 Okay, Traders, welcome to today's online education series with me, Patrick Munnerly. Before we get going, can I just get a quick audio and sound check? You should be able to see a Tick-Mill welcome screen and a Y in the chat box if you can hear me loud and clear would be great. Can I get a Y in the chat box if you can hear me please, guys? Thanks, thank you. Okay, we will get going here now. Before we get started, obviously we want to be aware of our risk and we're paying attention to that at all times when we're involved in the market. And like I say every week, you guys are helping yourselves mitigate that risk by participating in these online education sessions. I'll just give you a second to review that. Okay, so most of you will be familiar with me by now I guess, but for those who aren't, I'll just give you the quick rundown of my backgrounds. After I graduated, I went into the world of consulting. I specialized in executive search. I then left the PLC that I was working for at the time and did a startup, an executive search startup. I experienced some rapid growth and after four years of firm, we merged with another firm and I exited the business, sold my shares and I moved on to explore my passion for markets. I began trading, day trading the S&P 500 and the market was predominantly trending north and I had some beginners luck, I guess you would call it. And that beginner's luck lasted for a short period of time, as it tends to, and then the gains that I'd made, I gave back and then some. And after experiencing quite a brutal loss, I decided to get serious about the markets and really to apply myself as a student of risk. I sought out a mentor who I worked with to not only focus on developing my technical skills, but as he pointed out to me at the time, really to focus on my mental skills as well. So I spent a huge amount of time really becoming more self aware and focused really on personal development along with my technical knowledge of the markets and really apply myself like I say as a student of risk. So it took me a couple of years to get a solid understanding, a solid business and trade plan together and I developed that back-tested it, forward-tested it and underpinned that with a rigorous risk management strategy that allowed me to go back to the markets in 2008. Since then on an annual basis, I've been profitable and really that's what counts to me. I'm not concerned about the outcomes of individual trades or a string of trades. What I'm looking for is my edge, my trading edge as defined in my trading plan to demonstrate itself over a significant series of outcomes. You'll notice I use the word outcome. I don't really think any more about trading in terms of winning and losing trades. What I'm really focused on and where my passion is, is in my trading process because I know that if I adhere to my process and I stick to my trading plan, then over time the returns will take care of themselves. Since 2010, I've mentored over 100 private traders in one-on-one mentoring sessions, helping complete novices to guys who used to trade in the trading pits in Chicago. Really in developing trading strategies, mental performance strategies and trading execution strategies, since 2013 I've been managing not just my own capital but also external investor capital through a managed account service that I run. That service on an annual basis has also been profitable since 2013, as well as being a resident market expert at TITMIR, where I provide technical and trading analysis. I also am the head of trading and trader education for a firm called FXcareerswap.com, where we work with traders to take them from retail trading talent, I guess, through to managing our firm's money through a funded account program and a profit share. That's really how I spend my time. My core trading strategy now is really an end of day strategy. It doesn't require me to be active in the markets during the day. I don't tend to trade into road charts very much anymore, unless there are specific setups that I'm tracking. It gives me time on my hands to pursue these other activities. I obviously have a passion for markets and I always intend to remain involved in markets and enjoy helping other traders learn the realities of what it takes to go from a novice level understanding of the markets through to actually being a professional trader and what's possible in the real world, not in these Instagram ads that you see with rented Lamborghinis, etc. So that gives you a flavor of where I'm coming from. Now let's move into what I want to talk to you guys about today. In the last session, you will remember that we started to look at how we can use Fibonacci retracements to identify high probability trade locations. Now, we've done this in a couple of ways. We've looked at how we can identify trends and how we can identify corrected patterns. Now, those two pieces of information are obviously fantastic for us because we can use those to identify high probability trade locations. And as traders, that's really what we want to do. We want to be able to open a chart and very quickly assess where we are in the market phase. Are we in a trend or are we correcting versus a strong trend? Because those pieces of information can provide us with trading opportunities. And at the end of the day, trading is not just an exercise for mental stimulation. We're involved in trading to make profits. It's a business endeavor. And so we don't want to spend all our days just dazing at charts and wondering what's going to happen next. We want to be able to open a chart and very quickly identify, is there a business opportunity that's present in this chart? If there isn't, let's move on and look for another chart and see if we can find something there. So in today's session, what we're going to look to do is identify, now that we understand the corrections and trends, is what we want to do now is identify beyond just simple support