Trade Management & Removing The Need To Be Right

Date: 2026-08-18

SIBI Entry Toward NWOG

[00:20] SIBI right there. Again, we’re looking for a run down to the New Week Opening Gap, at least to its high. It’s coming out of a Volume Imbalance right there, so I’m going to take that.

I’ll put the stop loss just above Consequent Encroachment of the SIBI here. We could make this a whole lot larger, but this will accomplish the method. I want to see the bodies stay underneath that level. Specifically, my stop loss is just above it.

And right in here again is that little Volume Imbalance. We want to see that act as a premium array.

[01:19] So that would look like this. It’s also the 8:30 time, where the algorithm can expand whether there’s news or not. I think there’s an Empire something report or whatever. It’s light, very low impact.

Okay, so it’s simply a matter of the timing aspect here. We’re looking for—and I’ll annotate it like this—8:30 a.m. Eastern Time Algorithmic Expansion. So it’s just a timing aspect. Let’s do this.

Closing Confirmation and Stop Adjustment

[02:56] We can do it this way. There you go. We’ve created relative equal lows right here. See how the lows are there? See that? So we’ll put it back.

If we get a close below this body’s Consequent Encroachment, it’ll also be a close below the midpoint of this one. That would indicate a high likelihood of price reaching lower, at least to take out these lows.

Then we have to judge what price does once it actually accomplishes that—once it takes out those lows.

I’m going to grade this lower wick right here so you can see what I’m looking for. See how we have that? Price got really close to it there, but now if this body closes—there we go, we got it. Now we’re just waiting for follow-through. I can take the stop loss and bring it down just inside of here if I want to.

[05:09] If I felt inclined to do so, anywhere inside this portion—from this wick low to the Consequent Encroachment of that wick—I could add another portion. And I’ll do that here. All right, so let’s slot this in right there.

[06:57] Now remember, as I showed in the little video earlier, this was a buy-side imbalance, sell-side inefficiency—bullish PD Array. So we’d like to see this invert from its initial utilization and become an Inversion Fair Value Gap.

Okay, look at the benefit of knowing what it is I’m teaching.

Inverting the Bullish PD Array

[11:55] Okay, so that’s the one we were using right there, and it proved itself as a bullish PD Array. But now we want to see it give up the ghost and allow itself to be utilized as a premium array, supporting continuation lower.

It doesn’t need to spend any time here. I just don’t want to see it continue to be used in its original form as a buy-side imbalance, sell-side inefficiency.

[12:39] I want to see it give up the ghost, trade straight through it, or trade through it and then come back up and respect it as a premium array, sending us down into the New Week Opening Gap high.

Now I’m only going to move the stop down enough to take the risk out of the trade. For someone who’s brand new, maybe you’re watching price action like this and thinking, “Okay, I’m nervous.”

[14:27] “I’m afraid it’s not going to trade down to the New Week Opening Gap. I’m afraid they’re going to change the algorithm right now and make ICT look foolish—deny him.” You’d be surprised how many people send me things like that.

But we have a sell-side imbalance, buy-side inefficiency here with a Volume Imbalance at the low. So I’m giving it an opportunity to provide another Institutional Order Flow Entry Drill there. If it takes out this low, I’ll just peel off one.

[14:56] Okay, and I’ll do it with a limit order, so it’s already there. I’ll place it just above Consequent Encroachment of last Thursday’s Dealing Range from 7:00 p.m. to 10:00 p.m. Eastern Time. So I’ll scrub it down here just like that, right there.

The idea is that price will likely draw down to half of that Dealing Range from last Thursday’s Asian range. Not the Asian range like when we’re trading Forex—that’s not what I’m referring to. I’m referring to the time when the best trading can be done, which is between 7:00 and 10:00 p.m. Eastern Time.

[15:38] Now, as I’m talking to you, I’m noticing that this right here is showing a little too much discount sensitivity for my liking. So I’m actually going to peel one off there just to fund the position. Now I have something banked.

So ideally, it should’ve done something like what it did here—trade just above this candlestick’s high. I would’ve rather seen it really wilt and move lower from there. The fact that we’re trading in here—it can do these kinds of things.

[16:21] I just frown on it when we’re this close to the target I’m trying to participate in. So I’m including the Volume Imbalance at the high and the low. Put the midpoint line on there so we can grade it.

As long as the bodies remain in the lower half, I’m okay with that. As soon as we take out this low on a closing basis, the stop will roll right down to this wick high. Otherwise, it remains where it is now.

If it comes back and stops me out, it’s okay. It’s okay.

