Session Notes: Statistical Edges, Housekeeping, and Edgeful Tools (April Mentorship)
Attendance and cadence
Last session attendance: 45 participants were recorded.
Current attendance reported during intro: Started at 24, incrementally rising to 25, then 27, then 32, eventually settling at 32 participants actively present in the room by the end of the session. This fluctuation indicates that members join at different times.
Expectation: Attendance tends to be lower in subsequent sessions compared to the previous one, highlighting the challenge of maintaining consistent engagement.
Schedule consistency: Group meetings and lessons are committed to occurring at the same pre-scheduled times every week, ensuring a predictable learning environment.
Minor social note: Sky had a relaxing Sunday; the speaker shared that they recently got a tattoo yesterday, while Jaren reportedly has three tattoos, adding a personal touch to the session introduction.
Housekeeping: goals and accountability
First item: The meeting began by addressing the number of posted goals by mentorship members, emphasizing engagement and commitment.
Homework review: The review specifically focused on yearly goals posted by members, followed by monthly goals. Progress on these goals is actively tracked and discussed within the group chats to foster accountability.
Example observations:
Gorlok successfully posted a yearly goal, demonstrating proactive participation.
Leo also posted, though there was some initial confusion regarding his role, as a different Leo had been part of a previous mentorship cohort.
Panty was highlighted for a positive example by creating a Vision Board, showcasing a thorough approach to goal setting.
Totals observed: Approximately half of the group members posted their yearly goals (21 out of the total active participants); 18 members posted monthly goals. The overall impression was that only about half of the group was engaging seriously with the goal-setting exercise.
Action: Members who have not yet posted their goals are still encouraged to do so. Posting goals is considered a strong signal of seriousness and directly impacts the level of accountability and support received from the group.
Course structure and access
Recurring group sessions: Small group sessions reoccur weekly. Additionally, recordings from other mentorship groups are made accessible in a shared drive, providing supplementary learning material.
End-state: There are approximately 25 hours of recorded content available across various groups. While watching these recordings is optional, it is highly recommended for comprehensive understanding and review.
Lesson access: Access to the lessons is specifically available for those enrolled in the mentorship track. Any others not yet included are advised to contact Eric to gain access.
New York trip schedule mentioned:
Trip: The speaker will be away from Thursday, April 10th to Monday, April 14th. The departure is scheduled for 10:41 AM Central time on Thursday.
Plan: All one-on-one sessions scheduled during this period will be rescheduled to accommodate the speaker's absence.
Upcoming and overlap notes:
April 9: The Risk Management course is still scheduled to proceed as planned.
April 13: Jaren will teach a dedicated Book Map class. The main speaker will not be teaching on this date.
April 16: The lesson will focus on High Time Frame Analysis, crucial for understanding broader market movements.
April 20: A session dedicated to Trading Psychology, addressing the mental aspects of trading.
April 23: The topics will cover Fibonacci Retracements (Fibs) and Session Profiles, important for identifying potential support/resistance and market structure.
April 27: A session on News Reading, focusing on how to interpret and react to market-moving news events.
April 30: The speaker will conduct another Book Map session, offering a different perspective or deeper dive into the tool.
Reading material:
Required book for Book Map: "A Complete Guide to Volume Price Analysis" by Anna Coulling is strongly recommended. This book is foundational for understanding the principles behind Book Map, offering detailed insights into how volume interacts with price. It is available with pictures and an audiobook option, but reading the text is highly encouraged for in-depth learning.
Resources and channels:
Discord resources section: This section contains invaluable educational materials, including recommended books, websites, and courses to support learning.
If members encounter issues seeing yearly goals or certain channels, they should use the "Show all channels" option located at the top of the server to reveal all available content.
Book Map and reading strategy
Both the speaker and Jaren will teach Book Map in separate sessions, offering different insights and approaches to the same powerful tool.
Emphasis: Reading the recommended book, "A Complete Guide to Volume Price Analysis," is crucial for building a solid theoretical foundation and significantly improving the practical understanding and application of volume price analysis concepts discussed in the Book Map sessions.
Tools and access: Edgeful and other resources
Edgeful is introduced as a core, invaluable tool for identifying and using statistical confluences in trading decisions.
Website/tool with many stats in various categories (e.g., Fair Value Gaps, Power Hour, Opening ranges, etc.). It aggregates a wide array of statistical edges that can be applied to different trading scenarios.
