Trading Isn't Hard, It's Misunderstood (Full Course)

After seven years of trading, thousands of dollars spent on courses, education, and trading losses, there is two concepts that I discovered that almost no strategy, system, or setup can work without. These two concepts are the backbone of why I've been able to make six figures trading this year alone, and they helped me become a full-time trader for the last five years. In this video, I'm going to simplify the two concepts you need no matter what strategy you trade. I'm going to show you exactly how I apply it in the real charts, and the best part is once you understand this, you don't need hours of prep time making you overanalyze your trades, and you don't need thousands of dollars to start, as I'll show you how simple trading made me profitable. So the two concepts I'm going to talk about in this video are the backbone of every trading strategy, and it's the reason why I've been able to have results like this and this using the two concepts behind my simple strategy. Now remember, it took me years of losing to see what I'll show you today. I'm going to keep this video short, but to the point, but this will be one of the most valuable trading videos you watch once you understand these concepts. So the very first thing we want to do when we start trading or learning any concept is picking one strategy. Often traders try to jump from strategy to strategy, and it takes them so long to realize if they just pick one and master it, they'll be way better off. We have trend lines, break and retest, ICT and smart money concepts, volume profile, support and resistance, supply and demand, and the list goes on. Now the two concepts I'm going to talk about in this video work with any strategy, however for myself, I personally trade the break and retest strategy. Now we'll talk a little bit more about the strategy when we get into the real charts and I show you these concepts, but all the break and retest simply is, is we have this previous resistance here, you can see sellers try to step in, buyers then broke the stock out, we ended up entering in on the retest, so therefore the break and retest, this is where we enter for the next leg up. That's how simple the break and retest is, and this is the strategy that I personally use, but once again with the concepts I'm going to explain today, no matter what your strategy is, these concepts apply to those strategies. So in this video, first I will show you the first and second concept, then I'm going to combine it with the strategy to help you understand exactly how the concept works in the market. Finally, I'll combine everything together and show you real examples on the chart so you can see how I implement it in the markets. So the first concept we have is direction. Direction is very important for a stock. Typically what happens is often traders will enter into a trade, let's say we're entering into a break and retest into this area here, and it seems like buyers are going to step up, but before they can, we get a huge sell off. Now where the stock should have continued this trend up, we never got that trend up and we got stopped out. Why was this? Well it was most likely because we didn't understand direction and that's exactly what the first concept helps us with. To understand direction, we need to understand liquidity. And to understand liquidity, you need to understand that there's two subcategories of liquidity that I'm going to simplify today, and that is external liquidity and of course internal liquidity. But what you need to understand is when a stock is moving, it is going to be in its external liquidity phase, then it will go over to internal liquidity so it'll start at external liquidity, it'll grab internal liquidity, and once it's grabbed internal liquidity, it'll go right back to external liquidity. So it's this continuous cycle of external liquidity going into internal liquidity and internal liquidity going to external liquidity. But how does that look? Well to help understand how it looks, you need to understand what external and internal liquidity levels are. External liquidity is simply swing highs and swing lows. Swing high and swing low simply refer on the chart to the lowest area of the chart and the highest area of the chart. So as we can see here, when the stock was developing, this was the swing low because this was the lowest point that the stock has been and then this was the swing high because this is the highest point up until this point that the stock has been to. Therefore, this is external liquidity. Our external liquidity level was this swing low and then it was this swing high. However, as we move up, we can see the next area where we got this reversal or buyer stepping up was this swing low. So this is the next low on the chart that we do not want to break. This is where structure would break, right? It's not in these areas here and I'll explain what these areas are as well. From this area, we then come up into swing highs, right? Because this is the highest point that the stock has been. Then once again, we come into a swing low and we create a brand new swing high. Once again, if this is a little bit confusing, don't worry. When we get into the charts, this will make much more sense. Vice versa, when we look at internal liquidity, these are internal pivot highs and pivot lows on the chart. So as we can see here, our swing low was down here and our swing high was up here, but we still have these highs and lows that were created here. So what are these? Well, these are exactly those internal levels that I'm talking about. These internal levels help us see exactly where buyers and sellers have a little bit of conflict, but it wasn't strong enough to the chart down or it wasn't strong enough to reverse the chart up. Therefore, these are the internal high and low levels. As we can see, these levels continue to happen throughout the chart's actual development, but the internal levels are simply the levels that are in between the swing highs and swing lows as the chart is developing. So now that you understand what external liquidity is and what internal liquidity is, let's talk about exactly how external and internal liquidity work to help you give a better direction of where the stock is going. For step one, we need to understand that price will sweep external liquidity. So here we have our swing high and we have our swing low. The reason this is is because this is the lowest point of the chart. And of course, as we can see, this is the highest point of the chart, right? So this would be our swing high up here and our swing low will be down here. Now from this area, what happened? Well, you can see we had that swing low down here, but now we made a brand new high because we made a new swing high. This previous external high or swing high is now an internal high. Why? Because this is not the highest point