[16:55] I like what I’m seeing there. I want to see a continuation of that. I want to see it get real, real heavy in here. Heavy means we want to see price continuously move lower and build momentum to the downside.

My limit order is sitting right at the high of the New Week Opening Gap from Sunday’s opening, so it should be fairly easy to fill, even if price just comes down here and lightly taps it.

Think about this: I’m working with one screen, one laptop.

Just one more time, bumping the low of that SIBI. That’s this right here, okay?

When I post a target or a draw—for instance, the New Week Opening Gap—that’s like a big black hole. It can pull a lot of things toward it, but price doesn’t necessarily have to actually reach it.

Exiting Before the Terminus

[19:01] So knowing where you can get out before price reaches that specific terminus draw is important. That’s exactly what we were doing here around the PD Array I outlined in the little video I posted on X.

It says, “where you will see the logic I gave in Trader Roundup this past weekend,” and I want you to carefully consider the odds of it unfolding as precisely as I outlined.

[19:39] I also said, “Be careful today.” And then this is the actual little video. As you can see here in the description, it’s a 10-minute video just outlining the idea.

We went over this as the discount buy-side imbalance, sell-side inefficiency Fair Value Gap. And now, because I want to see price gravitate back toward the New Week Opening Gap, which it hasn’t traded to since it formed, whenever you get that, it’s one of the easiest frameworks for a Monday.

[20:47] It doesn’t require a whole lot of thought process.

Whether it gets right to that level or not, as you can see here, I’ve already funded the trade. So even if it were to turn around, go against me, and stop me out, I’ve won. There’s no way this should turn into a losing trade now.

Well, let me not say it that way. They could do something crazy and gap it up here, and then it could stop me out above where I got in.

[21:09] In that case, obviously, it would be a net loss. But as it stands right now, theoretically, it should not be permitted to turn into a losing trade.

So the critics of what I teach, you know, they’ll focus—if price were to come back and stop me out—on the fact that “he said it was going to go down here and it didn’t.” They’ll completely ignore everything I gave you to get into the trade, how I said while price was up here that it was going to go lower, and then how the wicks supported the move down into here.

[21:48] We do have this little body open, and I would rather see the Fair Value Gap that we showed at the beginning of the recording—and in the 10-minute review video—confirmed on the close rather than the open. It’s stronger when it does it on the close. The open simply isn’t as reliable for continuation.

So when you’re watching the bodies—in this case, because I want to see price go lower—I wanted to see a close below the midpoint of that level.

[22:34] That’s what I’d rather see, because if price can put a body down there, it’s usually indicative of a high-probability continuation lower.

Then the next threshold becomes: okay, how does price trade below that low? That’s why I have a resting buy limit order right there. Price could simply go down and fill it.

If it does go down there, you know, I could be wrong. I could be wrong. It could just come back up and stop me out.

[22:57] But if it rolls down and takes out that low, then I have something funded again. I have two partials, and I have one single contract that would get me out right here.

I want to see this buy-side imbalance, sell-side inefficiency fail to support price going higher. I want to see it fail there, even though when you look at price action like this, you can still see it sitting there.

That’s what makes this difficult for brand-new traders and students when they first come to me.

[23:41] They can see these little separations between candlesticks. Visually, they’re obvious. It’s not hard to see. It’s one of the easiest PD Arrays to identify, along with Breakers. Breakers are obvious too.

But when you see something like this, if the market is truly bullish, we should start seeing a willingness to trade higher. If it starts doing that, I’ll take another one off right at this high and above because I don’t want to see that happen.

[24:10] I want to see price use this as an Inversion Fair Value Gap. Its first utilization was as buy-side delivery. So if the market were bullish, any return back down into it—like we saw here—should result in price going higher.

But because I’m subscribing to the analysis that price should gravitate down toward the New Week Opening Gap, I want to see it prove itself heavy in here, show no willingness to go higher, move lower, and utilize this as an Inversion Fair Value Gap.

That would be one more factor bolstering the likelihood of this trade reaching the New Week Opening Gap high.

[24:51] So I don’t want it to behave like this. I want to see it do what you see me describing in my annotations—use this area as an Inversion Fair Value Gap while we’re inside this overall range.

One way you can manage this is with a buy stop right here. My stop loss on the two remaining contracts would get me out up here, but if price trades above this high—which is what I’m not comfortable with—I’ll take a partial on that retracement. It’s not ideal, but it’s better than taking a full stop-out on both contracts if price were to come all the way back up here.

