 Good morning everybody and welcome to the first day of the protrader webinar series Today we have Charles Goff. He is at Pirate Traders and Charles has been He's been or he trades the ES futures specializes in interday two-way auction process of the S&P 500 He's the founder of Pirate Traders a community for professional traders And I have his links here to his YouTube channel his Twitter And then also his website here. I'll be pasting these into the chat so that you have them and you won't have to Copy them down here. So Need to go through the disclosures and also want to talk about the Black Friday sale here So just a minute general disclosure all bookmap limited materials information and presentations are for educational purposes only and should not be considered specific Investment advice nor recommendations risk disclosure trading futures equities and digital currencies Involves the stanchal risk of loss and is not suitable for all investors Past performance is not necessarily indicative of future results And then want to also share with you guys here The 50% off the first month of all monthly subscriptions. This is our Black Friday sale It will continue through This Friday, so December 2nd. So during this pro trader webinar series We will be you know showing this slide here and to access it or the link here You can basically go to YouTube. I mean our Home page here and then click on the banner here that'll take you to bookmap.com Slash Black Friday and then you can sign up in here. It's pretty pretty straightforward I use this coupon code here. All right, so without further ado, let me get a hold of Charles's screen here And then we'll get started Are you ready? Yeah, everything will join in just a moment Yeah, we're all set All right guys, well, thank you so much for joining me. My name is Charles. Thank you Bruce for the kind intro Essentially, why don't we start right now just by talking about what's happening in the market? Right this minute and how I see it and then we'll kind of go into more about me and how I look at markets and The ways that I use a use book map. Okay So first and foremost Like actually, let's start with a tweet that I sent out on Friday and that tweet read Generally speaking a market that's ready to break out a balance to the upside does not leave this much weakness behind My guest is we test the 3940s again next week Quite a bold guess Charles. Why? Why are you thinking that way? Well, I see what the market's been doing over the last few weeks as what we call a balance area A balance area is basically a range that the market gets stuck in over a period of days When it's essentially trying to decide does it want to go higher or does it want to go lower? And it kind of just has to bounce around inside that range until it's ready to pick which direction to go. I Love balance areas balance areas are my favorite because the thing about a balance area is it sets you up with very high probabilities once it either Succeeds with a breakout of balance or fails. Okay, and so that's the the sort of Mechanics that I believe are at play in the market right now And it just so happens this morning and at this very moment We are dancing around right on top of what I would consider The balance area high so what that basically means is this right now at this very moment There are two probabilities that are the most likely to play out Either the market is going to find support in here this morning and Continue to move higher if that is the case. We see that as a breakout of balance That came back down Tested the breakout for support and is now continuing the momentum to the upside a breakout of balance is bullish Okay So the way I'm gonna measure whether the market is able to do that is I'm gonna watch the overnight high The overnight high that we left behind over the weekend I know you know, you could kind of consider everything that traded after Wednesday of last week as the weekend I'm just gonna call it for simplicity sake 4024 that's the overnight high so as long as the market is below that level my assumption is it's just gonna kind of grind Around in here trying to decide what to do But if it can get above that level if it's able to push above that overnight high Come back down and find some support that to me would be very very bullish that once again zooming out bigger picture We may be breaking out of a balance area. Okay So that would be very bullish. I don't get bullish though until we get above that overnight high and Find support, but then I'm very very bullish from momentum to the upside and then pretty much the same thing with the overnight low If the market works its way through the support it created in the overnight here around Wednesday's lows If it works its way back through there to the downside and it breaks below the overnight low, which we'll call 3993 I would be looking for continuation to the downside in the exact same way Does it push below the overnight low? Does it get resistance? If it can get resistance there. I'd be looking for a big move to the downside Does that make sense? So either way Whether the market is ready to break out of this balance and look for continuation to the upside or It's going to fail to do so Either scenario will set us up for a large move Well, why Charles because of this mechanism right here? Often when the market tries to break out of a balance area and it cannot do it When it pulls back into that balance it will immediately trade to the opposite end and then if it tries to look below and It can't quite break out to the downside and it pulls back in it will often trade right to the opposite end Does it work out every time? No, of course not look it didn't work that time But most of the time a balance area can be very reliable to go straight from one end to the other So this morning we're setting ourselves up on a longer-term basis on a daily basis to either break out and Continue the momentum momentum to the upside or to fail and head down towards that opposite end of balance So until we either break the overnight high or the overnight low I'll be looking for the market to just go sideways and chop up and down and Try to fool as many traders as they can one thing that is Very reliable when it comes to a balance area high or a balance area low is The reality that you will likely trade Back and forth and back and forth and just get as many people long You can look at the book map here and you'll watch it play out like clockwork They will do this all day long Well, they will push the market up to squeeze out a bunch of stops, right? They get people thinking oh, I got a short here. I got to get short and then boom They get them out and then they do the same thing the other way They make you think they're building support so they can come in and take out all the stops and Over and over and over again. They'll just keep grinding up and down making you think we're gonna go higher Nope. Nope. Just kidding gonna go lower. Nope. Just kidding and they're gonna keep playing that game as long as we're inside that overnight range And they're gonna get as many people long and many people short as they can Before they pick the direction that they're gonna move today and That is a great segue so bring me into telling you about myself and my way of trading and looking at the markets So I would describe myself as a Discretionary intraday trader. I generally sit in trades for somewhere between a few minutes to a few hours Generally the way I like to describe it is like if the day's range is gonna be say 40 points I want to try to grab 20 points of that somewhere along the way I want to try to recognize when we're somewhere near the lows of the day And when we're somewhere near the highs of the day and I want to be catching those moves in between and The way I make my decisions the way I build up my discretion as to whether or not I should get long or short and what position size to use in doing it is I use what I call market Well, what everyone calls a market generated information Market generated information is information that exists in the charts It has already happened in the real world and it is actual information. It