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The video discusses the trading model that works based on the misunderstanding of most traders. The goal is to anticipate price action and clear liquidity points. The video also showcases a random live backtest for odd CAD on a five-minute timeframe. The MTFX structure indicator is used to analyze the market and determine when to make a trade. Lastly, the video states that trading comes with a high level of risk, and anything done is individual responsibility.
The Model of Trading: Following the Market’s Misunderstanding
Introduction
In the world of trading, market participants are always looking for an edge. Many try to predict the market’s direction and make trades based on their expectations. However, this approach can often result in losses, especially when the market doesn’t behave as expected. To be consistently profitable, one needs to think differently, to look at the market from a different angle. In this article, we will discuss a trading model that takes advantage of the market’s misunderstanding and is designed to minimize losses.
Understanding the Model
The model is based on the idea that there is a misunderstanding in the market, and that misunderstanding is the reason for the market’s movements. By understanding this misunderstanding, one can predict the market’s movements and take positions accordingly. The model is designed to be used on any market and any time frame, and the only requirement is to have a market that’s delivering.
The first step is to identify the market that’s delivering. This can be achieved by using technical indicators or analyzing the price action. Once the market is identified, one needs to wait for a significant shift in sentiment. This shift can be identified by a significant breakout or a reversal pattern.
Once a significant shift is identified, the model requires waiting for the market to move away from the area of the shift. This movement indicates that the market wants to clear the next liquidity point, and one should anticipate this price action. This anticipation should be confirmed by bullishness on a lower time frame, which should then shift bearish.
Using the lower-time-frame bullishness, one should follow the market to the top side to keep going. Alternatively, one can wait for a reshift and follow the new shift to the top side to start clearing the highs. This is the entire model.
Random Backtesting
To showcase the practicality of the model, the video demonstrates how to do a fully random live backtest on a chosen currency pair. The model is applied to the AUD/CAD pair, and the backtest is done on a five-minute time frame. The market is chosen randomly from the list of available pairs, and the scrolling on the chart is done randomly as well.
The video also explains how to use the MintFX structure indicator to determine the market’s structure and how to identify significant shifts in sentiment. The indicator is free to use on the TradingView app and can be used to identify ranges and potential trading opportunities.
The backtesting demonstrates how the model can be applied to a real market situation, and although it results in a loss, the video highlights the importance of understanding the market’s movements and not making trades based on expectations.
Conclusion
In conclusion, the model taught in the video is a new approach to trading that takes advantage of the market’s misunderstanding. By understanding the market’s movements, one can make trades that minimize losses and increase profitability. The model can be applied to any market and any time frame, and the video demonstrates its practicality through a random backtest on a chosen currency pair. Traders who want to increase their profitability and minimize their losses should consider learning and adopting this model into their trading strategies.