Features videos explaining each stat; many of these videos are short (a few minutes), providing concise and clear explanations of how each statistical edge works and how it can be used.
Edgeful offers a free one-week trial. The speaker has personally extended their paid access to demonstrate the tool's capabilities to the group, ensuring everyone can learn from its practical application.
TradingView indicators available: Edgeful also provides custom indicators that can be added directly to TradingView charts, allowing traders to visualize and integrate these statistical edges into their live analysis.
Pricing and access:
Mentioned price: The service costs around per month, inclusive of a one-week free trial period for new users (as of the discussion date).
Group members can inquire about a potential promo or affiliate code, although its availability is not currently guaranteed.
User guidance:
Utilize the Edgeful videos to gain a comprehensive understanding of how each statistical measure functions and its practical implications.
The website itself provides clear explanations and visual examples for every metric, such as Fair Value Gaps, Power Hour dynamics, and Opening Range Breakouts, facilitating deeper learning.
Core statistical concepts taught in this session
Previous Day High/Low Break (PDHL Break)
Core idea: This strategy focuses on identifying market bias by observing whether liquidity sweeps (i.e., price moves beyond) the prior day's high or low levels.
Frame of reference: If a trading day sweeps the prior day's low and subsequently closes red (indicating a strong bearish move), the bias is generally toward further shorts. Conversely, if price sweeps the low but then closes green (showing recovery and buying pressure), it may signal a potential long setup, especially when combined with other bullish confluences.
Example framing: In a sustained bear leg, a red close after sweeping the prior day's low is a typical, expected continuation. However, if the very next candle closes green, it could indicate a shift towards a long setup within a broader bullish context or a counter-trend opportunity with sufficient confluence.
The approach is not a guaranteed rule; it is viewed as a probabilistic edge, statistically showing approximately a hit rate specifically within strong bear or bull legs. It is explicitly noted as not reliable during periods of market consolidation or chop.
True Day (TD)
A daily-statistic approach that uses the 'true day' as a critical frame of reference for determining market bias.
Key points discussed:
Open below True Day: Historically, if price opens below the true day's level, there is a tendency of approximately for the price to sweep through the day's open at some point during the trading session, often signaling a move back towards equilibrium or a continuation if it fails to hold.
Open above True Day: If price opens above the true day, this tendency is different, with a lower probability of approximately in certain observed cases.
Backtesting variability: The professor notes that backtesting results for true day statistics can vary significantly. For instance, on some Mondays, true day biases are observed to be weak or almost non-existent, highlighting the need for dynamic assessment.
Recommendation: Do not over-rely on TD as a standalone signal. It should be used flexibly and always in conjunction with other statistical confluences and market context.
Example: Significant news events, such as a Powell speech, can drastically alter or even invalidate true day expectations, requiring traders to adapt quickly.
Initial Balance (IB) / Opening Range
Definition: The initial balance range is defined by the first hour of price action, specifically encompassing the high and low points reached during this critical opening period.
Statistical edge (Nasdaq, past six months, from the provided Edgeful data):
There is a highly significant chance of a single break (meaning price breaks either the IB high or the IB low, but not both) within the first hour.
Approximately an chance of a double break (meaning price breaks both the IB high and IB low within the first hour).
A very low chance, about , of no break at all, where price remains entirely within the initial balance range.
This statistical tendency provides a strong probabilistic edge to trade in the direction of the breakout after the IB has been established. However, traders must clearly understand how to apply it, as the edge is conditional and requires proper execution techniques.
Observations on different assets/time windows: The strength and reliability of these statistics can vary significantly based on the chosen date range (e.g., one month, three months, or five years) and the specific asset being traded (e.g., Nasdaq, ES, Nvidia). Customization and re-evaluation are key.
Application: If the Initial Balance is broken (especially with a single break), traders often look to enter trades in the direction of that breakout. Conversely, if the IB holds, attention shifts to observing retracements and potential reversals within or near the IB range.
Consolidation and breakout dynamics
Consolidation is characterized by multiple consecutive candles showing 'barcoding' (small bodies, indicating limited price movement and a clear range-bound behavior).
Breakout regions, in contrast, are marked by larger candles and distinct directional moves that occur once the consolidation phase concludes.
