Transcription
80% of all the trading done in any markets is done by large institutions. If we understand what they're doing, we can capture those same market moves and make significant profits on moves that are causing most retail people to lose.
In this video, I'm going to walk you through these smart money concepts that I use, all of the ones that I don't use, so that we can approach trading more like an institution and find high-probability setups to build a consistent income-generating process for yourself.
These breakthroughs in trading we've been deploying over the past several months have allowed me to maintain a nearly 40% win rate and achieve consistent $3,000 to $5,000 profit days. The foundations that I'm going to show you are what our private team members are using in full systems to get funded extremely quickly, achieve six-figure trading years in their first year, and generate a really nice income even if they just got into trading.
I'm first going to show you all of the smart money and foundational trading knowledge that I use daily and how to actually find and apply them on the charts. Then, I'm going to show you my daily routine and checklist that I follow each day to find and set up these specific trades following these concepts. Finally, I'm going to show you live examples of me taking these trades in real time so you can see how it looks when you're actually executing.
My goal is that by the end of this video, you will fully understand this, be able to apply it to your own process, test it out, and hopefully create that income-generating machine for yourself.
I first want to cover all the smart money concepts and general market concepts. These are really the core foundations of how I'm reading charts to find and take these trade setups. If you understand these key elements, you're going to look at technical analysis a lot differently.
There are a ton of ways to look at price action, and there are a ton of people who do, in my opinion, all of this voodoo nonsense of reading the markets. It really doesn't have to be all that complicated because what you have to understand is you're not always going to be right about your trades. You don't have to be right every single time.
All you have to do is have a clear way of reading trends, price action, and human behavior. You can set up your trades accordingly, and if you understand those, you're basically 80% of the way to understanding everything you need to know in trading.
It's really easy to get lost in the sauce with all sorts of confusing stuff. I've been doing this for eight years, and all I'm doing is boiling down the things that I really focus on. If you want to add your own stuff on top of this, of course, here's the framework that I use.
The first thing to truly understand is the general structure of markets and what trends are. Basically, anytime you're seeing price move consistently in one direction or the other, those are generally considered trends.
The technical definition of a trend for an uptrend is having a higher high followed by a higher low, then having a higher high followed by another higher low. This is going to be considered an uptrend. The same thing reversed is true for a downtrend. If we have a lower low followed by a lower high, a lower low, and another lower high, now that is a confirmed downtrend.
Generally speaking, it's just the overall direction that the market is moving, and we're going to try to either anticipate those trends or play momentum into those trends to enter and take a position and make a profit off of.
Now that we understand the higher high, higher low, and lower high, lower low, let's take this uptrend as our example. There are a few critical things that I'm going to be looking at. The first of which is the lower threshold of moves on this trend.
You'll notice we push up, sort of bounce off of a lower level, make another push, and then have another point in which it bounces off. This is going to be really critical because if price tests it and then breaks through it, this could be amongst the first indications that price is going to flip direction and create a new trend, which, in conjunction with other things, can set up really good trade opportunities for us as traders.
The next thing to pay attention to is something called a break of structure. What this means is that we've had our first push up in our trend, and we've had what's called a corrective wave. This is called an impulse wave; this is called a corrective wave.
This isn't smart money concepts yet; this is sort of dealing with market structure and understanding the way price develops on trends. As soon as price moves up over this previous level, this is considered a break of structure.
As we have price coming into this zone, it's creating a structure, and as price pushes beyond that level, continuing into the trend, this is called a break of structure, showing a continuation or a potential continuation of the price action moving in that direction.
By the way, anytime I'm saying price action, all I'm talking about is basically the fluctuation in price on the chart, aka price action. You'll see right here price pushes another impulse, has a corrective wave, price moves up, creates another break of structure into this trend while maintaining this lower portion of the trend.
The next term that we need to pay attention to is something called a change of character. This is the abbreviation for change of character. If this is the general characteristic of the price moving up and we have all of our metrics—the higher high, higher low, break of structures, and lower trend level—when price pushes up, fails to create a new break of structure, and now turns around and pushes below one of these higher lows in the case of an uptrend, this is called a change of character.
It's now changing its overall characteristic of the price and could potentially be the beginning of a new downtrend, which is going to present trading opportunities to us once we understand how to enter in these areas and set up our positions.
