Lesson 1 – Introduction to Strategy 101

Introduction

- The Blueprint Strategy course is designed to be an all-encompassing strategy course covering multiple aspects of trading .

Key Pillars of the Blueprint Strategy

1. Supply and Demand

- Forms the foundation of the overall blueprint strategy and is universally applicable to all assets and markets .

- Essential for timing the markets with high probability, low risk, and high reward setups .

2. Fundamental Analysis

- Fundamentals drive price, and understanding them is crucial for predicting market movements .

- Different markets have different fundamental drivers, making it essential to identify which fundamentals matter .

3. Campo Strategy Optimization

- An innovative software designed to analyze vast amounts of financial data and generate potentially profitable trade opportunities .

- Functions like an answering machine for trading questions, providing insights on entry points, stop losses, and expected profitability .

Technical vs. Fundamental Analysis

- Technical analysis focuses on price and chart patterns, while fundamental analysis looks at underlying market conditions .

- Good traders utilize both analyses to make informed decisions .

Market Categorization

1. Finite Markets

- Include commodities like sugar and wheat, where physical supply and demand drive prices

- Key participants include producers and users who trade based on real product needs .

2. Infinite Markets

- Include stocks and equity indices, driven by factors like earnings anticipation and interest rates .

- Institutional participants play a significant role in these markets, making decisions based on value rather than price .

3. Man-Made Commodities

- Encompass Forex markets and treasuries, influenced by central banks and fund managers .

- Fund managers speculate based on market trends, while central banks set interest rates and intervene in markets .

Strategy Process

- Each trade should consist of understanding the fundamental conditions and timing the market with quality risk-to-reward propositions .

- Continuous learning and logging trades are essential for improving trading skills .

Conclusion

- The course emphasizes the integration of technical and fundamental analyses, the importance of understanding market dynamics, and the use of innovative tools to enhance
trading decisions .

Trading Concepts and Strategies

- Market Dynamics: The Forex market is heavily influenced by fund managers, who are considered non-commercial participants. Their actions drive significant trends within the
market, making it essential to monitor their movements closely.

- Central Bank Interventions: When central banks, like the Bank of Japan, intervene in the market, it's crucial to identify favorable conditions for trading, whether bullish or bearish.

- Timing and Seasonality: Understanding when to enter the market is vital. Seasonal trends and yearly roadmaps can significantly affect trading decisions. For example, the
"Compose Yearly Roadmap" can provide insights into optimal buying times.

- Supply and Demand Analysis: Identifying low price points with high risk-reward ratios is essential for successful trading. This involves analyzing supply and demand to
determine entry and exit points.

- Data-Driven Decisions: Utilizing computer algorithms can enhance trading strategies by providing data on optimal entry prices, stop-loss levels, and expected profitability.

- Blueprint Strategy: The course introduces a comprehensive blueprint strategy that encompasses various sub-strategies. Each module will delve deeper into these strategies,
focusing on specific processes and their integration into the overall framework.

- Key Questions in Trading: Successful trading involves asking the right questions, such as forecasting major market movements and understanding fundamental drivers. These
questions are universal across different markets.

- Market Valuation: Different markets are valued based on various factors, such as interest rates for stocks and gold for commodities. Understanding these valuation metrics is
crucial for making informed trading decisions.

- Trading Tools and Setup: A proper trading setup, including software like TradeStation, is necessary to access indicators and perform market analysis effectively. This platform is
essential for charting and analyzing market trends.
- Mentorship and Live Trading: Engaging in one-on-one mentoring sessions and live trading classes can help bridge the gap between theory and practice. These sessions provide
opportunities to learn from experienced traders and apply strategies in real-time.

- Continuous Learning: The journey of a trader involves ongoing education and adaptation. Courses on various assets and trading strategies are available to enhance
understanding and skills.

- Community Engagement: Utilizing a social trading platform allows traders to share insights, seek feedback, and engage with a community of like-minded individuals, fostering a
collaborative learning environment.

- Trade Review and Feedback: Traders can submit their trades for review, allowing for constructive feedback and improvement in trading strategies.

This summary provides a structured overview of the key concepts and strategies discussed in the course, emphasizing the importance of market dynamics, timing, data analysis,
and continuous learning in trading.

