Day one of the position trading bootcamp. This is a 5-day forex trading course designed to help you understand how to position trade and benefit from the natural ebb and flow of the foreign exchange markets. In this lesson, we look at the course overview and what we’ll be covering. We also kick off with a look at how to measure your success as a trader and why you should not use pips for that, or indeed for anything! Then we take a detailed look at how and why the market moves, who the main participants are and how we can take advantage of the natural ebb and flow of the forex markets.

Day 1 – How The Forex Market Moves & How To Measure Your Trading Success
Day 2 – Multi Time Frame Trading Analysis, Elastic Band Theory & Trading Psychology
Day 3 – Top Trading Indicators To Use For Position Trading Strategies
Day 4 – How To Position Trade, Trading Risks & Managing Your Drawdown
Day 5 – Strategies To Use as a Position Trader Explained In Detail

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Video Transcript

So, welcome to the position trading bootcamp. I’ve called it AKA basket trading, AKA portfolio trading, because there’s lots of different names for this style of trading. I call it position trading myself, but lots of people call it different things. Basically, position trading is taking multiple positions or multiple trades rather in a particular direction. So it’s a multiple entry strategy basically. So you’re taking a position on a currency or an instrument. So it’s going to be a five day course, or a five part course. And as I said, we will see how it goes. Some of these sections are going to be longer than others. Some are going to be a bit more hard work and intense than others.

So we’ll see how we get on. And if you’ve got any questions, obviously try to leave them to the end of each section. There will be a Q and A pop up on your screen and a slide basically to tell you when the questions are coming in. But if there’s any burning questions you’ve got and anything you really don’t understand, I will try and answer some as we go through the course as well, but try and keep them towards the end of the session if you can. So this is where we are, part one. So today we are going to cover an overview of the course. So the first sort of 14, 15 slides or so is going to be a kind of a top-down view on what I’m going to be covering in the entire course so that you can get a good idea of what I’m going to be teaching, and you can make a decision as to whether or not this is going to be right for you.

So that’s the main reason I’ve got these overview slides at the beginning, is to just give you a real good understanding of what we’re going to be covering. And I don’t want to waste anybody’s time. I’ve been through loads of courses myself. And I know sometimes you get halfway through a course and you think this is just rubbish, it’s not for me. So I’d rather give you up front an overview of exactly what this is. And then you don’t have to waste time on the entire five days if you don’t like the look of it.

So that’s what we’re gonna cover today. We’re also gonna cover how to measure success. And I’m gonna introduce you to the buyers and sellers, the main participants in the market, and we’re going to look at how and why the market moves. So today is all about setting up what you should be looking for and getting an understanding of what you should be understanding about the market so that you know basically how to trade it. So the next part after that is going to be multi-time frame analysis, something I call elastic band theory, and the difference between stop-loss traders and position traders. Part three will cover what a system is, and we’ll have a good look at all the indicators that I use, why I use those indicators, and what basically those indicators are telling you about the market.

In part four, we’re going to look at why you are not successful yet. I’ll put an exclamation mark on the end of that, because hopefully this is gonna make you successful. We’re gonna look at how to position trade and scale in and out using flexible stop loss strategies. We’re gonna take a look at drawdown control, currency exposure and risk. And then in part five, we’re gonna look at the strategies that I use. So it’s my exact entry criteria, and basically how I automate everything.

And as I said, at the end of every one of these sessions we’re going to have a Q&A and the Q&A you can use for absolutely any questions you want. Obviously if there’s questions you’re going to ask which are coming up in the latter parts of this week I’ll hold those ones back and we’ll cover those in the course. So we’ve got now 15 introduction slides coming up including this one and I’m going to lay out in a nutshell what you’re going to learn which is basically how I trade and why I trade in this way. The whole course in total, there’s 160-odd slides. So there’s a lot of information, but we’re also going to be covering practical examples of strategy. We’re going to be looking at psychology and obviously the indicators that I use, I should say use, not us.

But overview of what I do. You see that screenshot on the right here. This is basically what I do. I bank profit on a daily basis, but I bank small amounts of profit continuously. So it’s a different style of trading. And I’m using multiple trades and multiple small positions so that I can continuously put profit into a bank, which I can then use to do what I call drawdown control, which is part of the position trading strategy.

So the reason I put my P&L up on the screen here, as you can see, I think, I don’t know which month this is, it’s August. So you can see in the month of August at that point, I was up to 12.39% in profit. What I want to try and drill home in this particular slide is that you, to be a profitable trader or a successful trader you don’t need to bank big trades and big amounts of money. If you can bank half a percent a day you will be making 10 a month okay or one percent a day will give you 20 per month. So it’s really easy to bank half a percent a day or one percent a day and that is basically the position trading kind of strategy is to take lots and lots of small trades and bank continuous money in small amounts to build up a profit over the entire month, rather than going for those home run trades where you’re risking 2% on a position.

which is your one trade for the month that works out. So it’s a different type of strategy, but it revolves around continuously banking small amounts on a daily basis, which is what we all want to do. We want to be consistent traders, and that’s what this hopefully will do for you. So what you’re not going to learn in this course is going to be the basics of trading, all right? So I’m going to assume that you’ve got a basic understanding of some areas of trading.

So I’m not going through all the basics. So you need to have an understanding of brokers and charting platforms. I use MT4. Candlestick patterns and candlesticks obviously, because you can’t understand candlestick patterns if you don’t know what candlesticks are. Price action reversal patterns. So that’s things like M and W patterns, head and shoulders, double tops, double bottoms, you know, just standard reversal patterns and support and resistance. So understanding that price moves from level to level, support and resistance or supply and demand, they’re pretty much the same thing. So I’ll be talking about things like bullish engulfings, hammers, M and W patterns, et cetera. So hopefully what all of those are. If you don’t, there are videos on YouTube that I’ve already done which cover candlestick patterns, price action patterns, and support and resistance. So if you want to take a quick screenshot of this screen now, and you’ve got the videos there which cover those, and you can go and have a look at those at any time. I’d try and get that done before you do the next part, if you can, or just go to my YouTube channel, obviously, and the videos are all in there.

Rouse, just ask if you’ll get a copy of the slides. No, but you will be able to watch replays of this video. If you want to take a screenshot and save each one, there you go, you get the slides. Okay, so what you will learn, I’m gonna show you how I trade with very little effort, how I automate as much as I possibly can and make consistent profit every day with an easy to backtest edge without the fear of frustration or getting stopped out constantly.

Okay, so that is kind of position trading as a whole. Is there’s a lot of automation in there. There’s not a lot of time involved to trade this strategy. And it is an edge that you can easily backtest. But the most important piece of information on that sentence there is getting stopped out constantly. I’m gonna show you how to stop getting stopped out all the time, which is the biggest problem traders have. So you’re probably gonna disagree with some of what I say, and that’s basically because you’ve been programmed to do the total opposite, and that is why it works.

You probably heard that 95% of traders fail, 5% succeed. The 5% that succeed do it differently to the 95%. And that’s basically what I’m gonna show you. So what I want you to also bear in mind when you’re watching this is that I’m one of the few traders out there that shows his live P&L to people on a daily basis in a live room environment. We’ve got a couple of the live room guys in this, in the Zoom now looking, watching. A lot of the trading courses you see out there will give you an awful lot of theory, but they won’t be delivered by somebody that does this day in, day out on a regular basis.

So just bear that in mind when you’re going through the course. You can see I’ve got a P&L on the screen here. I have a live room, which you can join if you want to. And every single day in there, I’m showing you every single trade that I’m in, every single trade that I’m taking, walks in all the winners, the losers, and all. And there’s not many traders out there that do that and actually trade with you live and show you how to execute strategies in a real live environment.

So just bear that in mind when you’re going through this. I don’t teach crap. I don’t own a Lamborghini. I haven’t got a massive house. I’m like you. I’m just a guy that’s been trading for a long time and has basically cracked it. So I’m not one of these guys that’s trying to flog you a five grand course and show you pictures of my Lamborghini outside my mansion. This is what you see all over the internet. It’s a load of rubbish. You can’t buy a Lamborghini if you’re a retail trader. You can if you’ve got a hell of a lot of capital, but I’m gonna show you what it’s really like as a trader, and I’m not gonna stand there with a Lambo behind me.

I could do, you know, and a lot of people will probably believe it, but hey, that’s not real world. What I am gonna show you is a logical methodology, as I call it, which is a way to trade the markets that can be applied really to any system or strategy that you use at the moment or any system or strategy that you’ve used in the past. It’s just a basically a different way to look at trading and you can adapt a lot of strategies out there to work in a position trading environment. Some of them will, some of them won’t, and some of them will be able to be applied better than others. But I’m going to show you the way that I trade and the system or the strategies that I use to get into the market as a position trader.

And obviously, if you like those, great, you can use them. If not, you can possibly apply other strategies that you’ve used in the past that you use at the moment and use the methodology that I’m gonna show you to change the way that you approach the market and change the way that you trade. Trading is a personal thing. So if you teach the same strategy to 100 people, some people are gonna go out there and they’re gonna execute strategies and it’s gonna work.

