Welcome to Stage 1 of the The Social Traders killer Pattern Play & SMC strategy. This section contains seven in-depth episodes, based upon the science of learning and covers the key components of trading which includes an introduction to Forex, a Tradingview setup, Understanding True Market Structure and more. This is the start of your trading journey with The Social Traders, for this reason we highly recommend you grab a fresh pen and paper ready to soak up our educational content.

Welcome to The Social Traders written content.

Alongside our video content we have provided a written guide of our Pattern Play and SMC strategy.

First of all, let us tell you a bit about ourselves!

The Social Traders was founded by Max Baker and Dylan Lavin; we have both been around the block with multiple trading strategies for a combined 10 years in the markets, experienced the good the bad and the outright scams in this industry.

However,  having done this we have developed a trading strategy that we now want to pass onto others, building a community with low barriers to entry and providing real clarity when trading the Forex, Commodities and Cryptocurrency markets.

Both Dylan and Max have traded both small and large accounts, been through the peaks and troughs associated with trading and most importantly know the industry inside and out and what to avoid. And this is a key point WHAT TO AVOID  as most of you have an interest in trading you would have likely been enticed by signal providers offering “free signals” and flexing nice watches or cars.

• For those who are completely new to trading, ‘trade signals’ are essentially trading tips to help people in the market, most of the time they will come in the form of an entry point, take profit and stop loss. 

Directly following signals without a true understanding of trading itself will only be detrimental to your trading in the long run. From our experience, purely following accurate ‘trading signals’ won’t work because by the time a trade has been sent out to the community the best entry has already gone, not to mention the fact that you will never actually be honing in on the skills that makes a profitable trader, you will simply be copying what is put out there for you.

That is why at The Social Traders we will never send out a trade idea with an entry point, take profit and stop loss. We simply highlight areas of interest so that the traders in our community can capitalise on these areas having used the strategy learnt in this course.

Our setup gives the less experienced traders a confidence boost in the markets whilst also providing a great discussion point within our community for the more experienced traders.  With this strategy you will learn how to execute trades with precision, allowing for better risk/rewards,  how to become mechanical with entries and how to master your trading mindset and psychology. You will experience a true representation of two traders who have been through it all, and want to pass on their knowledge to others. 

What kind of strategy are we teaching?

So it wasn’t that long ago that traders used to think that technical analysis was just some form of magical hocus pocus. Now all experienced traders will be using some form of technical analysis to forecast and enter trades.

The market has changed and technical analysis has become the ‘go to’ for most forex traders due to its reliability and predictability in the long run.

All traders will have what is known as ‘an edge’. A trading edge is a technique or approach in the market that creates an advantage over other traders.

Our edge is our Pattern Play and SMC strategy alongside our community.

The Pattern Play and SMC strategy will tip the odds in our favour so that every trade we place we have a higher chance of playing out then if we didn’t have a strategy at all.  By the time you have finished and perfected our edge you will be able to enter the market with a tangible advantage over the other traders – which in turn, will make you more profitable in the long run. 

• We will be looking at raw price action to get a clear and simple understanding of where the market is heading next. 

• We will be providing a mix of patterns, structure and more technical smart money concepts to create a clean, easy to use and understand edge. 

We have found there is real reliability with this type of trading. Having worked with both technical and fundamental traders, we have found that our simplified swing strategy incorporating smart money – institutional concepts, will align with the most powerful strategies available whilst being easier to understand and execute.

Overall, It is an adaptable strategy that allows you to leave the charts behind to get on with other tasks during the day or alternatively can be adapted to lower time frames and intraday moves.

You will not have to sit at the charts all day.

And this is key really…

When I first started trading I would wake up in the morning desperately looking for positions on the live markets just so we had the thrill of being in a trade (I’m sure the majority of the traders reading this would have done the same).

With experience we have found that the more time away from the charts combined with more time backtesting, forecasting and planning will lead to considerably better trading results. So with our strategy it means we can take up hobbies, run errands or even work a 9-5 as a transitory form of income before your trading results meet consistency.  

Finally what really separates us from the rest is how simple and clean we will be keeping our chart work.

Clean chart work makes your analysis so much easier to understand and more importantly makes it easier for others to understand.  WE KEEP OUR CHARTS CLEAN. Having come from multiple different strategies and communities we have seen it so often where the analysis in the chat rooms is just way too complex to understand. Traders combine too many indicators or strategies into one.

Putting every single indicator onto your charts will not make you a better trader. To master your trading ‘edge’ learning and communicating with other traders is so important to you in the long run. 

Remember, feedback is key for personal growth – if people cannot understand your charts then you may struggle to get feedback on your setups.


What you’ll need for the strategy

When I first started trading I didn’t really know where to start. I thought trading required you to have 6 different monitors, displaying 4 different charts, Bloomberg and BBC news all at once.

While this isn’t 100% incorrect, it is important you go into the trading with the correct basics and the right mindset. Through this section I’ll be running you through what I found really useful to have in order to become a successful trader.

One. Notepad

First up, we have the trusty Notepad – with trading I found a notepad to be my best friend and one of the most useful things to have.

I found if you write something down you are more obliged to be disciplined and stick to it.

Trust me when I say, trading requires A LOT of discipline – poor habits and ill discipline will cost your psychology and capital.

Writing something down makes you accountable for what you are learning or experiences you are going through. A notepad can also be taken anywhere, so if you’re unsure about a particular pattern, candlestick or news event you can simply turn to your notepad.

The 3 stages process is great to implement with this.

(1) Watch this content on its own (with no notepad) to absorb the content in its most pure form.

(2) Then watch it again, this time take as many notes as possible, pausing the video when needed. 

(3) The 3rd time you watch the content, go back over your notes congruent with the video and update them with any small details you may have missed.  

This process will create a really solid foundation and round off the technical process so that you can begin to implement it on the live charts.

Two. Time

My second necessity for this strategy is time.

Becoming an FX trader WILL NOT happen overnight, I’ve been in so many communities where people will drop out after a month, 2 months or half a year purely because they haven’t seen significant gains or lack the dedication.

I live by the saying ‘become the asset’  giving up after, say your first string of losses will not make you a successful trader, spend some time, put in the work and you eventually become an asset from the skills you possess. In trading we have what is known as the 90/90/90 rule, The 90/90/90 rule is a basic rule of trading. 

It means 90% of new traders lose 90% of their capital in  the first 90 days of trading. I’ve been doing this for a long time, I still find myself learning everyday, perfecting your entries exits and trade management will not happen overnight these are skills that require experience both physically and psychologically 

Now, you’re probably thinking how can a trader avoid becoming a part of this statistic? By creating a trading strategy, testing it via virtual trading, being preferred and trading with a 1% risk model mindset –  a trader can avoid this common pitfall for new traders.

Keeping a Neutral mindset, your Psychology will be the hardest battle. This ride will be a rollercoaster, don’t let the highs be too high and the lows too low, learn from your wins and losses, have a neutral mindset when trading – the feeling of ecstasy after a few winning trades will almost certainly result in you blowing your gains over your next few trades. And it’s the same for losses, if you’re suffering from a larger losing streak don’t give up. I once took 3 -1% losses before seeing my forecasted trade finally go my way and back me 7 or 8 %.

I recommend all members of this strategy read 2 books, ‘The Chimp Paradox’ by Steve Peters and ‘Trading In The Zone’ by George Douglas –  every Forex Trader should be reading these.  Both helped me an untold amount with my trading psychology and mindset, chapter 7 in trading in the zone is especially good. Go back over this multiple times.

Three. Sacrifice

You might have to sacrifice some spare time or a night out to master this skill. You may have to wake up at 4,5,6 am to catch trade during the Asian session. You will also have to sacrifice some free time in order to properly backtest and forecast.

Now, I won’t go into too much detail of what backtesting and forecasting is right now (we’ll cover that later in the strategy and how we have mastered this technique), you get the idea that trading won’t come to those people that sit around and wait for others to do their analysis for them. Unfortunately it’s like anything in life, you have to go and get it, and what I’ve seen through my journey is that the people that do really want it and are willing to sacrifice some free time do end up being successful and full time traders. 

Four. You get out what you put in    

My final point is something we touched upon earlier.

“Become the asset” is an excellent mindset to have. Through my whole learning process I have had so many people doubt me, saying  “isn’t Forex trading gambling?” “Shouldn’t you get a real job?” 

Not all people will take trading full time and there is absolutely nothing wrong with this. If you don’t, then use it to stand out from the crowd, it’s so competitive out in the business world having that extra string to your bow can make all the difference and of course adds another stream of revenue to your income when you do decide to trade, it truly is a skill for life.

In the next video we’ll be going over why people actually trade forex, why I started and why you should be here. Trading isn’t easy if you have the wrong mindset from the get go and it will only be a matter of time before the markets swallow you up and spit you out. So without further ado let’s jump into it.

Summary

Trading Forex is not easy and never will be, at The Social Traders we provide you with all the right education and facilities to statistically have an ‘edge’ when trading the live markets.

Everything you will learn within this course can be tried, tested and shared within our free online community.

If you haven’t already we highly recommend joining our Slack community to discuss, collaborate and share great trade ideas.

We have traders from all backgrounds and all experiences you are sure to connect with some amazing like minded individuals that are all on the same path as you are.

Forex trading – What is it? What instruments are we trading and when can we trade? We answer all the questions surrounding the topic of trading. Covering all bases and getting you set for the rest of The Social Traders killer Pattern Play & Smart Money Concepts strategy.

