Good morning traders welcome to the book map Pro trader webinar series today's the last day of the series and we have Charles today from Pirate Traders He does stream with us weekly It is at all today from Pirate Traders. It is at on Mondays at 9 a.m. so He Yeah, I'm sorry. Yeah 9 9 to 10 a.m. That's correct And that's in our discord as well as our YouTube. Okay, so what you guys probably know who Charles is anyway, he Is an ES futures trader? specializes in intraday two-way auction process of the S&P 500 needs the founder of Pirate Traders and Which is a community of professional traders? And it's also here active in our discord channel at book map Let me go through some of his links here. You have his YouTube his Twitter his website I will put these into the chat if you want to reach out to Charles. He does offer mentorship and trading Room so you can reach out to him They'll go through the disclosures and I'll turn it right over to Charles the general disclosure all book map limited materials Information and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations risk disclosure trading futures equities and digital currencies involves the substantial risk of loss and it's not suitable for all investors Past performance is not necessarily indicative of future result Results. Okay, Charles. Why don't you I see you're sharing your screen? Let me get it up and running here Just a minute Thank you for the lovely introduction Excellent we're ready go for it. All right, perfect. Good morning everyone So as Bruce says I feel like the community is starting to get to know me a little bit You guys got a decent idea of what I do and how I look at markets But why not dive in a little deeper? Why not learn a little bit more? Let's get to know each other a little bit better If you have questions throw them up in the chat Bruce will keep track and then he is welcome. By the way, I'll just say Bruce you're welcome to interrupt me anytime If you feel like a question is pertinent to what I'm talking about Otherwise we'll save them for the end and we'll go through those questions together So why don't we start just right now because we're looking at it. Let's just talk about what's happening in the market at this moment So we had a gap up this morning The gap up is a sign of momentum to the upside so that is bullish to see But we're not getting much momentum. Are we the market opened it pushed and now we've just been going sideways ever since Just kind of letting these computers pick each other's pockets and trade the market up and down So that tells us that we don't quite have that much momentum and we will probably need to fill that gap Looking for buyers at yesterday's high 42 15 If there are no buyers there, they might be waiting down at 42 12 And only if we do not have buyers at either of those locations Only if the market pushes down below there and then gets new sellers Will I start to get bearish? And the reason is because I use momentum As a signal for what is coming next in the market I look at the market as a constant auction process And there are signals that it can give me through the market generated information through the things we see in the software That can give me signals as to what's happening Having a spike up at the end of the day yesterday Having a gap up this morning And having thus far a gap and go is all bullish signs That's all signs of momentum And I tend to assume they will keep the momentum going until the market specifically tells me The market tells me that momentum is over So like I said to me the only way the market could tell me that momentum is over now is pulling back down below Um This area down here near the overnight low and finding new sellers down there. Okay Otherwise we're either just going sideways up here at higher prices or we are building up momentum To continue to the upside So for a second, you know, I've been since the last time I did one of these Um, I've been working on my own personal project with pirate traders, which is I've been building out these workshops these um, sort of interactive Experiences where it's not me just live streaming and talking about what's happening in the market in real time And it's not just pre-made content that you watch for educational purposes It's a little bit of both And I've been learning a lot and it's been you know It's been a process of figuring out what works and what doesn't and I'm pretty excited about it So today what I'm going to do is just go through a couple of the slides from that workshop that I've created Just a tiny little Sliver of it to give you guys an idea of what that process is and how it looks. Okay So this is focusing on how you guys learn Um to read the auction process Okay, so first and foremost Very important for traders to understand The best you can do is just start where you are use what you have and do what you can I am a believer that there is no reason whatsoever That anyone couldn't be successful at trading That the limitations that you believe are holding you back. You don't have enough money You don't have enough free time. You have too many other responsibilities The market is just not behaving in the way that you like whatever the case may be that you think is the reason You don't have success in trading. I don't believe that's true. I believe there is something you could do In your process a decision you could make to act differently That would get you a different result and that different result would lead you where you want to go So you just start wherever you are use whatever you have and do whatever you can So the way that I learned to make sense of the market Was through a system that I learned from someone named Jim Dalton And the idea is that to basically become a successful trader You have to build a strategy for taking trades. How do you build a strategy for taking trades? Well, first you have to separate out your market understanding And your self understanding. So a market understanding is one's ability to to read the market And get an idea about what it's going to do What did my market understanding tell me this morning? Well, it told me with a spike up And a gap and go that the market is likely going to continue higher that we have that momentum It also told me that because we didn't just straight up keep going because we've been going sideways So far this morning. We might not be ready yet Right, so I don't want to be bearish. I don't want to assume the market's going to go lower But I also don't feel a need to jump into a long trade right here I can wait for the market to come back and fill that gap And make a decision at the gap fill or even if there's no buyers there I can wait and step in down here near the overnight lows where I can get in with very little risk And a lot of potential reward So that market understanding Is just one step in the process What does the market generated information tell me and how can I use it? The next step in the process is a self understanding. Okay, so you have to get to know your own personality You are a unique butterfly All your own and you have strengths you have weaknesses you have habits you have biases You have things that you fall victim to again and again and again, which are completely unique to yourself And so until you can distinguish what are your individual strengths and weaknesses You can't develop a system to work around them So you have to first Learn to understand the market be able to read a chart and have it tell you what's happening Then you have to get to know yourself and where your strengths and weaknesses are And then when you combine those two you can build out a strategy where you Use the things you're good at in reading a market To know when to trade and what direction to trade And you can use the things you know about yourself understanding to know what position size to use And when or when not to take the trades And when you combined all that together, that's how you become successful Too many traders that I run into are trying to put All their weight on a market understanding They think if I can just learn to read a chart If I just understood would all the little colors and dots and You know bars and lines if I just knew what it all meant if I was an expert Then I'd make money Then it'd be easy and that's not the reality of how it works The reality of how it works is that understanding all the bells and whistles is just the first step And if you can't get over understanding yourself And develop a system for working with your own strengths and weaknesses The market understanding won't really do much for you So This is something from Ray Dalio if you're familiar with Ray Dalio He was the guy who created what is now the largest hedge fund in the world And he uses a very simple system for approaching every single thing in life He calls it the five step process to me This is the process for success both in life and specifically in trading Okay, so you have to start with a goal You have to start with a clear understanding of what it is you're trying to do or trying to achieve You then have to identify and do not tolerate the problems that stand in the way of you achieving those goals You then have to accurately diagnosed what those problems are Particularly the root causes a lot of times a specific problem that you might be dealing with in life Might not be as simple as it seems there might be a deeper issue at play and you got to get to those root causes Okay, then you have to design a plan to get around those those problems Whatever the thing is that's getting in your way. How do you get around it?  I'm making all this money. Oh, it's such a terrible day I'm losing all this money if that's all you're doing and then at the end of the day You're getting up and you're walking away. You are only experiencing one part of the equation You are only experiencing the actual experience If you don't take the time to reflect On your experience to ask yourselves to ask yourself questions About why you made the decisions that you made And how you can make better decisions the next time if you don't go through this Then you will never get progress and too many traders spend years Just sitting in front of the chart every day pushing the buy and sell button And never really asking themselves why they make the decisions they do Sure, I get it the chart set a thing Who you saw that that little uh note of liquidity and book map And you were just sure we're heading up there to get that liquidity at 26 So you're buying right now at half back to get up there and get it Right So what happens if it doesn't go up there and get it what happens if instead Of going up there and taking out that liquidity at 26. They just come back down. They fill the gap first They do a little And then they come up for it Well, you don't want to make that mistake the next time You want to go back and analyze? Why did I get long? What was I seeing? And how could I have positioned myself better for that to take place? It is only with that reflection that you will improve All right, so we've got these cognitive biases Okay, things like confirmation bias self-serving bias the affect heuristic and the base rate fallacy So if you don't know what these are, I highly recommend you jump into it and do some research This is your brain. You can't stop it. Listen We were hunters and gatherers throughout most of human existence You were designed your brain was built for one simple thing fight or flight When you are confronted with something that is scary that is difficult that starts to make your your heart race And your your You know pours sweat and you just get so excited or fearful or whatever the case may be There is only two things your brain can do fight or flight It is programmed to just go into this reactionary mode and function like a computer Just doing what it's supposed to do get you out of there or fight to the death And so as a trader when you start to experience those emotions with your trading when a move that the market makes Makes you feel a thing Those are the mechanisms that kick in And you can't stop it You can't wish it away and I can tell you from experience