on the chart anymore. Along with this, we now have an internal low as well because this isn't the lowest point of the chart either. So you can see we are now creating a brand new swing high. And what does that mean? This means that liquidity is taken and this is typically where you see that price reversal, right? So once you get this swing high, now we can expect a price reversal from step two. And once we get that price reversal, where is the stock coming to? Well, that's where step three comes in place. Price moves into internal liquidity. So we can see we now created a brand new external high. So the only way the stock will come back into an area is the internal high. And this is the internal high right here, right? Because this was the previous swing high, now internal high. And this is where we want to buy the stock for the next leg up, right? So external liquidity coming into internal liquidity. And as we can see here, this is a great example and illustration of external liquidity, which was previously this high right here, going into internal liquidity, which was this previous high right here, right? So it's retesting that internal liquidity for a move back up into where? That external high. External going into internal and then creating a brand new external high. You can also see this is a great example of the break and retest. We broke out, we retested our support level, and then buyers stepped up. And that's exactly why if you've traded the break and retest before, but it didn't make sense why it worked. Now you understand why it works and how it works as well. So with that being said, now I've simplified the first concept, which is simply the direction of the market and how the system works. But what is the second concept? Because right now there's a problem that you may not know. And that is, yes, now you understand structure and liquidity because I just explained it to you. But understanding that is useless to many traders if they don't understand concept two and can combine both of these concepts. If you're getting value from this video so far, make sure to leave it a like and quick reminder in less than 24 hours, I will be going live on a private masterclass where I'll be talking about the biggest opportunity over the next six months that nobody is talking about. But I'll be sharing my exact playbook on what I'm doing over the next six months with my simple system strategy, not only for day trades, swing trades and long term that I've never talked about publicly anywhere. And because it's a two day free masterclass, I'm going to be live trading in front of you for absolutely free. So the masterclass will start Tuesday, June 16th at 8 p.m. Eastern. Make sure to sign up using the waitlist in the description and check your emails. Let's get back into the video. And concept two simply refers to the location of where we want to enter a trade, because if you know the overall direction of the market, that's good. But that does not give you any indication of where you should enter for a low risk trade, a high reward trade or even a mechanical and repeatable trade. You simply know the direction so far. How are we able to determine the actual location with precise entries? Well, to understand the location of a trade, you need to understand that every time frame you look at tells you a story. And because of this, many traders, if they just trade small time frames, let's say you trade the five minute time frame or the one minute time frame, they only look at the one minute time frame. So what they're looking at is the details on the chart, which is good. They understand where they can get precise entries. But the problem is they're completely forgetting to summarize the details. You need to understand what happened in the previous chapters to actually move forward in the story. So these details are useless if you don't understand what's happening in the book already. And the higher time frame allows us to get that summary. And therefore, when we get that summary and jump into the smaller time frames, these details only help us get a more precise and high probability entry. So if we use a multi time frame analysis that I will teach in this video, we will be able to get a clear thesis, low risk entries, and most importantly, high reward exits. And these are the exact three things that allow me to be done the day in 60 minutes when I trade using an extremely simple system. So when we look at higher time frames and lower time frames, sometimes it can be confusing because there's so many different time frames that you can look at. For me, I try to keep it very, very simple on the higher time frame. You have the daily time frame, the four hour, the one hour and 30 minutes. And then on the lower time frame, you have the one hour, the 30 minute, the five minute and the one minute. Now, these are a lot of different time frames. So what should we be using them for? Well, when we look at these time frames, the one hour should be used for swing trading. So anything that's the one hour or the four hour. These are typically swing trading time frames for day trading. You can use anywhere in between the 30 minutes of five minute time frame. This is typically very good for day trading as it gives you enough detail as well. And then for scalping, that's the one minute time frame. That's where you want to get the most precise entries on the chart for the highest possible reward. If you can, of course, combine the higher time frame into the lower time frame. So what's my personal favorite multi time frame analysis strategy? Well, for me, when I'm looking at the higher time frame, I look at the daily time frame, and this gives me a very clear indication of not only direction, but it gives me a very clear thesis if the market is either bullish or bearish. And then when I go to the lower time frame, I enter in on the one minute time frame. This gives me the absolute best location to enter for the highest reward trades. And of course, when we get onto the charts, I'm going to show you exactly how I do this multi time frame analysis strategy on the real charts so you can see how simple it is to combine two time frames and get rid of all the noise on the rest. So, so far in the video, I've explained concept one and concept two, which is direction and location of the market. But now let's hop on over to the real charts where I show you the exact strategy I use on how I look for trades, and then I'm going to show you examples combining all of the things that I talked about in this video so you can see exactly how I apply it in the real markets. All right, here we are on the very first example. Now, this is on INTC or Intel, and we're on the daily time frame. And on the daily time frame, all we're really looking for is what's happening on the chart, and we're going to use those same external and internal liquidity levels. So we can see on this chart