Lesson 2 – Trading 101

Course Structure

- The course is built on three major pillars:

1. Supply and Demand

2. Campus Indicators

3. Campus Strategy Optimizer.

Key Concepts

- Technical vs. Fundamental Analysis:

- Technical analysis is objective and applicable across all markets, focusing on timing.

- Fundamental analysis is predictive of major market moves but lacks timing precision. Fundamentals drive price.

- Combining Analyses: A good trader utilizes both technical and fundamental analysis, making informed decisions based on past studies and understanding market drivers.

Market Classification

- Markets are categorized into finite and infinite markets, with a focus on institutional participants who drive market dynamics.

Institutional Participants

- Institutions include banks, fund managers, and asset management firms. Understanding their actions is crucial for successful trading.

- Major firms include BlackRock, Vanguard, and Fidelity, with assets under management totaling over $55 trillion.

Trading Fundamentals

- Four Asset Classes: Forex, stocks, futures, and bonds, ranked by average daily trading volume.

- Risk Management: A key performance indicator (KPI) for trading is the risk-to-reward ratio, which guides trading decisions.

Trading Strategy Elements

1. Entry: The opening of a position at a predefined price, ideally below the current market price to maximize profit potential.

2. Stop Loss: A mandatory exit point to manage risk and protect capital.

3. Target: The predefined exit point for profit realization.

Psychological Aspects of Trading

- Emotions, particularly fear of missing out (FOMO), can negatively impact trading decisions. A structured approach helps mitigate emotional trading .

Conclusion of Key Learnings

- Understanding market dynamics, institutional behavior, and effective risk management are essential for successful trading. The course emphasizes a structured approach to
trading, focusing on predefined strategies and emotional control.

Key Concepts in Trading

1. Risk Management

- Calculated Risk: Traders must assess the risk-to-reward ratio before entering a trade. For example, if a trader risks $100, they should aim for a reward that is at least double or
triple that amount to ensure profitability over time.

- Stop Loss: A predefined stop loss helps limit potential losses. For instance, if a trader sets a stop loss from $11,200 to $10,700, their risk is approximately $500.

2. Trading Positions

- Long Position: This involves buying an asset with the expectation that its price will rise. For example, if a trader buys a stock at $20 and sells it later at $26, they make a profit
of $6, risking only $2.

- Short Position: This is when a trader sells an asset they do not own, anticipating that its price will fall. For instance, if a trader sells a borrowed stock for $1,000 and later buys it
back for $700, they pocket a $300 profit.

3. Trading Strategy
- Set and Forget: Traders should establish their entry, stop loss, and target prices in advance. This strategy allows them to manage trades without constant monitoring, reducing
emotional decision-making.

- Risk-to-Reward Ratio : A favorable risk-to-reward ratio is crucial. For example, a 1:2 ratio means risking $100 to potentially gain $200. This principle is essential for long-term
profitability.

4. Emotional Management

- Mental Game: Successful trading requires mastering emotions like fear and greed. Traders should prepare for various scenarios before entering a trade to maintain rational
decision-making.

- Reframing Losses: Losing trades should be viewed as a cost of doing business rather than failures. This perspective helps traders manage their mindset and focus on overall
profitability.

5. Market Dynamics

- Understanding Market Cycles: Markets move in cycles—up, down, and sideways. Traders can capitalize on these movements by employing appropriate strategies for each
market condition.

6. Key Terminology

- Entry and Exit: The entry point is where a trader buys or sells an asset, while the exit point is where they close the position, either at a profit or loss.

- Profit Target: This is the price level at which a trader plans to close a position to secure profits.

By understanding these core concepts and strategies, traders can enhance their decision-making processes and improve their chances of success in the financial markets.

Lesson 3 – Charts 101

Module 1: Strategy 101 - Lesson 3: Charts 101

Introduction to Price Charts

- Price charts are essential tools in trading, consisting of thousands or millions of data points depending on the timeframe and historical data loaded into them.

- Access to extensive market data is a relatively new phenomenon, with most data now available for free, although some may be delayed.

Importance of Accurate Data

- The accuracy and reliability of data are crucial for effective analysis. Institutional data, which can be accessed through real futures symbols, is preferred over derivative symbols
that may lack historical accuracy.