What is the foreign exchange? Who trades it? When can it be traded?

Forex or FX stands for ‘Foreign Exchange’, the foreign exchange market it is the largest financial market in the world.

It is a global market that allows the exchange of one currency to another. 

When traveling abroad, you’re essentially using the FOREX Market; you are selling one currency for the chosen alternative.
For example, if we wanted to travel to the USA from the UK, we would need to buy United States Dollars (USD) and sell our  Great British Pounds (GBP). 

To understand the size of the Forex Market – The New York Stock Exchange trades around $22.4 billion a day, whereas the Forex Market trades $5 trillion a day therefore proving huge volatility and liquidity. This is great for us as it creates amazing liquid trading conditions and opportunities for us to capitalize on frequently.  

So what are we actually trading? 

We’re essentially just trading MONEY!

Think of Forex as buying a share in a particular country, like buying a stock in a company.

If you’re buying Dollars, you’re buying a share in the US Economy. You are in effect making a bet that the US Economy is doing well, and hopefully will continue to do well, so therefore you will return a profit in the future when you decide to trade back. Vice versa, if you are selling the dollar, you are betting against the US Economy. 

The exchange rate of one currency versus another currency is a reflection of that country’s economy, in comparison to other countries’ economies. Consequently, the stronger the economy of a country, the stronger the currency. 

You may have noticed that currency pairs are broken into abbreviations?

All currencies have 3 letters to aid us in distinguishing one from another.

The way in which this is done is simple: The name of a country, paired with the name of their currency! The first two letters of the abbreviation identify the name of the country and the last letter identifies the name of the currency.

For example, ‘USD’ stands for the United States Dollar. ‘United States’ being the country and the ‘Dollar’ being the currency.

Most currency fit within this rule,

However, the Japanese Yen is a slight exception as it is broken down into its syllables. It’s broken down to JPY.

The Swiss Franc is also an exception this is abbreviated to CHF.

Later on in the strategy we will be developing a small trading watchlist and so should help identify a few of the top traded currency pairs. 

A currency pair is the value of a currency unit against the unit of another currency in the foreign exchange market. The currency that is used as the reference is called the Quote currency and the other currency that is quoted in relation is called the Base currency.

Let’s use EURUSD as an example: 

The Quote currency is the Euro 

The Base Currency Is the United States Dollar

CFDs

In forex trading you do not need to take possession of the currency to trade. When trading on the Foreign Exchange Market, you are trading a ‘CFD’ This stands for ‘Contract For Difference’.

This is essentially a contract between an investor like you and I and a broker or bank. At the end of the contract, the two parties exchange the difference between opening and closing prices of a specified financial instrument, including shares, commodities and currencies. 

When you are exchanging your currency to go abroad, you OWN the exchanged currency. When you are trading a CFD, you DO NOT OWN the exchanged or traded currency; you are simply trading the contract to make money on the difference when closed. 

So who actually moves the Market?

Supply and demand of a currency is the main driver of the Forex Exchange movement.  If the demand for a currency – for example, the US Dollar – increases, so will the rise in people looking to convert their currency into Dollars.  This will lead to its price to go up, unless supply also rises to match the increased demand.  

This is the same with supply: If the supply of a currency goes up without a parallel rise in demand, then its currency will drop in value.  

With $5 trillion dollars being traded daily your input into the market your trades won’t make the market move noticeably. This is where the central banks come in.

We will be entering the market in the area of high probability to capitalise on the movement created by the larger banks and institutions.  

Central banks have a massive role to play in currency movement – they can control the supply and demand of a currency by controlling economic factors such as Base Interest Rate. Without going into too much economic detail – interest rates increase/decrease the foreign direct investment into a country. Typically, higher rates reduce investment, because higher rates increase the cost of borrowing. It also requires investment to have a higher rate of return to prove profitable and vice versa. Investment creates a demand for a currency causing the currency to rise in value.  

When we put a buy position on USDCAD for example we are buying the United States dollar, we have created a demand for the dollar therefore increasing the price of the dollar against the Canadian Dollar – although the sizes of our positions within the entire market is negligible.

Remember, $5 Trillion dollars is traded on a day to day basis and we have created an edge that can tap into these institutional liquidity flows. 

Other than traders like you and I, who Trades Forex and When Can It Be Traded?

Forex traders and investors are a diverse group, coming from a broad spectrum of backgrounds, ages and disciplines. From the individual who is brand-new to the market, to the most seasoned currency trader, engaging in forex trading is one of the most common methods of participating in the world’s financial markets.

The great thing about forex is low entry barriers to the market. To trade forex all you need is a computer, an internet connection and brokerage account. While each person who enters the marketplace has a unique set of goals and objectives, forex traders are typically divided into two major categories. These are Institutional and Retail Traders.

So who are the institutional players? 

First up we have:

The Government  or Central Banks – examples include the European Central Bank, the Bank of England, and the Federal Reserve or the FED as you may hear it called. 

These are regularly involved in the Forex Market. Just like companies; national governments participate in the Forex Market for their operations, international trade payments, and handling their foreign exchange reserves.   

Another big player are The Investment Banks

For example, JP Morgan, Citibank, UBS, Deutsche Bank.

These banks have huge amounts of capital and due to the banks large presence in the Forex Market, they have the ability to drive short term market trends and counteract retail traders due to the sheer size of the accounts and positions being traded. 

You may have heard of market manipulation before? It’s the big players like the one mentioned now that have the capital to break through potential support or resistance zones created in the market and change the overall trend of price action. 

We will be trading alongside these positions. 

Now surprisingly we also have large companies and business as a big player in the FX markets 

In the 21st century companies are now more global than ever.  

Tesla, for example, might produce its car batteries in China, infotainment screens in Vietnam and Logic boards in the United States. But, at each stage of production Tesla would have to convert its base currency into different currencies in order to purchase the parts required.  

This moves the Foreign exchange market as currency is being transferred from one country to another.

And then finally we are then left with, 

Speculators and Individual Investors

This is where we come in! 

Often referred to as ‘Individual Traders’ as we buy or sell securities for personal accounts. 

The majority of market movement comes from the Large companies and Super Banks.  Our aim is to get into the market at the right point in order to be taken with the market movement and volatility created by the large institutions. 

We don’t want to be caught on the ‘wrong side of the market’,

When Can the Forex Market Be Traded? 

The Forex Market can be broken up into 4 main trading sessions: 

The Sydney trading session : this trading session runs from the 9 pm GMT to 5 am GMT
The Tokyo trading session : this trading session runs from 11 GMT to 7 am GMT
The London trading session : this trading session runs from 7 am GMT to 3 pm GMT
And then lastly the New York trading session : this trading session runs from 12 am GMT to 8 pm GMT

Between 8 am GMT and 3 pm GMT is where you’ll see the most forex movement as this is when the London and New York session cross over. 

The London/New York crossover is when the markets become really interesting, in this period you’ll get traders from the two largest financial centres in the world begin to trade (14:00-16:30pm GMT). 

This is especially volatile when political news is released surrounding the United States Dollar and Canadian Dollar.  The volatility created will see the largest FX movements so we must be prepared to capitalise on these moves hours, days or weeks in advance – this is where our forecasting comes in (we’ll touch upon this later in a later video).

Entry Types

When entering the market there are 5 different types of entries that all traders NEED to know. All of these entry types will be covered in this video, we’ll be going over what each entry type is and then later in the strategy you understand how we use them on the live markets. 

These are the 5 Entry types: 

Buy stop 

Sell stop 

Buy limit 

Sell limit 

Market execution. 

Market Execution 

So first up is the Market execution, this one is really straight forward. 

A market order is a buy or sell order to be executed immediately at the current market prices. As long as there are willing sellers and buyers, market orders are filled. 

Sometimes within the Forex market there are not willing buyers or sellers to meet your order and so ‘slippage’ occurs. Slippage is more likely to occur in the forex market when volatility is high, perhaps due to news events, or during times when the currency pair is trading outside peak market hours.

Buy Stop 

A buy stop order is when you are buying a financial instrument above the market. Unlike a market execution this is an order type that will NOT automatically enter you into the trade. You will only be entered into a buy position when price action touches your entry order. 

Sell Stop 

A sell stop order is essentially the opposite of a buy stop. A sell stop order is when you are selling a financial instrument below the market. You will only be entered into a sell position when price action touches your entry order. 

We have found that both the Buy and Sell stop orders offer the best risk protection out of all the order types, so take note of these they’re going to be used a lot. 

Buy Limit 

 A Buy limit is an order to enter a buy position below the market. You will be buying a financial instrument when the price has been sold down to your order price to then be entered into a buy position. You use this type of entry order when you believe the price will reverse upon hitting the price you specified.

Sell Limit 

Essentially the opposite to a Buy limit. A Sell limit is an order to enter a sell position above the market. You will be selling a financial instrument when price has been brought up to your order price to then be entered into a sell position. You use this type of entry order when you believe the price will reverse upon hitting the specified price. 

In this video we will be looking at what a Pip is. You may have heard this word before if you have been in and around trading but what are they?

A pip is typically defined as the smallest movement and exchange rate one can make.

Most currency pairs, like GBPUSD, are quoted to the fourth decimal place.

For example 1.5485

A one pip movement on GBPUSD using this quote price would move GBPUSD to

1.5486

Likewise, if the price changes from

1.5485 to 1.5484 

This represents a decrease in one pip. 

Not all pairs are quoted to the fourth decimal place, like in the case of the USDJPY, this currency pair is quoted to the second decimal place.

