all right folks welcome back this is our 21st episode of the 2022 free ict youtube mentorship little tongue twister there so we're looking at the hourly chart on the dollar index why are we here why are we looking at this well i'm looking at this because i want to show you the relationships between a risk on and risk off market if you've been following along in the comment section and if you haven't paid attention or even noticed all my videos in this mentorship the comment section is open okay so you're welcome to make your appreciation known you're welcome to you know prompt me with specific questions that you want to see me kind of like touch on without making uh you know too much of a long-winded request for it i can kind of get a feel for what you're looking for and i'll work those ideas into the lessons that we can hopefully get everybody's understanding on the same page i may not respond to your post i mean not you know directly answering sometimes if it's short and easy i'll do that but if it's a question i see a lot of across the other videos as well i use the videos to kind of like answer it so it's important to take notes because usually you'll find that the questions you have are answered in the progression through this mentorship if you're coming here later than 2022 all right so one of the questions i got and i get this a lot for people that have not been trained by me the idea of using the dollar index is it useful like when i look at the forex market like if the dollar is going higher obviously that's going to put pressure on the foreign currencies and it'll be less likely for them to have sustained rallies they're more likely to have sustained declines so dollar up foreign currency down dollar down foreign currency up the reason why that's occurring is it's a risk on risk off scenario dollar if it is going up as we have here this is a risk off scenario okay risk off scenario implies that generally every other market or asset class will start to decline and this is treated as like a flight to quality okay or a safe haven so money pours into the dollar and it pours out of risk assets that would be like foreign currency that's why i've been telling you to look at the euro dollar to go lower and make a new low on this daily chart and today it did it and now it's random then also this applies as well to the stock market and index market so obviously i'm kind of like pushing the index futures in this mentorship on youtube but it's applicable obviously everything i'm teaching here is universal so it works in everything now i'm not co-signing crypto as a reminder i do not trade cryptocurrency i have absolutely zero experience trading cryptocurrency outside of a demo account or a paper trading account i've never done anything with it i've never opened up a crypto account i have no interest in ever going into that asset class and there it is okay i see a lot of you asking that in the comment section so i'm going to try to throw this out there every now and then as a reminder because i don't do anything with that asset class a lot of students that trade them and they swear by my concepts work in there but i personally don't do it okay so there's that i am a forex and futures trader so that way you guys can know what my specialty is and i want to show you this chart here and remind you of what i mentioned in the previous week in our meetings together in episodes i said that we would likely see the dollar index drop down if i was making the market for the dollar i would see it go down to around 99. 92 can go back and listen to the videos and obviously you'll see it it's there and hear it then i said i would run the relative equal highs and start to run it higher i gave you the objectives of relative equal highs and mentioned like 102 103 and you know even my private mentorship group knows there's objectives as well and we have it here okay so i'll leave it up to you whether or not you find this inspiring or not knowing that this was likely to occur for a london setup and then rally higher i want you to look at the relationship between this price move here and go back into commentary where i was referring to that daily bearish order block on the index feature okay so i was talking about the the low of the daily order block the open of the order block and the mean threshold halfway and then the high of the order block being the less likely level be traded to and i'll talk about that when we get into the e-mini s p portion of this episode but for now let's take a look at what the relationship looks like with the dollar versus the e-mini s p so this is the june contract for 2022 of the e-mini s p futures market and you can see as the dollar creates its important low that i called publicly you guys know it i've said it i explained it to you in detail as this dollar was going higher what was going on in the e-mini s p see that inverted relationship there that's why i could go back and listen to the recording when i was talking about that bearish order block on the e-mini s p i said that we're going into may and it's usually a seasonal decline and i'm going to be looking for signatures to warrant downward pressure in this particular asset class and reaching for those relatively equal lows on the daily chart hello look at your chart folks this is this is what it's like to be mentored this is what it's like to know what's likely to occur with tools that make sense there's nothing ambiguous here there's nothing you know splattered across the chart it's just simple sound logic okay i'm hopefully inspiring you to simplify which many on the outside looking at what i do will make snipe remarks like oh he over complicates things and i'm not complicating anything these are very simple ideas and it helps you build the idea of bias it gives you intermarket relationships and intermarket analysis to give you the the trust okay why did i feel you know confident to publicly say that 99. 