 Welcome traders to today's session in our online education series. My name is Patrick Munley and I'll be hosting the session today. Before we start, can I just do a quick audio check if you can hear me loud and clear and see a tick mill welcome screen on your screen. If you could type a Y in the chat box, that would be really helpful. Okay, well, as always, before we before we get going here, let's just remind ourselves of the risks involved in foreign exchange trading. And as I say, each week, you guys are are equipping yourselves to help mitigate some of the risks involved by participating in these sessions and availing yourself of this of this education. Someone who's had 15 years experience in the markets. So without further ado, let me let me introduce myself for those who are here for the first time. My name is Patrick Munley like I said, and I've been in the markets 15 years. However, I didn't I didn't start out in financial markets when after I graduated from university, I went into the world of consulting. And after a period of working for a city firm in London, I left the firm with some partners and we did a startup consulting startup that experienced some pretty rapid growth. And after 45 years, I cashed in my stake in the business and set about exploring my passion for markets. And when I got involved in in trading, like many people, I experienced some early good fortune and and managed to make some some pretty nice gains. And, and then I experienced what what most most do I took some pretty big losses, gave back all the gains I've made and then some. At that stage, really, I decided that I was going to continue that I needed to take take this idea of trading seriously and approach it as I had done with other business ventures. So I set out to identify a mentor, someone who demonstrates excellence in the field of trading. I worked with my mentor for over a year to basically learn not just the technical game in terms of mind something of the markets from a technical perspective but more importantly the mental game and the mental aspects which which really drive trading performance to my mind anyway. After, after a period of about 18 months, I had fully back tested and forward tested trade plan which was underpinned by a rigorous risk management strategy. I then set about executing that strategy and since 2008 on an annual basis, I've delivered positive returns. And my focus really in terms of my performance is really that on an annualized basis I'm not concerned by the outcome of individual trades or even a string of trades because what I know is that if I follow my process and I adhere to trading excellence over an extended series of outcomes so months and years, my trading edge should demonstrate its positive returns and has done so. Since 2010, I have personally been involved in mentoring other traders from complete novices to former CME floor traders in helping them develop effective trading strategies. And since 2013, I've actually been managing external investor capital through a managed account service. And like I say that also has on an annual basis has has delivered positive returns. So hopefully that will give you give you a flavor of where I'm coming from what we're going to move into today. Now that we've finished both the the introductory and the intermediate stages of the education process is we're actually going to start looking at trading strategies. And specifically today, we are, we're going to look at my core swing trading approach. Now, before we get into to looking at the details of this approach, what I want to briefly do is just remind us that or remind, remind us that any strategy is only as good as the trader who is executing the strategy. I could give you my specific trade plan and you could go away and try and trade that. And over the same period of time that I could be profitable, you can end up losing money. The reason for this is that what happens when people take other people's trade plans without having done the requisite work to develop the plan. And certainly the backtesting element, which is key is that the minute any strategy goes into a drawdown. So any, you know, once you were executing trades, if whatever reason you experience losses, then without having done that work to develop a trade plan from scratch and and the back test, you will immediately suffer, suffer a conflict and conviction, because as, as, as, as any strategy will, and all strategies do go through periods of drawdown or loss. It's at that point that all the work you did to develop the strategy, and certainly the, the back test, which is key underpins your belief in the strategy and allows you to continue trading through a drawdown. Through to the next period of of equity increase in your accounts. Like I say, if you haven't taken the time. I mean, this poor swing strategy that that I'm going to walk you through today. When I was doing the back test, I looked at nearly looked at just in one pair alone over 1000 examples of the setup. So what that means is that I'd seen the trade, I'd identified the setup, I'd seen the exact setup over 1000 times in just one currency pair. And, and then I'd seen the outcome so I had a I had a new, or by the time I completed the back test, I knew what the A plus plus setup to look like, and I knew what the C minus setup to