[25:35] See that? It’s a process of managing the trade while still allowing myself to participate in any further erosion lower in price action. But if I’m wrong, they could yank this thing higher and cause the weaker-minded or newer students to second-guess what I’m teaching, while the critics say, “He wanted it to go down there, and it didn’t.”

But if I get stopped out here with one more contract, I’ve still banked profit.

[26:06] If this limit order gets me out here, it’s still profit. Then I’ll have one contract left either to take the full stop—which I won’t move anymore—or to get down to the limit order. At that point, I don’t really care.

What I do have to be mindful of is which order fills first: the buy stop at 30,213 or the limit order at 30,179.75. Whichever one fills first, I need to cancel the other because the market can fluctuate quickly and trigger both if I’m not careful.

[26:36] I don’t want both orders to fill and remove my ability to participate if price continues lower toward 30,169.75, which is the high of the New Week Opening Gap. See how it’s behaving here? I don’t like that.

So it looks like it’s going to take that buy stop, which is effectively the same as trailing my stop loss down to that high. But I still want to see if we can get a breakdown. Price could trade up here, hit that buy stop, take a partial, then fail to go any higher and still leave the remaining position intact.

[27:15] Now I have to take this limit order off. So at this point I only have two resting orders: the trailed stop loss here and the target I was originally aiming for.

***That allows me to stay in the trade while reducing my concern over every little fluctuation or bit of drawdown against the position. ***I don’t like the market structure that’s in play right here, so price would need to get really heavy and move aggressively lower through this Fair Value Gap, because we’re inside two premium arrays.

Managing Partials and Remaining Risk

[27:56] We just took a short-term high. So if we can get on the other side, south of this level, then bump it and shoot lower, that would bolster my confidence in price running below this low. But I don’t want to take a partial there. In this case, I only have one contract left, and I don’t want to use that low as the target. I want to focus on the New Week Opening Gap high.

So this is Trade Management 101—knowing how to navigate the trade, manage your emotions, and manage the psychology of the position.

[28:36] It’s also about not allowing them to take back everything that’s available in unrealized profit. That’s why I had that buy stop right here. Why risk the difference between this high and where my stop loss is up here on the final two contracts?

If price goes above this high, it could continue higher and erode some of that unrealized profit. It’s unrealized because the position hasn’t been closed yet; its value is still fluctuating higher and lower. But once you’ve locked in a portion of a profitable trade, why allow the market to reduce your paycheck?

[29:14] You wouldn’t do that at your job. You’re not going to work all the way through Wednesday and then say, “You know what? I’ll work Thursday and Friday for you for free.” Nobody’s doing that.

So see how it’s behaving here? To me, that’s not good. But I’m going to leave the stop loss where it is for now.

[29:46] I’m going to see what we get at that octant at 0.875. So it’s this one right here. These are actually some of the better ways to learn because you’re watching me manage the trade. You’re also seeing me manage price action that isn’t supporting the initial idea, and what I would do in response to that, versus just staring blindly at the chart and praying, “Please, please, please let it do this. Let it do that.” You can’t do those kinds of things.

[30:17] You have to have a process and protocol to manage yourself and manage the trade because nobody is going to do it for you. Your broker isn’t going to do it for you. You can’t rub the ICT Twitter profile and get three wishes either. You’re going to have to be responsible.

So hopefully this is just another little bump above this high here. This is about the last amount of willingness I have to sit in this. If we get a sharp movement lower here—it may not happen, but if it does—that would probably be the last attempt to trade higher if price is ultimately going lower.

[30:57] Otherwise, anything higher and we’re going to use a stop loss at this high. So I’m going to bring it down to just one tick above that high right here.

Now I’ve secured $215 more and paid myself the hassle fee—the hassle fee for sitting through this little bit of drawdown in unrealized profit.

[34:32] See, look at this. See how it’s behaving here? Look at this right here. This is not organic. This is not organic at all. You can argue about that all you want, but the bottom line is I’m already paid. I’m already paid, and it makes no difference to me whether price comes up, stops me out, and never trades down to the New Week Opening Gap at this point. I don’t care.

Every trade you enter isn’t guaranteed, and you shouldn’t demand that it always reaches your target.

[35:04] Your target is simply your best-case scenario. If you don’t have a way of getting paid before price reaches the terminus—the final objective you expect to see—it’s going to be very difficult for you to be profitable during the early part of your career, especially while remaining committed and confident that what you’re doing is a worthwhile investment.

All right, so we’re up inside this little SIBI with two Volume Imbalances, which is a Suspension Block, and we traded to the 0.875 octant.

[35:36] Again, these levels are graded from last Thursday’s Asian Dealing Range that I gave in the little video on X this morning, moments before this video started.

