Tai, known online as Bitcoin Playboy, argues that consistent trading profitability develops in stages. He states that a trader advances by controlling risk on every trade, following a proven model without deviation, and managing emotions. He estimates that moving from the advanced stage to the expert stage takes one to three years. He also reports almost three months of forward-test results for a single model, with a win rate of 61% to 65% and winning trades returning about 2.5R to 3R.

Agenda and what to expect

Tai, known online as Bitcoin Playboy, presents a road map from inexperienced trading to consistent profitability. He states that viewers are already in the next phase of that path, and he sets out the agenda for the presentation.

The agenda has four parts. First, he will establish his credibility. Second, he will identify the problems that keep traders from becoming profitable. Third, he will present solutions to those problems. He will also show the typical trajectory of a trader who becomes profitable and state how long that process should be expected to take. Fourth, he will give an overview of the road map, broken into phases, with the detailed mechanics to follow later.

Harmony of the phases

The presentation covers the harmony of the phases first. It then covers the ongoing support a trader needs. The case for listening to the presenter starts with his record.

Agenda and what to expect

The presenter has traded for just over eight years and has coached traders for five. His students number in the thousands. Several have become mentors in the trading space, including Casper, who began in the presenter's Discord community a little over four years ago. The presenter does not claim full credit for his students' journeys. He states that he has helped them reach profitability at a point along the way, which has changed their lives.

Testimonials from students are posted weekly, with counts of 158 and 200-plus cited. One student reported $141,000 in profit over six months. Another reported a 300% net year-over-year P&L, a result the presenter says he wished he had achieved in his first year of trading.

The presenter trades live every day in front of hundreds of people. He argues that this practice, rather than teaching alone, is the strongest reason to follow his method.

The presentation then introduces a brainboard. It begins by defining the problems beginners face. These include questions about what the markets are, why they move, how to position risk, and which variables matter. The presenter says he struggled with these questions himself. He started with crypto and later moved to futures, a market he had not known about earlier.

Each problem is reversed into a solution. The presenter collected questions from beginners and from people who said they wished they had learned specific lessons sooner. He mapped those ideas into the brainboard. The process produced more than nine solutions for becoming a profitable trader. The presenter does not detail those solutions in this section. He states that he has more valuable material to present first.

Noob stage: learning to trade

Most traders follow a recognizable curve. A new trader makes a small profit, often after opening a brokerage account. The trader then loses that money. The early profit had served as the trader's source of hope, and its loss often ends that hope. The presenter states that 50% of traders who reach this point give up.

Traders who pass this stage often enter an overconfident phase. They believe they have outperformed others and have earned more than before. They then fail to protect their gains. Their results swing between profit and losses, and they remain near break-even.

The presenter's goal is to shorten this curve. He uses a four-stage road map: Noob, Beginner, Intermediate, and Expert. Each stage has a psychological goal, shown in a box at the bottom right of the road map. Progress depends on that psychological foundation rather than on information alone. A trader must pass the psychological pillar of each stage to move to the next.

Psychological pillar one

The first pillar for the Noob stage states that trading is a zero-sum transfer of money. Capital moves from the ill-informed to the informed.

The pillar for the Beginner stage states that a loss does not equal failure. A loss provides data. Each loss helps the trader refine his or her approach and become more informed over time.

Noob stage: learning to trade

Trading takes money from the ill-informed and transfers it to the informed. As a beginner, the goal is to become more informed. Losses supply data that improves future decisions.

Psychological pillar one

Consistent execution depends on trust. Once a model is shown, the trader must follow the model, not emotions. Emotional control is a major factor in trading success. Trading consists largely of repeating the same actions over and over.

The speaker values trading because it involves no boss and no client base. The trader competes directly against the markets, and the trader's own emotions are the main variable. If a trader cannot control emotions, the trader cannot control the money earned.

Harmony of the phases

The speaker presents a five-stage progression: clueless to beginner, beginner to intermediate, intermediate to advanced, advanced to expert, and expert to consistently profitable. Each transition has a defined milestone.

The first milestone is setting expectations. Traders need accurate expectations about the journey so they do not quit when trading becomes difficult. The speaker states that trading is hard and that the video provides a complete roadmap to make the path easier.