For example 90.73

A one pip movement on USDJPY  using this quote price would move USDJPY to

90.74

In some exchanages you will come across fractional pip pricing. This is essentially adding in another decimal place to the quoted price.

For example, 1.5485 quoted on USDJPY would display as 1.54856

This just means the quotes are more precise whilst it also gives traders lower transaction costs.

What are the benefits of trading and why should you pursue it? We could sit here and reel off a massive list of the benefits found over the years but that’s a little bit boring. Let’s dive straight into some examples.

Before we begin to get really technical with our strategy I want to ask a simple yet complex question.


What are the benefits of trading?


The majority of people who answer this question will say money, “it’s an easy way to sit at home and earn additional or full time income”. 

Although this isn’t entirely impossible, it is a common misconception of the trading game. 

Ok, the most experienced traders will be able to seamlessly enter and exit the market once they have refined their profession and developed their craft but this would have come after countless setbacks and points of development within their career. 

If you ask me what is the real value of trading I would break it down into 2 key benefits, these are two that have had the largest impact on me as a trader.


Financial freedom


It sounds pretty cliche right? But financial freedom genuinely can be achieved by mastering the skill of trading and investing.

I personally have witnessed this happen with people I am surrounded with. By understanding macro and micro economic factors alongside having the accuracy and psychology to execute you will find yourself scaling your accounts and portfolios to earn additional or full time income before you know it. 

My second benefit is,

Overall self development – remaining patient and remaining organised.

Trading will develop you to become a more all rounded, level headed individual. The lessons you will learn within the markets can be applied to external factors found in everyday life.

Trading will make you a more patient person.

There can sometimes be a 2-3 day break between one trade and the next here at The Social Traders. We do not rush into a trade every single day the market is open. If we are not trading a setup that fits our plan the chances are we will be entering trades that are lower in quality within lower value areas. I can assure you, once you master the skill within the financial markets you will be able to directly apply this to everyday life. 

Trading will make you organised

If you are unorganised in life then you will be unorganised within the markets. Trading is all about discipline, going back to the point I made earlier about waiting for 2-3 day for a particular setup.

If you are unorganised this setup could present itself and you could miss it, or the setup might be in the process of being developed and due to your unorganised lifestyle and ill discipline you will execute early resulting in a -1% loss.

You will often find within trading that the majority of your losses will be the result of ill discipline and lack of patience. Once you master this you will begin to implement this into your everyday life. 

I personally think these benefits will be far more noticeable in the interim than the financial gains that the trading space is often sold on.

If you implement the processes you will learn within this strategy you will become far more rounded as an individual. Without realising these processes will allow you to accumulate income instinctively in everyday life. 

There are two main styles of trading within the financial markets, there are technical traders and fundamental traders. Here at The Social Traders we’re purely technical traders when entering trade but we do have an understanding of fundamentals and general world affairs.

Technical analysis by definition is ‘an analysis methodology for forecasting the direction of prices through the study of past market data, primarily price and volume’.

Fundamental analysis considers the overall state of the economy and factors including interest rates, production, earnings, employment, GDP, housing, manufacturing and management.

Which one is better?

We get this question quite a lot because some people are unsure whether to focus on the charts (technical analysis) or to focus on fundamental analysis of a currency before placing a trade, or do you need to be doing both?

The simple answer for this is that you can choose one or another as a trader. There are very profitable traders trading a technical analysis style of trading and there are very profitable traders trading a fundamental style of trading. 

Most typically you will see shorter term investors focus on the technicals.

And longer term investors focus on the fundamentals of price action.

The reason for this is that when you are looking at fundamentals you are looking at the underneath surface of what you are investing in, – the best way to describe it is that you are looking at the foundation of a company or economy.

 It’s going to take a long time to make any kind of change when looking this way at the market.

If you are into more day trading with short to medium term holds there is a very high chance you will fall into the technical analysis side of trading.

technical analysis is most commonly used for day trading, swing trading, options trading. 

A stock or currency will not be able to make product quick enough, make changes to thousands of employees quick enough and totally turn the boat around when it comes to the fundamentals, these things take time.

Having said that the two forms of analysis are not too dissimilar from one another when it comes to price action on your charts.

Stocks, currencies, cryptocurrencies that have great technical and great charts will more often than not have great fundamentals to back, and vice versa stocks, currencies and cryptocurrencies that have bad charts will often have underlying poor fundamentals. 

This is why you will hear us say the phrase ‘news creates volatility not direction’. It’s very common for a new event or data release to coincide with the technicals that are displayed in front of them on the charts.

The Social Traders are technical analysis traders, on the lower time frames within charting technicals will dominate the fundamentals and this is where we spend most of our time.

The Social traders will keep an eye on fundamentals to keep razor sharp on the charts. Everyday our Pro members will get access to the most up to date fundamentals that could move the market – this is so that we are aware of periods within the day that could cause unexpected volatility. 

For example:

https://www.tradingview.com/x/zDy4FIGx/

This is a short term play area of interest we were looking at for USDCAD, as you can see the technicals line up. We have a nice pattern break of structure, we have orders resting above highs and we have clear unmitigated order left below the market at 1.23000. This gives us a clear entry point to look to trade.

At 1:30 GMT on this day we had the Bank of Canada Rate Statement

The BoC Rate Statement is the primary tool the BOC uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions. 

This is the USDCAD chart after the release:

https://www.tradingview.com/x/7GJ1GbNK/

“News creates volatility not direction”

 Remember that! 

Our most effective understanding of the market has been adapted over years of trading data. Understanding and testing an ‘edge’ in the markets but pushing it to limits to extract the most out of the markets. The Social Traders have created an excellent understanding of raw price action and market movements using a developed patterns approach combined with smart money techniques incorporated for killer entries. Let’s take a look at the potential here.

Here at The Social Traders we trade a strategy compiled of Price Action, Patterns and Smart Money Concepts, the Pattern Play and SMC strategy.

We use Price action and patterns within our strategy to understand where the market is going, the overall direction of price and where the market is most likely to reverse.

When then use Smart Money concepts to hone in on an area of interest, maximise our risk to reward and also remove emotion. This has enabled our members to achieve 6 figure funding through prop firms such as FTMO whilst also having members achieve double digit account growth month after month.  

Let’s take a look at how our strategy and edge has evolved to be more rewarding than others.

We’ll take a look at an example on GBPCAD

https://www.tradingview.com/x/uFcG2Nhh/

So this was a setup that we looked at in TST PRO, the overall area of interest was honed in on by using our understanding of price action and patterns (although it is not featured in this chart setup as we are sat on the 30 minute timeframe). This setup mainly uses our experience with SMC to locate the most probable area of price reversing, it may look quite confusing now but will make sense as we begin to work our way through the strategy.  

This first example shows an entry that is very conservative, the entry point is placed at the very bottom of the last 30 minute up candle with the trades stop loss placed above. This means that if the trade were to hit its target (down at the 1.74644 region) it would only bank 2.74%. Not to be snubbed as 2.74% is still a good trade and will help you compound your account,  however we can do better.

https://www.tradingview.com/x/Y7oNIRS2/

This is an alternative way of entering the market, in this strategy you will learn we can whittle down our entry zones by using the 50% of the last up candle on entry.

As you can see our entry area has moved from 1.75459 to 1.75582 – we’re managing to get into the position 12.3 pips higher than the previous move. This also allows us to get into the trade with a much tighter stop loss, which in turn increases the potential risk to reward from 2.74% to 5.93%. 

But what if we were to take this a step further? 

https://www.tradingview.com/x/CpRvS1y3/

This is the The Social Traders Pattern Play & SMC entry model once refined, 

I have now dropped down to the 15 minute timeframe to really hone in on price once more. You can now see that instead of the market pushing up to the highs of 1.75700 we now have seen that the last significant up candle ranges from 1.75459 to 1.75640. Again, entry from the 50% of the candle. 

This has allowed us to bring our stop loss closer to entry and therefore significantly improving the risk to reward on the trade. The risk to reward has increased from 5.93% to 9.01%.

That means we’re increasing our account capital by 9.01% based on a 1% risk model. 

The crazy thing is, this trade has only moved 90 pips!  

This is ‘The Social Traders’ language’ – we show you how we set up the 3rd party trading platform Tradingview. Tradingview is truly a revolutionary platform for all traders and to extract the most out of it will level up your understanding of the markets. Members within the community will have a similar style of analysis allowing other members to understand posted setups and provide feedback.

A trader will not just look at the charts and guess whether to buy or sell, all good traders will work with a strategy or ‘an edge’ that will help them get in front of the market. In this strategy we will be teaching a technical analysis, swing based strategy that will provide us with the edge we need to benefit from the market moves.

However, like a tradesman will have a toolbox to undergo their profession – a trader will have his analytical software to refine his edge. This is where we use an online trading platform called Tradingview. 

Trading view is our go-to platform to analyse the charts on, traders can use software such as MT4 and other broker platforms for analysis however we have found that Tradingview offers the cleanest, most professional trading experience and we’ll jump into why later in the strategy.

All traders within The Social Traders community should ideally be using Tradingview – we say this because trading can be confusing enough for beginners, if we begin to use other charting software it will make it really confusing for new traders who have recently joined and gone over our strategy. 

First thing you’ll need to do is head to www.tradingview.com 

Once you’re on this page you’ll need to register for an account using the top right ‘register’. 

Tradingview pro? 

Tradingvew makes their money through ad revenue and subscription revenue. To remove ads you’ll need to get a pro membership – this will cost around £14 a month. 