Other people are gonna go out there and they’re gonna get it completely wrong. If you give the same strategy to 100 different traders and tell them to press the button at the same time, you’ll get 100 different trades, okay? So I’m hoping that what I’m gonna deliver to you is gonna allow you to mold it into your way of trading. So if you find this isn’t for you, that’s absolutely fine. You’ve got to crack a load of eggs to make a cake, as I say.

So you’ve got to try different strategies and different ways of trading. And if you can get something out of this course that you don’t know, that’s brilliant, my job’s done. And if you pick this up and you run with it and it works for you, absolutely fantastic. But if this isn’t for you, you can go on to the next strategy. Don’t get me wrong, I’ve done this many, many, many times. I’ve been there and I’ve been on all the courses and I’ve hopped from system to system and it’s just part of this journey that you go on as a trader, all right?

So this is just one step in your journey that I’m taking you on at the minute. I’m gonna show you basically why you’re not profitable at the moment, or at least where you want to be financially with your trading. If you were, you wouldn’t be watching this now. And I’m going to show you how I’ve eliminated these following issues that you can see on your screen now. And the vast majority of the traders out there, me included, have problems that are listed on this screen now.

So I want you to have a quick look at what’s listed on the screen here. There’s 11 issues. I’m not gonna go through all of these, but I just want you to look at them and see which of these you basically identify. If you identify with all of them, as a lot of traders do, then hopefully this way of trading is going to kind of revolutionize the way that basically you look at the market. But just going over some of the biggest ones that I find I come across a lot of time with traders.

The top one up there, FOMO, fear of missing out is one of the biggest ones. And this is a massive problem for a lot of traders because they worry about missing those big moves or they worry about getting the money back that they’ve lost, which is one of the main reasons for FOMO. You lose three trades on the trot and you think right this is going to be the one and you hit the button and then that becomes another losing trade and it causes this spiral of loss which continues over and over again and it’s all caused by your fear of missing out on that potential profitable trade.

It means that you stop following systems and basically just hit the button and overtrade too much. So that’s one of the main things that hopefully we’re gonna solve during the course. Trying to pick tops and bottoms of ranges is another massive one and trying to pick the pullback point in a trend, okay? Those are the main things that 95% of trading strategies revolve around. They try to pick a trend continuation pullback, or they try to pick a reversal at the top or the bottom of a range, okay?

So hopefully we’re gonna help you eliminate all of these. But if you’ve had a good look through those, ask yourself what every single one of those has in common. There’s a few extra ones actually there that I put in from a previous slide. But every single one of those things you can see on the screen there is to do with timing. And this is the biggest problem that traders have. And this is why traders lose because you are trying to time your entries and you’re not concentrating on where the market is actually going to go.

So the problem people trying to trade have, I’ll put the word trying in there, is they cannot time their entries, which results in being stopped out and losing money. So would you all agree that you’ve probably got one of those problems that you’ve seen on the screen, if not all of them, and the issue you have a lot of the time, and I have this issue as well is not getting that entry right which means we get stopped out all the time. So we need to find a solution for that. So the solution that I found was I simply stopped focusing my trading activity on timing my entries and I focused on how the market moves and why the market moves and that led me to concentrate my efforts on four simple facts. First of all, we know roughly when price turns, not exactly. If we knew exactly when price was going to turn, we’d have 100% strike rate and we’d be multi-millionaires. Yeah. So we don’t know that, but we can see what happens in the market with historical data.

We can see roughly what happens, can’t we? We know that it turns at support and resistance or supply and demand areas but we don’t know which of them it’s going to turn at. So the market will move higher up towards an area where it’s turned previously and it will either turn or it won’t. We don’t know whether it will or not but we know it will at some point. There’s always a support and resistance or a supply and demand area that price will turn at but we never know which one it’s going to be. We know the price goes up and down and it moves constantly through time and we do not know when this up and down is going to happen. So in conclusion we know nothing for sure do we? Basically. So we know the market goes up and down, we know it gets attracted to support and resistance and we know at some point it’s going to turn but the problem is we cannot get the timing correct.

And that is where most traders tend to fall down. So why try and pick entries based on something we just cannot know for sure? Logic would suggest that we should be focusing on what we do know. And that is roughly when things are gonna happen based on historical fact and what we can see on our charts. So here’s a quick example of that with an RSI. So if you’ve used the RSI indicator before, or in fact, any oscillator out there, you know that oscillators move up and down and up and down, and that’s basically what their job is.

So a lot of trading strategies revolve around when an oscillator gets to a certain point, you go the opposite direction, yeah? So they’re telling you to trade the other way and that’s how a lot of people use oscillators, RSI, stochastics, I mean there’s TDIs, there’s loads of stuff out there isn’t there, there’s oscillators. So we know roughly when the RSI is extended above a certain level or below a level it will reverse. However we don’t know exactly when it will happen. We just know that it does because we can see historically. So when price got up to here, it came down. When price got down to here, it went up.

When it got up to there, it came down. So we know that these things happen because we can see it. And you can look at your charts on any timeframe and you can go back in history and you can see these things happening over and over and over again. But the problem is we don’t know the exact point that price is going to start moving. And that is what we’re always trying to grab is the timing. But we know that it’s somewhere in this area.

Okay, so that’s basically what that slide is designed to show you. So we can use this to our advantage and start to scale into positions that we know are roughly in the right area at roughly the right time. And this increases our odds of having a successful trade substantially. So we’ll be profitable more than we will be right. or do you want to be a right trader? I.e. do you want a high strike rate or do you want profit in the bank? So my approach to trading in a nutshell. So this is, we’re kind of getting towards these 15 sort of intro slides now.

So the way that I approach the market is I don’t use hard stop losses, okay? So I don’t enter a position, put a stop at a low or at a specific level and a TP at another specific target level, okay? I manage risk completely differently, but I still have strict risk management that I work by. It’s just that I look at risk in a completely different way as in a portfolio or a position of a number of trades or my exposure to an individual currency.

So I don’t use a hard stop loss in the market. It’ll become clear as we go through why I don’t do that. I use small lot sizing and multiple entries for every trade so I don’t have to worry about trying to time every trade. As I just showed you on that RSI, we know that when it gets down here at some point, it’s likely to do that. When it gets up to there at some point, it’s likely to do that, but we don’t know when it’s going to happen.

So by using multiple positions and very small lots, it means I can eradicate that timing element. I don’t need to worry about timing my entry and getting it spot on. I use realistic targets based on every individual instrument’s daily range of movement so that I can make money consistently knowing how far price will typically travel. So a lot of traders, in fact, the vast, vast majority of traders use risk reward, and I use that for many, many years.

So if you place a trade with a 10 pip risk, you put a 20 pip TP on it, you’ve got a two to one risk reward. I don’t work in that way at all. I use the range of movement for that particular instrument to measure how far it’s going to travel or likely to travel. And I will look for targets within that range. Rather than saying, I’ve got a 30 pip stop on this, therefore I need a 60 pip TP. If the thing is unlikely to move 60 pips because its average daily range is only 30 pips, that’s an unrealistic target.

So I don’t target things based on pips or on a particular risk reward ratio. I use a completely different measurement. And I use custom indicators and an EA to automate 90% of my trading. And I only worry about positions that don’t go my way. The rest of my positions just make me money. So what you see up here, yeah, these are the profitable positions. These are the positions that I’ve taken, which just go off and they hit the target, they go into my bank and I don’t have to worry about them.

Positions that don’t go my way, I will deal with those in a completely different way. And again, we’re going to cover that as we go through the course. So what exactly is position trading? Here’s the basics. So the concept is to take a position on a currency pair by picking a direction in the market. And so we’re looking to pick the direction that that pair is expected to move.

And this is generally based on exhaustion and long-term trend. So you can trade as an exhaustion trader or a mean reversion trader or a trend trader. It’s the same process, we just need to pick a direction. We wait for conditions that historically repeat over and over again to present themselves. So we have a system that is based on historical fact, not blinking arrows and flashing lights and squiggly lines. It’s based on historical data.

And we basically wait for those conditions to repeat themselves and when they do we then take a position in the direction that we are choosing to trade. We take an initial position to see how that plays out. If our timing is wrong we then manage multiple trades as required until the move we are expecting completes. We don’t worry about stops as our positions are small enough not to care about them and we’re going to talk about lot sizing a bit later on in the course. We will bank small profits often and build a weekly profit bank. So this is what I was talking about at the beginning. If you can bank half a percent a day, all of a sudden you have gone from a losing trader to a 10% a month profitable trader. Okay, so we’re banking lots and lots and lots of small positions and we’re building a weekly profit bank. And we manage our positions after a certain amount of time if they go against us and deal with the drawdown on our account using the profits that we have banked. So this is what I call drawdown control and we’re going to go into that in one of the later sections of the course. So I’m just going to quickly show you an example of one of the recent trades that I have taken. Let me just bring up my mt4 so let me just open the chart and just change to a different template so you can see the trades okay let me just find one of the trades I wanted to show you, which is 23rd, I think it was, pound yen.

Yeah, there we go. Right, so this is an example of one of the trades that I took. So it’s a little bit similar to that screenshot that I showed you. So price pushed down, okay? And I was expecting price to push up, and I’ll show you why I was expecting price to push up when we go through the strategies. But basically I took a position here, as you can see on the screen, and that position didn’t work out.

