Hey hey, what's up my friend! So today we have Derek Dargo in the house baby! So Thek is a full-time Forex Trader and he has been profitable every single year for the last s years. And do you know what's even crazier? I've seen his track record, he has taken close to a thousand trades and can you guess his winning rate? He has an average winning rate of 86% Yeah, so clearly right now this is a man right that you want to learn and hear from, especially if you trade the Forex market. So in today's episode right, here's what you'll learn. We'll first talk about how Derek got started right in trading and why he choose to specialize in the Forex markets.

Then we talk about his proprietary price action plus MCD trading strategy, right? This is his core trading strategy which he used to trade the Forex markets. We dig into his specific entries, stop- loss targets, and much more. Then he also share his uh trading strategy called the Oppos Right trading system. This is very suitable for those of you, especially if you have a full-time job because it doesn't require you to, you know, stare at the screen all day.

Then we also talk about the difference between supply and demand and support and resistance. Plus we also talk about how Derek handles news events in the Forex market and it's you know, not what you think. So so all this and More in today's episode, you ready? Let's go! Okay, so welcome Dargo to the show. Happy to have you today! Hello hello nice, nice to see you Ryan I'm also happy to have this uh, let's call it a podcast or a meeting or a interview.

however we call it, it's always I'm happy that I have an opportunity to speak with someone who lives 15,000 kilom from me. That's pretty far right. And one thing I want to say is that you know, uh, we haven't known each other for a long time, but having you know see interact with you you know, see your postings I Really admire your trading approach where you combine both you know price action and indicators because often you know people fall in kind of like one of two cam either I'm a price action all the way, 100% naked trading or I'm going to go down with the indicators but you kind of, you know have a blend of both and I see that it really worked out for you and I understand I like I like the thought process right behind your trading which of course we'll dive in more later, but that's just kind of like you know my appreciation right to your trading methodology, right? That has you know clearly worked out very well for you. So to kick things off right, Darko uh Curious right? If If I were to ask you for one word to describe your growing up years, what would that one would be? Oh, I must say uh uh, when when I started uh, you mean the whole life or you mean the trading only period I would say more towards Growing Up years So maybe could be anywhere from you know when you're 5 years old as a kid to about 17 18 years old 20 years old.

They know that're growing up. Yes, so so it's more of your personal life. Yeah okay so I am a person who likes competitions I like to compete with with everything with anything. So I like to compete with the my friends in the school to be the be better I like to compete when I started uh training Sports I like to compete also when I'm a Trader because when I am trading I have one one um competitor.

It's market and me and that's what I love in trading that uh there's nobody around me. it's me and the market. You know nobody will tell me what I should do I'm just uh, using my education, my knowledge. uh uh.

so I like I like competitions I like competitions and uh, even you know time is running and I'm the same as I was 10 years old I always would like to be the winner so perhaps could you share with me? Maybe a time right where you competed right and where you? perhaps the outcome wasn't what you're looking for you? Maybe. Is there any stories that you can share? Well uh. competing for me. competing means getting yourself better because if you are, you don't have to compete with somebody you you never know what's the level you reached.

You only can test your level if you compete if you compare yourself with someone. um you know um my my first uh years I spent on Sri Lanka I was living on Sri Lanka over six years when I was a a boy I was there with my family my father was working in a in an embassy uh polish Embassy and I was I was just as a child I lived in Sri Lanka in Colbo and U my father took me to a swimming pool and just saying Me: this a bit a huge opportunity to learn swimming because in our country it was really we had a not a good clima we we we couldn't swim outd those more than two months a year. and the swimming pools there are few of them you know in those years and uh you know when I was walking by the by the poool I slipped and I fold inside and there was nobody around me and it was the moment. This was the way I started learning swimming because I had to survive so I fought with all my strength and I said that when I when I catch the bank I said wow it was a bit frightening but maybe it's not so bad.

and after after three months I started competing in swimming contest in Sri Lanka and I I got the Championships of Sri Lanka in diving and swimming on 100 yards pools because there were yard pools there and uh and that's how how I started feeling. That competing makes me stronger and that's crazy. That's so it's like you know you accidentally accidentally fell into the pool and where most people if there's no one around they could have drown but you you know found yourself to the bank. From there you started having a passion for swimming, doing it competively and within two months you won like a championship.

Yeah it was. You know it was a lunch break so nobody was on the swimming pool. people were sitting in in the shadow drinking some beer, eating lunch. and because this is this was a club, it was called Oter Aquatic Swimming Club in Sri Lanka.

It was a club for for for people who just like to spend free time there and it was also restaurant you know, tennis and everything around. So the pool was just a part of this huge uh complex. so I was really alone. I was alone in the swimming pool that time because for most people if they fell into the pool and they have no experience on swimming right, there'll be fear, right? Was there any fear in your mind when you're in the pool at a point in time? Yeah, of course you know I just don't remember so clearly that.

but you know when you compare this moment with a moment when you start trading and you fail, it's nearly the same. You just need to stand up and and try again. That's that's the way. that's my approach to to life and trade it.

But in swimming, right? if you fall and you don't have the skill right, you just you might drown and know it's a lot more serious than just blowing up a few accounts trading. Okay, yeah, but but uh, you know the stress is nearly the same. You know this wasn't a deep swimming pool. it was I fall where it was not so deep it was about maybe one and a half meter.

it was I was a bit maybe so much below the water. If I would fall on the deep water because there was also uh, the the second part of the pool was very deep because there's a jumping U the tower then it would be worse. Probably maybe we wouldn't speak today. I See and and how old were you when you you fell into the pool I was eight.

Eight years. Eight years old. Eight years old. Okay and you said that your father work in the embassy and that's why you're there in Sri Lanka for six years there.

About right you mentioned that. Yeah, Yeah, yeah yeah. then you got into competitive swimming. So okay, since competitive swimming and trading all very competitive.