The second milestone is managing risk. Beginners must learn to size risk correctly. Doubling risk after two losses, or increasing risk fivefold after five consecutive losses to recover money, does not reflect professional thinking.

The third milestone is adopting a proven model. Intermediate traders must understand proven models and apply them consistently to reach the advanced level. The speaker notes that many viewers lack a proven model. He states that his own model will be provided within the video, so viewers do not need to search for one.

Risk per trade and account risk profile

Beginners who manage risk move to the intermediate level. Managing risk means keeping risk per trade fixed rather than reacting to recent losses. Increasing position risk after losses to recover previous losses is not a valid approach.

Advanced stage: consistent execution

Intermediate traders must understand proven models and use them consistently. Consistent use of a single model separates intermediate traders from advanced traders. Consistency, not the number of models, drives progress through this stage.

Expert stage: trading for a lifetime

The speaker states that trading should not be a permanent career. The goal is to earn active income through trading and convert it into passive income. He describes trading as a skill for building wealth.

The speaker claims that less screen time produces a higher success rate. He cites a student who earned $145,000 in about six months through active trading. The student then invested the profits in real estate property, which the speaker says now provides guaranteed lifetime income. The speaker wants expert traders to recognize that they will not trade indefinitely.

Advanced stage: consistent execution

The model and strategy will be shared at this point. Moving from the advanced stage to the expert stage requires focus on one of the most important qualities in trading: patience.

The speaker has struggled with patience consistently over time and still does. Being open about this is useful, because patience runs against a basic human tendency. People want rewards immediately. When something is exciting, they want it now and take more than they need at once. The speaker compares this urge to gluttony, one of the seven deadly sins.

Impatience has two common causes. A trader may not be patient enough to wait until a setup reaches its full development. Or a trader may not trust their own analysis enough to hold a position through that process.

Patience will come up repeatedly throughout the course. The speaker identifies it as the defining characteristic of the stage ahead.

Expert stage: trading for a lifetime

Consistency Over Complexity

Experts and beginners share one trait: both know that less is more. A beginner knows little. An expert knows that a profitable trader does not need to learn more to trade well. Experts already have what they need, so they do not search for additional information.

Many advanced and expert traders keep looking for new material. They study a new model or a new concept, such as a fresh ICT or SMC idea, even when they are already profitable. Learning new models after reaching profitability is unnecessary. Less is more, and that principle separates an expert from a beginner.

Setting Realistic Expectations

Trading is difficult. It will not make a trader rich overnight. Losses are part of the process, and most traders will feel like quitting at some point. Nobody becomes a millionaire within three days.

Many educators show large profits and create unrealistic expectations that the viewer can achieve the same results quickly. Unless a trader is an outlier, the process takes longer.

Treat trading like medical school. Doctors train for eight to ten years and fail many times before they work in a real environment. Trading requires the same commitment to study and practice. The ten-year timeline is not viable for trading, in the speaker's view. One to three years is a realistic period in which a trader can move from advanced to expert.

Negative returns do not mean failure. They indicate that the trader has more to learn. Traders risk capital to earn a return, and losses are a feedback signal within that process. The market is designed to transfer money from the ill-informed to the informed. Becoming informed is the way to change that outcome.

Economics for Traders

Traders do not need a full economics education. They need a working understanding of the core concepts. Economics rests on the balance between supply and demand, on productivity, and on how resources are allocated across sectors. Global economies interact through these forces.

Each candle on a chart reflects a small economy of buying and selling. A green candle closes above its open. A red candle closes below its open and can signal a bearish session.

A trader does not need to be an economist. Excessive knowledge of economics can hinder trading by pulling the trader toward fundamental analysis. Markets often behave irrationally, and a trader cannot remain solvent for long if the trader relies on rational market behavior.

Choosing Markets and Platforms

Traders can access crypto through Binance. Stocks and options trade through platforms such as E*Trade, Robinhood, and traditional markets including the S&P 500, NASDAQ, and Dow Jones. Robinhood has improved in recent years. Futures contracts include NQ, ES, RTY, and gold. Personal funds are traded through Interactive Brokers (IBKR). Prop firm funds are traded through TopStep.

Prop Firms

Prop firms require little capital to start. A trader does not need $10,000. A trader can purchase a test account for about$50 to $100, pass the evaluation by demonstrating competence, and then receive capital to trade. If the trader loses the funded capital, the trader owes the firm nothing. The firm earns its revenue from evaluation fees. If the trader is profitable, the firm shares the profits.