So rather than being stopped out, putting my stop there, price pushed down a little bit further. So I took an additional position while I was waiting for the expected move, which in this case was up. And again, I’ll show you why I was expecting this to go up when we talk about strategy. And then as price pushed back further, I exited both of those positions to make a profit on both of them.

Now I could have exited somewhere around here and taken a profit on that one and taken a loss on that one, but the overall profit would have still been a profit. Okay, so that’s the difference. I’m taking multiple positions in a particular direction when an expected behavior that we’ve witnessed in the market in the past is starting to play out again. Okay.

So I’ll just switch back to the slides. So, so that’s basically position trading as a whole. So we’re taking a position on a particular currency pair or instrument or crypto, whatever it is you want to trade, we’re taking a position on it based on our expected movement, which is based on historical back-tested facts. Okay? So any of you know who these guys are? This is where the chat goes quiet.

Everyone goes, never heard of them. No. Yes, good. Some people do. This is from a show called Billions, which is absolutely fantastic. If you’re into trading, you need to watch this. But basically, these guys, he’s a billionaire, right? And he runs a prop firm called Axe Capital. That’s Bobby Axelrod. And what my point with this slide was is these guys do not take a single trade on a stock, put a stop loss underneath the low and then lose millions when that stop loss is taken out. Okay, a lot of big firms, this is obviously a fictional one, but a lot of big trading firms, hedge funds, they don’t use stop losses because what they do is they take speculative positions on where they think a currency, a stock, an indices, a crypto, whatever it may be, is going to go.

But what they do is they pile into that position gradually as the market presents the conditions that they’re expecting. So we trade, or we’re going to trade in a very similar way to a lot of the big institutions in the fact that we’re going to take a position in the market rather than entering a single trade with one stop loss and one take profit. So all I ask is that you try this method of trading for a month on a demo account, okay? Now this isn’t something that you can just go out and suddenly do tomorrow, because some of these trades may take days or even weeks to play out, okay?

So it’s a completely different style of trading which you’ll learn as you go through it. But what I want you to do is commit to trying this for a month, yeah? If you’ve been through loads of different courses and you’ve been through loads of different systems, you’re on your 50th indicator, you’ve bought from the MQL5 marketplace and you’ve been trading for three years, five years, three months, however long it may be, you’re system hopping still.

And you haven’t found the one that is working for you. So what I want you to do is commit to this for a month. Okay. And if you’ve not increased your balance on this demo account that you’re going to start by five to 10% by the end of the month, move on to the next system. It’s not going to be for everybody. Yeah. You have to go through a lot of systems, try a different strategy every now and again, and just, you know, learn and absorb trading, but give it a decent amount of time, at least a month. If in that time you haven’t managed to make five to ten percent on that account, which you should be able to do, and you only make somewhere between one to five percent, then at least you’re a step closer to becoming a trader than you were before, yeah? It’s very difficult to fail with this strategy, okay? But you are not gonna make Lambo money, right?

And that’s what I wanna drill home. Forget all these guys standing in front of massive houses with Lamborghinis, that’s not real trading, yeah? The big players do not make 100% profit a month, yeah? Not with proper risk anyway. Okay, so that’s what we’re looking to do. I want you to try and increase an account by five to 10% a month by doing what I’m going to show you. So a little bit more in detail what we’re gonna cover. We’re gonna cover how and why the markets move and how I take advantage of this with position trading.

Gonna look at all the indicators I use every day, what position trading is in detail and why it works so well for most traders. Why you are currently not successful or at least where you want to be at the moment. Examples of my trades and how position trading works. We’re going to look at tons and tons of trades basically just so you get a full understanding of exactly how this works. How to use a stop that doesn’t get taken out constantly. Lot sizing for position trading so that you’re not over leveraging yourself. We’re going to look at drawdown control and how to use drawdown properly, how to use it differently and see it as a positive.

Everybody looks at drawdown as being a negative thing. Drawdown is a positive thing. It’s there to be used by your account so that you can make money. It’s not there to become a loss. And there’s a big difference between going into drawdown and making a loss, which I’m gonna explain to you. I’m gonna go through all my main strategies, how I find entries, how I manage my portfolio on a day-to-day basis, how I pick the directional bias really easily that you should be trading in.

And I’m gonna go through my exact process I follow every day. And the process for every alert I receive from my indicators. It’s really, really simple, stress-free trading with very, very simple rules for entry. And there’s a way to automate the entire trading process as well. But the thing that you are not gonna remove from trading, okay, is you, right? The most important indicator you have is between your ears and it’s called your brain. You are not gonna be able to fully automate this style of trading, all right? So if you’re one of those EA hunters that’s looking to find an EA to stick on his chart and go and sit on a beach drinking Mai Tai’s, this isn’t for you.

This is 90%, you can get 90% I think automation with the way that I trade and I’ve built an EA to do that for me, but I still have to look at my charts every day. I still have to look at what’s going on in the market. So that’s basically a complete overview of the course. Just a quick overview of me personally, just for those of you that don’t know me. I’m a programmer by trade. As I said, I’m just like you.

I’m a normal guy. I’ve been trading for 13 years. So because I’m a programmer, I’m a very logical person. And every strategy and system and indicator that I’ve developed is based on logic and historical data. I don’t use anything that I cannot visually backtest or have statistical data to show me it gives me an edge. Okay, and that’s what I’m using in the strategies that I’ve built and I’ve developed basically. So as I said, I’ve been trading for 13 years on and off.

I started in stocks with a service called Day Trading Radio. If any of you have heard of Day Trading Radio, that was back in 2008, it’s still going today. I forget the name of the guy that runs it, but he’s brilliant. So if you’re interested in stocks, go and check out Day Training Radio, but give this a month first. I’ve given up twice. I’ve blown multiple accounts in the past, probably just like you have.

I’ve taken many, many, many, many courses. Every one of them helped me develop as a trader, and I took something away from every course I’ve done, but none of them have ever managed to make me profitable. I’ve had three private mentors where I’ve had one-on-one tuition or small group tuition like five or ten of us in a group, one, you know, with one instructor. Every single one of those guys taught me something invaluable, but again, none of them made me profitable. And I have bought and tested hundreds of indicators, okay, as you have probably done yourself but none of them has made me profitable either. So after the third time I gave up trading because I just couldn’t crack it, I decided to sit down and have a good look through everything that I have learnt and I have a massive folder on my PC which again a load of you probably have as well, full of PDFs, videos, spreadsheets, all sorts of stuff.

So I looked through everything that I’ve learned and I read it all again. And I took all the bits that made logical sense to me that I could statistically backtest and I combined them together. And that is basically what I have come up with. And this is what the position trading course is. So I ended up with market structure, support and resistance, the RSI, average daily range, one, two, three gaps or propulsion candles, whichever you want to call them, and dollar averaging techniques, which are typically used in stocks.

And now I am profitable. And that is basically what I’m going to show you. So I have created indicators on the MQL5 marketplace and I sell those. I built these to automate and speed up my analysis. So I found that with the indicators that were out there, they didn’t quite do what I wanted to do, or they just didn’t exist. And obviously being a programmer, I built them. You can choose to buy them or not.

There’s no hard sales, none of this rubbish where I’m not gonna sell you anything on this course, okay? I’m not gonna build up this whole thing where this is worth two grand, this is worth a thousand, this is worth five grand, all of a sudden I’ve got a 15 grand program, you can have it for 199. This is free, this course, this is going out there for free. I’ve got indicators that will help you automate and I’ve got indicators that will help speed up analysis. You don’t need them. You can do this with any system or strategy, as I said before, and you can trade my systems in a manual way as well. But they are there if you want them, okay? And I’m gonna show you why I built them, the logic behind them, and how I use them just basically to speed up and make my life simple.

I can trade on an hour a day on pretty much any timeframe using the dashboards that I’ve built, okay? You don’t need them. And two of my main indicators come free with MT4 anyway. So, you know, you don’t have to buy those. All right. So that’s it. Your 15 slides are up. So that is the top down view of the course. So you know everything that we’re going to be covering now. All right. So in this first part, what we’re going to do is now we’re going to move on to the sort of main bulk of it, if you like. And we’re gonna start to talk about how we measure our success as a trader, okay? So you can see here a P&L, one of my P&Ls on one of my accounts, and you’ll notice here that there is not a PIP in sight, okay?

So I do not use PIPs at all. The entire industry revolves around PIPs. You are constantly being bombarded with people saying they can make you X amount of pips. And pips are completely irrelevant measurement in any instrument or any trading activity because they are not consistent. So what I want you to do is first of all, wipe away what you’ve learned and forget about pips. We’re gonna concentrate on growth.

So measuring the success of any single trade or any day’s results in pips is pointless because if you think about it, what is a pip? What is a pip worth? The answer to that question is going to depend on two things. First of all, the base currency in the instrument, sorry, the base currency in your account and the instrument that you are trading. At the end of the day, it’s just a measure of price moving up and down. So we have a measurement on the right-hand side of our chart, okay, and that is measured in pips basically, and that is all it is. It’s a measurement of that particular instrument. So if we use that to target our profit or, you know, to set a TP for any trade that we take, it’s gonna be different on every instrument.

