change in order flow or a change in market structure. And how do we know that change in market structure is going to hold? We see continuation of that market structure. And then where am I going to target? Where those orders that were filled up there, or down here can be, um, exited, right? So that's going to be at draws in liquidity or in balance price action. So that's how I think about my strategy. When creating it, and I'll show you guys or when I was creating it and I'll show you guys a couple examples on the chart, um, and I'll write down like the step-by-step. But you guys have to know and understand, and this is why I'm not going to be like, hey, you look at this time frame first, and then you look down on this time frame, and then you look on this time frame because like the second that you don't do that exact step-by-step, the comment section is going berserk saying, you didn't follow your strategy. And it's like, shut up, bro. Like I know what my strategy is, and I changed it so that I would I was able to be able to take advantage of this price action that was in my favor. It's like, I'm making sound decisions based off of what I've seen the market do for fucking seven years now. And you're like talking about, you change your strategy. And it just drives me nuts. So we're not going to do the step-by-step strategy. Look at this time frame and wait for this and then you have to do this right after this. It's going to be this is how I've built my strategy and this is how I think about the markets and how the markets should be moving on a daily basis. And this is how I look for entries. Okay. And you guys will be able to get a pretty good gist of what I'm looking for on a daily basis and how I'm able to construct this and how I'm able to construct my thoughts when I'm looking at the markets. I'm not just going to give you like step one, step two, step three, because one, people fuck that up all the time. And then two, they they they leave no room for any discretionary trading. And that's what I want to leave room for you guys to be able to do is to be able to let your mind like flow and let your mind actually be able to see the candlesticks get printed and actually force yourselves to put in the time required on the chart to be able to understand why price is moving the way that it is. Why price didn't want to go hit this draw and liquidity compared to this one. All of those things are very important things for you guys to know, and I feel like as your mentor, I should purposely omit little pieces from the strategy video so that you go out and learn them yourself. And it's not like that I'm leaving the shit out like, um, because it's so valuable and it's like some secret sauce. It's like, no, I'm not going to tell you to do certain things because there's some things that shouldn't have very strict constraints on it. Like, hey, we can only enter when this happens, then this happens. Like no, I want you guys to be more of like a free little pony prancing through the rain and just having all these confluences in your arsenal like a toolbox. So every single day there's a different set of blueprints that are set down. You have all the tools and you have all the materials to be able to build what the blueprint is, but every single time, you're probably not going to be using the same tools because the blueprints are different. Um, the tools and materials are the same, but you might not need a wrench to be able to build whatever the blueprints say on this day. And then the following day, you know, you might need the wrench, but you might not need the hammer, right? That's how I want you guys to think about how we have our confluences, how we build our out our daily biases, what we're looking at the market, because the market's a different market every single day. That's one of the awesome things about trading, um, but that's also one of the difficult things about trading is we have to constantly be adapting to the new things that the market's giving us.
[14:54]So with that being said, let's hop on the charts. Give me like two seconds. I'm going to go run and get a little energy drink because I'm like sleepy. So give me two seconds.
[15:41]We're back, folks.
[15:48]Also guys, look, Killtech Capsule four, coming out. Fire. Okay.
[15:59]So, I already feel better after a couple of steps. Let's look at this. Let's look at this. Let's look at this. Let's look at this. So
[16:24]So, let's imagine that we are right here. Okay. Market is literally within the next millisecond, going to open. Okay. This 30 minute candle just closed, which means market is open. Okay. We obviously can't see the market open candle forming, but market is now open. What am I going to be looking at? Well, the first thing that I'm going to be looking at is have we swept out liquidity yet?
[17:18]Where are our where are our draws on liquidity for the day? Because again, what is my thought process? And I'm kind of going to break this down while we're going through this trade that I took on Friday so that you guys can get a good gist of what I'm looking for for trades. Okay. And how I break this down. So the first thing that I'm looking for is have we swept out liquidity yet?
[18:04]Where are our where are our draws on liquidity and what point are we at within current market structure?
[18:29]Okay. So right now we're in bullish market structure on the four hour. We came down, we filled this continuation confluence. We're seeing legs up. Me personally, coming into this day, I'm pretty bullish. Okay. Why? Because we have draws in liquidity to the upside, right? We have London session high right here. We've got some hourly high stacked up right here. We also have previous day high all the way up here.
