 which is good. Great. Thanks, Tom, and coming up to eight. Hello, everybody. It's 8am Eastern time. It is Wednesday, the 20th of December, coming towards the end of 2023, and Merry Christmas, everybody. Let us just do the disclaimer as quickly and efficiently as we can. All book map limited materials and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. Trading futures, equities, and digital currencies involve substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. Okay, and moving along. Yeah, welcome everybody. Everybody that just said hello in the room. Yeah, I think we've got a few people on Discord. We may get some people on YouTube in a little while. No, we have about five on YouTube as well. Yeah, I know we're into Christmas week and we're coming towards the end of the year, and yeah, the volatility may become a little bit different at this time of the year. It may become a little bit choppy, a bit thinner, so please pay attention to the liquidity in each of the markets you trade, because markets can go further than you can imagine within a liquidity. Well, I hope everybody is having a good week. I may just start on the slideshow and then we will move on to other things. This is the session, the Wednesday session of the week, where to the extent that we get a chance, we do focus more on technique and mechanics than we do on Friday, which is more about live order flow analysis. So let us quickly move on to the slideshow. So first up, the economic calendar, and we've got something at 8.30 USD current account. It's 8.30 Eastern, so that is during our hour in about 28 minutes. Yeah, we can turn on the financial news stream for that, but I'm not expecting a huge amount of action. It's not a red item. You can see down at 10 o'clock Eastern again, you've got the consumer confidence in existing home sales, which are a little bit more relevant, and there is likely to be more of a market reaction there. So let's keep moving. Okay, this is just a snapshot of pre-market today. The reason why I'm showing it is because we did actually have some sellers for the first time in days and days and days. Whatever tools that you use to see when buyers or sellers coming in the market, whether you're one of those people that uses things like Delta or cumulative Delta or time in sales, I'm a time in sales and visual time in sales person, you'd have noticed in Europe after the London Open that there was a significant change and that we saw some real size in sellers, and we got a good move down. But that being said, look how far they actually got. But first, let's just look at the daily. So for the last few weeks, we were talking about this little pause here or a balancing area before they suddenly shot up and it has as usual gone further than anyone expected. So when you have these big up runs, we've partly got the Santa rally, we've got the easing of the interest rates potentially, etc, etc. All these things, the market tends to be euphoric, whether it's up or down and always seems to go further than anybody expected. Unless of course you did expect 17K in NQ yesterday, which case very well done. So if we look across at NQ on the daily, you can see that it has breached that 17 level and we're just back under that as we speak. I'm also conscious today that I've got my air conditioning on, so I hope that is not affecting the audio. I'm placing the microphone quite close to my mouth. We are having yet another heat wave in Perth. So as I speak, and it is after nine o'clock at night, we're well above 30 Celsius. So we're well into the late 80s, I think, or 90s in Fahrenheit terms. Let's keep going. Okay, this is the 10 minute, why do we show this one? And again, it's another good example of why we have this here. We've had a down move. So you can see that nice big down move in NQ up there and ES down there. But importantly, we haven't actually managed to get below yesterday's mid. So in terms of the big picture scenario, it's not achieved anything yet. And if you look at ES, it's not even touched yesterday's mid. So we have to take everything with a pinch of salt. So it's a lovely down move. And there were definitely some trades to take. If you were trading that session, the European Open session or the London Open session, but we haven't gone very far yet. And when we go and look at the TPA and have a higher level analysis of the profiles, we can have a look at that. Okay, the range. So we're still getting good range, 87% relative volume, sorry, it's a relative volume is still pretty good. In terms of range, you know, the 90% issue 87% ish with smack bang on the average for Europe for NQ and just below it for EU, which would be expected with 90% you know, the very simple analysis is you multiply that percentage times the average range, which is the second figure here to get to get a likely range. Okay, that is oversimplified. And that is not something that I would ever recommend any be taking a trade upon, but it's just to give you an idea of how far we can go. And one of one of those reasons that I have it there is to stop myself being dumb. You know, if you're early in the EU range, and the NQ might be at say 10 of its potential 78 points. And if you let your stop go, and you say, oh, I'm only five points down 10 points down, all of a sudden you could find yourself 70 points down. That is one of the reasons why I have it there. We're all human beings and we are all prone to make mistakes. And one of the reasons that we try so hard on process and preparation is to cut down on the mistakes, but we will never really be able to eliminate them unless we go with a truly algorithmic or mechanical trading setup. In which case, I would probably say you'd make less money overall that you probably have more opportunities to make money as a discretionary trader, but each to their own. Okay, right. And the final slide, it's something different here. Let me just check that is actually showing. I'm looking up on the YouTube one. This is something I wanted to talk about and I will get into this after we do the TPO analysis. So this is an equity curve. I just did this challenge over the last week. It's an apex challenge. You'll find in a lot of these discord forums and you're on a lot of YouTube videos, they talk about prop trading challenges. So I'm going to a little bit later today. I'm not during the 830 