Endeavor So where do you think the similarities lie between competitive swimming and and trading? Well, the first thing is that what I said at the beginning we compete with someone either some other swimmers or either we compete with the market. We know that the Traders like to boast with the about their results. If you check the internet you only see good results. You never see those people who who who lose H So someone who who hasn't the idea of trading will say well it's a perfect business Everyone is winning uh and uh when I compare.

Now the swimming and uh and trading and I know many people who are losing I say it's the same like in a on a contest there's only one winner. uh and most are losers and the same is in in trading. I Believe that maybe 20 maybe 30% are winners and the others are losers. but it doesn't mean that if you lost today you it doesn't mean that you can win tomorrow.

This is the same When I started swimming I was seventh eighth in the contest, then I was fifth, then I was third and then I was first. So you know, uh, everything means that you need to practice, practice, practice and practice because especially swimming is is such a kind of sport that uh you cannot achieve good results if you are not training you know I Always compare football with swimming. In football you can accidentally kick a ball and it will fall and make a goal. Yeah it can happen accidentally.

You have no accidentally results in swimming. If you are not well trained you, you cannot change your results. Let's say 5 seconds in 100 meters day to day it's impossible. Yes.

and it's that's why training swimming is one of those Sports where you really need to work hard I was training twice a day for about 10 years even on Saturdays six days per week, twice a day early in the morning at 6 o00 before going to school and then when I came back from school I was just passing by the swimming pool and was going training and then I came home at 6 o' afternoon. so uh and it what it gave me it gave me really huge uh um uh I would say I'm I I I I I Response to the problems in a very easy way. Problems is just one of the things which I need to solve. It's not something which is you know beating me down.

it's not making me sad or or or or hysteric because I I feel that an obstacle is something which you need to fight with. Is it life? is it sports or is it trading? This is very important to to to be you know you need to be hard. You must We said that uh uh you must have a you must be hard like a stone uh to all the things which try to to to SPO your humor your your Bas to in the life So I'm generally Sports gives a lot Sports gives a lot because it it I learned to be hard and and I said I learn to be tough you know not not not soft. that's it I love it and I'm curious because when you mentioned you train twice a day for swimming I believe you're actually competing at a pretty DAR High Level so what what kind of level are we looking at as competitive swimming? Well when I was young uh my best results it was uh the finals in in, in in National Championships I never got a gold medal when I was youngster I came back to swimming in 2005 as a master swimming Master swimming you know it's it's those are old, the people still uh taking part in contests and uh so now it's it's over 18 years back I'm still training not so like I did it when I was young now I'm training three times a week only U So I'm doing.

Let's say per year I'm swimming about 300 kilometers only so it's not a big attempt but you know the age is also. you know, uh, you need to to to remember about your age. You know you cannot do too much because you spoil your health but uh uh the best results I got as a master because I I I have about 20 National records at the moment and uh I'm not able even to count how many gold medals I got in my different age groups because I started training I came back to swimming when I was about 40 and I'm and from that time on uh I lose very very rarely I would say I was taking part in in in world Master championships in GB I was uh taking part two times in European championships it was in Cadis it was in in Slovenia also uh I like to travel and swim also that's that's you know it's it's an opportunity to meet really nice people you know I know people from all over the world. When I was on the Championships scene um in Gorg in Sweden there were 7,000 people taking part in these championships and there were people from the whole world I I I met then people who I remember that I really there was there were Idols for me when I was young young those were people who were World Championships in swimming that time when I was let's say 18 they got gold medals on the on the Olympic Games and then I competed with them when I was 40 you know it was really something wonderful and it's it's really perfect in Gabor there was a swimming pool with a huge green grass you know huge field because it was open open swiming Po and there was a kind of you know a picnic there where few thousand people were were from the all over the world were just speaking exchanging you know uh the the the t-shirts and the swimming gaps you know I have one from Brazil from a from a swimmer who was the world championship on the Olympic Games You know for me it's a kind of a really nice nice item I have it's a kind of a uh let's say it's a history of swimming for of that man.

that man is a history of swimming so that's that's something which you know you must find a balance between work and and entertainment. Cannot work only because if you work too long the effects are even worse than if you work just the optimum time. The same is with trading. I Try to trade not more than 5 hours per day because if you look if you stay before the computer too long you you gaze at the after.

You know people a man's brain is is is not perfect. it's always uh uh when it gets tired you then also the results are getting really not not really bad. So I hate overtrading I Remember when I when I started trading 15 years ago? no I started trading in 1990s. Probably most of our viewers were still not on this world in school, maybe not even born.

Yes I started in 1990s No in 1990s big changes uh were taking place in my country. We became independent from the Soviet Union which was really keeping us uh in in very strong relations and they we didn't do we weren't able to do what we wanted and in 1990s the changes came and then uh also the stock market was activated and I started to learn the part. the principles of the Capital Market the mechanism how to govern the market. What is the demand, What is supply, what does the capitalization of company mean and those things there something new for me and uh in 1990s the Wor of Stock Exchange was established or not established.

it was let's say reactivated and I remember my first buy it was I I bought 100 shares of a company polish company Electri. it was a company which was building the highways so it was a construction company and believe me that those 100 shares I' sold two years ago I kept those shares for over 20 years. It was uh uh it was 1991 when I started uh buying stocks. yeah 1991 and I sold them in 2021.

so it was 30 years. why did you know? Because the company was not existing at all anymore and it was just it was divided to small companies or other companies and then uh someone started buying those those shares because they were not already on the stock, this was outside the stock and I got an offer by mail that I owns 100 shares of this company and they are going to I I have I had two choices I can sell them or I can lose everything because they will be no eliminated and I got some money from for this uh not big money but still compared to what I invested it was still about 500% more than I invested. you know compared in dollars when I counted it changed this values in dollars so uh but you know those funny times when the stock exchange there were quotations twice a week only Tuesdays and Thursdays and there was a limit that a stock cannot go up more than 10% % per day and cannot fall more than 10% day. So it was.