look like. And I, and then I was able to to trade them accordingly. Without doing that back test, the minutes, like I said, the minute that any strategy goes into a period of drawdown, you would suffer that that's a conflict with conviction and so it's really important. As we proceed through these these few core strategies I'm going to demonstrate to you over the coming weeks that if you decide that you know you think you can make these strategies work for yourselves. It's important that you undertake a period of back testing before you certainly before you would you consider trading live capital. So, now we've cleared, cleared some of that. What I want to do is I'm just going to walk you through this is a trade plan document that I share with students who I, who I teach at fxcareerswap.com. I'm the head of education business that I'm, I'm the head of trading and trader education for we take retail trading talent and offer them the opportunity to trade on a live funded account. And this is one of the strategies that I that I teach the core swing strategy. What I, what we're looking to do here with this swing strategy is identify a set up. I trade this on the daily timeframe myself but we're looking for a set up that is basically identifying a stretch in the market. What I mean is that price has moved, or has, has experienced a swing that has left the market stretched in one direction. And if we think in terms of the market, ultimately seeking liquidity and balance, once the market tends to get stretched in one direction, then we can certainly create a reversion to a mean. And for my, for my template that I use for this strategy, I have a proprietary indication which is a volume weighted average price. Now the volume weighted average price is, is, is useful to me because what it gives me is a feel for the underlying DNA of the price action in a chart. And what I'm getting from the volume weighted average price is, depending upon the look back period that I use, I'm getting a reading from the market with respect to money flow. And the money flow is identified by the volume up ticks versus down ticks. Now, because, because foreign exchanges is an over the counter product, so there isn't any one central exchange. You don't get the true volume that you would get if you were trading a stock, for example, that comes comes via an exchange. But in forex markets, it's basically ticks. So it's up ticks versus down ticks. So depending upon my look back period, the indicator will tell me whether we're experiencing money flow that's positive or money flow that's negative. Now, the actual close of the candle on the charts, you know, we could get a bearish close on a given day, but due to the nature of the volume of the volume in the market, even though there's been a bearish close on that day, depending upon the look back periods, we could get a read on the on the actual money flow being positive over the period of time. And so to help to help identify that the the VWAP indicator that I use automatically colors the candles for me. So when this this short term view happens a five period look back. Okay, so over the prior five days of price action, if we've had more up ticks than down ticks, the VWAP will be green. Okay, over the prior five days, if we've had more down ticks than up ticks, the VWAP will be red. And it just simply colors the candles for me to make it far easier for for me to see what the current money flow is. The other tool that I use for this strategy is the stochastic RSI. This is just a generic stochastic RSI. This is a game just to help in terms of giving an immediate visual read on on where we are in terms of the structure in the market. So if if we look at this stochastic RSI, I've got an upside of 75% downside of 25%. And what I'm looking for is if I'm looking at a short set up I'm looking to sell the market, then I want to see the stochastic RSI above the 75. Now in and of itself, that's not a signal, but taken with my with the VWAP and and then I'm going to talk to you about the volatility bands in a minute. Once I get the three confirmations, then I do have a signal. So if I'm looking at a sale, I want to see the RSI stochastic above 75. If I'm looking to buy the market. I want to see the RSI stochastic below 25. Okay, so that's that's one of my first checklists in terms of confirmations for the signal. The second the primary one is that price must be testing the volatility resistance bands. Now how these are defined are that again it's using the VWAP overlaid onto the charts, and I have a two and a three standard deviation band. The reason for using these is that once price moves away from the mean and tests two to three standard deviations above or below the mean, there is about an 80 to 90% chance that prices will pause. If not correct or reverse back to the mean. Okay. Now, again, the touch of the volatility bands in and of themselves does not constitute a signal. Okay. But what they does constant what it does do is it alerts me to the fact that prices are getting stretched in one direction. So I've got two tools at the moment that I'm focused on. I've got my the RSI stochastic which I mean if I'm looking at selling the market needs to be above the 75 level. I'm buying it needs to be below 25. If I'm looking to sell the market I want price to at least have