release, but during this hour, talk about this in my experience with this over, I think it was eight days, eight trading days. You can see I passed a couple of high level points before I get to it later. One thing you should know is that the equity curve to get to the three grand or $3,000 target is certainly not linear. You probably noticed that I became quite a lot more conservative after one big update as I was preserving that account. Anyway, we'll get to that and the psychology and the rules involved in that kind of thing a little bit during that session. Just to show you that we are interested in what people are doing and that people like Tom and I are happy to discuss that kind of thing. So let us go back to the charts. Let's go back to over here. So a very quick high level zooming in on ES. This is on the right hand side. I've got my tablet with me today, so I am going to draw at various points as well. By the way, I have just moved my YouTube out of range, so I can't see any questions. Tick Patrick, nope and no probes. Okay, great. No probes with sound, I hope. Okay, so I hope all the sound is fine, both on Discord and YouTube, and I will try and speak slowly. Okay, so the first thing that we notice as we zoom out or zoom vertically on ES is that there's nice liquidity bands up above at the 4825 and 4827 that are resting. So if we zoom out, we can see they've been there for the entire ETH session, and the second thing we'd note is that one of the things that I like, which is these resting cell icebergs above the market, which is currently this cell iceberg has got a confluence factor. It's at yesterday's point of control. So I would be looking for some kind of trade. Here we've got a double bottom or a test of a demand zone to trade up to there, looking for a long from a roundabout. Let's just draw this. So you've got this level roundabout there and you see you're looking with a smallish stop probably about one to half two points and you're looking for a target, the main target, regardless of where your scales are, but the main target really is nine, four, five points for that one. Whether it goes up much higher is neither here nor there. I find it helpful to me to have a main target and I'm not, I'm trying very hard not to trade for less than one R for the initial scale. So that's just, again that's how I have been using it and the caveat there is that when you see three massive cell icebergs, like we saw on Friday's session, it kind of throws that potential setup out of the window and it's not something I take because they're just too aggressive in moving it down at that stage and that trade isn't that set up as I've defined in my own trading plan is not there when that happens. Okay so that's just having a look at that and I'm about to go into the TPO and then if we look across at NQ, so you've got this big round number level that we have breached yesterday and which is also where yesterday's point of control is. So you've got some liquidity there and in terms of we haven't got any resting liquidity in the same way that we have in ES in the sense that it's been there for the entire session but we've got this level which again is a round number so I kind of ignore it especially when it's, they moved price or they've moved their orders off that level. So there's nothing really that excites me by way of resting liquidity. Maybe the only thing is this double band of liquidity down at 16, 9, 60 and 16, 9, 6, 2 but at the moment it looks like we are in a nice range over the last hour or two and we're going to talk about ranges a little bit later as well. So that is just a snapshot picture of ES and NQ as we're looking at so I would have been looking for a long in ES. I'm not trading in this session so my trading engine is off. So let's move on to the TPO okay and we might just scrunch this up vertically okay and drag this up right okay yeah you've seen that I've actually zoomed all the way out in this one. I did get the question on Friday, do I do any high level analysis? Yes I do and if we look back on the webinars you'll see that I do and I do try and point out some things. One of the things that I've spoken about in the past this is when we were way down here was loads of these naked points of controls which were well above eight or something above price when we're down at the lows at the end of October and I said that you know once you had a significant build-up of these then there was always a chance that you know that the market had been too stretched to the downside and that we'd start knifing through those points of control and I think we've obviously taken them all out now and gone to near all-time highs or I will not try and measure what is an exact all-time high based on back adjusted futures but essentially we're up there. Okay so looking at these naked points of control these are the bit gentler lines you can see below us we've got one two three four five six so we're beginning to count them maybe no seven and eight if we just zoom yeah seven eight so we have quite a few we've also got a gap you know where the market gapped up which is quite like a significant gap it is likely at some stage you know this could be months away it could be in January February though we will go and retest this gap but at the moment you know it's been very very bullish and yeah who knows when that might happen but of note of on this chart should we get any bearish action either this week or after Christmas is that on this composite profile I've added one in because people like it and there's absolutely no harm doing it I tend to draw them across this is just a four-week profile this is on the right and within that I've still got the order book so you can see all these horizontal lines across of ES those are orders in the book were right this second but this outline here is a four-week composite volume profile and oh are you not watching the stream huh let me just checking I've got a question you know the stream is showing reframe is asking a question reframe you might need to log out and log in again because I'm looking at YouTube right this second and I can see that it is showing me what I am streaming which is my monitor with a live book map ES and also the TPO for ES over the last few days I just fixed itself fixed itself great okay so yeah what I was just pointing out was that you