Many traders fail prop firm evaluations repeatedly, and those fees are how prop firms earn money. Traders with limited capital can consider TopStep or Apex.

Trading Analysis and Execution

TradingView serves as the primary tool for analysis, charting, and execution.

Selecting a Market

Stocks and futures trade during a defined window, from 6:30 a.m. to 1:00 p.m. Pacific Standard Time, which corresponds to the New York session from 9:30 a.m. to 4:00 p.m. New York time. These markets are less volatile than crypto, although Nasdaq futures can move considerably from day to day.

Crypto trades 24 hours a day, seven days a week. Crypto can suit a trader whose available time falls outside the futures session, such as at night. A trader with time during the futures session should choose futures. Futures are more consistent, and the fixed session end gives the trader a natural stopping point that prevents overtrading.

Once a trader selects a market, the trader should choose the platform associated with that market. The trader should then learn that broker thoroughly. Broker tutorials are widely available and are not covered here.

Psychological pillar one

The first of four psychological foundations for becoming profitable is that the more informed a trader is, the more successful that trader will be. The trader's job is to understand and execute, and nothing beyond that.

A trader who has moved past the complete beginner stage is no longer uninformed, but is still a beginner. At this level, the first concept to master is the risk profile. A trader needs to understand what a risk profile means.

Consider an account with a $50,000 starting balance. This is the typical allowance for the lowest-tier accounts offered by proprietary trading firms. The guideline is to risk only 2$50,000 is $500, so 2$50,000 is $1,000.

Risk per trade and account risk profile

One R equals the maximum risk allowed on a single trade. On a $50,000 account, the risk limit is$1,000 per trade, so each trade risks no more than $1,000 of total capital. A losing trade at full risk costs$1,000.

Profit is measured in R multiples. To convert a result into dollars, multiply the R value by the dollar amount of one R. A trade that returns three R on a $1,000 risk earns$3,000.

The R unit serves three functions. It calculates risk on each trade, it structures the trading journal, and it expresses the analysis and recaps. Results are reported in the account's risk profile rather than in dollars gained or lost.

Introduction to TradingView

Watch Lists

Three watch lists are available through the links provided. The first is a crypto watch list of about 300 cryptocurrencies. The second is a stocks watch list of about 300 stocks, which spares traders from locating and entering each symbol manually. The third is a "Holy Grail" watch list containing the top cryptocurrencies, top indices, and top commodities the presenter trades. All three can be imported directly into TradingView.

Candle Colors

Default candle colors in TradingView are red and black. The presenter argues that this scheme is harmful to beginners because it ties emotional responses to trading outcomes. Red and black are associated with failure and green with profitability, and traders may react to candle colors rather than to price. The presenter recommends changing candle colors through Settings, then Symbol. The presenter uses blue and black, reports feeling nothing when a candle is either color, and states that this neutrality comes from the colors being disconnected from conventional signals such as green for go and red for stop.

Timeframes

The top bar holds the symbol search field, where a specific asset can be entered manually. Beside it are the timeframes. The presenter uses 30 seconds, 1 minute, 5 minutes, 15 minutes, 1 hour, 4 hours, daily, weekly, and monthly.

Candle Style

TradingView offers many candle styles. The presenter advises using the standard candle and sees no reason to choose a more complex style.

Indicators

The indicators menu holds favorite and personal indicators. The presenter states that indicators will be covered later in the course.

Price Alerts

TradingView allows an alert to be set at a specific price. One method uses a horizontal line. The trader selects the line tool, right-clicks the line, and selects "Add alert." The alert can send a text message to the trader's phone when price reaches the set level.

Trading Tools and Risk-to-Reward Setup

Price Alerts and Replay

Traders should set alerts at their points of interest. An alert notifies them when price reaches a level, which matters when they are away from the screen.

The replay feature lets traders review past price action step by step. It is especially useful for new traders. Trading and charting rest on a conditional logic: if price behaves in a specific way, the trader executes a specific action. Replay helps traders practice that logic on historical data.

Drawing Tools

The toolbox contains the essential tools. Other chart elements, such as cycles and complex diagrams, add little value to trading and should be ignored.

