Therefore welcomed my second video of the trilogy dedicated to my policy, the first video was about the indicators and this video will be dedicated to the enterings of the policy. So, if you familiar with my analysis, my grocery analysis, every week, you know that there is a sentence that I was saying each time, this is that the strategy is very simple: what we have to do is to look for a trend on the Higher timeframes and once we have a trend, we go down, we zoom on the lower timeframes to take valid setup, ok? So what is a valid setup? What are the rules? This is the purpose of this video. All claim so we have 3 main rules and some additional conventions. The first pattern is that we use pending dictate at the undermining of a fractal carton, so let’s zoom the following chart … Here, for example, we use a pending degree at the divulge of the fractal container. For instance, it could be as well for a short-lived pending order … now I don’t say this is a valid setup, this is just an example. We have the interruption of the lower level of the box and your pending fiat is going to be triggered now alright?
We use nearly only pending orders because pending prescribes mean thinking, you need to think about where you gonna set your pending ordering frequently it’s one pip plus spread above or below the box, you need also to know the lot size so it doesn’t come from ardours but really logic and thinking. On the contrary, the market line-ups are very emotional, you don’t have time to think usually, it’s because you are too late into a trade but it could happen sometimes that you check the chart in the morning, there was a setup, “you’ve had” missed it because the price is already gone but it’s close to your potential pending order so you can still enter into the trade or you have a second solution, for example, we move to the h1 map, now: this is a break of the fractal container, ok? 4o’ clock on the 24 th, it’s Gold/ US dollar, you are able to miss it but if you go down to m5 you can look for pullback then there will be a new record, 2 hours later, it doesn’t work all the time, sometimes the prices got to go but if there is a small pullback you can use the break of the fractal container of the lower timeframes.
The second main rule, the SL must be close to the entry point. Before excuse what means to be close to the entry point, I need to remind you that when you enter into a trade, you should know exactly where to exit if the price moves against you. So the exit is not the purpose of that video, it will be the subject of the third and last video nonetheless for a sleeping alligator, I can tell you that the other side of the fractal casket is likely to be our initial SL so this is very important to check at the box, the fractal container sizing. So there is no precise rule generally 10 pips is okay for very fast timeframes like m1 and 30, 40 pips will be okay for h1 chart, for example, I speak about here EUR/ USD but this is more visual than anything, for example, here you can see the fairly large size of the fractal container and now you can see that it’s rather small so you really need to look at the size of the fractal box compared to the other ones, the previous ones and that will tell you what it’s right as the size of a fractal chest because, for a sleeping alligator, the initial SL will bein the other side of the fractal box.
This setup 1, this first entry way with the sleeping alligator, I am going to zoom a bit, it’s called a betting entry, we are in abetting mode because we don’t know if the premium will go, sleeping alligator isa saddle point so the price could go either wayso that was we call that a bet stage nonetheless if the price goes in ourdirection, for example now, you can have a second entry … here for example, you have a new fractal container at the break-dance, here’s my pendingorder above the fractal container and this time we are not in a wager modeanymore but in an investing mode, we know more about where the expenditure “il be going”, light-green lineor red wire are our SL, this is a setup 2, it would be here or here, in this example, well the lettuce row, I like lettuce argument more than red pipeline, youalso can calculate if the stop loss is far away or not, if the cost has notmoved that much and we had a pullback like here, it’s still right to make anadd-on or eventually to take a firstly entry.
However, when the rate travels fast and far away from the light-green strand plainly the SL will be far away so this is not a legitimate record, a valid setup. Third and last main rule, the point of entry, the setup must be when the Ewave is close to the zero lines, so for example here, obviously, this is a sleeping alligator, so the entryway corresponds to across of the Ewave zero line, a very strong signal, later, we have, after a small pullback, another enter possible, the bars of the histogram are still close to the zero lines, nonetheless we have here, for example, a fractal violate but you can see that the bars of the Ewave are far from being the zero wire, meaning that the SLis far away from the green line. You will also avoid taking an entry when the bars of the histogram are coming back to the zero lines meaning that we are losing momentum in that impulsive wave. We have also few additional conventions: first of all, shunned to trade during the red news and especially if you trade lower timeframes like M1 M5& M15 and too, of course, any timeframe, after having large-scale read news like the FOMC report release and likewise the release of the non-farm employment change in the USA every month.