and resistance. I'm going to teach you how to project a high probability trend reversal target for any market and pretty much on any time frame. Because that's information we can use every day as part of our trading plan. Now, there are a huge amount of books based on Fibonacci and Fibonacci retracements. And these books go into the depths and nitty gritty of Fibonacci and want to talk about its magical properties. But for me, all I'm concerned about is the trading opportunity. I encourage you if you want to in your spare time to read about Fibonacci, that's a useful endeavor if that's your area of interest. But for me, the Fibonacci tool, and notice I've used the word tool, is really just a business tool for me in a way of identifying a high probability trade location. Now what we're going to start to look at today is not just the Fibonacci retracement, so I'm going to go through those in detail in a short while, but we're also going to start to look at Fibonacci extensions and Fibonacci price projections. So there are two key types of retracement, there's an internal, which is the internal numbers between zero 100, which most traders are familiar with. And then there's the external. So those are the Fibonacci levels outside of the zero to 100%. And what we're going to do is we are going to look at how we can use those today to identify a high probability trade location. Okay. So why is it helpful to know the key retracement levels for any market, because most corrections in every actively traded market and timeframe will tend to adhere to four key retracements. That's why retracements are key to help identify where a correction will end. So what we're going to look at now is the simple retracement levels and I'm going to just move this tool here so I can show you those and I can show you the settings for the retracement so that you can use them on your own charts. Let's just move this around a little bit here. So when you're looking at this on playback in the video, shortly I'll post a link to all the videos in this series, you'll be able to pause this and look through and you'll see the levels that I have. But essentially the retracement levels that we're going to look at are the 38.2% retracement, the 50% retracement, the 61.8% retracement and the 78.6% retracement. Okay. So those are the internal levels, and then the external levels that we're going to look at are the 1.272, the 1.618, and then the 200%. So that's twice the original retracement zone and I'll show you now how that works. So here we have our figure retracement tool. We'll just change one of the settings here to make it easier for you guys to see. So we can see the trend line now. This is how we measure. So if this is the price action we're looking at and you'll know from last week that we're looking for trends that basically have a five wave structure. Like I said last week, we're not going to lose our minds about the way you appear and get involved in the paralysis by analysis. We're just looking for a simple structure that we can identify a five wave move. Because once we've got that move, we then with relative certainty can look at some specific retracement levels. So the first level we're looking at is the 38.2% retracement. So that's all that's about a third of the way from this decline. Then we're looking at halfway back, which is the 50% retracement. We then have the 0.618. And then the final level we have is the 78.6% retracement. Okay. Now, what do these levels tell us? Well, more often than not, and we'll use this now to show us the corrected move. So if this is our swing low, shortly we'll move on to actual price charts. But I'm just showing you this by the drawing tools so you can get a very easy visual representation of what it is we're talking about. Clear up. So this is our trend move where we've reached a swing low. We then make a reaction high. Okay. This reaction high here is going to test into the 38.2% retracement. So with respect to the 38.2% retracement, as you remember from last week, when we trade up to that level, more often than not, that won't qualify as the end of the correction. Or let me put that in another way, from a high probability perspective, and that's all we can ever do in markets is think about probabilities where we're not in the game of prediction. We're in the game of identifying a high probability scenario. And so when we test this 38.2% retracement, more often than not, we will then make a secondary reaction, secondary swing low. Okay, once we have that level in place, then price is likely to make a third wave higher. So we have an A, B and a C wave. Now, more often than not, okay, and again, let's always think in these terms, we're not talking in certainties, we're just talking about probabilities. So more often than not, from a probabilistic perspective, a correction will complete between the 50 and 68, and 61.8% retracement. That's more often than not. Okay. Can corrections exceed that level? Well, most certainly they can. But fortunately, we have another level whereby we can identify when the correction is potentially going to fail and a new trend is developing. And that level for us is the 78.6% retracement. Okay, so if price exceeds the 78.6% retracement, from a probabilistic perspective, that would suggest that the trend, the initial trend move has now, has now terminated. Just going to take a sip of water here guys. Okay, so what we're looking for ultimately is we're looking for a correction to complete in and around the 50 to 78.6% retracement. Now, the reason why I put the 61.8% retracement on here today is that we can use that to give us an immediate level of interest once we have this AB swing level in place. And I'm going to show you how we do that. And that's with the external fib levels. Okay. So once we have this AB in place, we can actually use our fib retracement tool to overlay that swing. And then that gives us some key levels that we can pay