92 level well i explained that why did i think it was going to rally from there because i'm bullish on dollar why did i hint that we're going to be going lower into the e-mini s p e relative equal lows and as we enter into may that's a seasonal tendency so all those factors came together and my experience of almost 30 years was used to hint at something for you to study and if i'm right or if i'm wrong you get to be a judge okay you get to see and weigh me in the balances i've laid it out there in your hands you see right now in this chart what i was forecasting the reasons why i was doing it why i said what i said and why it looks like it does in your chart today all right so here's that daily chart and here's that bearish order block i was referring to and the high i said is the level we don't look for it to be traded to and you can see we didn't even get to it there okay so we route up into the order block and then we had the weakness that was expected as we go into that may month and we're reaching into these relative equal lows that's the next draw on liquidity but for now again just keep your study inside this order block that's taught in this youtube channel okay so while it's not a main factor in the model i'm teaching in the mentorship for youtube here i leaned on that as a basis for my analysis why i felt this was likely to go lower that's the order block that's the one that makes the likelihood of the market turning in this area and then going lower and attacking the south side below here below the relative equal lows here is next and then this low here so ultimately we're looking for a run below here for the cell side now it might want to go down below here and give a little bit of a retracement if it leaves this portion open that might want to rally from going under here up there i don't think it would do that personally but it could happen but it's likely to you draw into that old low here now how we trade once we get there that'll be interesting because i don't know if it's going to accelerate violently to the downside or if we're going to have a sharp retracement higher i don't know that okay i don't care to know that right now i'm just looking for and submitting to the idea that we're going to keep drawing down on the daily chart each daily candle should be expanding lower and reaching into this area okay that's what i'm expecting that's my ideal scenario now if you look at the daily range here today we had a little bit of movement above the previous day so we rallied above monday's high and then failed and accelerated to the downside fell short of just running below these relative equal lows but i still believe that's where we're likely to go a little bit of consolidation in here dropped and we had a nice rally in here now admittedly listen closely folks because this is one of those times where i didn't get it right and i have no problem telling you i was expecting this to rally just a little bit higher and maybe flirt with that 4320 level i thought that we could get one more spike up into that and then i was expecting to roll over and go lower that did not happen okay so let's go into the lower time frame 15 minute time frame here is the midnight hour new york time and the opening price there notice we only had one two little moves above that and that's a really anemic movement for what i was expecting a little bit more pronounced rally higher i wanted to see a little bit of judith swing about 20 handles 15 handles to that effect like that and then break down and create something like this okay but we didn't get it so some of you may be asking and i believe it was michelle in the comment section mentioned that uh it didn't appear that power three was in effect today it actually was but sometimes it's really really small little movements like this and it may not be useful to you but what happens is when you enter the london session which we do here at three o'clock in the morning it breaks down relative to new york local time okay so three a.
m new york local time there's a lot of folks in the comments section that are referring to and confused about daylight savings time and such all of that is resolved if you simply just listen to the instructions i gave every single time i mentioned the time aspect if you use this little area down here on trading view and toggle it to new york and all you do is by clicking it a window will pop up scroll to where it says new york you highlight that one click it and then you're set you don't have to worry about it don't worry about daylight savings time don't worry about you know anything as long as you are aware of what local time is in new york set a clock on your computer that always tracks the local time in new york 24 7 365 days a year if you do that you'll never have any confusion about what you should be doing relative to time okay so if you have a small little movement like this it can throw you off if you're expecting like i was i wanted to see a little bit higher rally so in the morning i was looking for maybe a little poke above here didn't happen we broke down retraced back in bearish order block and the imbalance and spent a little bit of time here and then rolled over right before the 9 30 opening okay and i'm going to talk a little bit about the 8 30 and the 9 30 what times you know are useful what are they beneficial to your analysis and what you should be concerned about okay because there's a lot of questions about that but ultimately we moved into the lunch hour had a little bit of retracement here broke down once more and then aggressive selling really aggressive selling into the pm session into the close of the day if you look at the opening price at midnight local time new i'm sorry new york midnight local time that's what this here is that's the opening price this price is useful for trading the london session that's two o'clock and five o'clock in the morning new york local time and it helps me frame the power 3 for the daily range if i'm bearish i'm looking for something to rally above that opening price in london that's my ideal scenario i'm looking for that personally as you can see we really didn't get much of that today it was extremely heavy and just wilted and went lower sometimes that's going to happen folks and in this instance i missed a setup i don't get in what i'm thinking i'm expecting to see so i'm human you're human you're going to look at something in the chart and you're going to have something that is your favorite model uh whatever pattern is you're looking for and it may not even be my stuff you know say you're just here casually watching you're probably not in your head saying yeah i've had lots of instances where i was looking for my particular setup and it didn't materialize and it went the other way without me you're going to miss moves you're going to misinterpret it you're going to read it wrong that's going to happen that's why you have to use a stop loss that's why you have to