is not a guess. I am not looking at Companies earnings and saying to myself. Well, these earnings were better than expected. So the stock price has to go up No, no, no, I'm looking at the the company stock price and saying the stock price is continually going up It's trending. I I'm gonna get with that momentum and go long for that reason Not because of the earnings I like to get all my information that I use for decision-making from the market and that is why I love book map Now I will say I use book map very differently than most of you do I know a lot of people in this community use book map because your scalpers and you're looking for very very small Very tight ranges within the day that you can take advantage of I'm not really looking at that Because like I said, I'm more of a long-term trader to me The perfect day is when I get just one perfect trade Right if I can just get one trade where I enter and it's profitable and I close that trade and I'm green for the day That is to me. So I would rather wait Like a sniper for that one perfect opportunity to enter the market where the probabilities are most in my favor And I have an opportunity to enter the trade with the minimum possible risk and the highest likelihood That the trade will work out and so because of that most of the time I'm just observing the market and waiting for those opportunities and the way I'm doing that is I'm asking myself a question What is market trying to do right now in this moment? What's the market trying to do? Is it trying to go up? It's trying to go down. Does it just want to go sideways for a little bit? Well, it makes up its mind What is the market trying to do and how good of a job is it doing of that? How good of a job is it doing of accomplishing? Whatever that task may be So for example right now I think the market is trying to just grind up and down on the balance area high So that they can squeeze as many traders long and short back and forth keep stopping them out And just slowly accumulate a position whichever way the market is going to break so far. It's doing a wonderful job of that Right, and I know that because I see that it stays here that most of the volume is in the middle of the range and That we're just literally bouncing right on that balance area high What will change my mind? Well suddenly if the market were to push down and it were to get below that a period low Well now the information has changed now the market has begun The initial balance to the downside. I have new information So now I change the way I'm thinking and I say to myself, okay The market's not doing a very good job of just dancing on the balance area high anymore So maybe it's changing what it's doing now It's trying to go lower and then the question becomes how good of a job is it doing? Once it pushes below that a period low, do we get resistance? Can we get below that overnight low? Do we get resistance? Okay The market told me it was done going sideways. It was ready to go lower and then it confirmed it twice So now I can get into a short with a very high probability of the trade working out Because I know the market generated information the actual price action itself told me that that's what's happening Okay, so what do I use for market generated information? Well, my first source is this screen that you see over here on the left This is called a market profile chart The market profile chart is basically the same thing as a candlestick chart The only difference is it separates out the time periods so that you can see how much volume traded at Each individual level and how much time the market spent at each level So I'll just show you this overnight right here. This is what we call a collapsed profile So you see the way all the letters are just on top of each other like this They're all kind of smushed down on top of each other by seeing larger clumps of letters We can recognize those are price levels where the market spent more time Okay, so we can see the market spent a lot of time around the 4008 level it spent a lot of time down here around the 4002 level and in general the overnight spent most of the Time in the overnight in this area in here It spent very little time up here and it spent very little time down here And so that's important information to me that tells me that the market is very comfortable Rotating in this area, which is by the way that balance area high Exactly what we would expect it to do on a retest Okay, so that's the first indication that I get when I look at market profile software Where is the market spending the most time? The next question becomes where is it bringing in the most volume? Where is the most business taking place? So when we see last night another great example Most of the volume you can see the darkest colors on the volume profile here as well as the larger numbers That's where the most volume traded in the overnight Surprise surprise it perfectly lined up with where it spent the most time that tells me once again Rotation tells me the market is very comfortable. It just wants to spend time grinding around here whereas Let's say the market had spent a bunch of time up here grinding grinding grinding, but very thin volume Then it pushed lower it didn't spend a lot of time down here, but man it brought in a lot of volume Well, then we know there's been a change in the market. There was uncertainty the move has been Decided and now certainty is stepping in now that momentum So where the market spends time in comparison to where it brings in volume gives us insight as to what's happening underneath the surface So the profile that you're looking at over here on the left. That's the overnight range That's basically just what traded from last night and then what you're looking at over here on the right This one is today's profile. So that's from the market open at 930 moving forward throughout the day I have two profiles right next to each other It's kind of hard to tell right now because we're just in the first hour of the day But this one over here on the left looks like this one. It's collapsed So as the day goes on, I'll be able to see where the most time was spent This one over on over here on the right. It's expanded out so that I can see each 30 minute time period I'll just expand out that overnight real quick so you can see what it looks like boom Okay, so with the expanded profile I can see how the market moved through each 30 minute time period basically the exact same thing as a 30-minute candlestick and When it's collapsed together, I can specifically see where it's spending the most time And so I have both of those in front of me as I trade throughout the day I've then got the volume profile for the whole day So the volume profile over here on the left is from 930 in the morning the full day. Where did the volume trade today? Then you got the volume profile right here in the middle. That's the current 30-minute time period So within this 30-minute candle, where did the volume trade and then over here on the left? I've got the cumulative volume. This is all the volume for the last hundred days or so Just basically all the volume that is traded when we've been in this area before And so those are the things that I'm looking at to compare different areas of interest So that's that's my main source This is where 90% of my analysis comes from right here this market profile chart and I'm I'm looking at the market as an auction process, right? The same way that an art auction works an art auctioneer brings out a painting He says this is a beautiful painting and throughout the room people are asking themselves Do I want this painting? Do I think it's beautiful? How much would I pay for it? Everyone's deciding in their head what that painting is worth to them and What they're willing to bid for it. So then the auctioneer starts to bidding Let's start at a thousand dollars. Do I have a thousand dollars boom a paddle goes up? Do I have twelve hundred twelve hundred paddle goes up thirteen hundred fourteen fifteen paddles keep going up Lots and lots of paddles are going in the air. Everybody wants to bid they want this painting So what does the price