 Okay traders, welcome to today's live analysis session. If you can hear me and you can see the Tick-A-Mill welcome screen, can you type a Y in the chat box just so I know we can, we can get going here. Hi traders, just once again, I just want to check if you can hear me and you can see the Tick-A-Mill welcome screen or Y in the chat box. Thanks a lot. Okay, let's get going. So before we start, obviously I want to pay attention to the risk disclaimer. As we know, trading any financial instrument carries an inherent risk and there is the potential of losing more money than you necessarily have on deposit. More importantly for today, the views expressed by me and any opinions here are solely mine. They are not indicative of Tick-Mill UK or Tick-Mill Europe Limited. Okay, so for those that are here for the first time, very brief introduction to me. Like I said, my name is Patrick Munley. After I graduated from university, I joined a city PLC consulting firm. After a couple of years, learning the ropes, I left with some colleagues and went on to co-found and successfully exit a consulting starter post-emerger in late 2004. I then moved on to explore my passion for markets with some capital to play with and some time in my hands. I started day trading or probably more appropriately day gambling, the S&P 500. And after some early beginner's luck, I wrapped up some pretty solid gains. However, as is often the case, my beginner's luck went out and as the market phase changed and I began to average down into losing positions, I basically gave back all my gains and ultimately experienced a significant six-figure financial hit. To say this was a gut wrenching and sobering experience is an understatement. At this point, I had to stand back and figure out if it was feasible for me to make a living from the markets. So I decided to get serious about trading and sort out a mentor with an excellent trading track record. Working with my mentor for 18 months to two years, it was a period during which I upped not just my technical game, researching and developing a strategy that suited my personality, but I extensively back and forward tested this strategy and developed a rigorous risk management approach to underpin it. But most importantly during this period of mentorship, I significantly developed my mental game and probably the most important watershed shift was when I went from being a highly goal orientated, financially focused individual, focused on financial gains to really becoming purely process orientated. So what does that actually mean? Well, it means I had to stop focusing on what I could make from the markets and start focusing solely really on managing my mindset to allow me to consistently execute my trading strategy oftentimes in the face of negative feedback from the markets in the form of losing trades. But once you become process orientators and have a professional trading mindset, then you understand the true nature of trading, which is it's a numbers game in which you are simply playing the probabilities. And so what you lose then is the emotional investments and that hellish emotional roller coaster of living and dying by the outcome of individual trades. So no longer concerned with the outcome of individual trades or strings of trades, my focus is on the next hundred trades because I know if I focus on excellence and execution that my actual demonstrate itself over an extended series of outcomes. My multi-strategy approach has delivered profitable annual returns since 2008. Since 2013, the performance you can see on the screen is since I've been managing investor capital through a managed account service delivering annual positive returns. I'm currently responsible for managing a multi-million dollar portfolio. Since 2010, I've also mentored over a hundred private traders have all experienced levels from complete novices to former CME floor traders in developing the technical and mental skills to reach consistent returns from the markets. I've consulted to numerous brokers and trading education brands contributing written content webinars and live presentation content on a range of topics from market analysis to trading strategy development and execution. In addition to my fund management and private mentoring I'm also now a resident market expert at Tick Mill whereby I provide a daily market outlook covering four of the FX majors and then I provide a chart of the day or a technical setup that I'm tracking in the markets for the trading day ahead. My other passion project is as head of trading and trader education for a leading education brand FXcareerswap.com. We offer development and funding to retail trading talent at FX Careerswap. We don't just develop retail traders market and trading strategy knowledge. We work on mindset development through our structured program that culminates in managing the firm's capital at zero personal financial risk on a profit share basis. Those that are interested in that there are some contact details on the screen currently whereby you can get in touch and find out more information about what it is we are doing at FXcareerswap. So today we're just going to do something slightly different. We're going to go straight to the charts today and we're going to just walk through a bunch of charts and really I'm going to break down step by step how I technically frame the market data to help identify probable price paths or market maps that then give me specific locations on a chart where I'm