Optimal Trade Entry (OTE)

Definition

"Optimal trade entry is really based on buying retracements. As the market makes an impulse price move higher that impulse price move has to be incorporating a break in market structure and then what you're doing is you're trying to buy the retracement slower."

"If you're bullish you're gonna be buying the dips or any retracement slower after a price leg higher and then the expectation is you're buying it when it retraces and then you want to buy it as it does that and then capture the next leg higher and everything's reversed for when it's bearish we'd be looking for rallies in price and we look into sell those rallies with the expectation that we're going to break to lower lows."

Higher Timeframes Priority

Focus on Monthly, Weekly, Daily

"If you used a higher time frame monthly weekly daily n' four-hour and will just leave the four-hour offer right now this focus on a monthly daily and weekly time frames if you look for key levels where price has moved away from it"

"If you use a higher time frames you want any asset classes you're looking to speculate in or study that is where the big money moves are it's as simple as that it doesn't get any plainer than that."

"If folks would just focus on these timeframes it will answer 80% of the problems you're having because you're too worried about what's going on in these lower timeframes"

Four Hour Minimum for Key Levels

"Lower time frame that would be about the four hours the lowest I'd go in terms of defining it as a key anything less than four hours is too short term to refine that on a large institutional basis"

One Minute Charts Warning

"One minute charts are not going to decipher what smart money's doing that's just very short-term volatility"

Market Structure Break

Short Term High

"You want to see it take out a short term high... once it does that this break above that short term high is a market structure break"

Intermediate Term High

"A high that has two lower highs on either side of it it makes that high in the middle a significant high... This high being broken right there is much more convincing than this short term here"

Fibonacci Settings

Core Levels

Entry Zone

"We're trying to do is get below halfway of that price leg higher down into 60 to 70 and a half to 79% raise my level"

"I try to get a tour very close to the 62% tracing level I allow up to a little small deviation below the sub types of trades along 280"

Drawing the Fibonacci

"We're looking at we're gonna put on the bodies of candles up here this is the highest body right there this candle right there and we're gonna look at that as the open"

"The wicks are always going to be the thinnest price action"

Bullish Optimal Trade Entry

Setup Requirements

"We're going to assume for a moment that we are you assumed it's a markets bullish okay and we would be looking for the market to trade higher optimal trade entry is really based on buying retracements"

Impulse Leg Higher

"We have a impulse price leg higher and then we have another impulse price leg off that level and trading down into optimal trade entry"

Entry Execution

"I'd look to get there um fill that basically 12:35 we'll call it okay just a little bit about 62 I'm not gonna fancy dance around try to get the actual level I just want to be in a level that makes sense"

Bearish Optimal Trade Entry

Setup Requirements

"When the markets bearish we look for an impulse leg lower in price okay and then we expect to see price retrace higher back into optimal trade entry"

Risk Model & Stop Loss

Stop Placement

"My stop will be exactly at this low not 10 pips for 5 to put pips below that it's gonna be right at that low"

"Between the two reference points that would be the risk"

Give Price Room

"You have to give the price freedom to trade from where you're trying to get in at to your stop let it go did a full stop it's there for a reason to protect you but if you don't give it room to breathe you're never going to give these markets the ample room that needs to desire eight and then expand towards your targets"

Risk Calculation

"We would take that amount of risk defiant divided by you know the percent risk that we're willing to assume based on our count let's say it's a half a percent we're a half percent of your account is you take that in terms of the pips and break that down and that would give you your per pip leverage"

Targets & Profit Taking

First Profit Scaling

"The level up here zero level is when you take off first profit now I like to go a little bit early because it can always fail getting back to this high so at that high or just below it that's where my first profit is that's your first scaling that's not your first target"

Two-to-One Minimum

"It has to be a reasonable you know better than in my opinion better than two to one... If I'm getting here as an entry and my risk is here it needs to be enough of the position coming off that promotes at least two to one so this is one are in terms of risk whatever that is I have to be able to make two times that in my first profit that's what I'm trying to shoot for"