know we've got this large sort of distribution area now and that you got this lovely gap down to the the four seven ish level so you know if we managed to get past this naked point of control who knows maybe we could slip down quickly to there anyway that's just to point out that we have a lot of those naked points of control and we have had so many up sessions it's not funny in fact we've only had one balancing session really that one there which was last Friday so it should be interesting to see whether you know if there's any reaction to the news at 10 a.m eastern maybe we'll we'll get to tag something below but again I cannot predict the future all I can do is look at this TPO chart and see what it is presenting to us okay so that's and all these levels that I've drawn across as extending rectangles appear in the VP column on book map so you can see they will always match up I've just got a little bit of code that I wrote that that turns into cloud notes that book map reads okay and in NQ we've got a bit of a double distribution here on the overnight profile which is always interesting so we've got a nice clean split and that split is split in half right at yesterday's point of control around the 17,000 level so that really is as clear a line in the sand as we can get right now so you know that's something that I would pay attention to come on the RTH session whether that holds or we then move back into this upper distribution from from earlier but yeah that's looking like a good line in the sand and a reasonable probability that we will retag it given that it is yesterday's point of control and again if we zoom right out on NQ you can see all those naked points of control above us that just suggests that at some point there'll be a nice down move to go and retag some or all of them okay let us get back to them and let me do a time check 8 8.17 so we've got 13 minutes before the news release we will watch it I'm again expecting absolutely nothing turning our attention to what's on our book map again so I've actually removed one of the cloud notes columns on ES and NQ and by the way this is the unfiltered on both and if for people that aren't using Trader Map Pro the best use case I have for it at the moment is a high level analysis of NQ it's still quite good on ES if I click that one as well but for a high level analysis of seeing where levels are staying and might be of use either as magnets or support resistance so yeah in NQ when I'm trading and I'm not trading live right now I will often have this screen the NQ screen on its Trader Map Pro filtered and again it's only filtered to show orders that have not changed by size or by price so it's basically orders that are static in quantity and price level and ES I will generally have it on the unfiltered so I can see the stops and icebergs and I don't find that the algo bands which are these bands if I click this one these bands here above and below price in NQ they're not quite as distracting as they are on NQ so in ES it's much better it's much cleaner is what I'm trying to say but the only thing is that that means I've got to have a keyboard shortcut which I do so I can quickly flick over to it and see anything interesting by way of these icebergs that you know this by iceberg here or any huge stops on or not you'll notice today for the purpose of this webinar I have shoved on a market pulse oscillate the price change oscillator there is a reason because I want to get into mechanics and and to talk about oscillators and indicators just generally so so in terms of an ancillary topics for today's session it is it is this how they relate to price action why I don't tend to use them but why they might be useful to you and also to have a chat about about some of these prop firm challenges because I think that would be of interest to a few people because I do believe they are quite popular especially at the moment there is a lot of competition amongst these prop firm providers and they all they're now beginning to have really different terms and conditions both in relation to the challenge themselves and then the way that you then have to continue in order to get paid or even the payment terms so it is it is worth having a little bit of a chat about them because I've been around a few years and I've got a little bit of history in terms of what I know about them okay all right so it's eight so we've got a 10 minute gap here okay let's let's talk about the price change oscillator here in in market pulse in ES and in NQ NQ is what I look at in ETH more and I'd say that in my ETH trades especially my Asia and European session remember I tend to segment the ETH session to lots and lots of individual sub-sessions you know I could rattle them all off maybe I'll put them in a table and put them on a slide one day but but in ETH I'm looking more at NQ because you know it will have significant moves versus the very very small moves in ES today is somewhat different because we've had relatively real volatility in ES but you know even if you know even if I don't go and zoom in on some of this stuff but if we just look this is me not touching this chart so this is not massage in any way I'm over here on the left looking at the NQ and I will now dig out the pen and the tablet and we start looking at you know some of these little oversold and overbought regions and then we relate them back up to here you know for example you know if we had been looking for a long again I'm doing the idealised approach I'm not doing a necessarily a realistic approach I mean because we haven't done any preparation here so this is a spring or and this is often what happens on springs you know it'll have more than one attempt at a breakout failure in that direction and you know it'll test and test again until it's got enough fuel and then it will often go up so you know it may not look like a spring to you but one of the things that I want to talk about here is how the actual action relates to these oscillators I've actually got a slide as well so if I ditch all that okay I've got a slide of something from my 10 seconds again it's this is just I've taken the time off it this is a 10 second NQ chart it's a random bit of chart and I want to relate this to how those oscillators and for example the price change and we're going to go through the definition of the price