You know it was like a like a casino bio sell. it was nothing really to do with real Market But then one day came a black Thursday there was a crash and the stock started falling like crazy and luckily I took out the money I invested about I was not in a big minus but I know that many people lost everything and and there were problems, some suicides and so on. it was a Black Friday in Poland black Thursday sorry and then I came back to to trading after some years. um but why how it started? maybe I don't know if it's interesting but how I started many people when I asked how you started trading oh I saw it in TV oh I saw it in the internet.

Oh someone called me that there's an opportunity and I started thinking about trading. The way I started was absolutely different. I started from Real Money uh real exchange Mark the interbank uh exchange because u i was uh running for several years. um foreign Trading Company I was buying and selling.

you know I was importing goods from China and selling it in Germany I was buying Polish products and selling them in England or or in Italy just it was just a typical Trading Company So when I was buying and selling goods from different countries for different currencies, I had to exchange those currencies. No when I wanted to buy something in China I need dollars okay and I sold the goods for German Mark German Deutsche Mark So I had to change Deutsche Mark to Dollars and then I noticed that if I waited a few days I sometimes get a better exchange rate than I would have on Monday. let's say I I wanted to exchange let's say 100,000 deut Mar on Monday but I said oh I'll wait until Wednesday oh Wednesday I got few dollars more and I and I and I noticed that I could make money or lose on the currency conversions. uh exchange rate and I started following the charts because before I just had the info from my bank how much I will get for for for let's say British pound.

Oh so much so much dollars. Okay thank you I'll wait Then I got to the charts and I started watching the charts and I said uh, that's some kind of system that I can foresee that the market will go higher or lower and that's how I started gaining money exchanging the the currencies but those were real Market it's not contracts for different, those were not Futures those were real money to real money. Now this is one to one without the leverage at that time and that's how I started uh watching the charts and then when I closed the company uh I started trading and from that on time I'm on the trading I'm I I don't have any other activity at the moment. so how long have you been doing Forex Trading since you know you mentioned you sold the company 2008 something about 2008 I started.

uh, my first contact with charts. uh of course I was always looking at the charts of stocks. that's that's because I had it in my blood that stocks were always interesting. but I didn't invest much money, it was just a hobby.

But when I started looking at the Currenc exchange rate, this was 2008 2009 something like this and I found that contracts for difference are so easy to trade. they are so easy compared to the stock market. I said wow with stock market I can only buy, you know I can try only one One Direction I can buy and hope that it will. I'll sell it in better price but on contracts for difference I can trade both ways I said wow, it's it's El Dorado for me I can do you know I can I can sit two hours before the computer and I can buy, sell and be rich in in in few hours.

of course the the reality was a bit different. I remember burning my first first account. it was really crazy. You know I open an account a real account and I invested uh not a huge account.

It was about $5,000 and I made from $5,000 $5,000 in 20 days I said wow, wow, this is this now I need I I I mustn't work anything anymore I'll just trade and I'll be so rigid I I don't I will I won't know what to do with the money for probably and that time I was I started swimming also so uh I I I I left an open trade on dollar with Yen with a big volume because I was trading really like crazy. You know that it was 10% up, 10% down and I went to the swimming pool and when I came back I found that there's zero. there's $10 on the account I said what? what? What is this first thing I thought it was a scam. You know that someone cheated me I called the broker what happened and the broker said well check your check your account and see what happened and then I found out that there's something like like which which we call payrolls.

It was the payrolls day and the Peds were very positive for dollar and I was uh, shorting dollar with yen. So I lost all my account on one trade only and I remember that from that time I said okay so the fundamentals also have some some influence not only those lines on the charts and then I started following the fundamentals also. Now I combine a bit fundamentals, a bit technical analysis. uh I think that tech technical analysis is still let's say 70% of of the reason that I open a trade.

but there are few events which we need to watch payrolls. Central Bank decisions regarding the monetary policy. Um, lately. also the CPI reports the inflation rate report because inflation.

Yeah, you remember the time when when inflation was about 2% and it was not changing nearly and so this was not an important news. But now nowadays sometimes the inflation reports are even more important than than the Bank Central Bank decisions. So those three things I think we need to take you. You know we cannot get crazy and watch every event because it's nonsense.

Uh, most of the events have temporary impact, maybe few hours and things go back to normality. But payrolls. Uh CPI reports and Central Bank decisions especially when we expect some interest rate changes, Those things we need to watch. So why why did you choose to like? focus more on the Forex Trading Maybe instead of you could have do things like stock markets or even Cfd.

So why why Forex Trading Well um I Think that the volatility is is really interesting on the currency exchange. the currency exchange rates are are moving. There are some special pairs which I really love to trade I like to trade trade pound with Japanese Yen it's a pair which is giving huge opportunities. It's a trending market so it the trends last for for a few days at least I'm a swing Trader Let's say the generally I'm a swing Trader uh and a scalper I'm not a position Trader um I rather prefer prefer uh, sculping and and swing trading uh but uh generally uh from stocks I like to trade indices S&P 500 German 40 those are the indices I trade also uh I don't trade exotic because Exotics there are huge costs.

You know the provisions the Brokers take are huge on the Exotics the spread is huge and uh also the uh probability that the market will change in in second is also huge because those markets like to be let's say speculated that the markets are uh, not always uh, behaving like U like they should. Let's say this way, uh and there are two currencies which are also manipulated. It's Yen and it's Swiss Frank, we know that the central banks are has a huge impact on this. What's happening Bank of Japan is a special type of uh manipulator.

I would say that's why uh things which are happening on Japanese and we cannot understand them. We just need to feel them. You know, the only country in the world which has negative interest rate is Japan and still they have in yeah and the inflation they have at the same level as United States So when we look at the dollar with Yen from the fundamental uh point of view, there's no reason that Yen could get stronger. You get five and a half% for your savings in the bank in the US Bank if you keep it in dollar and in if you keep your savings in Yen you get minus Z1 So why should I keep in? So yeah, the fundamentals also help us to uh to understand the market.