I'm going to start off simple and get more advanced with these smart money concepts. Let's look at the same example but for a downtrend. Once again, we have our first impulse and corrective wave. Price continues by breaking that level; we get a break of structure, maintaining this trend level here.
Another push, corrective push through, break of structure. Price fails to make another break of structure here, changes, passes underneath this low, and creates a change of character. So, break of structure, continuation, change of character, potential reversal.
Let's take a look at an on-chart example now of some of these concepts. You'll notice we have over here a downtrend developing right where we have our lower trend level roughly being placed right here.
We have our break of structures, break of structure, break of structure. This point here is one of our lows on the trend. As soon as it's broken above, it's highlighted as a change of character. Then, once we have the establishment of our first impulse move, corrective move, we have once again our break of structure as price breaks above this level, corrective wave, break of structure to the upside.
Then, off of these low points, once we have a breakdown of that trend, we once again have our change of character. I actually really like to use the Lux Algo smart money concept indicator here. That's automatically going to put these break of structure and change of characters on your chart.
A lot of people who trade this stuff have issues with that because they're like, "I'm going to draw it myself; I know where everything is." That's fine. I like to have a full understanding of all of these, but it's nice to have them automatically populated on my chart and leave it up to me to decide whether or not I'm taking them seriously.
Because 99% of the time, I'm just looking at it quickly, and it's sort of more easily allowing me to visually digest it as I'm placing trades and in the heat of the moment. But these are really good market identifiers.
The next thing that we're going to tap into, you might be familiar with, is something called a fair value gap. This is starting to dive a little bit more into reading candlesticks and reading institutional price action that are going to give us points of interest that we're going to want to look at as potential areas to set up positions.
But first, you have to understand what a fair value gap is. If we look at this diagram here, we can see these are candlesticks, representing the total movement over that time increment on our chart. Here, we have one day selected, so each one of these candles is going to show us the price it started for that day, the price it ended for that day, and the total range that the price moved over that time period.
Oftentimes, what will happen is if the price moves very quickly, as we see in this example, that leaves this gap in price action. If we're looking at this candle, this candle, and this candle, the highest point here on this candle and the lowest point on the third candle don't have any period of overlapping, which means that the price moved up through this zone aggressively and never retested it.
This will often act as sort of a magnet for the price to meet equilibrium before having a continuation if it's going to in that direction of the market. These areas here are called fair value gaps. When the price comes down to fill that inefficiency, these are oftentimes big levels of institutional interest, as there's often a lot of liquidity resting in these areas for the price to seek equilibrium and then continue moving.
There are two types of fair value gaps. The first kind is often referred to as a buy-side imbalance, sell-side inefficiency, or a BISI, which is also called a bullish fair value gap. This is where price action is generally moving in a bullish direction, creating a fair value gap.
The same thing is true for a bearish fair value gap. We have bearish price action, sell-side imbalance, buy-side inefficiency created here from one to three candles not having overlapping wicks and creating this area of inefficiency, which price tends to gravitate towards to fill the equilibrium and once again make a continuation move.
If we look at an on-chart example, we have a new trend being established here. We have a move up, down, we have another move up creating a break of structure. You'll notice here we have something called an order block, which we're going to get to in a second.
We also have this big candle creating a large displacement. Notice how this candle is not overlapping this candle. Now we have price pushing all the way up and eventually having a corrective move down.
As we play this forward, price comes back down to fill that imbalance, reacts off of that level, and then has a continuation up higher. You can see once again this one was never tapped back into. You'll see this fair value gap as well was pushed into, didn't make it close through, closed above before having the price action move up.
As you'll see, price comes down underneath this level, creates a change of character, and leaves behind a significant sell-side imbalance, buy-side inefficiency zone. Price will push down further. Notice how it comes into the midpoint, doesn't close through the halfway point of this fair value gap, and continues making a move to the downside.
Something to also take note of is this midpoint zone in a fair value gap. It's often referred to as the consequential encroachment. Basically, what that means is if we want to consider this area a respected area for a continuation in the trend, we don't want these candles to close beyond the midway point of this fair value gap.