attention to. And that's the 1.618 extension, the 1.272, two times, we don't need the two times. Let me just get rid of that. We don't need that one for this. We don't need that for predicting or identifying where the retracement is going to occur. I'm going to remove that from the settings for this particular activity just so I don't confuse you guys there. Okay, we're going to use that in a minute when we're looking at trends. And then the next level of interest is the 2.618 extension. Okay, so when I say extension again, let's clarify that retracement are the internal. They're between the one and zero points. So 38.2, which is the 38.2% retracement 50, 61.8, 78.6. The external fib levels are outside of the swing we're measuring. Does that make sense to everyone? Can you type a Y in the chat box if you're following along? So the external are outside of the swing, the internal are the fib levels within the swing. Again, guys, let's just make sure you're following along here. Now, how do we use these to identify a high probability price and where price is likely to to complete its correction? Well, what we're looking for is something called a cluster. Okay. And the cluster is where we have the fib levels combining together. Okay, so with this, with the scale of this move to the downside, this trend move, and with this corrective pattern that we're looking at here. Once we've got this pullback, we've completed the swing point, once we exceed the A, which we know is a key criteria to suggest that we've got overlapping price action, which is going to define the corrective pattern. Then we then we can look for a fib cluster area. We know that most corrections, okay, not all of them, but most corrections are going to at least need to test the 50% retracement of the prior trend. And what happens here is we have where the 50% comes in from a external, from a Fibonacci extension, we also have the 1.618 of this swing. So that's this swing combined with 0.618 of the swing. Okay. And that gives us a target zone here. So that we would, we would all be, we'd be looking at this target zone from the point that we take out the swing A, because this is a cluster. So on your chart, before we can, before you can see the price action, we can identify that that level. Okay. It's a high probability area where we might well see the correction terminated. Okay. Well, the next level up is the 2.618. But if we look it from a price perspective, there's, there's about 20 pips of the distance there between that level. Now, certainly that gives it that gives a target area. But the higher probability can confluence area is currently this one where we have a two pit range between the 1.618 extension and the 50% retracement. Okay. So when we're tracking this setup, what we'd be looking for would be for price to test this area and for the correction then to complete and for the trend to continue to the downside. So that makes sense. Why in the chat box if you're following along. Now, let's let's let's draw and let's let's to clarify this point. Let's just remove that. Now, let's draw. Let's change this. Let's change the depth of the swing on our on our tool here. Okay. So let's say we get a shallower a point and slightly deeper be here. So we're still in this still call up this qualifies as a corrective pattern. Once the C point once the sea leg takes out the high of the a okay. Overlay our extension tool and see do we get any clustering right well now we get clustering the 38.2% gives us the 1618 as a cluster point but what do we know about the 38.2% retracement. So what we know from a probabilistic perspective is that when we test this area with it's unlikely to mean that the trend that the correction is complete. What's more likely is that we're probably going to see a complex correction, which means that we're going to see a pattern more into this develop. One second guys. So we're more likely to see another leg higher here to test where we have our cluster points, which now is the 2.618 plus the 50% retracement. So we're not at the point that we were able to overlay these kids on this swing. We're not going to get too concerned about what price does from the 38.2% retracement because although there is a cluster there. Probabilistically we know that this isn't going to be the terminal point of this correction, but we can see a cluster again at 50% retracement. Okay. Now let's, let's look at another scenario here just to finish this point. So here we get a, we exceed the 38.2% in our retracement, and then we get our B point and we take out, we take out our A swing heist the minute we do that, we're able to overlay our fifth tool and see this junction now. So we have the 1.272 extension coming in. We have the 1.618 just above so we have the 50% retracement. So now we have a 10 pip window where we could reasonably expect this correction to complete. So this gives us a 10-pip window on this chart after seeing this scope of move here. So this, this, this trend, this prior trend is about 150 pips. But now we actually, once we correctly position the fifth tool there, the higher probability is the 1.618 coinciding with 50% retracement. So we could ignore the point, the 1.272 because it doesn't, by the time we test that level, we wouldn't have achieved the minimum requirement, the minimum condition, which is at least a 50% retracement. Is everyone following along? Now I'm going to give you an additional piece of it, an additional fit tool that we can use to help pinpoint the potential retracement, the potential completion of the correction with even more clarity. And for this we're going to use the Fibonacci trend-based fib extension. So I'm just going to draw it on here for now so you guys can see some settings. Like I say, you'll be able to review these in your own time. But what we're looking at is the 100%. So that gives us an equidistant swing and we also want to look at the 1.618. So now what we have is once we get