• Trend lines sit at the top of the first tool category. They mark key levels, including liquidity and time-based sessions. On desktop, holding Shift after drawing a line straightens it into a clean line.
• Price level tools show the appreciation and depreciation of specific levels. They indicate where price stands and what to expect next.
• Curved lines serve as a general drawing option.
• Boxes are the most frequently used tool. They represent imbalances, support, and resistance.
• Templates save drawing setups. Clicking the icon with three squares and a plus sign stores a set of templates, so traders do not redraw elements. Templates save considerable time in a live market. Traders should build templates similar to those shown, so they can allocate their time effectively during live sessions.
• Paths display price action and the author's interpretation of it.
• Small icon indicators annotate charts and make them easier to read.
• Arrows highlight points of interest on a chart.
• Date range tools measure the distance across a range. The tool reports the span in days or bars, such as 60 days or 41 bars.

Entry Scale and Risk-to-Reward Ratio

The green and red box is the entry scale. It is the most important tool in the toolbox. It defines the entry, which sits at the level of the thin line inside the box. Moving the scale up or down changes the entry level.

The scale also displays the risk-to-reward ratio. In the example shown, the ratio reads 3.14. The tool records the exact trade parameters, and traders record these parameters in the trade journal covered later in the course.

The ratio measures the outcome in units of risk, or R. If price reaches the stop loss, the trader loses about 1R. If price reaches the take profit, the trader gains about 5.15R.

Introduction to Technical Analysis

Technical analysis covers price action, chart patterns, indicators, trends, and entry and exit decisions. The course treats these topics in greater depth later, in sections on specific trading models.

The core premise of charting is that large institutions and traders leave traces of their activity on the chart. Traders look for these small traces, or footprints, of larger market participants.

Fair Value Gaps and Market Imbalances

The If-Then Trading Statement

Price leaves behind traces that show what market participants are doing. Traders use these traces to build conditional rules. Each rule has an "if" part, which describes a price behavior, and a "then" part, which defines the action. When both parts occur, the combined statement becomes an executable trade.

Worked Example: A Short Trade

The speaker described a trade taken that morning under this rule. The "if" condition was a break below the LNA low. The "then" action was a short position into the previous day's low (PDL). The speaker required one additional condition. A fair value gap had to form while price moved downward. A fair value gap formed. Both conditions were met, so the trade was taken.

The stop loss was placed above the high of the candle that created the fair value gap. The take-profit target was set at the lows.

Trading as Evidence-Based Probability

The speaker described the trader's task as detective work. The trader looks for evidence and forms a reasoned estimate of where price will move. Losses will occur. The speaker stated that consistent results come from models with substantial supporting evidence showing profitability over time.

The speaker said two such models would be presented later in the video.

Why Indicators Can Mislead

The speaker introduced indicators as the next topic for beginner traders. He listed volume profiles, Fibonacci tools, Ichimoku clouds, and the relative strength index (RSI) as common examples. He stated that many indicators can be extremely harmful to a trader. He also stated that some indicators can be extremely helpful, provided the trader selects the correct ones.

Consistency Over Complexity

The Cost of Too Many Indicators

Eight of the nine indicators commonly used by traders will hurt results, according to the speaker. Over a data-tested period, he states, those eight produce poor outcomes. Adding too many indicators to a chart clutters it and makes it unreadable. In one example, a chart carries several indicators, including a WA indicator, an AC indicator, a dynamic index, and a TR indicator at the bottom. The speaker argues that this volume causes analysis paralysis. Traders cannot tell what the chart is showing.

The speaker compares this to overwatering a plant. Too much water kills a plant, and so does too little. Traders need enough indicators to produce consistent, actionable insight, and no more.

The 200-Period Exponential Moving Average

The speaker uses one indicator, the 200 exponential moving average (EMA), which he says he has relied on consistently for five years. He uses it for high-timeframe swing trades and for daily bias.

The 200 EMA tracks the average price of the previous 200 candles. It updates each time a new candle closes. The speaker says price often reacts when it approaches this line. He describes the 200 EMA as the most reliable indicator he has used, and he says its consistency makes it difficult to ignore.

He presents chart examples from 2018, 2019, and 2022. In each, he says, a return of price to the moving average marked a strong buy opportunity. He also states that the indicator works on the four-hour chart as well as the daily chart.