all the way down here, this is where the stock started. This was the lowest point of the stock since this run up, and this is why we're going to use this as a swing low. And then from that swing low, we can see we came all the way up into this swing high. From this swing high area now, you can see we have created a brand new low here where we're basing to. And what does this mean? Well, this simply means that this is technically an internal low because we already have our swing low right here. So this would be an internal low that we have. And therefore, we understand that after coming into this internal low, the next area the stock can go to is going to be gravitating towards that external high again. For me, all I'm understanding is this stock is indeed in an uptrend. Yes, it's consolidating. However, it is still in an uptrend. And therefore, I will mark out my daily candle high and my daily candle low of the previous day. From this, I can now go over to the one minute time frame. That's where I'm actually entering the trade after understanding the higher time frame thesis. All right, here we are on the one minute time frame. And on the one minute time frame for this strategy, I'm simply going to use the first five minute opening range strategy or the first candle strategy. All that implies is we're going to mark out the first five minute high up here and we're going to mark out the five minute low down here. This simply lets us know that right now we have an external high up here in the five minute range, and we have an external low down here of the five minute range as well. So external high and external low of the five minute. And all we're looking for is going to be a break above a retest and continuation. Why? Because if we get a break above, that would be a brand new external high, which would make this previous five minute high now an internal high, which we would retest for the next external high level. So let's see exactly what happens if we break above one of these areas. Okay, so so far we can see we have created a brand new external high. So our brand new external high is all the way up into this area here. This is our brand new swing high, right? Because this is the lowest point of the chart. This is our swing low and then this is our swing high. But where is our internal high now? Where does a stock have to go for that internal liquidity for the next leg up? Well, we know that the stock opened at the five minute range high. Therefore, the internal liquidity is this five minute range high, right? So if you've ever traded the first candle strategy, now you understand why that works as well. Let's see if we can come back into and retest this internal liquidity. And as we can see, we came up. You can see some buyers actually did try to step off this previous day high. And if you were using the previous day high strategy, you would have gotten faked out. But because we understand the external and internal liquidity levels, we were able to completely avoid this loss by simply getting a better and higher risk to reward trade. So with that being said, all we have to do is enter into the trade here. Our stop loss can simply be the break of the candle that we're entering in on. And we need at least a two hour multiple. In this example, we're risking about fourteen hundred dollars to make about two thousand seven hundred and twenty dollars. Let's play out this trade and let's see exactly what happens. And as we can see here, this stock came up nicely into our profit target, and this was a very simple trade executed using both of the concepts, which is direction and location of the market and combining it with a simple strategy. With this being said, this is the first example. Let's go over to another example where I combine all of these concepts into one to show you exactly how I traded in the markets. All right, here we are on our next example, and this is on C.R.D.O. This is a name that has been trending to the upside as well. So let's analyze the daily time frame first. On the daily time frame, we can see we have a swing low down here. We then have these two internal lows that we've created as well. We have our external high or the highest point of the chart right here. And you can see we actually broke above, got into that and now we retested where our internal high because this high earlier was an external high. But because we made a brand new external high, this turns into an internal high. So we get the breakout, the retest, and now we're looking to get back into where a brand new external high. So we're actually using that liquidity concept that I talked about on the daily time frame as well. So you can see it works on all time frames in general. And therefore, now that we understand that, we'll simply mark out our previous day high and previous day low levels. And let's go over to the one minute time frame. On the one minute time frame, all I'm going to do is wait for the first five minutes of market open to actually help me develop a thesis. And here, once the first five minutes of the market has developed, we can see we have our swing low down here. This is our five minute low. And you can see we have our swing high up here, which is also our five minute high. So these are both our external lows and external highs. We know what we want is a break above this external high, creating a brand new external high, and then a retest of this previous external high turned into internal high. And then once again, continuation into a brand new external high. Let's play out this trade and see if we can get that break and retest. We broke out. We created a brand new external high right here. We then went to go sweep that internal high here. So external, internal. So what's the next level that this stock will go up into? It's going to be the next external high, which is this 252.81 area. Once buyers have stepped up on this chart, we can simply risk the break back below this area. And we're looking for that 252 previous day high level. This gives us about a 2.3 risk to reward trade. This means we're risking about $2,770 for about $5,860 of potential profit. Let's see exactly what happens if we enter this trade. And as we can see, this trade was done at 946, about 15 minutes into market open by simply understanding these two concepts, which is the direction and location of the market and combining it with a simple strategy. With this being said, make sure to sign up for the free live masterclass that I'm doing in the link in the description. If you want to learn more about these concepts and strategies, make sure to click the playlist on screen now. It's a 10 hour playlist going over everything. If this video helped you, make sure to leave it a like. If you have any questions, put them in the comments down below, subscribe to the channel, follow me on Instagram and Twitter for more education, and I'll see you in the next video.