5-Step DRT Trading Model — Full Breakdown & Transcript

[00:00] In this video, I'm going to teach you a five-step A plus ICT model that literally changed my training. I call it the DRT model. It's the exact model that I used to quit my job as a pharmacist many years ago. And it's the same model that my students have used to pass challenges,

[00:16] get funded, and receive payout after payout after payout. You don't need any indicator for this model, and you don't even need to know a million different concepts. And this model really works across all timeframes, across all asset classes.

[00:31] For those of you who don't know me and are new to the channel, my name is Ali Khan. I've been trading for over 10 years now. I manage my own trading floor, and I was privately mentored by Mr. ICT back in 2018. Everything I have gone on to develop comes directly from his teachings, and now I help

[00:46] thousands of students all over the world, just like you, get consistent with their trading. Now, I don't promise to get rich in 90 days like other educators out there. This is still going to require some time using it, but this model can literally replace your job when you get good with it.

[01:04] I'm going to walk you through each step at a time, so make sure you take notes as we go through this. So, step one. The first thing we want to identify for this particular model is a higher time frame, type 2 dealing range.

[01:18] Now, there's different types of dealing ranges, right? But for this model, we're only going to focus on one specific one, right? is a type 2. Now, what is a type 2 dealing range? There are essentially two variations of a type 2.

[01:31] The first one is a bearish type 2 where the market is traveling lower and this is essentially characterized by having equal or relative equal highs above the market and of course we have a

[01:45] bullish variation where we are traveling higher and again this is characterized by having equal lows, this time below the market. If we see either of these conditions

[01:58] present in the market, we do absolutely nothing until we see set to recur. This is where we see one of two things happen, often both at the same time. We ideally

[02:10] want to see a raid on liquidity and or a rebalance of an inefficiency. Now these should be key inefficiencies and key liquidity tools. We know the market is

[02:22] being programmed to seek liquidity, right? And where do the books teach us to place our stocks? Above double tops and double bottoms. So, retail look at this as a strong level of resistance and therefore they're programmed to place their stocks

[02:37] above the market. Now those resting stockholders is the liquidity in the marketplace. Now why this is so powerful is because we can safely assume that at some point when this is done traveling lower we will see the market turn around

[02:52] and we price for those equal highs above again because there are stop orders resting above those highs. So we wait until price has completed its sell side delivery and fulfilled its downside objectives. Let's use this first example

[03:07] here as a sell side liquidity pool below an old swing low. Now this would be major or minor sell side liquidity dependent on the dealing range but D liquidity pools are always going to form at the extremes of a dealing range high or a dealing range low to the left When we see this occur it sets up step 3 in our 5 step model

[03:29] But first, as a little bonus here, let's look at this through the lens of candlesticks. Now imagine this chart is on a 4 hour time frame. Notice how on this time frame we see the market run through the swing low to the left, then

[03:47] close below it. If we zoom out to a higher time frame, now this is on a daily chart, this is what that 4-hour chart looks like. Notice how we have failed here to close above that same low. Look at what the candles are doing over here.

[04:03] They're closing above that same low, right? With the body showing an unwillingness to get below it, this signifies that there's strength behind move and we of course refer to this as a stop run. Now when we have a type 2

[04:18] dealing range with equal highs above the market we not only now have a strong draw on liquidity we have directional bias to look for those equal highs above. The second condition for a step 2 is when price balances an inefficiency below the

[04:32] market like a fair value gap so any kind of a gap in this case it doesn't have to just be a fair value gap it can be a volume of balance, a new day opening gap, a unique opening gaps, opening range gaps. There's several different types of gaps in the market.

[04:45] Again, gap theory is a little bit beyond this presentation. Again, here's a chart example of a buy side imbalance in price action where we have price just moving in one direction only. This is buy side delivery. Now, when the market retraces lower, notice the bodies here, right? They're

[05:01] failing to close below the discount low of that buy side imbalance. Again, this signals strength, right, especially if we're underlyingly bullish and the higher time frames tell us that the market is likely to grow higher. In this case we can see the relative equal highs above the market,

[05:17] again we'll have a strong pool of buy-side liquidity resting above that. Our eyes should immediately go to those equal highs above, so this is again classed as a type 2 dealing range. Now the question I often get asked here is which gap or which liquidity pool do we wait for?

[05:35] Can I predict where the sell side delivery will end and how far lower it can go and essentially when will it get there? And the answer is yes, you absolutely can. But I want to keep this model as simple as possible for this video.

[05:49] If you want to learn the details, join one of our programs. The links are below in the description. Now, once we have one or both of these conditions play out, we can essentially move over onto step three, which is SMT.

[06:03] where we look at intermarket analysis between correlated assets. There are two main types of FNT. The first type is what I call the deal range FNT. Let's say that these two assets here are positively correlated assets like Nasdaq

[06:19] and S&P 500. The asset on the right here, we can clearly see it posts a higher high, ranging buy side above that swing high. Since these markets have a positive

[06:31] correlation meaning if one asset makes a higher high we should see the other correlated asset make a higher high also but in this case we see the asset to the left make a lower high leaving the pool of liquidity above the high intact This is something that we call a crack in correlation We

[06:51] refer to this as SMT. I call this smart money time, since there is a predictable timing element to this book. Again, that's for another lesson. Now, after that SMT divergence, we can see how the market really sold off, right, in both cases. But

[07:07] The key thing here is we want to see this after step 2, where we have a range on liquidity with one asset, and then an SMT divergence that confirms that range and reversals.