be controlled about how many times you go into the marketplace and you also have to have some measure of flexibility and that comes with experience you're not going to always be able to see that this isn't going to go up for you initially it's just going to just wilt and go the other direction so when we get into the 8 30 hour and i have the lines really light here because i want to be able to show where the highs and the lows were on the respective candles so this is the 8 30 and this is the 12 8 am midnight candle in new york so this is new york and this is midnight new york so there's a distinction here the beginning of the day this is where i look for the daily range power 3 setup and or the ideal scenario from bear so i want to see something rally above that opening price if i'm bullish i want to see it decline below that opening price okay that's pretty much the basis for the opening price at midnight it may not be a factor for you like it is here it's not much of a use you know for anything except for well here it opened and it just basically went lower from there at 8 30 the same thing i look for those types of scenarios now i'm looking for weaker prices i'm looking for it to trade lower and does it rally above the 830 opening price it never does it's too heavy it just wilts okay keeps going lower now the opening price at 8 30 i use that for again power 3 for the new york session the same thought process i'm using for the opening price at midnight in new york time that opening price fund bears i want to see a move above that's what i dub a judas swing a false rally or a suspect rally i usually like to fade those types of moves as it goes up i sell right into it it's scary for someone who doesn't understand what you're looking at but if you know what you're looking for and it takes a lot of experience and learning and back testing and seeing things you'll be able to do those types of things over time but that same element of trying to look for a short above that opening price in new york when i'm bearish i would expect the same thing to happen for the new york session a rally above that opening price at 8 30 and then decline so i'm looking for something to rally above that and fade it but it isn't doing it today so now look what's occurring here this is really important that you understand this part of it you know that i've been bearish i've made it public knowledge here did we rally above the opening price at midnight no did we rally above the opening price at 8 30 no and we're bearish what does that indicate to you obviously with the benefit of hindsight it's extremely bearish it can't even rally to a short-term premium above the opening price at key levels and time so we have extremely heavy bearish market so it's not going to give us these stunning little short-term rallies that we can feed it's just going to stay heavy and either you get in where you can find small little pockets of imbalance or you miss the move entirely now as it happens today my wife went on a trip i had to take her to the airport i was only able to capture two thousand dollars worth of movement in the s p e-mini that's the only thing i could capture when i got back i didn't participate in the afternoon and looking at it now i missed a really really huge opportunity there was no trading whatsoever in the afternoon my money was made short on e-mini s p in the morning session and that's all i had for today if i would have just held on to what i had in the morning you know i could have done around twelve thousand dollars today alone but i didn't hold on to it i had other things to take care of and that's that's the reality of things you know real life creeps in it's going to happen but for those of you that are trying to learn these concepts these types of movements are going to be very frustrating in the early stages of your development because you're going to feel like they're changing something they're aware of this it's this stuff goes on a lot it happens in the futures markets like commodities like corn soybeans gold oil um stocks sometimes the markets are just simply too heavy and they're not going to rally for you okay to short into it doesn't mean that they've changed anything it doesn't mean that the concepts don't work it just means that this is a market that is extremely bearish and when it's extremely bearish you have to trade it differently and i'll show you what i mean by that here and i'm not trying to inspire much outside of the mentorship but i know some of you have asked this in the comment section plus it helps my own personal group to understand this as well so it'll be a little bit of a refresher for them all right so here's the london open setup this was the move that set up the only real sound entry in my opinion that took place today here this displacement fair value gap rallies up bear shoulder block fair value gap runs into it and then you hold it because at the micro structure shift below the short term low the imbalance we went back up in this inbounds here remember when i taught you about this this one here can be traded two on a spike it can get up in there but your entry is on the lower fair value gap do you see the logic working here you are going to use a stop that's going to allow for the market trading up into this one so you may not like that much risk you may not be able to take this trade that's all part of this game but you can trade a micro or maybe you could i shouldn't say that you can i don't know what all of your your risk parameters are what you can work with in terms of margin but while you're learning in paper trading obviously you you can use anything because it's all hypothetical money and you're learning the skill set but the rules are still sticking to what i gave you in terms of the logic if you have two fair value gaps you're using this as the entry and you're using this as the risk don't always assume that you can get up here and get the best entry because it never went there see that so it's things like this this is what i refer to as a signature in price action these are algorithmic things that repeat but you have to have the discernment and experience and know when it's likely to occur when it isn't likely to occur so anyway let's talk a little bit about the 8 30 time period and 9 30. all right so here's 8 30. i've got the inbounds here after 8 30 now normally with the model i'm teaching you to look for something to the left prior to 8 30.