do? Well, the price just keeps going up up and up and up that price goes and the bidding continues Then as the price continues to go higher fewer and fewer paddles go up in the air Fewer and fewer participants are willing to pay whatever price that painting is becoming as it becomes bigger and bigger Sorry more and more expensive. So then as you start to get to the very top the last few bids You're down to just a few people Maybe even down to just two. I have two thousand. Do I have twenty one hundred? I have twenty one hundred Do I have twenty two twenty two sir twenty two hundred? Are you willing to pay twenty two twenty two and it sold to the gentleman with a hat for twenty one hundred Right, but in the stock market what happens is at that very moment when that last buyer that very last guy That's willing to pay that price up there as soon as they bid and they get their painting the market brings out an identical painting Another share of ES futures Ready and waiting and but wait a second. We ran out of buyers There was only one guy left that was willing to buy up there So what does the market have to do? Well, it has to start the bidding down It has to say anyone willing to pay twenty two twenty two. Nope twenty one twenty one. Nope two thousand two thousand Oh, we got a buyer two thousand. Okay, do we have twenty one twenty one? Nope down back down to two thousand two thousand Nope, and they just keep doing that dance all day long It's buyers versus sellers competing with one another Seeing how far they can push it until there's no one left willing to bid up there Then they see how far down they can push it until there's no one left Look at that. They went up there to take out all those stops They came down here to take out all these They're gonna keep doing that dance as long as they can keep finding people willing to bid up here And then finding people willing to bid down here. They'll just keep doing that dance So I use the market profile software as a way to see That auction taking place Where are the buyers? What levels are they defending? Where are the sellers? Where are the stops gonna be that they're gonna want to come and squeeze and Then when I feel like I have an understanding when I say to myself, okay, I know what the market is doing So let's let's take a scenario for today. Let's say we break this chop to the downside We come down here. We repair the week low get some resistance. We turn this node into resistance We come down we get below that overnight low. So now I'm bearish Now I think the market's going lower That is when I'm ready to look over here on the right side of my screen Okay, the right side of my screen is what I call the market internals and the market internals are what I use to Confirm my analysis from the price action that I'm looking at on the market profile Okay, so every single thing on this chart kind of gives me a tiny little different piece of information that I can use differently and Balancing all those different pieces of information in my head is what gives me the edge to look for opportunities in the market Okay, so the first one over here on the top left is the spx and the ndx The reason I have these two charts up here is because I like to look at the 15 minute candles Without the overnight inventory So just the regular trading hours and the reason is because if you put a 20 moving average This is just a regular simple moving average a 20 moving average on the 15 minute candles Very importantly that are only the candles for the regular trading hours the US market It can act as very reliable support and resistance as you can see here in the NQ this morning Right, where did the NQ run out of steam right at that 20 moving average? Okay, there's a set of algorithms There's a set of bots that are always playing this moving average every single day So it's a great piece of insight to me. Are those bots able to control the market? Here's a great example happening now if the NQ breaks the a period low and we know that the momentum that broke that low Was just these bots selling the moving average that tells us that market is weak. There aren't buyers Okay So that's the first piece of internal I look at the next is this one over here called the breath and the Advanceers versus declineers both of these are basically just showing me all four of these actually the ticks the breath and the Advanceers versus declineers are all kind of showing me under the hood of the market. Where is the momentum? Is there more buying or is there more selling so on all of these? I'm watching for is the market above or below the zero line. Is it trending any certain direction? Okay, reading those right now. I would describe the market as bearish They're both the Advanceers versus declineers and the breath are below the zero line the Advanceers versus declineers are pegged sideways, which is bearish and the Breath is trending lower, which is bearish the ticks are also being held below the zero line, which is bearish Okay Then last but most certainly not least the reason you're all here Dun dun dun dun Bookmap, right? This is the book map channel. Why are you talking about all this other stuff Charles? Well book map is a game Changer Book map is without a doubt an absolute game changer because it gives me so many more insights It's just such a simple few tools that I am absolutely in love with it Now I will just give you the disclaimer ahead of time that I'm relatively new to book map. I'm no expert I don't know the terminology. I may describe things wrong. I may get certain things I may mix things up, but you'll get the general idea of what I'm describing So my main focus when I'm looking at the book map is the volume Where is the volume in the order books where business wants to be done and where is the volume Going throughout the day. Are they moving the big nodes of volume up and down also is the volume doing this right here Do you see these little like tiny little checker patterns where it's just little tiny dots of volume that that appear and disappear Second by second by second Right. All of that is bots. That's computers. And so I like to know is it real traders who are getting short Or is it just bots that are probably just looking for very quick little Scalp trades, right? Okay, so the market is getting bearish here The initial balance is now to the downside So that increases the odds the market wants to go test the overnight low at 39 92 50 As I said if we get below that overnight low and we get new sellers there That would be bearish for continuation to the downside as a look above and fail of the balance area So what a beautiful example everything I was talking about right So first thing in the morning I'm thinking the market just wants to balance on this level on this balance area high and decide which way it wants to go What will be my signal that it's going to go one way or another? Finding resistance below that overnight low or support above So we are now setting ourselves up for that first scenario Keep in mind resistance at the overnight low increases the odds that we're heading to the opposite end of balance Now we may not get down there today. That's the tricky thing about a balance area You don't necessarily go in a straight line And often the market is extremely tricky on the way down It will keep making you think it's going to find support and reverse It'll keep doing it all day long It'll make you think it's going to reverse and then out of nowhere at the end of the day You find yourself down there on the opposite end of balance So that is now what I am assuming the market is trying to do And so now I've switched from what is the market trying to do To how good of a job is it doing of that? Right do we get resistance now around the a period low? Can we turn this node that was support in the overnight? See we spent a lot of time in here. We brought a lot of volume in here This was support for the overnight and it was holding so far this morning But now that it's begun to break does this support become resistance? If this starts to become resistance, we're looking to test that overnight low Well, Charles I that makes sense to me, but now I