[07:20] After a step 2 rebalance, we want to see a step 3 SMT. But there is a different type of SMT. I call this a GAS SMT. Now we can get really really dialed in here, but again let's keep things simple.

[07:34] Let's assume these two assets show a positive correlation. Notice that the asset on the right, we have a fair value gap here. But what happens? We completely fill it here with this wick. So this is completely balanced. But if we look at

[07:49] the same equivalent fair value gap that was printed at the same time, again there's a timing element that makes it a key fair value gap, notice that most of it remains unfilled. We have all of this section here that price hasn't dipped into.

[08:03] This is another cracking correlation since both gaps should be filled in symmetrical markets. As a side note here, we should already be anticipating SMTs to unfold. It shouldn't be the main reason that you enter a trade and notice it's number 3 on our 5

[08:18] step list. After this gap SMT, we can see how the market really runs higher on both pairs. Notice the type 2 dealing range above the market here where we have the equal highs.

[08:30] There's a side note here. Despite both of these markets being positively correlated, we can see here that we have a higher high to the right. Generally, I don't like to see this as a signature for a liquidity one.

[08:42] However, if a positively correlated asset is showing equal highs, that's going to have the cleanest structure. And notice how we don't fill the gap here, again signifying that there's strength behind this market.

[08:56] He can therefore see how we have really run into that liquidity pool, as opposed to the small run above the highs to the left on this asset. Now, once we've seen a valid SMT, we want to wait for step four, something that I call a 25-75 DRT break.

[09:13] Now, what do I mean by this? But before we put a whole model together, I want you to meet somebody. This is Ahsan, right? And a while back, Ahsan was exactly where you might be right now. he knew his ICT and he was losing. He was looking for every SMT and was trending everything that

[09:30] looked like half a sale. And the thing that changed last time wasn't a new concept. It was a sequence you just learned, right? Buy it first, then raid, then SMT. Not SMT first. He was looking for every

[09:42] single SMT first before he would qualify his trade idea. Eventually, when he started marking off his checklist against the trading plan designed for this model, that's the payout that he received. using this exact APOS model that I'm teaching you today for free.

[09:57] Assan did the work his results are his and nobody can promise you his outcome But if you want to learn more about the trading plan Assan used click the link below to join the high probability trading challenge Right let get back to it Let me explain a little bit more about that 2575 DRT break

[10:12] Right, so to do this, let's go back to our diagram of our type 2 dealing range. Now at the extreme of this range, we obviously have a high and a low. We can refer to this as the dealing range high and the dealing range low.

[10:28] If we split that range in half, we get the midpoint of that range. I refer to this as the 50 DRT level. This is fair value. It's the fair price between the highest price and the lowest price. If we split those two areas in half again, we get the 25 DRT level and the 75 DRT level.

[10:47] Now, to port this other chart, we can use a fib tool here. And these are the levels. We would have a zero, which would be the dealing range low. would be the dealing range high, 0.5 would be the 50 DRT level, 0.25 the 25 DRT

[11:03] and 0.75 the 75 DRT level. This is what it looks like when it all comes together on a price chart. Here we have an example of a type 2 bullish dealing range where

[11:15] we can clearly see equal highs above the market. Again approval by-size liquidity will rest above that. We have also seen a raise on liquidity so this will be a previous dealing range low, we have sell side liquidity and we've dipped into that

[11:31] pool there and then we have seen an SMT divergence with a correlated asset so all three steps here are present. So step four would require price to close above

[11:43] the 25 DRT level. This would confirm a reversal and a change in direction. In a bearish type to be equivalent would obviously be through that 75 DRT level. Only when we have all four steps behind us do we then look for step five which

[12:00] is our entry. Again, note that comes right at the end. A lot of traders are looking for the entry as the first thing, like they want a reason to enter. You have to build the narrative before you look for a reason to enter. Now our first

[12:14] entry would be on a retracement back to that 25 DRT level. It can be a limit order or a market entry but the stop must go below the dealing range low where we've seen that SMT occur. Your first profit target would be the 50 DRT level

[12:32] and your second profit target would be the 75 DRT level. And of course the third profit target here would be your dealing range high where we finally see that rate of buy side liquidity. A second entry can be taken here at the 50 DRT level. Notice that we have

[12:50] this fair value gap. But again, the stop must remain below the dealing range low. Again, target one would be the 75 DRT level and target two would be, again, those equal highs above the dealing

[13:03] range type two high. Note what this does. We have five steps in order that gives you direction, bias, confirmation, entry and risk management all rolled up into one beautiful model.

[13:16] If you like this, you'll like the High Probability Trading Challenge, which is a five-day live event with myself going deeper into this model. Click the link below to sign up and I'll see you soon.