change oscillator and again what I talk about can relate to any oscillator an oscillator where's my pen again so look let me just draw on this so if I was going to draw a sub chart so let's say we had a sub chart an oscillator simply is just a wave like a sine wave where it goes from peaks to troughs and a lot of people swear by them if you look at the coding that I've done on TradingView the indicators under my name not that I use many of them in fact I didn't use a table one it's not really an indicator the indicator that is by far the most popular is the one I coded for RSI a relative strength index which is essentially the same as this it's an oscillator which is a derivation of price and derivation I mean it's a mathematical formula linked to the price bars and it goes from a peak and basically goes from about 70 to minus 70 etc it may have an extreme a bit beyond that but that's essentially what it does and this price change oscillator that we have in market in market pulse goes from 100 to minus 100 and maybe this is a good time how long have we got left six minutes before we have the news and again I don't think it's real news today let me just ditch that let us just go and look at this is the book map knowledge base you can see the web address on the screen and by the way I'm not really commenting on the live order flow analysis the ES is doing but it's slowly grinding its way up back towards yesterday's point of control all that resting so I spoke whichever way you want to look at it and you can also see this additional bit of pressure upwards that they applied by putting this block of orders in it for 7, 9, 8, 50, 75 okay the price change algorithm can be used with any instrument and calculates the deviation of the last price from the average on an interval the percentage value shows how the current deviation is to the maximum deviation that was detected on the interval the algorithm is controlled by the training period and is needed to calculate the average price as well as the max drawdown from it on the given time interval and then it's got a little circular widget which I'm not currently showing but it's there I've just minimized it so it does not get in the way when I flick screens to like the TPO because otherwise it would cover up part of what I was showing but it's there right so if we then go back to the slide shot so and we relate that oscillator to the price action that we see on the screen just a little five minutes to go and again I'm watching this gradually tick its way up so you can see by the way over on ES you can see this nice little red delta and that LVN that I've marked from my TPO and that has held as it's now grinding its way upwards so that red delta if you haven't come to this webinar before what I look at on this book map column in particular and this is a delta column this is the volume profile and they're both chart linked so it's what is currently visible on the chart what I'm looking for on these up moves or when I'm looking for a long is trapped red delta I potentially trap sellers to give us the fuel to go up towards this being the main target being that yesterday's point of control and the resting cell iceberg so that is why that's there and the volume profile which again is quite narrow and I could have made it much wider and then we can just zoom right in and out it's to show where these distributions are so it's really a live analysis or live working out whether we are getting into a distribution rather regardless whether we are in one at the moment is one about to form or are we in a pure trending motion you know going back to its simplest chorus basis the market is either moving in a trending fashion or it's bouncing i.e. in a distribution pattern which is this nice bell curve here so yeah that's what we're at the moment and that's why I have it there but because I've got other tools in Sierra I don't feel I need to have that very wide so I have it quite narrow I quite like the delta being quite wide so I can see that again I'm not showing the numbers because I have those numbers in Sierra so I don't need to show them and I'm also trying to fit in two symbols being ES and NQ side by side to show you that having them side by side can help you in some ways but this is not the screen or sorry this is not the monitor that I normally have those on when I'm actually trading so it's all scrunched up on this monitor but it's actually a good monitor for presenting webinars so that's why I've got them on here okay right okay so I'm just going to talk about price hold on two and a half minutes so I'm going to start very quickly talking about price action that we get in NQ and then we're going to come back and talk about that oscillator and how it relates to that so for the next two minutes I'm just going to scribble on this chart here this screenshot here all right and we're going to imagine for example we're going to imagine say this was a supply zone just imagine I don't know what was there and that is not the point the point is that if you go into your NQ or ES when it's volatile like this and you see the return path of price from a low which is a nice significant low and you would have had a nice little tail on your candlestick if you're into candlesticks there all these numbers by the way are just rotations on this 10 second chart minimum two bars and their rotation in tick size so this has got nothing to do with delta or volume and I did explain why I've got this there this is really to give me a rough idea of the stop sizing for my trades on the basis that I cannot predict the future and I'd like to know when I should be out of a trade i.e. when I should be stopped out so and I've said before you can do it on several bases looking at these numbers you can do it on the basis of half a large rotation or a full-sized small rotation or an average between the two and some people do this on rotations averaged out over an entire session for the last x weeks I don't I find that the market is too changeable especially with the sub-sessions that we had we have it in ETH and if I use rotations which might be an average of say the Japan opening session they're completely irrelevant to the rotation sizes that we might have on the London Open so that's why I use live rotations anyway what is my point here my point here is that you know if we are trying to