interested in looking at price action to see if there is a trading setup. So we're going to start here with the S&P 500 and we've got data going back here to the beginning of the year. This is, well, not even the beginning of the year, just into February there. So this is sufficient really for us to frame where we're up to at the moment and to get an idea of where the next trading opportunity comes. A couple of things here in terms of the indicators I have on the screen, which it's I guess useful for you guys to be aware of, the price envelope or price bands you can see are volume weighted average price bands. So where you've got these two green lines below and the two red lines above, the red lines below represent two and three standard deviations away from a 20 period look back. The red lines above represent two standard deviations and three standard deviations above the mean which is the 20 period look back. Down here we have 100 period look back on the VWAP. So this ostensibly gives us what I refer to as the monthly trend on the chart. This 20 period look back that provides the central tendency of the two, three standard deviation envelope gives what I consider to be the weekly perspective on trend in the current market. And then we have this five period look back. Now in the settings I have on my chart here what I'm able to do using these indicators is if I turn off the five periods, not that one, let's see if I turn off this five period VWAP you'll see that the candle colors change slightly. And that's because the five period that I'm using actually colors the candles to represent the current trend. So I refer to that as the daily trend. So you can see here that this is a red candle as per the normal price chart. You can see here it's a red close. So this would be considered a bearish candle and you may think that depending upon your trading strategy this is an opportunity to sell this market but using the trend candles what we get is the color remains green. And that's because price is still trading above that five period look back. So what this does is certainly when you're starting out and even once you've been trading for a while it just helps for you to visually be able to quickly identify trends. And so that's how I frame the actual price data. A couple of other things here that I've got this at the orange lines represents the projected weekly range for the S&P 500. The purple lines project the monthly range. And again, I use the word project. These are just guides and you know price whilst price does have a tendency to respect them and they're certainly not in and of themselves going to be sufficient for us to execute a trade. But when we think, when we look at identifying trade locations and we're working on the premise of trying to identify high probability zones when these levels coincide with other technical levels then we can use that as further confirmation for our trades. I also have on here the monthly pivot with the monthly S3 and the monthly R3. So that's monthly resistance point a monthly support point. And then I also have the weekly pivot and the weekly S3 and the weekly R3. Down here in terms of cycle and momentum I have the RSI stochastic. This is the daily RSI stochastic and then this slower RSI stochastic represents where we are from a weekly perspective in terms of the RSI stochastic. And then down here last but not least we have the psych indicator. The psych indicator is essentially an enhanced RSI just gives some better data and readings in terms of sentiment in the market. So when it's green, we can anticipate that the market is bullish and when it's red we can anticipate the market is bearish. So I use these in different combinations to provide visually very quick information about where we are in the market. Okay, so when we're looking at this price pattern here we know currently price is trading above the monthly volumetric average price and above the weekly volumetric average price and we're trading above the monthly pivot. So our immediate read here is that the price action is bullish. We can see that the psych indicator is positively orientated and we have although the near-term RSI stochastic is over what traders would be considered to be overbought you can see that we've got a positively diverged longer-term cycle. So for now the trend in terms of this market is to the upside. So if we're thinking in terms of upside then we wanna think in terms of targets for this current upside move and where there might be a potential for price to correct from and that can provide us with a reversion trade as opposed to momentum trade. When I talk about reversion trades we're not calling tops or bottoms in markets as such what we're identifying is high probability locations where price could correct. So if you start from the big challenge that traders face when they're starting out in the markets is this, it seems easier to pick tops and bottoms than to trade with the trends for whatever it appeals I think in Maine to people's egos and this idea of being the master of the markets and being able to pick the top or the bottom of the market. Once you become more experienced in trading and in markets as such you realize that we're not here to predict the markets as traders that's not our job. When people ask me whether I think the euro is going with the S&P I don't care where it's going. All I care is that it's going somewhere that there's volatility. Volatility is what's incredibly important for traders to