The second rule, because we trade in the direction of the higher timeframe, well if the higher timeframe is in a corrective ripple or there is no trend at all, you are able to avoid to trade if the higher timeframe has no trend. And ultimately, you are able to evade to trade when you have a long flat Ewave. Okay, now let’s see the 3 kinds of scenarios in which we can take a valid setup, first of all, the sentimental situation, this is when the setup is while the higher timeframe is classy so we go with the trend, the second scenario is a bit more tricky, it’s when there is no trend on the higher timeframe and finally, the last scenario is, when on the higher timeframe, the toll is overturning. For each scenario, we are going to look at 2 things: first of all, the double break of the fractal container for example, if I trade h1in the direction of h4, i will look for the double break H1-H4 of the fractal box and secondly, of course,
I will look at taking a trade at the cross of the Ewave zero line.We have 2 points of entering, 2 various kinds of entries: setup 1 and set up 2, the setup 1 is when we have a fractal box while thealligator is sleeping, for example, here, I zoom … okay we have a sleepingalligator this is a balance point which means that theprice can go either way, in that case it’s a bit risky, this is a betting phase, so we place the initial SL below now, the box, or in the other side of thebox and second character, the setup 2, let’s zoom and insure an example so this is thefirst entry, now, the breaking of the box with a sleeping alligator, the initialSL will be on the other side of the box and then the expenditure travels, you havea small pullback organize a second fractal, second fractal casket grade and thiswill be the second entry: the transgres of the fractal box following the break of afractal chest with a sleeping alligator, this is the second entry, the setup 2. the setup one is the balance point, we don’t know which room the toll will gobut after this disintegrate and the new fractal box statu, we are a bit more confidentabout the transaction because the price is above the alligator and this time, theinitial
SL will be the alligator fronts, the majority of cases, the green above or here below the green front sometimes the red order but here you can see that this is also a fractal carton, a sell fractal structuring a new lower level of the box so that will be perfect stop-loss, we say that the setup 1corresponds to a betting time because we don’t know which channel the price will go and the setup 2 is the equivalent of an investing procedure because we have already a kind of direction, the lines of the alligator are open.So these are our3 scenarios and our 2 kinds of entry: setup 1 and setup 2. let’s see now two examples for each scenario, first situation: an example on the gold/ US dollar on the 2nd of January of this year, this is the moment of the transaction, on H4 you can see that, although there is a divergence between the toll and the Awesome Oscillator, the lines of the alligator are still open and on the daily timeframe, it’s a no-brainer since this is the beginning( we think it’s the beginning of the movement 5) it’s an impulsive movement anyway and you can see the bars of the Ewave going away from the zero lines, it is, therefore, a no brainer here, present trends is bullish for all the higher timeframes.
Let’s go back on the h1 example I’m gonna zoom it, this is a perfect setup 1 since we have a sleeping alligator this is a tight box compared to the other sizes of the boxes and the Ewave is very close to the zero line, it’s even better because it’s on the way to cross the zero course so this is a setup 1, we applied the pending require above the box with the stop-loss, initial SL on the other side of the box sleeping alligator is always a risk because it could go either way, to give you a scene: imagine a cliff on the priorities in a hill who can fall in one side or the other side of the hill so that’s why we have a SL, initial SL on the opposite side of the box.
The price is going to trigger the pending degree then move up nicely and we have a second entry, a setup 2 following the first entry at the nextbreak of the fractal box, the SL will be behind the lettuce indication for 62 pips which is not a lot for gold/ US dollar so this is our 2 enters, 2 setups and if you examine closely here there’s the first escape at 8 O’clock, there is the first break, here, the initial SL is there, at thetime there were no other sell fractals so it’s 51 pips and then a second break, the both infringes are setup 1 because the price hasn’t moved and this is still a sleeping alligator so we’re still in the commerce and you can add-on on the second S1 or just let it go so this is the perfect scenario when wehave an entry while the other timeframes, the higher timeframes are posh sowe go with the trend. Second example: on the USD/ CAD H1 26 the of December.
A scenario which where we have a setup on h1 but there is no trend on thehigher timeframe so let’s go back to the higher timeframes, first of all, the dailytimeframe, you can see here that’s an up and down chart however now weare in a bearish move with the lines of the alligator open so it’s still not toobad.On h4 perfect sleeping alligator so no trendwe are in the brandish 4 following that gesticulate 3 we are looking forward the tide 5 who will become, youcan see here, a new wave 3 down but at the moment this is a sleepingalligator with no direction but the overall trend is bearish.
Let’s go back to the h1chart but before that, I leant now the level of the boxon the H4 chart. H1 chart with the zoom, you can see here the level of theh4 carton, we have a kind of setup 1 because this is a sleeping alligator and there is also a rule when we don’t have any trend on the higher timeframe like you can see a sleeping alligator on H4, it’s better to make the h4 break which is here, you can see the line so the pending tell will be there and on the other side of the box that will be my initial stop-loss, the rate is going to trigger the pending ordering now and after you can see that we have a very nice drop and this is the example which where it’s not obvious to take a set up 2 now because theprice has already moved a lot, something like 44 pips for yeah like +2%, it’s not very close to the zero lines but forty-four pips are not that much, you were able to here take the break with the initial SL above the green path this is the second scenario.
Last precedent: trafficking in a countertrade so this is an example on USD/ JPY on h4, on the daily timeframe you can see that there is not a lot of trend, here you have a small, I zoom it, bearish disparate candle there is divergence between the expenditure andthe Ewave so we can look for a setup in the lower timeframe, so on H4, we havea setup now, beautiful box, you can see this is a countertrend because the pending order happened to be above the light-green indication on D1, on h4, we take the setup, the price is going to trigger the pending lineup and then the cost is going to move, after indecision, and was down and we are going to exit here for +3% I think so thisis a countertrend trade and this last-place instance closes the video about the entries. If you have any question can be contacted me on the section below or thesocial medias and I would like to invite you to follow the next video about theexits of the policy. Thanks for watching and see you soon for the third and lastvideo. Hasta la vista.