get back to here to the supply zone to take a short here so we're trying to take a short somewhere in this region here right what you'll often find and I ask you to go into your own charts you know short-term timeframes and have a look what you'll often have are these really choppy channels you know you can draw some nice trend lines all the way up but you'll often see that is how they do it right oops 830 oh dear let me get my cursor back so I can turn on that newsfeed we've had absolutely no reaction so there is there is no point turning on the newsfeed so it was a non-issue so yeah we can just keep going on technique and talk about price action but yeah normally when we have a news release at 8 30 a.m I'll draw a horizontal line here from where price was exactly before that release and then they'll ordinarily if it's a significant release be some volatility away you know whether it's up or down and we'll comment or we'll watch order flow and see if we get any setups based on that but here absolutely nothing so I think we can disregard this one completely and keep talking about what we were talking about and assume that we may get a bit more volatility or reaction at the 10 a.m eastern release which is that housing stats etc okay right so I was talking about price action and I'm going to relate this across to that oscillator definition in a second um right so I think I'm going to try and start doing that now maybe I'll do it with you've got the screen so if you watch this in replay you can always go back to that screen so I'm just going to ditch all of that and I'm just going to start talking about it so let us go to here so this is a completely blank piece of paper where I can type so if I said that the the market polls price change was based based on max deviation average definition average deviation current deviation a training period and there's one other thing that if you go into the volume pressure imbalance which is essentially the same thing as this but with one other tweak but applied to a volume or delta volume there's often a a half life there's a bit of an overlap between half life and training period but sorry I had financial dues running um they were just talking so apologies if there was a financial dues person speaking in your ears for those of you on youtube by the way I've got to check there's no questions or comments in youtube okay great so there's no questions okay um so if we then draw what this effectively does so if we've got price so let's just say we've got bars right and okay and we are here or we're here so we're just looking at two positions x and y okay what that market pulse will do and say that the look back period is say 10 minutes and 10 minutes is theoretically longer is about that length so it's longer than this right what this is doing is it's looking at the max deviation in price which at x point x will be that length there and at point y will be slightly higher all right uh um I'm sorry sorry I apologize let me just I've got the last bit wrong so apologies for that one let me just do get rid of that one just I didn't mean to completely scribble it out let's just do that again okay and let's make a deviation a look back period that length it's a little bit hard to talk about formulas and present it and just essentially just draw it off the hook but well the idea is say this is the low during this period this point here or this line right and if we have point x and and we have point y the maximum deviation and this yeah and it hasn't price hasn't shot up any higher as you can see where price has gone it's gone from here along here it's quickly lined up there up there so the maximum deviation has been at x this from this peak here all the way down to this dotted line there and at y the maximum deviation is that all right and what the price change algo will tell you is that's cool I'm going to have to do some algebra I'm sorry about this so if we call that B and we call that A I'll try not to do the algebra so I'm trying not to confuse people it's just going to basically say how is a related to B right and it is going to plot a line you can see them over here based on you know what is that distance of A compared to B right and it's obviously going to go on the basis is it above or below B yeah or sorry is this point above or below where that deviation was from and that's all it is so I'm not quite sure if I've explained that well enough but it's basically looking at how you know what's the furthest price has traveled in the last x minutes and how is price now in relation to that furthest distance traveled so that's all it does it's simply a derivation of price so when you look at this kind of thing what I'm trying to say to people is you need to understand the definition behind it and see if that can then help you and yeah I'd probably say that this kind of thing can be useful especially if you don't like looking at raw price or for example you've got millions of volume dots and we can turn those on now so maybe we should turn them on just as to see what happens when you do turn them on so if we turn those on so we turn on all the volume bars and all the volume dots and we can make the dots much bigger like that right if you have that if you have your setup like that I can't actually see the raw price action anymore right so if I turn those off now I can equate that to the screenshot that I had here describing those channels and describing how price went from the low back to a supply zone and a potential short and I can understand how price travels in these little channels or flags or whatever you want or pennants whatever you want to call them but if I cover this with dots and bars and stuff I can't see that action and I explain to people why I like raw action and you know why I don't mind certain oscillators or why I don't tend to use them but how they can be really really useful for helping especially if you want a little bit more certainty in terms of your executions why those things can be useful to you okay where were we okay we're here all right okay and yeah so that's essentially what this is which is the market pulse price change and so you know if you're at you know if the distance between or the maximum deviation in price right now is huge compared to how it's been previously you're obviously going to get to this over bought or over