He frames its use as a conditional rule:

• If price tests the 200 EMA and bounces, the speaker expects a move up toward liquidity.
• If price breaks below the 200 EMA, fails to retest it, and does not return above it, the speaker expects a decline.

He states that the indicator should give traders a quick read on directional bias and a basis for an actionable trade.

Setting Up the 200 EMA

To add the indicator in TradingView, the speaker says, a trader opens the indicators menu and searches for the moving average exponential. The trader selects it, opens its settings by double-clicking, and sets the length to 200. The line then appears on the chart at the price level it currently tracks.

Accepting Losses

The speaker identifies losses as a normal part of trading. No trading model has a 100 percent win rate, and a trader with six months of experience and a trader with six years of experience can both take the same losses. A single losing trade does not show that the trader made an error. The speaker advises traders not to let losses change their decision-making during a session.

Periods of days or weeks without profit are acceptable, he states, and do not indicate failure. Failure, in his view, appears in month-to-month depreciation of the account. When that occurs, the trader should optimize the current model or replace it with a model that has a proven record.

Learning in Measured Doses

The speaker argues that traders should not try to learn as much as possible in a short period. Doing so, he says, lowers win rates. Learning should happen gradually, in small daily amounts, in the same way a plant receives water.

He says he trades with three models: two day-trading models and one swing-trading model. He states that a trader needs no more than these to trade successfully.

Proving a Model Works

Intermediate traders experiment with many setups and must determine which ones work. The speaker says a model must be tested before a trader relies on it. He introduces this step as the subject of the next section, which covers forward testing and backtesting.

Testing Trading Models

Traders need to prove their ideas before relying on them. The presenter argues that a trading model must show it works, and the way to show this is through structured testing.

Forward Testing and Back Testing

Forward testing means trading in real time and recording the results. Back testing means returning to past price action, often with a replay feature, and applying the model to historical data. The presenter asks whether a model was profitable over the long term.

He argues that back testing is misleading for many new traders. A back test does not involve real money at risk. It also does not show whether the model would work in real time. For this reason, he recommends paper trading for an extended period and logging every trade.

Results from Three Months of Trading

The presenter reports almost three months of forward-test data, covering May, June, July, and part of August. During this period he traded one model consistently and marked every trade. Some sessions contained three trades, and others contained one.

He presents the results as evidence that the model works. Over the period:

• The portfolio roughly doubled.
• Long and short trades were well balanced.
• The win rate averaged between 61% and 65%.
• The typical R collected ranged from 2.5 to about 3R per winning trade, meaning a winning trade returned about three times the amount risked.
• The daily profit and loss curve rose steadily.

He states that a win rate above 50% is positive, but he stresses that the amount of money gained per trade is the more important measure.

Logging Trades and Reviewing Results

The presenter recommends a trade journal. For each trade, the trader should record:

1. The date.
2. The entry time.
3. The exit time.
4. The direction of the trade.
5. The R collected.
6. Whether the trade was a win or a loss.
7. Notes on the setup.

The trader should review these records at the end of each week. The presenter tracks his average trade duration and his average winning trade duration, and he says this data supports his conclusions about the model.

Core Trading Models

The presenter names three models he uses most: ILM, ORB, and QP. He says these models produce consistent results. He states that he will not explain them fully in this section because a complete explanation takes more than an hour. He refers viewers to a separate video on the top three trading models for 2024.

He describes ILM as inverted liquidity. He has written an ebook on this model.

Market Structure and Fair Value Gap Examples

The model rests on two core concepts. Both apply to many other trading strategies. The first is the fair value gap. The proof for the model is shown through live trading sessions and a full data sheet, which the presenter states demonstrates the model's validity and profitability over time.

Fair Value Gaps and Order Book Imbalances

A fair value gap is a leftover order. Price moves so fast that it leaves a gap, and orders remain unfilled inside that gap. If price returns to the zone, those orders are filled, and price continues in the prior direction.

The pattern uses three candles. The first candle does not overlap the third candle. The high of the first candle and the low of the third candle do not touch, which leaves an open gap within the body of the second candle. This gap is the fair value gap.

When a fair value gap is tested, price returns to it, fills and rebalances the orders inside it, and then moves back in the original direction.