need to know how do I know if it's resistance? Well, that's where we look back at our market internals And we start to ask ourselves is the breadth and the avancers versus declineers still below the zero line Are the ticks still getting smacked down at that zero line? If so, it's resistance and we look for that test of the overnight low All right. Well, Charles, let's talk book map. What do you see there? Well, this is a kind of an interesting little thing to have happen So if we if we notice right in here, there's a lot of volume on both sides of the market There's bots and they're competing with each other and they're just passing the market back and forth and back and forth And then out of nowhere That volume just disappeared Do you guys see that look at all the color? Look at all the volume in here And then here it's gone All the color in here And then in here It's gone So the bots turned off. They said, okay, we've done it. We've pushed the market around enough We've got enough people long and enough people short Basically, they're building up that long here, right We're ready to break now So those bots disappear that volume disappears. Boom. They break they come down 400 stops waiting Thank you So that's the change in the market You could see it visibly By seeing the volume disappear that they were set up to make a new move So now we'll watch does this volume come back Does it start to get orange and red in here? Do we start to do that two-sided dance again? That's resistance Building and we know what resistance means Bruce you got any questions for me brother? Wow, that was beautiful So no no no questions. Um, I mean Yeah, guys get your questions in. I mean it was so well explained. I mean, I I don't think there's a need for any questions, but uh Really, uh, that was just just perfect. Um So, uh, yeah, no, we're good for now Okay, sweet. Well, then I'll just keep rambling. I'll just keep on talking Okay, so now we're printing the c-period and this is where things get fun This is where the market generally what I have found is the first hour of trade I think about it like it's its own thing The first hour's market is its own market Um, you know, there's people who have changed their mind over the weekend About how they're positioned and they're going to want to reposition themselves in the morning You got people who got paid on friday, right? They're 401ks. They're going to kick in on monday morning Um, so on and so forth, right? The the market kind of sets itself up for whatever it's going to do throughout the day In that first hour So one great signal that we can use one great piece of market generated information is After the first hour is done. We call that the initial balance Which way does the market break from there? Does it break the initial balance high or does it break the initial balance low? And that is just one more piece of market generated information that can give us some insights Whichever direction it breaks it is more likely to continue in that direction Quite frequently. It hasn't been as as common lately, but it is not uncommon that Once the initial balance breaks either the higher the low of the day is in So if the c period breaks the b period low You know with a decent statistical probability the high of the day is in right there at that a A period high again, the markets have been so choppy so greatly crazy the last few months You can't really trust The initial balance is much that way but You can definitely still count it as momentum in a direction So once again, if they broke that b period low, it would further increase the odds that we're going to test that overnight low So there's a question here Garrett's asking about not not so familiar with the breadth and tick Charts, uh, maybe you can cover a little bit more on that Absolutely. Yeah. Um, so first I should just make note these the ticks the two that you see down here The one on the right that just says tick. That's for the nicey. Okay That's all the stocks that trade on the nicey and the volume The momentum that's trading, you know up versus down in there And then the one on the left is the is the nq. So that's All the stocks that are in the nasdaq. Okay, so that differentiates those two And really they're just you know one problem with the internals right here Is that they can be very distracting? They can send you a lot of mixed signals So what I find is the most useful way To uh to use them is purely after I've made a decision based on price action to confirm it Is it doing what I think it's going to do? So I would say at this moment um the breadth And the uh advances versus declineers I would describe as both bearish but not terribly so Okay And the ticks I would describe as bearish to neutral The reason I would describe them as bearish to neutral is you can see They're slowly starting to build momentum here Right, they're trying to break above that zero line But they're having a really hard time. They keep getting smacked down So if they keep getting smacked down the market's going to break lower Right, these buyers will give up But if they can get in there And they can hold that zero line And they can keep those buyers coming in more buyers more buyers more Well, then they can break higher From there So really I'm first focused on this and then that's a confirmation which is the same way I use book map I think I see something happening. All right. Let's look for confirmation I think we're going to turn this node right here into resistance Are we getting some resistance? Not much so far I have a question for you charles um So, um, no, this was I mean just beautifully explained um Now, how do you start to look for? um a setup and how um How are you? kind of calculating your edge to Understand that you have a higher probability Great question very uh Tough one to answer. So if I'm shorting to test the overnight low, I'm short right now, right? This was the resistance This c-period was the opportunity to get short Okay, that I'm looking to get here. I got to get in the trade So this is where I'm expecting the resistance I'm seeing those ticks get smacked down I'm seeing that, uh, you know, there's nothing special happening in book map. That's that's catching my eye So I trust my analysis that we're going to go test that overnight low So I got to get short in the resistance somewhere. Okay And then the next question I'm going to ask myself is all right. Where where am I wrong? Like if if we're not going to go test this overnight low, where do I want to get out of this trade? Well, certainly if we get above the b-period high Right, we got this resistance here We got this resistance here. So if this market wants to go lower Certainly one of these will hold so I'm going to want to put my stop up here above that last resistance So the next question I say to myself is I say, all right, charles. I want to get short in the resistance I want to put my stop up here What is the distance between that entry and that stop? And then where is my target if I'm targeting the overnight low I would then say what's my distance from my entry to my take profit and my entry to my stop In this scenario, it's only a little bit better than a uh, it's almost one to one pretty much It's a little bit better than one to one Um potential reward to risk So this probably wouldn't be a trade I'd be looking to enter right here But what I would say to myself is You know, if it did come up here and test one of these resistances I could get in there and then my risk would be much less and my reward much more If I were to wait and get in up here Well, then my reward is bigger than my risk If I could wait and get in up here Well, then my reward is even way bigger than my risk So the edge Okay Is enforcing myself to wait for these opportunities The edge is enforcing myself to wait for the very best entry Where I'm taking the minimum amount of risk With the maximum amount of reward Okay, and it's really really hard to do And you will miss trades all the time This market will go down. It'll test that overnight low and you'll be saying to yourself Why the heck didn't I get in at the resistance when I knew I should? Well, because