tested the two to three standard deviation volatility band above the central tendency, which is the 20 period look back. Okay, so those are my first two. So these are the two signs I'm looking for the third and the final sign is a price or a price action response that closes. If I'm looking to sell the market that closes red, if I'm looking to buy the market that closes green. So these are the three constituents of this of this signal. So let me just go back, go back, go back again over this. And then we want to see above the 75. We want to be testing or have tested the two to three standard deviation volatility resistance bands. And then finally if we're going to engage the market, we want a red candle. Okay, this candle here could could have been a red candle if we weren't using the VWAP. So let's just, let's just take a look and see if we turn off the VWAP. Let's blow this up for a second. So this is the candle we're looking at here. We take the VWAP off. You see this was actually a red candle in terms of the daily clothes, but with the strategy that I'm using, I want to see if the VWAP was suggesting that there was still buying buying pressure in the market. We're waiting for that, that close with the five period VWAP. So we tested into the volatility resistance. So we're just going to walk you through this in terms of a cell signal here. So we tested into the volatility resistance bands prices stalled. And then we got a confirmation candle, which is the close below the five period VWAP. Okay, so once we've got the close below the five period VWAP, that's a signal for me to sell the market. And what we're looking for is we, we enter on the close of the candle with the stop a pip above the prior swing high or the swing high for the move. So what I'm generally looking for is a two to one risk reward or a test of the other of the opposing volatility band. So once we get down here and test this volatility bands, we can look to take profit. And certainly once we see in this move when we get down into this volatility band, we can see that the RSX stochastic is starting to show a corresponding stretch in the other direction. So in this instance, the profit on the trade would have been, or the signal to close the trade would be in the test of this volatility band. So it was 1.68 to one risk reward. Okay, so does it is everyone following along with the, with the, with the signal here for the cells sensing. I'll just bring up the entry rules here so you can see them. So the store trade we identify the five period VWAP close below, which was the, which was this candle. Let's just draw it in here. And we'll just highlight the candle so you can see exactly the one we're entering on this is our entry candle here. Okay, so we got the close below the five period VWAP confirmed with price, with price above the 75 and turning down. Okay, so this is our RSX stochastic above the 75 and now turning down. So we've got two ticks. We entered closing the candle, which we did. And then we can stop one pick above the high of the candle. So let's just get that there. We move the stop to entry. Once the trade moves one time in our favor. So you can see here we got that move one time in our favor. And we exit the trade at two times of a risk or at the test of the opposing volatility balance. It's it's not an EMA. It's a volume weighted average price indicator. It's called the VWAP. Okay, so that was that that's an example there of a short signal using this strategy. Now I'm just going to show you an example of the loan signal. We're going to go down here now to the entry rules are exactly the same. We hit we want price to be testing the volatility support balance. Okay, as we know that once we're testing there, the market is going to is suggesting it could be stretched on the downside. We want our RSX stochastic to be below the 25 level and starting to point up. Okay, so we get that signal. We test down into the volatility support band. We have our price below the 25 level and rising. We enter on the close of our candle. So we're entering a long position in the clothes of our candle here. But we put up a stop one bit below the low of the candle. And we're targeting a test of the volatility resistance band or two times our risk reward, whichever comes first. In this instance, we don't test the volatility resistance band, but we get up to two times our risk prior to that test of the volatility resistance band. Okay. So let me just run over this once more, trade it down into the volatility support bands. We've got the RSX stochastic below 25 and diverging positively to the upside. We've got a close above the five period VWAP. We enter at the close of our candle, a stop one bit below the low, and then our target is either two times our risk or a test of the opposing volatility bands, whichever comes first. Everyone clear on that. Can I get a why in the chat box if you're following that? So what I'm going to do now, as opposed to just going through and picking cherry picking trades here, what I did prior to coming on is, as most of you will know, I am obviously a resident market expert at Tick Mill. It's the daily timeframe, and I produced a chart of the day or a chart of the week. What I've done is I've just picked up a few of these from when I started sharing them. What I thought we'd do is go