Futures Market Insights

- Real futures market data allows access to the Commitment of Traders (COT) report, which provides insights into the positions of large traders regulated by the CFTC.

- Understanding institutional buying and selling activities in relation to price movements can help predict market trends.

Candlestick Charts

- A price chart typically has a horizontal axis (time) and a vertical axis (price), with candlesticks representing price movement over specific time intervals.

- Each candlestick displays four key components: high, low, opening, and closing prices for a given timeframe.

Understanding Candlestick Behavior

- Green candles indicate price increases (closing price higher than opening), while red candles indicate price decreases (closing price lower than opening).

- Wicks on candles represent the price range during the time period, showing where price moved outside of the open and close.

Supply and Demand Dynamics

- The relationship between willing buyers and sellers defines price movement. If demand exceeds supply, prices rise; if supply exceeds demand, prices fall.

- An imbalance in supply and demand can lead to significant price changes, with larger imbalances resulting in faster price movements.

Case Study: Rolex Watches During COVID-19

- The demand for luxury watches, such as Rolex, surged during the pandemic, leading to increased prices due to high demand and low supply.

- This scenario illustrates the fundamental economic principle that high demand and low supply result in rising prices .

Key Takeaways

1. Data Accuracy: Use institutional data for reliable analysis.

2. Candlestick Analysis: Understand the components of candlesticks to interpret market movements.

3. Supply and Demand: Recognize the impact of willing buyers and sellers on price trajectories.

4. Market Behavior: Observe how external factors, like economic events, can influence market dynamics.

Key Concepts in Trading Supply and Demand

- Imbalance Between Buyers and Sellers:

 - Price changes direction when one force (buyers or sellers) becomes zero at a specific price. This occurs when there are more willing sellers than buyers, leading to significant
price movements.

- The goal is to identify the origin of these changes and imbalances in the market.

- Buying and Selling Strategies:

- Buying at imbalances where willing buyers exceed sellers allows traders to purchase at lower prices (wholesale) while selling at supply imbalances where sellers exceed buyers
allows for selling at higher prices (retail).

- Market Analysis:

- Traders often rely on various information sources (earnings reports, technical indicators, etc.) to make decisions. However, institutional traders (like Goldman Sachs) have
advantages due to their buying and selling power.

- Institutional Influence:

- The market is primarily driven by institutions that aim to buy low and sell high. Understanding their actions can significantly improve trading strategies.

- Risk Management:

- Effective trading involves setting parameters for entry, stop loss, and target. A good risk-to-reward ratio (e.g., 1:4) is crucial for maximizing potential gains while limiting losses.

- Market Timing:

- Timing tools and setup tools are essential for effective trading. Setup tools help predict market movements (A to B), while timing tools assist in executing trades efficiently.

- Time Frame Analysis:

- Different income goals (daily, weekly, monthly) require different time frame analyses. Longer time frames tend to reduce market noise and enhance predictability.

- Commitment of Traders (COT) Report:

- The COT report is a valuable tool for understanding market dynamics by revealing the positions of different trader groups, especially commercials who are considered the
smartest money in the market.

- Commercials' Trading Behavior:

- Commercials (producers and users of commodities) typically buy into weakness and sell into strength, making them crucial to follow for trading decisions.

This summary encapsulates the essential concepts and strategies for trading based on supply and demand, emphasizing the importance of understanding market dynamics and
institutional behavior.

COT Report Overview

- COT Report Basics: The Commitment of Traders (COT) report provides insights into the positions of different traders in the futures market. It shows the net positions of users
and producers, highlighting the difference between long and short contracts.

- Net Position Calculation: To find the net position, subtract the total short contracts from the total long contracts. For instance, if there are 122,814 long contracts and 298,727
short contracts, the net position is -175,913 contracts.

Market Behavior Insights

- Market Shifts: The COT report reflects changes in trading activity over time, indicating shifts from buying to selling and vice versa.

- Commercials vs. Retailers: Commercial traders are seen as accumulators and distributors, indicating their bullish or bearish sentiment based on their buying and selling
activities.

Key Concepts

- Bullish and Bearish Indicators:

- If commercials are buying at multi-year highs, they are generally bullish.

- Conversely, if they are selling at multi-year lows, they are bearish.

- Net Long and Short Positions :

- Positions above the zero line indicate net long, while those below indicate net short.

