BEAT THE MARKET MAKER - BTMM - STEVE MAURO - COURSE - DAY 2

Finance-focused summary (markets & trading methodology)

Core thesis: what the “market maker” is doing

Price action in FX is portrayed as structured “stop hunts” around:

• the Asian range, and
• session changeovers (London/US),

with repeated “variations on a theme” intended to:

• trigger retail stop-losses / pending orders,
• induce traders into the wrong direction,
• then reverse/continue quickly so the “market maker” can book profit.

The approach emphasizes price-cycle timing (“where you are in the cycle”) more than standard indicators.

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Instruments / tickers mentioned

Focus: FX (no explicit stocks/crypto/bonds/ETFs).

FX pairs (major focus)

• EUR pairs
  • EUR/CHF
  • EUR/JPY
  • (Also referenced in homework discussion: EUR/USD)
• GBP pairs
  • GBP/CHF
• JPY pairs
  • EJ (EUR/JPY)
  • GJ (GBP/JPY)
  • “JY” referenced in USD/JPY context (mostly through the pairs above)
• TRY pairs
  • TRY/JPY (“Turkish l / Japanese Yen” reference)
• AUD pairs (concept examples)
  • AUD/JPY
• Euro odd / AJ cross
  • Interpreted as cross ideas paired with Euro/JPY concepts

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Key numeric rules & thresholds (explicit numbers)

Homework / operational logistics

• Homework submission cutoff: 4:00 p.m. Eastern
• Instructor will not check homework submitted at approximately 5:45

Trading zone framework (Asian range + buffer)

• Ideal Asian range: ≤ 50 pips
• If Asian range exceeds 50 pips, the instructor says to either:
  • reconsolidate into the last 1/4 to 1/3 of the “box”, or
  • pass on that pair if you can’t identify reconsolidation
• Trading Zone placement: 25 to 50 pips above or below the Asian range

Stop-hunt / move sizing assumptions

• Stop hunts and “vector” moves are described as repeating roughly in increments of:
  • 25–50 pips (general guidance)
• “Pound crosses”:
  • average 50-pip stop hunts
• “Australian/Canadian” stop hunts:
  • 20–25 pips, up to ~30
• Typical stop placement (conceptual assumption):
  • retail stops: around 7–10 pips below/above entry (common setups)
  • market makers target larger excursions of ~25–50 pips

Time windows / trade management

• Auto scratch out / forced exit
  • scratch out after ~2 hours if not in substantial profit
• Structure timing
  • 30–90 minutes for the first structure to form/complete
  • up to ~2 hours from entry (clock restarts on the “second leg”)
• Re-entry logic after stop-out
  • wait for the next strike zone (often another ~2-hour window)
• Caution if trade doesn’t go profit immediately
  • apply the 2-hour clock and avoid a “coin-flip” hold

Profit targets / performance metrics claimed

• Central target: 50 pips (often within 3–5 bars / “blink of an eye” for correct setups)
• Success-rate objective: 8/9 or 8/10 hit rate
• For counter/against-trend trades, example target split:
  • first trend move: ~30–50 pips
  • counter toward watermark: ~25–50 pips again
  • example daily total: 75–100 pips (noted as “market makers trade both ways”)

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Methodology / step-by-step trading framework (as taught)

1. Identify the “cycle” and peak formation

   • Determine where you are in the 3-day cycle:
     • Day 1 peak
     • Day 2 reversal/transition
     • Day 3 acceleration/trap
   • Decide whether market maker behavior implies:
     • buyer off the low or
     • seller off the high

2. Measure the Asian session “box/channel”

   • Ideal Asian range: ≤ 50 pips
   • If blown out:
     • use reconsolidation guidance or avoid the pair

3. Define the Trading Zone

   • Trading Zone sits 25–50 pips above/below Asian range
   • Entries are typically expected in the last 1/3 to 1/4 of the box

4. Wait for stop-hunt behavior

   • Expect 3 pushes / “vector” candles to hunt stops at the low or high

5. Look for second-leg confirmation

   • After stop hunt, price pulls back and completes an M/W-type structure:
     • shorts: W → M-type structure language; entry after “railroad tracks” and pin confirmation
     • longs: inverse logic
   • Key candle/price behaviors:
     • Hammer / inverted hammer as “pin” behaviors
     • Railroad tracks: fast movement out and back
     • Outside bars around consolidation/shift zones

6. Entry and exits

   • Enter on confirmed structure (e.g., “close on a pin” or “railroad track closes”)
   • Take profit near:
     • “watermark” and/or 50 EMA
     • “mayonnaise” equated to 200 EMA

7. Risk management and “time-based” stops

   • Use a fixed stop-loss (mental stops rejected)
   • Apply 2-hour scratch-out if not sufficiently profitable
   • Restart the clock on the “second leg” if the setup evolves
   • Avoid converting the trade into a 50/50 outcome (“no nursing trades”)

8. Re-entry rules after a stop-out

   • If stopped, wait for the next strike zone (often another ~25–50 pips beyond prior entry/structure)
   • Be especially cautious around session changeovers

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Explicit risk management & money management rules

• Fixed stop-loss: required; “mental stops do not work.”
• Auto scratch-out / self-stop: 2 hours if not in substantial profit
• Risk sizing guideline:
  • start around 1% risk per trade
  • scaling example for a $55,000 account:
    • 10% risk = $500
    • 1% risk = $50
• Spread/slippage considerations
  • spread referenced as approximately ~2 pips in examples
  • slippage referenced as approximately ~1 pip

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Performance expectations and cautions

• Claimed behavior:
  • correct setups should move quickly toward profit (discourages waiting/“nursing”)
• Cautions:
  • If Asian range is blown out and you can’t identify reconsolidation, don’t trade
  • If price holds levels too long without moving into profit, the setup may have broken down (risk shifts to “50/50”)
  • Don’t chase after price “left the station” (no trade zone concept)
• Disclosure:
  • No “not financial advice” disclaimer was stated in the provided subtitles

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Presenters / sources mentioned (end of transcript)

• Steve Mauro (main instructor)
• Car(r) (guest/another presenter teaching homework/chart marking)
• Dave McCoy (“The Real McCoy”) (example trades/homework)
• Murray (example success/trade feedback)
• Lisa Stewart (mentioned for markup quality)
• Tony T (mentioned for a slide/trade example)
• Gary (mentioned re: GMT offset / server time script in forum)
• Zen (student/assistant in US-session discussion; described as trading partner)
• Diane (Zen’s wife, co-trader)
• Craig (named in context of reference points/levels)
• Dean (mentioned re: TDI and naming hooks/shark fins)
• Students/participants referenced:
  • Massud, Kim, Granny, Jim, Ray, Nelson, Doug, Paul, Sean, Roberto, Whitney, Floyd, Gloria, Bruce, Wayne, Zim