some kind of short term high we want to see it rally up and using the opening price at 8 30 which is here we want to see it rally above that run some stops then break down and create this type of scenario where it has displacement and a imbalance it rallies back up into the imbalance and sells off the model doesn't exist in today's price action on the five-minute chart it doesn't give it to you there okay so i'm going to give you coaching if you will to kind of like show you what was in price and some of the things i was looking at to help get in sync with the move but i didn't ride the whole thing out okay and believe me i'm looking at this today wishing i just would have had at least one of the two contracts i had on one still and just let it run and i could have done you know about eight grand or so but i didn't do it okay i was leaving i was taking my wife to the airport and it's just better if you're not going to be in front of the charts and anything can happen you have to get delayed out there phone doesn't connect with the you know the broker it's just better just to be away if you're not going to be paying attention to the marketplace just simply completely close the entire position also i'll throw this in here too uh shortly before i started doing the recording here i saw a question do i ever hold overnight in these current conditions i stopped holding overnight like 24 hours years ago we had a lot of things going on in the world that changed my trust just like i used to hold things over the weekend and expect continuation going into the opening on sunday and monday i no longer hold over the weekend so i am 100 in a session or a day and out before the close like i'm not holding 24 hours i'm not holding 12 hours you know i'm not doing those types of positions typically my trade is anywhere between 90 minutes to two hours maximum that's about the the length of time that i'm holding and i'm i'm looking to take mine and get out and then reassess things because there's just too much risk right now in the marketplace all asset classes and things are now starting to get a little wild and it could get a little bit more wilder okay but the five-minute chart has the imbalance in here we saw that run and the model i want to see it run above the opening price at 8 30. the opening price at 8 30 is the new york sessions opening price now don't get confused with the new york midnight candles opening price because the new york association in the name new york session is the 8 30 to 11 time period new york local time so i'm looking for this framework to offer power 3 which is a fractal element of accumulation manipulation and distribution that's what power three the three things that is empowering you is understanding those three elements accumulation what's accumulating short positions okay why because it's bearish so smart money would accumulate short positions then anticipate manipulation above the opening price they would assume more short positions there then it starts to go the other direction and they distribute their short positions at some important low that's that we're able to forecast then obviously it's relative to those daily equal lows and old daily lows and projections with the fib all those ideas come to mind in concert with in agreement as well with time of day okay so we're looking at a movement down into around the lunch hour beginning at noon okay creates the important low there we have a retracement during the lunch hour one more time it punches above the high here then it breaks down consolidate start street one two three and then you can expect continuation going into the afternoon session we're not gonna talk about the afternoon session because honestly i wasn't participating in it and it is what it is i'm familiar with this morning because i had some horses in the race today okay so we'll start getting a little bit more detail here here we have the four-minute chart the imbalance here this is one again that is not rallying above the opening price at 8 30. now it's showing 8.