just studying it won't make any difference at all either You can be an expert in this stuff and it won't stop you from having to experience it every day So what the process of being a trader is is developing a system around these things So confirmation bias is basically Your brain will ignore information that contradicts what it wants to believe If you're convinced right now that this is a gap and go and that the market is going to just straight up rocket ship to the moon today Okay, then you would probably be ignoring the fact that we've went nowhere Since the open you'd be ignoring the fact that most of the time today Okay, we can see where's there more tpo's in here most of the volume today. Where did most of the volume trade Was right here in this one spot So even though you have the gap and go and you have the momentum, they're not ready yet You're early And being early Is the same as being wrong Okay, also confirmed by looking at the book map and the chop zone the bot zone that we're in We know they just keep passing it back and forth until they're ready to break Now if you were bullish and you were like, I think the market's going to the moon You could make a mistake And get yourself overly long and then when the market comes back down to fill this gap You get squeezed and then you have to short or you have to exit your long Okay, so you don't want to be confused. You want the market to tell you it's bullish But you also want to be able to see the contradictory information You want to be able to see something that is different than what you believe So it tells you how to play that in terms of trades Self-serving bias. This is a thing where we tend to believe that when we're When we have success, it's because we're smart because we did the right thing And when we don't have success, we think it's just bad luck We go, oh, that that was the market coming to get me. That was the universe trying to take me out Um, it's very bad for traders self-serving bias and we're very very guilty of it So you need to recognize Even if you were right even if you made money That may not have been the right trade to take And if it was the wrong action to take well, then you don't celebrate it You don't repeat it you do the right thing And if you do the right thing if you take the right action and you don't win money on this particular trade Who cares let it go It's just it is what it is Okay, you got the affect heuristic. You got the base rate fallacy There's about a dozen more of these and the long and the short of it is you have to develop a system to protect yourself from them So let's talk about how I approach the markets every day It seems overly simple and people don't want to believe me, but this is it Right here is my whole system Charles give us your system. Give us your entries. Tell us where to put the stop. Here it is right here folks All I do is ask myself these two questions all day every day non-stop again and again and again On every time frame. I'm asking myself this question What is the market trying to do? And how good of a job is it doing of it? So we could look at this morning as an example The gap up and the gap and go tell us the market is trying to go higher It's trying to keep the momentum going But the fact that we've just traded sideways As I've been discussing Is a sign that it's not doing a very good job of it So we should still be bullish, but not overly bullish. We shouldn't fall in love with a long trade Now what if the market were to come back down? It were to fill the gap And then it were to start to work its way down towards the overnight low Well, now I'd be saying what is the market trying to do? Well, it's trying to get a gap and go, but it's really not doing a very good job of it We're back down inside of yesterday's range So now I don't even really want to be looking for a long trade at all I want to wait and see what happens. See if we start to find some new sellers down here That's it. So all day every day I'm just asking myself, what's the market doing? What's it doing right now? Is it going up? Is it going down? Is it going sideways? How good of a job is it doing? What are the mechanisms that are causing it to move the way it is? What are the signals that would tell me it's done? If it's trending, what are the signals that it's going to stop? If it's rotating, what are the signals that it's going to start trending? Speaking of which, this is good support here So I think we're probably heading up to test the overnight high at 42.27 And then we'll be looking for new buyers up there. That's our next chance to answer the question So what is the market trying to do? Well, it's trying to go higher How good of a job is it doing? Well, if it can get above that overnight high and it can find new buyers up there Well, it will be doing a very good job and we would assume it's going to keep going If it were to go to that overnight high, it were to poke above and then pull right back down Well, then we would know oh, it's not doing a very good job, right? It's it's not Getting that continuation higher And then okay, this is I'm jumping ahead a little bit here getting a little overly complicated right away But if it were to push above that overnight high Come back down and then pass back through the opening price now After having done that. Well, then it changes what it's doing It's no longer trying to go higher It's now trying to fill the gap and so then we would look for it to head down and fill the gap That's getting a little bit advanced. Don't worry about it But the long and the short of it is it's really just those two questions What is the market trying to do and how good of a job is it doing? By asking myself that all day and looking at all the signals. I have an idea A decent understanding of what the market is doing The key to being able to be successful with the way that I trade the way that I approach the markets Is to combine a lot of different pieces of information So I've got to be looking at something that's bullish something that's bearish something that's neutral all the time And they're constantly changing right now. This thing might be looking like it's it's neutral and then all of a sudden Oh, no, it is bullish. Oh, wow. Look at that new information So I've got to always be open to all of the information and willing to constantly change what I believe So I want to have strong beliefs that are loosely held so that I can constantly change my mind As soon as the market generated information starts to tell me something new Literally five minutes ago. I thought we were going to keep going sideways now because I see that we didn't get a bunch of um Icebergs smacking the market down because I see that we're getting good solid support here I think we're going to the overnight high So I just changed my mind for being more neutral to a little bit more bullish just like that took less than a fraction of a second Explain why uh, Charles if you could Um, because beforehand What was the market telling me it was trying to go higher, but it wasn't ready yet Okay, and I could see that because of the volume And the time being in this tight range And I could see it because I was watching on the book map the way we had icebergs on the lows And then icebergs on the highs And it's just something I've observed. I call it a bot shenanigan zone When it does this it tends to just keep grinding around until suddenly one of those icebergs disappears And you can see now there's no red icebergs up here. No red iceberg. No red iceberg So that triggers a thought in my mind Maybe we're free Maybe we're ready to break out of this bot shenanigan zone that we're in And so then I say, okay. Well if we're free, what's the most likely place the market's going to go? Right. We're talking about momentum So if we're not going sideways anymore because we're breaking out. Well, then we're probably going higher So then the next thing I'm asking myself is okay If the market wants to go higher, where does it probably want to go? Where are the most participants putting their orders to take profits or their orders to short? Right there at the overnight high. They love an easily Visible level. That's a candlestick right there And so some guys are going short up here. They got their limit sell orders waiting Some guys who've been going long in here Have their take profit order right in there Okay, so if the market's done going sideways, which the but oh, no, maybe not If the market's done going sideways This is the most likely target because that's where the liquidity is waiting That's where the next set of business will take place Yep, excellent. Thank you. Okay So next we'll talk about the auction process I know a few people this week a few of the other presenters have talked about this So I'm sorry to bore the hardcore book mappings that have heard it again and again And of course members of the brigade have heard it a thousand times But I think it's important to understand I think it's important to wrap your mind around even in the modern world Where a lot of the trading is artificial Right a lot of the moves that the market is making each day are not actually genuine decisions Of buyers and sellers wanting to take the market higher or lower A lot of it is just computers doing lightning fast Trades based on mathematical probabilities So suddenly a thing happens an event happens in the world Somebody says something a news thing comes out Whatever and then all these mechanisms have to correct because they weren't programmed for that thing to come up And so we get these just very sporadic and unusual moves in the market Where it constantly appears to be setting itself up to do something It appears to be setting itself up to break higher or whatever And then out of nowhere it sells off and then boop then it goes And it does all these strange things And so it's easy to say well the auction process doesn't matter anymore It's not really about what market participants think it's about the computers and the mathematical, you know Probability that they're based that they're built on the structure of that I would disagree Okay, I would say it makes it a little bit harder when it comes to Looking for entries for trades But understanding what the market is doing it is still to this day always moving in an auction process Okay, so let's talk about it How does an auction work? Well an auction process is a process of changing the value of an asset In order to get more people to want to buy it So we'll start with a one-way auction process think about an art auction How does it work the auctioneer brings out a painting? He talks about the painting. He talks about the artist and and you know all the reasons why this painting is great At that moment in the room Everyone is making their own decision about whether or not they want to Buy this painting whether it's worth the money or not to them They're also deciding how much it's worth at that particular moment. How much are they willing to pay? So then the auctioneer starts the auction process Okay, he goes do we have you know a thousand a thousand a thousand nobody puts up a paddle So he lowers the bid do we have 900 900? No one puts up a paddle. So he lowers the bid 800 boom a paddle goes up in the air Okay, the moment that first paddle goes up in the air that first person in the room and it will be only one One brave soul that will that will slide that paddle cautiously up in the air that first one that does it They begin the auction process From that point on it is important to note the painting doesn't change The painting is exactly the same Two seconds ago. No one was willing to pay $900 for that painting But now that one single person is willing to pay 800 for it Guess what happens to the other participants in the room? They begin to decide They're willing to pay more than 800 So they lift the bid from 800 and 900 All of a sudden a bunch of paddles go up in the air You know 9 10 15 paddles go up in the air at 900. So the auction auctioneer lifts it again I have 900 here a thousand boom Paddles I have a thousand here 1100 boom paddles 1112 12 here 13 13 14 Boom boom boom boom boom as