So it’s not consistent. So targeting 50 pips profit on Pound New Zealand, for example, is a scalp. And if you do the same 50 pip target on the Euro pound, it’s a swing trade, okay? Because they have completely different ranges that they move on a daily basis. So the average daily range of the Pound New Zealand at the moment is around about 140 and Euro pound is around about 30.

Okay, so if you’re targeting 50 pips on the Euro pound, it’s gonna take over a day to get there. If you’re doing it on the pound New Zealand, it’s gonna take a few hours, yeah? So you can’t use pips for targeting. So that’s one reason why they’re totally useless. And I’ve got one here as well, on the S&P 500, the ADR is around 400. That 50 pip move is gonna be over in minutes, isn’t it? So it’s a totally useless measurement.

So next time some trading guru promises you 500 pips a week, run. Because you don’t know what they’re gonna be trading. I can make 500 pips a day, no problem at all. I’ll just take a trade on the US dollar czar, which has got an ADR of 2000. So I only need it to move a quarter of its normal daily range, which it’s gonna do probably in an hour, and I’ll hit 500 pips.

There you go. So if I’m offering you 500 pips a day, it’s one scalp a day. Yeah, but do you see what I mean? You get the point. If anybody offers to make you a load of pips a week, ask them what their percentage return per month is on their account. And I bet they won’t be able to give you an answer. So the way that we are gonna measure is by using percentage growth targets.

And it has big advantages. First one is that if you target percentage growth, let me just go back to my P&L here. So this is the column that I’m talking about here, gain. So this is percentage gain. So this is the percentage growth per day, per week and per month on this particular account. So just to clarify that for you. So using percentage growth targets has big advantages. First of all, it never changes and it’s consistent across every pair or instrument that you trade.

1% growth on your account is the same on Pound New Zealand as it is on the Euro pound. If you make 1% profit on that trade, you’ve made 1% profit. If you make 1% profit on the US dollars R, you make 1% profit. 1% is 1%. But you measure your success based on your account balance and how far you’ve managed to grow that account balance. It’s also consistent when your account grows from say a 5k account to a 10k account.

You are still targeting the same growth, you’re just making more money with a bigger account. So you simply increase your lot sizing as your account grows, but your performance targets will be able to remain the same. I may make 1% return on a 5K account and I make 1% return on a million pound account, okay? I’m making 1% return. If I concentrate on the percentages, it doesn’t matter how much money is being made, does it? If I wanna grow my account by 10% a month, I need to target half a percent a day. That measurement is the same regardless what instrument I’m trading.

It also allows you to measure performance on a daily, weekly or monthly basis in exactly the same way. So you can compare your performance this month last year to this month this year very easily. Because things are going to change in the market. Market conditions such as the average daily range of pairs, for example, is going to change dramatically, okay? But the percentage gain on your account that you are targeting and achieving is static. It doesn’t matter if the stock market crashes, COVID hits, there’s a earthquake in New Zealand. It doesn’t matter about all of that. What is going to be the same is how much you’re targeting.

The average daily range and the market conditions and the market movement is going to be dramatically affected by outside conditions, which are out of our control, but our focus needs to remain on what we’re doing in our account. Okay, so it’s something that you can use to measure on a regular basis and compare basically how you were doing last month to how you’re doing this month. So you can keep on track, it gives you a focus.

And you can set a simple target to achieve daily, weekly, monthly. I’ve already really covered this one. So if you’ve got 10K in your account and you need to make a thousand pound a month trading, you know you need to achieve 10% growth per month. That’s two and a half percent a week, half percent a day. So it makes everything simple, all right? So forget about PIPs for targets, for measurement of success, okay?

We’re gonna concentrate on using nothing but growth because it is measurable across every instrument that we’re going to trade. So targets for our positions are also not measured in pips. Targets for positions, we are going to use average daily range and we are going to use levels, okay? So when we enter a position on a pair, so I’m just talking about 4X pairs at the moment, we look at where it’s likely to go and where it’s been historically, not a number of pips that we want that pair to move.

All right? So the market is gonna move wherever it wants to go and it will give us what it wants to give us. We cannot force it to do anything. Okay, so we need to be realistic with how and when we take our profits. Okay, so this is going back to what I said about, you know, targeting 50 pips on the euro pound that’s more than a day’s range for that thing okay so if we want to get in and out in a day we can’t target 50 pips can we. So price moves an average distance on every instrument or pair every single day it can exceed this range but there is an average that it will move and it will be different for for every currency pair that we trade. And this ADR is often based on news, time of year, economic factors, there’s all sorts of stuff that goes into the average daily range of a pair. So if something is weak and you’re trading a weak currency against a weak currency, the average daily range is going to be very tight because neither of them puts monetary policy statement out that says they’re going to inflate the currency, that currency might start to fly and it might start to trend hard, which case the average daily range will increase on that.

So we need to adjust our targets based on how that particular instrument is moving at the moment, not what it was doing a year ago or what it’s likely to do in the future. So average daily range helps us do that and that’s basically why we’re going to use it. Price will fluctuate so we measure how far it’s been moving recently as I just said. This gives us an idea of how realistic a potential target is to achieve rather than being something that we’re just never going to be able to get to. We also know price moves between support and resistance areas as we can see this happening historically over and over and over again.

Okay, we’re going to look at lots of examples of support and resistance as we go through the course. So it makes sense to use these targets or rather to target these levels also and not a number of pips. Okay, so we know that price moves an average daily range and we know it moves between support and resistance or supply and demand levels. So rather than using PIPs, we’re gonna use these levels and these ranges because they are consistent, they’re reliable, and more importantly, they are realistic. So we can measure them and we can see them happening. So that’s what we’re gonna use to target, not a risk reward ratio because of where we’ve put our stop loss.

So using realistic target levels means we will bank profit more often because our targets will be achievable by the market more often and we might miss those monster moves that we see where it just flies off and it trends for three weeks on the trot. But so what? If we’re banking consistently, who cares about missing those massive moves, right? Our goal is to become consistently profitable traders, not to hit that home run and get that thousand pip move. Yeah, that’s for show. That’s not trading. So ask yourself, do you want to be consistent or do you want to brag about catching that monster move?

Yeah. How many times have you seen people throwing their P&L or an amazing trade they just got up in Telegram or in Discord or on Facebook, on Twitter. They’re going, yeah, look at this massive move I got. They don’t show you the nine out of 10 that they lost, do they? So it’s all about becoming consistent, and we need to give ourselves the tools to become consistent, which means we need to use fact-based data and an edge that we can historically see playing out over and over again.

So I’ve already kind of touched on ADR, but ADR is brilliant to use as a target. And the reason being is whenever we see a big move happening in the market, it has a retracement, okay? So if you think about the market moving up like that, when it’s in a trend, it pulls back and it continues and it pulls back and it continues, yeah. So in a trend, we get these pullbacks or retracements. And these are usually one or two ADR. And we can measure this, and we can see this happening historically in the past.

When price is in a range, you will find it will move within a certain average daily range multiplier, okay? So we can measure these moves using ADR. So if we only put our targets within this one or two ADR move that instruments or Forex pairs go through, we’re gonna bank profit very, very regularly. And we’re also not gonna have to sit through potential days and weeks of consolidation or drawdown waiting for the big payday to come.

So if you’re, let’s say you’re a range breakout trader. Everybody’s tried range breakouts, right? What we’re waiting for is that. Yeah, so we’re getting in here and we’re trying to capture this move with our stop down here and a five to one risk ward. That in the real world would be beautiful if it happened every time. What happens most of the time is it does this. Yeah, so we just have to sit through all of this, waiting for it to get up here.

Yeah, if we had targeted one ADR, we’d be out. Right, so that’s the reason we’re using ADR. We’re banking small profits consistently, which builds our account. Okay, so we’ll look at ADR in much more detail in a later stage. Okay, so to summarize what we’ve covered there, forget PIPs. We’re not going to concentrate on PIPs at all. From now on, I want you to concentrate on realistic targets that price is likely to actually get to, and I want you to concentrate on growing your account by a percentage, either each day, each week, or each month, and not a number of PIPs. All right, so get PIPs completely out of your brain.

So next thing we’re going to look at is the market participants. This is a key lesson, if you like, that everybody needs to fully understand, which is why I put it in the first sort of part of the course. So to be able to trade, you need to understand how the market works. Yeah, it’s like anything in life. If you want to be a brain surgeon, you need to know how the brain works. Yeah. If you want to be a newsreader, you need to understand how to project your voice on TV and look amazing, right? There’s things you’ve got to do when you do any job that you need to fully understand. And how the market works is one key thing that virtually everybody skims over and doesn’t bother with.

And it’s, for me, the most important thing that you can understand, because unless you know how the market actually moves and how the market works, you haven’t really got a chance of being a profitable trader, because you’ve got to understand where price is gonna go next. If you can’t extrapolate information you can see on your screen and forecast where price is gonna go, you don’t have any chance of getting profitable trade on.

So you’ve got to understand how the market works. And at the end of the day, it’s made up of buyers and sellers. That’s why they call it a market. A fruit market has got buyers and sellers. eBay is a market with buyers and sellers. The Forex market is a market with buyers and sellers, crypto, indices, futures, everything is made of buyers and sellers. And it’s really, really important that you understand how these buyers and sellers interact with each other.