sold level depending on whether you're above or below where you've recently been so that one is quite self-explanatory and if I take the same terminology and just apply that to the volume pressure or the volume pressure imbalance it's exactly the same as that you know there are some nuances in terms of you have inputs on setting the look back period and the training for a half-life and a half-life is simply the best way of describing a half-life is what strength or what relevance do you give to the previous bars as a bar you know like 10 minutes ago how relevant do you want that to be in the analysis of this oscillator you know and with a half-life you can you can change the relative strength or the strength of how much bias you give really old bars that's all the half-life really is but that's what I want to explain to you you know I don't think they're very expensive things that bookmap are offering but I just want to explain what they are and why they can be useful you know sometimes with the data that you're looking at price is probably one where I wouldn't necessarily use it because I really love looking at these patterns and I can read these patterns and I can understand how distributions form but if you're looking at something else like volume you know they can become a lot more useful in my personal opinion where are we now 20 minutes to go okay let me just ditch all of that have I got any questions on any of that no okay I might do some live order analysis I'm going to start talking about that challenge as well so let's just ditch all of that and let's bring up so this is the unfiltered NQ and here we go so we've got this so let's just zoom out again so oops we struggle with zooming live so yeah it depends on on what you're looking at you can call this a head and shoulders pattern so if this was a head and shoulders pattern where is that pen gone that's an A that's a B and that's a C and so A whoops and C equal shoulders and B equals the head so yeah so what you're looking at there is a classic head and shoulders and it's a question of whether you get in at B which is the spring or C which is the shoulder of this pattern it's all the same which is you know it's supply and demand it's the edge of a range or a distribution and you're going towards something that is a technical thing which is the resting iceberg the resting cell iceberg and also something which was a former HVN at a point where most of the volume was traded yes so you've got a confluence between factors on different time levels and that's why this one becomes more interesting because it's across different time frames okay I am just going to I'm on a separate screen but I'm going to drag something over a second which is the screenshot that I had of that equity curve on the apex challenge and I just wanted to talk about that we've only got 20 minutes left but I just want to talk about it so there it is and we can keep looking at price action as we get slowly you know as we grind our way up to it and if we looked at it on the filtered basis you know maybe price will get back up there back to this nice resting liquidity which is the high of the overnight session but we shall see I would normally say we're not going to go in a straight line I know we've been very very bullish recently but we'd probably likely to chop all over the place even if we get up there but meanwhile you know if you had taken a trade down here or here this has been a relatively smooth ride in the way that price normally reacts in ES there's hardly been too much chop on its way up okay switching tax let's talk about prop challenges okay there are lots of prop companies out there at the moment and I know there are interest people because I participated in many many discord chats on this subject and there are some companies that have been around since the year dot like top step some of the companies have been around a fair while like apex and some newer companies around as well if you know like elite came on onto the unseen last year I think so there are loads of competition in this space and some of that competition is certainly good because if anybody did one of the original top steps and looked at the terms and conditions both in terms of evaluation i.e. the challenge and also the the the qualified account you know they'd have seen that the rules were horrendous both in terms of actually passing the bloody thing or sorry excuse my language and also you know the difficulty getting paid at the end of the day so it was it was almost almost like an impossible scenario that they made it ridiculously hard to do business with you because you know the way they set out their terms and conditions they were so unfavorable to the the retail trader that you know they made as well not have been there and what is interesting I'm sure the internet has its archives but you know if you searched back for those original top step trader terms and conditions and the current terms and conditions and basically noticed that there was a total 180 so you know there were things previously you know so many different rules on how you could be knocked out of a challenge and I think they're now down to one or two rules um and um yeah and in terms of actually getting paid you know it was a complicated process where you had to jump through a few hoops you know earn an absolute fortune and then you got paid about once or twice a year or basically once or twice a quarter I'm exaggerating but essentially that is is the way they were and because they had little competition they had no incentive to reform themselves or their rules luckily that has changed so we've got a plethora of these people I mean why they might be of interest to you and I think I jumped the gun with that you're going back to this point why might they be of interest to you they might be of interest to you because they probably bridge the gap between sim trading and I think sim trading I mean it's it's wonderful for a couple of days you know or you know a few days maybe when you're starting off your trading career but um but it isn't real trading you may as well be playing you know the easiest video game ever on on easy or ridiculously easy level and you know where you've got a thousand different lives because it does not matter you know that that's essentially how I'd quite sim trading it does not deal with any