What I do a lot of times, and we'll get more into this in a second, is target the midpoint of the fair value gap as my entry. If the price does tap into this and have a response, it's often approximately the best area to enter into these trade positions to really maximize the full distance of the move.
But if, for example, you're looking at a fair value gap and the price closes up past this consequential encroachment line, the probability of the next candle respecting it and moving up back in your direction or down in your direction is a lot lower.
But we can see examples of these being generated and respected all over our chart. So let's move on to the next topic, which is something called an order block. These are significant levels where institutions place large orders and often lead to significant moves in trend.
When we see an order block, this can give us more conviction that if we do see a retracement down into a fair value gap at this point, we're going to see price actually continue in the direction that we're looking for. If we don't have the order block, it doesn't mean that institutions were pushing the demand through that zone, and oftentimes this will lead to trades that don't end up flipping and continuing off of the fair value gaps.
To look for an order block, for example, here we have price action moving down. We have a bearish candle here followed by another bearish candle that sweeps and clears out this lower portion. Then the next candle has massive displacement and leaves a gap in this area before continuing.
This candle holds distance, which is going to give us our order block, and then this area is going to give us our fair value gap where price will oftentimes come back and fill that equilibrium. The same thing is true on the opposite side. If we have price action moving significantly up, we have this last candle making this last significant push before a large directional change in displacement.
Now we have this area here creating our bearish fair value gap, and we have this whole area here creating our order block section. If we look at a real chart example, once again, we have our downtrend right here. We have our first bearish candle, the second bearish candle to sweep out below that low, followed by a big bullish candle, which created displacement in here.
Price came back down, retested it into this candle zone region. Notice that this candle never went below the fair value gap producing candle. This is something to remember for a little bit later in the video, but we have our order block right here, fair value gap right in here, and this was the last level before a massive change in market direction.
Continual downtrend for a long period of time, we have our significant order block, fair value gap. Price goes into that zone and has a massive reversal. If we were starting to build positions with these things in mind and we use some of our other analysis to get into areas like this, say for example we're risking $100.
If price continues to move down to this area, we risk $100 in this scenario. We would have the opportunity to make $1,100, risking $100 by playing these big swings in the market, sort of reading what the institutions are doing to place large orders.
This isn't like a far-fetched concept where it looks obvious in hindsight but is impossible to do in real time. I'm going to go over a lot more trade examples, but this is one of them from my session last week. I set up my entry level here using a bunch of other stuff that I'm going to show you in a second.
Entry midpoint of this fair value gap, after a bunch of other analysis on my entry model, price comes up into that midpoint, immediately gets rejected into profit. Now the trade is floating $8,000 worth of profit, breaks nicely under that level. I'm up about $2,000. It continues moving down, floating $2,500, $2,800, and I'm able to close the trade out for about $3,200.
It really only took, say, 25 minutes. So, risking $500, I can lock in near $3,000. You'll see in an example like this, I made 6.2 risk factors. Going back to our example over here, looking at moves like this are not hard to come by.
For example, one of our private team members hitting 25 risk-reward trades, 8.5 risk-reward trades, aiming for 12, 19 risk-reward trades, while maintaining between 30% and 40% win rate on these strategies.
We're going to get a little bit more into the framework of those models, but just to show you the potential of actually being able to read the markets like this. The fact that we have YouTube as a resource to share this information is exciting. This is information that has quite literally changed my life, and it's really exciting that we're able to share this with each other on a platform like this.
Now, let's get into the last layer of analysis that I do before we get into the routine of actually setting up these types of trades. These are not technically considered smart money concepts, but these are ways that I'm generally reading price action when I'm taking all of my day trades.
I think it's important to understand these market mechanics because these are things that can sort of add to your understanding of how markets move. Going back to our overall trend structure here, we have our higher high, higher low, higher high, higher low.
Basically, I like to read trends using something called Elliott wave theory and using something called Fibonacci. If you've been watching the channel for some time, you should be familiar with some of these topics.
Elliott wave theory describes the trends moving in five-wave patterns and usually have corrections in a structure of three, starting with your first impulse wave. You get your first corrective wave, then you get your next impulse, corrective, followed by the final push up before a deeper correction, a last attempt push at highs, followed by a regression down, and then the cycle is due to repeat or move in whatever direction it's going to move from there on out.