So, particularly with the Forex market, the institutions and the banks are what moves the market. And there’s two main reasons that the market moves. And that the institutions and the banks are the people that move this market. The first is to execute orders for their customers. So if you’re a big bank, you have lots of customers, right? And your customers will come to you and say, I need to pay this massive invoice. I’m in Japan and I need to pay somebody in the US.

And what they will need to do is execute that transaction through the bank. And there has to be a foreign exchange done because if I’m paying in yen and the person is receiving in US, that transaction gets conducted on what currency? US dollar yen. Okay. So a big part of what makes our Forex market move is the fact that the banks are executing huge orders on behalf of huge corporate clients.

And these orders have to be broken down into very, very, very small parts to be executed in the market. Because if, for example, as a bank, I need to make a buy transaction on US dollar against the yen, and it happens to be a billion dollar transaction, for example, I can’t just dump that billion dollars into the market in one go, because to be able to buy US dollar yen, what do I need?

I need somebody on the other side of that to be able to buy it from me. So I need a seller, okay? Now, if I dump a billion dollar order into the market, I have to be reliant on a billion dollar seller on the other side going, yeah, I’ll take that. Doesn’t happen. So what they have to do is they break their orders down into multiple small parts. We see these being executed as candlesticks on our chart.

Very, very small transactions, which take price in one direction, you pull it back and then take it again and then put it back, et cetera. So that’s the first thing that’s going on in the market. The banks and the institutions are executing large orders on behalf of their customers. They’re also executing orders to make themselves a profit. Okay, so we’ve got prop desks, you’ve got pension funds, you’ve got all sorts of other participants which are called the speculative participants, where they are trying to make a profit.

And they are also dumping large orders into the market. Okay. So, the outcome of this is that they go from level to level, creating positions and taking profits when they’re ready. Okay, and basically that is what gives us our market movements. We have buyers and sellers and buyers and sellers and then people buy and then people sell and people buy and people sell. And that’s basically how the market moves. That’s how we get market structure, movements up and down in market. So it’s called the market for a reason.

It behaves exactly the same way as any other market you would visit to make a purchase. For every buyer, there has to be a seller. So when I hit the buy button, someone somewhere is taking the opposite position in the market to me, okay? So I’m saying I wanna buy US dollar yen, someone at that same point in time is going, I’m gonna sell US dollar yen, all right? But that does not mean that one person is gonna win and another person is gonna lose.

It means at that point in time, we needed or wanted to enter a position in a specific direction. Nothing more. Okay. So if I was to say, I’m going to buy US dollar yen, and someone else is going to say they’re going to sell US dollar yen, doesn’t mean that I’m going to win and he’s going to lose because we don’t know what’s going to happen in the future. There’s every possibility that it could go down to there. He then gets out and makes money. And I make money on a move like that up here. We both make a profit but all that’s happening when you hit that buy and sell button is that there is a transaction taking place. One person wants to go one way, another person wants to go the other. One key fact about central banks, governments and institutional traders that is critical for for you to understand is that the concept of that, like I’ve just explained there, that every time somebody buys, they have to sell, all right?

So when an institution executes this $1 billion order, for example, I’m just picking hypothetical numbers here, but let’s say, for example, as an institution, I’ve got to execute a billion dollar order, which I will do over a period of, let’s say, two days. Okay. And I’ve been buying and buying and buying and buying because I need to execute my transaction in that way. What am I now? A seller. Because to get out of this position, I’ve just put lots and lots and lots of buys into and make money. I’ve got to be able to sell it. Yeah.

So every time an institution, a bank, a hedge fund, anybody with a decent amount of money to move the market hits that buy button, they must become a seller to take profit or exit that position. Yeah, same as you, right? If you hit the buy button when we get this breakout here, yeah, you’ve hit buy. What are you now? Seller.

Why? Because to exit this position, you’ve got to sell. You’ve bought it, now you’ve got to sell it. If it comes down to here and you sell it down here, you’re still a seller. You’re gonna make a loss, but you’re still a seller. Every time you hit the sell button to get out of that position, you’ve got to hit the buy button. Yeah, so we’ve got to trade in both directions whenever we enter a position in the market.

So what does this mean to us as retail traders? Every large move in one direction has either a pullback or a reversal that follows. We don’t know which it will be, but we know there will be one as there must be a profit taking move after a large buying or selling spree. If price pushes up sharply in one direction with little sign of a pullback, we know there will be one coming soon as all those buyers are now sellers in the making. Okay, so this is a very important concept for you to get your heads around because this is gonna form the basis of how we speculate where the market is going to be going in the future.

Yeah, think about indicators for a minute. Every indicator that you see on a chart, virtually every indicator, is giving you historical information and is lagging price. There are no indicators out there that will predict the future because no one knows the future. But there are indicators out there that will tell you historically what happened in the past may well repeat itself, okay? And those indicators you will find are based on buying and selling theory. The fact that if the market goes like that, everybody that’s made that happen needs to make that happen next. We just don’t know whether it’s gonna do that or whether it’s gonna do that, but we don’t care.

As long as we can take our chunk out of that bit, our job is done. So let’s have a quick look at a chart to explain it a little bit easier, right? So this is Eurocad on the hourly. Okay, you can see here that we’ve got buyers down here. So we’ve had a little bit of a range down here for a few days. And then we’ve got buyers which come into the market and they buy for two days, three days, and then they sell, okay?

So they’ve been buying, buying, buying, buying. Everybody was buying there, now needs to sell because they need to make their profit. Sometimes we will find that we get really, really strong buying moves, okay, where in one day price will push incredibly hard and then it might do that for another day. But everybody that’s done the buying here, if they wanna make money, what have they got to do? Sell. So what happens next? The market comes back down the other way. Then we have a bit of a consolidation. More buyers come into the market and as they’ve bought, it consolidates and then they sell and so on and so forth. And this repeats itself on every time frame that you see, on virtually every instrument that you see, to to varying degrees.

So all we’re doing is we’re taking advantage as position traders of the fact that we know that buyers at some point will become sellers and sellers at some point will become buyers. So to move the market where they want to go, they need to find people to take the opposite position to them, okay? So this is the banks and the institutions. And in fact, any trader, they have to find someone to take the other side of their trade.

If they want to go short, they have to find lots and lots of buyers. Due to the buying power that these large institutional traders and central banks have, they can move the market to the location these buyers will be in, okay? Because they need liquidity, they need orders in the forms of stops and pending orders to move the market.

So because I’m a bank and I can execute lots and lots and lots of orders, what it means is I have the ability to move price to wherever I want it to go within a certain degree, obviously I can’t move it forever because that would probably bankrupt the bank, but I have the power to move that market because what will happen is, if I keep hitting the buy button and someone keeps hitting the sell button, this will happen.

Yeah. If I hit the buy button faster, that will happen because I’m gonna be, there’s gonna be more buying than there is selling. If I put a massive order in the market, that will happen because there’s not enough sellers to take the other side of my order. So price will shoot up and find out where the sellers are so that I can execute the next part of my order. Okay, and that’s basically what you’re seeing is the banks, institutions, the large players moving the market to the location where orders are sitting.

And the majority of those orders in the market are either stops on existing trades taken by other people or they’re pending orders on future trades. OK, and these are all placed in the same area because that’s what we’re all taught to do. Yeah, you’re taught to go long and put a tipi at the top. And where do you put your stop? Underneath the low. Who else does that? Everybody. Where is there a large pool of orders underneath the low. Where do you think the bank could go and find those orders? Underneath the low, yeah.

They know where the orders are because they can see them on the charts, but they don’t even see them on the charts. They know where prices traded and they can take the market to those levels to just hoover up those orders. So let’s have a look at stop and pending orders in more detail. So stops on existing orders. This is what we all do as retail traders. This is the 95%.

We see the market start to turn and we get into a position. We put a stop at the high or the low and they know this is where there is liquidity, so they will move the market there and then carry on with whatever their move will be. Now this is often played out on your charts as an M or a W pattern. Okay so we see this playing out all the time. I’ll show you an example in a second. When they find this liquidity they will start to move the market where that wherever they basically want to go to execute more customer orders or to make a profit. Okay if they can’t because there’s no liquidity there, i.e. I’m looking to buy and buy and buy and there’s not enough sellers, they will go back and get more orders from the other direction and then try to take the market up again. And this is why we see the market continuously doing this. I’m trying to execute my orders, nobody wants to sell, so I’ll go down and find some more buyers and then we’ll all try and get up higher again and then we’ll try and get some more buyers and then we’ll all go higher again. When we’ve got enough buyers in the market we’ll be able to move and then we’re off. So it’s just what we call a range or an accumulation phase in the market where the market is just moving up and down from these stops and pending orders trying to grab enough liquidity to take the market where they want to go.

So you as retail traders get stopped out by this over and over again. Who’s tried range trading? How many times do you get stopped out as a range trader? It’s unbelievable. Doesn’t matter how good that range looks, does it? Yeah. When you place your order to go short, it does that. It comes and takes you out. There’s your M button, yeah?