that auction continues to go up and up and up and up Less and less paddles go up. There's fewer and fewer people that are willing to pay for it Now they've all got their own idea of how much it's worth They've all got their own limit of how much they're willing to pay And you just get less and less people who are willing to pay this higher price Until there's only one paddle left right it gets down to just two people. I've got 1800 here 19 I've got 19 to a here 2000 2000 2000 no one for 2000 sold for 1900 of this gentleman over here, right? That's the end of the auction process So you start with very little volume. You start with just one brave soul willing to pay 800 That person being willing to pay 800 makes everyone else realize. Oh, no They get emotional and they feel like oh, no, I've got to participate And so then they start to bid that pushes the value the painting didn't change But suddenly now it's worth more than it was just moments before That's that emotion of that auction process pushing it up and down And so the way we think about trading markets is basically that As soon as that one auction is done as soon as that first painting is is sold They just bring out an identical another painting another share of the stock another futures contract Whatever the case may be they just pull out that next painting. Well, we literally just established two seconds ago There's only one person left willing to pay this price So then that auction process happens again to the downside same thing People start to sell and sell and sell and push down until There's some brave soul that's willing to buy and then the process goes back up again So the market is constantly moving through this two-way auction process What's important to understand is the painting i.e the the share of stock that you're trading or the futures contract or whatever the case may be That underlying thing is not changing the value of it is not really changing moment to moment What is changing the perspective of the participants who are choosing to buy or sell it Their opinion is constantly changing and that a changing opinion is what causes the Price to move up and down so because of that what we say is the price is just a Advertising mechanism It is not it doesn't mean anything. It is just to get you to do business So on the way up In that auction process. It's FOMO. It's the fear of missing out on being able to buy this stock at this lower price Knowing that you could have sold it at a higher price in the future if you had That fear of missing that opportunity in that direction is what forces you to do business On the way down, it's the same general principle But the idea is that it's such a good deal You don't want to let the deal pass you by so in the same way that if a store has too much inventory They got too much stuff and no one's willing to buy it. No one's willing to pay the price. What do they do? They have a sale. They lower the price and they put these big flashy signs out sale sale sale Labor Day weekend Right and they shove it in your face. We lowered the prices. We lowered the prices Why do they do that? Well, because it causes you Who didn't want to buy that thing beforehand to choose to buy it Same way fear of missing out on the way up. It's fear of missing out on the deal It's saying I don't really need a new mattress. My mattress is fine But boy if it's labor day weekend and they're going to give them away for 50 off I can't let that deal go. Sure. I'm going to go buy a new mattress That's the auction process. So the same thing is happening to market participants to you and me On whatever time frame we trade if you're a scalper who jumps in and out of trades, you know In a matter of minutes this auction process is happening to you over a matter of minutes If you're a swing trader who trades over a matter of weeks This auction process is happening to you over a matter of weeks It is going up and down and it's movements up and down where it goes what it does when it gets there That is causing the next movement of price So what tools do we have in our arsenal to understand this auction process to understand where we are and you know how to Approach what's happening. Well, we use price time and volume And it is the combination of the three the order with which we look at the three and how we Measure them against each other that gives us this understanding So the way the jim dalton teaches it is that price Advertises Time regulates And volume measures. What does that basically mean? If the market wants to go to a new location So let's say the market is here It wants to go here and when it gets up here It wants to do business up here so that it can keep going Right, let's say that's that's what the market is trying to do Well, what would be the process of that? Well, the first thing would be the price would push up to there, right? You'd see the market move to that level. What would be the next thing you would see The market would start to spend time at that level. It would start going sideways up at that new level Okay, well, then what would be the next thing you would see if it spent enough time up at that level If people really wanted it to keep going if there really were new buyers ready to take that auction on the next big move up You would see volume So that is what you're looking for the market makes a move in price The next question you're asking yourself is how much time do we spend? Then once we start spending time you're asking yourself how much volume are we bringing in Whether you're getting what you expect or not is your signal. So if you think Let's go back to today's chart and let's talk about it using today's example So this move up yesterday Essentially, we'll call it from the breakout of the rotational area. Let me zoom in here So this is excess. This is that momentum. Boom. We make the big move Price takes us from where we were For hours and hours and hours just going up and down yesterday Bidding and bidding and bidding. I want it. I want it. I want it back and forth back and forth back and forth We finally at the end of the day broke out and price went to a new location. Where did it go? It went right here to where we closed 42 11 Okay, so then what did it do overnight? Well, it just went sideways up here at this new higher level So it spent a lot of time. It spent the whole freaking night From the the time the market closed yesterday to the time the market opened this morning It spent that whole time Up here in this overnight range. Okay, great. Well, then the next question is Do we bring in volume? Well, actually, no, let me start to keep it simple That continuation of time is going into today. So imagine this is basically just being from the Move up yesterday that whole time. We've just been doing nothing but going sideways Nothing But spending time up here and bringing in volume So the more time that we spend up here and the more volume that we bring The more likely the momentum can keep going Okay But here's where it gets interesting this auction process is happening on every time frame So bigger picture today This is bullish, right because bigger picture today. This tells us the market is likely going to keep going But intraday, oh, you know over the last hour hour and a half. What has the market been telling us sideways? More look at this. Look at that high They just want to keep chopping it up So they're coming back down to bring in more buyers to come back up for that high Okay um So that's where you can be getting different signals from the same thing on different time frame. Oh On one time frame a signal is sideways on another time frame. It's bullish Why because within the last hour We've spent very little time in the upper end of the range We've been up and down and up and down and up and down The volume's all over the place if it's on a lower time frame if we're talking about over the last hour But if we're talking about over the last day or so Well, then it's a different picture it pushed higher and now it's spending time and bringing in volume So on one time frame the auction process is all over the show And it's just so much uncertainty, but on another it's just building momentum So obviously this is happening over a monthly basis over a weekly basis over a daily basis This auction process is always happening Okay, so if we zoom out, let's just make this chart a monthly chart So now we're looking at the market over a period of years right now, right? What has been that auction process? Well, they pushed the market up as high as they could and they had to pull it back put it on discount labor day weekend 50 off Get you some yes And then they got that auction process going again But they got it a little little overbought up there once again and they had to put that market on sale bring it on back down To discount town And it got so cheap the market couldn't they couldn't resist they had to go buy more And then we got that next big move again Again again, and then we ran out of steam Now what happened this time? Well, previous times when the market ran out of steam to the upside And it pulled back down with price We spent almost no time at all On that pullback We literally just pulled right back and boop kept going Did it again barely spent any time on that pullback did it again?  Well that we didn't get another one of these We didn't get another dip that just turned around ahead right back up because we just kept spending more and more and more and more and more time So on a longer yearly basis. There's an auction process taking place But now let's zoom in a little bit We'll put it on the daily candles And now we can see that over the last few months there's been an auction process It's been going on the market's been going sideways in a range for a few weeks Exploring new prices coming back to test it heading to a new location going sideways for a few weeks Exploring new prices failing heading back down putting the market on sale to bring in those buyers Doing that auction breaking it out back testing it going to the new location Spending the time going sideways on and on and on and on it goes right So this auction process is happening. Sure over the last few years, but it's also happening over the last few months We can zoom in even more and see it happening over the last few days The market was stuck inside a range going sideways and it finally broke out So now the auction process is to the upside It's a really important thing to understand balance leads to excess excess leads to balance So whilst it can be very difficult to know What is the market doing right now? The market is always doing one of these things It is always either balancing inside a range Where it's going up and down or it has momentum where it's heading to a new location Okay, one of these two is always taking place on every time frame Now the challenge is sometimes it can be difficult to know which is happening right now And that's what we're doing. That's what we as traders are doing on whatever time frame. We're trading If you're a day trader, you're trying to understand today over this day Is it a day of excess where the market is moving to a new location? Or is it a day of balance where the market is moving sideways? And that's what you're trying to figure out Are you range bound or are you uh trending? This is the adoption curve. This is an important part of this process So every new Auction process that takes place goes through this adoption curve Everything in life goes through this adoption curve any new technology that people Interact with will go through this process And um, it's a great way to give yourself an understanding of what's happening by asking yourself What is the market doing and how good of a job is it doing? The good of a job is where are we in that in that adoption curve?  