Internal to External Masterclass : From Live Trading Room

All right. Before I start, I just want to point something out, then we’ll start with questions real quick. You know, I’m looking at the EUR/USD pair and the price action this week. Taking 4-hour charts and having these solid internal-to-external plays that we’re seeing, and we’re seeing another one this morning. If you’re trading currencies, the reason why I’m bringing this up is because I know we have a bunch of European and London traders here. But even if you’re not, this is the way we swing trade also, maybe from a weekly to a 4-hour. Here we’re looking at 4-hour gaps and we’re trading off the 15-minute or less. But if you find these opportunities in the market whether it’s EUR/USD or any pair where you have these big reversals, this is a perfect example. On the EUR/USD 4-hour chart, we inverse this fair value gap right here. And by inversing this fair value gap, we create an impulse-shift fair value gap right here, which was used to go from internal to external. This is one of the best setups that you can have. And knowing that the draw on liquidity is going to be here, when you get another one this morning with SMT, these are absolutely phenomenal setups to take. I went over this in the currency review this morning, so if you want to check it out, go ahead.

We got a great 10-minute inverse fair value gap at the SMT at the 4-hour gap with a great break-even trade going internal to external Asia highs first, and then targeting this area right here. Look how powerful this move is, impulse-targeting that area. And obviously, you’ve got other areas above here to target. But even so, this trade right here, even to the external liquidity here, is an 11:1 risk-to-reward trade. You only need one or two of these a week. You have the EUR/USD, GBP/JPY, GBP pairs, GBP/JPY pairs, and you have the EUR/AUD and GBP/AUD pairs. At some point during the week, you will find trades like this on at least one of them. And if you just do one trade a week, two trades a week on these, that’s all you need.

Now, if you’re trading FX, make sure that if you’re day trading, you have a broker or a prop firm that has tight spreads. If you’re paying three pips a side for your trades, yeah, in an 11:1 it’s not going to matter, but in a 2:1 or 3:1, that’s a lot. And that’s one of the issues with trading FX, and that’s why we all like to trade the futures markets mostly. But excellent price action in the EUR/USD. This move up should be studied 100%. If you go to this last trade right here when we came into this area, there’s your inverse fair value gap to the upside internal to external. This stuff works. This is actually an even better one because it’s just exploding to that final external target right there. And that’s really the basis of everything that we do: those external and internal areas and trading between them.

But when you get these nice trends in the currency markets where you can trade these 4-hour gaps internal to external, and you can do it two or three times in a row when they set up, that’s where you can really cash in.

Hey everyone, it’s Dale here. I hope you enjoyed the video. If you’d like to trade alongside me and our team of prop-firm-funded traders every day, then click the link below the video and hop aboard. We’re looking forward to trading with you.