this, let's just remove that from there. So when we have our A point in place and we have B swing low, which qualifies as a low once the A swing high is taken out, we can now overlay our fib extension tool, our fib price projection tool, to see where we have even more clustering by measuring and projecting from a Fibonacci perspective using our A, B and our C point high here. And we also again, we can use our fibonacci extension tool. So now we can cluster. We've got three Fibonacci points of reference. Okay. We have our internal retracement. We have our external extension of the A to B swing points. And we now have a trend-based Fibonacci price projection. And in this instance now, we're getting a cluster here of about 10 tips into this area. So from the point we opened this chart, and from a price perspective, we have just this, at the point we have this pattern occurring where we've taken out that A point, we're immediately able to apply our fib tools, and we're able to identify, from a high probability perspective, where the correction is likely to terminate. In this instance, we would expect price to move up to this area, and for this correction then to terminate, and for the trend to proceed to the downside. So what we've got now is we've got three tools to use to identify a high probability trade location. Does that make sense to everyone? Does anyone at this stage have a question? Yeah, please type it into the chat box. If I don't get to it now, I'll certainly try and answer it once I finish this presentation. Okay. So now let's move on and take a look at some actual price charts here and see what we can do with our tools. We're using this same piece of data, let me get rid of some of these. We don't need these at the moment, they're just confused masses. That's it, we just want our price patterns for now, let me get rid of that, let's remove all drawings. So now, we'll get rid of this. And remember, we've got a bunch of tools now that we can start to use to identify high probability trades. We know how to identify a trend move, we know how to use momentum, and we also now know how to use the Fibonacci retracement tool, the Fibonacci price projection tool, and the Fibonacci extension levels. So let's look at some price action now. The reason I'm using this euro chart is because this was posted on the daily market outlook. You can go back to one of my first pieces of the year on the 6th of January, where using this strategy, I was able to project where this pattern would complete. And this was posted in real time, you can go back and check, and you can all see how you then can actually use these tools in real world trading. I'm not a big fan of looking back over historic price action and stuff, but in this instance, it's the only method we have for teaching, so that's what we have to do. But what I encourage you guys to do is follow my daily market analysis where you'll see the price patterns that I use are formed using this type of analysis. So what do we have here? We have a five wave move that we can categorize just by looking at the chart, but we're going to draw it in. So we have a one, two, three, four, five. Okay. So that suggests to us a trend move. The price action we're seeing is not overlapping. Remember that key concept. You know, early wave technicians or theorists, as I like to call them will spend a huge amount of time stressing about, you know, is this three, four or is this one to we want a simple approach and simple approach for us is if it's not overlapping and we can identify five sections of price action where the middle section is the longest of them all, then we're going to classify that as a trend move. Okay. And once we've got a trend move then immediately what we're looking for is a collection. So, once we have this price action and, and again, the, when I posted that the daily market outlook, all we had at this stage was this leg and this low, and I projected using the fifth. So let's draw it in here. This is our retracement tool to start with. And now we can look at incorporating our extensions. So a, b, c, d. And let's not forget our external swing points. Once we've got that below in place. Yeah. Once we take out this swing high, we then know we've got the opportunity to use our extension levels. So for me, in advance of this price action occurring, I suggested that we would test up to the 112 level and the correction from a high probability perspective would likely terminate there. Okay. And look what happened price moved up tested the 112. So we had a window of 111 96 to 12 to 1206. That's a 10 pick window after we after we saw a move down of 100 pips. So we were, I was able to accurately predict. Well, we would likely see this correction terminate using this process of analysis. And I really do suggest you guys all go and look at my, my daily market outlook from the 7th of January, and you'll see I actually drew on these price bars suggesting where that actually turn. Okay. So now let's look what so then what happened we got another trend move. How do we know that well we've got a bunch of non overlapping price action that we could easily click we could easily look and categorize a five section move. So we had zero. One, two, three, four, five. Yeah. And then what do we get. Well, once we move up here. We can call that now the beauty of being over again beauty of using our RSI stochastic as our man manager and then momentum is we can use it to give us an objective view on swings. A lot of people get a bit confused or they're worried about identifying a swing point because they don't know exactly what classifies that well when you're starting out. So the first thing to do is just to use your momentum tool to track the swings. So we have low, we have a high, low, we have a high does does this low does this point that we might think is our swing low. Does the momentum tool run back to the downside do we even get into the 50% area of that primary