You missed the move as a swing trader The only thing to do now would be to wait for the market to pull back and give you a better entry to buy at a cheaper price And get continuation higher right So on the adoption curve of the move the market is making over the last few days We've probably already brought in a lot of the people that are we're going to bring in So we don't want to join the party as the last of them are getting in Right, we want to get in at a better location So going long right now as a swing trader would be a terrible idea Because that auction process to the upside as a swing trader is probably running out of steam We're probably getting less and less new participants at this point but What about as a day trader? right Well as a day trader, we've still got a gap and go. We've still got momentum. We've left behind a poor high right So in terms of the adoption curve of whether the market comes back up to the overnight high today We're still in there, baby We're still bringing in more people Right, we still have more and more participants who keep stepping in who keep the market coming back coming back coming back So on that auction process, there's still momentum to get back up there and test that overnight high Probably have to fill the gap first So that is part of what I think about all day when I think about entering a trade When I see what I what I think the market is doing and I feel I have an opportunity to take a trade I try to figure out who are the participants Always I want to enter the market as an early adopter and I want to get out in the late majority I don't want to try to be an innovator I don't want to try to be the guy who guesses when the market is going to reverse and go the other way If the market is trending, I just want to assume it can keep going and look for signs for when it's coming to an end Okay, and then that tells me we're ready to go sideways rather than guessing when it's going to come to an end And vice versa when it's going sideways I want to assume we're going to keep going sideways until I see those signs of those innovators Stepping in for that breakout. Okay You have to accept the reality that the market is random. It is random Okay, what happens on a day-to-day basis? No one ever knows It is Impossible to know if you understand the mechanism of how a market works It is literally impossible for it to continue to do the same thing in a repeatable way It must constantly change So you have to accept if you're going to be a participant Who is going to interact with this market that you are going to be interacting with a thing that is random The only way that you can be successful in a random Marketplace like this is by having some sort of way to make sense of that randomness That is what we call thinking in probabilities Using a mathematical probability structure and good risk reward to protect yourself From the randomness of the market The basic premise is you can do everything right And just not be lucky and you just have bad luck and you lose money And you can do everything wrong and just get lucky and win money Our goal is to differentiate which is which And do more of the right things and less of the wrong things regardless of the outcome Because that is random or I should say regardless of the outcome of any one single um trade So one of the big things that I have come to learn about traders the more and more I try to help them Is that they have this wrong idea of what it looks like to be a professional trader They think a series of trades as a professional trader should be like this Win win win win win lose Win win win win win lose win win win win lose win win win Right, that's what that's what people think they should be doing every trade winner winner winner winner winner. I'm right. I'm right I'm right. I'm right.  Maybe it's something emotional Maybe you didn't get enough sleep.  Whatever the case may be There's so many things that can lead you to being wrong You have to accept that you're going to be wrong all the time But that doesn't mean you can't make money A real professional trader has a win rate that looks more like this Win lose lose win lose win lose lose win win win lose win lose lose lose win win Okay, that's more like what a real trader experiences And what is that? That's a 50% win rate. That is only being right half the time But here's where it gets cool If you have a set of rules that you force yourself to follow and you Never ever break them And those rules require that every single trade that you took of these 20 trades Had twice the potential reward is the risk And that you risk the exact same amount in every single trade being 2% of your account size This would be one month of trading with a 20% return 20 days one trade a day Right half the time And you got a 20% return Let me just say that again because I know some of you take 20 trades in a single day Over a month you can take one trade a day Be right half the time half those days you're wrong And still bring home a 20% return on your account size How do you do this by being disciplined and following your rules and not taking the bad trades Not taking the trades that aren't part of the system The point of risk management Is not to make you rich. This is what people misunderstand You have to give yourself parameters that you require To protect yourself from losses And sometimes those parameters will prevent you from making money You might miss out on opportunities or you might make less returns on opportunities But that's okay because the focus of risk management is to keep you in the game for the long haul To bring you back tomorrow and the next day and the next day because as long as you're in the game As long as you're taking that next trade, it doesn't matter if you have a Loser a loser a loser because you know the next winner is coming But that next winner won't come if you get taken out of the game And that's why you manage your risk And then of course you have to create a systematic approach to trading the markets What do I mean by systematic? You have to have an exact way that you make decisions Now this doesn't mean that you you always enter with a 10 point stop or something stupid like that It just means that Every trade you take you approach it the same way If you're taking a trade because you think the market is going to fill a gap You always take that trade the same way If you're taking a trade because you think the market is going to break the initial balance to the upside and keep going You always take that trade the same way you take the same trade the same way over and over again Because then what trading becomes Is you versus you? Not you versus the market the market is random It's going to do whatever it's going to do when the market creates a gap You don't know if it's going to fill the gap or it's not what you do know is what are your rules for trading it? When can you take a trade to fill the gap? When can you not how often do your rules? Work out in your favor you could just try and see you can make the rules You can do the trades you can keep tracking a trading journal and you can literally see On paper how successful your gap trades are or whatever the trade setup is That is how you get better Have an exact way to do it Measure the success or failure of that rate make adjustments and then move forward like that Don't worry about the market. The market is random. It's going to do whatever it's going to do What you worry about is you and your approach Okay, and then just quickly to talk about the market profile The market profile is basically the same thing as a candlestick chart It just displays the information in a three-dimensional way It shows us time price and volume at each level Why because of what we've talked about, right? Understanding where the market is going how much time it's spending there and how much volume is an edge I'm just to answer the quick question that a lot of you will have about my setup 30 minute tpo's I use time as my point of control The levels that I pay most attention to is the settlement the closing price of the previous day opening price half back the time point of control the value area and The volume profile okay, so One important thing that I do want everyone to understand about trading is that whilst having an edge in life Having an advantage in life is having some sort of edge over the people you're competing with In trading it is about having an edge over the randomness of markets Once again, it is you versus you Not you versus the market so one edge that I have over The way that I give myself some some control of that randomness is before the market opens every day I make a plan for what I will do No matter what the market does. So let's take this morning for example I see the market is opening up with a gap up So i'm saying to myself the highest probability is that the market wants to keep going higher Okay, how do I want to trade it? Well, maybe i'm saying I don't want to mess with it inside this overnight range Because it will be too uncertain so How could I trade that? Well, I'd either need to see a gap fill And then the market finds support and I'd look to buy Somewhere for a gap and go trade to the upside Or I need to see the market push above that overnight high Find support up there and then get long for that gap and go trade Or I'd have to see the market push below that overnight low Find new sellers here and then I'd get short to start backfilling some of the weakness we've left behind Okay, so before the opening bell even rings because I know where the market closed yesterday And where it's going to open today. I can immediately say what is my plan? What's my plan if it goes sideways? What's my plan if it goes higher? What's my plan if it goes lower? What are the levels I'm looking at? Where am I interested? What will they tell me? These levels are not just random levels that I point to they're levels where that auction process starts again If we get above that overnight high Anybody who was shorting in this whole overnight range anybody who's been shorting all day today They're all gonna have to make a decision up here Get squeezed or add to it and pull it back down. So this is a very important level. Same thing down here Okay, same thing with where the market opened and so on and so forth So I make my plan ahead of time and I know what are the possible outcomes if the market does this Why would it do that and vice versa? Next we talk about self understanding is about mapping your emotions You need to understand that the emotions that you experience throughout the day Are not something to be afraid of they're not something to avoid You don't want to try to bury your emotions. You don't want to try to shut them off Instead you want to use them as a way for you to learn about yourself To learn about what your strengths and weaknesses are so that you can build an approach to work around them If you don't know what your strengths and weaknesses are then how can you improve? So the things you want to keep track of are the triggers the thoughts the emotions the behaviors the actions the Change in decision-making the change in market perception and the mistakes that you make So a trigger might be for example, if you try to trade options in today Or a thought might be I can't believe this is happening I'm not letting the market stop me out this time. I'm going to be right It might be an emotion. You might feel something. It might be a behavior You might have a certain action that you take over and over again So for example, let's say your problem is FOMO Let's say the market starts to make a move and you just can't help it You instantly want to push that buy button instantly jump into it. You're terrible waiting for a pullback Well, how do you know when that happens? Well, you might feel An antsy nervous sensation in your stomach when you start to get that FOMO There might be a physical feeling that you can feel There might be a certain thought that goes through your head like every time you get that FOMO you think like Don't you miss it? You have like a specific little phrase that pops up in your head It might happen because of something that happens in the chart. It might always be That when you're watching the chart and you're looking for support somewhere And then it finds it and it starts to go you chase it every time, right? So if you first can map out what is it that's going wrong Then you can figure out. Okay. What do I notice