If you take an entry there to go long, the TP is up there, your stock’s down there, it comes back down, it takes out your stock, and then it moves up there, yeah? And this is basically what the market is doing over and over again. It just frustrates the hell out of 95% of traders, yeah? So we’re gonna look at some examples of how this works in a minute, but I just want to go through the other type of orders first, which is the pending orders on breakouts. So the other common type of order placed is where we get into a trade. So when the market reaches a certain level, we as traders want to get in, and this is the breakout traders. So we see the ranges like this, and we see it pull down and we go, right, I’m going to put my pending order up there, expecting the market to go up.

And then I’m going to put my stock below the most recent low. And the market will move around like this. It will then go up and take my pending order and get me into my long position. And then it will come down and it will take out my stock. And then it will do that. And I’ll be sitting there going, oh, I’m going to get in with double the position there because I’ve got fear of missing out and you do that and then it pulls back down, takes out that stop and then it goes off and then it goes up to your target.

Okay, so the pending orders, there’s only two types of orders placed, it’s a pending order or stop order and both of them are there so that the market can move to the levels to hoover these orders up and then take the market wherever they want. They’re powering up their move, yeah? And they’re using your orders in the market to do this. So this is why we see false breakouts happen. And price reverses the other way from our entry, then takes out our stock back to step one. They know where the stocks are in these ranges, okay? So let’s have a quick look at a chart and we’ll look at how the market moves up and down over and over and over again, right?

So again, I’ve got Eurocad here. I’ve zoomed out quite a bit so we can just see lots of examples. So let’s say for example, we are a mean reversion trader. And we’ve seen this massive move down in the market here. And then we see price start to bounce. And let’s say, for example, there was a support and resistance level there that we’d seen.

So we enter a long position here. Okay, so we get in here, we put our stock down here, our target goes somewhere up there, price moves up, doesn’t hit our TP, comes down, takes out our stock, we lose a trade. Okay, so then we go right, okay, we’ll wait for the next move. So then it starts to move up again. So we get into another position along here, we put our stock down below the low. We put our TP up here. It pushes up, doesn’t quite get to us, comes down, takes out our stock. Okay, so we get fed up with it and go right. I’m gonna go in with twice the lot size this time.

Now it’s definitely moving up. Look at that beautiful market structure. I’m gonna go long there. I need a bit of a bigger TP, stop loss on this one, cause it’s a slightly larger move. Moves up, doesn’t hit my TP, comes down, takes me out. So what do I do? I get short.

Right, this thing’s definitely not going long I’m going to go short. So we get a breakout of these lows I enter in short I put my stock somewhere up here my Tp somewhere down there don’t know where it would be but it has to be a good three to four to one risk reward ratio wouldn’t it. Price moves down consolidates for a bit comes up takes out my Tp. All right okay so this isn’t going short it’s definitely going long. So I enter with a long trade there, I put my stop somewhere down here, and price pulls back, goes my direction, okay. Now look at the size of my entry here, so there’s my stop, let’s say my TP was up here somewhere, but I’m gonna get out here, because I’ve just made back the money I’ve lost on those three trades, thank God.

So I’ve been trading this thing now for probably a month and a break even. Haven’t lost any money, fantastic. You’re a successful trader? No. This is what happens to us over and over again. And it doesn’t matter if you’re a breakout trader and it doesn’t matter if you’re a trend trader, doesn’t matter what type of trader you are. When you put a stop into the market or you put a pending entry order into the market, they are there to be executed and they will be executed because the market moves up and down in such a way to take out those positions constantly. Yeah. So hopefully that explains what I mean by the stops, the pendings, and how the market moves. You can see that when the market makes a low, it pushes up, and it comes and takes that low out. Makes a new low, pushes up, and comes and takes that low out again. Makes a new low, pushes up, come and takes out that load again until it’s got enough power from these orders it’s been sucking up to make its move.

The market got out there. Yeah, because of all these guys buying the institutions, the banks and making this move happen, what do they have to become? Sellers. So it comes back down again and the cycle continues. Yeah so that’s how the market moves right, it’s powered by orders, by the market participants needing to execute orders long and short and they need to find people to take the other side of those positions and because they are so big they can move the market wherever they need to by executing large orders to find that liquidity, find those orders in the market that allow them to power up their moves to move the market where they need to, to either execute their customer’s order or take a profit on a speculative position, okay?

So what do we learn from this? Well, most of us, nothing, because we keep doing it over and over and over again, okay? We carry on placing our stops and our pending orders in the market, knowing that for most of us, 50 to 60% of them will be orders that will lose us money. But yet we keep doing it because everybody says that a trader with a 50% strike rate can make a really good living in Forex.

What they don’t tell you is that a trader with 50% strike rate gets beaten up psychologically every single day and physically can’t hold the trades long enough to make that profit. But that’s another class. What we do learn from looking at this chart is that we have no idea if they will turn at any specific point or they will just blow through it. So we don’t know whether this will be the breakout, this will be the breakout, or this will be the breakout.

In this case, it wasn’t. In this case, it was. So they just blew through that level previously. But the last two times, they turned. These two times here, we thought, brilliant, we’re getting long, because the last two times they’ve done it, they blew straight through it and took everybody out. So what we don’t know is basically whether it’s going to turn or whether it’s just going to climb straight through and take everybody out and be the move that they’ve been building up for the last sort of week, month, however long, okay? So sometimes those pending orders worked, other times they didn’t. Sometimes the stocks got taken out, other times they didn’t.

But what you have to accept is that we know one thing and one thing only. Price will go up and down through time and we can never know when the moves will happen. Timing is not something that we can forecast accurately. So we now know this, we have no control over the market. Okay, we can’t accurately time our entries and the market will move up and down. Yeah, so it sounds really, really obvious and logical, doesn’t it? But those are really the three things we know about the market. Yeah. All we need is a way to take advantage of these three facts. Okay. So what we’re going to do now quickly is have a look at how fundamentals drive the market. So we know who the market participants are. Yeah. We know that the banks, the institutions, anybody with a big enough bank balance to execute a large number of orders has the power to move the market.

To move the market, they need to go and find orders of the opposite direction so that they can hoover them up and execute their own orders, okay? But the markets move long-term on fundamental news, okay? And this fundamental news and the market as a whole is driven by central banks and government’s monetary policy. Okay, so it’s hideously complex, it’s economics, right? Most of us will never fully understand it, but the good news is that we really don’t need to.

You need to have an understanding of fundamentals and you need to understand they exist and understand that there are drivers that will move the market, which are driven by fundamentals. And fundamentals are things like interest rates, GDP, housing figures, monetary policy, bank rates, all that sort of stuff, okay, which is all hideously complex. But the banks and the institutions are at the end of the day what moves the market, because they are executing the orders.

And we can do nothing but ride their waves like a surfer. But every move that the banks or the institutions make is done in line with what their expected long-term goal is for that particular currency, all right? So when the bank wants to make a big move in one direction, okay, it will typically be in line with where they think it’s gonna be going over the next quarter, next year. And that will be based on the monetary policy for the central banks and the governments that run that country, right?

So their job is to execute their customer orders, move price with big positions, take profit, and then reset for the next day. So we’ve established that already. We can predict how they will move because we can see it happening over and over again in the market, but nobody can predict when it will happen. Okay, and this is why most traders fail, they concentrate on timing of the entry and not the trade idea and the expected move. Okay, so you’re trying to get in at a specific point and capture the high, the low, the pullback in the trend, but when we try and time our entry, we lose focus on where we think that is going to go long term. Yeah, price doesn’t move today to our TP.

It may get there over the next week or over the next few days, but we concentrate on trying to get our timing right. And we might even try to time an entry three, four, five times and get it wrong before it actually goes where we expect. Nine times out of 10, we won’t be on it because we’ve been stopped out four times and we’ve given up on that trade, then it goes. Yeah, how many times has that happened to you?

So if you concentrate on the direction, where they are likely going and why they’re going there, the reasons for them going to that location, the timing is much less important. So we’re looking at the bigger picture on where we think they’re going to go and why they’re going to go there. And we’re going to enter our trades in that direction. So the market moves often on news, and this is our when, our timing, all right? So the majority of the time, the market will move up and down in a range, okay? So the market will sit there and it will do this sort of thing, yeah?

So we see it doing that, right? This could be a week, a month, a day, doesn’t matter, but you get the idea. There’s a range and that range is not equal, okay? There’ll be a higher point, another higher point, and then it will come down and it will be a lower point, another lower point, then it’ll come back to the middle, then it’ll go up to the top again and come back. And this range could be jaggedy, they’re never even. Nothing’s ever nice and straightforward in the market.

But they sit in these ranges and it will consolidate or it will slowly trend while it’s waiting for a catalyst to make a big move. So the markets will be sitting there, the banks will be sitting there ready to execute large moves. And we try and trade this chop as I call it, okay? And we’re getting stopped out over and over again. So all these market movements before there’s a major move in the market, we’re trying to trade all that, all right? And what happens is we just get chopped to pieces and stopped out all the time. So what tends to happen is the markets will use news events to make these big dumps of orders. Why?

Because everybody is trying to speculate on the direction around news, aren’t they? How many people have you seen out there that you know in the trading communities that tried news trading, or are still trying news trading? Okay, how was your non-farm payroll? I see that all the time in Telegram. Oh yeah, it was great, I made X number of pips. So you waited all that time to make X number of pips on non-farm payroll, which only happens once a month.