We highly recommend you buy the Paid version of Tradingview pro because it gives the user the ability to use the ‘replay tool’ on the smaller time frames which is incredibly beneficial for later in the strategy when we put what we have learnt to work. 

Also, not having ads pop up will make your time on the charts so much cleaner and less distracting, think of Tradingview pro like a cost of doing business. Like a shop would have rent to drive commerce a trader will have small expenditure to trade on the live markets. 

You can purchase Tradingview pro through this link: https://tradingview.go2cloud.org/SH4Jp

We highly recommend it. 

Indicator and tool configuration 

Within the strategy we will be using  primarily technical analysis to enter trades. In order to use technical analysis we must configure our analytical tools correctly and must understand what each one does and how to use them.

 This strategy revolves around technical analysis – think of indicators as a workman’s toolbox. A workman wouldn’t go to work without his tools, using the correct tool for the job – it’s the same in trading. A Technical Trader would not place a trade without multiple confluences of technical analysis in place.

From the Tradingview Setup video you should now have all the tools set up ready to analyse the charts. The first tool we’ll be covering is probably the most used tool in this strategy and that is the trend line tool. 

Trend lines

By definition, “a trendline is a line connecting two or more lows or two or two or more highs, with the lines projected out into the future” 

Ideally, traders look at these extended lines and trade on prices reacting around them, trading a bounce off the trendline and this is exactly what we will be doing. Buy low, sell high or. 

.. or Buy the high and sell the low

https://www.tradingview.com/x/blp3pjsd/

Remember trendlines are subjective, one of the worst mistakes a Trade can make is  ‘marrying their trendlines’ thinking price will always bounce from a trendline. There are $5 trillion dollars traded daily on the fx market that is a lot of traders using different analytical tools and trendlines!

Another point to note, we will be using trendlines for marking out significant areas of liquidity and also breaks of highs and lows.

You may throughout the strategy see ‘BOH’ or ‘BOL’ attached to a trendline, this is us labelling when the market has broken a significant high (BOH) or broken a significant low (BOL) 

For this strategy we have our trendlines set to black with the thickness remaining the same as default. 

Rectangle tool 

Next up we have the rectangle tool, we will use the rectangle tool to place around areas of liquidity as well as areas of order blocks. We will also use it to highlight areas of interest when breaking down trade setups. We often use the rectangle tool to highlight areas where I expect price action to reverse.  

For this strategy we will have our rectangle tool opacity set to 30%

https://www.tradingview.com/x/XRK5jZxW/

Arrow 

‘The arrow’ isn’t really an analytical tool; we will be using it more for forecasting price movement and explaining in our Slack community. We often use the arrow tool to portray my analysis and highlight where I believe price action will be going in the future. It is an analytical tool that will help our community understand your analysis. 

Brush

Similarly to the arrow tool, we will be using the brush tool to forecast price movement and backtest price movement. Both of these will be covered in videos later in the series.   

It doesn’t matter too much what colour your drawing tools are set to as long as you and others can understand your analysis. 

To summarise, Tradingview will be your primary tool used to trade the online markets. The team over at Tradingview have done an excellent job in making the platform as fluid and welcoming as possible especially to newer traders. If used correctly, it can be an incredibly powerful tool in our arsenal. As Technical traders we will be using this software everyday to update our watchlist and keep our skills sharp so before we dive deeper into Stage 1 It is worth having a play around on the charting software to get familiar with everything it has to offer. 

How does the market really move? It sounds like a silly question but this is truly valuable knowledge. We start this episode zoomed out focusing purely on price action, slowly zooming down time frames for more clarity and clearer area of interests. This is an effective routine to break down any potential setup and a great place to kick off the Pro academy content.

You may have heard traders use the term ‘Impulse and correction’?

We use it quite a lot when looking at a more raw piece of price action.

In the financial markets, this is how price action typically moves within cycles.

You will see price action consolidate in a correction – where there are no clear winners between the bulls and the bears, causing the market ranges in a sideways.

After a while, the buying or selling pressure becomes too much resulting in an impulsive break of structure and momentum  in a particular direction – this is known as a price impulse. Generally speaking, the higher the timeframe of the consolidation the larger and more extensive the breakout impulse.

When I first started out trading, understanding whether I was in the impulsive or corrective phase of price action was very tricky. So It might be hard to distinguish at first, but in the long run it will become very easy and second nature.

Why is it important to understand which phase of price action you are in?

It’s vital to understand what period of price action you are in before taking a trade. Certain analytical tools and patterns are far less effective within different phases. When entering a trade you need to be completely aware of your surroundings to avoid taking unnecessary losses. 

Ideally we want to be entering the market at the start of the impulsive phase

Entering at the start of the impulsive phase is where you would see the area with the highest probability, the safest area to be entering a trade. Trading is all about probabilities, you DO NOT want to be entering low probability trades when price action has been exhausted at the end of a run. 

https://www.tradingview.com/x/gyJ2KtWQ/

This is an example of a basic market movement

Impulse, correction, impulse is the natural progression of the market.

As you can see we have a strong price impulse driven by cumulative selling. Having had the impulse, price action is then followed by the corrective phase. This is where price is undergoing a pullback or retracement before the bears or bulls enter the market again (dependant on what trend you are in)  

Price action started off with a heavy impulse up, the natural progression of the market normally results in price action pulling back as the bears enter the market during the corrective stage.

Followed by another impulse up and then another correction. 

Within this strategy we will  refer to these swing points as ‘higher highs’ and ‘higher lows’ when in an uptrend.  

And ‘Lower highs’ and ‘Lower lows’ when in a downtrend. 

Whilst price action is choppy and undecided between highs and lows this is known as the corrective phase. The majority of the time Price action will be in the corrective phase so it is very important that we capitalise on the impulsive phase. By buying or selling at the swing points.

https://www.tradingview.com/x/XB05sfs7/

We  highly recommend jumping onto the charts and trying to  identify and draw whether price action is in the impulsive or corrective phase.

How do we decipher what sequence the market is in? In this episode, Dylan explains what market sequencing is, how this works and shows examples both annotated and live on the charts and effective technique to make sure we are trading on the right side of the market.

It sounds silly, but so many new traders fail to understand the true direction of the market,

This is the topic of this video, we are going to hone in on exactly how we locate and decipher what the market is doing.

Is the market making a series of higher highs and higher lows?
Is the market making a series of lower highs and lower lows?
Is the market range bound?

This really is crucial to the strategy, so without further ado let’s jump straight into it…

LL – Lower Low

LH – Lower High
HL – Higher Low

HH – Higher High

https://www.tradingview.com/x/3sSAciOz/

This example shows an example sequence in its most basic form.

Price action has pushed to the upside creating a higher high, we have then retraced in the form of a correction creating a higher low.

This sequence will continue until the bear begins to take over the market, it is very unlikely you will see the bulls or bears continue to dominate one trend, without a change in market sequence.

As a typical rule of thumb, the further a market is within its sequence i.e the more higher highs/ higher lows or lower highs/lower lows we have seen form the higher the probability of seeing the market change sequence in the future.

When the market does change it’s sequence we will be looking for a break of:

Previous low for a bullish to bearish change

Previous highs for a bearish to bullish change.

https://www.tradingview.com/x/sYGDikQL/

The problem is, the market has multiple timeframes that we trade off?

What may seem bullish on the 1hr timeframe may also seem bearish on the 8hr maybe daily timeframe so which do you focus on?

Well, the answer to this is.. Both!

You see, a professional trader will have a good understanding of what is happening on all timeframes, not just the one he/she is focusing on at the time of the trade. What may look good on the 1hr time frame might be running into a setup that fits the opposite bias on the higher time frames.

This is why we look at multi time frames analysis, you will see this when we create our evening update videos and weekend market breakdowns.

If we, at the back of our minds, understand where the market has the highest probability of changing sequence on the higher time frames, everything up to that point can be traded for what it is.

So if we know there are 400 pips to the next daily order block (where we will see multiple confluences stack for a change in sequence) we know that we can trade the market sequence up into this region on the lower time frames.  Trades that are ‘counter trend’ (going in the opposite direction to our area of higher time frames orders will have a slightly lower probability of going in our favour.

This is The Social Trader’s way of remaining adaptive within this market, some of our most profitable trades have come from positions that are on those lower time frames, trading smaller market sequences.

If you jump on a chart and just label out the sequences on both higher time frames and lower time frames you will quickly master this concept.

We often teach some of our newer traders sometimes the most simple way of getting your head around a setup is to just mark out the highs and lows within the market on the higher time frames and lower timeframes. It is an incredibly simple technique but can be the difference between truly understanding the setup and sequence you are trading vs trading a lower quality setup that will likely go against you.

Carrying on from Market Sequencing, it’s now time to take a look at Market Structure. Within this episode we deep dive into working out when market structure has been broken, also taking a look at examples of when it hasn’t. How can we use this to aid our bias and stay out of the market when necessary?

Market structure is vital to understand as a trader.

It will tell you when to take trades 

And it will also tell you when to avoid taking trades (arguably more important) 

So we know from the previous video covering market sequences, that when the market is moving up it will be creating a series of higher highs and higher lows on the lower timeframes and potentially the higher timeframes depending on how long the move has been in progress for.

