Identifying Bank Manipulation & Forex Day Trading Strategy

everyone’s sterling here from day trading Forex live and it is July 8 2013 what I’m bringing here today is just a quick video of what we term as the confirming entry now this is a very important video it’s a very important video from the aspect of entries when it comes to identifying what the banks are doing, and then putting that in a package where it’ll allow us to take an entry off that information that’s where the confirming entry comes into play and, so the confirming entry is one of the entries that we teach in in our in our strategies and in our course and in the room and there’s videos and articles on the confirming entry, but what I wanted to do is do a more updated version of that and that’s really what we’re here for today, so we’ll get right into the video and get right into why it’s useful why the confirming entry is useful well from the standpoint of those of you that are not members of day trading Forex live and are not part of the day trading Forex live community you, if you’re familiar with the site then you probably view Chad’s commentary each night one of the most important parts that you have to understand with the commentary is that chad will choose multiple levels now those multiple levels are not going to be as selective as what we choose in the review and what we go over in the members review, but it’s still a very good selection of points based on previous manipulation to identify where the banks could create that manipulation from and, so with that being said the entry is not taken when the market just goes into a level we don’t just randomly take the entry and that’s where the confirming entry comes into play, so, if you’ve seen the commentaries and you’ve said to yourself, well the markets gone into this level how do I know to take the entry or not that is where the confirming entry is one of the tools that we use a very good tool and we’ll get into that and kind of explain the basic principle behind it, so what I’ve done here is I’ve drawn a level of one spot one spot one spot five thousand just a random number obviously that’s probably where the pounds that are in that area you know I guess the Euro wasn’t one spot five thousand one time, so the point is is just a number on a chart, so, let’s just say we had chosen this as a high probability point, so, let’s say this is, maybe one of the points chosen and jazz are in Chad’s commentary or, maybe it’s one of the points we chose in our daily market review for the members and how do we know to either take a trade at this point or not well assuming the market is below this level what, I’m going to do is, I’m going to pause the video and draw out a scenario what of what would happen as the market comes in to this point and, I’m going to draw out a valid entry, so, let’s do that, and then we’ll walk through it, so basically what I’ve done what I’ve done here is I’ve drawn out a standard confirming entry this is one way that the confirming entry can set up and as you can see here I’ve laid labeled three of the candles candle number one candle number two and candle number three, so anything not labeled is really just for illustration purposes it just adds to adds to the picture of what we have here and is really not all that critical, so what’s labeled is really the critical part and that’s what we’re going to be looking at a little more in-depth, so this is obviously a shorting opportunity and, let’s just say that in this case Chad was looking for chatter I were looking for a second push down in the market remember we trade based on market cycle, if you’re not familiar with that there’s a lot of information on this on the site based on market cycle you can check that out, but what we’re looking here for what we’re looking for was a shorting opportunity in this example and, so as the market comes into fifteen hundred as the market comes into this level here at the 1500 point the question becomes do I take the trade as the market comes into this level or do I not take the trade and as you examine the reviews or the commentary that’s the critical question that you ask yourself as you come into those levels, so the basis of the stop run and the basis of the confirming entry is that one of the high probability point that we’ve chosen gets broken by at least three pips or more now why is that critical well our belief when we choose a high probability point we believe that there’s orders sitting above the key level that we’re looking at in this case we’re looking at the 1500 level in just this example and, so we believe that there’s order sitting above that now we walk up we walk through how we choose levels and why we choose certain points in the course we’re not going to get into that, because it’s it’s a whole separate video and again there’s already information on the front of the site for that as well, but we believe that there’s order sitting above that, so in order for us to visually see that smart money has taken the orders we need to see them break that high probability point by at least three pips or more that ensures us that stops were more than likely taken above that point, so in a standard three candle confirming entry setup this is one way where notice how the first candle breaks that high probability point, and then gets rejected back down below that high probability point, so that’s what we term as a stop run candle that candle as the name implies went above the area that we are looking for took the stops and was rejected back down below it now do we take the entry after the first candle closes no what we do is we then wait for the second candle to open the second candle is what we term as the confirming candle now confirming candle has two rules and again we’re looking at it from the from the example of a shorting from a short setup and those two rules are number one it needs to close below the body of the reversal candle therefore in this case number candle number two would need to close below the body of candle number one it did that very clearly and the second rule is that it needs to close in the lower two-thirds portion of that candle the reason we use that rules it just ensures that our confirming candle is and it is aggressively confirming that reversal, because technically, if you look at it and