It just does. Okay, but the banks are sitting there knowing that when non-farm payroll comes around, you guys are all gonna be sitting there going, I’m gonna enter 3% of my account short when that does a little spike in that direction. When it gets to the bottom of that spike, I’m gonna buy it with 3% of my account. Okay, they know that there’s a load of liquidity gonna dump into the market as soon as that news events hit, okay?

So we all know about, I mean, you’ve probably seen this one before. This is Forex Factories. And this is the calendar that I use most of the time. There’s lots of news calendars out there. There’s investing.com. A lot of the brokers have got their own news feeds. There’s FinancialJuice. There’s all sorts of stuff. But basically there are fundamental news releases throughout the month.

And the red and the orange ones on Forex Factory, I think on investing.com there, three star or one star or whatever. But basically these news events are fundamental news events that the market will move to dump large orders. And the reason they dump large orders is because the rest of the retail traders and the smaller like commercial traders are trying to jump in at the same time. So they know there’s a lot of orders gonna be executed, a lot of liquidity coming into the market.

So what you find is quite often what will happen is where we have these ranges, where they’re either nice tight ranges or they’re these jaggedy ranges, which go like this. Yeah, what will happen is when a news event comes out, you will get that start of that trend. Yeah, so this was waiting for the news, the news caused that, okay? The news didn’t cause that, the banks dumping orders caused that in line with the direction they’re expecting that currency to go over the next three months.

They just use the news event to make it happen because everybody was trying to trade the news. So this is why news events are so important, why you need to understand them. So you could be sitting in a trade and you’ve been in it for two days and it hasn’t gone anywhere. And all of a sudden, boom, it’ll either hit your TP or it hit your stop literally within an hour. Nine times out of 10, that is caused by news, okay?

And people are like, oh yeah, the news really helped me. No, you were lucky that the news went in your direction. That’s what it was, okay? Sometimes the news will go absolutely mad. You’ll have a non-farm payroll where it will shoot five ADR in one direction. Other times you’ll have a non-farm payroll and it will spike up half an ADR and then come back and be a little bit liquid and jiggle all over the place for a half an hour, and then it won’t go anywhere at all.

Why do you think that is? Because that previous non-farm payroll, they had a load of market orders to execute and they want to enter a load of speculated positions in one direction. The next non-farm payroll, their order books were pretty flat and they didn’t have a lot to do, so it didn’t move. Okay, it’s nothing to do with the news, most of the time. If there is a news event that comes out as really unexpected however, so for example you get your non-farm payroll and the figures are expected to be X and they come out as Y and that Y is five times out from what it should be, Interest rates are a prime example of that, where you will get an interest rate, as you can see here, the official cash rate for the New Zealand dollar, okay, was 0.25, was expected to be 0.5.

It actually came out at 0.25. That would have caused a massive move in the market because it was not as expected. When it comes out as expected, you tend to see the market move in a strong direction of where they expect that currency to go long term. Okay, so if, for example, the market is positioned long on New Zealand because the New Zealand economy is doing well, they’re on top of COVID, they’ve got good exports at the moment, the government’s doing well, the unemployment rates are low, everything’s looking up for New Zealand.

If those rates come out as expected, employment rates are low, everything’s looking up for New Zealand. If those rates come out as expected, i.e. the bank have said, we’re going to be 0.25, we’re going to go to 0.5 and it comes out at 0.5, the market will go, brilliant. As expected, New Zealand’s doing well. And they’ll dump money and New Zealand will shoot in the direction it was meant to go in, which is wrong because everybody’s happy with New Zealand at the moment and it’s all doing well economically. If it comes out differently, i.e. the banks have gone, actually, we’re not doing as well as we thought because of this. So we’re gonna do something different, then the market will go into free fall in the opposite direction a lot of the time.

But we never know what it’s gonna be. And we can’t control that. Remember, we don’t know where the market’s gonna go. We don’t know when it’s gonna go. We can just look historically and see, right, if that happens, what’s the likelihood of happening next? So for example, if the New Zealand dollar, we’re expecting it to go up and all of a sudden it tanked like that, of happening next. So for example, if the New Zealand dollar, we’re expecting it to go up and all of a sudden it tanked like that, what do you think is going to happen after this move? That. Why? Because everybody that sold there is now what? Buyer. So it doesn’t matter what the news is. Yeah. What we’re doing is we’re trading based on historical information that we can see on the charts. And we know that after a big move like this, that happens because everybody that did that and made that move happen has got to do that.

Because if they don’t, they can’t get out of their positions. Okay, so it doesn’t matter if the news is as expected. It doesn’t matter if the news is massively different. We don’t care. What we care is what happens when that news event happens. It’s either gonna hit or take profit, or it’s not. If it doesn’t, we’ll deal with it. Okay, but you need to know why the market is moving and when. So when you see, and I see this in telegram groups all the time, people go, wow, what’s happened to the US dollar?

Why has it suddenly gone crazy? Because non-farm payroll has just been released. Oh, if you don’t know what that is, you shouldn’t be trading, because it drives the market, not necessarily non-farm payroll, but news events drive the market. They drive orders being dumped into the market, okay? So we don’t know what it will do, we just know that the big market players are gonna use it to move the market, so we have to be aware of it.

So this becomes our timing, our when, okay? So our job as position traders is to take a position in the market, okay? And we are gonna wait for a catalyst to move the market in our direction. When it does, we will exit that position. We will enter that position based on where we think the market’s gonna go because of fundamentals, trend, and how extended the market is on either a buy or a sell move.

Okay, and these are strategies that we’re gonna look at in more detail. So let’s have a look at what we have learned so far. Okay, we know that price moves a certain distance on average every day. We know it likes to trade between support and resistance areas. We know who drives the market and we know why it moves and we know it moves up and down through time and that we have no control over that. We know strong buying or selling runs will often have the opposite move at some point very soon and we know that stops and pending orders get triggered as the market moves up and down. Okay, so how do we take advantage of everything that we know so far?

Would everybody agree that we know that? Yeah. Okay, so we simply ride the market waves up, down, up, down, up, down, you get the point. Okay, so we load up positions at roughly the areas historically price tends to reverse at and we’re just loading up positions, waiting for the move, which is quite often caused by the news. I call it putting my pies in the oven. So I’m gonna enter positions in a direction based on a theory I have or historical data that tells me something should be happening.

And I’m gonna wait. I’m gonna wait for them to go in that direction because I know they have to at some point, because I know historically they always have done, okay? And we can see these waves happening all the time. And there are indicators we can use to show us when the waves are likely to start and when the waves are likely to stop. It’s really, really simple. We buy low and we sell high.

Yeah, have you heard that before anywhere? Every film you’ll ever see about trading stocks or anything like that, buy low, sell high. Yeah, it’s really that simple. We just can’t time the entry. We know that the move is coming. Okay, so we know we need to buy low and sell high. We just need to know roughly when that low is forming or that high is forming, okay? We don’t need to be pinpoint accurate with when we get into our position.

So why is it people who are learning to trade find this simple concept so hard to execute? Well it’s usually because you’re stopping out constantly by trying to time the entry. You’re not concentrating on the actual move you are expecting to happen, you’re concentrating on entry into the market. So let’s look at a simple RSI, and we’ll see how the waves in the market happen. And then we’ll look at how we can take advantage of these moves. So you get in somewhere down here, and you get out somewhere up there.

We’ve looked at this chart already, okay? So we know that the RSI, when it gets up to here, when it gets high, tends to come back down the other way at some point. We know that because it got down here, at some point it was likely to go up there. We know that because it got up to there, at some point it’s likely to come down there. But we can’t time, we just know. And the RSI, the relative strength index is showing us when there has been a fast, hard move in the market.

And what do you think a fast, hard move in the market is? Banks executing large positions. So we know that when the RSI, for example, gets extended, that the banks or somebody has executed a large position. And because they have bought, they will at some point soon need to sell. Okay, so all this is doing is it’s telling this, that there’s a condition in the market at the moment. Yeah. If you were to enter a position here, for example, with a stop loss under the load, what would happen to you?

You got stopped out. Then what happened? It went in your direction. We knew that. Yeah, we knew that roughly somewhere around here that was gonna happen, but we timed it wrong. So we lost our money. Yeah. Let’s look at another example. Okay, so price pushes down.

Yeah, the RSI gets low. We know that there’s gonna be a pullback at some point. Gets down here again, pullback, because there was a strong move to the downside. Gets down to here and it gets embedded as we call it, where prices push down really, really, really, really hard. The longer this gets embedded down here, the bigger, the profit take move tends to be. Why? Because there’s more and more and more and more people selling, the more people that have sold, the more people have to buy.

So we’re waiting on those positions. So as a position trader, I got in here, okay? And then I got in here because that one didn’t work. The likelihood was that one would work. Could have gone in again there, but I missed that one. But took profit on both of those. Stops got taken out, stops got taken out. If I’d have got in on this move here, look at that lovely hammer there. If I’d have got in on a move, a break above that hammer, what would have happened?