I was disciplined and I was waiting for a better entry So which game am I playing do I want to be in every possible trade? Or would I rather wait for those best possible setups? That's what I asked myself. Okay. So that's step one. So now I see a trade. I see where I want to get in I want to sell In here with a stop up here with a target down here Okay, I'm happy with the risk to reward It's at least double the reward for the risk that I'm taking So that meets my risk reward criteria So now the question is what's the position size? How many contracts do I want to enter here? Well What I would say to myself is if I lose I do not want to lose More than 2 of my account size. So since right now I'd be taking Uh looks like eight points of risk I would have to say to myself How much how many contracts would add up to two percent of my account size if I lost eight points Okay, so that's the size of my entry. Let's say I can enter with one es contract short Because eight points on a single es contract which is like 400 bucks. That's my risk That's the most I can lose in a single trade So that tells me what position size where to put my stop where to put my entry where to put my take profit So now what do I do? nothing This is the key I put my orders in and I just let the trade work and As long as I follow these rules as long as when I lose I only ever lose two percent of my account size Okay, and I'm always taking a two to one reward to risk. So that means if I win I'm going to win four percent of my account size right I only have to be right like 40 of the time. I don't even have to be right half the time I can literally be wrong More than I'm right about what I think the market's going to do And still be profitable as a trader as long as I don't mess with the formula As long as once I enter the trade I either let the trade fail Or I let the trade work I don't Let my emotions affect me once I'm in the position And that is the edge as well So the edge is the patience of waiting for the better opportunity to get in And the patience of letting the trade work itself out And not trying to outthink the market in the middle of a trade That's it. That's my whole I literally just told you guys my whole system So, so I mean that's Um, really nice. Thank you. Charles. Um, I I'm wondering though they get so you're basically setting up that that formula um, and then you're um Setting up your entry that So if it goes above the b uh, uh period Uh, it and stops you out. That's your two percent. So it doesn't matter Really then where you are going to enter as long as it Matches that formula 100 percent. All right. So the risk of every trade I ever take Is exactly the same Every trade I ever take If I'm wrong and the trade is wrong, I will lose two percent of my account If I am right, I will make four percent of my account All I must do from that point on Is be right as much as I'm wrong That's it like it's it really is that simple. I don't have to know what the market is doing all the time I don't have to be in a trade all the time. Uh, I don't I don't have to really worry about anything I just got to be right half the time And as long as I follow my rules, which is the hard part Then I'll I'll be profitable and I'll win in the end. So so let's say For example right now I was looking at this trade and I was thinking, you know, I'm going to take profits right there at the overnight low Well, then like I said, I got to get a really good entry where I have minimal risk But maybe I'm not thinking like that. Maybe I'm thinking longer term Maybe I'm saying charles this sure looks like a look above and fail Of a balance area and the market's heading lower Down here to the balance area low Well, then I could use that as my target to take profit I can say I can get in anywhere in here Right with a stop above the high of the day And it's an excellent risk reward opportunity To take that trade all the way down to the opposite end I don't even have to wait around. I can go short right now at market And I'm still within a reasonable risk reward if I get short right here. Sorry. Let me just redraw this So if I'm if I'm trading for the opposite end of balance and I get short right now with a stop above the high of the day This is two percent of my account If I lose It's the same loss as if I went for the shorter term play just to test the overnight low But the reward obviously is going to be very very big Okay, well, what's the catch charles? There must be a catch to choosing between Trading now short to target the overnight low as opposed to trading now short to target the balance area low Well, the difference is the discipline, right? Remember I said the the equation only works If I do not change the trade once I'm in it So for me to choose To get into a short right now Targeting all all the way down here On this end of the balance that means I am accepting That I'm going to have to sit all day long and this market's going to be grinding lower And it's going to try to fake me out that it's coming back and then it's going to grind lower and figure And I'm going to have to sit through all those emotions and all of that in order to get to the opposite end This is the big problem. A lot of traders have a lot of traders. They they want to get in the short from here to here But they don't recognize when they're getting into that short that it's going to be really really hard to stay in and wait for that full move So if they choose to use the high of the day as a stop And enter right now, they're totally messing themselves up because the probability becomes higher that it'll come back up here Then down here, you know, well not sorry not I misspoke. That's what I'm trying to say The probability is that before it can get down to here You're going to lose faith in the trade and you're going to get out early And then that trade you won't get 4% of your account size Right because you got out early and so then you you mess up your whole scenario Because the only way it works is to know your win rate And to and to have your risk reward compared to that. So anyway, that's the other element of it is like When I'm entering a trade, I will think about how difficult it will be for me to stay in that trade If I think I will only trust the short to test the overnight low Then I just I have no choice. I just must wait for the better entry And not lie to myself and say, okay, you know, I'm actually trading for the opposite end of balance So I can take on a ton of risk. No, no, no, no, no. I got to know what's the trade. I'm in ahead of time Very very well spoken I'm wondering What about, uh, you know end of the day or You said that, you know, in the beginning of the webinar, you are in for either Several minutes or maybe several hours or hours Um, so how do you if you're going to take on like, you know, high of the day as your ultimate risk and you're looking for that, um, You know much greater, uh, reward Then you may have to stay in Several days Yeah, I don't do that Yeah, I don't do that Yeah, I I can't I've I've Listen, if I could if I could swing trade if I could get in a trade and just wait for it to go where I think it's going I would crush the markets I would be the most because my ability To read markets is top notch my ability to guess Days before it happens I guessed on friday or sorry on wednesday of last week that we were going to head back down here this week But do I have the balls to get short? You know, it would have been at market close So it would have been right here Do I have the balls to get short here sit in that trade all weekend long? Maybe even for four or five days waiting for it to get down there. No, of course not I don't you know what I mean? So i'm forced to be flat Wait for the market to open wait for it to push below that overnight low find the resistance. Then I get my trade. You know what I mean? Right. Yeah, I I don't like carrying risk overnight I like to be in and out and as far as like how long I'm in a trade. I never know going into it Right, I could get short right now to test the overnight low and the market could push down there in five minutes And then boom I take profits or we might grind