you were to draw this candle out a little bit differently, let’s say you were to draw out the second candle like this and that second candle looked something like what we have drawn out here notice how does this candle close below the body of that reversal candle or below the body the first candle well yes it does, but it’s closing way up near its highs and is definitely not confirming the reversal and that’s why we want to see it close in its lower two-thirds quadrant, so by it closing its low lower two-thirds quadrant or the lower two-thirds of the candle what that does again it just ensures that that the reversal is stronger and it confirms that more in our minds, so after those two candles have closed technically that is what we term as the confirming the confirming entry and, so those two candles represent what either dictates that the trade is valid or not valid and the question then becomes, well as the entry taken after that second candle closes answer that is no at the close of this second candle you may very well be about 15 15 20 30 pips away from the high of candle one, so, if we wanted to use a twenty pip stop and get our stop above the hives of candle number one and again that’s another topic of why we want our stop why we want our stop-loss above the stop run high again that’s a separate video, but we always look to use a 20 pip stop and therefore what we need to see is we need to see candle number three pullback to within 15 pips of the high of candle number one, so very simple all you’ll do is you’ll put your cursor above candle number one right at the high measure down exactly 15 pips and that’s where the entry becomes valid, so depending on your scale, maybe this third candle would have to pull back to this point where the red line is, if it’s a larger scale, maybe your third candle would have to pull all the way back to you know a depth that’s all the way up to the red can’t the red line where it’s at now, so that’s obviously going to going to depend on your scale and it’s going to depend on each individual setup sometimes at the close of the second candle you’re already within 15 pips of the high and at that point the entry again would be valid the deeper the pullback the better, but 15 pips within the high or closer and the entry is valid in the case of a long setup you’re obviously flipping everything I’m saying here and looking at it from an inverse situation, so this is one example the confirming entry, but what I want to illustrate, is that the confirming entry can look a few different ways and, so what we’re going to do now is, I’m going to clear out some of the candles that we have here and draw it visually in a little bit different way, so, let’s do that right now alright, so we’ve drawn this out a little bit different, but, if you look at this really it’s illustrating the same principle and that’s what I want to really discuss with you right now before we talk about this I really want to urge people to not get caught up in the candle patterns no doubt most of you listening this video have tried a strategy based on candle patterns and I can comfortably say that nobody will send me a track record based off of a prop excuse me a profitable track record based off of strictly trading candle patterns and, I’m not going to say you know really get into that one way or the other you know from your own results what you’ve achieved with candle patterns and that’s why I really urge you to not get stuck on the candle patterns the candle pattern simply show us visually what smart money is doing, but the real key behind it is the fact that our high probability point is broken where we expect the orders to be they reject in the case of a short back down below that high probability point and confirm that the stops have been taken, so it’s really it’s the action of creating the stop run that is the key part visually that will look a little bit different in this case this is often what’s referred to as a set of reversal legs or more commonly referred to as a set of railroad tracks in this case the set of road tracks back to the downside, so candle number one breaks our high probability point it closes above it that’s fine, but what we need to see from that point forward is we need to see the market immediately get immediately rejected back down below that high probability point and by rejecting it back down below it that shows us that they went took the stops ran it back the other way it’s exactly what we want to see and the same as the other example as the third candle pulls back the entry is taken on that pullback, so again same exact thing just visually looks a little bit different, so, let’s show one more example last example here what we see is typically what’s referred to as a evening star candle formation the long setup of this set of the same situation is what’s referred to as a morning star type candle pattern and again the principle behind this is the key part and what is the principle behind all three of these examples the principle behind it is that they’re going above our high probability point taking the stops and what illustrates them and what gives us the strongest clue that they are taking the stops is that they quickly reject it back down below our high probability point, so one of the advantages to reading the commentary each day and one of the probably the biggest advantage of those in our members community is that we choose these high probability points for you and walk through why exactly we’re choosing each point, so as you’re looking at either the commentary or, if you remember looking through the reviews when you identify these points the principle is what you want to keep in mind don’t get stuck on the candle pattern getting stuck on trying to chase these candle patterns is going to result in the same losses that you’ve probably experienced with any other candle pattern based trading strategy, so again focus on the principle when it comes into that high probability point is it breaking it and quickly getting rejected back down below it candle number one again our candle number two the confirming candle has two criteria, let’s go through those two criteria again number one in the case of a short it needs to close below the body of the first candle, so in this type of setup that would be your small bodied candle