Stopped out, okay? But if you don’t use a stop, you won’t get stopped out. Okay, so using hard stops, you would have lost both of those trades. Position traders won them, okay? But position traders are not gonna get in with one or 2% risk on an individual position. We’re gonna get in because we know that there is a market condition that is likely to reverse scene.

Yeah, we know what’s coming because we see it play out over and over again. We don’t enter a stop in the market so that the banks and institutions can use those to grab our money and then power up their move to take it in another direction, all right? So when you use a stop loss, it’s important you get the entry as accurate as possible. Obviously, when you’re entering with a stop, you’ve got to be laser targeted.

You’ve got to be pinpoint accurate with that entry. Because if you’re not, you’re going to lose money, okay? As a position trader, what is more important is how you manage the position after you’ve taken that initial entry. Okay, so going back to my slide, I got in here, okay, and I had a backup plan when I got in. And my backup plan was, if this moves an ADR against me, while it’s already extended all the way down here, I’m gonna take another position because the likelihood and the chances and the probability of that buying run coming because of this selling run is higher.

When I took that position there, my plan would have been to take another position if it pushed against me. So what was important to me was when I took that trade, not whether that trade is right or is wrong, what was important to me is, how am I gonna manage this position I have of being long Aussie short CAD? How am I gonna manage this position after I hit that button?

So that’s the big difference between position trading and stop loss trading. The entry is way less important than how you manage your positions and how you manage your portfolio. Okay, and we’re gonna look at risk as a portfolio drawdown of our portfolio and exposure on our portfolio. We’re not going to concentrate on individual trades. So let’s look at loads of examples of how the market moves in waves. Okay, we’ll see how the banks move price hard and then do one of two things. They either put in a profit take move, which is a pullback, or they reverse the move completely, which is obviously a reversal. Okay, now this is the last part of this part of the course. Okay, so we’re going to go over some examples now, just looking at market movement. That’s all we’re trying to concentrate on today is seeing how the market moves up and down so that we can take So let me open a new chart.

Okay, don’t worry too much about the indicators at the moment. We’re going to have a session on indicators in another part of the course. But what we’re interested in here is market movement. Okay. And we’re going to look at examples of what we’ve basically been talking about. So you can see here we had a bit of a sideways move okay and people here would have been going short, long, short, long, short, long, short, long trying to figure out which way the market’s going and then eventually the market pushed up really, really, really, really, really, really hard okay. So as the market pushed up hard everybody started to buy and as everybody started to buy they had to exit their positions and become sellers. So the RSI, for example, got massively extended, telling us that there’s too many buyers in the market and all these buyers will need to be selling soon.

And then we’re going to a very, very, very long consolidatory period where we’re sitting in a range for weeks and weeks and weeks on end. But every time the RSI gets down here, it’s telling us that there’s been a lot of selling pressure, therefore we’re probably expecting some buying pressure. Lot of buying pressure, so we’re expecting some selling pressure. Lot of selling pressure, expecting some buying pressure. Buying pressure, selling pressure. And so on and so forth.

So this is basically how the market moves. Every time we get a big strong push by buyers we get a strong sell because it’s all all this move is is these people here taking profits on their positions. Big strong push up started to take profit. Okay. Strong three-day push followed by pullback. Where did it pull back to? Supply and demand, support and resistance, whatever you want to call it. It’s an area that price struggled to break out of, managed to break out of, pulled back into, found support and then pushed away.

Yeah. Support and resistance is incredibly important. We’re going to cover support and resistance is incredibly important. We’re going to cover support and resistance in a little bit more detail a little bit later. But as I said, there’s video on YouTube about support and resistance if you want to learn how to draw it properly. Look at the US dollar Swiss right now. What sort of move do you think is probably going to be coming over the next three or four hours? Yeah.

Yeah, likelihood is because there’s been so many sellers, all these sellers down here are probably gonna wanna take a bit of profit on their move. Now they’re either gonna do one of two things. They’re either going to take a profit, a partial profit, and then continue the move to the downside, or they’re gonna take all profit and then either pull back and push off or whatever they want to do. Doesn’t matter, does it?

All we know is that there’s been a lot of sellers in the market. So what do we think as position traders might happen next? Probably gonna be some buying, isn’t there? Yeah. So you can do this on any timeframe. And again, we’ll look at indicators at a later stage, but this is the four hour timeframe. Lots of sellers come into the market, they turn into buyers. Lots of buyers come into the market, they turn into sellers.

Buyers, sellers, buyers, sellers, buyers, sellers, buyers, sellers. We call it consolidation. The banks are just waiting to grab all the pending orders and the stop orders for this period of days, weeks, months, or whatever it is so they can start their move. So you see it playing out over and over and over again. Too many buyers need to become sellers. Too many buyers need to become sellers. Too many buyers need to become sellers. Okay. It’s not rocket science. Remember what I said? Buy low, sell high. It really is that simple. But the problem is you’re concentrating on timing your entries. You’re trying to get in here, here, here, here, here. Stop, stop, stop, stop, stop. You’ve lost five positions. If this is one strategy, and you’ve lost five positions in a row, what do you think you’re gonna do here?

System hop onto the next strategy, because this one doesn’t work. But you were right about the direction, okay? You just didn’t give your trade time to play out. If you’d have taken a position on this, rather than taking a single trade, you’d have made a lot of money, okay? So I can show you endless examples of this, but I’m not going to go into in detail because we’re going to look at more as we go through the course. But as I say, it works on all timeframes. After a big selling move, there’s a buying move, big selling move, big buying move, big buying move, big selling move, and so on and so forth. Okay, it just plays out over and over and over again.

Okay, so let me just switch back over to the slides. That is end of part one. So next we’re gonna cover the importance of multi-timeframe analysis. And this is what we’re gonna cover starting tomorrow. There’s a lot more to cover tomorrow, but we’re gonna start off with multi-timeframe analysis. So I want to end on questions. Just basically about what we’ve covered. Has anybody got any questions specific to what we’ve covered so far?

Or any other burning questions they’ve got that might have cropped up during this part of the course? Which timeframe for the RSI is the best? There isn’t a timeframe for the RSI that’s the best. The RSI measures the relative strength of the move on that time frame. So it works on all time frames. But like any indicator, the relative strength index is better on higher time frames because it takes more strength to make that move happen. So the moves tend to be bigger, basically. But there is no best. Your entries, as a trader, your timeframes that you trade will not be based on what is best and what is worst.

Your timeframes as a trader will be based on when you can trade. So if you work nine to five, you cannot trade the M5 timeframe, because you’re at work. You can trade the H4 timeframe, because you’ve only got to check in on that four times a day, because you’re sleeping for the rest of it. Now, if you sit in front of a computer all day long and you’re self-employed at home, and you can have another monitor up with charts and alert dashboards on all the time, trade any timeframe you like.

But that is what’s gonna designate what timeframe to trade rather than any particular timeframe that’s better. Any other questions on what we covered? And we will go into the RSI in detail. That’s coming up in the indicators section. We’re going to have a good detailed look at the RSI. But the RSI is just one indicator. It’s the one that I use. You could use any indicator to measure market condition.

There’s lots, so we’ll go into what market condition indicators are, I’m jumping ahead of myself. So we will be covering that in detail. I think that’s in part three. OK, any more questions? No? Did it all sink in that well? That’s brilliant. I’m shocked. Either that or you’re all asleep.

Yeah. Cool, okay. Today was very much a foundation of market movement. As I say, you have to understand how the market moves to be able to trade the market. The most important thing to take away from today, if you’re going to take anything away, is that buyers have to become sellers. That is the key thing that you need to understand. But it will all become clear. So, you know, today is very much a foundation and we’re gonna build on that as we go.

But as I say, tomorrow we will be covering multi-timeframe analysis to start off with. And then we’re gonna go into, yeah, lots of other bits and pieces, but it will all start to come together, and you will understand basically from what indicators I use why I’m using them. Andreas asks, which time? Do you mean which time? What time tomorrow?

Same time tomorrow, 1 o’clock. Is that what you mean? Thank you. Today I’ve learned more than one year’s trading. Brilliant. Well, that’s good because I’ve done 13 years of it and I’m only giving you the best bits. That’s the whole of point of this. Yes, so it’s one o’clock tomorrow. Okay. Same time, one o’clock UK. Yeah. So basically what I’ve done a lot of indicator testing, and I’ve dumped everything. So if watching this course, I can cut five years off of your learning curve because you won’t have to go and try all that stuff, and this just works, brilliant. Job done. I’ve been through this. This is why I’m doing this course and why I’m putting it out there, because it’s hard. It’s a very, very, very hard job and it takes a long time to get it right. And anything you can do to cut down the time it takes to crack it. And as I say, if this isn’t for you, that’s fine as well.

At least you will take something away from this that you will hopefully use, as I have done to put in a bank and go, I know why that’s happened because he said that. And it’s just a learning curve. So the more you can learn, the better you’ll be. It’s like I said, that brain surgeon, brain surgeons don’t just go out after they’ve left their course and go, right, I’m going to cut this bloke’s head open and operate on his brain. It takes years and years of training and practice to become good at something, trading is no different. You just need to know which shortcuts you can take and which shortcuts you can’t. And I’m just going to show you the shortcuts I don’t think can be left out. So the invaluable bits that you really have to understand to make this work for you.