happens before that thing goes wrong? Then you can make a plan for what to do next time that thing happens So the next time you feel that feeling in your stomach, you know not to FOMO The next time that you see the market make that little push higher, you know not to FOMO So on and so forth you have to map your strengths and weaknesses to be able to make adjustments to them There's also a a different Sort of stage to trading depending on where you're at in the process and it's important not to try to rush It's important not to try to get beyond your ability So in the beginning when you're first learning to trade it's a mechanical You know approach to trading you need to do things in a very exact way You need to have very hardcore rules that you force yourself to follow and you do things in a very specific way But the better and better you get the more subjective you can start making your approach until eventually it becomes intuitive And you can just sort of act and make the right decisions and do the right things Without needing to really be exact about it. Just kind of go with the flow But if you try to rush the process, you'll never get to the end result The common problems that most traders the things that that end up being the deal breaker that takes them out of this business for good Is the unwillingness to create rules unwillingness to give themselves a structure they force themselves to follow A failure to take responsibility An unwillingness to admit their strengths and weaknesses and learn from them And an addiction to random outcomes. Our brains are addicted to random outcomes. That is why gambling is so effective. That is why Instagram is so effective. That is why twitter is so effective. We love those random results, right those random rewards So you must take responsibility. You got to eliminate fear And develop with restraint You have to focus on your attitude Okay, the way you approach the market will always be more important than your analysis Okay, the tools you use don't matter how you use them is what matters The solution is in your mind not in the market Don't waste time and energy focusing on the wrong things If you spend years and years and years trying to learn how to trade with vwap and you think it's vwap That's the reason you're not successful. You're wasting your time your problems with your self understanding and vice versa Okay Understand where you're going wrong and work on those specific things until you fix them Otherwise so much time will pass and so much money will be lost just doing the same things again and again Expecting a different result Another thing that you should focus on is your habits You want to create good habits and trading doing the same things over and over again makes a thing a habit Your outcomes in life are a lagging measure of your habits Your network is a lagging measure of your financial habits Your weight is a lagging measure of your eating habits Your knowledge is a lagging measure of your learning habits You get what you repeat So repeat doing the right things every day in the market and you will get the result that you want You only have to improve one percent every day So many traders want to just read a book or take a course or watch a video And instantly make tons of money in the market It doesn't work like that.  You must accept that And then the very last thing that we talk about is anti fragility Anti fragility is basically just the opposite of fragile. So If something is fragile the more pressure you put it under the more likely it is to break Whereas if something is anti fragile, the more pressure you put it on the stronger it becomes A glass versus a rock Bunch, okay So yeah, like if you think about a glass the more pressure you put it under the more likely it is to shatter But if you think about like a human muscle If you want to make a human muscle stronger you lift a big heavy weight which actually tears the muscle apart But by tearing the muscle apart it grows back stronger So you want to become anti fragile with your approach to markets You want to build into your systems for how you make decisions ways so that when things go wrong You learn from it and grow stronger and your system gets better Unlike fragility, which would be just making random decisions because then as soon as something bad happens Your whole system falls apart Uh, we talk about a setup called the one time framing trade that is an example of anti fragility in a setup Anti fragility in market conditions is an ability to trade trends trade rotation trade breakouts failed breakouts Whatever the market is doing anti fragility in a win rate is using risk management to protect yourself from losses Anti fragility in taking losses is turning every loss into a lesson Anti fragility in dealing with fear is having insurance So all of this that you saw today is just the bare bones the bare minimum Of what I talk about in my workshops The workshop is intended to be an all-encompassing experience Where I teach you all of the steps that you need to go through to learn how to become a profitable trader And I teach you all of the specific tools that I use being market profile book map and the market internals To um to make that decision Okay, if anyone is interested in checking out the course you can find it at pirate traders.io forward slash workshops And if you sign up today today is the last day of a sale where it is only 125 dollars And anytime that you sign up between now and the next one starts in july So anytime between now and then if you use the promo code book map, you'll get 20 off So with that we'll turn back to the live markets and some q&a And see if you guys have any questions for me. Oh, man. Marcus still going sideways Let's see. It looks like you answered hector's question over in discord and Uh, not really any questions over here. Uh, really great presentation charles Some compliments in here. Um, yeah, I mean it it gets down to the the crux of it. Uh, and and uh Really well well said well presented. Um, I actually have a bunch of questions for you. Uh, and um While we wait for for others maybe um So one of the things that um god you said so many interesting things, uh One of the things about the auction process, uh That I want to um inquire about is Uh, so you were talking about this. What is the market doing? Uh, and how well is it doing it? Uh, and you went through that process in the in the live market And how it changes? Uh, that was excellent. Um, however, there's a higher time frame process, uh, and you mentioned a little bit about it. Um, and that is extremely important. Um, and you set the tone of the day Uh, based off of that Uh, and can you talk a little bit more about that auction process? So for example, like you go maybe just go over you Rehashed, uh, what you said earlier about today On the higher time frame so for the day Yeah, so Okay. Yeah, I think I understood your question. So yeah, basically How I take it into account is I'm kind of always paying attention to every auction process on every time frame So like bigger picture when we zoom out and we look at the daily chart There is what the market is doing over the last few weeks, right? Which is like it was going sideways In this range. It was just stuck man. It was stuck like glue to this to the center of the range Couldn't go higher couldn't go lower couldn't go higher couldn't go lower and it just kept going so on that bigger Picture, what is the market trying to do? It's trying to break out of that range So there is a certain pattern that I would look for that would tell me whether it is successfully doing that or not And so on that time frame, that's what I'm watching and I'm asking myself that okay So just to talk about it very briefly here Um, so often if the market is going to break out of a balance area such as this There are two behaviors that we would look for The first is at some point it will pull back and back test that balance area high And find support there And if it does it will then get a move that is at least the same size as the general range of the balance area So for this one here, we would expect that the market is going to make a move if it successfully breaks out up into, you know, the 4320 area, right? So what is the the process that it goes through to do that? Right, how does it tell me if it's doing it? Well first it has to break out above the highs Which it did Then it has to come back and find support if it does then it tells me it's making that bigger move Okay, so if i'm now asking myself a question on a smaller time frame if i'm asking myself like today What's gonna happen, right? That's what's happening over the weeks. What's happening today? Well, if the market needs to pull back down and back test that balance area high, right? If that's what it needs to do That's a big move. There's a lot of potential money to be made on that way back down So what is a signal that could tell me on the daily range that that's happening? Well, I went over them right break the initial balance to the downside is about to happen That'd be the first signal If we hadn't have spent this long here I would have said we had to get below that overnight low But because we went sideways again things are changing because we now went sideways because we created that poor high And didn't repair it in a when what should happens doesn't This slightly increases the odds that we might need that pullback that we might need to go lower today Okay, so how do I use that information in my trading today? Well, if I have a limit order going long waiting at that gap fill Because I've been bullish all day And I've been wanting to buy for that gap and go Maybe now I say yeah, I'm gonna pull that order. I'm gonna wait and see I could still get in at that same level But I want to see what happens once we poke below and catch it on the way back up instead So why did I think that thought? Because of first seeing that on the longer time frame we'd gone too far and need to pull back And then seeing on this shorter time frame We can't keep going up and if we can't go up if there's no one left to push the market higher They got to put the market on sale to go bring in those buyers Does that answer your question or did I make a more kind of I mean you covered like the candlesticks on the on the higher time frame I think the the leap of There's kind of a leap of faith in there that that A little more explanation what I I thought would would clear help clarify Is some of these things read from a book on it from Dalton about the auction process of a gap or that It's high of day low of day and there's It was just it was kind of presented in a way that these are the this is what is said in the book But we know as traders you have to do your own studies and to then extrapolate that Into your your studies and then into a trading plan Um because a lot of a lot of times I think traders the one of the pitfalls is well, I read that in the book and Dalton says that Oh, it's a gap. Oh gaps fill. No Why do gaps fill? When are they more likely to fill it is an auction? phenomena And that that's kind of where I was leading Um or high of high of day like why is it emotional? Yeah, yeah, so that's getting into more complex stuff that takes it just takes a long time to sort of wrap your mind around all of that um But yeah, that's what I would I would say that's what I'm doing is I'm I'm understanding Where there are important levels on every time frame. What is an important level on the daily? What is an important level intradaylee? What is an important level? You know what I mean? And I have an idea in my head of what I think will happen at that level And what that will mean for that time frame and for the other time frames And just the more I do it the better I get and and it really is building a skill You know what I mean? So yes another analogy to explain the learning side of what you're talking about is like I always tell people the basketball coach who taught michael jordan how to play basketball Probably he taught a thousand other kids who never ended up being as good as michael jordan so reading the book Learning what the auction