Retail Trader Behavior

- Retailer Sentiment: Retail traders often act contrary to market trends. When they are most bullish, it can signal a market top, while extreme bearish sentiment can indicate a
market bottom.

- Statistical Insights: Studies show that a significant percentage of retail investors lose money, suggesting that following their sentiment can lead to poor trading decisions.

Conclusion on Trading Strategies

- Timing the Market: Understanding the behavior of commercials and retailers allows traders to make informed decisions. Buying when commercials are accumulating and selling
when they are distributing can lead to better outcomes.

- Fundamental Analysis: The focus should be on relative shifts in trading activity over time rather than just net positions, as these can provide better insights into market
movements.

This summary encapsulates the key concepts and findings related to the COT report and trader behavior, providing a comprehensive overview for study purposes.

Lesson 4 – Supply & Demand 101

 Key Concepts

- Supply and Demand: Understanding how institutions operate in the market is crucial. Institutions, referred to as "smart money," drive price movements based on their buying
and selling activities.

- Market Timing vs. Setup Strategies: The course emphasizes the importance of fundamentals for predicting price movements rather than relying solely on price action .

Important Lessons

- Relative Extremes: Major rallies can be predicted by identifying relative extremes in buying activity, particularly from commercial traders.

- Case Study - Warren Buffett : The case study illustrates how Buffett accumulated IBM shares over time, highlighting the need for institutions to scale in their purchases to avoid
disrupting market prices .

Practical Applications

- Backtesting: An essential exercise where past price movements are analyzed to predict future trends.

- Identifying Demand Areas: By analyzing price charts, traders can identify areas where demand exceeds supply, indicating potential buying opportunities.

Fundamental Setup Tools

- Compose Valuation: This tool assesses whether a market is over or undervalued based on interest rates and stock prices, helping to identify potential entry points.

- Market Imbalances: Recognizing areas of imbalance where demand exceeds supply can guide traders in making informed decisions.

Conclusion

- Institutional Behavior: Institutions cannot buy all at once and must scale in over time, creating opportunities for individual traders to align their strategies with institutional
movements.

- Combining Technical and Fundamental Analysis: The course stresses the importance of integrating both technical price analysis and fundamental valuation to enhance trading
strategies.

Key Concepts in Trading and Market Dynamics

Institutional Trading Dynamics

- Institutional investors, like Warren Buffett, often create supply imbalances in the market. For instance, when Buffett sells shares, it can lead to a significant supply zone where
more willing sellers exist than buyers.

- As price approaches these supply zones, unfilled orders from institutions can drive prices lower.

Supply and Demand Imbalances

- Price movements are influenced by supply and demand imbalances. When institutions sell, it creates a supply area, and when they buy, it creates a demand area.

- The greater the imbalance, the more unfilled orders exist, which can lead to significant price movements.

Market Behavior and Trading Strategies

- Traders should aim to identify areas of supply and demand on price charts. Buying should occur in demand zones, while selling should occur in supply zones.

- It’s crucial to participate in the market when it is imbalanced, rather than when it is at equilibrium.

Understanding Market Psychology

- Retail traders often make mistakes by buying into rallies and selling into declines. Successful trading requires a counterintuitive approach: buying when prices are low and selling
when they are high.

- Recognizing the actions of institutional traders can provide insights into market movements. For example, if institutions are buying, retail traders should also consider buying.

Economic Principles in Trading

- Economic fundamentals play a significant role in determining market behavior. Bullish fundamentals typically indicate more willing buyers, while bearish fundamentals suggest
more willing sellers.

- Understanding the relationship between supply and demand curves is essential. Higher prices generally lead to increased supply and decreased demand.

Support and Resistance vs. Supply and Demand

- Traditional support and resistance concepts may conflict with supply and demand principles. While support and resistance suggest that repeated touches strengthen these
levels, supply and demand theory posits that more touches indicate fewer unfilled orders.

- The goal is to identify the most favorable entry points based on supply and demand, rather than relying solely on support and resistance levels.

Conclusion and Future Learning

- The course aims to equip traders with advanced tools and strategies for navigating the markets. A rule book will be developed to guide trading decisions based on the principles
of supply and demand.

- Understanding that markets are imperfect and unpredictable is crucial for developing a successful trading mindset.