to the upside well no we don't. On this swing, which on this retracement, we do get that though. Okay, so that stage what do we do. Well, we're going to immediately bring in our fit tool. And then we are going to bring in our extension tool. We have our ABC C point, we know once we've taken out the a that we're looking for a minimum of an of an equality moves and ABC pattern. Yeah. And we are able to use our extension level. So, what we've got now, let me get rid of this one so that's confusing things. And girls. What we've got now is we know at a minimum. Yeah, at a minimum, we're looking for price to test the 50% retracement of the price way to suggest that the correction is likely to turn. Okay. We've also got the ability to look for the Fibonacci price projection. And more often than not, we will at least see a test of the equity store or the quality swing. So, once we can measure the AB, this C point gives us a D target up here, which exceeds the 50% retracement. Now remember, the 50% retracement is the minimum requirement for a correction. Okay. It doesn't mean that every correction is going to terminate the 50% retracement. But more often than not, we know from probabilistic perspective, once we've been able to identify trend pattern that 50% retracement is going to be the minimum requirement for a correction. So in this instance, what do we have from a cluster perspective. Well, we have the 1.272. Which comes in ahead of the 50% retracement. So we'll ignore that, but we'll look at the 1.618, which comes in five pips above it. So what happens, price moves up to that area, we test it, we get rejected from there, we consolidate, and we roll over. But we don't make a new swing, we don't take out the price swing low, which was, which we know if this, if the corrections complete, then one of the minimum criteria is that we exceed the price swing low to suggest that the trend is going to continue. So in this instance, we get another opportunity to measure versus our swing high, which is there. And we've now got another swing points that we can use with after retracement to look for an extension. And where's our cluster. Well, our cluster now is the point point 618% retracement. Okay, which comes in the 111.59. So we have the equidistant swing, which is the minimum price, which we know more often than not is the minimum criteria for correction, which comes in at 111.66. And we have the 1.272 extension coming in at 111.58. So again, we've got about a 10 bit window there where with reasonable certainty, we can identify that the correction may well terminate in that window. Okay, and what happens well price runs up test the level spikes above it doesn't close above it and then sells off and ultimately exceeds the price swing load, which suggests trend continuation. Does that make sense guys. I get why in the chat box if you've been following along, how we can identify a high probability trade location based on being able to identify a prior trend swing and then beyond using just Fibonacci retracement. We can also use our Fib extension tool and our Fib price projection tool to give us this high probability trade location. Does anyone have any questions regarding what we've discussed today. I really said it's complicated, but kind of follow it is. Look, what I suggest you guys do is you rewatch this video. Okay, it is, you know, you're not going to pick this up in a in a 40 minute webinar. But what you can do is you can use this as let me just see if I've got the link here to give you guys trade series on YouTube. Yes, I have. So this this link I'm going to post in the chat box is the series of these webinars for you. So you can rewatch from the beginning if you haven't joined us from the beginning but you can rewatch these ones. Obviously now as we're starting to progress when we started out we were covering some relatively simple concepts. So now we're starting to move into a little bit more technical work now. Next week we're going to look at how we can use cycle projection so how we can use time to also help in assisting identify these high probability trade locations. And then after next week we're actually going to move into specific trading strategies that I use on a day to day basis. So like I say it's going to get a little bit more complicated as we start to progress now I strongly suggest you guys follow my my daily market analysis. Let me post a link for that for those who don't have it because you'll start to see how I use this these these tools that I'm teaching you here to to map the market and to identify the high probability trades that I post on daily basis in the chart of the day. Certainly if you've been following along with those you'll see that the market has been mapping the levels that I've been looking at very well. We've had some great trading and great trade set up so I strongly suggest you can subscribe using that link there and you'll get my my analysis in your inbox. But like I say what I suggest you do is we watch these videos start to practice in your own time looking at the charts using this this type of analysis and you'll see you'll start to train your eye to see these patterns. It's not something that's going to happen overnight guys and if you expect it to you know you're not taking this seriously something you really have to practice like anything you have to put in put in genuine effort to really get good at this stuff. I can assure you that over time if you do put in that that practice and persistence and an effort then you will you also learn this skill and able to to analyze the markets in a rational logical fashion and identify these these high probability trade locations. Okay if there aren't any other questions I'll wrap things up here I hope you found today's content interesting and useful and hopefully it will be another tool to add to your your trading trading talk. Thanks very much for your time guys and I'll catch you all next week.