through, we can look at the setup and see how the other trade played out. So the first one we had was a sterling end setup. This was a short and hopefully I've got the chart. So what we were looking for here or what I'd identified using this exact same setup was a test of the volatility resistance. We also had some Fibonacci resistance in play as well. And again, once you for the purposes of today, I'm just simply going to walk you through the swing, the swing approach. But if you've been, if you've joined in the other sessions, you will know that I have other methods for organizing the markets. And once you've mastered the course swing approach, you can start to overlay the other tools and skills that we've worked on over the past week. Certainly looking at price and time retracement, price and time extensions. I use them regularly to identify and highlight the better signals that I've seen in the market. So here was a simple retracement. This is the live chart. So what happened was we tested up into the volatility resistance. Okay, so that can test the resistance. We've got a pullback, but we didn't get the VWAP confirmation. Okay. The following candle gave us the VWAP confirmation. You can see that's the candle I've highlighted on this. This is the live analysis that I gave. And so what we'd be doing here with this trade is we are entering a short position at the close of the candle. Our stop is a tick above the high of our trigger candle. And we are looking for a minimum, well, we're looking for two times our risk or a test of the volatility support band, whichever comes first. And we can see here that we tested down, we just, on the day that we actually tested the volatility support band, we also got that two to one risk reward. We have the RSI stochastic above 75 and diverging negatively. We tested into the volatility resistance. Also, what the other line that I've got on here that you guys might want to make a note of is this is the 100 period VWAP. So this gives me an idea. So let me remind my trading time frame is the daily chart. The 100 period VWAP tells me what the trend is on the monthly chart. Because as most of you all know, I'm trading these higher time frames because what we're looking to do as retail traders is participate in the moves, the big mark, the big moves in the market and write the major players in the market, big banks and trading desks. So what we're looking to do is as best as possible is align ourselves with those moves. And so I want to be aware of what the trend is on the higher time frame. I'm trading the daily time frame, so the monthly chart is my higher time frame. And so when I get this confirmation, once we got this signal here, there were some additional aspects that gave me further confidence. In this trade, one was that we got the near term VWAP, the near term being the five period look back was bearish. But we also at the point I entered the monthly VWAP had also ticked bearish. So we had two. So I had my trading time frame and the higher time frame negative from a volume weighted average price perspective. And we got the core swing signal as well. So that just adds additional conviction to the trades. And we've got that two times risk reward. Okay. Let's take a look at another example. This is the Aussie. And this was a this signal. This was a set up I was tracking here into the end of September. So as we got into the end of September, we traded down into this support area. Weighted watching for the RSI stochastic to flip bullish, which is what we got. We then got the close above the near term volume was average price. And so what do we do? Well, we enter a long trade at the close of our candle. We put a stop a tick below the low of our signal candle. Okay. And then we're either looking for a test of the volatility resistance band or two times on risk reward, whichever comes first. Now, in this instance, we tested up into the volatility resistance band and you would have got 1.5 times your risk out of that trade. Okay. Now, bearing in mind, the monthly VWAP was negative. That would have given me extra conviction to exit this trade on the on the test of the volatility resistance band. Okay. Now, obviously the trade moved on and you could have got certainly got more out of the trade, but this is the this is the key to successful long term successful trading is you have to stick to the trading plan. Okay. So it's either. If you're trading with the higher timeframe, then certainly you can hold these trades for that two times risk reward. But when you're trading against that higher timeframe, so when the trend on the monthly chart was bearish here. I'd certainly this trade will be considered counter trend. Okay. And so I want to just exit when we test the volatility resistance balance. So that makes sense. So when I'm trading with the higher timeframe, I'll tend to let the trades run to certainly try and capture that two times risk reward when I'm trading against the monthly timeframe. I'll, I'll look to take profit on a test of the opposing volatility balance. Okay. So that was the Aussie. Let's take a look at another one. We've got a Euro trade here. So this was the end of so this, this is this candle here. So I was watching price action as we traded down into the support area. We've got a test into the volatility support bands. We've