make money. And so this idea of being able to predict the market isn't really important to me. What's important is being able to trade it and to trade it we've gotta have a plan obviously and we've got to have a consistent approach. We've gotta have some type of strategy that we're consistently applying because as long as that strategy has a positive expectancy and believe me it doesn't need to be particularly high but as long as it has a positive expectancy and if you continue to apply that strategy over and over again and you have a long enough series of outcomes that strategy should deliver positive returns. So in terms of when we're talking about these target areas for correction or let's say reversion trades, we're not predicting or thinking when I get a target area that it's gonna be the all-time high or all-time low in that market. That's relevant. What's relevant is that we're able to one, have the technical know-how to be able to identify a potential reversal zone which sets up a reversion trade. And that's a skill that's important to have and in having that skill you can build confidence in terms of your understanding of reading markets. As a trader it's important to be able to read a market but like I say, the technical, the analytic side of being a trader is far removed from the actual act of executing trades and managing trades because one appeals to your intellectual and has a high level of intellectual stimulation being able to analyze the charts and see where the opportunities lie. But the actual pulling of the trigger and putting a trade on and managing a trade and managing your profit and loss and managing your risk, that's a whole other story because that's a very visceral experience. Certainly when you're less experienced in trading, watching every tick on the chart can give you a feeling of elation or deflation if the price action is going against you. But once you become or once you move to that process mindset that I talked about in the introduction there, this living and dying with each trade or the outcome or every tick on a chart becomes far less important to you because what you know at the back of your mind is that if you're trading your strategy consistently then over the long run, you should come out on top. And this is another very important concept I think for retail traders, certainly those who are attracted to trading by the idea of these Instagram ads showing people in gold-plated Lamborghinis, et cetera. It's very difficult when you're starting out to glean what I would consider an income from trading because you've got that, you know, one, you've got the period of acquiring knowledge and acquiring understanding and then ultimately being able to apply it. And even then a lot of traders struggle with capitalization because if you're under capitalized, what that essentially means is no matter how good your strategy is, if you're under capitalized you are going to at some point overextend yourself, take on too much risk because you'll become frustrated by the fact that, great, your strategy is working but if I have a 30% year or a 50% year on a 3,000-pound account that's 1,500-pound return whilst the percentage returns are fantastic, the financial return there doesn't really move the diet. And so it becomes frustrating that you're behaving like a professional trader but you don't seem professional trader in returns. And so you ultimately, or what a retail trader does ultimately do is they take on too much risk and end up blowing accounts. So when you're starting out in this game it's really important I think in terms of managing expectations that you certainly don't come to it as believing that it could be a primary source of income from the get-go. What you want to be doing is building it up from it being a supplemental income in the early days and building an account, et cetera, to the point that down the line it can become a sole income source. So that's just a little bit of input in terms of managing expectations as you're getting going in the markets. Now back to the idea of the reversal trade. So what am I looking at here? Well, we've been in this advance you can see that price was moving strongly to the upside the glide path of price in terms of the dispersion away from the monthly trend is significant. You can see this distance between the VWAP here and then recently we made a high and what happened next? Well, we kind of went sideways and this sideways action allowed the VWAP or the VWAP to catch up with price. Now what you'll find, and again this doesn't happen every time but more often than not once the VWAP does catch up to price like this unless we accelerate very quickly away from the VWAP then more often than not the consolidation phase we move into here is the prerequisite of an extended correction in this instance but certainly we have the potential for a reversion setup and what we want to look at when we get into this type of price action is where is that opportunity? Well, the last decline that preceded this advance that preceded the flip here in terms of the monthly VWAP being red to green was this leg here. And so what we want to do is always just overlay a Fibre Tracement because this will give us information here because once we take out the 78.6% retracement of the prior decline then more often than not we're going to retest and break the price, okay? So once we take out the 78.6% on a closing basis, sorry we're more likely to retest prior highs and break those highs. Once