Every-time the market changes direction a ‘swing point’ is created (a higher high, higher low, lower high or lower low) and market structure is formed within the market. 

https://www.tradingview.com/x/7dWFlIRg/

In this example here you can see that he market has pushed and created a new higher high, 

We’ve then fallen back and printed a higher low, 

On the next drive up the market sees a full body closure above the previous higher higher confirming that we have now broken structure. 

https://www.tradingview.com/x/HNQ6rN09/

In this example, price action repeats the same process, 

We have formed a new HH and HL within the market.

However, on this push up the market fails to break structure and instead creates a wick above the previous higher with a body closure below. 

In this example, price has not broken market structure.

This would suggest to us that there may be a short term shift in direction before a retest of this structure, 

We may now go and form a lower low within the sequence.

This technique should only be used as a guide to understanding market direction. We will be covering other aspects within this strategy that will sharpen our ability to hone in on the areas where the market is really looking to reverse and trade them accordingly.  

Now let’s have a look at major and minor structures within the market. 

In the market sequence video we mentioned that within each sequence of swing points there will be smaller swing points on the lower time frames.

The easiest way to determine what is minor and what is major structure is to imagine the market like this.

https://www.tradingview.com/x/sHJK6VQT/

This screenshot was taken on the 2hr timeframe.

You can see within this timeframe the market breaks structure multiple times, however that does not mean on the higher timeframes such as the daily or weekly timeframe that market structure has been broken. 

The moves within this piece of price action could be traded within our pattern play and SMC strategy and we’ll touch upon how later on in the course.

What you may find is that moves within the minor structure will be shorter term positions whereas the moves that occur once these major structure points have been broken could be held for a longer period

It is always a good idea to have an understanding of where we are in terms of market sequence and also market structure.

We recommend spending around 30 minutes to an hour drawing out these sequences and structure points repeatedly within the market. This will give you a good understanding of how this concept works on both the higher timeframes and lower timeframes. 

This is a huge episode covering our understanding and implementation of patterns. Patterns play a huge part within our strategy; we use patterns to spot direction and provide clear areas of interest to get involved in the market, without them, we would be trading the market without our parameters set.

Throughout my trading career I have found that using patterns and structure as a form of technical analysis is a  very powerful way to analyse the charts. Having an understanding of market sequence, market structure and institutional concepts (which we will touch upon later in the strategy) is super powerful, but patterns will be instrumental to the Pattern Play & SMC Strategy.

Grab your notepad as this video is one of the  most important in the series, our strategy is based heavily around patterns and pattern formations, So let’s dive straight into it!


Reversal Patterns

A price pattern that signals a change in a trend is known as a reversal pattern. 

These patterns signify periods where either bulls or bears have run out of steam – the trend will pause and then head in a new direction as new pressure forces the trend to bend and reverse. For example, an uptrend supported bulls can pause, signifying even pressure from both the bulls and bears, then eventually giving way to the bears. This results in a change in trend to the downside.

The longer the pattern takes to develop and the larger the price movement within the pattern, the larger the expected move once price breaks out.

Patterns are never ‘one size fits all’, there will be an element of discretion used, they come in all shapes and forms and can be seen across all timeframes.

In this video we will be covering:

Head and Shoulders

Rising wedges and falling wedges

Ascending channels and descending Channels

Reversal patterns should never be taken on their own accord.

There should always be another added confluence in place before taking the trade, yes they are strong indicators of where price will be heading next but within this strategy we should be aware of ‘valid setups’ vs ‘high quality setups’.

A ‘valid setup’ is simply a trade that looks good on the lower time frames and has only a few confluences, for example just ascending channel formation. A ‘high quality setup’ is one that has multiple confluences both on the higher timeframe and the lower timeframe. 

Patterns taken on their own without other influences involved would be classed as only a ‘valid setup’. 

The probability of the move playing out is significantly reduced without our other methodology involved.  

First up we have the Head and Shoulders pattern.

Head and Shoulders


https://www.tradingview.com/x/ywQ3Kr3X/

By definition – “A head and shoulders pattern is a chart formation that resembles a baseline with three peaks, the outside two are close in height and the middle is highest. In technical analysis, a head and shoulders pattern describes a specific chart formation that predicts a bullish-to-bearish trend reversal”.

As we can see we have a left shoulder form with price rejecting a key level. 

Once the trend has turned around, the head forms. 

And then finally we have the right shoulder form. 

Now, the right shoulder typically rejects from the same price level as the left shoulder, however this isn’t always the case. Sometimes we won’t get a perfect head and shoulder pattern so we have to use other confluences to gauge where price will reject.

In the example shown here, you can see that price action is range bound. 

Price action is bouncing between 1.15400 and 1.16400 here on EURUSD. When the market has tried to push to the upside we have failed to do so with any conviction. This has left a pattern that has one spike to the upside, followed by a heavy retrace with every following attempt being failed.

For entry on the right shoulder, price action has hit an order block around the 1.16000 level, after this the market pushes to the downside… You’ll see this a lot, after the right shoulder has formed the following price action normally reverses and continues to the downside.

As a general rule of thumb, if you measure the neckline to the head, then place that distance on the break of the neckline, it will give you a rough guide on a profit taking area.

Inverse Head and Shoulders

An inverse Head and shoulder is essentially the opposite. This is when you see price push to the upside after completion with the formation being developed below the market.

https://www.tradingview.com/x/WAjHfgy8/

This is an example of an inverse head and shoulder setup (prior to the buy)

In this scenario we have forecasted a price reversal as price action has the characteristics of inverse head and shoulder forming.

In this setup price action is pretty range bound between the 1.68600 region and the 1.70800 region. 

Every-time price has pushed to the downside the bull has stepped in a quickly bought price action back up. This signals that maybe the trend is running out of momentum to the downside and a reversal could be on the cards.

… remember, no formation is ever set in stone and guaranteed to play out. 

Ascending Channels

https://www.tradingview.com/x/4wa3WGkV/

Ascending and descending channels are two of my favourite patterns to trade from. They are formed from higher highs and higher lows that create a larger reversal pattern.

An ascending channel is an uptrend that moves between two ascending boundaries. Price becomes confined in two parallel lines where one trendline supports and the other acts as resistance. The logic is that someone should enter short when price reaches resistance and long when price reaches support but the odds are better if someone enters only in high probability trades, this is why we look for other confluences.

https://www.tradingview.com/x/Ka2qKYI3/

With ascending channels we will be looking to trade this pattern when price action has completed 3 touches on either side of the pattern, as this is where we will see the highest probability of the trade reversing and going in our intended direction. 

Descending Channels


https://www.tradingview.com/x/uT64BL56/

A descending channel forms in the opposite direction to an ascending channel.

Price action is making a series of lower highs and lower lows correctively.

This makes a larger ‘channel pattern’ formation that can be used to indicate a price reversal. In this example, the bottom trendline is support and the top trendline is resistance.

https://www.tradingview.com/x/YlcjyVBs/

Similar to ascending channels, we will be looking to trade descending channels when price action has completed 3 touches of its structure on both sides of the pattern.

Rising wedge/falling wedge

A rising wedge is more of an advanced version of an ascending channel. Where with ascending and descending channels you have a steady flow of higher highs/ higher lows creating a nice even channel pattern.

With a rising and falling wedge the impulses tend to be more volatile with the corrections being smaller. The means towards the top (or bottom) of the wedge price action really begins to squeeze to form an area where price is waiting to explode and reverse. 

Similarly to what we covered in the previous video, we only really want to be taking these patterns when there are other confluences in place. Like when the higher timeframe structure agrees with our analysis, when there is another technical indicator in place that agrees with the trade going in our forecasted direction.

One of the most important characteristics of a rising wedge is when you see low volume candlesticks being produced near the top or bottom of the formation

https://www.tradingview.com/x/jRj20kUh/

Take a look at this example here on USDJPY, if we strip price action back for what it is we can see two key characteristics.

We can see a rising wedge complete it’s 3 touch structure up into the larger ascending channel. There are two pattern confluences here to suggest that the market could potentially be ready for a reversal.

The candlesticks that were produced at the top of this structure show low volume, i.e the bulls have run out of steam to keep pushing price to the upside.

Remember patterns do not have to be respected perfectly, you will often see price spikes out of structures before retracing.  Take a look at that previous example = do you see how price drove to the upside before coming back into the pattern. Even in this most extreme area of the market the sellers are still going to outlook for the most extreme area of liquidity.

What we see commonly within the market is that price can become quite manipulated around the areas that line up with the 3rd touch of the market. Don’t always assume that because there is a 3rd touch that the market must respect that pattern perfectly and push in your intended direction. The best traders see these areas as ‘opportunities’ within the market and not set in stone.

There is additional SMC methodology we will teach later on that can provide us real accuracy when trading these patterns. 

The black swan in trading.. Although often sold otherwise, discretion can be a very powerful weapon in a traders arsenal. Master this and you will enter the market in a ‘flow state’, managing to seamlessly implement the TST killer Pattern Play and SMC strategy to the live markets without hesitation.

Discretion is one of the most, if not the most powerful tools you can have in your trading arsenal.

Discretion – ‘The freedom to decide what should be done in a particular situation.’


https://www.tradingview.com/x/oAwBWuGo/


The market will often perform moves like this, 

You will see price action coming into your AOI and then it spike out of your technicals,

You’ll think… “Oh ok that setup can be written off now as invalid” 

Then all of a sudden price action aggressively reverses in your intended direction and plays out like you forecasted.


https://www.tradingview.com/x/NbXtcgny/


To understand this movement this is a skill we call ‘market discretion’.

By mastering this you will be able to understand the market with a 6th sense.