got the RSI stochastic below 25 and diverging positively. And we got that close above the five period VWAP. Okay. Cognizant obviously that the monthly VWAP is bearish. So I'm going to be taking two times my risk or a touch of the opposing volatility in this instance resistance bands. So what do we do? Well, at the close of the candle, we enter our position, stop one pit below the low. And we're either going to test the volatility resistance bands or we're going to get out at two times our risk, whichever comes first. In this instance, we got that test of the volatility resistance bands. So we've got our two times risk reward. And so we were out of the trades. You can see this is, this is the chart I posted prior to this setup actually occurring. And that's what happened in the price action. Okay. Let's take a look at another one here. This was a swissie. And you can see the chart here. Let's see the date. So fourth of the 10th. So this was the setup I was watching in the swissie. Okay. So we trade it into volatility resistance bands. We've got these three tails, these long tail candles suggesting that there's a lack of liquidity above the market, meaning there's a higher probability that the market is going to revert to the mean to attract more liquidity. And I watched the price action waited for my confirmation candle, which I got. Now again, I'm trading counter to the month counter to the long term, the longer term trend, which is the daily that monthly timeframe. So what I'm going to be doing is I'm entering on the close of my signal candle, stop the pip above the high. And I'm either going to exit at two times my risk, or when we test the opposing volatility balance. And this instance game gives you about 1.5 times risk rewards. So you can see the light. This is the chart prior to you know that on the day I posted it, and that's what happened next with the price action. And that's how I managed to trade. Okay, let's take a look at one more example. We've got here. This is the dot again. So, and I identified a pattern for those who were involved in last week's session I considered this to be a trend move and this price action to be corrective versus that trend. Okay. So cast it down below 25 and turning upwards positively diverging. I watched price action. We got that confirmation here with the clothes above the near term be well. And I put my position on so I go along the Japanese yen on the clothes here at the stock one pit below the load my trigger candle or signal candle. And once I got into the trade, the monthly timeframe flipped bullish. So what I'm looking for here ideally is two times my risk reward. Okay. So because I had the monthly candle bullish. Sorry, because I had the monthly VWAP bullish, and I got my signal versus what I considered to be a trend move and a corrected pattern, as we discussed in past couple of sessions. Everything lined up here so I hold this trade for two times my risk reward, which is broadly in line anyway with where the volatility resistance bands come in. That makes sense. So, you know, I was risking 65 pips to make 130. Any questions guys. I'll tell you what I'll do now as a matter of fact is we can, we can actually take a look at a potential live scenario that's developing here. We haven't got the signal camera. We had a potential signal candle developing here. I was watching this swissie at the moment for a potential short set up. We've got the monthly VWAP bearish. I consider this to be a trend move to the downside this price action overlapping so corrective. We're in the ideal time window the 61.8 1.618 to 100%. And I'm watching how we've got this monthly monthly VWAP we're testing up into the voltage resistance area. And so what I'm watching for is if we get a close a red clothes versus the VWAP so we get a close below VWAP and that will be a signal for me to sell the market. And I'll actually be sharing this charts today as my as my chart of the day is one that I'm watching in real time. So that's one that you guys can track and maybe I'll follow up with at the beginning of next week's next week's session. So that covers the core swing strategy. I've walked you through a bunch of examples there. You can follow my trade trade of the day or chart of the day is that it's called now. Whereby I share these these setups on a daily basis. Like I said, I've been training the strategy myself for nearly 15 years in live markets now it's being consistently profitable on an annual basis. It's hard to say that there aren't losing trades guys because there certainly are and you can get string a string of losing trades, but over the long term, this strategy proves to be very profitable. And is that is my, my, my bread and butter approach really to trading the markets. I don't have any questions guys I'll wrap this one up here and then we'll move into the next strategy this time next week, next Thursday. So I'll just give you a minute here to type in any questions you might have just to clarify again the look back periods on my VWAP are the five period is my near term. 20 period gives me the volatility that I'm tracking and then the longer term the monthly is a 100 period VWAP. Okay, if there aren't any questions I'll close it out here guys thanks very much for your time and look forward to showing you another strategy this time next week.