we break those highs we then have a high probability of testing the 127 Fibre extension. Now, I'm not gonna walk through the I'm not gonna get into the weeds in terms of Fibs today but these 127 extensions above and below a swing are important and our areas certainly of technical interest. So what we know is that once we're through the 78.6% retracement here and price did respond in around the 78.6% retracement we've got a pullback we've got a correction in the trend that just refueled the market and we continue to the upside. So now we have this target area or we have an area of interest at this 3728. So this brings us back to the current price action and this last, this area here which is our point of focus at the moment. So this is the correction that we're currently in and what we want to be thinking about is this zone here, this 3728. Now, versus the current correction I use another tool which is a trend-based Fib extension. So what this basically does is it allows us to look at price extensions versus prior swing structures. So let me just give you that. So this first green line here that I have on the chart means that these two swings here are equal lengths. Okay, so by the time we get into this leg here by the time we hit this price level here this 3572, that basically means that we have traded an equal distance in price versus that prior swing over here. Okay, so that's an area we always want to pay attention to. Why do we want to pay attention to that? Well, because equality in markets, equality objectives if we adhere to the idea that markets are by their very nature made up of human beings making billions of trading decisions then what we know about humans is from a psychological perspective that given a similar circumstances that humans will tend to act in a similar fashion. So once prices travel equal distances more often than not, we'll certainly see a pause if not a correction in the opposite direction. So that's why we want to pay attention to this equality objective. And the other level that has significance is a 161 extension of the prior swing. So what this area here represents 161% of that prior swing here projected into the future. Okay, so these are the two levels that I pay attention to in terms of prior swings. So when I'm tracking the market advance from this low I have two key levels in mind. The 100% extension, which gives us 3572 here. And you can see we plowed through on the first test but interestingly we closed below on the day. So I mean, these levels will come up over and over again. And then we have the 3781 level just above us. This is the 161 extension. And we know that we're paying attention to this 127 extension over here. And so can we see that there is a point of interest developing in this market above price? So we have on this daily timeframe we have about a 50 hand or 50 point target range here. What else do we have? Well, just above it, we have the monthly R3 and just above that we have the weekly R3. So if we move to the, keep the monthly R3 inside and then what do we have here with this orange line? Well, this is the weekly predicted range resistance. And then we look at the last swing over here. So just before we went into the corrective phase do we have any further confluence? Well, yeah, we can see that again this 127 extension, which was basically pinged on that breach. And then we've got the close below the one level. So just above we have the 161 extension of this swing. So at the moment, what appears to be the case is that whilst we hold support and in terms of support we want to look at the prior swing highs which come in here. So whilst we hold this support zone balance of probabilities for me anyway is that we should see price trade up to test. Let me go over this. That's what I'm looking for is price to hold and ultimately test this area. And from here, this is where I'd anticipate we could get a reversion set up because what else do we have here? Well, we have the volatility resistance patterns so that we know that this a move into this area represents a test of nearly the third standard deviation move outside of the meme. And statistically that has a 90% chance of containing price action on the test. And so from there, so what I've been looking at here if we can get up into this area if we hold this support and we trade up into this zone then what I'm looking for is a bearish reversal pattern. And for me that means a candle that closes below the five period VWAP because that's gonna give that's going to trigger a change in terms of the near-term momentum in the market which could set up our corrective phase. Now, where do we target with a corrective phase? Well, if we think in terms of basic Elliot wave, again, I don't wanna get down as the weeds on this today but it's very easy to identify the pattern here. So we have a five wave advance of this low and we now have this target zone which we'll just label the fifth wave for now. If we get up into this area, more often than not once if we get a reversal pattern from this level then the target for that move is a retest of the prior wave for low. Okay, so you can see here how we're able to using some basic technical patterns here identify a target zone of interest. We know now that what we're going to do in terms of how we would get a trigger for this trade, what we'd be looking for. And then once we're in the trade, we know how to manage our risk because we will be using the trigger, the daily, the candle that gives