Anytime I'm analyzing a trend, I always want to look to see if it's fitting these characteristics. I have a ton of videos that go into the more nuanced details of all of the ins and outs of Elliott wave theory. I'm going to put those at the end of this video so you can just follow along now, and if you want to dive in a little bit later, it's going to be at the end, so you can stick around for that.
Bear with me here, and let's go over the rudiments of Elliott wave and reading these charts. Say, for example, we're trying to find a reversal entry. We want to enter the market where price has made a push, and we're anticipating that it could make a reversal, in which case we're looking to enter positions somewhere in these areas and play a move to the opposite direction.
Similar to what I showed you where price is moving up, I want to trade it in the new direction of the trend to get those significant risk multiples. I can use my wave count, but also I can use something called Fibonacci.
There are two ways that I'm using Fibonacci. We can observe the Fibonacci ratio right here. Basically, what Fibonacci is, is it's a naturally occurring ratio. You can sort of consider it the code of nature. For whatever reason, human beings, the way cells work, the way trees grow, the way shells, plants, you name it, are formed, always follow this ratio.
We can actually use this to study human behavior. Most people are just acting with the buying and selling, or institutions are buying and selling, and all of this is hardwired into our minds to follow these levels of regression. The golden ratio, the Fibonacci ratio itself, is this 0.618 level.
If we look at regular price charts, this is oftentimes a massively important level. I'm going to get into more detail about this, but we're looking at this overall pullback right before a big move. I can almost guarantee you that this hit near perfectly off of the 61.8 of this overall move.
If I draw my line up to the highs here, you can see price consolidated and moved right near the 61.8 level before having a major move to the upside. Let's take another example with this retracement. I click from here to this high level, and lo and behold, price comes perfectly down to this golden ratio before having a massive move to the upside.
You can basically take most of the traces that you see from this point to this point. Once again, we drag it out, and it perfectly hits off the 61.8 level. Now, if we use this in conjunction with counting waves, we can come back to this example.
We can see 1, 2, 3, 4, 5, A, B, C. C comes down. Now I can start looking at this trend in terms of wave C count. Maybe our 1, 3, 4, 5 is here, and that's an extended fifth wave, or maybe this push in this retracement here is our 3 to 4, and we have our five move followed by our A, B, C move down here.
The next thing that I can use to start anticipating where we are with the current trend is something called a Fibonacci projection. Both of these tools, by the way, you can find on your TradingView chart in this section, Fibonacci trend-based FIB extension.
We're going to focus on the trend-based FIB extension. If I click on that, all I'm doing is finding that first impulse on my trend and clicking from the low part up to our high part, back down to our low part. What that's going to do is give us multiples of this golden ratio.
You'll see 1.618, 2.618, and oftentimes what will happen is if we have proper wave structure and we have the high of five following all the rules and having a reversal off of either this 1, 2, 3, 6.618 projection, this oftentimes can signal really good reversal points when I'm actually taking trades.
If we look at a trend like this, for example, we can identify we have our first move, second move, third move, fourth move up to our high of five. Once again, we're finding from this point up to this point and clicking up to here, up to here, creating that factor of one.
You'll see the 2.618 level perfectly hits off of there. We have our regression down to this point, which temporarily caught some sort of support off of 61.8 and ultimately went down to this 78.6 level before having a continuation of price action.
Notice how all of these levels tend to be key levels when you're actually reading and evaluating a trend. Notice here how we have an order block. This is actually happening in real time, so this is kind of cool. We have our order block put here, we have a big displacement candle here, and then price trades back into this fair value gap before having continuation.
We also have this level acting as our fair value gap. By the time we finish recording this video, let's see how this idea would play out. Now that you understand generally how I'm looking at the markets, let's get into how I actually set up my trading session, the checklist that I follow, and then we're going to go over a few scenarios of finding good models to enter in using these concepts on a chart.
Anytime I'm setting up my day trading sessions, I have a few things set up. First, I have my exchange up here, I have my trading tracker over here, and then I have my charting pulled up in this section. Over on this monitor, I'll have the larger pairs for the day or what I'm watching for, just the overall market in general.