The fundamental are also important, right? So you've been trading Forex fulltime for the last. Was it three, three to seven years? How many years has it been? It's about no. The I think it's about 15 years now. 15 years, 15 since 2008 you've been trading Forex fulltime actively.

nice. Main contracts for difference, contract for difference. but for now it's still contract for difference or is it more of trading Forex in the OTC markets in the with the brokers. Uh yeah, yeah, yes, something like this also.

uh I have few accounts you know I have accounts also Futures account. So uh I cannot say that I'm only on One Direction but at the moment I Must say that the contracts for Difference for me are perfect for trading. Okay, got it. I think because in different countries they call it differently.

some call it contract for difference, some call it sport Forex some has forwards. Futures There are many ways to trade the currency Market not just you know on certain like OTC market. So yeah, I think different countries have different ways or different accessibilities for their retail traders to access. Yeah, the nearly the same.

like contract for Difference. For me, it's nearly the same, right? and uh, maybe let's kind of like touch a little bit more or your trading approach right? So I know you specialize in the Forex market, so maybe a high level overview? Maybe you can share with the listeners, the audience. You know, how do you trade the Forex markets right? We can talk about the high level overview first and then maybe later on. dive deeper into the specific strategies that you trade.

Well, how I trade? Forex Market First thing is that um I always say that uh, it's no matter how you trade, what kind of strategy you use. Uh, it's very important to stick to the rules. So if you have a strategy and you test it for five six times only this gives you absolutely no idea. Are you.

is it a profitable strategy or not? If you are able to back Test a strategy it's even better. But not all strategies are possible to be back tested for many reasons. but uh I use I use for some time also expert advisors. but I must say that uh um I I don't know how to program them I only gave some instructions to my friend and he wrote this.

He wrote the the code and everything and I found it a bit uh problematic for me to to to give my ideas to someone. he will turn it into mathematics and so on. So I I quit expert Advisors. So now I'm trading manually and I must say that uh the most important thing for me is not what I'm trading but how I trading because each instrument is is is uh good for trading but you need to find a special approach to it.

You cannot trade in the same way a currency like pound within which has very Dynamic compared to Euro pound which is flat. you know this is in consolidation mainly so you need to to First think you need to do is describe the market. is it a Consolidated Market with some range or is it something very volatile then you need to uh use this this this specific strategy for that for that instrument uh well of course it also depends on your uh the strategy must suit your, your character and your lifestyle if you're a full-time Trader no problem. you can try different strategies.

but if you are working and I believe most of our viewers our our friends, they are working and trading so they must fit. They must have such a strategy which will fit their lifestyle. If he comes back from work and has only three four hours per day for trading, he must have another strategy than someone who can sit before the computer from early morning to late evening. That's why I always say that for people who work and don't have much time, they want to like to trade and use it as a hobby.

Uh, they could uh use a strategy which is based on pending orders. So I I have a strategy which is called oppos. It's a strategy based on pending orders where you have Supply demand zones and you plan a trade in front. so even if you're at work the the the broker will open the trade if it's appending or if Market hits that level uh I'm a full-time Trader So I I I use mainly mainly a strategy which is based on uh manual opening.

I open the trades manually I Have a strategy with very objective. uh, objective, uh assumptions. What I mean objective. It's uh, my strategy is based on questions and those are questions with where I call them 01.

you can only answer yes or no. You you cannot hesitate to answer if the assumption is is matched or not. If I if I say uh that the the part of the strategy is based on breakouts and if I ask myself was the breakout done or not I already see on the charts yes because the market is closed below the over the level or not if didn't do it. So very simple question.

The worst strategies in my opinion are those where you hesitate? Maybe yes, maybe no I don't know I must think it over. The best test is if you have 10 people be before you and you ask them a question, if 10 of those people can answer the same, it means that this is an objective question. If I ask uh um someone is it uh outside, is it day or night? Of course everyone say yes it's a day because sun is shining and no problem but if uh you ask someone about the weather in China at the moment uh someone say oh I don't know I must check it. You know maybe it's sunny or maybe it's winter this is the problem the the The assumptions of the strategy must be very simple.

My strategies are very simple price action and as you mentioned at the beginning of the session I'm using MCD it's an indicator I Sometimes feel shy saying that I'm is an indicator because I Know that markets believe that naked trading naked trading I mean not we naked but the CHS are naked. it's of course. uh it's of course the best way of trading indicators are disturbing, distracting us and so on. I Thought so also at the beginning when I started trading, I only tried to use uh, no indicators then I started testing hundreds of indicators I remember a chart when I had about 12 indicators at once on it and then I F found out that no, it's not the way and I started eliminating all the indicators and the the the only indicator that uh survived this Macd.

but I'm using Macd in a special way I'm not using it as most uh people show that there's a signal line and so on. No, I'm just looking at the changes of the direction, but it's not all in. The Macd is on a indicator which is uh, filtering, filtering the the the setups. It means that it's not deciding about entering.

Uh, the decision that I enter a trade is based on three steps first: I need a pattern like a inside bar, outside bar, pin bar. then I need a breakups on that pattern and then comes the Macd as a filter. If Macd is not showing any changes at still in the same mode, let's say bullish and I want to short then I the MD says no, no, no, no shorting wait. that's how I'm using Macd not MCD is not the only decid.

you know it's not the the the reason that I open a trade I need I need some more more signals from the market to open a trade And what's important is keeping up to the rules. Even if things doesn't work 10 times, it doesn't mean that it will not work. You must test it 100 or 200 or 300 times before you can say yes you have an edge or not And what if let's say you test a trading strategy 300 times and then it lost money. So what's your next step? Well if uh if I see that from 300 trades, uh over 50% we're losing.

It's time to change the assumptions of the strategy or just quit it and search for another. Um, normally this strategy the main strategy I'm using. It's very easy to test it. It's very easy to test it.

so if you uh want to test it, you just sit down in the during the weekend when you have more time and you just search for the patterns I Use My favorite patterns are engulfing patterns two Candlestick patterns and you can check all the engulfing patterns on the chart. Let's say of one instrument back for let's say three months and check what happened, what happened after the breakout. Did the market follow the breakout or was it a false breakout and compare it with Macd. Macd is not rep repainting.