us our trade will be a close above that candle will be our invalidation point or our start. And then we also are able to quickly identify a target again using technical patterns because we know that there's a high probability of retesting this wave for low as the target zone. One final thing we're looking for which adds conviction to the idea of the reversion trade is this momentum. So we have down here, this was our last high. So this was our wave three high. This was the high we had in terms of momentum. And you'll notice that as we're trading up here, as price is moving higher, what we are looking for to confirm to give us extra conviction for this trade is that the momentum or the RSI, the psych indicator doesn't make a new high. So as price makes its new high into this 3760 to 3780 target zone, we're looking for a reversal pattern and we're looking for a failure in terms of momentum. So we don't make a new high on the psych indicator. And so that, what we're getting, the information we're getting from there is that the market is losing steam. Although we're making new highs in price, the underlying support or the rate of change that's required for that price to make that high far exceeds the prior swing high. But in that, what we get then is this idea that the market is one stretch to the upside in terms of the trade location, the price location it's trading at and the momentum is failing and starting to wane. And in that, then what we can, then we know then we have the requisite ingredients or constituents to give a high probability reversion trade. Does that make sense? Is everyone followed along with what I've, how I've put that together, the constituents, the elements that I'm looking for, what they mean, what they represent. Okay, now I did see a question pop up there. Let me just see and it's gone. Okay, so hopefully that will show you or gives you an idea of how I frame market data to identify potential trading or potential trade locations. We're not just putting our finger in the air and I'm thinking, right, this is gonna be the top. You can see methodically how you can build a case for this being an area of interest. So now what I want to do is just quickly move on to some of the opportunities that I'm looking at at the moment. First one here is the Sterling Kiwi. We are currently trading at this trend line support here, third test. Now we have been consolidating heavy rotation occurring here. What I'm looking for is for a close back through this weekly pivot. So we get this green close on our candles above the weekly pivot, then we can challenge this descending trend line. And so again, going back to this idea of then building the idea of a target. Well, for me, the target is going to, the initial target anyway is going to be an equality objective versus that swing. So versus this last swing here, we're simply going to be looking for price to replicate that swing here. Now we do have the, you know, we could just, we could touch here, we might not make here, we might be, you know, price might be going down and might make new lows. But if this technical pattern plays out, then we also have the potential to trade up into the higher end of the range. And what do we have there? Well, we have the 161 extension of this prior swing. So the Sterling Kiwi is one that I'm watching. The Canadian Dollar is another one I'm watching, looking for a move through the overnight lows here and looking for these momentum studies to roll over to, for us to trade lower in terms of the Canadian Dollar. A bunch of these are posted on the Tick-Mill sites. You can, if you want more detailed discussion in terms of what I'm looking at and the technical setup so you'll find them there, but I just want to quickly run through here some of the charts that are of interest to me at the moment. Swissy, this one could be setting up for a reversal here. I was bearish and had short positions on. I got taken out of those at break even. If we can get a close through the monthly pivot here, I think we could see another correction develop in the, in the Swissy. Again, thinking in terms of targets, just keep it really simple. We would have that quality objective and you can see now versus this structure where again, nothing too crazy. We just be trading into what's currently range resistance. So if we quickly go to the dollar index here, dollar trading at trend line support again, what you'll find with these markets when we're in these potential fourth wave corrective phases is that volatility is sucked out of the market. So volatility is what supports the price movements or trending type price action where we have lower volatility, we tend to get choppy markets that are range bound and that's indicative of these wave four corrective phases that are frustrating to trade and tricky to trade but proceed one, a wave five advance or decline that in and of itself then should be turned on should proceed better trending action. So whilst we hold this trend line support here in terms of dollar index, so I'd be looking for something like this again, thinking initially just in terms of equality which would bring us into the monthly pivot. From there then we could get the next leg down. Again, looking at a confluent area, immediately we can see we've got the monthly S3, the weekly S3 and weekly range, predicted range support down at this 91 area. So again, another pullback there, simply thinking in terms of again, symmetry versus these moves here which would take us then