What I want to do is focus on this section here for a bit. I've designed this as sort of my personal trade log. This is also available to you guys. If you follow me on Instagram and DM me the word "tools," I'll send all of this stuff over to you, so you'll have full access to it.
This is going to allow me to do a few things. Here, I have different trading strategies that I have, and then I created a sort of step-by-step checklist for myself to follow each day. Below here, this is where I'm actually tracking all of the trades that I take.
If I click right on this section, that's going to prompt a trade for the day. I can select the day of the week, the pair that I was trading. If you want to add anything on your own, say you're trading futures, you want to add the MNQ or whatever you're trading, you can add that there.
You can have your strategy type here, choose from time frames, add your own time frames, whether it's long or short, the percentage risk you put on each account, whether it was a win, break-even, or loss, and then you can add along with the P&L value that you made on the trade.
You can also add other metrics. I like to have confidence metrics, the percent range of the overall move, what account I was trading on, and all sorts of other notes as well that allow me to effectively keep track of exactly what I'm trading.
The reason I like to do this is that it's accessible to everyone, and Notion allows me to filter between trades very easily. The next thing that I like to do is follow my pre-trading and post-session checklist.
Say I'm trading my strategy with the smart money concepts. The first thing that I'm going to do is come in here and check for news or important events. The way you can do this is by going over and clicking on this calendar here on TradingView, and you can filter on this button, which shows us only high-importance events.
You can see right here we have the Australia inflation rate year-over-year report coming at 7:30. Any moves like this for the US can lead to major swings in the market, so I'm always looking out for big high-impact things that are going to affect the volatility when I'm getting into a session.
I'm going to check that off. The next thing I'm doing is something called daily bias analysis. If I'm trading cryptocurrency, for my example here, and I want to trade Solana, I'll first go over into the main pair, which is Bitcoin.
I'm going to go out to a larger time frame, something like 1 hour or 4-hour time frame, which is going to give me a view of what's happened over the past several months. I'm going to see what we're looking at on a grand scheme.
For today, we have our general range from here to here. Price came up and retested this overall level. I have a whole process that I do for getting a daily bias in an overall analysis, but basically here, I'll start drawing important trend levels.
You'll see we have this high and this high, this high, so I'll draw some lines and see if it starts to show any sort of patterns. This could be potentially an area of support here. You'll notice this level, this level, and this level were both hit, so this is an important area for support, as well as an area that the price could regress down into.
For the day, if I was anticipating some sort of support off of this key level—resistance, resistance, broke up, support tested again, support again—over this time period, I would be aiming for bullish coming to this overall resistance zone into a fair value gap. This is an area where we could potentially anticipate the price to reverse.
Now, price reversed a little bit early off of this area, but overall, if we see price coming up, retesting it again, coming into resistance and the fair value gap, this could lead us to sort of a move down, and that's exactly what we saw for the overall session.
I'll do my daily analysis, then I'll set up my tools. Considering I already have my trade journal, my exchange open, and all of my scanners set up, I'm good to go. Next, I'm basically checking scanners and looking for pairs to trade.
For this specific model, I've been trading basically Ethereum and Solana exclusively. I like them because they have really good depth of market liquidity and predictable price action. So, I always like to trade Solana first.
What I'll do is bookmark these and leave them in this small section here, and that's going to allow me to have sort of my own checklist. I can have my watch list set up here. If I'm adding new pairs to my watch list, I'll put them in, and then I move into my trading session.
When my session starts, the first thing that I'm doing is marking out my larger time frame key levels. You'll see this gray area here. I've added this with something called the Iit Foundation. This is also an indicator that, if you want, I can send it to you. Just follow me on Instagram, DM me the word "tools," and it will be sent over to you.
I basically went into settings here and modified this to 8 to 9:30, which is where our New York pre-market starts. The New York Stock Market opens officially at 9:30, which creates a lot of volatility, which is really good to play for these institutional reading strategies.
Once I set that up, you can see I have my gray zone starting at 8, dotted gray zone at 9:30, which is going to show me where my New York session opens. Now, all I want to do is start marking out some key areas and some key trends.
The first thing that I see are my overall trend levels. The next thing I'm waiting for is some sort of significant momentum push, and I'm waiting for some sort of signal of a reversal.