If we get any movement lower here, I’m going to try to move the stop loss down and strangle some of this unrealized profit, because I’m not interested in seeing price go any higher. If it does, then I’m probably cooked, as they say in today’s slang.

There’s a buy-side imbalance, sell-side inefficiency here.

[36:16] If it were bullish, I’d want to see price go up and run right through this wick. But because I’m in a short, I don’t want to see that. I want to see those types of things fail.

Whenever the doubters see something like a Fair Value Gap, they assume, “Okay, here’s where ICT would be going long.” Not necessarily.

[36:46] Not necessarily. You have to understand the narrative and where I am within that trade idea. Am I even in the position you’re looking at? Sometimes I might not be.

But because you think you see a Fair Value Gap or an Order Block and it doesn’t perform the way you think it should, you assume that I failed. You look for things like that in price action so you can come back and say, “See? This is where it doesn’t work. This is where it doesn’t work.”

[37:16] But they ignore all the times I’m proving that it does. Even this example was fruitful, even though price didn’t trade down here. See, the New Week Opening Gap high is the target that would say I was right.

But being right is not required for profitability. It’s not required. Being profitable is knowing how to get into a trade while price is moving in one direction and finding ways to get out profitably in that direction without needing or requiring the absolute target—the terminus—you originally called for.

[37:50] That’s real-world trading, folks. That’s the way it is. That’s the reality of it. And frankly, nobody really teaches that way either. It’s always, “All or nothing. Don’t take partials. That’s stupid. I put the trade on, I initially took this much risk, so taking partials is dumb.” Well, that’s somebody who’s not consistently profitable telling you that.

This is actually a better video than I had in mind. If price had simply gone straight down to the New Week Opening Gap, it would’ve been like, “Yeah, we’re tired of this. It’s boring. We expected that at this point, Michael. We see it. We expect it to happen.”

[38:26] But this is actually one of the better videos, even if price comes back and stops me out. It’s proof of why you should be taking partials. It’s proof and testimony that it works because taking profit is profitable.

Think about that. If you’re taking something off and putting it into the positive column of your equity, you’re increasing it. There’s nothing anybody can say—nothing, not one thing—that can remove the profitability of that. Those are the facts. There’s no argument in that regard.

[39:07] Looking for that stop loss. Wouldn’t it be funny if they stopped me out and then ran it right down to the New Week Opening Gap? That would be funny.

I get asked all the time when I’m in a trade whether I ever have regrets or feelings about something before the trade closes out.

[40:38] It would be good to see something not trade to the target but still make money on it. That’s the key to being consistently profitable—not requiring yourself to be correct. Correct is not the game. Being right is not the game. The process, the business here, is finding profitability consistently. Profitability.

The warning sign for this deep retracement, in case you didn’t pick up on the significance of what I was saying earlier, was this: yes, we got a little bit of a body below that midpoint. If I’m bearish and expecting this to become an Inversion Fair Value Gap, I want to see the body close below that.

[42:15] That’s favoring continuation lower. I shared my stop loss publicly, and now we’re going to see: does this swing high remain in effect?

[43:49] Or did they tank it? I shared it at that moment because I wanted to see two things happen. Number one, we have this diagonal support here that traders are going to believe is supporting higher prices, and then there’s my stop loss here.

So price could do this: come up, stop me out, then break lower and trade down to my target. It could easily do that, and I kind of want to see it happen so I can talk about it later.

Sometimes when I’m in trades and I only have one contract left like this, it’s almost torturous.

[45:06] Because I don’t care about the outcome anymore. In some instances, I’ve been inclined to just kill the trade because I don’t care. I don’t care if it reaches my target. I don’t care if it stops me out.

I’m spending mental capital observing price action that I’m no longer interested in. I just don’t care anymore, especially because I’ve already paid myself during this run. I’m no longer as interested or excited about where I originally thought price was going to go.

Reassessing Lower-Probability Conditions

[45:38] It could still do it, but the probabilities are lower now than they were when I was initially looking at it. When we were talking about price up here in my little recording, I said it was likely to draw down toward the New Week Opening Gap. I wanted to see price provide something that would support that idea. Well, here we have it.

It offered it: Institutional Order Flow Entry Drill here, Volume Imbalance there, and then adding inside the wick here. See it right there underneath my cursor?

[46:11] There’s my fill. It’s inside the lower half of this wick, so on the candle of entry, it’s treating that wick as a premium array. We drop down into the Fair Value Gap I told you about in the little video I posted on X before starting this recording. I took a partial, then used a trailed stop on one of the two remaining contracts, leaving me with one contract still on.