Your discretion will tell you when to stay out of the market and when to actively trade. It’s your experience within the market truly shining through.

Remember the point I made within the last piece of written content?

I said that traders will often use patterns as ‘areas of opportunities’ not an area that should be respected to a tee. Our market discretion will teach us the most probable area that the trade can reverse from, aligning other methodology pulled from our pattern play and SMC strategy. 

Lets give you an example, 

Within the financial markets there are often plenty of high impact news events, for example FOMC speeches and NFP. When these occur you often see the market shake out buyers and sellers creating huge volatility and market moves. 

But what you also see is that these events often line up with key technical analysis that will push the market in the right direction. ‘News creates volatility not direction’, you may have heard this before. 

With market discretion you know that there is a high probability that even with the market volatility the trade setup you have been studying will still play out.

The news has simply caused the market to spike on release. Most traders lacking in discretion would blame the event and write the setup off. However, those with key experience within the market will know that these events will often play out in the planned direction and will still look to enter the market despite the volatility caused. 

Your discretion will tell you that the market is either creating a new trend or shaking out buyers allowing you to enter the market seamlessly. 

Now, you’re probably wondering how you can build up this skill?


If we were to say there was one straight answer to this question everyone who participates as a trader would be laying on a beach trading consistently day in day out. There is a reason why so many traders will fail to become successful… 

The truth is, market discretion is a collection of skills. It’s the ability to understand pair characteristics. Which is a skill obtained by backtesting and time spent within the markets.

You also need to witness these price movements first hand with live positions in the markets.

A trader that has gone through difficult market conditions will often come out a much stronger trader than those trading only impulsive cycles and easy technicals. 

When the markets are choppy and difficult to trade this is when you will learn the most about yourself as a trader and therefore develop the most.

All of the above needs to happen in order to effectively develop the skill of discretion. Keep up all these processes and over a long period of time you will notice small 1% tweaks in your trading that you previously didn’t notice. 

When people sell you trading as a get rich quick scheme they are completely wrong, it is the skill of market discretion that makes this statement invalid garbage. You will not get rich trading overnight but when you get into the ‘flow state’ mastering discretion you will soon realise how effortless entering in and out of the market for profit can become.

The market more often than not has to come back to mitigate previous orders. Before diving deep into this episode, we rewind a bit to look back at ‘impulses and corrections’ within the market – these corrections often happen so orders can be mitigated.

What is the definition of mitigation?

It is ‘the action of reducing the severity, seriousness, or painfulness of something’

Mitigation in the FX markets happens all the time.

The big boys that are pushing the market will often need to get out of positions that are in drawdown to avoid causing too much damage to capital.

These flows can be seen within the market using technical analysis and can be used to our advantage.

Although the big boys control the market you have to understand that these players will be battling against one another for winning positions. Trading is a game and the players with the most order flows in their intended direction will be the winners within the market.

However, because these larger institutions and players have significant capital within the market they can push the market back in their intended direction in order to suppress their losses or even get small wins out of the market.

When our positions go into drawdown we do not have the capital to push the market back in our intended direction. We have to put in damage limitations such as stop losses in order to get out of these positions without damaging our capital and blowing accounts.


How can we use this to our advantage?


From the techniques covered in the market Phases video, we know the market will move in both impulses and corrections.

These corrective periods are often where you are seeing larger institutions attempt to push price back in their direction in order to get out of positions potentially in drawdown from the initial impulse. 

Because of this, we now know that once those orders have been mitigated it is highly likely that we will see a spring of liquidity come into the market creating that next impulse.


https://www.tradingview.com/x/EXI4mZC3/


This screenshot is a drawn example of this.

So by using the technical analysis you have already learnt such as patterns alongside additional smart money concepts that you will learn within this stage. We can identify the most probable areas that these orders will be resting and therefore use them to our advantage.

But you can see mitigation occur on all timeframes and often when you have just been triggered into a position (which is why the market will often mess around within your area of interest before a committed move). 

If you are in a buy limit position that is sat on a key area maybe you will often see the market reject when it hits your level. However, if the force of selling (in this example) is too strong you can see this level broken and then your previous orders change to resistance as traders that are stuck on the wrong side of the trade push price back up to mitigate their orders and get out of the position for break even.

It’s really fascinating to watch if you can see it and of course this happens on all timeframes, small and large. 

Liquidity is everywhere, ranges, double tops/ bottoms, trendlines, above highs and lows. The question is..  how can we use it to our trading advantage? This episode covers a mixture of drawn and chart examples so that you can become a master of understanding true market liquidity to trade on the right side of the market.

‘In business, economics or investment, market liquidity is a market’s feature whereby an individual or firm can quickly purchase or sell an asset without causing a drastic change in the asset’s price. Liquidity involves the trade-off between the price at which an asset can be sold, and how quickly it can be sold.’

In trading we can use liquidity and an understanding of liquidity to greatly benefit our trading.

We can use our understanding of liquidity to avoid trading setups that could result in -1% losses.

We can use liquidity to highlight areas where the market needs to pull back to. Therefore identifying areas where trends can change.

The market often has to pull back into these areas to gather the required liquidity so that ‘an individual or firm can quickly purchase or sell an asset’.

You have to remember within trading we are not placing trades against robots or a machine, like a video game. 

Trading is a zero sum game meaning that if you are within a winning position someone else on the equal and opposite side to the trade is losing.

There always has to be a buyer for what you are selling in order for the market to remain liquid and vice versa.

We can use liquidity to understand where to place entries and stop losses, greatly enhancing our accuracy on the charts.

The key thing we need to understand is that we are all retail traders within this market.

We simply do not have the capital to significantly move the markets or cause huge shifts that will affect price. We are passengers within the markets often piggybacking off of the larger banks and institutions who try to push price in their intended direction.

Having said that, by understanding liquidity we can often remove the noise from the market to hone in on the most probable areas to see the market react therefore ‘trading with the big boys’.


So how do we do this?


Liquidity is everywhere and it can often become hard to distinguish the areas to see the market react. If you are often struggling to find the most probable point of market reversal there is one easy rule of thumb.

Where the average trader will be placing their stop loss will often be where the market will reverse.

Ok so if we know this how can we use it to our advantage? Let’s take a look.

https://www.tradingview.com/x/wVY172RO/

This screenshot is a great example of how liquidity works.

There are multiple setups here that would fit the most common methodologies and strategies within the financial markets. Within every setup, the market has plunged liquidity once price has moved into an area of interest.

I highlighted on the patterns video within stage 2, that patterns can be used to hone in on our area of interest within the market. 

We can then use our understanding of institutional market movement to avoid taking unnecessary losses within these AOIs and get on the RIGHT SIDE OF THE MARKET. 

There are multiple examples of these liquidity plunges happening with patterns within this screenshot.

What is market Imbalance? How do we spot imbalance within the markets? How can we use it to our advantage? We can highlight the cause for the market to move in certain directions effectively understanding and utilising market Imbalance therefore creating specific areas of interest and profit taking regions.

Imbalance is a really great tool in our trading arsenal, it’s part of our methodology that we can really utilise and use to our advantage when we are analysing the market looking for entries and exits.

It can help us:

• • Find targets
  • Improve understanding of market movement
  • Creates cause for the market to move into a area

For example, If we know that there is an imbalance within the market to the upside there is cause for the market to move to the upside at some point.

Therefore we can shift our bias to potentially look for long positions up into this area of interest (and vice versa).

If there is cause for the market to move in a direction, the probabilities of the trade playing out in your intended direction are increased.

Remember trading is a game of probabilities not certainties.

You can see Imbalance pretty clearly when the market ‘gaps’.

What are Gaps?

Gaps are sharp breaks in price with no trading occurring in between. Gaps can happen moving up or moving down.

In the forex market, gaps primarily occur over the weekend because it is the only time the forex market closes. Gaps may also occur on very short time frames such as a one-minute chart or immediately following a major news announcement or potentially on overnights (the period between the US and Asian session).

Naturally, we’re going to see an imbalance when institutions are involved within the market, they’re going to push prices leaving behind heavy bullish or bearish full bodied candles. Just like gaps within the market, these imbalance drives are typically filled at some point within the market cycle.

Remember, this move doesn’t have to happen straight away other technicals can play out before this occurs but can give us an indication of where we can forecast the market heading next.

You can also see imbalance pretty clearly when the market sees a period of large volume.

Take a look at this example: https://www.tradingview.com/x/ANZKMlGL/

You can see the market pushed to the upside from the 1.16640 level very impulsively. Huge volumes stopped into the market creating bullish engulfing candles, after bullish engulfing candles. Naturally the market is going to be sucked back into these areas where the market has had little selling pressure / pullbacks.

It is an imbalance within the market that needs to be filled.

So we can use this to our advantage and trade back down into these regions

OR

Use them as a confluence as part of a long position in this scenario. 

Order blocks are commonly overused and misconceived. We’ll teach you how we find them whilst eliminating a lot of the noise whilst  understanding the safest way we can trade them. We also touch upon order block refinement and over refinement within the market.

Order blocks are a key section of our technical strategy. 

Order blocks are considered a market behaviour that indicates the pile-up of orders from banks and institutions.

Similar to what we covered in the liquidity section, we can use order blocks to our advantage.


– We can use Order Blocks to avoid trading setups that could result in -1% losses.

– We can use Order Blocks to highlight areas where the market needs to pull back to. Therefore identifying areas where trends can change. 

– We can use Order Blocks to understand where to place entries and stop losses. Greatly enhancing our accuracy on the charts.