sideways for five hours and then it goes down there Either way as long as I haven't gotten up to where my stop is. I'm still in the trade And so I don't know how long it's going to take fantastic Let's see some questions are coming in now So let's see here Hold on a minute Yep, a lot of no a lot of Dalton here for sure Yeah, Dalton's my my mentor. So if you guys are hearing a lot of Dalton, that's I'm just a parrot of Dalton I I love I mean like everyone's looked at volume profile for so long And I always kind of thought like Yeah, but you're you're not getting like it's just mashing it all together like when you look at market profile though in these periods Then you I think you just get much more detail About what's going on Um, yeah, the interesting thing is the way people's brains are different It's like some people Market profile doesn't work for them. Like it just they're they can't connect with it Candlesticks is easier for their brain to like connect with And some people it's exactly the opposite. They look at candlesticks and it just looks like Random and then they look at this and all that makes sense, you know When I can physically see a big node and I know like that's easy You know, everyone's different. Right, right um, so Let's see. There's a question on the timeframes for the internals Oh, that's a great question Also, it's worth noting with book map a lot of times I'm I'm really zoomed out or like this And that kind of can also give me a lot of insights about how the market is making its moves You know They're bringing in volume down here to pull the market to the volume Okay, then they're bringing in volume up here to pull the market back up Bringing in volume down here to pull the market down. And so then when I know that that's what's at play I can keep an eye on those bigger nodes and just just it sounds like an oversimplification But like is there more volume below or above price? And it's likely to head in that direction. So just just not to confuse Our our users what you're referring to is liquidity Uh, I mean we refer to it in the webinars as liquidity not volume I I always refer to the traded volume the the aggressor Uh, once it's filled with volume before that it's liquidity Um, I mean, yeah, that's where there there are orders there But uh, and there might be quite a bit of volume within that liquidity, but uh, just just to make the distinction. That's the passive Uh orders resting orders, uh, yeah and liquidity Uh, that's a good. I should actually switch. That's a good way to differentiate the two Yeah, because because the aggressor like we we just try to make the distinctions like the aggressor is like what the traded volume Everyone looks at um, and it's the one that moves the market, but uh, uh, the liquidity the passive orders Can't technically move the market Gotcha Yeah, it's funny how people get so um Tangled up in words one time I was doing a live stream and I said something like all right So we're looking to see are there more sellers here That start to pile on to take the market lower and this person like emailed me It's like so upset. They're like, it's not more sellers. It's aggressive sell. It's like, oh god But anyway, yeah, I get you. Um, but to answer the internals question Um, so I have my internals set up as all 15 minute candles um Just because for me, I like things to be uniform and uh, I when I used to trade using candlesticks I use the 15 minutes. It's just a time frame that I like So I've always kept it in that but there's no reason why you would have to If you wanted to look at the ticks in one minute or five minute or whatever you want You totally can do that and they work exactly the same Um It is worth noting one thing I will mention We're getting ready to break the initial balance here Which would increase the odds that we're heading down to test that overnight low as I said Um, one thing that I will mention here that I think is really important that a lot of traders don't understand About technical analysis is that the way it works is it is all pattern recognition Your brain learns to recognize The information that it sees over and over and over again every day the same way And so what you're basically doing when you're learning to read markets Is you're you're creating that framework in your mind if you understand the way that the human brain is designed It's a bunch of tiny little neurons that connect with one another So the more you think about a certain thing the more you exercise a certain part of your brain The more of those little neurons that grow together They say the uh the neurons that uh fire together wire together, right? So if you're constantly looking at a chart on a 15 minute candle the more time you spend studying it How does it move? What's the tempo? What's the style? The better and better your brain will get at recognizing that thing However If you switch candlestick sizes, so if you're a person who goes from like one minute candlesticks to five minute candlesticks to 10 to 20 You know and you're constantly jumping to different size candlesticks What you're doing is first and foremost you're making it harder for your brain to develop that understanding Of those. Okay. So there's the break of the initial balance to the downside, which is bearish So now we're looking for a test of that overnight low at 39 92 We did get resistance. They turned that support into resistance So that is bearish and it also adds to the look above and fail narrative that we may be heading down to 45 okay, um So that's the first problem right is that if you're if you're moving your candlestick size around all the time Then your brain can't form that deep understanding of how to read those candlesticks um The other tricky thing is the hardest thing the thing that most traders don't think about is you only have so much mental energy You literally build it up while you're asleep at night and you wake up every morning And you only have so much capacity to think in any given day the most um energy You know using activity that your brain can do is switching from one thought process to another The switching between thought processes is actually More difficult for your brain than focusing deeply on one thought process. Okay So if you're constantly changing from like five minute candles to 30 to hours to dailies to Every time you're changing it Your brain must completely reset and re you know figure out its scenario. Wait, what am I looking at? What's happening here? How do I read this? And so you're actually taxing your brain the the energy that you use significantly by jumping around So anyway, that's a long story to basically say pick whichever time frame you want to trade on Any time frame is fine, but just stick to it because it will be much easier for your brain to master and understanding If it's looking at the same thing all day every day That's one of the reasons why I keep my book mat zoomed out is because this is the the sort of look of it that my brain is becoming used to seeing You know Rather than all the way zoomed in like this Yeah, that's that's a really good point and to keep you just like on track There you go. Uh, let's see here. Um the Steve I he explained the chart on the on the left hand side there about the the um Uh, some of its volume profile some of its market profile Uh, and then the half hour candle or um, you can see the half hour time frames as well with the ab's and c's there Yeah, and if you guys have any questions like that, I encourage you to check out my youtube channel pirate traders Uh, every morning I live stream like this for the first hour of the day And I'm happy to answer any questions like that. Um, you know the pop up in the chat Yeah, and um What do you have any sort of particular like, uh, um initial balance? Uh strategies, I mean, I I know you just talked about the c period, uh, etc Uh, and once that goes, uh, that is likely just gonna go but um Anything deeper than that Yeah, yeah, like do a lot of people look for like, um the the size of the initial balance you look for move the same size so like if Um, you know, if this is the size of your initial balance And you break out to the