process is where are the important levels? Why are they important? What can you you know do with those? That's all great information. That's teaching you the game of basketball But to truly become michael jordan You have to put in the work gain the experience have the natural skill all these other things are part of that equation So I feel like That's the difference is like if you read the book and it doesn't click yet. You just haven't put in the work You've learned the info, but it hasn't sunk in you haven't done the practice Okay. Yeah. Yeah, I mean it it just um It it always bothers me to see traders say like well, it's the initial balance Okay, or you know, it's a gap fill and these are volume profile strategies Um But they don't it's not understood why What's behind at the initial balance? Uh, how is that any different from just another big volume event during the day? um, you know, uh, or You know high of day, um It just understand you're hitting it. Yeah, you're hitting it on the head. That's exactly right the the that's why my approach isn't What is happening in the market right now? Is there a gap fill? I'm going to take a gap fill trade, right? My approach is What is happening in the market right now? What does that tell me the market is trying to do? How good of a job you're you're nailing it. It's like I want to understand the story of what's happening right now The signals that I see whether it's a gap or whatever the thing is Those are just pieces of information for me to construct that story in my mind Um, but you're absolutely right understanding why the market is doing these things is the insight the the The signals are just signals to gain that insight right, right Okay, um and another another um, well more of a comment than a than a question Was about the auction process would I really liked what you know the paddles in the one way? like a painting is obviously a one-way auction um and uh And one paddle goes up. Okay, uh, that starts the process. Oh other pal start going up and Maybe there's FOMO or whatever This just to dimension something like this is where and in what you mentioned was it is the behavior basically of these participants, uh, that we are starting to realize in the auction process that is kind of guiding where this is going Uh, and this is where bookmap shines Uh because those paddles going up you'll see it historically in the chart Uh where those transactions happen you'll see it in relationship to price Uh, so that context is all there um, it Understanding how to read it and putting getting traction out of it is is understanding this auction process in detail Oh, yeah, and and being able to see you know when they're putting liquidity in And then spoofing it Right. Yeah, so so now you can start to tell is this a genuine auction process Are they really trying to take the market to a new level or are they just getting you down there to get you to do business So they can turn it right back up. I mean you can literally see it happen in the chart Right speaking to which we just lost a bunch of liquidity. So obviously there's some sort of news event happening right now um So I'd expect some sporadic moves Dipping back below the overnight low is bearish but Because it's a news driven event and because it's a liquidation break More important than the bearishness down is whether it rotates back up into that overnight range So if we start to get resistance here at the overnight low, I'll get bearish But I'm not yet because this could just be a liquidation to bring it right back up right um Yeah, I again I I really Really liked what you were talking about the randomness and how that needs to be embraced the Understanding that it is your reaction to this and having your rules and your reaction to your tools as well Not the tool itself is what's important here um, I did have a question on the how you use um And I guess we don't have to elaborate too much on it But the the distinction between your your usage of volume profile versus market profile You started to talk about the time price Opportunities and like a t-wap and and some of these kinds of things Yeah, so it's all the same to me To me volume profile is basically just a piece of the market profile right To so technically what makes market profile different is just the tpo's So that's just the letters Um, but that's basically just a candlestick is really all it is um, it just is visually easier to see as letters, but Yeah, I mean it basically is volume profile trading just with that extra added context right volume just tells you how much business Is happening at a certain level by bringing in the tpo's I can tell how much time is being spent there as well Which the two in combination are really the insight there's nothing wrong with just knowing where the volume is coming in But how you know what that volume is and how likely it is to continue depends on how much time So it's it's really the same thing and a lot of the principles are exactly the same Okay, okay, excellent. Uh, let's see if there's any other questions in here um waffles I Don't know what to to to say here like a too many ifs Well, I think Charles is going through the process to bring Bring down the ifs and to simplify it and he has his own rules based on it um The um Let's move on to josh's question here. Hi josh actually hold on i'm seeing his question Let me just let me just dive into this for a second for the the too many ifs thing is a I get your point Here's what I would say if you want an exact way to trade markets where there's no ifs It's like when the market does this I go long. I go short. I put my stop here. I always do this exact thing There is definitely a way to make money doing that Um, there's nothing wrong with that as a matter of fact every algorithm on earth does that every day That's how they make money But my edge right my advantage is in the what ifs it is in my brain's ability to To decipher all that information So there was a point a few years back where I wanted to try to Systematize my trading I wanted to try to create an algorithm to just trade for me Because at the time most of the money I was making was from a rotational strategy That was very very exact and so I thought let me just try to create this spot And so I went through and I did this massive. All right, so we got new selling now below that overnight low This is now a liquidation break with new selling which is bearish to see So that increases the odds in my mind That we need to pull back down and probably test the base of the spike up at 41 99 called 4200 So that is less bullish to see If they were going to take the market higher, they should have just dipped below and pulled right back up So those new sellers are a little bit bearish Um What was I saying? Oh, yeah, so so the what ifs So I basically went through and I calculated in a literal way all of the signals that I use How often do they work so how often when the market creates a poor high does it get repaired How often does an initial balance break continue in that direction? How often does this how often does the gap feel how often does blah blah? I went through all these different setups And I worked out the mathematical the literal mathematical probabilities of them And none of them worked better than like 50 of the time most of them had 30 to 50 win rates When it traded it like a computer like an algorithm in an exact way And so then I sat there baffled and confused Well, how is this possible that I make money every day trading these things? But yet when I trade them in an exact way, they don't work What's going on? And that's when I learned that there is discretion taking place that inside my brain There is a capacity to choose when to listen to a signal and when to ignore it And the only way my brain can do that is by combining those different pieces of information So market profile might be telling me one thing, but the book map is telling me another by combining those two I will end up with a better end result than just going off of the data On the one Does that make sense? So the what ifs are actually what give me the edge Yeah, makes makes good sense there. Um, let's see Um, uh, josh is asking, uh, it seems 41 90 was a big level historically liquidity at 4200 From yesterday, maybe this combo can support, uh, coming up um Yeah, no, I mean I like 41 90 But the problem is we haven't back tested it, right? How hard did the market have to work to get to that level? So they had to come From all the way down here They had to turn the market around to work it all the way up to there The idea that they're just going to be able to boo keep going forever Not as good, right? So that tells us And that doesn't mean today, but at some point they're probably going to need to come back and test that Now you notice the level you know, it's important. What does that tell you if they come back and test it? And you're seeing that support You can take the trade I think the way that um, I would answer it the very much the same way that you did earlier about like, okay See how the auction is starting to change Uh, and you noted it a few different times And therefore it seems like it wants that liquidity, uh, and is going for it. Uh, so Um, it's that again the behavior, uh, what it and answering your two questions, uh, will Um, really help filter that Exactly. So what was the market doing this morning? It was trying to gap and go it's trying to go higher How good of a job did it do? It did not do a very good job, right? Couldn't even get to the overnight high So now what happened? Well now we pulled back down into yesterday's range. So what does that mean? It means the market is trying to pull back down and backfill some of that weakness we left behind It was trying to do something this morning The signal it could not do that told us it's now trying to do the opposite And so now we're looking for signals that court that, you know, um Confirmed that that's what's happening, which would be resistance and more selling Okay, excellent. Um, one one last question here. Uh, we'll end it on this. Uh, and then we've got to go. Um Could you explain how tv is asking how if you can explain how you read the icebergs during? Um, Well liquidation breaks, uh, basically Yeah, I would actually prefer to hand this over to you. Do you have any insights on that? Unlike if a market starts to randomly liquidate. Is there any way to understand what's happening based on You know the iceberg I mean the way I use the icebergs is is is very I mean everyone does it differently scott pulsini For example, we had the webinar yesterday with him He looks at that as the volume event Uh, and then he wants to look at the order flow around that so it kind of perks up his interest at that time Which makes good sense Only if those icebergs are, you know, meet a certain threshold I'm I'm different. I will look at specific levels and then I look at the, um Uh stops and icebergs as another Um confluence at those levels. Okay, so what are these participants telling me now? Uh, and we know the types of participants the larger players are using icebergs the smaller players are using stops Uh, what is their behavior at these levels of interest? So if I see a lot of for example, uh price comes down to an area Of high liquidity and it gets filled and I see a lot of icebergs I'm very interested But now I want to see the aggressors come in Uh, and uh, the buyers and I want to see them starting to move the market And then I can start to target higher liquidity on the offer Any specific insights on a liquidation like when it happens super fast like it's happening in a in a second's time Is there anything that you just like give you a quick insight or you have to wait and see? Um, that's harder. Um, of course like uh, look at your level, uh, and uh, uh, yeah I mean, I'd have to see some some pretty You know Distinct uh ice pergbine like it has to be kind of a threshold I think or just has to be a lot compared to and it's relative for me. It's not like scott Uh, it's relative for me. I you know personally, that's what I look at if it's like You know a few thousand and and uh for the