The problem is, order blocks could be identified in all areas of the market.

At the end of the day, every candle stick within the markets are orders piled on top of orders. So which order blocks are the ones we really need to focus on?

As a general rule the most probable order blocks will be:


– The last bullish candle before a clear break of minor or major structure to the downside (short)
– The last bearish candle before a clear break of minor or major structure to the upside (long)

Whittling orders down to these set rules we can eliminate the noise and focus 100% on orders that repeat themselves time and time again. Therefore making the areas of interest to trade mechanical.

We need to get into the mindset of … ‘If this occurs in the market look for this’

However, even using this methodology will still mean there could be orders sat on the 4hr candle, 1hr candle maybe 30 min or 15 min candle? So how do we distinguish which one to trade from once we have highlighted an area of orders?

I use a simple method to get around this.

https://www.tradingview.com/x/xY5HjQRU/

This is a great example found on AUDUSD.

I have drawn out both the last 4hr down candle and the last 1hr down candle.

You see how the two overlap each other?

Now do you trade from the 4hr hr candle or the 1hr candle to get involved within the long?

The best traders will stick their orders within the area of the market where there is the highest probability of seeing a rejection.

So in this example, it would be safe to be say if we drew out the 50% of the 4hr OB then our entry will be close to the 1hr orders whilst our stop loss would still be close enough to have protection from the bottom of the 4hr OB.

https://www.tradingview.com/x/PFxMRFC8/

You see how the 50% of the 4hr orders mean our entry is within the bottom quarter of the 1hr OB? If we had got in off the top of the 1hr OB with our stops just below there would be a very high chance that market manipulation would tag us out of this trade.

Like so…


https://www.tradingview.com/x/yXdLEpbA/

We want to be on the right side of the market especially when there are multiple orders sat within a section of price. In situations like this we need to hone in on the area that has the highest probability of:


-Tagging us into the move in the first place

-Is close enough to the bottom of order for protection

-Allows us to get into the move with a small enough stop loss that the position still yields an attractive RR

An episode of pure value. Dylan will show you how we refine order blocks, detailing how we regularly see traders over refine and take unnecessary losses. We also cover key concepts that aid your overall understanding of more granular price action when interacting with orders, this is how you will achieve insane RRs

Before we start this written piece it should be noted that advanced order block refinement should only come when the trader is experienced enough within the market.

We touch upon this in a later episode but over refinement can cause a detrimental effect on your trading. The more experience you have in the market and in particular with order blocks will make this topic far more likely to have a positive impact on your trading, allowing you to extract the most out of our edge. 

Advanced order blocks essentially take what we learnt in the previous video ‘order blocks’ and take it to the next level to achieve more advanced risk to reward ratios on our trades.

Order blocks will already give you a lot of accuracy within the markets but refining them can be an incredibly powerful tool if used in the correct manner.

You have to remember that every candle you see can be broken down into multiple sub candles. For example a 4hr order block candle will have multiple 1hr, 30min and 15 min candles within.

By zooming down the timeframes we can narrow down our entries to these much smaller order blocks therefore providing us with more accuracy to get in tighter providing a much higher risk to reward on our trades.

This can be hugely beneficial if you have mastered the ability to place your entries within the most probable areas within the market. However, for an inexperienced trader this may result in unnecessary losses within the market.

Being a the move with a slightly reduced risk to reward ratio is far better than being taken out for a -1% loss (often by only the smallest margins)

In order to attempt this, we would recommend that you heavily backtest this.

take a look at what you would class as a standard order block (1hr candle +) and refine this down to the lower time frame candles within. Play that trade back, see if your refined order block actually tagged you into the move and if so what was the improvement in the risk to reward.

The positive of getting in tighter is that you can:

Get into trades with a much higher risk to reward. What may have been a 1:5 could quite easily turn into a 1:20 with the correct refinement.

You can also manage your trades more much more aggressively therefore potentially taking fewer losses after seeing a rejection from an AOI.

For example, if a trade pushes off the OB perfectly then there is not need to leave that trade wide open. The orders have been respected and if the price then comes back to your entry point there is a much higher chance that the OB will break.

What not to do:

Refine too much – don’t drop down to the really low timeframes like the 1 minute. What we often see is traders do this and then fail to get back up to the higher time frames where moves are more concrete and thought out.

If you are in the mindset of refining too much then we often see trades stick to these lower timeframes and trade as if they have ‘blinkers’ on. Constantly looking for entries on the lower timeframes and forcing positions. This is the worst position to be in as a trader, we need to let the moves come to us and trade primarily on the mid timeframes like the 30min, 1hr and 2hr for entries.

There are multiple ways we can approach entering a setup. We cover all bases in this episode and run you step-by-step through the process to enter a trade seamlessly. This is how we remove the noise and focus 100% on the setup and technicals in front of you.

In the previous video Dylan covered how we can get into the market. However, exiting the market at the right time is just as important to avoid seeing market gains eroded. In this video we cover  why it’s important to plan an exit, even before we take a trade, the 90% rule, highs and lows, targeting order blocks, and runners. Remember we have to pay ourselves!

A take profit scenario is not always how we look to exit trades. In this video we look at alternative ways we manage our trades, including trailing stop losses, when to move a trade into breakeven, when to close out a portion of a position, letting the rest run and more.

Scaling in, if not performed correctly, can backfire and erode account gains. Dylan teaches you in this video set parameters we use in order to effectively scale in whilst maintaining professional risk and trade management.

One of the most crucial episodes of our strategy and what will become your overall edge. Understanding and outlining set risk parameters from the get go is key for any trader to succeed within this business. In this video we teach professional risk management on and off the charts. This is the difference between a good trader and an excellent trader.

Why is a Trading Plan one of the most essential tools within a traders tool box? Dylan runs you through start to finish on how to create your own bespoke trading plan whilst understanding the use case and properties of a well laid out plan. If completed properly, you will be able to enter and exit the markets seamlessly without doubting your personal setups.

Gather trading data is key before deep diving into the live markets is an issue we see time and time again. Without data you will struggle to understand true market flows and topics such as Pairs Characteristics which we cover in a later episode. Dylan shows you the most efficient way to complete this process.

This is for traders who are set out to take their trading to the next level. Some pairs are wicky, some pairs retrace harder, some pairs are naturally more corrective. To avoid unnecessary losses, this is all great data to have. Dylan runs you through multiple examples whilst also highlighting how to document your chart findings.

Think of these as your books for running your trading business. The professional traders will document every aspect of their trading journey beginning with the most important, trade tracking. Not only will this help self reviews it also provides you with key data to use.

ASR on a monthly basis is a powerful tool. At the end of your chosen period you go across the data and way you have been trading with a fine tooth comb. Working out what you did well and what could be improved upon. It’s important to make those 1% tweaks, marginal gains that add up to a much larger self development.

Funding traders is a great way to scale your trading quickly. Within this video Dylan covers all aspects of the funding process both good and bad.

Want to see the exact  process we go through to extract the most out of the financial market? This is a day in the life video running you through the small 1% tweaks you can add to your preparation routine that will make a huge difference to your bottom line results. Grab a notepad! 

Just like any success in life mastery takes time, you need to remain patient and almost treat it like a degree or apprenticeship. You need to be patient when actually trading and on the charts, one of the most important traits in a consistent trader is knowing when not to trade, knowing when the markets are showing clear signals to remove an order or evaluate your bias. Recorded across a week, this a week in the life of a patient trader.

In our first applying the concepts video Dylan breaks down a beautiful long position on EURCAD, we identified our bias from a discretionary based pattern and then zoomed into the lower time frames to apply our smart money concepts to maximise risk to reward.

This is a great example of how to keep things simple. Price action was a clear indicator for where USDCHF was going to go next. We then took full advantage of our smart money concepts to enter this trade with precision and really maximise risk to reward.

Lots of value to take away from our third breakdown here on GBPUSD. Overall this pair looked great for another leg to the upside. Dylan also gives an example of how we can utilise our ‘wick below’ order block in order to get into this position as tight as possible.

Moving onto our fourth applying the concepts video, Dylan breaks down a fantastic short position on USDJPY. Using our pattern to identify a short bias before zooming in to the lower time frames to really find that pinpoint entry.

Our final breakdown in this series is here on GBPJPY. Dylan breaks down this fantastic short position that we managed to hold all the way down to a bullish order block. Dylan also highlights why he manages more aggressively as price action approaches our targets.

Our Second breakdown is on NZDUSD, this is a beautiful example of how to utilise all of the concepts within the strategy. We used our confirmation entry model here to reduce risk and swing the probabilities in our favour.

EURAUD is our fifth breakdown and yet again there is so much value to take away. Dylan dissects a picture perfect long position that turned into a swing position. Dylan also explains why he gave this trade more room to breathe when trailing his stop loss.

On to our sixth trade breakdown Dylan highlights how we managed to take advantage of a long position on EURUSD. This is a great example of how we can use discretion to draw patterns and really understand what’s going on. This trade was taken using our lower time frame entry model.

In our seventh trade breakdown we take a look at a textbook long position. This move is more of an intraday position and we took full advantage of our confirmation entry model to really add strength and accuracy to the set up.

Our penultimate breakdown is on NZDJPY and this is a beautiful example of how we can use patterns to identify our direction. This trade also incorporated the use of pattern separation to really understand price action. This is truly a textbook TST set up.

This happens a lot in the early days of trading and can be incredibly damaging to any trader. You need to get this out of your system as soon as possible, new traders will want to be in trade all the time. You’re more likely to force trades and take low quality setups when you do this. This is how we combat over trading.