into the trend line support to act as resistance. And then we can start to think in terms of the next leg to the downside to complete a broader pattern there in terms of the dollar index. What else have I got on watch here? The Aussie, again, what I'm looking for here in terms of the Aussie is one more, if we get another leg here into let's, let's look at a retest in the 72. Ideally I want to see this 70, these prior highs here pinged. We've got monthly R3, weekly R3, predicted range resistance. And from there then we could look at a reversion move but I'm not overly excited about trading this on the short side into this consolidation zone. What I'd be looking for is this pop up into the 74, 45. Kiwi, I posted this one yesterday. I think we've got a great opportunity developing in the Kiwi just above the current levels. We've got this channel that we're in here and if the Kiwi can get up into, so something like this, get up into this resistance zone here at the 70 handle, then I think there's going to be an opportunity on the short side in terms of the Kiwi. Talked about, let's quickly look at the Euro. So the Euro game, what I'm looking for here is a correction and if we can hold the monthly pivot then we look for this move up into the target zone here and from there we could see a more sustained corrective move develop. The alternative scenario with the Euro is that we hold, there's a pivot level here that we want to pay attention to this 1920 because if we hold 1920, it could actually be that we are going to correct meaningfully lower first in the Euro, test that support zone at 115 before then making that advance up into the 120 target area. So those are a few of the charts I'm watching. The purpose of today really was more this idea of how I frame the market data to identify trade locations and how you can do that in a methodical and consistent way so that you want, you only spend all day looking at the charts and glued to the screens that you can identify these levels in advance and then place your alerts, price alerts so that you don't become a slave to these charts or slave to the screens. Okay, are there any other questions before I wrap this up today? Next week's session, what I'll do is I'll show you how we look at momentum trades. So how we position ourselves to trade with the trend. Today I was talking more about reversion or reversal trades, but next week we will look at momentum trades. Okay, if there aren't any questions, I shall wrap this session up. Sterling Cable from Aslan. Okay, let's take a look. So where are we with cable? Well, let's look at some trend lines in place here. So this is our current trend channel that we're in where it's grinding sideways pattern, but it's bullish because we're trading above the monthly VWAP at the moment. So we have this swing here versus that swing there. Now, what can we see at the moment? Well, we've traded into a potential resistance area. We also have the 78.6% retracement. So this, we know that prices is likely to find it a bit sticky here at 1.3338. Potential double top, we couldn't get a close back through. Prices, you know, failed there to close now for the fourth time above 1.3270. So what can we see develop from here? Well, we could see another correction. And if we bring in the interim trend channel here and we wanna think about where we could trade to before seeing the next leg higher. Well, to my mind, it would be that we probably pull back one second like that. So we have this swing here. So we could easily see something like this, test weekly range support and then get another move up into the price cycle highs at this 1.35 area. And then we've got the trend channel resistance just above 1.3615, 1.3692 is that 1.27 extension. And we have the 1.61 extension. So if we can hold, so if we can hold 1.3050 and get some bullish reversal patterns, then I still think we get up into this 1.35, 1.36 area before we likely see a more sustained correction. If we fail below the 1.3070, then watch trend channel support at 1.2950. So that makes sense, how's that? And then options up to 1.05. So the sterling dollar, let's take a look, sorry, dollar yen. So look, where are we with dollar yen? Well, we have this big outside reversal candle last week. Sorry, the week before. And we've since then just grind down back into monthly predicted range support. We tag that basically to the PIP and reverse. Can we get a bullish close today to set up another corrective phase? Equal legs. Let's just draw that in so you can see what I'm talking about. So if we get a close today back through 1.0450, we flip the daily chart bullish. We obviously we want to see the RSI stochastic turn here, but we could easily correct back up into this area. We've got some competing trend channels in place here with the dollar yen. So we have this channel to the downside. We've now got a trend line support here coming in there, which sits within this much bigger ascending trend channel to the upside. So really want to pay attention to how we close today because if we roll over and take out this 103.24, then we've got trend channel support back down into these priorities. Does that make sense, Ben? But if we can hold and get a bullish turn here, then we do have the potential, I think, to see an equal leg test to the upside. Okay, if there aren't any other questions, I'll wrap this one up here and we will reconvene at the same time next week when we'll take a look at momentum setups. Thanks very much, everyone.