For the example here, I'm not going to get into the full details of the proprietary system, but I'm going to show you some of the things that I look for. For the smog, I'm waiting for a change of character. We talked about change of character before.
In this situation, we do have a change of character, but this is moving in the bullish direction. So, I'm going to wait for a significant swing in price action. You'll see here we have our trend generally moving up underneath these lows.
You'll see we have a low, low, low. Price breaks, creates a change of character, and leaves behind this really nice fair value gap. We have this key level here followed by a fair value gap, so this is looking like a really interesting area to potentially build a position.
What I do is this is sort of getting into how to actually build a proper position. The first thing that I'm going to be doing is adding this short position button on my TradingView. Now, if you're brand new to trading, you need to start from square one.
At the end of this video, I'll have more about the Elliott wave theory as well as more general trading concepts, so you can sort of start at the right place to get started with trading. You can just finish this video, try to absorb as much as you can, and then later on start with more basic stuff because I am diving into a little bit more high-level stuff for those of you guys who are subscribing and are returning viewers.
I want to make sure that you guys are getting the content too, not just beginner content all the time. I just want to share with you what I'm doing to have these crazy trade opportunities.
In this situation, we have a change of character, significant high point here, so I'm already licking my chops. Right out of New York, we had a swing up here over this high, breaks out, and just fails it. That's telling me bearish vibes on the day.
I'm going to the midpoint here of this fair value gap, starting that position. All I'm doing is finding this fair value gap producing candle, and I'm just putting the stop loss outside of key areas. Technically, I'll start my key area outside of the candle.
What I'm going to do in this situation is look at this level, this level, this level. So, right in this cluster, we have really critical highs and lows levels. I would ideally love to put my stop loss outside of this zone, so right at this level, I'm looking to enter.
Price makes its move back up into that fair value gap, tests the trend one more time, comes back down, doesn't quite close under this level. Now, this is the second thing. So, I'm waiting for my change of character. I have that, waiting for the fair value gap input and manage trade.
I have my entry set up here. What I'm then doing before I even get in—I should have gone through this sooner, right?—I'm clicking on my inevitable trade position size calculator, which, once again, you guys have access to in your tools if you DM me.
I'm going to click on my entry price, click on my take profit, and click on my stop-loss level. Then, I'm entering in the dollar amount I want to risk. If you want to risk $50, whatever, I'm risking $500 on my trades, so I'm going to put that in there.
What that's going to do is give me this table to show me my quantity, my expected profit, and then all of my order inputs—how much to buy at my entry, what my entry value is, and then my take profit, my stop loss. This allows me to build out a proper position for me to actually trade on.
In this situation, what I'm doing next is waiting for this level to be broken, so this first push down after our fair value gap to be broken in order to reduce my risk to this break-even point. Part of trading is that you really want to take risk off the table as soon as you can.
You'll notice price comes down, doesn't close. We don't have a candle close below this level. Price comes up, would actually stop us out of this position. This is something to make yourself aware of in trading. You are going to have losing trades in your model.
When you have good trade setups, this was an okay trade setup. I took this in real life, and I'm showing you sort of the thought process behind it. This is a good model, a decent setup. It's not perfect; it's not amazing, but it's not bad. This is a contained loss.
I didn't reduce risk, even though it was tempting to. Price came up, stopped this out for a full loss on this trade. That sort of set up one. So, I'm inputting my order, inputting it into the trade tracker, and then I'm finding my next trade setup.
I can click this button to populate a new list for myself. All I'm going to do is go into here, put the day, the coin, the time frame, short position, the risk that it was a loss, and then say I lost $652 based on slippage. Then, I'm just going to move on to the next trade setup.
All I'm doing is saving them in folders here so that I can open and close them after the fact too on TradingView. For example, if we want to save any piece of analysis, you can go into this icon here, hit shift, and click on several different things.
You can click on this folder here, collapse this folder, and mute it, and then you'll have that analysis sort of hidden. Playing this forward again, we have a big push, reattempt on this trend line. Once again, equal highs being hit off of this level, and we have big displacement into heavy resistance.
You guys will see in a few weeks I'll drop a live trade video of me showing you and walking you through my mentality doing this in real time and recording it. I'm also going to show you the recording here in a second, but you'll see reattempted the underside of this trend.