Why is it important to keep a neutral bias within the markets? A lot of traders will have a fixed bias and assume the market HAS to move in their desired direction. This leads to holding on to losing trades and the wrong bias. When you remain neutral you can see the market from both sides and understand when to admit your bias was wrong and change it. The market can and will do whatever it wants.

Trading with fear is super common with traders, especially those new to the market. The main fear is losing money and being wrong. Nobody wants to lose their hard earned cash nor do they want to admit to being wrong. Ways around this include trading with what you can afford to lose, backtesting, trade tracking and trading plan. These help you to gain confidence in your ability and become emotionless.

Losses are inevitable and a part of trading. If people say they don’t lose within this space or claim ridiculous strike rates you should stay well away from them. The way we look at it is losses are a cost of the business side of trading. The sooner you understand this the better trader you will be.

Everybody starts somewhere in trading, not everyone has massive amounts of capital and in the early days when you’re making £5-£10 a winning trade it may seem like what’s the point? You have been working so hard for such small returns. This is where thinking in scale comes into play. You have to think about the bigger picture, if you can be consistent on a £500 account you can be consistent on a £5000, £50000 and so on. The skillset will become your greatest asset.

Why is it important to keep a neutral bias within the markets? A lot of traders will have a fixed bias and assume the market HAS to move in their desired direction. This leads to holding on to losing trades and the wrong bias. When you remain neutral you can see the market from both sides and understand when to admit your bias was wrong and change it. The market can and will do whatever it wants!

Coming soon…

In this video Dylan explains the importance of market discretion. We debunk the myth that discretion is a bad thing by showing you how truly powerful it can be. Discretion is simply your knowledge and understanding of the markets. It can be used at all times and in many different situations to give you an edge within the markets. Once you understand how to harness the power of this you will truly begin to reap the rewards.

In this episode we take a look at liquidity. Dylan explains what it is, where we can find it and how we can use it to aid our trading. Understanding liquidity is truly a game changer. When you know where liquidity is situated in the market you can plan your trades and build a story around it. Understanding this concept will really level up your trading.

In the finale of your free training we take a look at the power of the swing. We believe that trading’s main benefit is freedom. This is why we do it. Swing trading gives you that freedom as you don’t have to sit and stare at your charts all day. We highlight pinpoint areas of interest to find an entry and look at that larger picture to find our targets, this truly is a recipe for success.

In the finale of your free training we take a look at the power of the swing. We believe that trading’s main benefit is freedom. This is why we do it. Swing trading gives you that freedom as you don’t have to sit and stare at your charts all day. We highlight pinpoint areas of interest to find an entry and look at that larger picture to find our targets, this truly is a recipe for success.

We talk about Trading in the zone A LOT through The Social Traders core strategy. A lot of traders have read this book and there is a good reason for it, it is one of if not THE best trading book on the market.


If you haven’t already got this book and are serious about your trading goals, do yourself a favor and purchase it.

The book starts off with an ‘attitude survey’ so before you have even started the book Mark Douglas is laying the foundation to really question whether you are as good as you think you are as a trader. 

Question number 1: To make money as a trader you have to know what the market is going to do next?

Agree or disagree? 

Question number 8: The more a trader learns about the market and how they behave, the easier it will be for them to execute his trades?

Agree or disagree?

Now really think about those two questions, in most industries the more knowledge you have about a particular subject the better you will become at it right, the more equipped you will be? Well that is not the case with trading acquiring and acquiring more and more knowledge from different creases of the market may cause other issues.

Trading is a game of probabilities, it’s about an edge and mastering that edge. So many traders delude themselves thinking that acquiring more knowledge will help them succeed when really the tools to succeed are right in front of them, with their mentally typically being the only thing stopping them from being consistently profitable.


Let me show you a snippet from Chapter 7:

“Traders who have learned to think in probabilities approach the markets from virtually the same perspective. At the micro level, they believe that each trade or edge is unique. What they understand about the nature of trading is that at any given moment, the market may look exactly the same on a chart as it did at some previous moment; and geometric measurements and mathematical calculations used to determine each edge can be exactly the same from the one edge to the next; but the actual consistency of the market itself from one moment to the next is never the same”

So what I want you to think about before trading at scale,

If you’re really serious about leveling up your psychology
If you’re really serious about leveling up your trading capital

Then get this book, it will be a game changer for you trading. 

The Science of mind management in business and in life. Although this book is not directly linked to trading, some of the key topics discussed are key to levelling up your overall mindset as a trader, especially if you are looking to trade larger capital. 

So let’s think about this,

Every time you get a negative thought or belief creeping into your mindset about trading, I want you to use this to interrupt the pattern of the thought.

‘Is this thought that I am having right now useful to me?’

Ask yourself that question, like really ask yourself that question…

‘Is this thought useful to me’ 

Trading isn’t easy, right… Let’s say that you’re having a streak of losses and things just aren’t going your way. It could be that you’re on a funded account and 3 of your first trades have been going against you. 

Maybe you deviated from you trading plan and you know it but you did it anyway because you fell down a negative path of thoughts

It doesn’t matter what it is, you MUST stop yourself and ask yourself this question… 

“Is this thought that I’m having right now useful to me?”

And the analytical side of your brain if taught and trained correctly will kick in and say

‘No it’s not snap out of it’

The Chimp Paradox will teach you to train the analytical side of your brain.

There is a lot in this book to digest but The Chimp Paradox uses a simple analogy to help you take control of your emotions and act in your own best interest, whether it’s in making decisions, communicating with others, or your health and happiness.

Extreme Ownership is another book that is not tied to trading but the overall process and discussion points can be directly linked to the psychological skills required to be a successful trader. 

This book teaches you everything you need to know about discipline.

Discipline equals freedom, discipline is the most important thing because if you have the discipline to do what you know you need to do it will excel your trading career.

Most traders don’t do it, they expect to wake up everyday feeling happy and motivated and when they aren’t they get upset and don’t know what to do.

You see it so much most particularly in this generation,

The thing is successful people don’t wake up inspired and motivated every single day, in fact quite the opposite. The difference is that successful people know how to control their emotions when they don’t.  

Discipline is having the ability to show up like you love it even when you don’t feel like doing it, it really is that simple.

I know so many people that do not have the discipline to even get out of bed and attack the day. If you think about it, your bed is the most welcoming and warming place you know, it is where you feel most comfortable. So many people will have a day off and just use that time to stay in bed..

so if you can just learn to get out of bed when you don’t feel like doing it BUT do it as you enjoy it this will translate into so many areas of your trading.

Think about it, if you do not have the discipline to do something as simple as getting out of bed, what are the chances that you have the discipline to take consistent profits from the online trading markets?

If there is one word that will allow you to scale to the capital within your goals for it will be discipline. 

I remember a story of one of my grandparents about how everything cost 2 pennies when she was young, but now everything has got constantly more expensive and when I have the privilege to see her, the complaining would last for hours and hours. 

And that’s exactly what reactive people do.

They always focus on the things that they cannot control.

It’s not possible that a concept like inflation could exist and if it did, it is not possible that they wouldn’t know about it. 

On the other hand, proactive people realise, even if my complaints were completely objective, it doesn’t help me.

So I am going to focus on what I can control.

If a proactive person owns a business where he sells a product, instead of focussing on ‘how people these days don’t appreciate good product anymore and how the government has horrible regulations’

He focuses on 

How can Improve my product so that my customers cannot live without it?’

Do you realise how much responsibility, how much dedication, how much commitment the proactive person would need to have to take this route?

That is why so many people focus on the things they cannot control, rather than focussing on the things they can.

Habit number 1 is to be proactive. 

If you can implement these 7 habits into your trading, you will be able to achieve much greater results.

Looking at the example of reactive vs proactive, reactive traders are going to blame the market when a trade goes against them and have their head down the minute it does, meaning whatever else they do that day they will be in a bad mood or potentially have shorter patience and discipline. 

Proactive traders will understand the market has gone against them but will already have their next setup forecasted, planned and revised before the move is going to happen. They know that they can do and will do whatever they like and so we are simply playing the probabilities we have in front of us. 

Trading in the Zone and The Forex Mindset both look at the psychology side of trading rather than the technical side. 

You see once you understand your edge to the fullest there is no further progression from a technical perspective. What I mean by this is that there is no indicator that will automatically make your trading better, in fact quite the contrary more technicals will likely confuse you more and make you see the markets in conflicting ways.

Jared Martinez traded the forex market for a decade through the 1980s and ’90s before he discovered that successful trading requires 10 percent skill and 90 percent emotional intelligence

Chapter 1 – Get Excited About Trading
Chapter 2 – Finding a Mentor in Trading and in Life

Chapter 3 – Greed and Fear Control the Market

Chapter 4 – Achieving Excellence at Trading

Chapter 5 – Understanding How Your Head and Heart Work
Chapter 6 – The Importance of Emotional Intelligence

Chapter 7 – The Importance of Change
Chapter 8 – Creating a Personal and Traders Constitution

Chapter 9 – Dealing with Frustration as You Trade

Chapter 10 – Dealing with anger as you Trade

Chapter 11 – Alter Your Attitude Alter Your Trading Results

Chapter 12 – Learning Patience and Self Control to Avoid Temptation

Chapter 13 – Listening with Humility

Chapter 14 – Learn to Trade with Confidence
Chapter 15 – Protect Yourself at All Times

Follow Your Dreams and Persist Until You Succeed