The gap forms because of an imbalance in the order book. A large market participant buys a significant amount of an asset at the market price. That buying moves the order book immediately. Sell orders cannot rebalance the buy side because it fills too quickly. The result is an unfilled gap.

Types of Fair Value Gaps

The presenter identifies three types.

Balanced Price Range. A balanced price range occurs when a bearish fair value gap and a bullish fair value gap overlap at the same price level. The presenter describes this setup as very powerful.

Inversion. An inversion occurs when a candle closes outside the fair value gap. This closing candle invalidates the gap, so it no longer functions as a fair value gap. If price returns and retests the failed gap, as it does in the example, price continues in the opposite direction.

Unfilled Fair Value Gap. An unfilled fair value gap is the standard form described earlier. Price forms the gap, returns to test it, and then continues in the previous direction.

The presenter also states that inverted fair value gaps are part of the model's approach, but the draft does not describe their application.

Resting Liquidity and Stop Clusters

Liquidity Defined

Liquidity marks a price level where a significant number of buy and sell orders rest. Traders do not need to make the concept more complicated than that. The task is to find where those orders sit and where they will form.

Structural and Trendline Liquidity

Structural liquidity appears at obvious swing points, such as a low or a high. Trendline liquidity forms along a drawn trend line. If price returns to test a trend line, many participants act at that level. Each trend line contributes more liquidity to the market.

Manufactured highs and lows form when price creates a series of lows or highs at the same level. If price comes down to test these lows and the orders there execute, a large pocket of liquidity forms at that level. The market will use that pocket to move up or down.

Liquidity alone does not determine direction. A model must supply the direction. Liquidity forms the base of the model, and the model defines the conditional logic that follows.

Equal Highs and Lows

Equal highs and lows carry resting orders from participants who entered at similar prices. Those participants hold buy positions near these levels. If price falls below their average entry, they sell. The logic follows an if-then structure: if price does this, the trader responds with a defined action. This structure forms the core of liquidity and fair value gap analysis.

Buy-Side and Sell-Side Liquidity

Buy-side liquidity sits above price and consists of short positions. Short sellers borrow the asset, so they must buy it back to close the position. When price reaches a buy-side level, short sellers buy to cover, often at a loss. Price reacts strongly from these levels.

Sell-side liquidity sits below price and consists of long positions. When price reaches a sell-side low, long holders sell, often at a loss, and their stop orders trigger. Large market makers can then absorb this selling. Large participants cannot buy unlimited size at once. They must wait for sufficient volume to fill large orders, so they use these sell-side pockets to build their positions.

Resting Liquidity Runs

The speaker states that trendline liquidity, high resistance liquidity runs, and similar formations rarely appear on a chart. The speaker estimates that traders will almost never see them, roughly 99% of the time, and assigns them no value.

Low resting liquidity runs carry more importance. These runs resemble trendline liquidity and occur at manufactured highs and lows. Price does not run the previous high before it. When an inversion forms at the lows, the trader enters.

After entry, price moves quickly through successive levels. It moves from the first level to the second, third, fourth, and fifth. It then reaches a larger point of interest above. The speaker states that this pattern occurs consistently and that he trades it every day.

Daily Trade Limit

The speaker follows a defined plan for each session. He takes a maximum of two trades per day. The session ends after two losses, after two wins, or after one win and one loss.

Trading Days and the New York Session Open

Trading Days

The trader trades only Tuesday through Friday. Mondays are excluded.

The Opening Range Breakout Model

The next model covered is the opening range breakout (ORB). The ORB model rests on a single time window: the New York session open. Trades are taken only during this window, and only in futures markets.

To set up the model, mark the high and the low of the first 15-minute candle of the New York session. These two levels define the opening range.

External Liquidity and the ILM Model

The previous model, referred to as ILM, is tied to external liquidity. When price reaches a level of external liquidity, it trades beyond that level. A live example of this sequence is planned to illustrate the mechanics.

Fair Value Gaps and Buy-Side Liquidity

A fair value gap is a key area on the chart. If price fails to hold a fair value gap and trades below it, the setup is invalidated and the trader looks for a retest. When price returns to the gap and retests that area, the trader looks for an entry. The retest is typically small.

Fair Value Gap Retest Entry

The entry is placed after the retest, with the stop loss above the high. The target is buy-side liquidity, which sits at the most recent low. The take-profit level is typically reached fairly quickly once the entry is triggered.