Important: Traders should explicitly avoid using simple IB/TD rules in isolation during consolidation periods. Instead, the logic during consolidation should be used to anticipate a larger directional move once price decisively breaks out of the confined range.
Demand zones and related concepts (briefly referenced for later lessons)
Demand zones, representing areas where significant buying interest is expected, will be covered in greater detail in a dedicated future lesson. The current discussion merely notes their role in providing points where buyers are likely to enter the market.
Power Hour stats (3–4 PM Eastern)
Edge stat: The occurrence of 'No-new-high' or 'No-new-low' during the Power Hour (typically the last hour of the regular trading session from to EST) can be effectively used to time trades, especially near the end of the trading day.
In the past three months of data, one particular statistical observation showed a continuation signal (referred to as 'Power Hour Continuation') for specific setups. This implies that if price is significantly red or green during the power hour, the daily close tends to follow that same directional signal.
Another related statistic notes a lower probability, depending on the specific session data, indicating that this edge is not always reliable and should always be corroborated with other confluences.
Fair Value Gaps (FVG) and Inverse FVG (IFVG)
A Fair Value Gap (FVG) occurs when there's an inefficient price delivery, leaving a gap between the wicks of three consecutive candles. It signifies an area where price might return to 'fill.'
30-minute timeframe: A bullish FVG holds (i.e., price respects it as support) approximately of the time, while a bearish FVG holds (i.e., price respects it as resistance) about of the time.
Five-minute timeframe: On this shorter timeframe, FVGs hold roughly of the time, often behaving like a coin-flip and exhibiting significantly lower reliability.
15-minute timeframe: Holds around ; generally, the reliability of FVGs decreases notably as you transition to shorter timeframes.
Generally, statistical reliability for FVG setups improves significantly on higher timeframes. Traders are advised to avoid relying solely on short-timeframe FVGs due to their reduced predictive power.
Inverse FVGs (IFVGs) are highlighted by the presenter as a primary tool within their own trading model. The discussion hints that there are distinct differences in how FVGs and IFVGs are utilized within their specific trading framework.
Demand zones and price interactions (upcoming lessons)
The speaker has explicitly planned to delve into the intricacies of demand zones in a separate, dedicated lesson. This introductory mention highlights that demand zones will be demonstrated to significantly influence long setups, particularly when price returns to these predefined areas of buying interest.
Practical trading framing and rules of thumb
Thirteen evidence points (three core edges used most by speaker)
Previous Day Higher/Lower Break (PDHL Break) – this serves as a main framework for establishing market bias based on the sweep of prior day's high or low liquidity.
Initial Balance (IB) – considered a primary, strong probabilistic edge primarily for identifying first-hour breakouts and generating actionable trading signals.
True Day – to be used with considerable caution; specifically, avoid over-relying on it on Mondays, and always consider other statistical confluences to confirm its implications.
Power Hour – utilize continuation statistics during this period to time end-of-day trades and gauge the potential for price to push through or reject extreme highs/lows into the close.
Other edges discussed and experimented with include Fair Value Gaps (FVGs) and their inverses; Group-driven comparisons of various stats; Opening ranges; and Price action around demand zones (which will be extensively explored in later lessons).
Edge confluence and trading model
The crucial principle is to build a robust trading model by integrating multiple confluences from various statistical edges, rather than relying on any single statistic in isolation.
The instructor emphasizes that each student must actively engage in finding their unique combination of statistical edges that best align with their individual personality, trading style, and risk tolerance.
Customization of Edgeful stats by time frame and session is paramount; users must tailor the edge parameters to the specific assets they trade (e.g., ES futures, Nvidia stock, etc.) to optimize their accuracy and relevance.
Risk management and position sizing reminders
The speaker critically stresses that traders should never commit to only one contract without proper risk controls. Effective risk management necessitates the disciplined use of stop-losses and carefully planned take-profits (TPs) to protect capital.
Paper trading is unequivocally recommended as an essential step to rigorously test and refine any statistical approach before committing real capital in live market conditions.
Real-world context and trader development
Jaren: He is recognized as a strong, highly competent student with a solid, advanced understanding of statistical probabilistic trading. He not only runs his own dedicated Book Map class but also consistently contributes valuable insights and guidance to the group, demonstrating a strong grasp of the methods.
