About this video

• Video Title: Episode 7: The Present Moment Is All We Have
• Channel: Wick Sauce Ro
• Speakers: Romel, Rodney
• Duration: 02:46:14

Overview

This video features a one-on-one session between Romel and Rodney, discussing trading strategies and psychology. Romel, a student of Rodney, seeks to refine his understanding and gain confidence in his trading. The conversation covers topics such as identifying order blocks, drawing supply and demand zones, managing trades, and the importance of focusing on the present moment in trading. They also touch upon the psychological aspects of trading, like dealing with drawdowns and building conviction.

Key takeaways

• Trading Philosophy: Focus on the present moment and current price action, as past and future are not directly experienced in trading decisions.
• Order Block Identification: Order blocks should be drawn from market structure to market structure (swing high to swing low or vice versa), not just based on individual candle bodies.
• Timeframes are Arbitrary: The core trading methodology remains consistent across different timeframes; the key is to identify significant highs and lows that span across multiple timeframes.
• Risk vs. Precision: It's more beneficial to accept a bit more risk and seek less precision in entries, especially for larger-scale plays, to capture more of the market move.
• Psychological Aspect: Building confidence in trading comes from internalization and consistent application of a chosen strategy, rather than constantly comparing oneself to others.

Romel defines "most recent price" not in terms of the most recent time, but rather as the last time the current price was at the current price. This means looking horizontally on the chart to find the last instance where the price was at that specific level, regardless of how far back in time that was.

This concept is crucial because it helps identify relevant historical price points that can inform current trading decisions. Instead of solely focusing on the most recent candle or data point, this approach ensures that the analysis is grounded in the actual price history, providing a more robust basis for trade planning and execution. It helps in understanding where price has been and how it behaved at similar levels in the past.

Here's a breakdown of the trading approach discussed in the video, presented as a detailed strategy:

Trading Strategy: Present Moment Focus with Market Structure Analysis

Core Philosophy: The primary principle is to operate within the "present moment," meaning all trading decisions should be based on the current price action and the most relevant historical data. The past is a guide, but the focus is on the immediate conditions of the market.

1. Identifying Relevant Price Action (The "Most Recent Price"):

• Concept: Instead of looking at the most recent time on the chart, identify the last time the current price level was previously traded.
• Action: Scan the chart horizontally to find the most recent occurrence of the current price. This historical context is considered the most relevant data for present decisions.
• Why it's crucial: This helps establish areas of significance (support, resistance, order blocks) based on where price has historically interacted, providing a foundation for anticipating future price movement.

2. Market Structure Analysis (Ranges, Highs, and Lows):

• Concept: The market is viewed as a series of nested ranges. Significant analysis should focus on major swing highs and lows that have spanned across multiple timeframes.
• Action:
  • Identify Macro Structure: Mark out significant swing highs and lows that define larger trends and ranges. These are the primary reference points.
  • Identify Micro Structure: Within these macro ranges, identify smaller swing highs and lows that can offer more precise entry or exit points.
  • Order Blocks: Mark order blocks from swing point to swing point (low to high, or high to low) that led to a significant break in market structure. This is considered the area of balance.
  • Imbalance/Fair Value Gaps (FVGs): Identify areas where price moved rapidly, leaving a void between candles. These are areas of imbalance.
• Key Principle: "Timeframes are arbitrary." The identified structures (order blocks, imbalances) should remain consistent across different timeframes if they represent significant market movements.

3. Trade Execution - Entry and Confirmation:

• Concept: Entries should align with the identified market structure and the prevailing trend, with a focus on "buyers vs. sellers" control within specific zones.
• Action:
  • Directional Bias: Determine whether buyers or sellers are in control of the current price zone based on the preceding market structure.
  • Entry Zones: Look for entries within identified order blocks or imbalances that align with the directional bias.
  • Confirmation:
    • For Sellers: Wait for price to reach a supply zone (order block or imbalance in a downtrend) and show a reaction (e.g., a rejection candle, a price reversal pattern).
    • For Buyers: Wait for price to reach a demand zone (order block or imbalance in an uptrend) and show a reaction.
  • Entry Trigger: A valid retest is confirmed by a candle closure, not just a wick. Alternatively, look for lower timeframe confirmations (e.g., on a 1-minute or 5-minute chart) after price reaches a higher timeframe zone.
  • Risk Acceptance: Be willing to accept a certain level of risk. Entries are not always perfect, and price may move against you initially.

4. Risk Management and Trade Management:

• Concept: Proper risk management, especially stop-loss placement, is paramount for profitability and survival in trading. Patience is key.
• Action:
  • Stop-Loss Placement: Place stop losses logically below significant lows (for buys) or above significant highs (for sells) that define the structure supporting your trade. Do not place them too tightly.
  • Lot Size: Scale lot sizes appropriately based on the stop-loss distance to manage overall risk per trade (e.g., risking only 1-2% of capital).
  • Patience: Allow trades to play out. Avoid rushing to exit or forcing entries without proper setup. Recognize that larger trades take time to develop.
  • Drawdowns: Accept drawdowns as part of the process. Proper risk management ensures that a few losing trades do not decimate the account.

5. Trading Style Adaptation:

• Concept: While the core methodology is consistent, the execution can be adapted to different time constraints (scalping, day trading, swing trading).
• Action:
  • Scalping: Focus on very short-term opportunities within small ranges, requiring quick entries and exits.
  • Intraday Trading: Target moves within a single trading day, often using smaller timeframe confirmations.
  • Swing Trading: Aim for larger moves over days or weeks, requiring patience and wider stop losses placed according to the larger structure.
• Key: The underlying principle of identifying buyer/seller control zones and market structure remains the same, regardless of the timeframe or holding period.

In essence: The strategy emphasizes a deep understanding of market structure, a focus on relevant price history, and disciplined execution with robust risk management, all while maintaining a calm, present-moment awareness rather than succumbing to emotional reactions or over-analysis.