To me, this is a super critical level after getting a change of character on this trend. What I'm doing, or what I did once again, is finding the midpoint of this fair value gap. Ideally, I want stop loss outside of these highs, entry, take profit, stop loss.
You'll see price comes back up, taps into that resistance level, midpoint of fair value gap, finally gets a candle close below this level. Now, I'm reducing this risk down to break-even. So now, it's either I lose zero or I make a full profit.
Then price comes down and fills me for a full take profit. I take profit right at this key level of support, basically just finding other key levels of support where price will most likely reverse around. You can see that's exactly what happened.
The price started moving drastically up, and once again, just to go over that specific trade idea, here is me entering that specific trade. You'll see my line drawn over here, stop loss placed over these key levels. Price comes down, I have this area marked off to reduce risk, comes down, I reduce the risk on my position.
I have my take profit set at this price. We get a dump-off, nice juicy take profit. A cool part about looking at the market for this reason is I looked at this as a super important key level over here. Once we got a confirmed response off of that level, you'll see we have our change of character, we have another fair value gap.
I entered another position here, placed my stop loss underneath this low here as a reasonable area. If we have our price action moving up like this, price breaks clean through that, we get out; otherwise, we stay in. You'll see price comes up, closes above this high, reduce our risk down to zero.
Then I draw key levels off of these lower levels where I anticipate to get some sort of rejection later on in the trade. You can see initially we did get our sort of first push down. We broke a little bit above it before having a massive sell-off to the downside.
We were able to get out fully for full profit right at this level for another three risk factors. Once again, just to show you this happening in real time, there's my entry. Price comes up, I've reduced risk. I have that underside resistance level drawn here with my take profit zone here.
Price comes up, tags my take profit before having a flip, and I'm out of the trade. Once again, I would go over and add all of that into my journal, open this up, take a screenshot, drop it into my trade journal, and now I have a step-by-step process that I follow, a way to manage all of my trades over my various trades to be able to follow this on a routine basis.
Let's take a look at a few other examples now. You can see I'm setting up my trade here into a critical level, stop loss over highs here. Price comes up, I set my risk. Price continues to come up. I'm in a losing position here, and then price creates a change of character, comes up, okay, triggers my stop loss, and I get out for a contained loss.
This is all part of trading as well. It doesn't make it a bad trade. Like I said, if the model's there, that's fine. That's why we have a stop-loss position because price can continue to rapidly make moves against you, and you don't want to be holding losses because that's how you let things get crazy out of control.
Let's take another look at a trend. Notice how I have my break of structure, break of structures. I have a change of character underneath this key level with a fair value gap identified. Stop loss at a key point, price comes up, fills into my entry, pushes down, creates a change of character underneath this level, which allows me to put my stop loss at break-even.
Notice how we got a nice reaction off of that second fair value gap as well before taking another push to the downside. I was just basically targeting this fair value gap section down in this trend. $2,100 got a really nice push.
It's actually trying to move my position, but it ended up triggering my take profit anyways. Still, nonetheless, I got a beautiful 1 to 5 again, so that sort of buys me five losses in a row just with one decent profit.
Notice once again I have my break of structure, key level, fair value gap midpoint perfectly tagged. Price creates a change of character. I'm in my position, up $2,000. Price is hovering around this area, and I get out for full profit.
In reality, my goal for you guys as well—I just started trading this officially a few months ago—but my goal is to be able to continue to hold these a little bit longer because I did pick out this key support level to target overall, which would have essentially doubled my profit on this trade.
It would have been closer to $5,000, risking $500, which is huge because that's 10 risk factors. It allows you to grow your account very quickly. I need to work on holding my trades a lot longer. I know the math behind it; it's emotionally a little hard because it's nice to lock in winners.
But that's the reality of trading. You got to know what you're going to work on. Overall, following the system makes it super easy. Hopefully, this video is helpful to show you some smart money concepts, show you some models, show you a daily routine, and give you the assets to be able to do it yourself in practice.
If you want to learn more about the Elliott wave as well as building strategies and learning trading fundamentals, you can check out some of these videos right here. Make sure you hit the like button if you haven't already, subscribe to the channel, and until next time, I will see you all in the next video.