It's always the same. You know it's not that got. There are many indicators which are repainting themselves. When you look back in the history it's showing you perfect results.

But in the moment when it was, it was absolutely different. Those repainting indicator that is absolutely scam you know I I hate those things and people get CED it people buy those indicators which so nicely look on the charts. but at the moment when you want to make a decision, the values have different. So this is the way.

I My approach to the market is that if I can test the strategy and when the assumptions are so simple I can spend, you know I can spent even four or five weekends for this. and when I see that from 100 patterns, 70% work. Okay I think that's worth trading the strategy and uh, understand your Md. So MCD I think maybe for the audience who are listening.

So MCD there are two main approaches to it. One is the lines. the squiggly lines that show up on your charts like moving average and the other one is specifically called the Magd histogram. I Believe you are focusing more on the MD histogram.

am I right? Yes, yes and again. So the Magd histogram right? So correct me if I'm wrong. It basically measures uh, buying and selling pressure in the market. So the histogram can be either.

I think on trading view it's the default color is green and red. So if it's red, it means that there is more more selling pressure. If it's green, has more buying pressure. Yeah! so I think maybe to to kick things off.

You know Now that we kind of like explain to the audience, uh, what the Mecd indicator is about how you use it I Think you also have a certain settings right for your Mecd indicator based on your preference. Maybe you can share the specific settings that you use. Well, I Must say that maybe the settings themselves are not so specific because those are traditionally it's 12. Because what is Macd? Macd is just showing us the distance between two moving averages.

Exponential. Moving one is 12 period and the second one is 26 period. So we can say there's a slow moving average and fast moving average and the distance between them. Is this what we see on the histogram.

The only problem starts how to use it is that sometimes it's over the zero line. sometimes it's below because an oscillator. It's it's oscillating around the zero line. and then it's a question.

Uh, because the original Macd is has one color, it means means that it's non-stop Just one color. gray or blue or red doesn't matter. but the one I Am using is double color. It means that anytime it's changing the direction, it's changing the color.

Why? Because it's easier for me to analyze the market when I See, you know when I'm My approach to the market is very simple I Open my computer and search for the moments when Macd just started turning around, making a U-turn and then I look if there was a pattern and on so it's easier for me to select a instrument for trading. when I look at the colors, you know it's it's so simple a child could even do it I would say my my son's at the moment over 30 years old so it's not I would ask him but let's say I would ask my grandchild children who is let's say six years I say okay, come here C and show find me a screen where Macd is First Time read and he can do it for me. You know it's so simple and when he say Okay Grandpa you can say on Euro USD the MD just changed to red on the 4H hour chart and then I look at the chart I say okay this is one thing but it's not enough for me. It's also I need to see the market making a uh high of this swing High I need to have a pattern.

There's some more things coming but the first thing I don't know if you have you had the problems. Also, when you started trading, when uh, you open the charts and what to what to start with What? What should I start with which? which uh Market is giving us a chance for a trade many times I had that problem when I started trading which is the moment. What is the best trade instrument to trade now I Have no doubts I just scroll and see red red reded. Oh here it comes.

Uh today I saw that as I remember it was on pound with dollar that on daily there's something changing I said okay I put it on my watch list I'll come back to this in the evening and I'll see how the daily candle will close. if it's closed on bearish. it might be a signal for a correction. or if I see that market was is trending and I see that Macd has fallen below the zero line.

maybe it's time to join the trend again. So those are. It's so simple that people don't believe that it works and still you know still I mentioned some time ago during our last webinar, which I'm happy that I could share my ideas with your community and there was a question about the efficiency. I said my my efficiency is 84% so it means that I made Thousand trades and 840 trades are winners and 160 are losers and uh I saw that people don't believe in it.

so I will show them today the the I'll give them the link to the account so they can check it. it's a live account. it's account which is two years old and they can do it. You can see it because uh I know that this strategy is working but maybe people need some more proofs that it's working nice and so maybe now we can justbe dive a little bit deeper and talk about the Uh I Think you started off with the Mecd and the price action strategy right? So let me let's talk about that first.

So you mentioned I Think the first thing we look for it's uh I think it Go different ways so you look for maybe a A MD histogram, right? Let's say the market is uh, the histogram is now green color. You're looking for a downt. So meaning from Green it becomes red. So what about Market structure.

Does it matter whether the market is in an uptrend or downtrend or your first thing you look for is just the Macd histogram. Uh first thing I look at the histogram. but then I analyze the market. uh very closely because the the the the this The fact that Macd changed the direction for me is only a hint that this might be interesting instrument.

not all situations. uh, Macd. First thing is that Macd not in all moments, can show us uh, a good uh, they don't Not always. Macd will indicate properly what's happening because Macd must be extended.

It must. It cannot be flat. It must be really high away from the zero line. Second thing, it must be regular for at least a period of time.

It cannot be that it's Cho You know it's changing red, green, red green. then I Don't believe it. It must be. So it's not that it's not So simple that just Macd green that I S no no no there there must be some other in this uh in your in that module we we we I made on your Um platform I mentioned that Macd must also feel some rules.

it must be the value must be high enough um and it must be regular for at least a period of time. It cannot be choppy as I call it. so this is the first thing. but uh, it's not enough for me to to trade.

It's just a way to select from 35 charts which I have those most interesting. Okay so let's say I have 35 charts open at the moment and I will choose only three of them because on three of them we see that that U-turn of Macd and then I go close and look. Let's if I see this a huge strong Trend I don't want to trade against a strong Trend because corrections I trade on the corrections but I prefer to join the trend so sometimes I say okay, let the correction run when the correction will be over I will join it I'll join the trend uh if the if it and I of course analyzed uh High time frames daily and 4H hour charts uh using this price action and ACD strategy for for sculping I have a different strategy it's also based on Macd but then I don't look at all at the patterns I look only on high lows and and swing High swing low so you no, This is what I said at the beginning: every instrument needs to. You need to have an approach to to instrument, uh, individually gold.

