Summary of "BEAT THE MARKET MAKER - BTMM - STEVE MAURO - COURSE DAY 1 - FOREX"
BEAT THE MARKET MAKER - BTMM - STEVE MAURO - COURSE DAY 1 - FOREX
Market Context & Participants
The course focuses on the Forex (FX) market structure and behavior, specifically how market makers operate:
- Market makers manage risk, induce retail traders into positions, create stop hunts, and profit from retail traders’ losses.
- They operate globally with desks in major financial centers such as Chicago, New York, London, Hong Kong, and San Francisco.
- Market makers use tools and plugins to manipulate prices, spreads, stops, and re-quotes to their advantage.
- Dealers can deliberately widen spreads and trigger stops, causing retail traders to lose money.
- Regulatory bodies (e.g., NFA) attempt to curb some abusive dealer practices, but not all dealers are honest.
- Market makers have weekly net change allowances, limiting how far prices can move within a week (approximately a 1000-pip range).
Trading Philosophy & Risk Management
Key principles emphasized for successful trading:
- Do not trade live money initially; observe market behavior first.
- Avoid mixing other technical systems or indicators with this methodology.
- Trade in line with market makers’ behavior rather than conventional retail technicals.
- Maintain a clear head: stop trading if losing or overly winning to avoid emotional decisions.
- Homework and chart study are critical; understanding past moves helps anticipate real-time behavior.
- Use clean brokers/dealers (contacts provided for Compass IBs).
- Avoid carrying trades over weekends due to unpredictable gap risks and stop hunting.
- Stop losses placed just below/above obvious technical levels are often targeted by market makers.
Market Maker Behavior & Methodology
Objectives of Market Makers
- Induce traders to take positions by showing false breakouts or textbook technical setups.
- Create panic/fear through spikes and sharp moves to trigger irrational decisions and stop losses.
- Hit stops and clear the board to pocket retail traders’ money and manage their books.
Market Maker Tools & Manipulation
- Ability to reject orders and re-quote prices, affecting fills.
- Widen spreads to pick off stops.
- Set highs/lows/closes on bars to trigger stops or avoid triggering unwanted orders.
- Real-time knowledge of trader margin levels and use of “straightaway trades” to finish off margin-troubled accounts.
Typical Market Structure & Cycles
- Market makers operate on a 3-day, 3-level cycle:
- Trap lower-level shorts and higher-level longs.
- Create unidirectional swings lasting 2-3 days.
- Multi-session M and W patterns dominate (repeated highs or lows across sessions/days).
- Stop hunt moves are false moves meant to induce traders to take wrong positions.
- Market makers accumulate contracts during consolidations (not congestion).
- Often end the day near highs or lows, then consolidate to trap traders.
- Use three pushes or bursts (psychologically significant number) to induce trader reactions.
- “Vector candles” are aggressive 3-candle pushes used to trigger stops and induce trades.
- Use session changeovers (Asian to London, London to New York) to create trap moves and reversals.
Key Session Times (EST/New York Time)
- 5:00 PM: Daily high/low reset, market maker spread set.
- 5:00 PM – 8:00 PM: Dead gap (low activity).
- 8:30 PM – 3:00 AM: Asian session (accumulation phase).
- 3:00 AM – 3:30 AM: London-Asia gap time (instructions passed).
- 3:30 AM – 9:00 AM: London session (aggressive moves, stop hunts).
- 9:00 AM – 9:30 AM: London-New York gap time.
- 9:30 AM – 5:00 PM: New York session (aligned with equities open at 9:30 AM).
Additional notes:
- Market makers often create false breakouts at session starts and ends.
- Weekend gaps are used to stop out retail traders; do not hold trades over weekends.
- News events are used to conceal market maker moves and complete patterns.
Key Patterns & Setups
- Stop Hunt High (M formation): False move to the upside to trap longs.
- Stop Hunt Low (W formation): False move to the downside to trap shorts.
- Straightaway Rise/Drop: Final aggressive move to clear margin-troubled traders.
- Brinks Trade: Reliable setup at session changeovers (3:30–3:45 AM London, 9:15–9:45 AM New York) characterized by a hammer or spike candle on the 3- or 4-5 minute candle, signaling reversal.
- Peak Formation High/Low: Levels where market makers trap traders and reverse the market.
- Multi-session M/W patterns: Repeated highs/lows over several sessions/days signaling trap zones and reversals.
- Vector candles: Three aggressive pushes in one direction used to induce trader entries.
- Shadow boxes: Zones highlighting stop hunt areas (typically 25-50 pips wide).
- Pins and hammers: Candlestick signals used to confirm stop hunts and reversals.
- Railroad tracks: Two opposite candles in succession signaling reversals at session opens.
- Mayonnaise (200 EMA): Used as a key level for trade entries and stops.