[19:54]Okay. This is previous day low, and this is London session low. So, what did I just do? What's the first step of finding my strategy?
[20:09]Well, it's daily bias and we had a daily bias video like two days ago. Okay. So I'm looking to one identify the high time frame trend. Identify at what point in time are we in in the high time frame trend?
[21:21]So at this point in time, what what are we in? We were filling an imbalance and we are seeing extensions out of it. Right? So for me, I'm like, okay, cool. We're filling imbalance, we're probably going to want to seek out some form of external draw on liquidity, because that's how trends move, right? If we're in an uptrend, which right now we are, we inverse this gap. We come down, we respect the four-hour gap and then we start seeing legs out of it. Awesome. Our target should be up here. Right? So the first thing that I'm doing is doing that, identifying what order flow are we in on the four-hour and on the one-hour. Okay. The next thing that I'm going to want to do. Sorry, disregard that massive candle that hasn't happened yet. Um, the next thing that I'm going to want to do is identify all of our draws on liquidity for the day. So what did I just do? I went in and I said, okay, we have previous day high right here. We have previous day low down here. We have a session low right here, which is Asia session. We have session high right here, which is London session high. We have a session low right here, which is London session low. Um, Asia session high had already been pushed past London session highs, and there was no reaction off of it. So, in turn, that draw on liquidity is pretty useless for us. Same thing here on the S&P 500. We have London session high, we have previous day high, we have Asia session low, we have London session low, and then we can even mark out these hourly highs right here that look pretty good. So, now we have identified the high time frame trend that we're in, and we identify the draws on liquidity. So, me personally, what am I going to want to see? I especially right now because we're in an uptrend, I'm going to want to see candles out of and reacting bullishly again, disregard this hourly candle right now. Let's imagine as if we can't even see this, but I want to see price start reversing up because right now on the S&P 500, we're in a downtrend and on Nasdaq, at this point in time, we're actually in an uptrend. This candle shouldn't shouldn't look like this right now, but at this point in time, we are in an uptrend. And actually, even better for us is we are sweeping out liquidity to the downside on the one hour. So, for me, I'm thinking, hey, if we can get confluences to the upside, that to me means that, hey, we're going to want to come up and take out all of these very solid draws on liquidity, right? We got London high, we got hourly high, hourly high, previous day high, all of these highs up here look great. Right? And we just recently saw that price came down and swept out these lows, and now we're reversing. And awesome, we already hit one of our draws on liquidity, but market is just opening, so we weren't able to take a trade on that. Maybe we can take a trade to be able to target some of these highs. So the first two things is I established my bias, okay? So my bias today is bullish. I'm looking at all of these highs here. All right? The second thing that I do is identify the key draws on liquidity. Now, again, what are draws on liquidity? Areas where price has the potential to fill orders, okay? To cause reversals, right?
[24:36]So with that in mind, I'm looking at these draws on liquidity as one of two things, okay? Entries and targets. Right now, we just pushed up above this Friday's high. On the S&P 500, we're or sorry, London session high on on on the S&P 500. We're we're significantly underneath these high right now. What is a concept that we learned when we are pushing above a high on one of the indexes, and then below a high on another one of the indexes? S&T divergence, specifically a bearish S&T divergence. So uh oh, even though we are in bullish market structure on the four-hour time frame, and we're respecting bullish market structure on the higher time frame high, and I probably want these highs. What do I have to consider? I have to consider that, hey, we might be potentially sweeping out these orders right here. Missing these orders right here and forming an S&T divergence from this high down to this high, from this high up to this high. And what is the S&P 500 telling us about Nasdaq? That, hey, we probably want to go down and we actually might want to take out these London lows, these Asia session lows, maybe even the previous day lows all the way down here, right? So, with that in mind, let's play the market out a little bit and let's see where we end up going. All right, so we'll play this. Boom. This candlesticks forms. Does this give us any real overall sense of where the market's going to go or what decision the market has made? Not really, right? This is a pretty indecisive candlestick. The S&P 500, we are still remaining underneath these high time frame highs. So for me, I see this, and I see that we're underneath these high time frame highs. I'm thinking, hey, man, we're still above these highs on Nasdaq, and we're still underneath these highs. My bias is still the same. I would potentially want some sort of high time frame entry to to take to take buy positions. But I have to be conscious of a potential bearish S&T. So from there, let's play it a little bit more. Boom. Now do we think orders were filled? Probably.