For for example, I I love to trade gold because gold and Macd those are really best friends I Must say they are so friendly. They are so nicely correlated that uh I was showing many times on my webinars that it's something incredible how gold and Macd are working together. uh, on daily and 4our chart it's you know it's it's a charm, it's a charm. and if you understand when Macd makes sense and when you should avoid it, the efficiency is 80% of the entries got it.

So from what I'm hearing that you want to, you don't just look at the Mecd histogram like you know from Green become red, you sell or red become green. you buy, but rather you want to see there's like a proper app and flow to it. You want to see kind of like there's a pick to the greenness. There's like certain I don't use the word overboard, right? but you can see that there.

The spike in the Magd histogram is pretty much large, right? large relative to the earlier spikes of the histogram. And that's where from Green it becomes red and that's kind of like your first uh, condition. And then you start to look for other patterns like you mentioned, the inside bar, the outside bar, the engulfing pattern. Etc.

So hopefully I got that part correct and you want to avoid those mag histogram where it's near the zero line chopping up and down. you avoid it's conditions. It's not worth than trading. Just what I would add.

Um, because it's very important to understand what is an inside bar. What is an outside bar inside bar is nothing else but a consolidation. It means that there's a huge day and then Market cannot break the top, the maximum or the minimum of the day. This is the inside bar.

Okay, and what we say about Consolidations: breakout from consolidation is an opportunity to trade. That's why breaking from an inside bar means for me that market decided to to to move. and what is the direction is the direction of the breakout. Of course we have false breakouts.

Uh, trading would be too too too easy if every breakout would work and Macd helps me to avoid those false breakout. Maybe not all of them, but most of the false breakouts. I Avoid looking at MCD because it often happens there's a breakout, but Macd still didn't change anything. No, it's still the same direction as it was.

This is a alarm signal for me Oho Someone is going to trick me I'll wait. That's why. uh I use Macd as a kind of a filter. It's maybe not a deive thing, but uh, as a filter.

I I I showed many times a situation when I said okay guys. Uh now we have a inside bar U Macd is still showing Po N. Now we wait for the breakout and if this breakout is followed by bearish m this is the moment we can start selling. But if you see a breakout and MCD is still bullish, forget about it.

it's it's it means that they're going to Treck us they want to pull pull higher. it's a strong Trend So naked charts are are very good. very good. but Nega chart plus MD is the best.

Awesome to hear it. So let's say we have our Macd. so just walk me through. I'll just walk you through the scenario and maybe you can share your thought process so the listeners can Kind of like because we don't have we are not sharing charts over here so it helps them better visualize right to your trading approach.

Yeah, so let's say Macd is, you know, having multiple green bars and then boom right? we have a rate bar meaning there's some selling pressure looking in the back end. Then you probably, uh, look for patterns, right? patterns that you're familiar with. like you talk about the inside bar, the engulfing pattern. So let's say you have a bearish engulfing pattern on the chart right? I Guess that meets your second criteria.

So what happens next? Well um, if Macd turns to to, let's let's say that we are analyzing a bullish. Market okay there's a bullish swing and uh I search I'm watching at the charts and I couldn't find Macd that Macd just turned to bearish then I look at the CH at the at the charts if maybe there was a pattern so it you know those things are equal for me either change on the MD either pattern on the charts and then normally the best setups for me are when I see a pattern my favorite patterns are outside bars. there are in case of a upswing of course beish engulfing pattern and when I see a beish engulfing pattern and I see that Macd didn't change I say very good situation I put it on my watch list and wait for the breakout. As long as I don't see a breakout, even Macd will change to bearish.

I Still suspect that it could be trick a tricky a tricky situation. three uh um let's say three assumptions must be met. All of them, not only two of them, only first and the third or or the the middle one all three. if I see breakups from a pattern in a uh and the market uh and Macd is following the breakout then I feel that it makes sense sometimes specific instrument is gold where I also analyze Market on one hour charts because I found that on one hour chart gold also likes to um feel the the the the Assumption of the strategy but on other instruments I use only 4 hour and daily I Don't uh take into consideration lower time frames.

uh because there are so many patterns on Lower time frames see on a five minute chat you can find daily maybe 20 such patterns which one work while not not work know it's it's absolutely useless because uh I always I say that uh uh in case of patterns inside and outside bars, not all is gold. That Glitters Not each pattern will work if our you know because people try to find short cut. they buy computer they they they open an account on the with the broker and they start trading because they already know how to press the buttons, buy, sell and so on. And then after some time they find that there's so many things they should learn.

Education is absolutely a must. You know, don't believe that you have a you know bers luck. Okay it can happen once or twice, but at the end the education the the knowledge comes and the knowledge means filtering filtering setups which may not work. focusing on those on those best setups.

Don't trade each pattern because it will not work. Pattern must be either on a if I mean let's say ban ging, it must be on a swing High Bullish engulfing must be on a swing low. If you find the bullish engulfing, uh on a swing High It means that it'll be continu. probably continuation.

not a a reversal pattern. So I think that practicing is very important. You know 15 years of trading made me, made me, uh, learned me a lot. you know I burnt many accounts before I started.

Uh I think that I started gaining money after four years of trading. uh for last seven years I didn't have a losing year. This is what I believe is a success. You sometimes no, sometimes the winds were not big, not big ones.

but generally I think it's the now it's the E year I'm closing with a profit in a row U I have five accounts to say the truth I have Futures account where I don't need a broker then it's uh, let's say but this is absolutely different to the contracts for Difference By the way, what is happening on the contracts for difference comes from the Futures Market Of course we we need to have the quotation from somewhere. Yeah, it's not taken from the air, but uh, contract for difference uh I have three accounts on on on Cdfs and one on stock market on Polish stock market but this is the most speculated stock market in Europe I think Polish stock market. you know it's so the capitalization is so low that one one big customer can change. you know the the the quotation.