of the psychological challenges or the mental challenges of trading and I'd say again that you you know the mental challenges are one element you know without an actual trading edge you know you know your plan with your setups having a positive expectancy overall you know all the cycle psychobabble is totally and utterly irrelevant but um but once you do have something which probably and again there's no certainty because things change from second to second but it's something that has a high probability of having positive expectancy and a good edge then the mental side becomes a heck of a lot more important and then in my personal opinion sim is a bit pointless so then you've got sim and then you've got live and you're going to have a limited amount of trading capital that you know that you can throw at this you know you may have 30,000 saved up you might have 3,000 saved up you know 50,000 saved up right and it's also you know it can be gut wrenching or heart wrenching you know having all your capital drain in front of your eyes breaking an account and then it then the mental challenges really go into play and you really get into this fear of loss risk of losing etc so that is where these prop challenges especially some of them have come down considerably in price can be of interest you know let's put it like that of interest to you I think you know back in the day the top step was several hundred dollars for something like a 50 or 100k challenge 100,000 dollar or 50,000 dollar challenge and now you'll see all these prop firms always have a sale and they can like have a 90% sale like apex will often have a 90% or 80% sale so that's something like a 50,000 dollar challenge which is what this is here on the left hand side of the screen is down to like you know 20 bucks or less so in other words it becomes affordable if you don't you know or something that you know you're happy to you know like buying a ticket or at a fun fair that you know you've had some enjoyment out of it and if it doesn't give you you know your ultimate reward of whatever it is you want out of it you know say x thousand dollars out of it or whatever it does not matter as much as losing all your own capital in your own account so that's where it fits into this middle ground middle ground of bridging that gap okay now let's get into you know talking about this particular challenge so you can see that I passed it on the 19th which is yesterday and that I can't quite see but effectively I had eight trading days it looks like I had nine but I had eight and you can see that on day two or three I had a big day and after that I went completely conservative and that is the truth I did do that as soon as I had a big day I decided I wanted to pass the thing and it completely affected how I traded that account the other thing that is worth talking about about this specific one and this rule often occurs in a lot of these accounts is that they have a drawdown a trailing drawdown and I can start scribbling this on another screen let's go back to this other screen so let's call this one prop firms and this concept of a live trailing drawdown by the way I do apologize if I'm not doing an awful lot of live order flow analysis in this particular session it's just because there isn't an awful lot to talk about we're in Christmas week and you can see the ES has essentially just been grinding very very slowly towards you know towards this target if it is a target so they've got this concept of the live trailing drawdown so um yeah let's let's do an example say you've risked you've risked $200 on a trade sorry I covered my cursor on a trade you are up $100 during the middle of the trade and then before you get to your target you get stopped out at the full $200 I'm just doing the conservative values on risk because for this kind of scenario for doing those challenges that is what I would do personally I would not take much risk per trade because you don't need to you know you know if if you're taking an awful lot of risk per trade on something that only has a $3,000 overall target you know it's like roulette rather than you know what you're hoping to play which is more of a blackjack or poker type game okay going back to this and you stopped at the full $200 your actual trailing drawdown has yeah has gone up buy that $100 immediately during the middle of your trade totally affects the psychology of how you manage your trades you know if I now draw you know what we were just talking about in NQ so if I'm saying that in NQ it's quite often we are in these you know these choppy channels choppy channels going up and down up and down up and down we're trying to get from here to there but it's quite possible that on one of these chops we're going to get stopped out right so there's a danger there that you know you can get all the way up there your trailing drawdown which is like two and a half thousand dollars on a 50,000 account will suddenly have been gone up by two or three hundred dollars and you know you don't have a winning trade so what I'm trying to say is that it is not reflective of what you're actually doing in your trades as opposed to a static trailing drawdown I was a question from Patrick Patrick you're quite new to this oh you've got to yeah I'll ask Patrick's question quickly because he's asking why you Sierra and not trailing I use both Patrick I use them for different purposes just in a nutshell I use trading view because I get to see a plethora as in many many different symbols the markets are all very very interlinked and if you trade at ETH especially you need to be abreast across a lot of different things to understand what might actually be moving price it's often not just the market that you're looking at so that's the reason why I use trading view Sierra is it's like a box of tricks there are so many different things that you can do inside that and it's also exceptionally good in terms of how you can manage your trades or algorithmically get into trades or get out of trades it's a very sophisticated platform and it's also very programmable friendly so you can do all sorts of things through the C++ language I know I can program in trading view as well but the other big big difference if you're trading futures that I should not forget to mention is that something like Sierra and there are plenty of other platforms