28 but that's because i'm showing a four minute chart so don't let that confuse you but the opening price again never got traded above at the 830 candle so whatever that opening price is at 8 30 you extend that out in time and you want to see that rally above now when you have this expectation the other aspect of time is the 9 30 opening that's when the equity market or stocks themselves start trading their new york session so what happens at 9 30 what am i expecting at 9 30 well no number one 9 30 is just when the opening occurs and there's initial volatility now it can be whip saw where it can go up and down real short term and go both directions in a small range sometimes it could be a really large range and clear both sides of the buying cell and then whatever the real move is going to be for the day we wait for that to unfold today we can see at 9 30 it just starts to run lower it doesn't give us a rally at all so it just starts to speed up what's already in motion from three o'clock in the morning during the london open session so at 9 30 all it does is just start to accelerate down okay and the same ideas being shown on a three-minute chart you can see here that a little imbalance gets a little bit more refined trades up into it rather handsomely breaks down and here's another everybody got with a bearish order block now this is one in here where it's useful because you have a little bit more insight as to what it's doing it's too heavy it's not likely to rally there's no reason to look to go long start looking for reasons to get short and anytime you get an imbalance and we're above those relative equal lows on the daily chart because it's going to draw down into that that's the that's the heaviness objective okay why the prices keep going lower lower lower lower is because they're gravitating towards those relative equal lows on the daily chart okay so go back to the chart where i mentioned in this video and showed the daily chart i had that little blue line that's where price is being drawn to okay the algorithm is marching every minute every hour every day to that level how long does it take to get there i don't know that but i mentioned in my group that i didn't want to see it happen like we're seeing it right now because it's it's too fast and it doesn't give a lot of opportunities to get in with it and ride it so you either have to have entries like this which unfortunately isn't scalable with the model i've shared publicly but i do have obviously opportunities to go over it like this and show you that how you can still use the idea of the fair value you got to get in with it but you're going to have to leave out the element of a rally above the opening price at 8 30 and 9 30 just creates a lot of volatility okay the initial surge in the new york session as the stocks begin to trade basically so as a recap here before i go into the next slide midnight new york time that opening price i used that to trade the london open session that's two o'clock to five o'clock in the morning and also to help frame the idea like say i sleep through london which is ninety percent of the time what i do today like i don't do a lot of london session trading and because of that when i wake up and i'm looking at the market around seven o'clock in the morning or so i'm looking at what has happened overnight and did we create a scenario that i would be looking to trade if i was awake during london if it happens then i know that i'm really built in with an advantage on the daily bias because if i'm bearish and it creates a rally above the opening price midnight time in new york and it creates that rally that little judas swing that explained many times already and it starts to decline and i'm below that around seven o'clock in the morning i know that i'm likely to create another little short term rally but it would be above ideally above the opening price at 8 30. but it may not do that and price just remained heavy below both opening prices at midnight new york local time and 8 30 new york local time so everything was extremely bearish and it was just so heavy it could not mount any meaningful rallies many times in my early development i got crushed on days like this where it felt like okay it's too too low now it can't just keep going lower so i'm going to try to buy it now because you know indicators told me they were oversold 1992 1993 1994 i blew account after account after account doing that and it's frustrating now obviously with three decades of experience behind me i know what it's trying to do and where it's trying to get to and it's getting there in a really fast rate of speed now obviously you can get there a lot faster than that but i don't i don't want to do that because it gives no real opportunity for me to engage and participate in and it doesn't give you as the student to engage also with your demo or paper trading account to practice but as real life sometimes is it's unfair okay it doesn't give us what we want sometimes our expectations and our wants are denied and in today's climate that is not popular that's why this market and trading these markets is very very difficult especially for like the millennials okay that ideal perfect always come exactly as i expected sometimes is denied and either you accept that and navigate the markets within perfection and without the ideal scenario for your model or you're comfortable with just letting go and not doing anything and being accepting when it comes to big moves and you can't participate in it there's lots of moves folks over the last 30 years that i missed that were huge big huge moves for instance bitcoin i called that thing i called that thing at 7 500 to 20 000. and then right before 20 000 i said it wasn't going to 20 000.
it was 19 700. and i said it's going to go to 6 000. and everybody laughed and went down and i said i was going to go down 3 000 but it went down to like 32 and then i think a couple times i i had it wrong publicly and then i said that we would go to 20 000.