So I keep up to the I have some stocks open on the banks polish Banks which have no huge, much bigger capitalization. So I have I have some shares from the Polish banks on. Okay, maybe just to know, take a step back and maybe just to continue off from the MD. So let's say uh, just want to give the R some guidelines that they can, you know, go and research on their own right? So let's say the Macd.

Let's imagine it's a bullish. Let's put it. let's say uh, there's a bearish engulfing pattern at a swing. High MCD has now from green right now becomes red.

And then let's say there's a you mentioned that you there's a breakout of the bearish engulfing pattern. So is there any definition that you call a breakout? Is there maybe? I Think if I'm not wrong, it's like a close below the low of the engulfing pattern. Would you call that a breakout at the closing price? Yes, for me, a breakout means breaking the low of the candle, creating the pattern. in case it's a inside bar, it will be the mother bar.

Uh, extremums are important. So if they break, uh, you mentioned a bearish engulfing pattern. For me, a breakout means that the candle closed outside. But what I mean closed? It means the candle must be finished.

It cannot be a breakout during the day if I if I analyze daily candles I need to wait to the midnight before I can say that the breakout happened because it might be so that last four hours they will start pulling higher and they close in the range of the pattern, then there's no breakout is I would even call it a false breakout which you know that in case of false breakout Market likes to move opposite opposite direction with a double speed. then so because they catch some customers on the bottom and then whoop we go. so uh no. I Always said that the market is doing all the best to cheat us and uh, it's Market likes to be tricky and we must be prepared for any situation.

So for me a breakout means candle is closed, outside candle is over, and the new candle is built then I can are you referring to the Daily time frame? Uh, in case of daily I need to to check this candle in the midnight after the midnight. Uh, in case of 4our charts, it's better because we have six candles per day so it can happen so I I I must say that I prefer trading on 4H hour chart because it happens quickly I must wait to the end of the day I Just see. Let's say after the Um Us session is H and I see okay candle closed I close outside, Macd is falling I can join the market. Okay, does it mean that does it mean that the pattern had this is assuming the pattern is formed on the 4our time frame.

Did I get it right once more? So let's say you are looking for the breakout on the 4H hour time frame. So this is assuming that your Candlestick pattern has formed on the 4H hour time frame, not the daily time frame. It depends. It depends because uh, sometimes we have a pattern on 4our chart and I can trade it and then I check next day I see W Also, the daily created a pattern because it happens that the pattern is built starting from one hour and then it grows right? you? No, it's it's it's, it grows so.

uh. but if a pattern is built on 4our chart I Check on the 4our candles. If it's built on daily, I look at the daily. So the definition would be that the breakout must happen.

uh, from a pattern on the same time frame. So if it's on a daily, then a daily candle. If it's happens on 4our chart, it must be a 4our candle. Uh, some people ask me.

oh I See that this 15 minutes candle just broke out I said. but it's still 45 minutes to close one hour and it's three and hours and 45 minutes to close the 4. Hour And you know and the pattern is on 4our C chart. So it's not so easy that a f minute chart will break out.

Oh, it's the breakout. No, of course you can risk. It depends what is your appetite for risk. if you would like a risky trading, you can start trading after they just touched.

you know they do three Pips below the the pattern. okay is a breakout but so many times I was trapped in this that after one hour they were back in the pattern and then I was hoping that maybe there will breakout at the end because Macd was still not changing anything. So you can try to break out to trade a breakout on a not finished candle. Only if Macd confirmed the breakout already then okay then the risk is is not a big one that that the candle will close again in the range but uh I prefer just you know I Some people say that I'm a slow slow slow Trader like a snil I never hurry in trading you know I always say there's always another day, there's always another trade can can happen it's it's so I say it's like moving with a crowd.

If you go one step before the crowd you can miss the moment. When they turn around you're still going forward. Oh nobody behind me. So the same is with trading.

I rather go by The Crowd by the big boys, then try to uh uh show them where should they go. So I rather go by the market not before the market even if I lose 20 Pips even if my entry is 20 30 Pips later than it could be. First thing safety for me. Safety of the account.

uh we didn't speak of course About The Money Management here. but I think that uh everything starts from money management everything. The best strategy won't save you if you don't uh, properly manage the the, the money, the account and if if I would say what is the most important number in trading, go there. So many numbers, The efficiency, uh the the profitability, the sharp, the sharp ratio or risk to reward.

There are many many numbers in statistics. For me, the most important number is throw down I I Feel if you are able to manage the throw down you will never lose. Well well sometimes it can happen of course. but uh, controlling the drown down in my opinion.

of course this is my private opinion. People can have absolutely different. but I'm not looking at the numbers that how much percent I ear today uh or or how much I lost today for me is most important. How big was my draw down today? how much I risk as and uh I try to not to cross.

You know my maximum draw down this year is 15% which happened uh one month only normally I try to keep it below 10% because you know letting the door down go 15 20 then then forget it then then it's no sense. uh you can risk. if you trade with th000 you can risk 60% Okay, $600 I Will Survive But if you trade with $100,000 would you risk 600 60,000 No, No, of course not. No For most most people know unless I'm a billionaire maybe Yeah, at least they they are.

just you know. Sorry saying that, but stupid. So so stupid that there is so many. You know if someone is able to lose $100,000 it means that he's a millionaire.

Okay, but I know people who don't are not Millionaires and they lose so much money because of not keeping the draw Down Under Control draw down for me is most important number. and yeah so so to car where we left. Okay so now we have you know, got the MD we got a pattern. We have the the breakdown right.

So I think the next question would be you know where would you then going to set your stop loss and your target? Maybe you can expand a little bit more. You know talking about your stops and your target stop loss and Targets in my in my system. Well um in case of stop loss. um my my my stop losses are always based on the patterns which I'm trading if I'm trading a pattern.

uh which is uh, a size up to 100 Pips I put my stoploss over the pattern about let's say 10 Pips higher than the pattern. uh if I let's say that I'm trading a up swing and there's a pattern on the top of the swing and I want to short it, then my stop loss is over the pattern about 10. Pips in case the pattern is not bigger than 100 Pips of course this is plus minus. It's not a universal number, but if the pattern is huge let's say uh on pound with the pattern can have even 200 Pips Then I put my stop loss over the breaking candle.