[28:41]Right? So I see a massive down candle, and we break structure to the downside on Nasdaq. And on the S&P 500, now what is confirmed? Nasdaq swept out a draw on liquidity. We have a confirmed bearish S&T divergence. Nasdaq for sure filled orders up here. How do we know that orders were filled? Because we changed the current order flow of the low time frame. From there, what am I looking for? I'm looking for a continuation of the low time frame trend in order to prove to me that, hey, we just broke this and we're starting a new trend, you know, to the downside.
[29:32]I want to see that new trend continue to the downside. So, again, the change in order flow or the change in structure could have been seen in two ways, either via a break of structure or an inverse for value gap. In this case, we didn't have a fair value gap to inverse within this leg up. So, we had to wait for a break of structure. And luckily, the market gave it to us. Same thing here on the Nasdaq, we didn't have a fair value gap that we could inverse. So, what did we wait for? A break of structure. Now for waiting for a continuation of the current trend that we're in, what do we have to wait for? We have to wait, we have to wait for one of our continuation confluences, which is either a fair value gap getting filled or equilibrium. So right now, we don't really have the opportunity for either of those because we don't have a bearish fair value gap that's formed yet. And we don't even have an up candle to draw equilibrium from this high down to the low of the up candle. So, let's see. And again, I'm going to want to now be focusing on this trade specifically on the S&P 500. Why? Because it's the leading index. Okay. And it's leading to the downside, meaning this one didn't this index didn't have enough buy positions to be able to push above this high. So, what is it signaling to me that the S&P 500 is the more bearish index? So if I'm looking to take a short position, I'm going to want to take a trade on the index that doesn't even have enough buy positions to be able to push up above these highs, that already has enough sell orders to be able to push down without needing to take out these highs. Right? So I'm going to want to focus my my targets on the S&P 500.
[31:19]Okay. Price comes down, breaks structure right here. From there, let's play it. Awesome. Boom, big candlestick to the upside. So, now what am I looking at? I'm saying, okay, from this high down to this low, where we're at, where are we at? We just filled equilibrium. Awesome. Once we fill equilibrium, we can wait for one of two things. Me personally, I like to scale down to the lower time frames so that I can get ahead of this.
[31:52]But once we fill the confluence, what's the last thing that we need in order to be able to enter? Well, we just need confirmation that not only was the confluence filled, but that we are actually going to move down out of it, right? Because it's one thing just for price to push into equilibrium, but price easily could have just gone all the way up, right? So if we just press sell, right when equilibrium gets pushed into, then why did we even draw out equilibrium in the first place? It's pretty much useless. Why do we have equilibrium there? It's to be able to see price come into it and then respect it. And then that's when we're looking to enter.
[32:30]Okay. Continue and same thing with a fair value gap. We didn't make a fair value gap on this, but if we have a fair value gap, do I enter the trade right when price pushes into the fair value gap? Well, no, that would be stupid. Because if the candle is still forming and right when we get into the gap, what happens if price just keeps going higher and higher? You're immediately going to get stopped out. And all of that could have been avoided by just waiting for price to fill the confluence that you want, and then wait for confirmation down and out of it. So you can wait for one of two options here. You can either wait for just the five minute, the following five minute candle to close bearish to prove like, hey, we filled this continuation confluence and the market is showing that we want to move down off of this. Or you can do what I do and what the majority of other people do, is you can scale down to the one minute time frame and you can look and see, okay. So, we came down and we came up. We filled the continuation confluence, whether it was equilibrium or a fair value gap. And then typically on these retraces up on these five-minute retraces, we are going to break one-minute structure back to the upside, either via an inverse fair value gap or through a break of structure. So, at this point in time, on this candlestick, we are bullish. We're bullish going into this continuation confluence, which on the higher time frame is going to be bearish for us. And we actually want price to break structure or get an inverse fair value gap while pushing into these confluences because it's going to give us our entry confluence. What is my entry confluence? Well, it's simply just waiting for price to push into the five-minute continuation confluence, and then on the one minute, we break structure to the upside, and then we just simply wait for a break back down or wait for a change in order flow back down. Because that what is that proving on the market? It's proving that price came into a continuation confluence, and we when we push into the continuation confluence, that is supposed to be respected of this new trend that we're forming on the low time frame, we get a break of structure or an inverse fair value gap. That's proving to me that, hey, we filled all of the orders that we needed to up here and we are actually going to continue this trend down. So, in this case, I entered this trade. You guys can watch the trade recap. It was literally yesterday on Friday. I entered this trade once we inversed this gap right here. And I put my stop loss above these highs.