downside you'd look for a move, you know, somewhere in that in that range Um, that's not something I look at personally um But I I do know there are some people that use that The way I see I don't really have specific This is what's so hard for me when it comes to teaching people how I trade Like I don't really have specific anything It's it really is as simple as like I said, I'm just always asking myself. What is the market doing? So breaking the initial balance to the downside gives me a piece of information That piece of information is the market wants to go lower Once I get that piece of information. That's it. I'm not paying attention to the initial balance anymore Now I'm looking for resistance, right now. I'm looking for Do the ticks stay below the zero line? Are we building in volume here on the uh book map, you know I'm I go from worrying about one piece of information until it gives me Whatever the signal I'm looking for then I stop thinking about that and I move on to the next thing And that keeps it simple for me. So yeah, when it comes to the initial balance, I just look for the break Yep, keep it simple. Um Uh, no, I have a question on the return. Let's suppose So you have your setup all in your mind. You're looking for a risk reward that works out um This is where it gets complex the you know, well, what if But let's suppose the internals on the pullback that you're looking for Back into that area in the b Time frame You know, but the internals are just showing like wow, there's a lot of buyers coming in Um, and you just you might just get run over. Um, how do you determine? You know Yeah, it's a great question. That's That's part of Um, that's part of the how good of a job is it doing kind of analysis So if the price action is telling me the market wants to go lower, right But the internals are telling me wait a second. There's buyers coming in here They're they're not they don't really want to go lower. They're they're happy to do business here, right? Well, then that tells me I don't want to get in that trade to go lower Right and I might be wrong the market market may still go lower But that just helps me to not get into trades. I I would say the simplest answer to how I went from Not being profitable to being profitable as a trader was learning to not trade It was it was learning when to avoid taking trades There are a hundred times a day where the market might give me an opportunity where I think I know what it's going to do Right, but if I only take, you know, the one or two or three trades Where all the stars perfectly align where I'm extremely confident and I have an excellent risk reward That is how you win the game over the long run If you're chasing every single potential opportunity Then you'll be in tons of losing trades. You'll wear out your mental capital You'll be exhausted. You'll be annoyed And it just won't help you out. So yeah, when I'm getting conflicting signals, whether it's from the internals or the the map From what I think I'm seeing that just tells me to step aside. It tells me I need more information I don't actually know what's happening Okay, so so basically the the short answer on on in this example would be like the how at the bottom edge there And if you see lots of sellers in there Uh, then that confirms it you wouldn't necessarily look at that as maybe like trap volume and that they're working at, you know The other way back I I mean, this is where like I struggle To understand like yeah, I don't know. It's looking pretty strong and yet You know, I want to get short, but you know, maybe it's the fuel that's down there from those Uh guys shorting or you know building volume down at that bottom edge That are the buyers on the way back up Yeah, see I I really just I just don't ask too many questions. I keep it really simple. So Basically in a situation like this is a great example with the ticks here, right in a situation like this I would describe this as as you know neutral to bearish, right? Why is it neutral because they do keep they do keep defending, right? They do keep trying to get back to that zero line So it's not fully bearish like the nq looks fully bearish, but the the nice he doesn't Um And so what does that tell me? Well, it tells me that the market is bearish, but neutral, you know It's not looking for a big massive. Oh my god. The world's coming to an end, but it's slowly melting lower um The internals are tricky to read sometimes and the the bitch of it is it always seems crystal clear after the fact So let's say the market breaks lower here and we head down towards say 3980 Then what will when we look back at the ticks, you know, the ticks will have done this It will have seemed so obvious Right that like we tried to get above the zero line couldn't do it failed and went lower So it's you know, they're very tough to read But if you keep watching them every day, you'll start to catch those little insights Um, but I would also say don't ever let an internal talk you out of a trade If you if you're confident that you have a good setup, it's okay. Take the trade Right, right. That's that's the the Following in your plan part. That's just can be like, um Like you uh said multiple times is it can be challenging Yeah, it's it's the hardest part It took me a long time to figure that out that like market analysis Like figuring out what the market is likely to do is actually not that hard What's hard is following a set of rules when you're trading it and uh Most people put all their time and energy into trying to read the market You know, I tell people this this one right here the 20 moving average 15-minute candles you could literally trade nothing but that Like sell it when it tests it from below I at when it tests it from above Like as simple as that and you can make money in the in the market Now you'd be bored a lot of the time because there's going to be days where you don't even test it Um, which is what it looks like we're going to get here on the es um But it's just it's just to understand that You don't have to overthink things you don't have to always know what the market's going to do You don't have to have certainty Just have to have a good entry and you have to follow your rules Yeah, this is this is a great webinar Thanks so much charles Um, let let me see. There's uh any other questions. Um, uh Let's see stumpy's asking, uh Anything that signals a fobo at the low or high of the range Which I don't know what a fobo is You're a bitching out Um What is a fofo mo? Yeah, so what what he's talking about is this idea which is just to me the real key to everything is When you get to a pivotal level and we're looking at the overnight low right now Okay, this is our pivotal level What happens when we get there? Are there new sellers? So we know for example, there's going to be people who are buying right now who have their stops right there So when the market first pokes down, it's going to boom It's going to pop right through because we're going to just those sellers will just be stops They're not actual real people going short. There are people who were long getting out of those shorts So then the question becomes is there new sellers? Right, do new sellers start to pile on here because all of a sudden they're like, oh my god This market's going to keep going lower and that's that's where the magic happens waiting for the test Looking to see Who wins this little mini auction right here that gives you the bigger move Um, so I think that's what they mean about testing out at the higher the low. Yeah, is it new business? Yeah, fake out break out the old So stumpy said uh fake out break out Is the full and that those are a bitch right it could come down here It could make you think it's going to pop right back up Oh, look, we're just looking below and failing the overnight range and then out of nowhere crash and burn Yes, sir. It happens Let's see Lord MacGyver is asking about uh, why do you use um, why do you watch the price axis on the 0.5? Uh tpo and not the uh 0.25 or where the futures contracts are Calculated All right. Yeah, great question. So he's talking about the what we call the tick increments So each