in the center criteria number two in the case of a short it needs to close in its lower two-thirds quadrant or the lower two third section of that candle and again what that rule does is that simply tells us we have a strong reversal candle or strong confirming candle as we call it in this example what’s important to note is that in order for the confirming candle to be a confirming candle it has to get back down again in the case for short get back down below that high probability point as this very clearly does gets well below that high probability point once about 15 one spot five now that we have marked out there now guys one of the the key things to remember with this is that this strategy or this this little section of the strategy really at the end of the day is a very small portion this thing has stood the test of time for the first two years of day trading Forex live day trading Forex live was nothing, but a live trading room that means every single one of my trades is live and at the core of a lot of those trades was the confirming entry and, so what helped me maintain that profitability over the course of years in front of everybody was using the confirming entry, so it’s the combination of two it’s having the ability and the know-how to first and foremost select the correct levels that’s the heart of it, if you’re picking the wrong levels based on you know the the criteria that we use well then you’re simply at that point just trading candle patterns, because you have to be able to select the right levels, but after you’ve identified those correct levels and and one of the easy ways to identify some decent points is to go into chats commentary each day when it gets into the levels he chooses does it validate this setup or not, because the manipulations job is to do two things, if that level is not going to hold then its job is to not show us a confer a valid confirming entry set up that level should just simply break and should never show an entry that’s one job of the manipulation however the second job is, if it’s going to turn from that point, if they truly are taking the stops at that point then a valid confirming entry should set up and should give us an opportunity to catch it obviously it’s not going to do it every time, but it’s a happy medium between providing enough confirmation to not get burned on a lot of false turning points whereas not giving too much confirmation to force us to miss, so many trades another great principle of the confirming entry or another great side effect, if you will the confirming entry is it fixes some of the problems that a lot of losing traders have many traders that are struggling to turn a profit they can know a strategy up one side and down the other and they can watch somebody else profit with that exact same strategy, but, maybe they don’t turn a profit with it one of the main reasons behind that is aside from risk reward and money management is the different psychological factors such as the patience to wait for it discipline and a solid trade plan for knowing exactly what to do as the price comes in to that level and the great thing about the confirming entry is that it forces you to be disciplined, if you are waiting for exactly an exact confirming entry valid clear confirming entry and, so it forces you to be patient it forces you to be disciplined disciplined and those are great qualities that make up any profitable trader out there and, so it’s it’s a teaching lesson without actually having to go through that process and really teaches the lesson, maybe better than you could ever do with words, because it’s forcing you to wait for your criteria when that criteria is satisfied you’re taking a trade when it’s not more importantly you’re sitting on your hands it teaches you that discipline it to do, so which is also critical for the profitable trader or becoming a profitable trader well I really hope you enjoyed this video guys again do not get caught up in trading candle patterns you will get burned trading candle patterns will result in the same losses it did for you before and it will result in the same losses down the road the key is the combination being able to properly identify those high probability points, and then waiting for the valid manipulation waiting for the banks to show their hand give us the entry that’s when the trade is taken we don’t try to take lackluster trades we select only the best points and we select only the best confirming entries at those points doing, so is the key to getting in the trades that are going to give you the high risk reward high risk rewards they always say as the article that’s on the site, if you haven’t gone over the risk reward article probably linked to at the bottom of this risk/reward is is almost always a common denominator of profitable traders and the great part about this is that you’re not going to win every single trade, but the trades that it puts you in our trades where the banks have just entered the market when the banks enter the market they’re not going to run the price 20 or 30 pips they’re going to run the price 70 80 90 pips and that’s what gives these setups such a great overall risk to reward ratio it’s a very high risk to reward ratio and that’s what’s turning traders around traders that have lost for four years are turning profit based off the fact that they’re now able to identify high risk reward setups and that risk reward is absolutely critical, so again that’s the side note, if you haven’t watched that or read that article I would recommend doing, so, if you’d like to learn more about the strategy, if you’d like to learn the complete in-depth breakdown of the bank trading strategy and essentially how we track banks on a day to day basis and what allows us to identify what they’re doing and get us into their trades, if you like that break down, if you like the daily support a live trading room and the members community as well as again that the daily market review which is probably the most valuable part feel free to check out our course or shoot us an email we’ll be happy to get back with you and give you a bit more information on the strategy or anything else you may have questions on again I hope this video is helpful until next time guys happy trading.

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