Then we traded up into the lower half of this wick here, but I’m not convinced yet. It would have to get down below here before I’d expect it to roll over even further.

[46:54] There’s a whole lot of interference occurring right now. I know many of you don’t want to believe that, but that’s what it is. “How do you know that?” There are certain things I can’t get into, and it’s not important for you to know them. That’s why you have stop losses and trade management.

When something doesn’t feel right, you start worrying about the outcome, and you have the ability to take something off the trade, do it. If it’s making it difficult to breathe, giving you anxiety or heart palpitations, making you snappy with your wife, or making you feel like you’re going to kick the dog or something—God forbid—simply close the trade if it’s putting you into an altered state.

[47:41] No trade is worth that. None. Master your emotions, master trade psychology, then simply excuse yourself from the risk entirely and go do something else. Don’t come back in 10 minutes. Turn it off and come back at the end of the day.

This is a weird area for price right now. It’s almost 50/50—actually, not quite. More like 60/40. I’d say 60% likely it’s going to stop me out and 40% likely it’s going to reach my terminus target at the New Week Opening Gap.

[48:25] That shifts in my favor if we can get below this Inversion Fair Value Gap, or what I’d like to see behave as one. This is a buy-side imbalance, sell-side inefficiency here. I’m going to remove this buy-side level I had marked as the stop loss.

We have this little gap here. Price wicked down through it, but we didn’t leave a body below it, so it’s still potentially in play. What I’d like to see is for this to act as an Inversion Fair Value Gap.

[49:28] So far, the wick at the high has behaved accordingly, but we’re still close to my stop loss. I want to see how price behaves here. The real thing I’m looking for is a close below this candlestick’s high, which would put us below this area and validate it as an Inversion Fair Value Gap.

If we can keep the bodies out of the upper half here, that’s good. I’m going to bring the stop loss down to just above the Consequent Encroachment of that wick.

[49:59] I’m going to lock in a little more because I’ve stayed with this trade longer, so I want to secure more profit and pay myself the harassment fee for being plagued and vexed by a single contract.

All right, see this candlestick? It opened, traded up, and now it’s showing this. Again, if we can stretch lower and get a close below this candle’s high—which is also the opening price of that same candle, so it’s the same value—if we can close below 30,196.25, that would most likely indicate we’re going to roll over and gravitate toward the New Week Opening Gap.

[50:43] Still too early here. Still too early. That’s too close, in my opinion, to the low of that candle. I want to see it open, trade up to the low of it, work lower, and then close below this low. That would be good.

I don’t want to see any bodies in the upper half. See the number eight on here? There you go. I guess screenshot it with the eight off the screen.

The whole point is for you to be an independent thinker. No matter what anybody else says about what you believe is being delivered in price action and what you’re trading based on, the only thing that matters is what you think, because the responsibility is in your hands. You can’t allow anybody else—no matter how much you respect them—to make those decisions for you. You just can’t do it.

[52:52] Okay, you can’t do it. We’ve done enough here. I’m going to bring the stop down even more and pay myself another harassment fee if I get stopped out there. I’ll secure a little bit more, and that’s okay.

Why did I pick that level? Because it’s this candlestick’s high. We’ve already had two candle wicks trade above this buy-side imbalance, sell-side inefficiency that I want to see act as an Inversion Fair Value Gap. Price has done enough down here to warrant this becoming an Inversion Fair Value Gap. So for me to place the stop loss above this candlestick’s high, that’s good.

Defining a Good Stop-Out

[53:35] If I get stopped out there, it’s a good stop-out. I want to be out there. If price goes that high, I don’t want to be in it any higher. I don’t want to see any more retracement than that.

So everything is a go if it wants to continue lower. It’s all there. And see that? See how fast it snapped up there? Done. See the logic? See how quickly things can change? I don’t want to be in that market when it does something like that.

[54:00] Now, the really interesting thing would be to watch this thing tank from here and trade down to the New Week Opening Gap high. Think about that.

Anyway, in my opinion, that was very, very useful information. It was a very good demonstration of the conceptual ideas and the things that need to be weighed while you’re inside a trade: when conditions shift to lower probability, what you’re supposed to do, how to manage the trade, and how to behave as the trader in the driver’s seat.

Then you take this information forward. You don’t simply say, “Well, it reached my target, so there it is,” or, “Wow, I got smoked here. I better completely change my discipline or trading approach because suddenly it doesn’t work anymore.”

[54:50] You develop a very mature way of managing yourself and managing your trades.