Video Transcript:
Let’s talk about the EUR/USD level that got hit this morning, right at the beginning of New York. This PC right here—the pink line—is Dale’s predetermined level at 1.1588. Now, if you’re trading the futures contract, which is right below here, obviously you’ll have a slightly different level because the futures contract and the spot contract are a little different. I recommend trading these on the futures contract because you don’t have to deal with spreads, and you’re going to get filled just like here. So, this would be the futures contract.
Basically, what we’re looking for is price to come into these levels—around key areas such as the beginning of New York or the beginning of London. As you can see, when we got that first touch here, we had a couple of close ones. Sometimes Dale will not go back to the well, but from what I see, these levels are good until they fail. To me, this is a manipulation taking out internal liquidity at a key level. This is exactly our model: accumulation → distribution → accumulation → manipulation into the key level → and distribution out.
If we can combine what we do and use these levels as key levels, the best part is that you don’t have to follow these markets like we follow the NQ. Dale is already putting out the levels. All you need to do is set alerts. When price gets to that level, go to the chart and look for our model—accumulation, manipulation, and distribution out with an inverse fair value gap. That’s it. These will give you extra trades per day.
If you use our model around his levels, Dale usually says his average win percentage on the first touch with a 1:1 risk-to-reward is about 68%. We can do better. If you apply our model to these levels, you should get a much better than 1:1. We should be at least at 2:1 at a bare minimum, if not 3:1 or 4:1, and your win percentage should be much higher—above 75%, maybe over 80%.
So, in an example like this, I’m going to show you on the spot chart because I have it marked; I didn’t have it marked on the futures. When we came into that level this morning—and remember, we want to see SMT—SMT confirms everything. When New York opened, we didn’t have any SMT with GBP/USD. Then we moved higher, moved higher, and all of a sudden, GBP/USD dropped at about 8:20, but EUR/USD did not. That created the SMT.
What validates the SMT? It’s now validated by an inverse fair value gap on a short time frame. I’m picking the two-minute chart because there wasn’t anything great—there was an okay one on the five-minute. We could have used the five-minute; it’s the same trade, just a little cleaner. This inverse fair value gap, once we created SMT with momentum, is where we enter—right on that close. Our stop is right below that candle because it’s a thin fair value gap.
We’re targeting at least the London highs right here. That alone is a 3.39 risk-to-reward trade. You also have secondary targets here: Asia highs and overnight highs, which would have produced anywhere from almost a 5:1 risk-to-reward trade.
So here, we’re taking Dale’s levels—levels that he allows beginner traders to start trading with on a 1:1 basis—trading these levels on the touch with about a 68% win ratio. But if we apply our model to these levels, you’ll get a higher win percentage and a better R.
Hey everyone, it’s Dale here. I hope you enjoyed the video. If you’d like to trade alongside me and our team of prop firm-funded traders every day, then click the link below the video and hop aboard. We’re looking forward to trading with you.
Comments
Post a Comment