letter that you see on here it actually represents two ticks It's half a point And a lot of traders use one tick one point so one letter per tick Uh, just for me right now with the amount of volatility in the market. It's just easier to see If this was one tick increments the profile would be like, you know, Boom, uh, it would just be really big and spread out across the screen So by condensing it down it just makes it a little bit easier to see Okay And let's see here. Um, the simon the numbers on on book map there are stops and icebergs Oh, yeah, if I could take just a second to talk about that So this is one thing I just started looking at the stops and icebergs tool And I freaking love it. It's my favorite because it really really helps you to understand the dynamic of shorter term smaller size traders and larger players Um And what you want to look for is when both stops and icebergs are on the same side of the market So if like you have here where you've lots and lots of stops Right and at those same areas lots and lots of icebergs So the people who were stopped out here were longs that got squeezed and the people that were the icebergs here were getting long This is a really wonderful thing to see that you can trust. It's just game playing They were just playing a game to get as many people Um long as they could so they could stop them out when they came back down Um, so yeah, I love comparing where there are a lot of stops to large icebergs And when you see them together, that's just great information All right. Um, let's see question on What are the time frames on the profile try it? I know I know that you had already covered it, but uh Some people yeah 30 30 minute tpo's and I split them the profiles overnight and regular trading hours Then let me jump over to discord. Um Razor is asking about that 20 Moving average was it simple or exponential? It is simple. Okay, and it's it's so important It's got to be 15 minute candles and only the regular trading hours. You can use spx or ndx You can use the futures and just only use the regular trading hours But it will shock you how often that is perfect support of resistance throughout the day Uh intraday. It's just a set of algorithms that always play that Okay, uh, let's see here. I think I think we're good. Uh, unless uh, you guys have any other questions, uh, please get them in Eat now forever hold your peace. That's right. That's right. Well, we'll certainly have you again. Charles. This has been just, uh, excellent awesome Okay, no, I think I think we're good. Um What I mean, uh, wow. Uh, well, I mean there you go. So You've got now guys like, uh, a bigger picture Uh, Charles went over using his higher time frame. Uh, uh, analysis and volume and market profile He's got internals That he relies on to give some insight and then he looks at book map here To also understand the other side of the trade And stops and icebergs in there. Uh, so that now he's got a complete picture of this Uh, and then he's got his setup so, um Yeah, it It's uh, really really nicely outlined a process here And just for what it's worth as I told you so Resistance in this node test of the overnight low Don't say I didn't tell you while it was happening. Right, right. No, you you you read it perfectly And and it's also been kind of a bit of a grind down there But well, that is the unfortunate thing about these balance areas Is the market when it fails to break out it is heading towards the opposite end But it always does it in the most grindy annoying way And uh, it just is what it is Yeah, yeah, and like You know, the the one thing that's nice is like you're you would just be in it and you just be like Well, I you know, I'm expecting it to grind and I know where my stop is I know where my take profit is and and that's that Um And just let it work or it doesn't work Exactly you nailed it. So, I mean, how would you in in some of these like It never is so simple uh as some of the scenarios that you've outlined, but like let's suppose it just grinds like, uh You're in your you're in your trade. Uh, it grinds all day long. Um, and uh, it's you know End of the end of the regular trading hours. I would you just You know, um exit the trade Or yeah, okay Yeah, yeah, if I so in the last 10 minutes of the day We have a little joke in the brigade. We call it the murder bot There's like a set of algorithms that that jump in right in the last 10 minutes of the day One set kicks in 10 minutes before the close and one five minutes before the close And the market gets very sporadic Uh, there's no way to predict the moves it's going to make I almost never am in a trade when that time period comes So if I'm in something and it's not working out, I'll just exit and remember for me The most important the key was when I learned to stop caring about a trade not working I think like a casino. I'm thinking about the trades over the next 100 trades I'm not thinking about any one trade. So if I get in it and I have to sit there for hours and then I have to exit It sucks. I mean, I'm not saying I like it. It's it's a shitty feeling, but I'm fine with it. That's the name of the game Yeah, yeah, I mean, uh, those are your rules. Uh, and uh, uh, and that's what what you're looking for I mean, um, or that's the way that you want to manage it and handle it Um, and makes complete sense Uh, it erodes that, uh, you know, um, uh risk reward ratio However, uh, you you want to exit Yeah, and I will just also say that doesn't happen often Generally, if I have enough confidence to get in a trade The trade will work or it will fail. You know what I mean? It's it's not common that I get that thing where I think the market's going to go somewhere and then it just goes sideways Generally, if it's going to just go sideways, I can tell and so I'll be trading for that, you know Right, right. So um, there's a few questions. I think uh, someone had answered it in youtube, but uh, also in uh, in discord Uh, the software you're using for the market profile Oh, yeah, it's called window trader. It's window spelled without a w at the end Okay, uh, and uh, let's see the um I've been uh, pasting into the chat guys, uh the um uh contact information or social media for uh Charles at uh pirate traders. So uh, you have all of that And let me know if there's any more questions or any last words that that you have Uh last words for me. Yeah. Yeah, I mean, uh, well, I mean, we're fine. We're fine to continue on if you see something But we're we're about, uh, you know an hour and 15 minutes into it. Um Yeah, no, no, I'm ready for a potty break Okay But yeah, no, I would just say as far as leaving you with the market here Um, I would say the market is one time framing lower Which is bearish, right? Uh, it pushed below that overnight low. We did not get resistance there So remember the question is always what is the market trying to do and how good of a job is it doing? Well, it's trying to go lower here today, but it's not doing a very good job There were no new sellers waiting down there at the overnight low So that increases the odds that maybe we do need to go sideways today But we'll just wait and see as long as that d period high Stays below the c period high. So as long as the d high is below the c I will assume the market is going to keep going lower Um, and as far as like famous last words from me I would just say thank you so much for watching and I hope to see you on the pirate traders channel sometime Yeah, yeah, excellent. Thanks so much charles Uh, I've put the links in several times here to charles is um youtube and his um twitter and his pirate traders dot i o website Guys, also, don't forget about our black friday book map dot com slash black friday So this is a great time to if you if you haven't tried book map You know, this is a good time to try it. You'll get 50 off for the first month And it works for anyone who's upgrading from like global to global plus as well So if you want to try it out and uh, this is the time to do it so Yeah, yeah, thanks charles And uh, looking forward to doing much more with you in the near future Some thanks bruce. Thank you everyone. Bye. Bye. Okay. Bye. Bye