[35:18]Okay. And then from there, I targeted all of my draws on liquidity. So we had London session lows, we had, I believe, these were the Asia session lows. We had these high time frame hourly lows all the way down over here. Okay. We had really good draws on liquidity on the high time frame. All right. Now, again, let me just walk you through the entire thought process of being able to take this trade. I needed this is the step-by-step TJR strategy, how he thinks about entering trades. I need the potential for orders to be filled. Okay. How do we see the potential of orders to be filled by us pushing above a high a significant high or below a significant low. Once we have the potential for orders to be filled, what do I need to see? I need to see confirmation that the orders actually were filled.
[36:17]How can I see confirmation of that? Through a change in trend on the lower time frames via a break of structure, via an inverse fair value gap. From there, I want to see a continuation of the new trend that was formed off of the orders getting filled via equilibrium and via fair value gaps.
[36:44]And then if you want to, during that process, when you're looking at the continuation, you can scale down into the lower time frames to be able to spot confirmation out of the continuation confluence to prove that price is going to go down a little bit earlier than just waiting for the next five minute candlestick to close.
[37:25]Because now, again, we would be entering this trade down here instead of up here and one of our take profits is just been hit. So while my take profit one is getting hit, you guys are just now entering by waiting for this candlestick down. And again, we can look in here, it is very obvious that we push into the continuation confluence, and then we confirm that orders were filled out of the continuation confluence on the lower time frame, because we're disrespecting bullish continuation confluences right here. So what's that telling me? It's telling me that, hey, we're disrespecting bullish continuation confluences, we're going to go down. Right? And if that's the case, then we're probably going to sell off pretty hard towards our draws on liquidity, which again, are where we are going to be able to offload all of the orders that we filled up here, which is the last step of our strategy. So we need the opportunity to fill orders. We need confirmation that that opportunity was actually taken by seeing orders get filled through a change in structure, via break of structure or an inverse fair value gap. From there, I want to see a continuation of the new trend that was formed off of the orders getting filled, via equilibrium and via fair value gaps. And then where are we looking to exit the trade once we get that entry? We are looking to exit the trade at possible liquidation points such as high time frame highs, high time frame lows, previous session highs, previous session lows, where those orders that were filled can be liquidated.
[39:19]Right? Again, we want to think about liquidity. And that's why my strategy makes sense. My strategy makes sense. If you think about it and you guys think about how I just talked you through it, we have the potential to fill orders.
[39:56]Where do we see potential for orders to get filled via liquidity sweeps? How do we confirm that orders have been filled through confirmation confluences? How do we see continuation of the new trend off of those orders that were filled through our continuation confluences? Equilibrium and fair value gaps.
[40:24]And then where are we looking to exit the trade once we get that entry? We are looking to exit the trade at possible liquidation points such as high time frame highs, high time frame lows, previous session highs, previous session lows, where those orders that were filled can be liquidated.
[40:51]We are quite simply trading and moving with the market flows, with the inflows and outflows of the market. That is how we are trading. We're not trading off of support and resistance. Okay, price is like banging like bouncing off of a floor and it's going to go to a ceiling like come on. Like what like what what even is the thought process on that? Like you're you might as well you might as well like
[41:31]like you're just flipping a coin at that point. You're just like hoping and praying. Um, I'm not the I'm not the biggest fan of support and resistance. I know there's some people that are very successful with it, but me personally, I'm not the biggest fan of it. Uh, so yeah, that's my strategy explained. Hopefully, you guys enjoyed it and hopefully, this entire series has helped you guys become better traders.
[42:40]So, with that being said, it's been a fun little ride. Path to profitability has been lit. Um, but with that being said, I love and appreciate you guys. I'll catch you guys on probably a trade recap, not on Monday because Monday market is closed. We'll do a trade recap on Tuesday or I don't know, maybe a YouTube video, something else, me teaching you guys other concepts, maybe how to pass a funded account. I don't freaking know, but I'll catch you guys regardless. Love you.