day I've only had like, you know I've seen moves of like a hundred and a hundred two hundred and then I see a few thousand that gets more significant for sure Those are I mean you can still the order flow principles apply it it has to The aggressors have to come in to move it back up But uh, it can be kind of tricky to to trade that and it's a bit more of a kind of you know shot in the dark or With the volatility you just you know, it's it's trickier put it that way That is how I do it by the way too of with the liquidation. It's It's it's generally a guess in the moment If I want to trade it I enter the trade and then I have to just wait and see I mean, you just don't know until Yeah, the next thing comes in the next business starts Yeah, yeah, exactly. But you know, if it's had a very specific level that there was a lot of buying previously And and price comes down into that area And spikes below it Lots of tons of stops, but you see aggressors A buyers above that area. I'm in And I'm looking for it to go higher But that that's the way I would look at it Well speaking about it looking like it's going to go higher to me. It looks like it's going to go lower Yes, I think you're spot on Um There goes next one Excellent, uh, well, uh, let's see, uh, any parting words of wisdom charles and uh, we'll wrap it up Yeah, I mean no parting words of wisdom. Um, you guys know me You know, uh, I got this youtube channel pirate traders. You're welcome to come watch our free streams Um, we have a brigade membership. You can get the the first hour of the day every day You can stream with me to get my insights get my Analysis of what those scenarios are I think are going to happen each day But ultimately my advice to you would be just explore try lots of things track your results Get better and better and stay stay positive Excellent. Uh, thank you very much charles and uh, we'll see you on monday then All right. Thanks bruce. Have a good weekend. Okay.


Aloha and welcome to Think Tech Hawaii. This show is the state of the state of Hawaii. And I'm your host, Stephanie Stoll Dalton. This show brings you newsworthy topics and issues affecting Hawaii. And it does so through conversation with guests whose expertise and viewpoints can inform us even beyond other media resources. Today's show guest has deep experience in public service for Hawaii and at highest levels, including the US Congress. So as we all read and hear, Hawaii's economy is emerging from the depths of the pandemic. And of course, we all want to know how it's going and how it's managed and how our leaders are serving us and how we're gonna see us get back and get better. But today's show guest, Colleen Anabusa, has deep experience in public service for Hawaii and she can give us glimpses and backstage looks at how the benefits of what has occurred recently that you may have heard about, which is the $1.9 trillion package known as the American Rescue Plan Act has brought enormous amounts of resources, funding, federal funding into the country and into each state. And so we're interested in this act, we can call it the ARP for short, the American Rescue Plan Act of 2021 ARP for short. And we would really like to know how it is that the leaders and the policy makers who are gonna be making decisions about the disposition and the allocations of these funds and how that's gonna ensure benefits to Hawaii and to all of its citizens. Welcome, Colleen Anabusa. Thank you, Stephanie, thank you for having me. And Mahalo for joining us today and for sharing your insights and thoughts of how this is all gonna work as you're not one of the people actually doing it right now, but you may be as you move into your new position, you'll probably have to do with some of the transportation side of the funding that's coming from the feds. But why don't we start by having you just give us a little update or a little precy of what you have done in your service for Hawaii at the national and state level and how that public service has been your life and continues to be and will again be public service for you with the heart. Well, thank you, Stephanie. And I gotta tell you, I didn't begin as, if you look at many of my colleagues who still serve in my state like for many of them, it went from undergraduate to law school or graduate school and they're into service by getting an elected position. I was exactly sort of the opposite. I'm a lawyer by training and I was in my 40s before I actually ran for office. And the reason why is I'm fourth generation of the Waianae coast. And it's always been an issue for me as to why it seems like everyone forgets that there's a Waianae after Kahi power plant, as I say. And as a result of that, I decided at one time that, you know what, I'll throw my name in for an election and the worst it can happen is that I'd be in the same place, I'd be back practicing law and nothing else would change, but maybe I could make a difference. And that was in 1998 when I ran and I took office in 1999. And as some may know, I served in the Hawaii State Senate for 12 years. The last four, I was president of the Senate, first woman to lead either chamber and the first Asian woman in the United States to lead a legislative house like that. But the other interesting thing is for, with the exception of two years, I think for the whole 10 years, I held various leadership positions within the Hawaii State Senate. And in 2010, I ran for the US Congress. And that was a very interesting election to say the least. And in the end, in the general election, won that position and has served a total of little over six years in the Congress of the United States. And in between, I've run for various positions unsuccessfully, but with each one of those adventures, lack of a better description, it's made me even appreciate more what we have as a country, but how special Hawaii is. So I'm always gravitating back home and running for office here. But what my stand in Congress has shown me is it's no different whether you're in the Congress of the United States or you're in the legislature here, it's all based on relationships. And many of the relationships that I developed in Washington, they're still there, many of them are still there. Some have moved on, we've got a governor among our ranks. And but it really is important to always stay focused on what is important and it's important for us because we're so far away and people tend to forget about us and some people just think we're an exotic place to go vacation. And so they don't think about us as having the same kinds of problems or the challenges that everyone else. Well, we're in paradise. That's how it is, we don't have a challenge. That's right, no, it is true.  And then you have the focus on Asians and then recently on the people of who would be considered or consider themselves Jewish. And that's something that I didn't think we'd see, especially in big cities like New York and Los Angeles. I didn't think you'd find that because that's not the way you expect people in urban cities, especially big cities to act. But instead we're finding that and it makes you wonder what's going on? What's happening to our country? We do need to talk more about that. And I mean, it's a very pleased and proud Maisie Hirono, our Senator, that have that role with that Asian act. That was very, very good work. And we need to hear a lot more from her about that. And Hawaii needs to be seen as more of a resource for how to get as far as we have here and how we're going forward with the lo-ha for everyone and how that works. But that's another topic for another time, so to do. Yeah, I just think that your service at the state level and then also at the federal level with the Congress, that just gives you such a broad view and such a big oversight of how all of these things work. Am I exaggerating what has- No, what you are saying is and thank you for saying that but what Congress did for me personally is that not only do you have the opportunity to develop the relationships, but it also makes you understand the process that the country goes through. Because like I tell people, there is no greater legislature in the world than the Congress of the United States. And to watch how issues get developed and even with the lack of bipartisanism, I think that's the best way to put it. Even with both sides of the aisles, sort of digging in and not coming together, it still manages to address certain things. Like for example, you started with talking about the American Rescue Plan, but remember there are various versions of how we would come out of COVID or how we would help people health-wise or the business-wise all before ARP. And I'm talking about what we call CARES Act, and which was in March a year ago, 2020. And then in December, remember I call it CARES Act II because CRRSA is a mouthful, but that was in December. And both CARES Act I, as I call it, and CARES Act II were under the Trump administration. So you know that you have that. And of course, we have the majority of the two branches of government, but it was still a situation where one majority. And then, but it was still to show you how even in that situation, people could come together and people could begin to look at things. That's a wonderful point to make. That really is given our dividedness now. I think it's so good you brought up the history of those other federal funding packages because Hawaii already has received a big chunk to solve some of its tremendous challenges, which were gonna be very hard on people in terms of layoffs and furloughs and just not being able to meet those payrolls given our dependence on the way our tourism and the way our economy works. I mean, the state can get so close to the bone so fast, which is a little bit disturbing. I mean, there are other states like us. I mean, Alaska kind of is due, because they desert, they take tourists too and depend on that trade, but to get so close to the bone so fast. And then for you to say how wonderful it is to be at that federal level with those resources and that capacity to come to policymaking decisions that are beneficial to the country, but to be able to draw on the resources of that, to be able to put together a 1.9 trillion bill that is gonna take all this money out and distribute through the country is just enormously, incredibly wonderful. And that's one of our part of the greatness of the country is that it has been productive enough to have that kind of capacity, financial capacity. So I would imagine that that was pretty awesome too to see it all work like that and to feel like there's not the bottom. I mean, like here in Hawaii to get so close to the bottom with people not having enough to eat is very disturbing, but to know that we're in the bigger picture with health like this ARP or ARP Act maybe it is called the ARP. I haven't heard it said as many times as I should have, but it's, well, I wanted to bring down that 1.9 trillion which is of course going to many categories of me throughout the country and the purpose is of course to combat COVID-19 itself and then to also ameliorate the impact of the virus and the pandemic on public health and the country's economy and all the state's economy. So all of the categories of the states have been given portions of this 1.9 trillion package. But just for example, to bring it down to earth, I feel pretty high. I mean, like the education was given for the country 122 billion and that's still just a huge, huge amount with further our 50 states and territories. But for the state of Hawaii, the education portion was roughly about 552 million. So almost half a billion dollars to go. Stephanie, the other thing that you have to focus on is the fact that when we had CARES Act one, it was like 2.2 trillion and CARES Act two, if I remember correctly, was just under, it was about 900 billion, so just under a trillion. And in each of those bills, there were education components but only in CARES Act one and in this ARP, that was passed to March of this year, do you have any grants directly to the state and counts? And so the first one, I believe Hawaii received in March of last year, 