Opening Range Breakout (ORB) Model

The ORB model is presented as one of the most consistent setups because it occurs every day. The opening range is the first 15-minute candle after the New York session open. The trader marks the high and the low of that candle.

After the range is marked, the trader waits for a five-minute candle to close above the range. Once that close occurs, the trader enters immediately.

The trader applies standard deviation settings with a Fibonacci retracement, drawn from the high to the low of the range. The trade is held through one standard deviation and then two standard deviations. The stop is placed at the half standard deviation level.

The model is described as easy to apply and consistently effective. The speaker stated that the method would be demonstrated live.

The next example uses the 6:30 a.m. time point within the same session to show how the ORB model operates.

Entries Near the Market Open

Defining the Opening Range

The market opens at 6:30, and the first 15-minute candle sets the opening range. The high of that candle, at 6:45, marks the ORB high. The low, at 6:30, marks the ORB low. Once the chart is cleared of other elements, the range appears as a single high and a single low.

Entry Confirmation

The ORB model requires a 5-minute candle to close outside the range. The trader moves to the 5-minute timeframe and waits for that close. The first close outside the range triggers the entry. If the candle closes beyond the range, the trader enters on it. The model is presented as consistently effective.

Profit Targets

The primary target is the two standard deviation level. Buy-side liquidity or the one standard deviation level can also serve as a target. Standard deviation projections are not mandatory. When important levels sit to the left of the entry, those levels take precedence.

Example: October 3

On October 3, price raided the first standard deviation level and reached the entry area. The trader took most of the profit at that level. Price then retraced, which set up the ILM short. The ORB long and the ILM short both generated entries that day.

Summary

The procedure has three steps. Mark the high and low of the first 15-minute candle. Wait for a 5-minute candle to close outside that range. Enter on that close and manage the trade toward the defined targets.

Taking Profit and Closing Trades

Traders close a position in stages. The approach is to take the entry, then take profit gradually as the standard evaluation target is reached.

The QP Model

The QP model is the final model in this sequence. It is illustrated on a blank chart, starting from an uptrend in which price is trading higher.

Identifying the Structure Change

The key condition is a change in market structure. During the uptrend, price repeatedly broke above prior highs while holding higher lows. Each new high and higher low confirmed the trend.

That pattern changes when price breaks a low. The most recent high remains intact and is not taken out. Price then prints lower highs and lower lows. This sequence signals a potential bearish transition, meaning a change in the state of delivery.

Once this move occurs, the market may be shifting from bullish to bearish delivery.

Identifying Market Structure Shifts

Market direction can be read in either direction. Inverting the chart turns a bearish read into a bullish one, and the same logic applies to both.

The key area is a specific highlighted price zone on the chart. A particular price leg is expected to produce a fair value gap. Once that gap forms, the trader looks for an entry. The direction depends on where price currently trades: a short position or a long position.

For a short, the trader targets the extended lows. The stop loss sits above a protected high. A protected high is the level the trend has defended. When a low that previously held gets swept, price has traded through a level it had not previously broken. That signals a shift in structure, and price can be expected to move lower.

The model is basic. A separate video covers all three models in detail.

Recognizing Swing Highs and Lows

Journaling and Risk Monitoring

The speaker states that journaling is how a trader gets reviewed and improves. Without a record of trades, a mentor cannot identify what a struggling trader is doing wrong. The speaker identifies a common intermediate-stage pattern: traders are good at making money but poor at monitoring the risk profile of their losses. They cycle between gains, losses, and renewed gains. The speaker refers viewers to a separate journaling guide for setup instructions, which is not covered here.

Mindset and Loss Management

The speaker states that traders will lose trades and that losses cannot be prevented. The objective is to make money, and every model carries inherent risk. Losses should be used as data. A trader who identifies a mistake in one month should avoid repeating it the next month, and profit should rise as a result.

The speaker describes a set of psychological principles:

• Execute the model as shown, without deviation.
• Leave ego aside and focus on making money.
• Take full responsibility for every trade.
• Treat money as a scorekeeper, not the goal. A losing day followed by a winning day that recovers the loss is an acceptable outcome.
• Maintain discipline outside trading, including making the bed, eating properly, exercising, and cleaning the workspace daily.