that do this as well have native tick by tick analysis every single tick gives you the data whether it's the price data the volume data etc whereas something like trading view it's on a per second basis so it's not the actual individual ticks and the market moves by ticks not by seconds so I like the fact you have the raw data so that when you have things like volume profiles it's a lot more accurate even VWAP it's a lot more accurate in something like Sierra or IRT Ninja can be turned into tick by tick as well and depending on how you use it but trading view does not have that so that's the answer to your question okay where are we five minutes to go let me just ditch all of this yeah I'd be very remiss if I didn't do some live order flow analysis because this is the breakfast session and we need to talk about what might happen in the session we can't just say oh it's likely to be bearish or bullish we've got to give some basis on which different probabilities may play out okay so we finally had a little move away from this resting cell iceberg in ES and again one of the reasons I've said this about these distributions and this is a perfect range distribution nice bell curve yeah you've gone from one part of it to the bottom part of it to the top part of it and I tend to scale halfway up those distributions provide I've got my one R there is always a danger because this is the midpoint that it will get to the middle and then come back and sometimes it'll go all the way to the end and come back and sometimes when you get to this point here where you might be within two ticks of your target or one tick of your target the risk to reward of destroying your trade you know changes on every single tick and you know the risk to reward suggests that you do take a large part of your scale there and then so you don't lose it because the risk reward becomes very unfavorable if you don't take it okay so yeah so we've got in NQ some nice liquidity bounding or ranging price action so we're in this little hub here between 88 and 78 nice 10 point range and ES you can see there were between 1350 and a nice you've got four and a half point range so they're both they're both in pause mode pending the rth session and pending that 10 am news release so what I would be expecting is that we'd have quite a choppy session if you look at yesterday's session even though we did go up it was quite choppy so because the markets tend to be thinner at this time the year coming right up to Christmas and because we've also had most if not all of our Santa rally I'd expect there to be two-sided trading so I'm suggesting that there'll be both longs and shorts good longs and good shorts available during the rth session and that some of these resting liquidity areas might you know be quite useful to you know when we get to the rth session okay so yeah I'm very quickly wrapping up my thoughts on on these on these prop challenges okay to summarize I'm not going to write this down but I do think they bridge a gap a middle ground I think it's probably a necessary bridge because it takes you out of that realm of sim trading which is next to useless I would not put my or all my eggs in the basket of one of these prop traders because you do not know how long they'll be around or whether they will live up to all the rules that they have set themselves some of them are more reputable than others I'm not going to defame anybody here so I'm just going to suggest that people do their own due diligence yes they have a better track record in the last year or two of paying out so that you know both the rules to get paid you know real dollars are based on your qualified account and you know the steps you you both sorry both these steps you need in terms of the challenges you need to get to them and the actual payout mechanism have been simplified and improved substantially so that they are much better and some of them have much better commission rates than others which is something else to bear in mind that if you look at some of those challenges that the commission for example on the micros is so bad that it puts a second hurdle in front of you before you yeah before you get to the point where you're you know you're winning trades are actually doing you any good yeah you basically got to cover several ticks worth of commission to to get into the black on an individual trade so so I'm saying yes they do but I'm saying longer term psychologically they are bad for you because that is not how you want to manage your trades you know having to tight a stop which is essentially what I was saying that even when you've got a winning trade because of the way they have those live trailing drawdown rules you're essentially forced into having a much tighter mental trailing stop for your winning trades than you otherwise would have because you don't want to you know dig yourself a hole for no good reason you know just because their rules said so and I'm saying that you know if you're trading your own money or you're trading these challenges after you've you passed the point of the trailing drawdown I think you know for example apex once you get to x dollars after you know this is after you passed then the trailing drawdown goes away so once you don't have a trailing drawdown you're going to manage your trades in a much better fashion in a more realistic fashion again I mean one of the points I keep making is that we can't predict future price action so that even if we say we got in here long and we've got a high probability of getting up to here where this yesterday's point of control all that resting cell iceberg is we cannot predict that the price won't in this distribution range go at the top bottom top bottom top bottom four or five times before it goes up there if it does go up there you know so that's almost forcing you with their rules to take control of predicting the future and doing yourself harm by way of mentally being able to handle this type of choppy action which is often the case that you're going to get in really good trades as well as really bad trades okay I think I've gone past my hour I hope that was um of relevance to some people and it wasn't just me I'm babbling on again but yeah I better um I better hang up and thank you very much for coming yeah slightly different webinar this time but thank you all for coming I will close