1.25 billion dollars, of which though, 380 some odd went directly to the city and county of Honolulu of that. So it was about 800, some odd million that went to Hawaii. In the second bill, in CARES Act two, there were no direct grants and that was a major point of contention between the Democrats and the Republicans and basically President Trump who said he's not gonna give any more monies directly to the state. This recent ARP with President Biden, Hawaii got about 1.6, Hawaii directly, got about 1.6 billion dollars. And that's, and when you add everything together with the states, the other counties, I think it adds up to about 2.2, Honolulu, I guess, getting the other lion share almost $400 million. Having, the reason I bring that up is because what I think a lot of people don't realize is education is a separate category. So it's not in that. Education had its own. So education, for example, in what we call CARES Act one, was about 45 million. CARES Act two, it went up to about 120 so long million. This is just elementary education by the way. And in ARP, elementary education, which is called ESSER, the ESSER funding went up to about 412 million. This does not come out of the state portion. This is just in education. And when you were talking to me earlier about it, you said, how is it that, you know, Hawaii is able to survive with education? And the reason is definitely because interestingly, in CARES Act one and CARES Act two, and ARP has a different version of it, there were specific provisions written in it about education. One was called continued payment. In other words, when you receive the funds, it requires not only the education, well, actually for us, it's the Department of Education. But remember, we are unique because we're the only state-run education system in the whole United States. So they have to do a certificate, basically to sign to the Department of Education nationally and said, okay, we agree to these terms. And the terms that they want, and by the way, the governor also have to agree because governor was given discretionary funds in education as well, and also the university system. But we're just talking about elementary ed now just because those numbers are fresh in my mind. They have to agree, and the one and two version to what they call continued payment. In other words, you have to agree that you would make every effort, an extraordinary effort to make sure that you don't cut anybody's pay. And in addition to that, they have what is called a maintenance of effort, which says that the state, in order to get these funds have to agree that they will continue to fund the Department of Education. The state will continue to fund the Department of Education at basically the same level, which is one, and two, in a proportionate level. And by the way, that's also found in ARP. Yes. Yeah, and ARP has an additional condition, which is very relevant for Hawaii, and that's called maintenance of equity, which is to ensure that, for example, Native Hawaiian education continues to benefit. And of course, on the mainland there, we're talking about the Native Americans and the Alaska Natives. So when you look at all of that, education had a different life cycle, so to speak. And that's why, yeah, we was able, you were able to see what education managed to do for everyone else. As I, I don't know if you recall, initially, the governor said he was going to insturlose and cutbacks and layoffs, remember that? Yeah, I mean, that was getting down to the bone and trying to put to perspective. When this came in and with education, and then he said, there'll be no furloughs and layoffs. So as a result of this funding source that came in, I attribute that to the reason why all of the public sector employees did not get the technically the layoffs and didn't do this because of the fact that not only did education have this huge amount of money that came in directly for education, but in addition to that, the governor had his funds and he could use that for the other employees, not specifically covered by the, by ESSA, Education. Well, I think that with that, what is it that the education has like a 2.1 billion budget each year, but it's mostly coming from funds that weren't lucrative during the pandemic. I mean, clearly an example of the impact of COVID so that that was gonna be a dire straight situation without this influx of money. But I think that there were, like you say, there are these conditions on the money. And so the, and then there's lots of them for those ESSA funds. I mean, like you go directly to public schools and 90% of that money has to actually be put into the field and reported that way.  I don't know if these are not necessary, are these regs already or they're just coming right out of the statute? I don't know, but I think that there are lots of interesting conditions. Now, do you think that the department and is, I'm sure they're ready to do this. What do you think about how this process is gonna move? So you talked about that earlier in understanding, you know, more about how these decisions are made and how they work. So how do you see that this department so dependent now on this, these funds and the state not having the, you know, the resources to handle that. But do you see them being able to manage all this? Cause isn't this like a new assignment? Do they have the staff? Do they understand how it works? How long is it gonna take? And will the public be able, is the public gonna be informed and will they see? So can you comment on how you see that might go? You know, what's interesting is that, for example, because it's government funding and it's government, it's a government entity and it's a law, technically the agencies are to implement rules, which helps you understand them. And it's, you know what, it's the federal registry and it's the CFRs and they're supposed to do that to sort of give you guidance. What happened in CARES Act one is that the state of Washington, and I just noticed because I served with Governor Inslee, he sued then the Betsy DeVos, Secretary DeVos, cause she interpreted the first CARES Act one, I think of giving almost 50% of the funds to private schools. And he sued saying, you can't do that, we need all the money. And then they stopped and she did it by a rule. And he sued and he said, you can't do that because you have a rule. That's interesting. Because that certainly would be an issue, it could be an issue here in Hawaii. Oh, definitely, because we have such a high percentage of students who are actually in private school. So you can imagine, I was curious because I was beginning to watch the private schools and wondering if one, they understood that this was Betsy DeVos's interpretation or two, whether they would say anything from that. But it was really a fascinating thing because now there is an interim rule, interim final rule implemented in April for how you would do ARP under education. And this is what's causing some of the issues now because I think the Department of Education here is saying, we got to do surveys, we got to do all of that. But if you really, if you read it, what they're saying, what the feds are saying is, okay, we're giving you two thirds of the money. But for the final third, you have to show us how you're complying with all these different conditions. So it's in the rule and whether or not or how the DOE actually implements it, we have to wait and see. But to me, the way it's written is two thirds of the money is out there. And I don't believe as of this date that the Department of Education has expended even CARES Act two monies and definitely not ARP monies. And I think they still have some leftovers from CARES Act one. So that's why there's a huge chunk of money out there. Which is a very positive situation to be in, especially me. But like what you're saying, in one of the Publication Student Department of Education, with the LEAs or the local ed agency schools returning to in-person instruction, the public schools, there has to be a plan and it must be within 30 days of receiving the funds. All these rules have these specifics in them. But they have to get public comment before... Well, that's the latest rule implementation. But Stephanie, remember Hawaii is unique. We don't really have LEAs. We only have a SCA, a state education agency. Because we are the... Yeah, so it's... And so I know for the Department of Education it's always been a matter of going to the DOE and saying, hey, this doesn't apply to us. We don't function like the rest of the United States. So we should have an easier time because it's on one level. And everything is uniform. In other words, it's a policy that's implemented throughout the state. So I would like to think that that's something that makes it easier and we're able to do it. And I think the Department, if my information is correct, has sent out surveys and done that. But the question is gonna be if you read it, the Department said we're giving you two thirds of the funds but for this final third you have to show us. And we'll see. But I think it's not as great a situation as somebody make it out. Well, I mean, I think that it is stepping up to a challenge that they may not be even staffed for this given circumstances and the money decreasing. We've been in this crisis for a year. So I think that this is a challenge, which is, and yes, and I agree, it all falls what you're saying because we are just an SEA. It all falls on the Department. And so I wonder, do you see that there's gonna be any remedy here to help them through it? Or what do you think? Are they gonna- Oh yeah, Stephanie, I think it's because like I said earlier, if you haven't expended all of CARES Act one and you haven't expended CARES Act two, I think that's a huge hunk of money yet that they can expend for specific purposes. And arguably you could say, two thirds of the other money. So I think they would be able to do that. It's just a matter of deciding, I think this is more of a jurisdictional issue between does the legislature decide how you expend these funds? This was my next question. There's no superintendent. Yeah. That is the, is that gonna move then? So is the department gonna be working more hand to the glove with the legislature? It gets even more complicated than that because under our constitution, the policy makers for education is the Board of Education, which isn't the Department of Education. So you have all these different layers of who to deal with and, you know, the legislature is always gonna say, we're the ultimate policy makers. And we were talking offline earlier, that's where if you look at Bill 613, which the governor may decide to veto or whatever, you know, that bill is set out so that it says from CARES Act one, basically, these are what's gonna be funded from CARES Act two, this is what's gonna be funded and from ARP, this is what's gonna be funded. So arguably, this plan or the survey doesn't apply to anything else other than the last third of the fund. So of ARP. So, you know, there's, I would assume the legislature would say, we have the right to determine everything else. And that's gonna be the issue. That's, there you go. Well, we are out of time and I'm- Amazing. Sorry, because we're just getting down to the meat of it. So we might have to talk more again as things develop and we are apprised of how this is gonna be managed because that's really the basic question here for this show is does that 613 Bill solve the problems or? So anyway, you've been most generous to come and share how it works and give us that a little handle on what the challenge is for the people that are making these decisions. So thank you very much, Colleen and look forward to having more talk with you about it in the future. But this is the Think Tech Hawaii show that is the state of the state of Hawaii. And we have been speaking with Colleen Kanabusa who is the former Congresswoman and will continue with her public service work here in Hawaii shortly in another role. So thank you very much. I'll see you again in two weeks on the next state of the state of Hawaii. Mahalo for your attention and big aloha.