Why? Because if there's a pattern and then comes a candle which begins in the pattern and is closing outside, it means that someone initiated a move, someone made a decision. it's time to break up from the pattern. So it in my opinion it's a logic that putting a stoploss over that breaking candle means that you are over the price from which Market initiated a breakout is the level where there's a strong selling of selling area. So if I put 10 15 Pips over the breaking candle, it means that if they break it, if they take my stop loss, it means that no more bearishness.

Again, they are joining the trend because uh you know the Cands are showing us what's happening. If I see a breaking candle starting inside the pattern and then closing outside it means that decision was made. Who made the decision? Sellers where they made the decision. Where the breaking candle started.

This is the the way I understand the market markets always between buyers and sellers who's stronger and in that moment by sellers were stronger. So if I put my stop loss over the entry price, it means that I put it on a safe area in case they go over my this breaking candle and take my stop loss. It means that it was the best I could do because no more selling, it's time to go with them. So this is where I put my stop loss regarding the take profit.

oh it's not. There's no Universal new Universal prescription. Let's say because it depends on many, many things. One of those is that uh, there was a guy who whose name is Buosi.

Mr Buosi was a man who was making statistics of different patterns he was testing. He was testing thousands and thousands of patterns I Read that he tested 3,000 Head and Shoulders pattern to find how much the market breaks out from a head and shoulders pattern and he checked that over 70% of the patterns break break down I mean the head and shoulders and they gain 70% of the size of the pattern you usually we say oh Head and Shoulders one to one the size of the patter and the size of the breakup Mr Buosi tested 3,000 and said no, it's only 70% of the size This is theory and he also tested breakouts from outside bars engulfing patterns, bullish engulfing patterns, bearish engulfing patterns and he said that in case the breakout is at the size of the pattern, he treats this pattern as a good one. It means that it work and he tested also a few thousand of those pattern. and he says that the effic that probability that after market breaks out from the pattern and makes a move of the size of the pattern is 72% So I believe that when I'm trading a let's say a a sell from a pattern, my target should be at least at the size of the pattern.

but this is Theory sometimes uh, situation doesn't let me to have such a big big uh uh, take profit. It depends. You know normally I use uh the demand and Supply zones. if I see that I when I start selling and I see that there's a demand Zone close to the pattern.

my first Target is this demand Zone I Don't try to take targets below the demand Zone because it's nearly obvious that they will stop on the demand Zone and they make a correction. They come back to the pattern, then they try again. Market Not Doesn't fall just like a stone. it usually wanders a bit up a bit down.

it's it's moving in a swings. Yeah, so stop loss is in in my strategy. The definition of a stop loss is either over the pattern if it's only 100 Pips or less. but if it's more than 100 people say 150 200 then I put my stop loss over the breaking candle in case of a sell over there.

Got it right. That was concise I Love it, right? Very clear at least I Understand. Hopefully those listening watching can visualize right where you are coming from. Beautiful.

Yeah! So also you mentioned uh, supply and Demand. So let me let's touch a little bit on that one because I think now you actually have given us a very high level overview plus a detailed explanation of your price section plus Mecd. uh, trading strategy. So maybe now we can talk a little bit about supply and demand right? because I I I Know that uh, you mentioned earlier the Osps right? Was it the end of day trading system? Oppos? I love the names you Oppos, right? What's the Opos? What's what's the the full acronym for Opos only pending order, order strategy.

There we have Oppos, right? Give really interesting. Okay, oppos. All right. So let's talk a little bit about that, right? So Oppos: I Believe Before we talk about the Opos I Think that strategy is very useful for those who have a full-time job, right? Because you don't need to be in front of the screen All, but before we get to it, maybe let's talk a little bit about because your th on the difference between support and resistance and supply and Demand I Believe you feel that there's a difference between the two, so maybe you can share your take on it.

Yeah, you know. Um I Always say that before I Uh because I uh sometimes I make some webinars and people ask me about those support and resistance, supply and demand. and I always say that my way, my approach to support and resistance and supply and demand might uh, be different to this. What you already learned learned because many people, uh, say that support and resistance is the same.

like supply and demand, they don't see the difference. Uh, because sometimes it really is in the same place. but uh, to say the truth, it's not the same at least in my mean this. What? I Understand I Understand support and resistance are levels which are created by the market in a technical way.

Sometimes it happens that because some of some news Market starts to grow from a place, but when the market comes back to those levels, it mustn't react again because there'll be no more news. Let's say there were payrolls and payrolls pushed the price from. Let's say Gold started from 1900 and started growing to 1950. and when price comes back to 1900, it doesn't mean that once again, that will go because there'll be no more payrolls that day.

So this is why. uh, support and Resistance level I Mainly trade those levels horizontal levels only and I treat them with a a high level of you know, suspicious, suspicious I'm very suspicious on those levels supply and demand zones. This is something this absolutely different story to make. Market Move A big Move Make a big upswing.

You need some forces to do it. Those are buyers. Okay, those are big I Call them big boys. Sharks of the market.

Those are big Banks Hedge funds. Those institutions operate with such huge amount of money that we cannot even uh, imagine. Those are billions and billions and they are able to change the price on the market and we should follow the big boys. We cannot fight with them.

So if someone started buying gold at 19,000 and is pushing the price higher and higher and higher without any news, just because it started growing, we can be sure that on the level of 19,000 there are more money laying. Why? Because if they would like to buy all the gold they want to buy, they would spoil the market. They you know in short seconds the gold price would go so high that they couldn't realize the mark they. They order at once so they divide the orders to small chunks.

Let's say they want to buy two tons of gold. Okay, they buy one ton at 19,000 They wait for the price to come back and they buy another 250 kilos or another 250 kilos. This is the way they they must divide the orders to chunks because in other case putting an order. Okay I want two two TOS of gold and then the last kilo they will buy at $2,000 That's why not to disturb the market, they divide it two chunks and those I call them block orders.