Emphasis on learning from multiple mentors while forming your own routine; This acknowledges that while mentorship provides guidance, successful trading requires integrating diverse perspectives and adapting techniques to develop a personalized and effective trading routine.
The instructor uses a comprehensive mixture of qualitative notes (which involve detailed trade framing and step-by-step processes) and quantitative stats (such as historical percentages and backtesting results) to teach how to frame and execute trades effectively.
Group access and cross-group resources
Members can access video recordings from other mentorship groups via the shared drive. This offers an opportunity to view sessions and gain additional insights from different teaching styles or topics if desired.
Each group typically has one live small-group session per week. However, extra engagement and learning opportunities are readily available through the extensive drive resources, allowing for flexible and self-paced study.
Homework assignment for next session
Task: The primary assignment is to actively find and identify five distinct statistical edges utilizing the learned concepts or the Edgeful tool. For each edge, students must clearly explain how they would personally integrate and use it within their own trading strategy.
The assignment encourages personalization: Students are reminded that they are not obligated to implement all five identified edges into their live trading. The goal is to broaden their understanding of available edges, aiming for at least five to expand their 'edge set' mentally.
The goal is to curate a personal model that integrates multiple confluences and is adaptable to dynamic market conditions, fostering a systematic and robust trading approach.
The instructor will review group chats prior to the next session to check if goals were posted and discussed, as posting and engaging in group discussions is an integral part of the assessment and accountability process.
Miscellaneous operational notes and reminders
If Federal Reserve Chain Jerome Powell’s statements imply hawkishness (tightening monetary policy) or dovishness (loosening monetary policy), true-day and IB-based expectations may shift dramatically. Traders must be prepared to adapt their analysis and trading plans quickly based on such market-moving news.
The speaker often uses Central Time for scheduling, but it’s crucial for individual members to prefer using their local time that minimizes confusion. Adapting to a time zone that works best for individual scheduling is encouraged.
There is significant emphasis on not letting personal bias blind the trader to the objective data and statistical probabilities. The trading model is explicitly stated as probabilistic, not deterministic, underscoring the importance of flexible thinking and data-driven decisions.
IP leakage concerns were mentioned, implying that video editing will be diligently done to remove any sensitive or proprietary information before posting recordings publicly to protect intellectual property.
Quick references and formulas (LaTeX)
Probability of a single IB break (documented with 6-month Nasdaq data):
This indicates a high likelihood of price breaking out of the initial balance range in one direction.Probability of a double IB break (price breaks both IB high and low): approximately
This suggests a much lower chance of wide-ranging movement encompassing both sides of the initial balance.Probability of no IB break (price remains entirely within the IB range): approximately
This is a very rare occurrence, highlighting the strong tendency for price to move out of the opening hour's range.Edge likelihood for PDHL in Bear/Bull legs (rough guidance and context-dependent):
This indicates a reliability for the Previous Day High/Low Break strategy when applied within clear trending (bear or bull) market conditions.True Day directional tendencies (illustrative, conditional probabilities):
These probabilities suggest different tendencies for price to move towards the true day level depending on whether the market opens below or above it.Power Hour framework: trading window is from (New York trading hours); power hour specifically refers to the window from in practice (though the exact definition can vary slightly by session).
FVG holds on 30-minute frame (effectiveness as support/resistance):
These figures indicate that FVGs on a 30-minute timeframe have a moderate likelihood of acting as valid support (bullish) or resistance (bearish) levels.FVG holds on 5-minute frame (significantly reduced reliability):
This low probability underscores why relying solely on short-timeframe FVGs is generally discouraged due to their weak predictive power.Fair Value Gap observations: Generally, higher timeframes tend to give stronger odds and more reliable signals for FVG validity. Conversely, shorter timeframes significantly reduce reliability, making them less dependable for isolated trading decisions.
Initial Balance edge takeaway: The IB-based edge, yielding an approximate chance for a single break over the last six months of Nasdaq data cited, serves as a powerful probabilistic advantage. However, its effectiveness is highly context-dependent and varies significantly based on the specific asset being traded.
Final note
The mentor emphasized the critical importance of using what works personally for each individual trader. This involves a continuous process of iterating and refining one's trading model with ongoing feedback from market observations and rigorous backtesting.
The overarching philosophy is to approach this as an continuous learning process focused on building a robust, personalized trading framework, rather than merely chasing a single 'magic signal' or a one-size-fits-all solution.