The speaker distinguishes confidence from overconfidence. In the speaker's view, overconfidence is gambling. An overconfident trader repeatedly enters trades and may take six losses in a row. Attempting to recover all losses with one oversized trade risks a deeper drawdown if that trade fails.

Expert Stage: Emotional Demands and External Factors

The speaker describes the expert stage as demanding because it carries significant emotional responsibility. Experts must track external factors, particularly scheduled economic news. The speaker uses forexfactory.com to identify high-impact events. The method is to set the filter to red folders, select the USD currency, and apply the filter to see the week's major events.

The speaker cites an FOMC announcement on Wednesday, October 9, and core CPI on the following Thursday. The speaker states that these events produce large candles. A trader holding a favorable position should not be positioned against major news. News released 30 minutes after entry can trigger a stop loss and reduce the trader's confidence.

Alternative Market Instruments

The speaker presents three instruments beyond equities that indicate market bias.

Bitcoin dominance (BTC.D) measures Bitcoin's market capitalization relative to altcoins. A rising chart indicates that Bitcoin is outperforming altcoins. In 2021 and 2022, the speaker advised selling Bitcoin and buying altcoins as Bitcoin dominance reached about 50%. When dominance tested about 40%, the speaker expected Bitcoin to outperform. The speaker states that Bitcoin has outperformed the broader market for roughly 400 to 500 days and is now searching for buy-side liquidity. The speaker expects dominance to rise toward levels seen in 2020.

Tether dominance (USDT.D) measures the share of the crypto market held in the stablecoin Tether. Rising dominance indicates risk-off behavior, as participants move from crypto into stablecoins. The speaker states that tether dominance tested the 200-period EMA and that selling crypto at that point matched the bear market that followed in 2021. That bear market lasted about 700 days. Falling dominance indicates capital returning to the broader market. The speaker notes that dominance fell from 8% to 4%, which the speaker describes as a bull market.

The US Dollar Index (DXY) measures the strength of the US dollar. From January to October 2022, a roughly ten-month period, the index rose, and the speaker states that the dollar gained about 20%. The dollar outperformed the S&P 500 and gold. The speaker states that a rising dollar draws capital away from equities, stablecoins, and fiat alternatives. On the weekly chart, DXY broke below the 200-period EMA for the first time since COVID. The speaker had previously anticipated a bull market if price held above that level. In the first week of October, price fell back through seven candles. The speaker states that this breakdown points to a bearish market over the coming weeks if the trend continues.

Advanced Models and Resources

The speaker states that expert traders should learn additional models. The speaker personally uses three models, labeled QP, ORB, and ILM. The speaker also cites concepts including liquidity sweeps, displacement, SMT divergence, time elements, and unicorn entries. The speaker identifies SMT divergence as a key concept for optimizing models.

Live Trading and the New York Session

The speaker states that expert traders should trade independently of outside guidance. The speaker's goal as a mentor is for students to no longer need the speaker's services. For traders who understand the full scope of trading, the speaker recommends trading the New York AM session for two hours daily over three months. The speaker presents this as a test of a trader's ability to perform without distraction. The speaker states that this trading can be done from any location, such as a café.

Optimizing with Weekly and Daily Data

The speaker reviewed a month of personal trading data, covering September 2 through September 30. The speaker recorded about 17 trades during that period and did not trade weekends. The speaker found that trades taken against the EMA bias lost about 80% of the time. In October, the speaker stopped trading against the EMA bias. The speaker reports a win rate near 100% in that condition and says the win rate for the month increased by 8%. In the first week and a day of October, the speaker reached half of the monthly goal.

A day-of-week analysis showed the speaker's weakest results on Wednesdays, with losses over the prior month and a half. The speaker states that Mondays also warrant reduced exposure. The speaker plans to trade less on Mondays, either at half risk or with reduced size, and less on Wednesdays. The speaker states that the success probability rose above 50% after one month of data-driven adjustments. The speaker also found that short trades underperformed long trades. The speaker frames this optimization process as the method expert traders use to improve.

Passive Income as the Long-Term Goal

The speaker states that the long-term purpose of trading is to stop trading. The speaker describes students who traded for two to three years, accumulated enough capital, and used rental income to replace their earned income. The speaker presents this as a path to investing in startups and real estate that generate regular passive returns.