"Sometimes I'll take trades that are just slightly underneath - it might be like one in three quarters okay if I'm really really aggressive"

Target Progression

"You got to expect price to want to eventually get to this level or maybe this level if you're really extremely bullish all the way up here to have a measured move"

"What's a measured move the impulse leg low to high that move is the same thing just add it to the high up okay so that's a perfectly symmetrical price swing"

Extension Levels

"At the 127 extension basically is what this is I'm gonna be looking to take something off there and if we get to 162 extension up here I would be another portion for me to take profits and then if I'm extremely bullish I'll leave a small piece on for a measured move type effect"

Scaling Benefits

"I laugh when I hear folks saying it's stupid to take first profit or scaling out profits because your initial risk is X and then you've taken a small profit yada yada ya well that's because I'm looking for these objectives down here and it takes care of itself okay and it ends up becoming my last portion ends up being way more generally than what I did in my first scaling"

Algorithmic Price Levels

Institutional Levels

"The markets trade in an algorithmic format okay there's price engines that generate you runs on price and runs on stops and it's accelerations in price and we're delivery skips and jumps to specific areas and pricing"

Price Level Framework

"You can see it on all time frames but really 15 in one minute if you do it every course of a week you'll see how price gravitates from a full figure okay that would be an example of like one 1700 to 118 zeroes there that would be a full penny move in a year a dollar that one penny move is broken down algorithmically to the 11780 level 11750 level or mid figure 117 20 level and then we have 117 big figure"

Monthly High Example

"This high comes in at one 1714 okay one 1714 for this particular month... from an algorithmic standpoint we would look for sensitivity or support to form around or at 1 1720"

Why Algorithms Work This Way

"The reason why it does that is it allows the market to pick up orders at just below or above that level okay there's limit orders there there's there stops there but generally it's coming down to run stops to pair the orders with smart money's limit orders"

Institutional Perspective

Support & Resistance from Higher Timeframes

"If price has moved up to a resistance level and repelled and went lower we can reasonably assume that there was a large degree of institutions that had a interest and being short there and if the market trades down to a level and bounces off of it and goes higher we can reasonably assume that there is an institutional basis for that rally to ensue"

Monthly Levels

"There's plenty of high probability scenarios that you could find just using a monthly chart no you don't get a whole lot of setups but if you're watching a wide array of particular assets there's always something trading at or near a monthly level... an old high an old low simple as that"

Smart Money Orders

"We're looking for the evidence that there's going to be a institutional sponsorship behind the price move that means big entities deep pockets lots of orders coming in large sizeable orders are coming in"

Buy Stops vs Sell Stops

"Every time you see my chart below the market I'm always referring to it as running cell stops above the market I'm always referring to it as running 5 stops those that are not in the know they will question whether or not I'm using the right definition I am using the right definition because I'm looking at things from an institutional standpoint those cell stops they're below the market place smart money will have their buy limits to pair up with those cell stops okay so my perspective is not retail so I'm looking at it from an institutional standpoint"

Liquidity Runs

"Why they want to run by stops because the orders they picked up down here going long and then Baltimore down here there alone so they have to have people that want to buy it from them at a higher price so by stops it would be above here why would there be by stops there Michael because folks that are being short this is the last intermediate term high for anyone that has not trailer stop-loss lower and got stopped out there gonna make a run on that liquidity right there"

Market Maker Buy Model

Consolidation Pattern

"We already have a consolidation in here price trades away can came back to the consolidation distribution redistribution smart money reversal low-risk Buy and here we're looking for another area to buy okay or another area of accumulation or Aria cumulation to take us above this consolidation"

Wyckoff Comparison

"Some of you will say oh that's Wyckoff well I kind of got the idea from looking at price action alone and then when I saw Wyckoff describing that scenario it made me feel better that I seen something that someone years and years before me was able to see that same price structure but his definitions and things I don't use that there's a different approach"

"It's very similar in terms of the general market profile itself because it's a very generic process markup and discounts and simple as that"

Study & Review

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