Trading Rules & Recommendations
- Trade only in the direction of the market maker bias.
- Avoid counter-trend trading at critical levels (e.g., Level 1, V1, A1).
- Take profits or small losses if trade doesn’t move favorably within 2 hours.
- Place stop losses strategically, avoiding obvious retail cluster stops (below low or above high of day).
- Recognize when market makers are accumulating or distributing contracts.
- Confirm setups using timing and candlestick patterns described.
- Use the ADR (Average Daily Range) to estimate move sizes and levels (divide ADR by 3 for approximate level size).
- Avoid overtrading; the market offers multiple setups over time.
- Understand market makers have limited equity and cannot move prices infinitely; retracements are inevitable.
- Study charts for M/W patterns, stop hunts, and session timing to anticipate moves.
- Use 15-minute charts primarily for this method.
- Avoid reliance on traditional support/resistance lines as many are false, created by market maker consolidation zones.
Performance & Outcomes
- The instructor claims very high win rates (e.g., 87.5% first week for some students).
- The method is said to produce consistent profits and high success rates.
- Four main trades to focus on:
- Stop Hunt High (M)
- Stop Hunt Low (W)
- Straightaway Rise
- Straightaway Drop
- Emphasizes simplicity: strip away extraneous indicators and focus on price action and market maker behavior.
Explicit Recommendations & Cautions
- Do not trade during class; focus on learning.
- Do not mix other technical systems with this method.
- Do not hold trades over the weekend due to gap risk.
- Use clean brokers and understand dealer practices.
- Take notes and do homework by labeling charts with taught concepts.
- Avoid emotional trading; follow the method and timing strictly.
- Use provided session times and patterns as a framework.
- Be patient; mastery requires time and practice.
- Not all brokers/dealers are equal; choose carefully.
- Disclaimer: Instructor states this is not typical retail advice; method is proprietary and requires dedication.
Assets, Instruments, and Sectors Mentioned
- Forex major pairs referenced in examples:
- EUR/USD
- GBP/USD
- GJ (GBP/JPY)
- EJ (EUR/JPY)
- Instruments:
- Spot FX trading
- Breakout trading
- Swing trading
- No mention of stocks, ETFs, crypto, bonds, or commodities.
- Focus entirely on Forex market structure and retail trading dynamics.
Methodology / Step-by-Step Framework
- Understand Market Maker Objectives and Tools
- Learn Market Maker Session Timings (EST)
- Identify Key Patterns:
- Stop Hunt High (M)
- Stop Hunt Low (W)
- Straightaway Rise/Drop
- Brinks Trade at session changeovers
- Use 3-day, 3-level Market Cycles
- Watch for Multi-session M/W formations
- Use Vector Candles and Shadow Boxes to identify stop hunt zones
- Trade in line with market maker bias (do not counter trend at critical levels)
- Use ADR to size moves and levels
- Place stops strategically (outside obvious retail stops)
- Take profits or small losses within 2 hours if no movement
- Avoid weekend carry and overtrading
- Practice chart labeling and homework for mastery
Key Numbers & Timings
- Session times (EST/New York time):
- 5:00 PM: Daily high/low reset
- 5:00 PM – 8:00 PM: Dead gap
- 8:30 PM – 3:00 AM: Asian session
- 3:00 AM – 3:30 AM: London-Asia gap
- 3:30 AM – 9:00 AM: London session
- 9:00 AM – 9:30 AM: London-New York gap
- 9:30 AM – 5:00 PM: New York session (equities open at 9:30 AM)
- Stop hunts typically occur in 25-50 pip increments.
- Average Daily Range (ADR) examples: 100-150 pips per day, divided into 3 levels (~33-50 pips each).
- Moves often consist of 3 pushes or bursts (psychologically significant number).
- Brinks trade candles form between:
- 3:30–3:45 AM (London)
- 9:15–9:45 AM (New York)
- Swing trades capture 200-600 pips over 3-day cycles.
- Stop losses placed 3-5 pips beyond lows/highs are often targeted.
Disclaimers & Disclosures
- This is not financial advice; proprietary trading methodology.
- Instructor stresses this is the last FX market training needed if method is followed.
- Respect intellectual property; no sharing of course materials publicly.
- Emphasizes importance of trading with clean brokers.
- Instructor acknowledges some dealers manipulate prices and spreads.
- Method requires dedication, homework, and patience.
Presenters / Sources
- Steve Mauro – Primary presenter and course instructor.
- Support team includes: Carr, Kim, Granny, Scott, Allen, Rick, Diane, Zen, Dave McCoy (students or co-instructors).
- Broker/dealer contacts: Compass IBs (Kim and Scott).
- Mention of Craig Harris (indicator developer, community member).
This summary captures the core finance-specific content, methodologies, key timings, instruments, and practical trading guidance delivered in the video.
Category
Finance
