Lesson 1: The basics
This is the first lesson of the playbook, free. The rest unlocks with Full Access.
Educational only. This is how I personally trade, not advice or a recommendation for you. Futures trading involves substantial risk of loss. Practice on a simulator first, and you are responsible for your own trades.
Know these before you take a trade
What is a fair value gap (FVG)?
A fair value gap is a 3-candle pattern. When price moves so fast that the wick of candle 1 and the wick of candle 3 don't overlap, the empty space next to candle 2 is the gap. Price moved through it too quickly, so it often comes back to it later.
The gap is between candle 1's high and candle 3's low.
The gap is between candle 1's low and candle 3's high.
When price closes all the way through a gap instead of respecting it, the gap flips. A bearish gap that price closes above becomes support. A bullish gap that price closes below becomes resistance.
How to mark PDH and PDL
- Open your chart on the daily timeframe.
- Find yesterday's candle. The top of its wick is the PDH. The bottom of its wick is the PDL.
- Draw a horizontal line at each one and extend it to the right.
- Drop to your 5m or 15m chart. The lines stay. That's your map for the day.
How to draw support and resistance
Look left on your chart for prices where the market turned more than once. A level where price kept bouncing up is support. A level where price kept getting rejected is resistance. Draw a line through the bodies and wicks that cluster there. Two or more clear touches makes a level worth trading.
When price breaks a level, support becomes resistance and resistance becomes support. That flip is what the break and retest setup trades.
At the session opens, like the New York open at 9:30 AM ET, or when price reaches the midpoint of a gap. That's when there's liquidity. Outside of that, sit on your hands.
NY sessionFind your setup on the 5m or 15m chart. Then drop to the 1m and wait for a candle to close in your direction before you enter.
The rest of the playbook
- My 10 trading rules
- Step 1: Setting your bias with PDH and PDL
- Strategy 1: Inverse fair value gap, entry, stop and target
- Strategy 2: Break and retest, entry, stop and target
- Managing the trade: securing profit every 25 points
- The 5 mistakes that blow accounts
- My daily checklist
- Prop firm rules
- Risk rules, position sizing and a risk calculator
- Your 3-week practice plan